Valero Energy Corp., a major oil refiner, funded a study by Charles River Associates that supports placing a cap on the price of biofuel blending credits under the U.S. Renewable Fuel Standard (RFS) — a change meant to help refiners that complain the RFS now costs them a fortune.

A rival report from Iowa State University, also released this week, said such a cap on credits would backfire by eroding U.S. demand for corn-based ethanol and potentially lowering corn prices, already under pressure from a supply glut. The corn industry did not directly fund the Iowa State study, but does provide funding to the university.

The studies are meant to inform the administration’s deliberations on how, and if, to reform the RFS — which has become a major point of tension between two of President Donald Trump’s most important constituencies.

The RFS requires oil refiners to blend increasing amounts of biofuels, mainly corn-based ethanol, into the fuel supply each year, or buy the renewable fuel credits, called RINs, from other companies that do the blending.

The regulation was introduced during the administration of President George W. Bush to help farmers, cut petroleum imports, and improve air quality. But a surge in the price of RINs in recent years has upset merchant refiners who say the policy now costs them hundreds of millions of dollars a year.

Trump waded deeply into the debate last week, urging representatives of both sides to accept a compromise deal that caps prices for the credits while also removing seasonal limits on high-ethanol-blend gasolines to expand the biofuels market.

A cap would control costs for small refiners and help them stay afloat, said Brendan Williams, vice-president of government relations for refining company PBF Energy.

The biofuels industry likes the idea of expanding high-ethanol-blend gasoline sales, but has pushed back on the idea of a cap. “The RFS is a well-designed program,” said Brooke Coleman, head of the Advanced Biofuels Business Council. “Part of the whole mechanism working is that the price of RINs may go up, and so you should go long on biofuels.

“It’s a strategy to kill the RFS and to kill the economic incentive to blend,” said Coleman, referring to a 10 U.S. cents cap.

Trump has not pushed a particular price level for the proposed RIN price cap, but Republican Senator Ted Cruz of Texas — an advocate for the refining industry — has called for a limit of 10 U.S. cents per RIN, a fraction of their current value.

The Iowa State study said such a cap would translate to 4.6 per cent less ethanol blending in 2018. And without an increase in exports, that would mean a drop in corn prices, too.

The Valero-funded study, on the other hand, said a price cap “could alleviate several of the most pressing issues with the RFS,” while also continuing to incentivize investment in ethanol blending.

In January, refiner Philadelphia Energy Solutions blamed its bankruptcy on RINs. Bad deals and large investor payouts also played key roles in its collapse, Reuters reported.

On Wednesday, 150 biofuel manufacturers sent an open letter to Trump urging him to protect the program. The letter came as a delegation of refinery workers held meetings with lawmakers urging changes to the RFS.

The post Oil and corn go to war appeared first on Manitoba Co-operator.

The researchers said, in a paper published online by the journal Proceedings of the National Academy of Sciences, that they have identified the major steps in the process. That includes the tools used by plant cells to create cellulose and proteins that transport critical components to the location where cellulose is made.

“Cellulose is the single most abundant biopolymer on earth,” said Ying Gu, senior author of the paper. “In the past 10 years or so, cellulose has also been considered as a major component of biofuels. Understanding how cellulose is synthesized may allow us to optimize its use as a renewable energy source.”

The cellulose within many of the products used in everyday life is primarily produced by plants. Despite the economic significance of cellulose, prior to this study researchers only had a basic understanding of how plants create this abundant resource, other than the location and that a protein group known as the cellular synthase complex is involved.

“We didn’t know if other proteins are involved in the complex, or how the proteins get to the plasma membrane,” Gu said.

Using various techniques to image and examine the cells the researchers identified new compounds and sites involved in the process.

“We eventually hope to translate what we know about how plant cells build cellulose to more efficiently break it apart again for use in biofuels,” said Gu.

The post Fuel cell insight gets powered up appeared first on Manitoba Co-operator.

Scientists there have demonstrated how to design and genetically engineer enzyme surfaces so they bind less to cornstalks and other cellulosic biomass, reducing enzyme costs in biofuels production, according to a study published in the journal ACS Sustainable Chemistry & Engineering.

“The bottom line is we can cut down the cost of converting biomass into biofuels,” said Shishir P.S. Chundawat, senior author of the study and an assistant professor in the department of chemical and biochemical engineering at Rutgers University.

Typically, the enzymes tapped to help turn switchgrass, corn stover and poplar into biofuels amount to about 20 per cent of production costs, said Chundawat. Enzymes cost about 50 cents per gallon of ethanol, so recycling or using fewer enzymes would make biofuels more inexpensive.

“The challenge is breaking down cellulose (plant) material, using enzymes, into sugars that can be fermented into ethanol,” he said. “So any advances on making the enzyme processing step cheaper will make the cost of biofuel cheaper. This is a fairly intractable problem that requires you to attack it from various perspectives, so it does take time.”

Biomass contains lignin, an organic polymer that binds to and strengthens plant fibres. But lignin inactivates enzymes that bind to it, hampering efforts to reduce enzyme use and costs, according to Chundawat.

The researchers showed how specially designed enzymes can limit their binding to and inactivation by lignin.

The post Cutting the cost of ethanol appeared first on Manitoba Co-operator.

That’s according to The Money Farm’s Mike Krueger, who adds that world demand has been keeping pace with massive production.

“High prices didn’t kill demand at all, but high prices did bring us a lot more acres,” he said at the recent CropConnect conference.

And growing conditions allowed for those planted acres to shatter previous bests.

“We had just basically near-perfect weather almost every place on Earth. We really haven’t had a significant crop problem anyplace for the last four years.”

• Read more: Soybeans poised to beat out wheat, barley
• Read more: Wheat acreage decline connected to demographics, economics

Krueger, however, doesn’t foresee a fifth straight record year, with dry, cold conditions across western Europe, Ukraine and parts of Russia, and flooding in Brazil and Argentina.

Moreover, the U.S. is set to experience major acreage changes.

Soybeans

Krueger sees a shift away from corn and wheat acres to oilseeds in 2017, with an extra four million to five million acres going to soybeans. (He predicts a similar shift in Canada, with less wheat and more canola and pulses.)

Although he predicts over four million more planted soybean acres in 2017 at 88 million, he also believes average yields will decline by four bushels an acre, resulting in production actually declining to almost 4.18 billion bushels — a drop from 4.33 billion in 2016.

But a high carry-in will push ending supplies up to 488 million bushels from 420 million the previous year.

“We’re still going to have just shy of 500-million-bushel bean carry-out. Now everybody’s tried to make a number that big look bearish for the last four or five years, but it hasn’t been.”

Krueger points out that despite four previous record crops, demand has kept pace.

“We’ve popped off enormously big crops, and yet, we have for the most part managed to consume those crops.”

And China needs to be credited for weathering any economic problems it’s had and expanding its soybean appetite.

“You go back just 10 years ago, they were importing 25 million to 30 million tonnes of beans. Most people think they could be at 90 million tonnes of soybean imports this year: phenomenal increase.

“Despite every year worrying about China’s economic growth and stories about poor soybean crush margins within China… everybody continues to underestimate what goes on there.”

He believes the bulls are returning to market.

“Some of these big banks put out these quarterly commodity outlooks, and all of them have started to turn just a little more positive than they’ve been recently,” Krueger says.

The other key to watch is what the big speculative funds are doing, especially as they’ve managed to get the market right more than grain companies and just about everybody else, he says.

“If you look from a fundamental standpoint at the numbers, they look bearish, but the big funds have just continued to pile in to the long side of soybeans, soybean meal, soybean oil.”

Meanwhile, the funds were also short corn for a long period of time, but weeks ago turned the corner to become small longs. And they’ve also been whittling down their short positions in Chicago wheat.

“So I’m not so necessarily bearish (soybeans), but I do think oilseeds have probably the greatest downside (risk).”

Corn and wheat

More soybean acres will partly come at the expense of corn.

“We’re thinking we’ll see probably maybe four million acres less corn in the U.S.; that’s kind of what everybody’s thinking.”

Corn Belt rotations are pretty well set, so the big shift in acres to soybeans will happen in “fringe” states: western Minnesota, the Dakotas, parts of Nebraska, Kansas, and Missouri, Krueger says.

With a projected 90.3 million acres of planted corn in 2017, and a five-bushel-per-acre yield cut to 2016’s record, he forecast 2017 U.S. corn output to reach 14.28 billion bushels, or close to one billion bushels less than 2016.

The U.S., however, is far from the only corn player.

“There’s certainly much bigger supply choice in the world, mainly because Brazil and Ukraine have come on as bigger producers of corn.”

And then there’s China. Nobody knows for sure the quantity it has available or the quality. Previous public auctions, however, suggest the quality was poor.

As for demand, ethanol remains a major consumer. At its peak, ethanol consumed roughly 45 per cent of U.S. corn production.

“We’re now roughly consuming in the neighbourhood of 35 per cent in ethanol. Not because ethanol has dropped off, it’s just that our crops have got so much bigger.

“Week after week after week, we’ve been setting new ethanol production records, mainly because our exports have been so good on ethanol. We’re kind of at that ‘blend wall’ they call it, we’re not using any more gas in the States, but exports have been good.”

But the market with the most bullish potential may be wheat.

“I think wheat could be the sleeper,” says Krueger.

He predicts a massive reduction in U.S. wheat production in 2017-18.

“I think the U.S. wheat crop is going to be probably 500 million bushels smaller than (the previous) year just because we’re going to plant four million-plus fewer acres. That’s a pretty significant change in one year.”

Forecasting slashed planted acres at 46.3 million, and yields of 45 bushels per acre – well off 2016’s record 52.6 bushels – Krueger estimated U.S. wheat production would reach 1.79 billion bushels, down significantly from the previous year’s 2.31 million.

The post Crop production could take hit in 2017 appeared first on Manitoba Co-operator.

Canola’s May contract rose from a closing price of $515.30 per tonne on Feb. 24 to settle at a closing price of $532.60 on March 3.

The market was partially lifted by surging vegetable oil prices and strength in U.S. soybeans.

Much of the increase was traced to ideas that the Trump administration will offer incentives for ethanol and biodiesel creation in the U.S. while slashing foreign imports.

As of March 3 however, there were few, if any, concrete details about what measures would take place or how they would affect Canadian canola exports.

Both soybeans and soyoil on the Chicago Board of Trade reaped large gains in the wake of Trump’s address to the U.S. Congress and the speculation that went with it. The “Buy American and Use American” mantra seemed to bolster investor confidence in U.S. agriculture.

It also raised crush margins on the Prairies, something that hadn’t happened for a while. Crush margins had been down nearly $50 per tonne in late February before staging a rally behind soyoil.

Steady global demand for oilseeds propped up prices, especially after muddy roads in Brazil prevented many shipments of soybeans from getting to port.

Spring buying was also in the air as traders debated how much canola was left in Prairie fields and what its quality would be.

Exports of canola remained steady while farmers were quick to pounce on rallies while holding supplies back during the downturn in price.

Muddy roads

CBOT soybeans gained roughly 13 cents on the week. Much of the strength came from the rumours on U.S. biofuel regulations, but weather issues were also at play. Farmers in Brazil have had difficulty getting soybeans to port due to muddy roads which delayed exports significantly.

May corn futures gained 10 cents on the week, also enjoying speculation over what U.S. biofuel regulatory changes may mean for ethanol production. Weekly U.S. ethanol production reached one million barrels or higher for the 18th week in a row. Corn acreage in the U.S. is also expected to suffer slightly as farmers swap out acres in favour of soybeans.

Wheat futures rose as much as 5-1/2 cents, taking strength from spillover gains in corn and soybeans. CBOT wheat was also buoyed by weakness in the U.S. dollar. Exports were steady while ideas persist that winter wheat in some regions of the U.S. southern Plains and Midwest may emerge too early and become vulnerable to frost.

The post Oilseed values gaining on talk of U.S. biofuel rules appeared first on Manitoba Co-operator.

I am willing to bet that the grain growers among our readership just felt a small blood pressure spike at the very thought, anticipating dramatically lower crop prices.

That figure represents the portion of the U.S. corn crop converted to biofuels annually. However, the world’s oil producers and refiners have made it more than clear they’d love to see that stop.

The oil companies have attacked the mandates as wasteful, unnecessary, a subsidy by another name, and the fuels themselves as inferior energy sources that could be damaging to engines. They’ve also challenged the assertion they’re environmentally friendly.

Proponents have responded the industry creates jobs, lowers harmful emissions and keeps a portion of the US$1 trillion spent on motor fuel annually at home rather than shipping it overseas to unfriendly regimes.

Like all political fights, both sides seem intent on presenting the facts in the most positive light possible to make their case. But making their case both sides are.

• Read more: In Trump freeze, U.S. agencies delay rules affecting farms
• Read more: Former environmental official defends biofuels
• Read more: U.S. ethanol sector pumped on Trump

It’s become enough of an issue that even former U.S. agriculture secretary Tom Vilsack, a noted biofuels proponent, recently fretted publicly about their future. In an editorial board meeting with the Des Moines Register just before Christmas, Vilsack said he’s begun to see mixed signals about the U.S. Renewable Fuels Standard, predating even the contentious U.S. election. Vilsack even went so far as to indicate he’s “concerned” about the future of the U.S. biofuels mandate.

The Trump administration’s appointments to key cabinet positions haven’t been much source of comfort. The newly elected president has nominated two fierce renewable fuel foes to key positions — former governor of Texas Rick Perry has been tapped to head up the Energy Department and Oklahoma Attorney General Scott Pruitt is slated to run the U.S. Environmental Protection Agency.

There’s little doubt an elimination, or even just a reduction, in the U.S. biofuel mandate would be disastrous for the grain sector. When the mandates became reality with the U.S.’s Energy Independence and Security Act of 2007, the effect on grain prices globally was immediate, pronounced and extremely positive. Between 2006 and 2008 average world prices for rice rose by 217 per cent, wheat by 136 per cent, corn by 125 per cent and soybeans by 107 per cent, according to USDA data.

In the ensuing years, farmers around the world have responded to that price signal like they always do. They’ve upped their game, made investments to grow their productivity, and met that demand. In 2006, the U.S. produced 10.5 billion bushels of corn. In 2016, it produced 13.6 billion bushels, according to USDA data.

Similar, and even greater, production increases can be seen in other locations around the world. Ukraine corn yields, for example, have more than doubled in the last 15 years. They’re a relatively small producer, but that figure underlines just how much potential there has been to increase yields globally.

We’ve seen very similar results in other crops as well. The Black Sea region, once a major grain importer under the Soviet system, has become a fiercely competitive wheat exporter. Presented with the first meaningful price signal since shaking off the shackles of that moribund economic system, farmers there responded by quickly adopting technology and genetics to spike yields.

It’s too soon to say for sure that the U.S. mandate is doomed. Plenty of people support the policy, and the renewable energy industry is finding its feet in the lobbying game and inevitable propaganda war. Vilsack himself had earlier predicted there would be a lot of sabre-rattling but no concrete action, and despite his growing alarm, that may still be the case.

But it is clear that the policy is back in play and must be protected. In Canada there’s only been a few shots fired so far, but the industry will need to respond, or risk being overlooked.

There’s little anyone on this side of the border can do to influence the U.S. decision, so the best course of action is likely going to be hoping for the best while preparing for the worst.

That means playing defence, keeping a careful eye on the bottom line, and using current conditions to prepare for future challenges.

For example, interest rates remain very low, so paying off debt now might make a lot of sense. Another similar wind at the back of the sector is the lower value of the loonie. It has lost about 25 per cent of its value, protecting Canadian farmers from lower global grain prices.

What the sector shouldn’t do is blithely assume the mandates will continue forever. If recent geopolitical events have taught us anything, it should be to expect the unexpected.

[Update] The editorial originally stated ‘400 million’ bushels of corn at the opening sentence. An error in calculation required a numerical update to ‘five billion.’ We apologize for any confusion this may have caused.

The post Editorial: Biofuels fight appeared first on Manitoba Co-operator.

The Environmental Protection Agency (EPA) will delay implementation of this year’s biofuels requirements along with 29 other regulations finalized in the last weeks of Barack Obama’s presidency, according to a government notice. The U.S. Department of Agriculture will pause rules affecting livestock, groups said.

• Read more: Ottawa needs to get serious about encouraging renewable fuels

EPA and USDA representatives did not respond to requests for comment.

The freeze prompted worry in rural communities, though sources said such delays are not unheard of with a new administration. Trump won nearly two-thirds of the rural vote in November, with big agricultural states lining up for the Republican.

The more than decade-old Renewable Fuel Standard (RFS) has been stymied by regulatory delays in years past and is facing uncertainty under the new administration, including a proposed EPA chief who has been a critic of the program.

The RFS, which is aimed at reducing greenhouse gas emissions and reliance on imported oil, requires that oil companies blend increasing amounts of biofuels, such as corn-based ethanol, into gasoline and diesel. Refiners that fail to do so must buy paper credits.

Some in the oil industry were heartened by the news. The oil industry has lobbied heavily for changes or a repeal of the policy.

“While the regulatory freeze implemented by President Trump does not change the statutory compliance of the RFS, it does provide an opportunity to take a closer look at this fundamentally flawed policy,” said Chet Thompson, president of the American Fuel and Petrochemical Manufacturers, which represents companies including oil refiners.

Prices of the paper credits used by fuel companies to prove they are meeting the requirements dropped sharply after the news, falling to the lowest levels since November 2015.

The Renewable Fuels Association, which represents biofuels producers, said it did not expect the procedural delay to lead to any significant changes to the requirements. The delayed fuel rules will be implemented on March 21, according to a federal register notice.

About a third of the 13.6 billion bushels of corn produced in the United States in 2015 was used to make fuel ethanol, according to the National Corn Growers Association.

At the USDA, “they put a regulatory freeze on everything that is in the pipeline,” said Dave Warner, spokesman for the National Pork Producers Council.

The agency has put on hold new rules it had formerly said would help protect meat producers from mistreatment by packing companies and processors, he said. The pork council opposes the measures, saying they are not necessary.

The freeze is also affecting new rules that would for the first time mandate specific space requirements for hens laying organic eggs, Warner said.

The U.S. Cattlemen’s Association said the delay in implementing USDA rules involving meat packers was worrisome. The group, which represents cattle producers, had supported the measures as needed to prevent anti-competitive buying practices.

It was not immediately clear when or if the USDA rules would be implemented.

“We are certainly on edge right now and hope that with further review the Trump administration will see the value in those rules,” said Lia Biondo, the association’s policy and outreach co-ordinator.

The post In Trump freeze, U.S. agencies delay rules affecting farms appeared first on Manitoba Co-operator.

For growers like Wagh, a 35-year-old from the Marathwada region in the west of India’s Maharashtra state, sugar cane has two attributes that make planting the crop lucrative — hardiness and state policies that ensure higher returns. These farmers sow the cane even as its outsized water demands relative to other crops threaten to plunge this traditionally arid region back into a drought.

“It is the only reliable crop. Earlier this year I cultivated onions and incurred a 50,000-rupees loss as prices crashed,” said Wagh, who plants 1.5 acres (0.6 hectare) of sugar cane.

Four months ago Maharashtra, the biggest sugar-producing region in India, suffered the worst drought in four decades that ravaged crops, killed livestock, depleted reservoirs and slowed down hydroelectric power output.

Environmental activists and the government blamed the rapid expansion of sugar cane growing for creating the water scarcity. Cane consumes about 22.5 million litres of water per hectare during its 14-month-long growing cycle, compared to just four million litres over four months for chickpeas, a pulse commonly grown in India and called gram locally.

Growing problem

Without government intervention to reset the revenue balance in favour of other crops, experts warn the sustained production of sugar cane will further deplete scarce water resources and leave the region prone to droughts. This could create social unrest stemming from the widening income gap between cane growers and other farmers.

“The government asks farmers to shift to less water-consuming crops, but it does little to support those crops. It failed to solve the problems of oilseed and pulses growers,” said Pradeep Purandare, a former professor at Maharashtra Water and Land Management Institute based in Aurangabad.

Erratic prices for vegetables, oilseeds and pulses limit the incentive for farmers to plant them.

In contrast, the government requires sugar mills to buy cane at a set “fair and remunerative price” (FRP). The government also buys wheat and rice at what is called the minimum support price (MSP).

“Returns from other crops are unpredictable. This year I allowed five tonnes of onions to rot. Prices were so low that my losses would have increased by transporting onions to the market,” said Suresh Kothawale, another Aurangabad farmer.

India’s government hopes higher subsidies for pulses and oilseeds will change farming patterns.

“We are creating oilseeds and pulses as an alternative for sugar cane by raising their minimum support prices,” said a senior official at India’s Agriculture Ministry who declined to be named.

But industry critics said the pulse and oilseed MSP only exists on paper, as the government never procures them aggressively like wheat or rice.

“Green gram prices were trading below support prices due to higher production. This makes the support price irrelevant for farmers,” said Nitin Kalantri, a pulses miller based at Latur in Maharashtra.

Political clout

The sugar mill buildup in Marathwada was initially pushed by politicians in the region trying to replicate the prosperity of mills in other areas of Maharashtra state and was focused on areas with plentiful water, said Jaidev Dole, a political analyst in Aurangabad.

“But later politicians opened mills everywhere, even in areas where drinking water is not available, to build a constituency rather than making farmers rich,” he said.

Farmers sell cane directly to sugar mills, effectively getting 100 per cent remuneration, but other crops pass through middlemen, ensuring farmers get half the price consumers pay, said Sanjeev Babar, managing director of the Maharashtra State Co-operative Sugar Factories Federation.

Sugar cane’s sturdiness also attracts farmers because of limited access to insurance that protects against crop failures.

Mature cane withstands heavy rainfall or dry spells and is also less vulnerable to pest and diseases compared to other crops, said farmer Sharad Mate, who has lost pulse crops due to droughts and unseasonal rainfall.

“I had taken crop insurance for pulses last year, but didn’t get compensation despite losing an entire crop,” said Mate, a farmer from Sillod, northeast of Aurangabad.

The post Sweet paradox: India’s drought-stricken farmers plant thirstiest crop appeared first on Manitoba Co-operator.

In a recent column I pointed out that electric cars are only as green as the fuel used to generate the electricity they consume.

For internal-combustion-powered vehicles, much of the focus has been on trying to reduce carbon emissions by adding ethanol to gasoline and vegetable oil to diesel. These biofuels are sourced mainly from cereal grain and vegetable oil. Ethanol is manufactured by fermenting and distilling grain, while vegetable oil comes mainly from palm trees.

Biofuel has become an enormous global industry, producing some 100 billion litres annually. Mandatory ethanol and vegetable oil standards have been enacted in 64 countries.

But biofuels fail on several fronts.

First we need to correct the popular misconception that burning biofuel produces significantly lower emissions than gasoline or diesel. In reality, there’s little difference. Essentially, all of the hypothesized emission reduction relies on the premise that, since plants consume carbon dioxide to grow, the carbon they remove approximates the carbon released when burned. This is the basis for the biofuel industry’s claim of zero net emissions.

But just as the zero-emissions electric car fallacy ignores the environmental impacts of electricity generation, the zero-emissions biofuel myth ignores the environmental impacts of production. And there’s a lot of evidence that these production impacts cause very serious environmental damage, while exacerbating global food shortages and creating price escalations.

Let’s start with ethanol fuel. The United States and Brazil are by far the largest producers. In the U.S., some five billion bushels of corn are used annually to produce 49 billion litres of ethanol fuel through the same highly energy-intensive fermentation and distillation process used to produce whiskey. That 49 billion litres of ethanol are enough to fill 65 billion standard whiskey bottles.

Multiple studies, including by the International Institute for Sustainable Development, conclude that the fossil fuel used to produce corn ethanol creates essentially the same carbon emissions as the gasoline and diesel displaced.

But that’s only part of the environmental impact. Rising corn prices have led to the draining and tillage of ecologically important wetlands. And increased fertilizer use has sent nutrient-rich run-off into streams and rivers, resulting in weed-choked, oxygen-starved water courses devoid of fish and other aquatic life.

Meanwhile in Brazil, almost one million acres a year of carbon-dioxide-absorbing tropical forest are clear cut and replaced by sugar cane for ethanol production. Studies show that the net effect is about 50 per cent more carbon emissions than by fuelling automobiles with fossil fuels.

Then there’s the food-or-fuel issue. The cereal grain required to produce enough ethanol to fill the fuel tank of an average-size car would feed one person for a year. In 2000, some 70 per cent of global corn imports came from the U.S., but that important global food supply has largely been redirected to ethanol production. So while U.S. Corn Belt farmers buy bigger tractors and more expensive pickups, international food-focused non-governmental organizations such as Oxfam cite biofuels as contributing to food supply shortages and price increases that disproportionately hurt the world’s poor.

What about the environmental impacts of producing palm oil for biodiesel?

Indonesia is the world’s largest producer of palm oil and the island of Borneo, in particular, is a great place to produce it, provided you first burn one of the world’s most important rainforests. A visit to this land is a depressing lesson in the unintended consequences of actions taken by politicians half a world away. I have witnessed the lung-choking smoke as hundreds of thousands of square kilometres of rainforest were burned to create huge industrial palm tree farms. The same scenario is playing out in remote parts of Indonesian Sumatra.

How ironic that decisions aimed at environmental benefit are permanently destroying the lungs of our planet, obliterating the way of life of aboriginals who have lived in harmony with nature for centuries, and wiping out habitat for endangered species like orangutan.

A Natural Geographic article entitled biofuels: The Original Car Fuel, states “Gasoline and diesel are actually ancient biofuels… made from decomposed plants and animals that have been buried in the ground for millions of years.” Trying to replace these ancient biofuels with fuels made from plants grown today is one of mankind’s greatest environmental blunders.

Gwyn Morgan is a retired Canadian energy industry leader and current board member and past CEO of EnCana.

The post Biofuels are mankind’s greatest blunder appeared first on Manitoba Co-operator.

The coal under the boiler was USDA’s forecast farmers intend to plant 93.6 million acres of corn this year. That figure is two million acres more than anyone had dared to even think and 3.5 million acres more than the average best guesser had guessed.

Market sages stared at the number as if it was the sun: blinding, searing, killing. Soon, though, most began to scour record books for a historical fact or figure that might put the number into a more hopeful light.

The search hit pay dirt when Alan Brugler, a contributing analyst at DTN, uncovered a gem: corn, he offered, “has seen final acreage below the March intentions in 13 of the past 20 years.” The “largest swing in the last 20 years” was 3.073 million acres. A drop of that size this year, he noted, however, would cut trendline production by just “500 million bushels.”

Nothing can be done, though, to reduce the 1.8 billion bushels we’ll still have in the bin when the 2016 harvest begins. The world feed grain picture is worse; 21 per cent of the previous crop, or 207 million tonnes, will remain when the new marketing year begins.

And, yikes, now the U.S. might plant 93.6 million acres of corn this year?

Yes, of course, that’s crazy. For more than 20 years, though, American farm policy often has encouraged farmers to produce first, then figure out what to do with the market-splattering surplus.

Over those years, the handiest, most universal fix has been ethanol. Creative policy solutions to encourage or mandate domestic ethanol usage have redirected American acres toward corn (and its rotational complement, soybeans) and away from other crops like cotton, wheat, and oats.

Indeed, as U.S. corn-based ethanol production ballooned from 848 million gallons in 1990 to 14.8 billion gallons in 2015, American corn acres soared from 74.5 million to this year’s anticipated 93 million-plus.

Across those same 25 years, however, all wheat acres have plunged from 77.3 million to 2016’s forecasted 49.6 million, and oats have virtually disappeared, dropping from 10.4 million acres in 1990 to just 2.7 million this year. Cotton has been affected, too, with acreage swinging from 12.4 million in 1990, to 15.5 million in 2000, to an anticipated 9.5 million acres in 2016.

Ethanol policy, also, changed between 1990 and 2016. Federal and a patchwork of state tax breaks, as well as tariff protection against imports, were traded for an escalating, mandated Renewable Fuel Standard.

The number of ethanol plants nationwide, according to the Renewable Fuels Association, has gone straight up, from a handful in 1980 to 214 last year. And, those plants, claims the RFA, “supported 85,967 direct jobs” — whatever that means — “as well as 271,440 indirect and induced jobs.”

All these ethanol-related numbers — with the exception of the RFA’s squishy “jobs” numbers — are inarguable. Also inarguable is ethanol’s dominating role in U.S. ag production. No matter where you farm or what you farm, ethanol now drives many of your farm’s choices and decisions.

Where would the nation, its farmers, livestock growers, and rural America be today had ethanol not been given such a protected, oversized role in U.S. farm and energy policy during the last 25 years?

More to the point, as farmers, their bankers and input suppliers stare blankly at another year of record-shattering corn production and bleak corn prices, what role should it play in the future?

Those are fair questions and, sooner or later, someone will ask them. As such, maybe we in agriculture should do the asking since we’re going to be the ones needing the answers.

Alan Guebert is an award-winning agricultural journalist and expert who was raised on a 720-acre, 100-cow southern Illinois dairy farm. He writes a weekly column that is regularly published throughout the U.S. and Canada.

The post U.S. farmers have an ethanol addiction appeared first on Manitoba Co-operator.