Tuesday, February 09, 2010

Ethanol: The Real Growing Problem

The White House this week released the report, "Growing America’s Fuel." The report, created by President Obama’s Biofuels Interagency Working Group, "lays out a strategy to advance the development and commercialization of a sustainable biofuels industry to meet or exceed the nation’s biofuels targets."

I have been a critic of the use of conventional biofuels (i.e., corn-based ethanol) to satisfy the U.S. Renewable Fuel Standard (RFS), and unfortunately, this report does little to encourage optimism that our reliance on corn as our primary source of alternative fuel is going to change anytime soon.

Although the report espouses the need for, and support of, additional next-generation biofuels, the report also indicates support for expanded corn-based ethanol production. Noting that the current RFS “has effectively placed a 15 billion gallon cap on ethanol production from corn starch as part of a new 36 billion gallon target for 2022,” the report then states that “there are opportunities to develop new markets for corn-based ethanol that can provide improved economic stability, increased rural wealth and reduced use of petroleum based feedstocks.” Thus, the report appears to question the value of capping the use of corn-based ethanol to satisfy the RFS, while also encouraging expanding the market for such products. I am all for economic stability, increased rural wealth, and reduced use of petroleum, but I remain skeptical corn-based ethanol has a proper role in achieving those goals.

Beyond that, even in identifying problems related to ethanol production, the report is a cause for concern. The report argues “As more farms and forests are utilized for biofuels production, careful consideration of feedstock production practices and location of biomass conversion plants will be required to avoid serious impacts on existing food, feed, and fiber markets and the quality of natural resources upon which we all depend on for clean air and water.” This, it seems to me, has the analysis wrong.

The better report language would be: “Because feedstock production practices and location of biomass conversion plants could seriously impact existing food, feed, and fiber markets and the quality of natural resources upon which we all depend on for clean air and water, careful consideration of using more farms and forests for biofuels production is necessary.”

Alas, no one asked me.


Anonymous Anonymous said...

I think the reluctance to establish a hard cap is the acknowledgement that the efficiencies in farming continue to develop and impress. There has been NO increase in land allocated for corn ethanol use while productivity increases substantually every crop.

2/10/2010 9:20 AM  
Anonymous Anonymous said...

It's and known fact that ethanol has 75% of the energy per gallon that gasoline has, The main fact however is that ethanol is made from an energy source that is renewed every year. It is produced from a farm product that is currently in oversupply. Currently the price of corn is dropping and is about one half the price it was at the end of 2008. The corn versus fuel argument has been found to be false. We can now see that American farmers can produce both food and fuel.

2/10/2010 10:11 PM  
Blogger Josh Fershee said...

On a large scale, the food versus fuel argument is hardly settled, but there is a lot more embedded in the issue of using corn for ethanol than simply food versus fuel.

Even with subsidies, ethanol is only competitive when gasoline sells at $2.65 gallon (i.e., more expansive than it is right now in much of the country). The price of corn is dropping in part because the price of oil is relatively low, and both can be expected to change. Beyond that, corn production relies heavily on petroleum products, so while corn is renewable, its entire production cycle is not.

To be clear, I don't hate ethanol, and I don't hate corn. However, corn-based ethanol is not a long term solution and has minimal short-term benefits. As such, I simply don't think any more time, effort, or money should be spent expanding corn-based ethanol programs.

2/11/2010 9:57 AM  
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3/19/2010 2:07 PM  

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