The End-All, Be-All Defense of Ethanol
By: Andy Quinn, Bushmills Ethanol

One by one, every challenge against ethanol—produced from one of America's most plentiful, green renewable energy sources—has fallen flat in the face of facts.

But opponents have been successful in proving one thing about the times we live in if nothing at all about ethanol: when the facts aren't on your side, pour more money into public relations.

And, if that alone fails, reach for that last, failsafe weapon in the arsenal: ask a question that cannot be answered—at least not with any accuracy, if at all.

For ethanol opponents, that question, that silver bullet, is the issue of "indirect land use" effects of biofuels, like ethanol, in the effort to curb greenhouse gas emissions—where the conclusions drawn by the experts are as uncertain as they are varied.

Before diving head first into the deep and murky water of indirect land use, let's look at the litany of other false arguments that opponents of ethanol have perpetrated, starting with all the blame that has been cast about concerning increases in food prices.

We know on good authority that ethanol had a negligible impact on last year's spike in food prices because the official, nonpartisan scorekeeper for the Congress told us so.

The Congressional Budget Office puts ethanol's contribution at a mere half to eight tenths of one percent of the 5.1 percent increase in food costs.

This meager contribution is hardly surprising given the fact that, as CBO puts it, "The cost of commodities makes up about 19 percent of the price of food that originates on U.S. farms and that is sold in stores."

But consumers hardly need to be told by CBO or anyone else what they are already bound to know from their weekly trip to the grocery store: the daily fluctuations of crop prices on the big board don't determine the direction that food prices take, much less do they set the pace.

What is surprising, however, is the want of any real scrutiny of the major food companies that last year placed the blame for increased food costs at ethanol's doorstep and now report huge profits with food prices remaining essentially unchanged at last year's peak levels (the CPI for food at home is down just 1.6% from last year's high) despite the nosedive in the price of corn and other commodities.

Ethanol easily passes the test on food prices.

And, that's before counting the actual boost to the American family's buying power thanks to ethanol, which the Department of Energy reports, lowers gas prices at the pump by 20 to 35 cents per gallon. Using government and independent numbers, the net boost to household income is estimated to be in the range of $204 to $510 when gas savings offset the negligible percentage increase in food costs attributed to ethanol.

And that marks yet another test passed by ethanol since opponents have, rather bizarrely, claimed that ethanol somehow increases gas prices.

The score in favor of ethanol is now 2-zip for those keeping score.

Opponents also contend that ethanol means there is a choice being made to fuel American cars at the expense of feeding people. The problem with this reasoning is livestock, not people, eat the corn otherwise used for ethanol. People eat sweet corn and popcorn but that is not the corn used to make ethanol, though a fraction of the 9% of the kind of corn that is suitable for ethanol does wind up in food sweeteners and additives.

So, if corn-based ethanol were to somehow have an adverse impact on human food supply, it would have to be due to corn being diverted from livestock feed to ethanol production, causing inadequate livestock feed supplies or too high a prices for that feed, thus, driving down livestock production and, in turn, supplies of meat and meat products.

But, the fact that domestic red meat and poultry production has not changed since 2007 casts serious doubt over the claim that expanding ethanol production is shorting meat and meat product supplies, especially when ethanol usage is situated next to record high energy prices (that drove up production costs) and the downturn in the world economy (that drove down world demand), that together stand as the twin problem for livestock producers.

In fact, the data suggests that corn farmers have more than done their job to produce a steady supply for all markets by increasing their production efficiency. While land planted to corn has been generally level, average yields have increased from 91 bushels per acre in 1980 to 154 bushels per acre last year, thus allowing total production to reach new levels in the 12 to 13 billion bushel range—more than enough to meet domestic feed and ethanol needs while still exporting 1.5 to 2.5 billion bushels per year.

Further mitigating any impact of ethanol on livestock production is the overlooked co-product from ethanol production, distiller's grains. High in protein and rich in energy, this livestock feed brings all the corn's nutrients except for carbohydrates to the livestock producers.

And the doubt over this anti-ethanol claim has proved well founded as, more recently, the economy shows signs of some improvement, energy prices have come down, and food inflation returns to historical levels, both now and in government forecasts, despite increased ethanol use.

Clearly, food verses fuel is just as much an excuse as it is a false choice—an excuse for the Grocery Manufacturers Association and the big food companies it works for to bilk consumers and pad their pockets while pinning the blame for higher food prices on ethanol. How else can one explain why food inflation was twice the rate of inflation at the end of last year even as corn prices fell by 50% and oil prices tumbled?

Yet a third test is met.

Not to be outdone, opponents concocted a string of other charges against ethanol including that ethanol is somehow...

One, harmful to air quality, never mind that ethanol is proven cleaner than gas, emitting fewer hydrocarbons, nitrogen oxides, carbon dioxide, hydrogen, and carbon monoxide, and even reducing the toxicity in gas by diluting compounds like benzene.

Two, uses too much water, never mind that it only takes about 3 to 4 gallons of water to process a gallon of ethanol, compared to 150 gallons of water to produce an average size newspaper, 300 million gallons of water to produce a single day's supply of US news print, 44 gallons of water per gallon of crude oil, and 1,800 gallons of water per barrel of oil which is equivalent to 92 gallons of water for a gallon of gasoline.

Three, costs more energy to produce than it produces, never mind that, in 2004, USDA concluded that for every 100 BTUs of energy used to produce ethanol, 167 BTUs of ethanol is produced, with this calculus including the energy required to grow and harvest corn and manufacture and distribute ethanol. Compare this to the net energy loss of 19 percent in the production of gasoline.

Four, harmful to small engines, never mind that the waiver requested of EPA to allow ethanol blends up to 15% has been subject to the most extensive testing and research in the history of such requests, that the Underwriters Laboratories, Inc. has okayed E-15, and that a Minnesota study concluded that even E-20 is wholly compatible with engines and fuel dispensing equipment.

Minnesotans—with their motorboats, jet skis, and snowmobiles—speak with experience, having very successfully blazed the trail to the first in the nation 10% ethanol requirement and later the first 20% requirement, breaking the monopoly gas has held. And the Minnesota experience is that ethanol adds oxygen to fuel providing more complete combustion, it eliminates the need for antifreeze, it prevents burning of engine valves because ethanol burns cooler, and it prevents build up of olefins in fuel injectors meaning cleaner engines.

Five, drives up nutrition program costs to the taxpayer, never mind the negligible amount of last year's food inflation attributed to ethanol or the sharp decrease in government costs for U.S. farm policy, which actually results in a very large net savings to the taxpayer. One estimate says farm policy costs were down by $2.65 billion in 2007 alone, far outstripping any increased costs to nutrition imputed to ethanol.

The score is now 8 love.

Then comes the issue of corn-based ethanol and its carbon footprint. On this there is also universal agreement that ethanol reduces greenhouse gas emissions, taking into account ethanol's full life cycle, including corn planting and harvesting, ethanol production and usage. The amount by which ethanol reduces greenhouse gases compared to gasoline ranges anywhere from 30% to 61%, with future advances to ethanol putting ethanol's advantage over gas as high as 90%. Last year alone, ethanol removed 14 million tons of greenhouse gas emissions.

Ethanol is now batting 1000. On all 9 issues, ethanol rises to the challenge.

But then comes the silver bullet. That test that can't be passed: Indirect land use, the theory that producing ethanol from corn here at home causes land use changes in other places around the globe which, in turn, results in higher greenhouse gas emissions that must be attributed to U.S. ethanol.

The State of California and, more recently, the EPA have adopted the lawyer-rather-than-scientist-developed theory of indirect land use despite the fact that both government and private scientists have called it "speculative" and "seriously flawed."

Says Department of Energy Argonne National Laboratory: "There seems to be no indication that U.S. corn ethanol production so far has caused indirect land use changes in other countries."

Says NRDC's Nathanael Greene: "The marginal impact of land use changes here in the United States on land use in the rest of the world is extremely hard to predict with economic equilibriums and agricultural and trade policies all interacting in complex ways."

Says USDA Chief Economist Dr. Joe Glauber: "Modeling the change in land use resulting from the expansion in the production of corn-starch based ethanol, requires making projections about future values of parameters that cannot be known with certainty." Dr. Glauber goes on to list yields on converted lands, shifts in land use, yield growth over time, substitutability of Distillers Dried Grains (an ethanol byproduct used for livestock feed), and other variables as ones that can't be pinned down because they can't be quantified or known for sure.

Empirical evidence backs up the skepticism. It's been observed that while U.S. ethanol production has increased, deforestation in places like Brazil has actually decreased. And, past analysis predicting indirect land use changes for the period of 2001 through 2006 proved dead wrong, with the exact opposite unfolding.

Perhaps most telling is the fact that not one other economic sector, not one other good or service has been put to this test, including the oil and gas against which ethanol is to be directly compared. In fact, California didn't even bother to calculate all of oil and gas's direct effects on greenhouse gas emissions.

This is the special treatment reserved exclusively for corn-based ethanol, the renewable energy source that in 2007 alone added 200,000 new jobs, $47.6 billion to the nation's Gross Domestic Product, and $4.6 billion in tax revenue, while cutting our dependence on foreign oil by $7.2 billion.

Importantly, there's still time to get it right. The EPA can ditch the test or Congress can do it for them by passing the bipartisan Peterson-Lucas bill.

While EPA's at it, breaking oil's 90% fuel mandate by simply allowing 15% optional ethanol blends would also help U.S. economic recovery efforts, adding 136,000 jobs and another $24 billion in economic activity while at the same time reducing foreign oil dependence by yet another 7 billion gallons.

Opponents of ethanol are skunked. Ethanol's a slam dunk.


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