Does Oil Cause Indirect Land Use Change?

I’ve been paying a lot of attention recently to new analyses attempting to model carbon emissions from indirect land use change, which is the conversion of land needed to maintain an international balance of supply and demand for agricultural crops, an effect that is heavily determined by crop prices. These new analyses raise a question about the existing assumption that oil has zero effect on land use change.

Tim Searchinger, the lead author of one of the Science papers that brought this debate to national attention, says, for instance,

The amount of land used to produce a gallon of gasoline is extremely small — according to some energy experts we have quickly consulted, it is less than 1 percent of the amount of land used to produce a gallon-equivalent of ethanol. Much of the world’s oil is either produced in deserts or offshore or on land that still remains in productive agricultural use. Because the effect of oil production on emissions from land use change is small, it is reasonable to omit it.”

Similarly, Dan Kammen and Thomas Hertel, et al., in a recent letter to the administrator of California’s Air Resources Board encouraging the inclusion of a large indirect land use emission number for biofuels in California’s Low Carbon Fuel Standard, say,

Our judgment incorporates recognition that land use effects of fossil fuels need to be compared to those of biofuels. Briefly, petroleum (with the important exception of strip-mined oil sands and oil shale) affects tiny amounts of land compared to biofuels per unit of energy obtained. Oil is extracted from open water, from deserts, and in any case from very small land footprints.”

The statements primarily address the direct land use change emissions of petroleum, assuming that because oil does not displace crop production it does not have an indirect effect on land use. However, indirect land use change is heavily mediated by crop prices. And as we’ve seen over the past year, oil has a significant impact on crop prices.

For biofuels to meet the new U.S. Renewable Fuel Standard, they must achieve “at least a 20 percent reduction in lifecycle greenhouse gas emissions compared to baseline lifecycle greenhouse gas emissions … for gasoline or diesel … sold or distributed as transportation fuel in 2005.”

A recent paper from Purdue University professors Thomas Hertel, Wallace Tyner, and Dileep Birur, assesses land use change in the 2001-2006 timeframe as a baseline for predicting land use change through 2015 in response to the U.S. and EU renewable fuel standards. The researchers find that in 2006, grain output in the U.S. increased by 7 percent. “The majority of this (5.6% output growth) was driven by higher oil prices,” and the change did lead to declines in output of other agriculture and forestry.

Searchinger’s original paper cites an estimate of the baseline carbon emissions for gasoline of 92 tons of CO2 per megajoule, and most analyses appear to adopt that figure. And Searchinger has publicly stated that it “makes little sense to reduce fossil fuels at expense of greater land conversion” when calculating the carbon emissions.

However, there is a need to study and model the true effect of biofuels and petroleum on land conversion and carbon emissions before drawing a final conclusion.

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More Models to Measure Land Use Change

As the U.S. EPA and California’s Air Resource Board seek to implement their respective Renewable and Low-Carbon Fuel Standards, economists continue to refine models to measure and predict indirect land use change emissions associated with biofuels.

Many of the original critiques of the Searchinger paper in Science that initiated this debate commented on the uncertainty in attributing indirect land use change to biofuels. Prof. Roger Sylvester-Bradley of ADAS UK Ltd., for instance, summarizes many of the issues that must be worked out in the analysis of indirect land use change. According to Sylvester-Bradley, “Deforestation may also be driven by meat production, timber extraction, accessibility, migration, and other changes. To what extent should ILUC be attributed to the biofuel?”

A few groups have advocated dividing biofuels into groups that are more or less likely to produce land use change. E2 is a national community of business leaders who advocate for good environmental policy while building economic prosperity. They are allied with the NRDC. In a position paper they state, “Current food crops have a large indirect land-use penalty and that will continue unless productivity improvements can outpace demand for food and fuel resulting in no increase in total land use.”

Still other researchers are attempting to model and measure the exact effects of biofuels on land use change.

According to University of California Berkeley researchers active in helping to define California’s LCFS, “The market-mediated climatic land use effect of crop-based biofuels appears to be very large.” These researchers sought to quantify and validate the model originally proposed by Searchinger. They found that any ecosystem converted to crop production releases a significant amount of carbon, not just rainforests. What matters is how much the world market for crops must expand in order to meet the biofuel mandates set by the United States and other countries. According to these Berkeley researchers, many factors create uncertainty in measuring indirect land use change, including whether other crops can be substituted in meeting the demand for corn, how much yields might increase through technological innovation, how baseline demand is measured, whether additional cropland is available, as well as trade policies, regulations, and investment dynamics.

Recently, the American Chemical Society held a briefing on Capitol Hill to explore the question, “How Do Biofuels Impact Greenhouse Gas Emissions?”
Wallace Tyner, a professor of Agricultural Economics at Purdue University, gave one of the presentations at the briefing. He asked, “What do we need to consider to be able to isolate the effects of biofuels?” and presented the following short list:

  • Energy prices – major biofuels driver
  • Demand – population, incomes, etc.
  • Supply – yield increases, policy on idled land, water supply issues, environmental issues
  • Exchange rates
  • Policies in the rest of the world

Tyner recently contributed to an analysis of the combined effects of the U.S. and EU biofuel goals on land use throughout the rest of the world. The paper uses models data from 2001 to 2006 and uses it to predict rises in crop land and declines in forest and pastureland through 2015 as a direct result of U.S. and EU biofuel policies. The paper also factors in the effects that oil prices have had.