It’s time to stop filling our cars with corn

| December 9 2012
Christopher Cook

Is It Time to Stop Putting Food in Our Cars?, by Kenneth P. Green and Elizabeth DeMeo, came out a few days before the election, but other than discussion Romney’s position on the issue, the piece is entirely relevant. A series of pervasive myths abound on the subject of using ethanol as fuel, and these myths have gone a long way to help buoy a practice which benefits some people in government and a small number of farmers, but hurts everyone else.

The piece, from AEI, helps debunk some of those myths:

Our conclusions are that the ethanol mandate continues to do more harm than good — inflicting environmental damage, raising food prices, and distorting energy markets.

Ethanol and Food Prices

Projections estimate that by 2016, the United States will have diverted up to 43 percent of its cropland toward ethanol production. Since such land is normally used to harvest grain for feeding livestock, any diversions to ethanol production would require either changing the use of other land to growing grain or sharp increases in the cost of grain and meat. Given these ramifications, it is no surprise that a myriad of global organizations have opposed the biofuel mandate, including the World Trade Organization, Food and Agriculture Organization of the United Nations (FAO), International Fund for Agricultural Development, International Monetary Fund, Organization for Economic Co-operation and Development, UN Conference on Trade and Development, World Food Program, International Food Policy Research Institute, UN High Level Task Force, and the World Bank. In a recent opinion piece in the Financial Times, José Graziano da Silva, director-general of the FAO, also called for the suspension of biofuel use. He noted that “an immediate, temporary suspension of that [ethanol] mandate would give some respite to the market and allow more of the crop to be channeled towards food and feed uses.”

Ethanol and Gas Prices

To offset the environmental harms listed above, many hope that ethanol will at least benefit the economy by helping to keep gas prices down. However, closer inspection reveals that this is yet another energy myth: ethanol will not shield us from high gasoline prices because, in a free market, the price of ethanol will be the same as gasoline, on an energy-equivalent basis — that is, the price of a gallon of ethanol should be around 66 percent of a gallon of gasoline, as it will take you the same distance when you drive on it. A 2008 report from the National Renewable Energy Laboratory confirms this fact: the report reviews five independent studies to assess the impact of ethanol blending on gasoline prices in the United States, and concludes that they all “overestimate the impact of the substitution effect on driver economics, because the reduced gasoline production costs do not translate fully into savings for end consumers.”

Environmental Impacts

Ethanol poses numerous environmental threats. One of the most serious is the overuse and destruction of land and water. According to scientists Jan Kreider and Peter Curtiss, refining a gallon of corn ethanol requires 35 gallons of water. But that is only the beginning. Kreider and Curtiss estimate that three times as much water is needed to grow the corn that yields a gallon of ethanol. That brings the tally to 140 gallons of water per gallon of corn ethanol produced. If their calculation is correct, the 5.4 million gallons of corn ethanol used in America in 2006 required the use of 760 million gallons of fresh water. Furthermore, note that these estimates are conservative by some more recent standards. As energy analyst Chris Nelder remarked . . .

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