Can Ethanol Save The World?

There are few issues in Iowa that stir as much debate as ethanol.  Iowans love it or hate it, and for reasons ranging from thoughtful to misinformed, sincere to downright superstitious. One thing is for sure: the debate over the value of ethanol will go on as the price of crude oil continues to rise.

Iowa's politicians, preparing for the upcoming legislative session, and more importantly the upcoming election cycle, are looking at energy issues to hang their hats on. High prices at the pump, high home heating prices and an increasingly costly and unpopular war in the oil-rich middle east are all fueling a rush to move legislation ahead that will incent the use of ethanol and biodiesel.

Biofuels: Ready for Primetime?

For those who don't know the history of ethanol and biodiesel, they are what are known as "biofuels" - plant based alternatives to petroleum. "Ethanol" is ethyl alcohol, currently made in the US primarily from corn, but which can be made from nearly any plant based starch or fiber. Brazil is the world's largest producer (and consumer) of ethanol, made mostly from sugar cane. In the US, ethanol is currently used in blends of gasoline in amounts ranging from 10% (E10, the blend available at most pumps in Iowa) to 85%(E85).

 Biodiesel is ethanol's plant-based counterpart for diesel engines, and is made primarily from soy oil, though it too can be made from a range of oilseeds, the highest yielding being rapeseed, sunflower or (god forbid) hemp. It can also be made from animal fats rendered from the meatpacking industry. 

The idea of using vegetable oils for fuel is not new - Rudolph Diesel, the inventor of the diesel engine ran his first motors on peanut oil in 1895.  In 1908, Henry Ford proclaimed ethanol was the "fuel of the future" and designed his model T to run on a blend of petroleum and ethanol. So why has it taken a century for us to start using them?

It is a question, of course, of economics. With the first oil strike in Texas at the turn of the century, the modern petroleum industry was born, and the powerful corporate interests that grew up around the industry have been extremely influential in government energy policy to this day.  During the same period, farming was falling increasingly under the control of the federal government, whose role was to integrate agriculture into the support structure for America's transition to an industrial economy. In addition, ethanol, being grain alcohol, fell under numerous government taxes and regulations, and prohibition virtually killed any chance of ethanol playing a role in the growing automotive fuel market.

Only after the majority of petro-profits began to flow to the Middle East after World War Two and the nation suffered an oil crisis in the 1970's, was there a serious attempt to seek a domestically produced, renewable alternative to crude. After 30 years of struggle on the part of farmers and the biofuels industry and increasing instability in the Middle East, America's policymakers are finally waking up to the urgency of the situation. Meaningful progress on the fuel problem is necessary now, and it looks like biofuels time may have arrived.. What could possibly stand in the way?

Anti-ethanol groups latch on to study

Recently, studies by Cornell University entomologist and ecologist David Pimentel and Tad Patzek, a geoengineering professor from The University of California (and former Shell Oil engineer), have blasted ethanol as energy-negative.  According to their most recent report, it takes 29% more energy to produce a gallon of corn ethanol than it contains, and 27% more energy to make a gallon of soy diesel.  Despite reports from the USDA and Argonne Laboratories to the contrary, this study has ignited a firestorm of anti-ethanol media reports.  The study has reverberated with two groups; environmentalists who see ethanol as a major contributor to the continued move to unsustainable and environmentally damaging row-crop farming, and the petroleum industry, which sees biofuels as an imminent threat and a competitor for massive energy subsidies from the federal government. For both groups, this report is one more reason to dislike ethanol. 

Unfortunately for those who have chosen to embrace the Patzek/Pimentel report and despite it's popularity in the press, the study appears to be heavily flawed. According to Michael Wang of Argonne National Laboratories Center for Transportation Research, the data in the Patzek/Pimentel report over-estimates farm energy usage by 34%, and Wang states that " energy balance calculations for individual energy productions in their isolations could be arbitrary; results are less meaningful or could be misleading."  Of course this does not prevent Wang from quoting Argonne's own study, which shows corn ethanol as 26% energy-positive.

The argument over the energy balance of corn ethanol and soy diesel and the implications of the production system both distract from the real issue - can we use biofuel technology to reach our goal of finding an economical, environmentally friendlier, domestically produced alternative to crude oil?

New Technology, High Oil Prices

In a recent Wired cover story, "Why @!#% High Oil Prices Are Good For America", author Spencer Reiss points out that "Corn, Sugar and Soybean farmers hope rising prices can do what billions in subsidies and tax-funded research couldn't: make ethanol and biodiesel cost effective.  Smarter money is betting that using plant waste will be more economical."

The production of "cellulosic" ethanol from corn stalks, prairie grass or other plant fiber is the latest direction in ethanol development.  By using an anaerobic digestion (biodegrading) or gasification (burning) process to release the alcohol from plant cellulous, these processes could hold the answer to our current dependence on corn for ethanol and moving to new, more sustainably grown energy crops like switchgrass, sorghum and kenaf. As for biodiesel, there are many oilseed crops with a higher oil yield than soybeans - sunflower seeds, canola and hemp produce more oil per acre. These currently available technologies could greatly improve the production process for biofuels, improving the energy balance, reducing the environmental damage caused by the corn/beans monoculture, and diversifying the ag economy.  The problem is, there is no support structure in place for any of the alternatives to corn/beans biofuels. As long as federal farm policy continues to focus on subsidizing large corporate ag operations and their goals of higher yields, lower prices, consolidation of production and corporate control of everything from seed stocks to distribution, there can be no room for honest competitive markets for alternative energy crops and production techniques. 

With the onset of recent increases in energy prices, state policymakers are rushing to pass renewable fuels legislation with an eye on their stump speeches for the upcoming election more than on Iowa's long-term economic and environmental well being. One proposal, which has been on the table for several years, includes mandating a 10% ethanol blend in all fuels sold in the state.  Another would establish a RFS (Renewable Fuels Standard), which would ramp sales up to a 25% ethanol requirement by 2025. The second plan would rely on the increase use of "flexible fuel" vehicles - those cars and trucks capable of using E85. Regardless of the approach, legislators are flocking to get on board energy legislation that most had previously ignored. Economists credit a Minnesota ethanol mandate with the initial boom in Iowa's biofuels industry, and there is no question that these plans will assist in growing it further. Still, both proposals support Iowa's agricultural status quo, as neither currently include provisions addressing the need to move Iowa's biofuels production into new energy crops and new production technologies.

Increased Efficiency, Decreased Consumption

Biofuels can only serve one purpose; to replace a percentage of the fossil fuel we consume.  They are far from a "silver bullet" for our energy problem. By increasing the efficiency of the entire system, from the production of the crops grown to the design of the engines in which we burn the fuel, biofuels do have the potential to reduce dependence on fossil fuels, which has huge implications for air and water quality, human health, national security and the local economy.

Properly crafted legislation could potentially open up markets for "Green" biofuels production, researchers, farmers and engineers could make it a reality, but ultimately, the key to solving the worlds energy needs cannot be solved by legislators, farmers or even engineers. A market in which consumers understand and pay the true cost of their energy choices and the cultural changes that take place when those economic forces come to bear, is the only solution to the long-term energy problem. Although most consumers don't think about the hidden costs of fossil fuel use reflected in their auto and health insurance and income tax bills, they do understand the pain of high prices at the pump. Only then will consumers drive the market by demanding more efficient vehicles and domestically produced "Green" fuels.

Beyond the arguments on energy balance, row-crop production practices and government subsidies is the underlying problem; Americans are not being allowed to make their own energy choices. Imagine this scenario: 

Iowans have the opportunity to purchase a Brazilian-style car capable of burning 100% ethanol or a small, European style diesel SUV. They can go to their local station to fill up with sorgunol (sorghum ethanol) or hemp biodiesel, grown locally and produced in-state by a farmer-owned cooperative plant. The price at the pump of the local fuel is $2.75 a gallon (50 cents cheaper than gas or diesel) but their new car gets 40-55 mpg, so their fuel bill is much lower than it was driving their old gas SUV.  The local farmers are happy; their on-farm cost is down due to lower fuel, fertilizer and chemical bills, and the movement of acres into energy crops has pushed up corn and bean prices. The new biofuel plants and the fiber industry that has grown up to use the bi-products are providing new jobs to small towns. The US is doing less business with OPEC nations every year. US air quality is improving, and child asthma rates are down across the country for the first time in two decades.

What is standing in the way of this utopian fantasy? Is it the low energy balance of corn-based ethanol, or is it our nations current policy of "Corporate Socialism" and our own culture of consumption?