15 Sep 2008

The Corn Ethanol Juggernaut

Oil isn't America's only fuel addiction. Inefficient and environmentally damaging, the corn-ethanol boondoggle will nonetheless be hard to stop.
By robert bryce

The huge corn ethanol mandates imposed by Congress a few years ago may be the single most misguided agricultural program in modern American history. That’s saying something, but consider the program’s impact: higher global food prices, increased air pollution from burning ethanol-spiked fuels, spreading dead zones in the Gulf of Mexico from a surge of fertilizer use, and strong evidence that growing a gallon of corn ethanol produces just as many greenhouse gases as burning a gallon of gas.

Why then, given these many problems, hasn’t Congress rolled back the mandates and stopped this boondoggle?

The answer can be boiled down to a few salient realities of American politics and agricultural policy. First, even in the subsidy-rich world of U.S. agriculture, corn is king. Second, the power wielded by the farm state lobby remains enormous. Third, Iowa is Ground Zero for corn, and its pivotal presidential caucuses leave even supposed change agents like Barack Obama bowing before the altar of corn ethanol.

And, finally, once a juggernaut like corn ethanol gets rolling with massive federal support and mandated production levels, bringing it to a halt is enormously difficult — even when study after study shows that relying on corn ethanol as a cornerstone of an alleged renewable energy policy is folly.

The corn sector has long enjoyed staunch backing from Congress. According to the nonprofit Environmental Working Group, between 1995 and 2006, federal corn subsidies, which are provided through a myriad of programs, totaled $56.1 billion. That’s more than twice the amount given to any other commodity, including American mainstays like wheat and cotton, and 105 times more than was paid to tobacco farmers.

Corn ethanol production has long been a favorite of farm state legislators in Congress, who have promoted the fuel as an alternative to the evils of foreign oil. Congress approved the first ethanol subsidies in 1978, just a few years after the Arab oil embargo of 1973. “It makes for a good public image — supporting the farmer, supporting the rural economy,” says Thomas Elam, an Indianapolis-based agricultural economist. The problem, he says, is that “it’s a special-interest program that spreads the cost of the program across the rest of the economy.”

Elam says that the farm lobby collects tens of millions of dollars a year to lobby lawmakers at the state and national levels. States like Iowa and Ohio have their own ethanol associations, which work in tandem with national groups like the Renewable Fuels Association. In 2006 alone, that group collected about $3.7 million in dues from its members and paid its president, Robert Dinneen, a salary of $300,000 to push the ethanol-is-good message on Capitol Hill.

Additional support for the ethanol mandates comes from groups like the American Corn Growers Association and its larger cousin, the powerful National Corn Growers Association (NCGA), which reported 2006 total revenue of $8.6 million. The NCGA has some 33,000 dues-paying farmers spread among 48 of the 50 states. On its Web site, the NCGA makes it clear that it aims to “increase ethanol demand” by establishing a federal program that is “part of a comprehensive energy policy.”

These interest groups will spend millions of dollars “to keep the mandate where it is,” says Jan Kreider, a professor emeritus of engineering at the University of Colorado, who has been studying motor fuels for three decades. “It’s a massive political battle to even slow it down,” says Kreider. “Once the mandates are in, it’s almost a one-way street. It could take decades to whittle down the size of the mandates.”

It’s a massive political battle to even slow it down... It could take decades to whittle down the size of the mandates.”
The staying power of the ethanol mandates is largely due to the decades-long influence of the farm state delegations on Capitol Hill. As former Sen. Bob Dole of Kansas once explained to Texas oil baron T. Boone Pickens, “There are 21 farm states, and that’s 42 senators. Those senators want ethanol.” And the influence of those senators — 15 states now have ethanol production capacity of at least 200 million gallons per year —will be hard to overcome.

Cutting the ethanol mandates will require jousting with two of the most powerful members of the Senate, Republican Charles Grassley and Democrat Tom Harkin. Both are Iowans. Both are ardent ethanol boosters. And Harkin is the chairman of the Senate Agriculture Committee. Harkin’s position gives him tremendous leverage over any ethanol-related legislation that comes before the Senate.

Which brings us to the Iowa Imperative. Any candidate who wants to win the White House must have a good showing in the very first presidential primary – the Iowa caucuses. “Candidates have to come here and suspend all critical judgment,” says David Swenson, an economist at Iowa State University. “There is a knee-jerk reaction in Iowa that if you don’t support our special interests then you don’t love us and we won’t vote for you – and that’s true even though the vast majority of Iowans don’t have anything to do with farming and wouldn’t know a crop if it fell on them.” The imperative can be explained by looking at the numbers: Iowa now has about one-third of the ethanol production capacity in the U.S., and those ethanol plants provide jobs for several thousand Iowans.

Barack Obama understood the Iowa Imperative. And his strong support for ethanol helped him win the Iowa primary. That win validated his campaign and was a key factor in assuring that he won the Democratic nomination. And the farm lobby is rewarding Obama. On Aug. 22, the American Corn Growers Association endorsed Obama.

On the Republican side, John McCain, a long-time ethanol critic, tied for third in Iowa. In August 2006, six months before the Iowa vote, McCain switched sides in the ethanol debate, telling a crowd in Grinnell, Iowa, that ethanol “is a vital alternative energy source not only because of our dependency on foreign oil but its greenhouse gas reduction effects.”

McCain has since switched sides again and is now co-sponsoring a bill — introduced in May by Texas’ Kay Bailey Hutchison and 10 other Senate Republicans — to freeze the ethanol mandates. Hutchison argued that the ethanol mandates needed to be limited because they were driving up the price of corn and were “clearly causing unintended consequences on food prices for American consumers.” Her bill would limit the volume of corn ethanol to be blended into gasoline to no more than 9 billion gallons. But current federal rules mandate far greater production: U.S. oil refiners must be using at least 15 billion gallons of ethanol per year in their gasoline by 2015 and 21 billion gallons by 2022. Such a sharp increase by 2022 would principally be reached by making ethanol from other materials like switchgrass and wood chips. But this “cellulosic ethanol” has never been produced in commercial quantities.

Hutchison’s bill, S. 3031, is stuck in the Senate Environment and Public Works Committee. A hearing has not even been scheduled.

In early August, the Environmental Protection Agency denied a request by Texas Gov. Rick Perry to allow his state to opt out of the federal ethanol mandates. Lower corn prices are a critical issue for livestock producers in Texas who have been hit hard by soaring corn prices. In denying the request, E.P.A. Administrator Stephen L. Johnson said that the ethanol requirements are “strengthening our nation’s energy security and supporting American farming communities” and are not causing severe harm to the economy or the environment.

Furthermore, Congress has passed rules that make it hard to waive the mandates. The Environmental Working Group is one of several environmental groups that are fighting to slow or reverse the ethanol mandates. The group’s Michelle Perez, a senior analyst for agriculture, was not overly surprised that the EPA rejected the Texas request. “Congress set the bar pretty high for states to demonstrate environmental and economic harm in order to get the mandate waived,” says Perez. She points out that Texas applied for a waiver based only on the economic harm being done by the mandates. The state would likely have made a stronger case had it sought a waiver based on both economic and environmental harm, Perez says, noting that her organization has begun providing testimony to the EPA on the environmental impacts.

Any sustained attack on the ethanol mandates would have to counter the enormous amounts of capital that have been invested in the corn ethanol sector. The industry’s momentum can be measured in the billions of dollars. According to the Renewable Fuels Association, the trade group, some 168 ethanol distilleries with an annual capacity of 9.9 billion gallons are now operating in the U.S. Those plants are spread among 26 states, and another 43 plants are under construction or are being expanded. If you assume that each of those 200-plus plants costs $75 million to construct (a conservative estimate), the total cost of those distilleries is about $15 billion. If the federal mandates are eliminated or rolled back, the owners of the ethanol plants could seek compensation from the federal government.

So the mandates continue, despite at least 10 studies — including one this spring by the World Bank — showing that the surge in U.S. corn ethanol production is forcing up global food prices. On the environmental front, a spate of studies has shown that the production of corn ethanol likely creates more greenhouse gases than conventional gasoline. Due to the energy-intensive nature of the cultivation and distillation processes, ethanol produced from corn yields very little, if any, benefit. Clean-air advocates also contend that the growing use of ethanol in gasoline is increasing the amount of smog in America’s cities. William Becker, executive director of the National Association of Clean Air Agencies, which represents air pollution control authorities across the U.S., said Congress “decided to mandate ethanol without first analyzing the air-quality impacts.” Gasoline that has been blended with 10 percent ethanol may be more volatile than conventional gasoline, which means more light hydrocarbons — and ground-level ozone — are emitted into the air. For Becker, the conclusion is crystal clear: “More ethanol means more air pollution. Period.”

More ethanol means more air pollution. Period.”
Corn ethanol production has negative impacts on water quality. Researchers say that a key reason for the growing “dead zone” of oxygen-depleted water in the Gulf of Mexico is the increased planting of corn to meet the soaring demand from ethanol distilleries. That additional acreage has resulted in increased applications of fertilizers like nitrogen and phosphorus, which are then washed into the Mississippi, helping create the algal blooms that cause dead zones.

The controversy over the ethanol mandates will undoubtedly go on for months, or years, to come. But even if Congress repeals the mandates and eliminates the subsidies for ethanol production, the ethanol industry will not shut down. Even without federal supports, some distilleries will still be profitable. And their profitability will be directly linked to the price of oil: As the price of oil continues to rise, some of the most efficient ethanol producers will be able to compete with high-priced gasoline.

No matter what Congress decides to do in the future with regard to the ethanol mandates, it has birthed an industry that has an incentive to burn food in order to fuel cars. And the ramifications of that move — in food prices and environmental effects — are likely to reverberate throughout the global economy for years to come.


Robert Bryce is an Austin, Texas-based journalist who has been writing about the energy sector for nearly two decades. His lastest book is Gusher of Lies: The Dangerous Delusions of “Energy Independence.”

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As an environmental engineer in the energy industry including developing renewable energy, it is hard to find a more effective legislation than the 2005 Energy Bill. Ethanol is just one example. It just a matter of a few years, more than a hundred ethanol plants have been built and corn ethanol is in our gasoline supplies. The US is doing what it set out to do.

Having read many life cycle analyses on biofuels, there is no reason to believe that corn ethanol is not a good choice that will lead to better choices. Simple put, there is no basis for the author’s objections.

There is a systematic approach for protecting the environment while producing energy that includes LCA, root cause analysis, and design for the environment. At some point we have to step forward and find out what works. Time will tell if ethanol is a good choice.

While my evidence about the benefits of ethanol is clearly antidotal, there is a surprising lack of response from our academic community. Bryce commits the sins of location and blame. Clearly, a good choice for agricultural states might be different a good choice for Texas. There are an infinite number of good choices. One can always find a list of issues but to blame corn ethanol without a corn ethanol being a root cause of the problem only show that the author has an agenda.

Posted by Kit P on 16 Sep 2008

Corn ethanol is not a silver bullet, and several of
the negative impacts noted by Bryce are serious
issues that must be addressed – the soil and
water quality impacts of corn production are
perhaps the most pressing of these. But corn
ethanol isn’t the demon described in Bryce’s
piece either. For example: (1) The impact of
ethanol on VOC emissions depends on the
gasoline blend; sweeping statements like “more
ethanol means more air pollution, period” are
unsubstantiated. (2) The GHG impacts of corn
ethanol depend greatly upon the method by
which it is made, with some plants achieving
20% or better reductions. While 20% is not
nearly as great as the 100% that one would hope
for in an ideal biofuel, it’s a non-trivial amount.
(3) The suggestion that we are burning food to
fuel cars ignores the fact that most of our corn is
used as animal feed, and that a large fraction of
the protein in corn remains available as feed
after producing ethanol. (4) Texas likely didn’t
make a strong claim regarding environmental
harm because the data’s not there to support it.
(5) Cellulosic ethanol is still in its early stages,
but the investments in corn ethanol have
attracted venture capital to this area – and we
can hope for even greater GHG emission
reductions from these systems (approaching
90%). Does Bryce think that we should sit on our
hands and stop working on alternatives? What
exactly is his vision for a future transportation
energy source, and does he subject other
current energy sources and alternatives to the
same level of scrutiny as he has corn ethanol?
(The wide deployment of battery or fuel-cell
technologies will have their own non-trivial life-
cycle implications.) (6) As a multitude of studies
have shown, crop prices have increased for a
myriad of reasons, with corn ethanol being one
of them. Bryce manages to imply that it’s the
only one, and also that increased crop prices are
a universal evil – in fact, for years the global
development community has worried about low
crop prices helping impoverish farmers in poor
countries. (7) By most accounts, corn grain
ethanol has been good for U.S. farmers and U.S.
taxpayers. Despite the argument that we are
burning food to make fuel and depriving the
world of corn grain, U.S. corn exports rose 6
percent in 2007; a $3 billion ethanol subsidy
reduced crop support payments by $6 billion,
and reduced the US trade deficit by more than
$20 billion. Most economists agree that the
increase expenditure of U.S. consumers for food
has been more than offset by reduced fuel costs
and taxes.

Posted by Raj Raman & Rob Anex on 16 Sep 2008

The only real hope is the electric car (and nuclear
power). Pray that the Chevrolet Volt is a success.
Otherwise, as you say, there is no stopping this
train, no matter how illogical.

Steve K

Posted by Stephen J. Kennedy on 19 Sep 2008

@Raj & Rob: Good points. Despite the negatives
Bryce points out, some of which are arguable, I
believe ethanol will be important at least as a
"bridge" because it integrates so easily into the
existing gasoline infrastructure. Similarly, I think
BMW is on the right track with their
gas/hydrogen engine: for the near term, it is
best to hedge our bets and increase the
diversity of power sources, then as each comes
online we will be better able to accurately weigh
costs vs. benefits as we transition away from a
total dependence on petroleum.

@Steve K: Electric vehicles merely move the
pollution from the tailpipe to the smokestack, as
most of our electricity comes from burning coal,
oil, & gas, Worse, they introduce the
inefficiencies of transmission lines, batteries, &
motors to the equation, such that emissions per
mile travelled may actually be higher than a
vehicle with a modern internal combustion
engine. I have also not seen a good comparison
of the end-user's cost per mile for electric vs.

@Kit P: We can only value your argument by
the quality of its language, which does not
suggest expertise.
Posted by Doug on 19 Sep 2008

Any biofuel produceses CO2 emissions, and with them being sold to the public as an answer to our enviormental problems it makes them very dangerous to the earth and our children. If we dont say no to people who are just out for profit no matter what the cost then we lose. The obvious answer is wind, solar, and tidal produced power to make hydrogen out of water . The hydrogen will power cars, and anything else , it dosent pollute , it is accessible to everyone. No one dies or hurts the earth to acuire it.
Posted by Daniel Thorne on 21 Sep 2008

To Daniel:

Which is more likely: That we will make hydrogen through electrolysis, with renewable electricity as the power source, or that we will make hydrogen from natural gas?

For a quick and dirty answer, find out where the H2 gas used as feedstock in ammonia production (which eventually becomes fertilizer) comes from. Here's a hint: Wind turbines aren't generally found next to chemical plants.

Alternatively, because we are concerning ourselves with the transportation industry here, have a look at

Draw your own conclusions.
Posted by DugglesG on 21 Sep 2008

While I agree with Mr. Bryce's comments, he missed one point that looms very large. America can no longer sell its corn overseas due to concerns redarding genetic modification and the resulting damage to organic and other corn varieties. No longer is America the corn supplier to the world, so if we can't sell it, I guess we have to burn it.

Jim Gerweck
Posted by jim gerweck on 24 Sep 2008

Making plastic out of food

My company sells oxo-biodegradable disposable plastic items. I am really worried about the strong movement to make plastic out of food under the guise that it is sustainable and compostable. There are 54,000,000 tons of plastic bags and wrappers made every year. If we made that out of food, it would equal 7% of the wheat + corn grown every year. Add that to the amount of corn being turned into gasohol and it is getting really scary.

That is a lot of food, with over 850 million hungry people in the world who don't get enough to eat right now. We propose an alternative-read about it at our website at:
Posted by Tim Dunn on 26 Sep 2008

Due to the length of an opinion essay arguments and facts to support opinions are necessarily limited. I have read and recommend Robert Bryce's book "Gusher of Lies." Ethanol is a terrible solution. Again see the book.

The "bridge" solution is methane generated electricity. In 1999 BMW built a car to run on methane using a solid metal oxide fuel cell that powered the electric motors. Energy efficiency went up from 25% to 65%. The car cost the same as any other 1999 model.

With the addition of BASF's commercialization of work by Dr. Omar Yaghiat at UCLA , to produce essentially molecular sponges, the methane can now be stored at 3-4 atmospheres of pressure rather than as CNG at 60 to 70 atmospheres of pressure.

A further advantage of methane based energy solutions is the infrastructure already exists to produce, distribute, and deliver. Billions will have to be spent to create a new infrastructure for hydrogen.

To the uniformed Texas is 12th in state corn production and gets its fair share of king corn subsidies. I applaud a Texas senator challenging these subsidies.
Posted by Earle Stone on 01 Oct 2008

The state of California has passed a law, assembly bill number 2417, stating that the words biodegradeable, oxo-biodegradable, degradable, and every possible synonym for those words, in effect, belong to the corn-based plastics (PLA) industry. No biodegradable plastic made out of naphtha, an otherwise useless industrial byproduct, may be labeled biodegradable, nor any synonym thereof, may, given current technlogy, be called biodegradable, even if they do, in fact, biodegrade in one day longer than 120 days. This is true even if the biodegradable plastic alternatives are far more likely to biodegrade in a landfill that the corn based plastic alternative. The net effect of this is to increase the demand for corn based plastics. The result of making non-food items out of corn has driven a price spike in the world grain supply that threatens hundreds of millions of impoverished third world citizens with starvation.

A further effect of this is to deny the citizens of California the benefits of new technology that makes inexpensive, recyclable, disposable plastic products-garbage bags, shopping bags, plastic cutlery, straws, styrofoam cups and containers, deli containers, soda bottles, etc. etc. The corn based plastics cannot be recycled under in any existing system in place in California, whereas the naphtha based biodegradable plastic alternatives can. In fact, the recycling lobby is trying to ban corn based plastic bottles, because it gets confused with PET, and wrecks their recycled PET plastic batches.

Who is behind this? I can't prove it, but I strongly believe that Cargill Inc. and Dow Inc. have been working behind the scenes to create this spike in corn prices, with no concern whatsoever for the lives of hundreds of millions of people who struggle to find food every day. Cargill has acquired the 50 percent interest in Cargill Dow LLC previously 100% owned by Dow Chemical Co. and has renamed the company NatureWorks LLC. That's right, that friendly neighbor Dow that brought you napalm and Agent Orange. Cargill is a huge company that has a great interest in making things besides food out of corn-including gasohol, biodiesel, and plastic-no matter how many millions of children in the third world starve to death as a result.

Campaign contribution laws in this country are so lax that I don't think they even had to break the law to get away with this appalling tactic. I doubt whether Archer Daniels Midland, another corn products juggernaut, is sitting quietly by, and ignoring candidates and legislators hungry for donations, either.

Our (completely recyclable) plastic products biodegrade in the ground in 9 months to 5 years, but we cannot label them biodegradable in the State of California. The ASTM standard that California law refers to is a standard that requires high temperatures and frequent mixing-none of which happens in landfills. IMHO the California standard is in fact likely to mislead the public into believing that their corn based plastic products will degrade under circumstances that do not describe an ordinary landfill. Tim Dunn,

Posted by Tim Dunn on 29 Jan 2009

As a chemical engineer I am no stranger to energy and mass balances which are fundamentally at the heart of the “renewable’/carbon neutral discussion. IF ANY fossil fuel or fossil based energy is involved in any part of the process you cannot be carbon neutral. Therefore, corn based ethanol or any agricultural bio fuel for that matter is NOT carbon neutral PERIOD. The only way to be carbon neutral is to have every part of every step of the process including; land prep, planting, fertilizing (manufacture and transportation), irrigation (water processing and pumping), harvesting, transportation of all raw material to the ethanol plant, operation of the ethanol plant, transport and distribution of the product ethanol – all of this must operate on the same ethanol or bio fuel that is being generated from that same land in the first place. Theoretically this is certainly possible but not practical and thus it is not being done. The reason this is impractical is that you would essentially consume all your product ethanol in the process itself. You must draw a boundary around the entire process and NOT allow any fossil based energy to enter into the boundary to test this. But alas, large amounts of fossil fuels are involved in all of these processes. Thus, bio fuels are not carbon neutral. Let’s not kid ourselves the equation is fossil fuel IN = corn ethanol OUT – this is not carbon neutral.

The ethanol yield of a bio feedstock (overall efficiency) does determine the degree of carbon neutrality. Sugar cane tends to be much better than corn since for the same input effort of fossil fuels you end up with more ethanol. Generally the yield is almost double. But, then here comes the land use argument again. If you destroy CO2 absorbing rain forest to create agricultural land to grow sugar cane you lose the net accumulating CO2 absorption impact of the forest. You must take into consider that land not used to grow the biomass for fuel would be used for food or forest which both also absorb CO2. Forest land is best since it is a long-term accumulator of carbon. From the engineering, scientific, and logical basis it is clear that agricultural ethanol simply does not work as a means to reduce atmospheric CO2. It is pabulum for the ignorant, non-scientific, and emotional, global warming zealots, while providing brownie points for politicians to keep them in office.

None of this analysis addresses all of the other concerns, in particular the logic of growing food for fuel and the other negative impact of converting more and more land for non-food crops and removing them form alternative better use. Land is a limited resource! If you are attempting to reduce CO2 the only answer is to generate energy from non-combustion sources such as Nuclear, Wind, Solar, Hydro and the often overlooked Efficiency. Efficiency is the reduction in consumptions which is equivalent to non CO2 generation.

Posted by mikeg on 21 Mar 2009



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