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Another Look at Ethanol

Filed under: Natural Gas, Energy, Commodities, General — Patrick Reames | April 25, 2008 @ 9:24 am (Views: 311)

I had posted an article about ethanol a few weeks ago, but I’m not done with it yet. This issue deserves to have all the bright light of examination shown on it as possible. As much as ethanol mandates are contributing to damage being done to our economy right now; they are, perhaps more importantly, having wide ranging effects around the globe.

I’m linking to this article by Deroy Murdock on National Review Online. I realize the site is a “conservative” one and that may lead some liberal leaning readers to question its motives; however, I think the observations and arguments contained in it are some of the most cogent and disturbing that I have read.

Amongst those observations:

“As ReasonOnline's Ronald Bailey observed April 8, "the result of these mandates is that about 100 million tons of grain will be transformed this year into fuel, drawing down global grain stocks to their lowest levels in decades. Keep in mind that 100 million tons of grain is enough to feed nearly 450 million people for a year" -- assuming 1.2 pounds of grain each, daily.”
…
“President Bush announced April 14 that the U.S. would provide $200 million in nutritional aid to poor countries ripped by such unrest. This may feed starving rioters, but it perversely requires that Uncle Sam allocate fresh taxpayer money to scour the mess he created by spending $8 billion in ethanol subsidies. This is like buying a new hangover cure every morning after closing a new bar every night.”
…
It would be bad enough if this human suffering and geopolitical strife were ethanol's ransom for dramatic environmental progress. In fact, ethanol is Earth-hostile.

According to the Hoover Institution's Henry Miller and University of California Davis professor Colin Carter, "ethanol yields about 30 percent less energy per gallon than gasoline, so miles per gallon in internal combustion engines drops significantly."

It takes three to six gallons of water to grow the corn for one gallon of ethanol, thus draining rivers and reservoirs.

As farmers turn forests into corn fields, they expend energy uprooting trees that produce oxygen, absorb CO2, and store carbon. Princeton University researchers calculate that this ethanol-driven arboricide has spawned a "carbon debt" that already will take 167 years to reverse.

As Princeton's Tim Searchinger said in the February 8 Washington Post, "We can't get to a result, no matter how heroically we make assumptions on behalf of corn ethanol, where it will actually generate greenhouse-gas benefits."

Meanwhile, tree killing consumes wildlife habitat. Orangutans now are in jeopardy as their surroundings fall to new, ethanol-inspired palm-oil plantations.

Nitrogen fertilizer, common in corn cultivation, yields nitrous oxide, a greenhouse gas -- which is no laughing matter. As Nobel laureate Paul Crutzen and his scientific team concluded in Atmospheric Chemistry and Physics last August 1, "the relatively large emission of N2O exacerbates the already huge challenge of getting global warming under control."

Unless superior substitutes emerge, obeying Congress' 2022 diktat will require a corn crop equal to 115 percent of 2007's U.S. output, with every kernel going to ethanol, none for food. The consequences would be calamitous -- from movies without popcorn, to over-farmed and under-rotated fields, to growing global starvation.

It gets worse.

As Eric Peters explained in the March 3 American Spectator, ethanol is simply ethyl alcohol. Unfortunately, "Alcohol fuels may constitute a new type of fire hazard because they are harder to extinguish than gasoline fires and require new types of fire-extinguishing equipment and training." Peters added: “The fires are extremely hot, and the flames invisible. . . ” Foams designed to combat alcohol fires are made using specific polymers that can smother the flames of an ethanol fire but carry a price tag about 30 percent higher than conventional flame-suppressing foams. That means your local fire department has a new line item on the budget.”…

There is little good coming out of ethanol mandates, save that grain farmers are seeing record profits and ethanol use has lead to a slight, yet insignificant reduction in crude consumption. Meanwhile inflation, driven by grain prices, is taking off and impacting all Americans not only at the gas pump, but also in the grocery store.

People have a choice to cut back on driving and save a few bucks on gasoline, but it would be the height of arrogance to argue that it’s okay that people’s diets are degraded as long as it’s for the greater good of the environment.

There are much better ways to meet our current needs for energy and still plan for, and move toward, a future less reliant on petroleum. Burning food for energy should not be part of the portfolio of solutions.

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4 Comments

Comment by steunenber:
April 25, 2008 @ 12:51 pm
I guess I am one of your more liberal readers?

Well, I agree with you.

There is one aspect I’d like to add on agrofuels in general: modern agriculture depends very much on fossil energy. For fertilizers, for machines, for transportation. In fact some people estimate that you have to add 10kJ of fossil energy to get 1 kJ back. If you look at it as a cycle, like you want the energy input in your agriculture, because, let’s say, you want a harvest again next year, nothing special, it does not look well.

Just because people are conservative doesn’t mean they are wrong. (Though for progressive people it looks like there is some correlation )
Comment by Patrick Reames:
April 25, 2008 @ 1:43 pm
Johan,

You’ve not my only somewhat liberal reader, I have one other! And, just like you, he is occasionally correct in his thinking!

Excellent point about the inefficiency of the ethanol model.

Seriously, I hope this problem transcends political labels or leanings.

Both the US and the EU are contributing to a very real global crises through their misguided attempts to solve complex issues with blunt and heavy handed market intervention.

On a right leaning side note, I’ve tried to find any comment from the godfather of global warming, A. Gore…he seems to be unwilling to take a position on this issue. If I were inclined to comment on his silence, the cynic in me would say that apparently he views starvation as a cost of doing business, painful but necessary when one is fighting the carbon wars for the future of the planet.

But, I’m not that cynical…yet.
Comment by carlucci:
April 28, 2008 @ 5:31 am
Hi Johan,
Yes, this is an ancient fear in the energy area, specially in my country (Brazil), which is the top ethanol producer since long time ago.
If it is more profitable to sell your product to produce ethanol than rise some food, the farmers will prefer the former.

There is also another problem with the U.S. ethanol production: the use of corn, which is just insane. I don’t know if it is because of the weather or historical reasons, but it is just a bad idea.

The energy balance concerning corn conversion into ethanol is negative (1.29:1), that is for each kcal of energy supplied by ethanol 29% more energy is used to produce alcohol. This means that if 100% of the United States corn was to be used for ethanol production, this would satisfy only 6% of the needs of petroleum substitution.

Of course changing the main source of ethanol wouldn’t fix the problem, but it would drastically reduce it.
Comment by steunenber:
May 5, 2008 @ 2:36 am
Hi Carlucci, hi Patrick,

@Patrick: I have been thinking about this ‘one other’. I guess you have much more readers, and this shows that in general we don’t talk with each others. I’m afraid it is a hard challenge for democracy when conservatives and liberals don’t talk..

@ Carlucci: I don’t know much about the US-politics.
In Germany we have the sugar industry lobbying for ethanol from sugar beet. Of course this helps in a world where the sugar prices are driven by the much cheaper production in eg your country. It helps the farmers, it helps the sugar industrie, I don’t think it helps the climate though, nor energy security, the second (or only, depending on how cynical you are) driver for renewables.
And we have bio-diesel from rapeseed, quite ineffective too, but helps you get a warm and cosy climate-saving driving experience. German farmers benefit from this initiative too, as rape-seed is a crop that goes very well here.

As far as I know, on investor level these types of first generation biofuels are out. At least Morgan Stanleys Iain Smedley said so on a recent conference on energy risk.

At the moment I see a lot of government initiatives that disturb markets without making much sense in the end. As I’m not a free-marketeer, I still get angry with governments that refuse to tackle real problems.

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Another Look at Ethanol

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