Ethanol's unintended consequences

Weekly angst: A glass of beer costs more in Germany because the price of barley doubled in two years. Mexicans rioted last summer because they couldn’t afford tortillas. A key ingredient in soap is getting scarce because it’s now used to supplement feed for cattle. All these are unintended consequences of the growing demand for corn ethanol.

Corn is currently the grain of choice for the boom in biofuels, though soy, palm oil and sugar are in play. Corn ethanol is subsidized, can be made cheaply and has a strong lobby in the U.S., where the crop is now bigger than at anytime since before WWII. Corn enthanol production has grown 80% in 2 years and takes 24% of the nation’s corn crop. So corn prices have gone up from $2 a bushel to an average of $3.35, spiking to $4. The price is at an 11-year high. There are 111 ethanol plants here and another 235 in construction or on the drawing board. If all are built, they would use half the U.S. corn crop, leaving less for consumption by people and livestock.

All this happened before the Energy Bill was passed in December, calling for 36 billion gallons annually by 2022, 15 billion of which could come from corn. Production is now about half that, at 7 million, but growing rapidly. The bill specifies that after 2016 a higher and higher percent must come from “advanced” ethanol, like cellulosic, which is better for the environment. But it looks like we’re in for a big increase in corn ethanol over the next 8 years and beyond.

And that presents all kinds of problems:
1. Rising food prices
2. Little change in greenhouse gases
3. More toxic fertilizer and pesticides
4. Use of scarce water resources
5. Deforestation and loss of biodiversity

Rising food prices
Corn prices have doubled since September 1906. As farmers shift to more profitable corn, soy, wheat, barley and other crops have become scarce and expensive. Inflation for food is now forecast at 7.5% a year during the next 5 years. And there is growing concern for the very poor of the world who will be unable to afford the basics. Every 1% increase in food staple prices will result in a 0.5% loss in caloric intake, the World Bank says.

Environmental damage
Corn uses fossil fuels to fertilize, grow, harvest, manufacture and transport corn ethanol, so when all is said and done the lifecycle reduction in greenhouse gases is minimal at best. Corn absorbs less nitrogen than other plants, so it runs off into rivers, including the Mississippi, where it adds to the “dead zone” in the Gulf of Mexico, hurting the fishing industry. The Sierra Club successfully sued plants in Iowa and Indiana that were making neighbors ill from toxics in the air and water.

Using precious water
Corn ethanol requires 3.7-5 gallons of water to make 1 gallon of fuel. Many regions of the country are already water-starved and can ill afford to share their drinking water with thirsty biofuel plants.

Deforestation and loss of biodiversity
As ethanol crops become more profitable, more grassland and rainforest is turned into farmland, reducing biodiversity in its wake. This is happening in Indonesia, where palm oil is used for ethanol and in the Amazon where sugar cane is the dominant source. One of the unintended consequences of Europe’s biofuels mandate several years ago was that economics led them to outsource farming to developing countries. Clearing rainforests and transporting fuels back to Europe negated the GHG benefits of biofuels over gasoline.

Is cellulosic ethanol the answer?
Cellulosic ethanol is better for global warming but it now costs twice as much to make as corn ethanol. But producers say the energy bill will act as a catalyst and help bring down the price.

Switchgrass is expected to be the main cellulosic feedstock in the future. It produces 5 times the energy it uses, and the lifecycle emits 94% less CO2 than gasoline, according to Reuters.
Other advantages:
• It is not used for food or feed, so won’t pressure prices
• It can be grown on marginal land
• It helps sequester CO2 in land because its root system remains after harvest
• It requires less irrigation and fertilizer
Other potential sources of cellulosic ethanol include corn waste, wood waste, sugar cane waste and poplar trees.

Range Fuels recently broke ground in Georgia for the first plant to make commercial cellulosic ethanol from wood waste. It is one of 6 companies to get a grant from the Dept. of Energy and expects to make 20 million gallons a year initially and 100 million eventually. Range is owned by Sun Microsystems’ co-founder, Vinod Khosla.

POET, the largest U.S. ethanol producer, expects to make commercial levels of cellulosic ethanol from corncobs by 2013.

Several other cellulosic plants are in the planning stages, including one in northern Michigan that would use timber and wood byproducts, and another in Florida that would use sugar cane waste and woodchips.

(Sources: Reuter’s PlanetArk, Greenwire, Associated Press, The Guardian, The Wall Street Journal, Union of Concerned Scientists, Truthout.com)