Conservative Viewpoints

"Government is not the solution…it is the problem" -Ronald Reagan

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Ethanol: Friend or foe

Posted by Stephen on March 9, 2007

The ethanol craze that seems to be taking America by storm is a confusing panacea. On the one hand, the corn filled fuel suggests an alternative to oil dependency, a positive step for the environment, and a strike against oil rich companies. On the other hand, there are questions regarding ethanol’s ability to tear the country away from its oil addiction, new environmental concerns are being raised, and oil companies don’t seem to be slowing down.

So which is it, friend or foe?

The heart land of the U.S. is upbeat about new trends. While it had become standard practice to discuss farm closings, the new discussion focuses on an increase farm production. In Stanley, Wisconsin, an ethanol plant that opened in 2002 now uses 15.5 million bushels of corn a year and puts out 42 million gallons of ethanol which, with oil prices over $60 a barrel, is a booming commodity. “Corn prices have gone through the roof, to more than $3 a bushel,” says the town’s mayor, David Jankoski. “They’re finally getting a good price for their crops.”

The plant employs 41 people directly and has also led to other hiring, such as drivers for the trucks who haul CO2, a byproduct of ethanol production, to a nearby paper plant. Other truckers take away the processed grain – a highly nutritious feedstock – to cattle farms. The business boom has crossed farm lines onto main-street and into other business sectors. In Stanley eateries are reopening and fewer businesses are closing; a trend welcomed in communities that have seen populations decline at a rapid rate in recent years as more and more farms closed down.

According to Bob Dinneen, president of the Renewable Fuels Association, ethanol is now revitalizing many of these rural communities. “I’ve had the privilege of going out to grand openings of several ethanol plants,” says Dinneen. “Standing in front of 1,000 farmers who have invested in these plants; the excitement is palpable.”

These farmers benefit in three ways: They get profits from the ethanol sales, higher prices for crops and the acreage they own becomes more valuable.

A CNN report stated that ethanol may not be the savior for oil dependency, the environment, or the economy that some are hoping for. Dave Pimentel, a Cornell University agronomist, told CNN that there are practical limitations with ethanol production that could eventually slow the excitement centered on this form of fuel.

“I wish ethanol production was a boon to the nation and the environment; it is not,” he continues, “Even if every grain of corn went into ethanol production, it would still not make the United States oil independent.”

Jerry Taylor of the Cato Institute adds “If all the corn produced in America last year were dedicated to ethanol production (14.3 percent of it was), U.S. gasoline consumption would drop by 12 percent. For corn ethanol to completely displace gasoline consumption in this country, we would need to appropriate all U.S. cropland, turn it completely over to corn-ethanol production, and then find 20 percent more land for cultivation on top of that.”

The U.S. Energy Information Administration believes that the practical limit for domestic ethanol production is about 700,000 barrels per day, a figure they don’t think is realistic until 2030. That translates to about 6 percent of the U.S. transportation fuels market in 2030.

The proof may be closer than one might think. “Look at it on a per-gallon basis,” says Pimentel. “Our latest study indicates it takes 40 percent more fossil fuel energy to produce ethanol than it creates.” Fossil fuels run farm and factory machinery, provide heat for the factories and transport ethanol to distant markets neutralizing the benefits of ethanol production.

CNN reports that corn, the No. 1 ethanol crop in the United States, requires more herbicides and insecticides to grow, needs large amounts of fertilizer, and is responsible for more soil erosion than any other U.S. crop. Furthermore, many of the areas benefiting most from ethanol production face water shortages; it takes 1,700 gallons of water to produce a gallon of ethanol, according to Pimentel.

Taylor states that according to academics from UC Berkeley who published in Science magazine last year, 5 percent to 26 percent of the energy content of ethanol is “renewable.” The balance of ethanol’s energy actually comes from the staggering amount of coal, natural gas and nuclear power necessary to produce corn and process it into ethanol.

“It’s a temporary boon for the corn belt,” says Pimentel, “that could last a while if the subsidies continue. But if Congress decides it’s a boondoggle, someone may get caught.”

Subsidies in and of themselves are problematic. Most subsidies are provided to mega farms just as they are provided to big oil and pharmaceutical companies, none of which seem to justify continued tax payer support in the face of record profits. Taylor points out that “Ethanol subsidies have risen to six times those provided to petroleum.”

Another negative side effect of the popular push for ethanol may hit consumers at the grocery store. In a Fox News report, the Department of Agriculture said that strong demand for corn from ethanol plants is driving up the cost of livestock and will raise prices for beef, pork and chicken, while meat and poultry production will fall as producers face higher feed costs. Ethanol production is supposed to take 25 percent of all corn production in 2007. Corn is the number one food for livestock, and the Fox News report stated that chicken prices will also increase as a result of corn prices which have increased the cost of feeding chickens 40 percent in the past year.

Tyson’s Food Chief Executive Dick Bond warned that, “Companies will be forced to pass along rising costs to their customers, meaning consumers will pay significantly more for food.”

There is a desperate need for the United States to use the technology at its disposal to work toward energy independence. This is a country with the technology in place but a questionable will to diversify energy sources in the way necessary for true success. Wind, solar power, ethanol, clean and safe nuclear power, and a plethora of additional sources exist at our finger tips. The only question that remains is; when will we provide the leadership necessary to move forward?

Americans hope that our sudden passion for ethanol is an all important first step toward a series of attempts to find long term solutions for a great American impasse.

Stephen Winslow is the executive editor of Conservative Viewpoints.


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