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July 18, 2007

The Ethanol Curtain

Posted by Angel Gonzalez at 10:16 AM

Biofuels are tres a la mode. On Tuesday, the House passed an appropriations bill that would give alternative fuels research and development $250 million, $50 million more than last year. But the United States' main source of biofuel -- corn-based ethanol -- remains controversial.

Ethanol supporters say that the fuel burns cleaner, can help free the country from dependence on foreign oil, and boosts local farmers' revenues. Critics argue that it's inefficient to produce and that the ethanol craze can have significant social and environmental impacts -- and raise food prices. Two recently published reports illustrate this chasm -- which has grown wider as Congress decides on farm subsidies and energy programs for next year.

In "The Rush to Ethanol", Food & Water Watch and the Network for New Energy Choices say biofuels "are not the silver bullet solution that some say they will be."

High corn prices foster the concentration of ownership and the industrialization of agricultural lands. Most subsidies will end up in the pockets of big agri-business, the report says. Moreover, corn-for-ethanol crops won't reduce overall greenhouse gas emissions, and is a drop in the water amid our growing energy needs. The report authors recommend pushing for better energy efficiency, as well as sustainable standards in the production of biofuels.

The report says:

Even if the entire U.S. corn crop was dedicated to ethanol, it would displace only a small share of gasoline demand.

On the other side of the curtain, sits Ethanol Across America, an industry-government partnership that favors the advancement of the renewable fuel. In a brief published Tuesday, the organization rebuffs the argument that more corn-based ethanol comes at the expense of food production and significantly raises food prices. Corn is used not only in producing corn flakes and many other human-consumption products, but is also widely used as feedstock for beef and pork.

"The raw material in many products is a very small portion of the cost paid by the consumer," the report says. The middle man accounts for most of the cost, and more expensive food prices are due not only to higher corn costs, but blizzards, ice storms, and overall inflation.

The report says:

Ethanol critics routinely overstate how much corn is actually consumed as human food. Less than 12% of the nation's field corn crop is processed directly into human food products in the United States. Corn syrup, sweeteners, starches and cereals are examples. Corn demand for the human food market has been flat over recent years.

In any case, the oil-industry led National Petroleum Council says in a draft report that the world will need any type of energy that's thrown at it, as conventional sources of oil and gas won't be able to fulfill growing demand, according to a recent Wall Street Journal story.

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Tricia Duryee
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Angel Gonzalez
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