When fuel prices are competitive, drivers of flex fuel vehicles (FFV) will fill up with high-ethanol blends such as E85 according to a new article published in Energy Policy. Authors Sébastien Pouliot and Bruce A. Babcock, both rsearchers with BIC and faculty in Iowa State University’s Dept. of Economics, also found that the recently finalized RFS requirement for 2017 for 15 gallons of conventional biofuels is in fact achievable with current infrastructure and vehicles. Read the article in AgWired
Berkeley Bioeconomy Conference and Iowa NSF EPSCoR Consider Energy Policy Future
Bruce Babcock, BIC director, recently supported and co-sponsored the Eighth Annual Berkeley Bioeconomy Conference, held April 1-2, 2015, at U.C. Berkeley, CA.
Babcock, who is the leader of the Iowa NSF EPSCoR Energy Policy effort, saw this year’s conference as an opportunity to ensure bioeconomy research in Iowa continues even after the Iowa NSF EPSCoR grant is finished. “I thought one way to make the EPSCoR programs in energy policy sustainable was to pick the brains of smart people about what future key research topics were in the area of biofuels, bioenergy, and biorenewables policy,” Babcock said.
He tailored speaker invitations with an eye for encouraging future collaborations and projects. Babcock is the Cargill Endowed Chair of Energy Economics and professor of economics at Iowa State University.
The Bioeconomy’s Past, Present, and Future
The conference presented analyses of the biofuel sector and other renewables’ past performance and future prospects. Attendees also discussed biofuels and forestry, the global bioeconomy, and biotechnology regulation. During the sessions, Babcock presented “Land Use Changes at the Intensive and Extensive Margins” and Iowa NSF EPSCoR energy policy researcher Sebastien Pouliot presented “Willingness to Pay for E85: Evidence from Revealed and State Preferences.” Presentations and a full agenda are available on the conference website.
After seven years, the Berkeley Bioeconomy Conference lost significant funding. Fortunately Babcock provided enough support from Iowa NSF EPSCoR to give the conference one last year. “It was like a swan song for the program,” Babcock said. “They needed the support money, and I was able to tailor the invitations to meet my needs.”
As director of BIC, one of Babcock’s needs is to gather unique perspectives in order to create the best research agenda possible. “The viability of keeping research funding going at Iowa State depends on us coming up with new, innovative, and cutting-edge research proposals, projects and ideas,” Babcock said. “I put out a request for proposals (RFP) for the Biobased Industry Center for the 2015 research projects that reflected the ideas that were presented at the conference. The RFP does contain a lot richer set of ideas and projects than I would have thought of, so it did meet its objective.”
The conference was co-sponsored by Iowa NSF EPSCoR, the Giannini Foundation, the Energy Biosciences Institute, and the College of Natural Resources at U.C. Berkeley.
Article by Sara Parks. Reprinted from Iowa NSF EPSCoR
BIC’s Babcock Remarks on Future of Cellulosic Biofuels
Remarks by Bruce Babcock, Biobased Industry Center director, lead the article, “Save $270M! (and Make Biofuels Feedstocks, er, Feasible, er, Now),” published recently in Biofuels Digest. “The future of cellulosic biofuels in the United States hinges on whether three under-construction plants are successful,” Babcock said. Read the article in Biofuels Digest
CARD Policy Brief: Outlook for Ethanol and Conventional Biofuel RINs in 2013 and 2014
The US ethanol industry faces numerous challenges over the next two years. The 2012 drought sharply increased corn prices, so profit margins will be low until least the 2013 corn crops are harvested. A saturated ethanol market means that ethanol mandates that are scheduled to be implemented in the next two years can possibly be met only if ethanol prices are heavily discounted. Thus, profit margins will continue to be low even if production costs fall after the next crop is harvested. In addition, buyers of ethanol can draw on blending credits they have accumulated over the last few years in lieu of ethanol to meet their obligations under the Renewable Fuel Standard (RFS). These banked credits are called RINs (Renewable Identification Numbers) and allow the Environmental Protection Agency (EPA) track how much renewable fuels are being used. When domestic consumption of ethanol exceeds mandated levels, the surplus RINs can be banked to meet future mandates.
This policy brief by BIC Director Bruce Babcock provides insights into how the next two years will unfold in the ethanol market by focusing on whether the supply of banked RINs will be used in 2013 to help offset current high production costs or in 2014 to help offset low ethanol prices. The guiding principle of the analysis is that owners of banked RINs will use them when they have the greatest value. This principle implies that RINs will be used in 2013 until their 2013 value is equal to their expected value in 2014. The analysis indicates that because of the E10 blend wall and high ethanol production costs, a significant portion of banked RINs will be used in 2013. If, as seems likely, imported sugarcane ethanol is used to meet the portion of the advanced biofuels mandate that is not met by biodiesel meeting its own mandate, then almost all the banked RINs should be used in 2013. This result assumes that corn yields return to trend-line levels in 2014. If sugarcane ethanol is not imported to meet the advanced mandate, then fewer banked RINs will be needed in 2013 to offset heavily discounted ethanol prices. Whether sugarcane ethanol is used or not, the fundamental market forces indicate that RIN prices will be low in both 2013 and 2014.
The ability to use banked RINs increases the feasibility of meeting the 2013 and 2014 mandates and is what keeps expected RIN prices low in both years. Low future prices are why conventional biofuel RIN prices are so low today. This result, though, depends on the assumption that heavily discounted ethanol will incentivize significant amounts of additional ethanol consumption from owners of flex fuel vehicles or by an unexpectedly large and rapid movement to use of E15. If this additional consumption does not materialize, then it seems that EPA will have no choice but to waive conventional ethanol mandates in 2014 because mandated consumption will exceed the ability of consumers to use ethanol as a fuel. Such a waiver, were it to occur, would also validate current low RIN prices.Read the entire policy brief the Center for Agricultural and Rural Development Web site.
This report, along with two related publications, Updated Assessment of the Drought’s Impacts on Crop Prices and Biofuel Production and Preliminary Assessment of the Drought’s Impacts on Crop Prices and Biofuel Production, have been downloaded over 8,000 times in the period between Oct. 2012 and Jan. 2013.
BIC’s Babcock Answers Drought Questions on The Colbert Report
Bruce Babcock, director of the Biobased Industry Center and an agricultural economist at Iowa State University, recently appeared on The Colbert Report to answer questions on how the drought will affect the price of foods around the country. The Colbert Report is a satirical late night television program with a large following. Watch the video
- 1
- 2
- 3
- 4
- Next Page »