Study Indicates Renewable Energy Can Meet 25X'25 Goals

The University of Tennessee reports that renewable resources can supply 25% of the nation's energy by 2025.

Published on: Nov 16, 2006

Farmers, ranchers and foresters can supply at least 25% of the nation's energy needs with renewable resources by 2025, thus meeting the objectives set forth by the 25X'25 group, according to a research report released by the University of Tennessee. The findings of the study were unveiled Wednesday at a press conference in Kansas City.

The study was funded by the 25X'25 Word Group, Energy Future Coalition and the Energy Foundation.

By 2025, the U.S. will require 126.99 quadrillion BTUs of energy (quads). About 9.6 quads of energy will be needed for renewable sources to meet the 25X'25 group's goals.

The UT study examined two scenarios. One was to replace 29.42 quads, or 25% of the nation's expected needs, based on a RAND Corporation study, which estimates that 121 quads will be produced via geothermal, solar, photovoltaic, hydro and wind energy in 2025. That, combined with the 1.87 quads now produced from biomass, leaves a deficit of 15.45 quads needed from the agriculture and forestry industries. This scenario is called the "All Energy Scenario."

The RAND report, incidentally, concludes that renewable energy is shown in simulations to lower total energy expenditures in virtually all cases in which current energy price and technology cost trends continue, says Reid Detchon, executive director of the Energy Future Coalition, which requested the study. "Under many scenarios, renewable energy use would cost less in total than continuing with 'business as usual.'"

The second scenario examines the impact of producing 25% of the nation's electric power and motor vehicle fuel, called the EPT scenario. This would require 9.6 quads from agricultural producers. While overall benefits would be less than with the All Energy Scenario, net benefits to agriculture of this plan would be significant.

A wide range of agriculture products, from soybeans to switchgrass; corn to forest residues and stover to food waste, will be needed to fuel the U.S. appetite for energy.

To put 9.6 quads in perspective, it is the equivalent of 86 billion gallons of ethanol, 1.1 billion gallons of biodiesel and 932 billion kilowatts of electricity from renewable sources. That 86 billion gallons of ethanol will require more than 2.5 times more corn than the 12 billion bushels currently produced in the U.S.

"This is a beautiful opportunity that seldom arises in agriculture today," says Daniel DeLa Torre Ugarte, associate professor of agricultural economics at the University of Tennessee and one of the researchers.

Meeting the 25X'25 objectives would require yield increases in feedgrains, strong contributions from the forestry sector, utilization of food processing waste for ethanol and the use of 50 to 100 million acres for dedicated energy crops like switchgrass. The study uses U.S. Dept. of Energy estimates that the technology needed to produce cellulosic ethanol efficiently and economically will be available in 2012.

The cellulosic ethanol industry will create huge demand for dedicated fuel crops like switchgrass, the researchers predict.

"By 2025, we expect these crops will be grown on 100 million acres or more," De La Torre Ugarte says. "Many acres of soybeans in the Southeast U.S. will be switched to fuel crops. That's where the initial boom of energy crops will happen."

The net effect of renewable fuels on agriculture can be huge. The study estimates that using new and existing sources to provide the feedstock to meet the 25X'25 goal will add $180 billion in net farm income between now and 2025, says Read Smith, co-chair of the 25X'25 Project Steering Committee. In 2025 alone, net farm income would increase over USDA baseline projections by $37 billion.

Farmers could see price increases per bushel of $0.71 for corn, $0.48 for wheat and $2.04 for soybeans above the USDA projections for 2025, Smith adds. These higher market prices could save more than $15 billion in counter-cyclical and loan deficiency payments to farmers, based on current farm program guidelines.

An increased emphasis in grains and grasses for fuel will affect livestock producers, researchers point out. De La Torre Ugarte says livestock producers will respond by using more distillers grains and soy meal, both of which are by-products of the ethanol and bio-diesel conversion process.

"The livestock industry can adjust inventories to the realities of the market," he says.

More information about the RAND and University of Tennessee studies can be found at www.25x25.org.