: Only in an economic environment character-ized by high oil prices, technological breakthroughs, anda high implicit or actual carbon price would biofuels becost-competitive with petroleum-based fuels.
Effects on Land Prices
Unless there are major increases in agriculturalyields or improvements in the efciency of converting biomass to fuel, an additional 30 to 60 million acres of cropland would be required to produce enough biomassto meet the Renewable Fuel Standard by 2022.Therefore, increasing biofuel production to meet theRFS consumption mandate is expected to create compe-tition among different land uses and increase cropland prices.
Effects on Food and Feed Prices
Diverting a portion of food crops, such as corn andsoybean, to biofuel production was one of the manyfactors that contributed to increasing prices for agricul-tural commodities, food, and livestock feed starting in2007. Other factors affecting food and feed pricesinclude growing global population, crop failures in other countries, high oil prices, decline in the value of the U.S.dollar, and speculative activity in the marketplace.
Although biofuels hold potential for providing netenvironmental benets compared to using petroleum- based fuels, specic environmental outcomes fromincreasing biofuel production to meet the RFS consump-tion mandate cannot be guaranteed. Some of the keyfactors that inuence environmental effects from producing feedstocks for biofuels are site specic anddepend on the type of feedstocks produced, the manage-ment practices used to produce them, prior land use, andany land-use changes that their production might incur.In addition to greenhouse-gas emissions, production anduse of biofuels affect air quality, water quality, water use, and biodiversity (see Box 1).Many processes affect the overall greenhouse-gasemissions from the production and use of biofuels; some processes result in sequestration of greenhouse gaseswhile others result in greenhouse-gas emissions. For example, carbon dioxide is stored in plants as they grow, but emissions are generated by fossil fuel combustionduring the process of manufacturing and transportingthe biofuel. Conversely, replacing an annual crop with a perennial biofuel crop could increase the amount of carbon dioxide sequestered at the site.Indirect changes in land use can also occur andaffect greenhouse-gas emissions. If the increased production of biofuel crops causes decreases in the production of commodity crops, the price of commodi-ties could increase. Farmers could respond to marketsignals and expand production of the displacedcommodity crop by converting noncropland to cropland.If the expanded production involves removing perennialvegetation on a piece of land and replacing it with anannual commodity crop, then the land-use change wouldincur a one-time greenhouse-gas emission from biomassand soil that could be large enough to offset greenhouse-gas emissions benets gained by displacing petroleum-based fuels with biofuels over subsequentyears. Furthermore, such land conversion may disruptany future potential for storing carbon in biomass andsoil. Although RFS imposes restrictions to discourageU.S. farmers from land-clearing or land-cover change,
FeedstockWillingnessto AcceptWillingnessto PayPrice Gap(Per Dry Ton)Price Gap(per Gallon of Ethanol)
Corn Stover (stalks, leaves, and cobs)$92$25$67$0.96Corn Stover in a 4-year Corn-Alfalfa Rotation$92$26$66$0.94Alfalfa$118$26$92$1.31Switchgrass in the Midwest$133$26$106$1.51Switchgrass in Appalachia $100$26$74$1.06
in the Midwest$115$26$89$1.27
in Appalachia$105$27$79$1.13Wheat Straw$75$27$49$0.70Short-Rotation Woody Crops$89$24$65$0.93Forest Residues$78$24$54$0.77