Fields of Fuel: Market and Environmental Implications of Switching to Grass for U.S. Transport

Commercial-scale switchgrass production is projected to involve substantial increases in agricultural land acreage, with new acres coming from a combination of conservation reserve program (CRP) acreage, other cropland currently used as pasture, a reduction of winter fallow in production rotations, and displacement of existing crop production. The displacement of existing crop production reduces domestic crop supply and generates market impacts in the form of increased prices and reduced exports for existing crops, which creates the potential for significant indirect land use impacts associated with changing commodity production patterns beyond the borders of the United States and outside the scope of this study. Domestic environmental implications are also simulated; commercial-scale switchgrass production may be associated with reduced erosion and improved nutrient pollution performance on U.S. working croplands, but projected increases in nitrogen application and the associated nitrous oxide emissions could offset soil carbon sequestration benefits and result in substantial increases in greenhouse gas (GHG) emissions from the agricultural sector. Furthermore, the loss of substantial amounts of conservation reserve program acreage and pasture land could have significant impacts on dimensions of environmental quality not covered by this analysis, including habitat quality and biodiversity.

Policy Recommendations

1. Federal biomass research programs should prioritize research on the long-term environmental impacts of scaling up production of switchgrass and other biomass crops. All projects that receive federal funds to explore crop yield improvements should be required to explicitly address the soil, water, and GHG implications of the new production methods.
2. Federal biomass research programs should also perform system-wide studies to identify potential impacts of scaled up biomass production, including switchgrass, on landscape-level ecosystem services like provisioning of habitat, maintenance of surface water quality, and support of biodiversity.
3. Reducing the uncertainty associated with carbon impact estimates of biofuels under current regulatory programs such as the federal Renewable Fuel Standard and California’s Low Carbon Fuel Standard will require increased investment in research on agricultural land-use dynamics in the United States, including regional availability of idle cropland and the returns to land in alternative uses such as pasture and forestry.
4. Payments rewarding GHG performance in agricultural production, through offsets or cost-share programs, for instance, should, wherever feasible, be awarded based on actual performance rather than assumed performance of a class of production practices. Actual performance for any given practice can be highly variable across soils and climatic regions.
5. Performance-based payments for carbon mitigation should be based on a comprehensive quantification of the impact on emissions across all changes in production practice. While no-till is generally believed to have soil carbon sequestration benefits, for instance, if a switch to no-till is accompanied by increased levels of nitrogen application, the resulting nitrous oxide emissions could offset the soil carbon benefits associated with switching to a no-till, perennial farming system. The no-till practice alone should not be rewarded without a consideration of the GHG impacts of all accompanying changes in production practice.
6. Existing and proposed policies in support of biofuel production, including the 2007 Renewable Fuel Standard and the Volumetric Ethanol Excise Tax, should be revised to include a broad array of safeguards to protect air, soil, and water quality in addition to climate.

When President Bush mentioned switchgrass in the 2006 State of the Union address, listeners across the country responded with a collective “huh?” But in part due to that highly visible endorsement, and in part due to the explosive growth of the ethanol industry and the rapid advancement of ethanol conversion technologies, this modest prairie grass species has now become a household word. As large sections of the U.S. ethanol industry push hard to move beyond the current generation of corn-based ethanol and introduce technologies that will allow use of a much broader range of feedstocks for ethanol production, increased attention is being paid to new feedstocks that have the potential to be produced at large commercial scale. In this Policy Note we explore the potential for the use of switchgrass as a domestic energy source, as well as some of the environmental issues associated with producing it at a large scale.