I am most certainly encouraged upon my reading of pg.s IV-41 through IV-43.  Many of the things that I have been saying about the economic & humanitarian impacts of corn-ethanol, crop-based biofuel feedstock, etc., are pretty well summed up on the aforementioned pages.  It is my hope that, in the formation of the "final" version of the LCFS, that ARB staff will pay diligent heed to the things recorded on the aforementioned pages.  

   Now, during the course of last March 27 2009's workshop, the allegation was made that increased 
crop-based biofuel feedstock production is somehow economically neutral (in the sense that the impact 
of higher food prices is somehow offset by higher earnings by food producers).  Of course, allegations that 
increased crop-based biofuel feedstock production are somehow economically neutral ignore some very 
basic "on-the-ground" facts.  

   It is therefore incumbant upon all those considering the proposed LCFS to pay some very diligent heed to pg.s IV-41 through IV-43 of the Staff Report (released March 5, 2009)!  Thank you.
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                        h. Food Versus Fuel Analysis

The LCFS, together with biofuel production mandates in the U.S. and Europe, will result
in the diversion of agricultural land from food production to biofuel feedstock production.
This diversion of agricultural land to biofuel production will exert an upward pressure on
food commodity prices, and potentially lead to food shortages, increasing food price
volatility, and inability of the world’s poorest people to purchase adequate quantities of
food (63, 64). As both food prices and corn ethanol production levels rose during 2007
and the first part of 2008, warnings about a possible linkage between the two trends
began to surface(65). Controversies over the trade-offs between food and fuel crops
are likely to intensify as crop-based biofuel production increases over the next decade.
In this section, ARB staff discusses various food-versus-fuel issues associated with the
production of corn and sugarcane ethanol-the biofuels that are expected to dominate
the alternative fuels market over the next five years.

The primary benefits of increased production and consumption of biofuel are thought to
be twofold. The first-an increase in energy security-is the rationale for the Energy
Independence and Security Act (EISA). In 2007, the U.S. imported roughly two-thirds of 

                                                                          IV-41
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its oil with over 50% of the imports coming from OPEC countries (EIA 2009). This
dependence on foreign oil leaves the U.S. vulnerable to supply disruptions and price
shocks. Increasing the domestic production of corn ethanol will diversify our fuel supply
and potentially leave us less vulnerable to decisions made by foreign countries and oil
producers.

The second perceived benefit of increased reliance on biofuels-a reduction in GHG
emissions-is the rationale behind the LCFS. On an energy basis, direct GHG
emissions32 from the production and use of corn and sugarcane ethanol are less than
the comparable emissions from gasoline. When land use change emissions are
considered, however, the emission-reduction benefit from corn and sugarcane ethanol
is diminished.

Some of the costs and benefits associated with a 50 million gallon per year corn 
ethanol plant operating in California are summarized below (See Appendix C for a 
description of how the values appearing in this summary were derived). Such a plant 
would:

     • Provide enough fuel for approximately 80,000 vehicles capable of operating on
       E-85;

     • Displace about 34 million gallons of petroleum fuel;

     • Reduce direct GHG emissions by about 0.19 million metric tons per year;

     • Require almost 18 million bushels of corn per year;

     • Require about 110,000 acres of U.S. farmland to produce the feedstock;

     • Result in about 36,000 acres of land conversion, 14,000 acres of which would be
        in the U.S.; and

     • Result in the release of 3.6 million metric tons of greenhouse gases due to land
       conversions; and

     • Result in a net greenhouse gas emission benefit after 19 years of production.

In addition to the costs listed above, the conversion of agricultural land to the productionof biofuel feedstocks has the potential to increase the price for food, increase food price volatility, and increased pressure on water supplies. The production capacity of the ethanol plants currently operating and under construction in the U.S. is approximately 13 billion gallons per year (BGPY)(54). About 4.6 billion bushels of corn-more than 30 percent of the annual U.S. corn crop-is needed to support this level of production.
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32 Direct and indirect GHG emissions, as well as the concept of indirect land use change, are discussed in
detail in preceding sections of this Chapter

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Diverting this much of the American corn harvest to ethanol production is likely to exert
upward pressure on food prices(66).

Historically, the price of corn has been relatively stable varying from about $2.00 to
$2.50 per bushel between 2000 and 2006. Prices in 2008, however, spiked at over $5
per bushel and are currently near $4 per bushel(55). The recent sharp increase in corn
prices was not caused solely by the conversion of acreage devoted to food and feed
production to biofuel crops. The cost of energy appears to have been the largest
contributor (65, 67). The demand for biofuel feedstocks may, however, be
overwhelming a food supply system that was already overextended by weather-induced
production shortfalls and surging demand from a worldwide population that is both
increasing in size and affluence. Increased meat and dairy consumption by newly
affluent populations places additional demands on soy and corn-feed crops that are
also used for direct human consumption and biofuel production(64). Moreover, the
increased production of biofuels may more firmly link prices of biofuel feedstocks with
petroleum prices, thereby leading to increased price volatility for food(63): as petroleum
fuel prices increases, biofuels become more profitable which, in turn, allows producers
to raise their feedstock prices as they increase production levels. Because those with
the lowest incomes must devote a large percentage of those incomes to food, they are
less able to adjust to changing food prices in the short term.

An important factor in the food versus fuel debate that has received relatively little
attention until recently is the impact of expanded biofuel production on water supply and
water quality. The shift in U.S. agricultural production toward corn, the conversion of
land to agriculture (indirect land use change), and the growth in the number of
bio-refineries will place additional demands on already overburdened water supplies.
The water use impact of devoting a larger proportion of available agricultural land to
corn production depends on the crop that is being replaced as well as its geographical
location. Of more concern, however, is the expansion of agriculture in dry areas like the
western U.S.: altered cropping patterns on relatively moist agricultural lands will usually
have less of an impact than expanding irrigated production in relatively arid areas.

Bio-refineries can also place a strain on local water supplies. A refinery that produces
100 million gallons of corn ethanol uses as much water as a town of 5,000. More
intensely managing land to improve yields may also exacerbate water quality problems:
soil erosion along with fertilizer and pesticide runoff can increase as crop management
intensifies(68, 69). Bringing non-agricultural lands into production can also increase
erosion and runoff. Conservation Reserve Program (CRP) lands are of special concern:
the CRP was created, in part, to protect environmentally sensitive or highly erodible
acreage.

                                                                    IV-43
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