Dry conditions that continue to grip Midwestern states, damaging crops and threatening to push up food prices, stirred new debate this week after the U.S. Department of Agriculture (USDA) released crop yield projections capturing the severity of the drought. Though the U.S. is the largest producer of corn and soybeans, the report puts corn production at 10.8 billion bushels, down 13 percent from last year’s yield and 17 percent from July projections. It also slashes soybean yields, though not as sharply as corn.
The low projections are bumping up corn prices. The price spike in corn is causing some livestock farmers to turn to other sources, even candy, for their animals’ nutrition. While the USDA announced it will buy up to $170 million worth of meat to help relieve some of these farmers, low yield projections still mean feed could be more scarce next year. “I think this will help some in the short run, but what we really need is to change the ethanol mandate,” said Bob Ivey, a hog farmer and general manager of Maxwell Foods, of the USDA announcement.
Like Ivey, others renewed debate over the use of corn for ethanol production this week, putting more pressure on the U.S. to divert its corn crop to food. As required by the Renewable Fuel Standard (RFS), about 40 percent of the U.S. corn crop is currently used in ethanol production, with the rest going to food, animal feed and exports. With agricultural production in other major exporting countries such as China and India suffering and the global food price index up six percent in July, some are concerned about global shortages of certain food commodities. As some legislators called on the U.S. Environmental Protection Agency to issue a waiver of the corn ethanol RFS for the next year, the top United Nations food official, José Graziano da Silva, told the Financial Times that an “immediate, temporary suspension” of the mandate could help head off another world food crisis as poorer countries bear the burden of rising food costs. The Renewable Fuels Association urged the EPA to reject the waiver request, saying it “would do more harm than good to America’s economy and its energy security.”
Meanwhile, the federal government is poised to approve the use of sorghum to create advanced ethanol. It would join imported sugar-cane-based ethanol and domestic biodiesel to become the third “advanced biofuel” in the U.S. (Advanced biofuels produce fewer greenhouse gases over their lifetime.) A sorghum-based ethanol could be a welcome addition to the U.S. biofuel supply because sorghum is not an important ingredient in human foods (it’s mainly used as animal feed), it is more drought-tolerant than corn, and it produces the same amount of ethanol as corn using one-third less water.
Study: Temperatures May Climb 7 Degrees
If droughts weren’t enough, global warming and urbanization could cause temperatures in cities to climb seven degrees by 2050, according to a study published in the journal Nature Climate Change. That’s two to three times higher than the effects of global warming, says Climate Central’s Michael Lemonick.
One scientist affiliated with MIT is pursuing a technology that would help in droughts by mitigating water lost from reservoirs through evaporation. The technology involves coating the water with a thin layer of vegetable oil, which could possibly reduce evaporation by up to 75 percent.
Energy in the Arctic
Shell’s plans for drilling in the Arctic faced another delay—not one due to ice, but rather to failure to complete construction on a spill response barge, according to Interior Secretary Ken Salazar. “So it’s not a matter of ice. It is a matter of whether Shell has the mechanical capability to be able to comply with the exploration effort that had been approved by the government,” Salazar said. The window to drill is closing, The Wall Street Journal warns, as exploration in the Chukchi Sea must end by Sept. 24 and the end of October in the Beaufort Sea.
This came as the first comprehensive plan to manage the National Petroleum Reserve in Alaska was announced, leaving open the possibility for a pipeline to transport oil and gas from the Chukchi Sea onshore. The plan would allow drilling on half of the 23 million-acre reserve estimated to contain 549 million barrels of recoverable oil and 8.7 trillion cubic feet of natural gas.
In the renewable energy sector, wind made headway in 2011, adding about 6,800 megawatts of power generation, which made it second only to natural gas of all new U.S. electric capacity. Specifically, wind accounted for 32 percent of energy, pushing U.S. wind power capacity to 47,000 megawatts.
The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.
Clean energy could be among the hardest-hit sectors if the U.S. government does not raise the debt ceiling and then defaults on the national debt.
If there is a default, it could hurt in direct ways, by stopping payments for cash grants and loan guarantees that support many renewables projects. It could also hit innovation, by putting the Department of Energy program for cutting-edge energy technologies, ARPA-E, at risk.
A default could also hit indirectly, by pushing down the value of the U.S. dollar, as well as pushing up interest rates, which would affect financing for renewables projects that require large up-front investment.
Leaving Energy Subsidies, Credits Behind
Any kind of budget deal will have to include large spending cuts. According to a survey of experts by the National Journal, most energy subsidies and tax breaks could be cut back. Subsidies for wind and solar may fly under the radar and survive cuts—at least for a little while.
Corn ethanol subsidies are likely to face big cutbacks, following a Senate vote in June. Any plan to raise the debt ceiling would most likely include slashing the 45-cent-per-gallon credit for gasoline blended with ethanol. “We don’t need the excise tax credit,” said Chuck Woodside, chairman of the national Renewable Fuels Association, because ethanol is now cheaper than gasoline.
The tariff on imported ethanol is likely to go soon as well, reported Ethanol Producer—either at the end of the year when current legislation expires, or sooner, if that legislation is repealed by a deal on the debt ceiling.
Making Oil Go Further
Problems with the debt ceiling could have mixed effects on the price of oil, which has been rising again in recent weeks. A default would likely push down demand, but also push down the value of the dollar—which would have opposite effects on the price of oil. Lately, though, traders have been betting prices will continue to go up.
The oil the U.S. buys would go further under new auto efficiency standards Obama is expected to announce on Friday, which would require cars by 2025 to average 54.5 miles per gallon, compared with current requirements of 30.2 mpg.
During the first half of 2011, Detroit’s Big Three automakers—General Motors, Ford and Chrysler—boosted their lobbying to more than $10 million to try and shape the efficiency standards. Now, Platts reported, the major automakers have agreed to the plan.
Renewables Boost in U.K., Germany
The U.K. is dominating the offshore wind market lately, installing, in the first half of 2011, the most offshore turbines of any country—101 around the U.K., compared with seven across the rest of Europe.
But Germany is looking to catch up. Both houses of Parliament have now passed a new energy bill, which has more aggressive targets for expanding renewable energy, and includes higher tariffs for biomass, geothermal energy and offshore wind. But according to an analysis by Rhenish-Westphalian Institute for Economic Research, the transition to renewable energy is likely to be more expensive than the government has said.
A Warm Cloud
Server farms—which store and process huge amounts of data that zing around via the internet—eat up a lot of electricity, but the heat they spit out could be put to use, argued scientists at Microsoft Research and the University of Virginia. They propose putting servers in buildings, where the waste heat could heat the buildings, to save on energy—and it could also create faster, more secure networks.
The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.