U.S. Department of Agriculture: Agricultural Research Service, Lincoln, Nebraska


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CAST Commentary QTA2006-3 November 2006


Access to an adequate energy supply at reasonable cost is crucial for sustained economic growth. Unfortunately, oil prices and the need to import from politically unstable countries lowers the reliability of the U.S. energy supply and hinders economic development. Although biofuels have been identified as an important component of the national strategy to decrease U.S. dependence on imported oil, the ability to sustain a rapid expansion of biofuel production capacity raises new research and policy issues. This document seeks to identify the most critical of these issues to help inform the policy development process. The goal is to enhance the long-term economic and environmental viability of the biofuel industry and its positive impact on agriculture, rural communities, and national security.
The new Farm Bill will be a crucial driver of policies related to biofuels. Despite uncertainty related to global trade negotiations, key components of this bill must address agriculture’s role in providing new sources of energy. Because grain-based ethanol is currently the only major source of biofuel for the United States, and because the magnitude of increase in grain-ethanol production is expected to have a large impact on commodity prices, agricultural profitability, and global food security, this commentary focuses on the key issues concerning corn-based ethanol production systems during the next 5 to 10 years. Much of the discussion also is relevant to fostering development and sustainability of other biofuel systems, including ethanol from sugar crops and ligno-cellulosic biomass, and biodiesel from oilseed crops.