Can we grow our way out of an energy crisis?
By: Donna Osborn, CCH editor donnao@cpimo.com 12/08/2006
OZARK-Missouri's Mark Twain popularized the phrase, "There are three kinds of lies: lies, damn lies and statistics."
That is exactly what a prominent researcher says about the nation's current rush to embrace corn ethanol as an alternative fuel. And, he's not alone.
New government mandates will bring ethanol to a gas station near you. Proponents of the alternative biofuel say it burns cleaner, is economical and will reduce the nation's dependency on foreign oil. Opponents say it is a government giveaway that cost more to produce than it delivers in energy, pollutes more and does not foster energy independence.
"It is absolute stupidity," said Cornell University's David Pimentel, professor in the College of Agriculture and Life Sciences, in a recent telephone interview with the Headliner News. "It is a major scam."
Why would business leaders, state and U.S. lawmakers perpetuate a "major scam" on the public?
"Big money and politics" Pimentel said. "Those two words tell it all. Ethanol has 45 times the subsidies that gasoline has. (Our government is) spending $6 billion annually on subsidies for ethanol."
And the government has, since 1978, subsidized the ethanol industry, according to the non-partisan budget watchdog, Taxpayers for Common Sense. Tax exemptions that total more than $11 billion with a production mandate through 2012 plant dollar signs in the eyes of investors, even if the dynamics of corn-produced biofuel present economic and environmental challenges.
All the while, residents in Webster and Christian counties wait to see the outcome of court proceedings that may affect whether a $160-million ethanol plant is built on top of their water supply. A water supply that could be adversely impacted if Gulfstream Bioflex Energy, LLC situates the operation in the southwest corner of Webster County and begins pumping 1.26 million gallons of water a day from four deep wells to produce about 2 million gallons of ethanol a week. Organized opposition to the plant filed a petition with the court to restrain the company from doing just that.
Charles Luna, GBE vice-president, said the latest proceedings scheduled for Dec. 12 in Webster County amounts to residents asking a circuit judge to rewrite the law.
"They should not be attacking us," he said. "They need to go to the legislature. We have a right to use that water-there is no law to prevent us (from doing that.). They are asking the circuit judge to make a new law."
Luna asserts that tests prove the company's deep wells will access the trillions of gallons of water in the deep aquifer without drawing down the neighboring shallow wells. Conflicting data arrives at different conclusions. A study done by the Webster County Groundwater Impact Committee suggests wells could be harmed and that discharge from the plant could contaminate the groundwater.
The local debate focuses on this plant's specific environmental impact. The larger debate hinges on ethanol's ability to reduce America's dependency on foreign oil coupled with its reputation as a cleaner-burning fuel and whether it is a good economical and environmental tradeoff.
The often-cited research by Pimentel and Tad W. Patzek at the University of California, Berkeley concludes that it takes more energy to produce ethanol than the fuel delivers. And that ethanol production takes an even greater toll on the environment.
Their latest research dated January 2005 states, "ethanol production using corn grain required 29 percent more fossil energy than the ethanol fuel produced."
Pimentel said he's been studying ethanol production for more than 25 years.
"About 1980, I was asked by the (U.S.) Secretary of Energy to look at this issue," he said. "We produced a report that was reviewed by 26 top scientists who unanimously said it was sound."
But the results conflicted with what some in congress wanted to hear, Pimentel said.
"Two congressmen from the corn belt didn't like that," he said. "They had the Government Accounting Office investigate me and the committee. The GAO concluded our report is sound. We've been chewed on quite a bit."
Who is doing the chewing?
In a press release from the American Coalition for Ethanol in July of 2005, six months after Pimentel and Patzek's latest published research, Ron Lamberty, ACE's vice president of market development said:
"That claim is just outrageous. The bottom line is that it takes 35,000 (British thermal units) of energy to turn a bushel of corn into a gallon of ethanol, and that gallon of ethanol contains at least 77,000 Btus. What kind of math is being used to turn this number into a negative?"
Pimentel's critics say the data used in his analysis is outdated and that the research doesn't include the feed by-products marketable from ethanol production.
"That is the little story," Pimentel said of his critics. "Take a look at our data; it is all up to date."
Pimentel said the American public is being sold a bill of goods when told that ethanol will reduce the nation's dependency on foreign oil.
"The new data indicate that (our earlier) information was too conservative, which makes the results look even worse," Pimentel said. "Corn production requires 14 different inputs, that large input plus processing the corn takes more energy (than it produces)."
Pimentel said the studies that show a positive energy return do not take into account the vast amount of resources needed to grow the corn.
"We are including all of the data, the data (other researchers) omit," Pimentel said. "Farm labor, machinery, irrigation and others. If we omitted that we would get a positive return (also)."
Luna is one of those critics who echoed the "outrageous" claim that corn ethanol has a negative energy balance and believes the entrepreneurial spirit is the ticket to energy independence.
"I don't believe those statistics," he said. "You will never replace the fossil fuel industry with ethanol entirely. If we get this country to 10 percent ethanol it will make a tremendous impact on foreign oil. And, what is wrong with the farmers making money rather than the Mideast countries? It may be a 10- to 20-year stop gap but we must do something. People are fools if they think we can continue to build on fossil fuels. We have to do something- we must have an alternate fuel. "
GBE plans to help provide at least part of Missouri's supply of ethanol by building two other plants besides the one slated for Webster County.
According to information from the Missouri Corn Growers Association, Missouri now has four ethanol plants and in order to meet production mandates, the state could support at least a dozen.
The Energy Act of 2005 requires refiners to increase ethanol production from 2.5 billion gallons in 2005 to 7.5 billions by 2012. And, according to information from Forbes magazine, a "51-cent tax credit paid to blenders of the fuel and a 54-cent tariff on imported ethanol," paints an even rosier picture for investors. Couple that with Missouri's Renewable Fuel Standard signed into law by Gov. Matt Blunt just a few months ago, which requires 10 percent ethanol mixture at the pumps in 2008, and the pot is even sweeter.
Ethan Taylor, the E85 coordinator for the Missouri Corn Growers Association, is optimistic about the future of ethanol.
"It is a cleaner burning renewable fuel," he said. " It can be economical, reduces emissions for the environment- overall it reduces tailpipe emissions up to 40 percent. It is biodegradable; its chemical properties make it a safer product as far as vehicle crashes. It's better than gasoline."
Taylor also said ethanol is easier on the mechanics of an automobile engine extending its life.
So, it is no surprise considering the PR effort and the government mandates, that ethanol plants are cropping up all over the country-about 100 of them so far, with many more in the planning stages. And, just like the one slated for the Rogersville-Fordland area, none are without controversy fueled by conflicting statistics.
A July 2006 article from the University of Minnesota states that five researchers from the school conclude that ethanol "delivers 25 percent more energy than is used to produce it." But their research, according to the news story, points to the energy dividend coming from the production of ethanol byproducts-animal feed-not from the ethanol itself.
The plant slated for Webster County, according to information from GBE, would be a dry-mill process with the capacity for a wet-mill process. That means the agricultural by-product would be dried-distillers grains, or DDGs, as opposed to wet-distiller grains or WDGs. According to information from the Webster County Groundwater Impact Committee, GBE would fill orders for WDGs according to the demand. But even that leads to criticism, with many being concerned that the feed byproducts just fuel another controversial industry, concentrated animal feeding operations or CAFOs. These factory farms confine large numbers of animals into small areas and some are accused of polluting nearby streams and rivers.
The U.S. Department of Energy cites a 2005 study by Argonne National Laboratory that found ethanol "generates 35 percent more energy than it takes to produce, reinforcing the fact that production of the corn-base fuel yields a net energy gain."
Even if that study proves true, what kind of "net energy gain" will it really be?
Pimentel said there's no way that America can grow its way out of the energy crisis posed by dependency on foreign oil and dwindling supplies.
"Eighteen percent of all U.S. corn is going to produce ethanol now-4.5 billion gallons of ethanol," he said. "What does that mean to total petroleum use? Less than 1 percent."
He said even if 100 percent of the corn grown in the United States went to ethanol production, it would still only replace 6 percent of the petroleum used.
And, that would come at great socio-economic and environmental costs.
"Ethanol plants use large quantities of water and produce nine gallons of sewage affluent to every gallon of ethanol," he said. "Not only in the production of the corn but in the processing plant when the yeasts are working and converting the starches and sugars, large quantities of carbon dioxide are released."
Some plants, like the one planned for Webster County capture that carbon dioxide and sell it to bottling and other industries.
Others, like Frank Rhinehart, a cow-calf and stocker operator near Phillipsburg, lament the rising corn prices that are causing feedlot operators to take "severe hits and slashing what they pay for cattle."
He recently wrote about the supply side of ethanol economics in a piece published in the Bolivar-Herald Free Press, Nov. 29.
"Taxpayer subsidies, both at the state and federal level, are contributing to corn growers' delight and beef producers' depression. While the federal government has been subsidizing corn farmers for decades, many states have now joined in by passing laws mandating ethanol be put in gasoline at every service station.
"These efforts are all now designed to lessen our dependence on foreign oil imports and provide American consumers with cheaper gas. When oil was close to $80 a barrel and gas at the pump was $3 a gallon, ethanol from corn at a production cost of around $2 a gallon looked like a no-brainer, particularly for politicians wanting to do something about high gas prices, but never learned about supply and demand curves in Economics 101."
But Taylor said that new technology will allow more corn to grow on less land for specific purposes and that will eventually moderate corn prices.
"Corn yields are increasing every year with the advances of technology-genetically modified hybrids- that are genetically engineered to produce a certain result," he said. "They've been in existence for a while."
Taylor said it is fuel corn and not necessarily the corn you eat.
"There is going to be enough corn out there for both markets," he said.
And Luna points out that while critics clamor about ethanol subsidies or not being able to grow enough corn to make a dent in the petroleum demand, they're overlooking the taxpayer dollars paid to farmers not to farm.
"There are millions of acres that are not being farmed in this country," he said about the government's Conservation Reserve Program (CRP) that pays farmers not to farm their land and therefore raises food prices by decreasing the supply.
Luna agrees with Taylor that better technology will substantially increase annual corn yields and both agree ethanol is a good deal for Missouri.
"In the Midwest it's been a big boom," Taylor said. "These plants provide economic opportunities (and jobs) to these small rural communities. Over 50 percent of the investors are farmers. The profits they make off the ethanol plants they put right back into the community by buying equipment or by buying coffee-it is going back into the town. That is a big benefit."
But information from Taxpayers for Common Sense says thinking that ethanol supports corn-growing family farmers is wrong.
"In fact, significant economies-of-scale advantages in transportation and conversion of corn into ethanol mean that large companies like Archer Daniels Midland take more and more of the market share-and the subsidies. About three-fourths of the ethanol plants being constructed in 2005 were not farmer-owned... ADM, which controls nearly half of the ethanol industry, is also a large campaign contributor-since 1990, it has contributed over $7.7 million to both political parties."
And some notable politicians have also gone against the ethanol grain.
Sen. John McCain, R-Arizona, who is eyeing a presidential bid in 2008, is on record blasting Congress and the administration for its position on the ethanol mandate contained in the energy bill.
"Make no mistake: Ethanol is a giveaway to special interest in corn-growing states at the expense of the rest of the country. It is a costly additive...that will add an extra 8 or 9 cents per gallon to the cost of gasoline. Nor will ethanol improve our environment," he said in a congressional address in 2003. "Ethanol is a product that would not exist if Congress didn't create an artificial market for it. Yet thanks to agricultural subsidies and ethanol producer subsidies, it is now a very big business-tens of billions of dollars that have enriched a handful of corporate interests-primarily one big corporation, ADM. Ethanol does nothing to reduce fuel consumption, nothing to increase our energy independence, nothing to improve air quality. Let me repeat for emphasis; ethanol does nothing to reduce fuel consumption, nothing to increase energy independence and nothing to improve air quality."
He voted against the Energy Act of 2005 and was quoted in a Washington, D.C. news story saying why.
"This bill does little to address the immediate energy crisis we face in this country," McCain said. The handouts to big business and oil companies are irresponsible and will be disastrous...I cannot in good conscience, vote to pass legislation that does not adequately address issues related to energy efficiency, security, and energy independence."
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