CORN ETHANOL AND WILDLIFE: HOW ARE POLICY- AND MARKET-DRIVEN INCREASES IN CORN PLANTINGS AFFECTING HABITAT AND WILDLIFE? By: Rebecca Brooke Gregory Fogel Aviva Glaser Elizabeth Griffin Kristen Johnson A project submitted in partial fulfillment of the requirements for the degree of Master of Science of Natural Resources and Environment at the University of Michigan April 2009 Faculty advisors: Professor Michael Moore Professor Steven Yaffee Abstract Since 2005, government incentives have driven massive growth in the corn ethanol industry, increasing demand for corn for ethanol by 200%. Corn prices have risen to reflect increased demand, and farmers have responded by planting more acres of corn. The amount of corn planted in the United States grew by 12 million acres from 2005 to 2008. New acres for corn have come from crop switching, loss of conservation program land, and native prairie conversion, all of which affect habitat quantity and quality. This study used GIS software to map “hotspots” of corn plantings and habitat loss in the Prairie Pothole Region of four Midwestern states: Iowa, Minnesota, North Dakota, and South Dakota. These maps informed a statistical analysis that quantifies grassland bird population changes in areas experiencing high increases in corn plantings. A review of current legislation and market data revealed that government incentives are the main driver of corn ethanol expansion. We interviewed over 30 conservation practitioners to assess the potential of federal and state conservation policies and programs to mitigate the adverse effects of increased corn plantings on habitat and wildlife. Our results show that dramatic loss of habitat is occurring in the ecologically unique Prairie Pothole Region, and that populations of sensitive bird species are declining significantly in hotspots in this area. Principal among our recommendations is that government incentives for corn ethanol production be reduced; in particular, we recommend a reduction in blending requirements, which drive demand for corn ethanol. Unless changes are made, corn plantings for ethanol production will continue to expand until at least 2015, resulting in further declines of sensitive wildlife populations in one of the nation’s most ecologically important regions. ii Acknowledgements This project’s success is due to numerous individuals who generously offered their time, expertise, and support. We would like to thank Julie Sibbing and the National Wildlife Federation for providing much-needed guidance and a venue for our research findings. We also wish to thank our advisors, Professors Michael Moore and Steve Yaffee for their direction and valuable feedback throughout the length of the project. Thanks to Professor Johannes Foufopolous for his support and willingness to meet for hours on end, to Professor Bobbi Low for her enthusiasm and research guidance, and to Bobbi Lab for providing helpful feedback on our methodology. This project would not have been possible without funding from the Education Fund of America and resources provided by SNRE Technical Support and Office of Academic Programs. Particular thanks to Judy Byington, Kim LeClair, and Sondra Auerbach for their constant smiles and help. We owe a special thanks to the numerous practitioners from agencies and organizations who offered their time and expertise during interviews. We greatly appreciate their insight, willingness to talk, and tremendous commitment to protecting natural resources. We would especially like to thank Scott Stephens and Johann Walker at Ducks Unlimited for welcoming us to North Dakota and answering our questions throughout the length of the project. iii Table of Contents List of Figures v List of Tables vii List of Maps ix List of Acronyms xi Executive Summary 1 Chapter 1: Introduction 3 Chapter 2: U.S. Corn Ethanol Industry Overview 19 Chapter 3: Habitat and Environmental Impacts of Corn Production 29 Chapter 4: Federal Conservation Programs 39 Chapter 5: Four-State Focal Area 57 Chapter 6: Wildlife Populations 73 Chapter 7: Iowa State Profile 97 Chapter 8: Minnesota State Profile 121 Chapter 9: North Dakota State Profile 143 Chapter 10: South Dakota State Profile 163 Chapter 11: Four-State Comparison 185 Chapter 12: Conclusions and Recommendations 195 Citations 211 iv List of Figures Figure 1.1: Diagram of Study System Figure 1.2: U.S. Corn Ethanol Production Capacity Figure 1.3: Average U.S. Corn Price Figure 1.4: Total U.S. Corn Acres Planted 1979-2009 Figure 1.5: Research Questions and Methodology Figure 2.1: Corn Ethanol Value Chain Figure 2.2: System Diagram of Federal Corn Ethanol Laws, Incentives, and Programs Figure 4.1: System Diagram of Federal Conservation Policies and Programs Figure 5.1: U.S. Ethanol Production Capacity Figure 5.2: Total Corn Plantings 1998 to 2008 Figure 5.3: CRP Enrollment, 1999 to January 2009 Figure 6.1: Average Number of Indicator Species Sighted on Low Corn Increase versus High Corn Increase Routes Figure 6.2: Average Number of Indicator Species Sighted on Low Change versus High Change Routes Figure 6.3: Average Number of Indicator Bird Counts in Low Corn Increase versus High Corn Increase Routes Figure 6.4: Agricultural Intensity and Land-Use Category Figure 6.5: Average Number of Indicator Bird Counts in Low Change versus High Change Routes Figure 6.6: Average Number of Insensitive Species Sighted on Low Corn Increase vs High Corn Increase Routes Figure 6.7: Average Number of Insensitive Species Sighted in Low Change vs High Change Routes Figure 6.8: Average Number of Insensitive Bird Sightings in Low Corn Increase versus High Corn Increase Routes Figure 6.9: Average Number of Insensitive Bird Sightings in Low Change vs High Change Routes Figure 6.10: Western Meadowlark Population Change and Change Index Figure 6.11: Western Meadowlark Population Change and Corn Increase v Figure 6.12: Average Number of Western Meadowlarks in Low Corn Increase versus High Corn Increase Routes Figure 7.1: Land Ownership in Iowa Figure 7.2: Top 5 Crops and CRP in Iowa Figure 7.3: System Diagram of Corn Ethanol Laws, Incentives, and Programs in Iowa Figure 7.4: System Diagram of Conservation Policies and Programs in Iowa Figure 8.1: Land Ownership in Minnesota Figure 8.2: Top 5 Crops and CRP in Minnesota Figure 8.3: System Diagram of Corn Ethanol Laws, Incentives, and Programs in Minnesota Figure 8.4: System Diagram of Conservation Policies and Programs in Minnesota Figure 9.1: Land Ownership in North Dakota Figure 9.2: Top 5 Crops and CRP in North Dakota Figure 9.3: System Diagram of Corn Ethanol Laws, Incentives, and Programs in North Dakota Figure 9.4: System Diagram of Conservation Policies and Programs in North Dakota Figure 10.1: Land Ownership in South Dakota Figure 10.2: Top 5 Crops and CRP in South Dakota Figure 10.3: System Diagram of Corn Ethanol Laws, Incentives, and Programs in South Dakota Figure 10.4: System Diagram of Conservation Policies and Programs in South Dakota vi List of Tables Table 1.1: Corn Acres Used for Ethanol Production Table 1.2: Major crop prices received by farmers ($/bu) Table 1.3: State-Level Interviews Table 2.1: Historic U.S. Ethanol Refineries and Capacity Table 2.2: Renewable Fuel Standard Table 3.1: Historic Environmental Impacts of Corn Ethanol Production Table 3.2: Herbicide Use on Corn (2005) Table 3.3: Projected Environmental Impacts of Corn Ethanol Production Table 4.1: Farm Bill Conservation Programs Table 4.2: Conservation Reserve Program: USDA Farm Service Agency Table 4.3: Wetland Reserve Program: USDA Natural Resources Conservation Service Table 4.4: Environmental Quality Incentives Program: USDA Natural Resource Conservation Service Table 4.5: Wildlife Habitat Incentive Program: USDA Natural Resource Conservation Service Table 4.6: Conservation Stewardship Program (Formerly the Conservation Security Program) USDA Natural Resource Conservation Service Table 4.7: Conservation Technical Assistance: USDA Natural Resource Conservation Service Table 4.8: Farm Protection Program USDA: Natural Resources Conservation Service, Farm Service Agency, & Forest Service Table 4.9: Grassland Reserve Program USDA: Natural Resources Conservation Service Table 4.10: State Wildlife Grants: US Fish and Wildlife Service and State Fish and Wildlife Agencies Table 5.1: Average Changes in U.S. Corn Plantings, 1980s to 2000s Table 5.2: CRP Acreage Enrolled in Region, 2007-2009 Table 5.3: Top 5 Herbicides and Top 4 Insecticides Used on Corn in Study States, 2005 Table 5.4: Percent of Corn Acres Treated With Fertilizer (2005) Table 5.5: Water Usage by Crop (inches/week) Table 6.1: Indicator Species Correlations and Regressions Table 7.1: Iowa Biorefinery Locations and Capacities vii Table 7.2: Iowa Ethanol Incentives, Laws and Regulations Table 7.3: Federally Funded and Implemented Programs in Iowa Table 7.4: Federally Funded and State Implemented Programs in Iowa Table 7.5: State Funded and Implemented Programs in Iowa Table 8.1: Minnesota Biorefinery Locations and Capacities Table 8.2: Minnesota Ethanol Incentives, Laws, and Regulations Table 8.3: Ecological Profiles of Minnesota PPR Subsections Table 8.4: Federally Funded and Implemented Programs in Minnesota Table 8.5: Federally Funded and State Implemented Programs in Minnesota Table 8.6: State Funded and Implemented Programs in Minnesota Table 9.1: North Dakota Biorefinery Locations and Capacities Table 9.2: North Dakota Ethanol Incentives, Laws, and Regulations Table 9.3: North Dakota Species of Conservation Concern in the PPR Table 9.4: Federally