INSIGHT: Lady Ethanol holds the heart of Congress

27 September 2007 15:18  [Source: ICIS news]

By Joe Kamalick

 

WASHINGTON (ICIS news)--She is not the unblemished beauty she once was - she eats too much, costs too much and has some embarrassing emissions - but the enchanting Lady Ethanol still commands the affections of Congress.

 

The congressional love affair with bioethanol, and in particular with corn-based ethanol so dear to the hearts of farm-state senators and representatives, remains undiminished despite mounting criticism of the biofuel.

 

Indeed, it has been a rough couple of weeks for the US biofuels industry as a barrage of critical reports punched holes in the energy, economic and environmental benefits of corn-based ethanol.

 

Earlier this month the Organization for Economic Cooperation and Development (OECD) launched a broadside at corn ethanol, warning that government-funded campaigns in the US and Europe to increase biofuels output threaten food shortages, may damage biodiversity and will generate questionable energy benefits.

 

In a study prepared for a sustainability conference in Paris, the 30-nation OECD said increased ethanol production already is raising food grains prices worldwide and is putting pressure on forests, wetlands and pasture as more land is converted to growing rapeseed, corn and other contemporary bioethanol feedstocks.

 

The group of developed countries also questioned the much vaunted environmental benefits of ethanol, noting that it delivers greenhouse gas reductions of less than 40% compared with fossil fuels.

 

In rare harsh language, the OECD study added: “When such impacts as soil acidification, fertilizer use, biodiversity loss and toxicity of agricultural pesticides are taken into account, the overall environmental impacts of ethanol and biodiesel can very easily exceed those of petrol and mineral diesel.”

 

Finally, the group of developed nations - the US and Europe along with Japan and Korea - said that continued government subsidies and protective tariffs for biofuels “could end up supporting a fuel that is more expensive and has a higher negative environmental impact than its corresponding petroleum product”.

 

That punch-up was followed days later with a report funded by US meat and poultry industries, which compete with ethanol for corn supplies, arguing that the federal subsidy for corn ethanol is obsolete.

 

“Increased energy prices make it possible for the ethanol industry to thrive on its own, even without subsidies,” the American Meat Institute argued in the study also funded by poultry interests.

 

“The subsidy programme has shifted from making ethanol feasible to causing significant increases in grain prices, distorting farmer planting incentives and causing the cost of producing the US food supply to increase,” said the institute.

 

Ethanol next came under the guns of two influential environmental groups.

 

New York City-based Environmental Defense charged in a mid-September study that increased corn planting and the rapid growth of ethanol production facilities in the American Midwest are threatening the already strained water and grassland resources of the Great Plains.

 

The Chesapeake Bay Commission, a private group of environmentalists and policymakers from the three states (Virginia, Maryland and Pennsylvania) that surround Chesapeake Bay, followed with a study warning that the boom in ethanol production could threaten agriculture in the tri-state region and the bay as well.

 

“Biofuels could lead to shifts in crop patterns and acreages that create an uncertain future for farmers and foresters and seriously worsen the overload of nutrients to our rivers and the Bay,” the commission said. It too raised questions about the environmental benefits of corn ethanol as a transportation fuel and the impact on grain prices.

 

The Chesapeake Bay folks also drew attention to the nitrous oxide (N₂O) emissions created by corn-based ethanol production.

 

The N₂O issue was given even higher profile by a US and European scientific study issued earlier this week. 

 

A multinational research team led by Nobel laureate Paul Crutzen, honoured for his atmospheric environmental work, reported that production of corn-based ethanol generates up to 50% more greenhouse gas emissions in N₂O than could be saved in carbon dioxide (CO₂) reductions by substituting ethanol for fossil fuels.

 

Arvin Mosier, a co-author of the study with Crutzen and a professor of agricultural and biological engineering at the University of Florida, said that hoped-for advances in use of cellulosic ethanol feedstocks such as grasses and wood chips would all but eliminate the N₂O problem.

 

However, Mosier said, with corn-based ethanol production “you get more greenhouse gases out of it than you save”.

 

“As a policymaker, I certainly would want to look at corn-based ethanol more closely before putting more money into it,” Mosier said.

 

Amid the bombardment of studies critical of ethanol, those who have long held reservations about the biofuel could not help saying “I told you so!”

 

Bill Holbrook, spokesman for the National Petrochemical & Refiners Association (NPRA), said: “Policymakers simply can’t ignore the large number of studies that have come out recently showing the problems, both economic and environmental, associated with ethanol.”

 

Those studies, said Holbrook, are reason enough for Congress to hold off on increasing the federal mandate for biofuels production. Ethanol, he said, “is not turning out to be the silver bullet for energy security and CO2 reduction that many thought it would be - and legislated for it to be”.

 

The US and European ethanol industries fired back, attacking the OECD study in particular, charging that was one-sided and biased.

 

The US Renewable Fuels Association (RFA) and the European Bioethanol Fuel Association (eBio) said that the OECD paper and other critical studies are riddled with “inaccuracies and omissions that call into question the validity of their findings”.

 

RFA president Bob Dinneen dismissed grain price allegations, saying that ethanol critics overlook strong global demand for corn and other food grains that is unrelated to ethanol, arguing as well that increased crop yields will help ease pricing pressures.

 

Critics also seem to ignore the fact, said Dinneen, that global energy needs simply cannot be met indefinitely by hydrocarbon fuels and that government subsidies for ethanol pale compared with decades-old federal incentives for oil production.

 

Despite the hue and cry from critics, support for corn-based ethanol in the US Congress remains solid.

 

A new energy bill pending on Capitol Hill will boost the US ethanol mandate to 36bn gallons per year by 2022, a five-fold increase from current US corn ethanol output of about 6bn gal/year.

 

The many friends of ethanol in Congress are not dissuaded by challenges to the environmental, energy or cost profiles of corn-based production, seeing corn as the necessary bridge to a cellulosic ethanol future.

 

Bill Wicker, spokesman for the Senate Energy and Natural Resources Committee where the energy bill is championed, notes that the legislation anticipates that reaching the 36bn gallon goal will require development of cost-effective commercial production of cellulosic ethanol by about 2015.

 

Wicker notes that cellulosic technologies already exist and argues that it will only be a matter of time before those production methods achieve cost-effective and large commercial capacities.

 

Frank Maisano, a Washington lawyer and lobbyist representing traditional energy interests, believes the rash of negative studies on ethanol might have some impact on Capitol Hill.

 

“But only time will tell,” Maisano said. “Ethanol is politically powerful”.

By: Joe Kamalick
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