CORN AND THE TAXMAN

Periodically agribusiness manages to get the politicians and the bureaucrats excited about throwing your tax dollars down a deep dark hole called "alternative fuels", ethanol in particular.  The latest ethanol craze comes from the hysteria over this summer's spike in gasoline prices (and hysteria is the word, seeing that last summer's spike was in fact higher and in any event prices have already dropped by almost a third).

Ethanol is an alternative to gasoline made from corn.  You can pump it into your car just like gasoline, which will run fine on it.  So ethanol is an alternative fuel that is practical for ordinary people to use without much fuss.  Plus, people like the idea of growing "gas" right here in our own backyard instead of importing petroleum from all those foreign hotspots.  So why not use the stuff?

No reason, except that ethanol is competitive with gasoline only because your tax dollars are subsidizing well-heeled corporations to distill corn into ethanol -- and increased production of this fuel is predicated upon public funding of new ethanol plants.  Now, some might say that this tax subsidy is good policy, because it will reduce our dependency upon foreign oil.  No, it won't.  The prospect of bio-fuels substantially displacing fossil fuels like petroleum is a myth.  This is because, as I have noted elsewhere, there is not enough land in this country to grow the biomass needed to dispense with petroleum, let alone coal and natural gas.

But you don't have to take my word for it.  On Saturday the Grand Rapids Press ran an opinion piece by Kenneth Piers, a professor of chemistry at Calvin College.  Prof. Piers noted that: [1] Michiganders consume about 5 billion gallons of gasoline annually; [2] if EVERY bushel of corn grown in Michigan were distilled into ethanol that would produce only 617 million gallons of ethanol; [3] a gallon of ethanol provides only 65% of the energy of a gallon of gasoline; and finally -- this is the kicker -- [4] the production of 1 unit of ethanol energy requires 3/4 of a unit of petroleum energy (to plant, fertilize, harvest, dry, transport, and distill corn into ethanol among other things).

According to Prof. Piers the bottom line is that ethanol would replace at most 100 million of the 5 billion gallons of gasoline Michiganders use every year, or two percent, and only if the state's entire corn crop went into the production of ethanol.  That means no corn for food, including feed for animals we use for food.  In other words, ethanol replacing gasoline -- it ain't gonna happen.  So, Prof. Piers's closing remark should give us pause about feeding the taxman any more of our dollars for the ethanol boondoggle:  "Before we rush into large investments in corn-to-ethanol plants with publicly-funded incentives, we should ponder the realities ..."

Comments

[Steve Goulet]

This is a good example of where a little common sense can bring together rational thinkers from both sides of the "sustainability" debate. The problem with Ethanol is that the EROEI (Energy Returned On Energy Invested) is very low, which makes it a money loser until the EROEI of naturally occurring fossil fuels drops below that of ethanol. Since fossil fuels are used to create ethanol, ummm, we have a problem.

EROEI is becoming an important tool to measure the viability of alternative fuels (http://en.wikipedia.org/wiki/EROEI). The so called "hydrogen economy" is another example of a much hyped alternative that is actually EROEI negative. In other words, we burn more fossil fuel energy to power a hydrogen fuel cell car than we do for a normal gas powered car. Brilliant.

Wind and solar are currently much better alternatives as a function of EROEI (compared to Ethanol and Hydrogen), but they don't help solve the huge problem of falling EROEI for petroleum because you can't power a car with solar or wind.

From the article on EROEI above: "When oil was originally discovered, it took an average one barrel of oil to find, extract, and process about 100 barrels of oil. That ratio has declined steadily over the last century to about three barrels gained for one barrel used up in the U.S. (and about ten for one in Saudi Arabia)."

Hmmmm, that might be a problem some day.

[Brian Post]

I also read Professor Piers article in the Grand Rapids Press. While I agree with the overall conclusion that ethanol cannot replace gasoline, he also seems to present overly pessimistic numbers as "facts" to support his case. I have never seen quoted an energy density figure as low as the 65% (relative to gasoline) he uses. The studies cited on this website (http://hypertextbook.com/facts/2003/RoxanneGarcia.shtml) put that figure between 72% and 83%.

Also in the blog above, the case of "no corn for food" is also overstated. While most of the carbohydrate is removed, substantial livestock food value remains from the byproducts of ethanol production (http://www.iowacorn.org/ethanol/ethanol_12.html).

So what is the answer? Biodiesel does have significantly higher return on energy investment than ethanol. It has been correctly stated that none of the biofuels can replace oil as an energy source. But it seems that this is at least a starting point, and anyone looking for the "magic bullet" to replace oil is not going to find it anytime soon. So biofuels are not a bad beginning in this respect, conservation is a must, and a big mixed bag of renewable energy generation techniques will surely be needed.

[The Executive Director]

Hello, Steve & Brian.

I think it's great that people keep figuring out new ways of producing energy. There is plenty of room in the market for solar and wind power, and biofuels too. What I object to is forcing the taxpayers to subsidize these ventures, especially when those receiving the subsidies get to profit off the taxpayers' "investment" without the taxpayers getting any return.

Of course, the problem many see with letting the market determine which alternative energies succeed is that most of them, maybe all of them, won't. That's because fossil fuels are very compact and efficient ways of providing energy where it is needed AND when it is needed (no small thing when you must balance the inputs with the outputs of continental-scale electrical grid). The fact is that alternative energies will have their niches, but are financially, technologically, and environmentally disastrous on the large scale.

So fossil fuels rule because they work on all scales of energy needs. Only hydro-electric and nuclear power offer serious competition to the use of fossil fuels to produce electricity, and if they, especially nuclear, were more widely used to make electricity cheaper, then perhaps electric cars might become more economically practical. But NIMBY and environmental politics have severely limited the building of new dams and nuke plants.

That's not to say there is no promising technologies out there that could revolutionize the production of energy. Perhaps the conversion of microwave energy from the sun into electricity will become practical within our lifetimes, and that will put an end to the use of fossil fuels, but right now that's pie in the sky.

So, we'll remain stuck with oil, natural gas, and coal. They work. They're cheap. And there's plenty of the stuff as far as anyone can see. Solar, wind, and biomass will go nowhere, because the reality is they can't. Hydro and nuclear will remain stymied, because politics has throttled their growth.

Perversely we want the alternatives that won't work and refuse the ones that will. So, only politics, not technology, will be the solution in the medium term.

Regards, Bill