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Ethanol: great politics, ineffective energy

 

Fuel from foodCorn Ethanol is becoming the Iraq war of energy policy. A policy based on lies, that initially won supporters political advantage, is highly destructive to the US, and ultimately destructive to its supporters when the costly truth becomes widely known.

In 2007, 115 US plants produced 7 billion gallons of Corn Ethanol – the energy equivalent of 132 million barrels of oil using about 15% of corn production. While this sounds large, it is tiny in the context of the US economy. This is equal to only 1.6% of the energy from from oil in 2007 used in the US. But the situation is worse than this because it takes 1 unit of fossil fuel to produce 1.3 units of corn ethanol. The net energy produced was only 0.5% of the energy from from oil – while consuming 15% of the US corn crop!

Vast sums of taxpayer and consumer dollars are funding an ineffective solution to the real problems of global warming and energy independence. While the country does not sufficiently fund what can be real solutions.

The Federal corn ethanol policy is extremely costly to working people in the US and the world’s poor (through higher food prices). The ethanol equivalent of a gallon of gasoline costs far more than a gallon of gasoline. Fueling your car with corn ethanol makes the world grain shortage worse and increases food prices to the world’s poor. 15 gallons of ethanol in your gas tank uses enough corn to feed one person for a year. Higher grain prices, from corn ethanol subsidies, have a big impact on grain feed beef, chicken, milk, and egg prices for hard working Americans.

US politicians love heavily subsidizing corn ethanol because it makes great politics because of the many subsidized winners from this policy – farmers, farm states, companies and workers that make fertilizer, seed, agriculture equipment; banks and venture capital; towns wanting new factories and jobs, construction workers and mis-informed green voters. By supporting Corn Ethanol, politicians can present themselves as Green and pro-energy independence.

There is a major economic boom in US grain farming from the massive government subsidies to corn ethanol from direct payments, credits and mandates for ethanol use – while the rest of the economy is likely in a recession. Oil companies benefit from Corn Ethanol, as it does little to reduce demand for oil and therefore keeps prices up. Big agriculture is more powerful than big oil, as big agriculture is powerful in most states while big oil is concentrated in a few states and many more people work in agriculture and supporting industries than the oil industry.

Another big interest group in the way are politicians who advocated corn ethanol, who now may be better informed that this was a bad policy – but are afraid to change for fear of “flip flopping” charges. Maybe as part the new politics, Democrats can have the courage to say as John Maynard Keynes said, “When the facts change, I change my mind ? what do you do, sir?” Then again there will be others who will do the same as Hillary Clinton did to preserve her reputation by – holding fast to the Iraq war – when it was recognized as bad policy.

It will take political courage to oppose Corn Ethanol’s powerful interests – while the rest of the public are not interested in “policy details.”

About the author

Nextstep, the author is a diarist with the Daily Kos web site.


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4 Responses to “Ethanol: great politics, ineffective energy”

  1. Charlie Peters Says:
    April 6th, 2008 at 1:18 am

    Does corn fuel ethanol policy increase oil use and oil profit?

    * Some folks think so

    * Clean Air Performance Professionals

  2. MikeG50 Says:
    April 7th, 2008 at 10:02 am

    Merryl Lynch says that the 7 billion gallons of ethanol being produced has lowered the price of gasoline by 45 cents per gallon. Have you noticed that diesel fuel is selling for almost 80 cents more than gasoline? That is because refinery profits are running at normal for diesel, which has no substitutes. Refinery profits on gasoline are near zero, because 7% of gasoline is being replaced by ethanol. Stockpiles of gasoline are at 14 year highs today.

    USDA Economist Ephraim Leibtag says that it takes a 50% increase in the price of corn to have less than a 1% effect on the price of food. When you have 4 cents of corn in a $3 box of cornflakes, you can’t have much effect on the final price. Claims that ethanol are causing food prices to go up, whenever the cost of food is determined 80% by the price of oil, are simply ridiculous.

    Our country is spending 1/2 of a trillion dollars per year on foreign oil. Every dollar spent on gasoline stays in the U.S. This alone is reason to use ethanol. Our spending on foreign oil is not sustainable. It will bring our country down.

    As far as energy balance goes, it takes twice as much energy to create a gallon of gasoline than it does to create a gallon of ethanol. It also takes 8 to 10 times more water to refine gasoline than it does ethanol.

    This writer states that 15 gallons of ethanol requires enough corn to feed one person a year. Oh? It takes about 5 bushels of corn, which is valued at $25-$30, to produce 15 gallons of ethanol. Does anyone believe that you can feed a person for a year on 5 bushels or $25 worth of corn?

    Mike Geske
    President, Missouri Corn Growers Association

  3. Dangousity Says:
    April 11th, 2008 at 5:36 pm

    (quote) Have you noticed that diesel fuel is selling for almost 80 cents more than gasoline? That is because refinery profits are running at normal for diesel, which has no substitutes.

    Oh, really? Diesels have no substitutes? Since when has this come about? I figured when I went to the pump and saw Soybean bio-diesel, that would be similar to Corn-ethanol. Now call me silly But there are a lot of substitutes for Diesel, aka Bio Diesel, algae Diesel ( i know long shot), Do you know China, Austria, Brazil, and a lot of other countries are producing Jatropha Diesel, Heck they are even growing it in Florida! The big reason gas is cheaper, its outta season, diesel is always higher in the winter due to it being a heating oil. Also tons of people aren’t worried about Diesel due to the fact that only 7% or so of the US Cars/Trucks are Diesel.
    So i think It would be correct to assume there are actually the same number or more substitutes for Diesel then Gas

  4. Charlie Peters Says:
    December 29th, 2008 at 5:44 pm

    ”Unlike MTBE, little is known about the impacts of ethanol releases into groundwater or the environment. However, because ethanol is the primary ingredient of beverage alcohol, which is classified by the California Proposition 65 Committee and other cancer experts as a human carcinogen, many are concerned about the possibility that ethanol may pose a cancer risk. Additionally, independent researchers have determined that ethanol in groundwater can extend plumes of other more potent gasoline carcinogens (benzene, toluene, etc.) up to 25%. In addition, ethanol is less effective than MTBE at fighting air pollution, and due to transportation and supply problems, will likely increase gasoline prices.”

    Stella Sez, Hemmings Motor News, July 2000

    http://clubs.hemmings.com/clubsites/capp/july.html

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