Energy in and energy out
The tax cut bill signed by President Obama preserved a pretty sweet deal for corn ethanol, extending a tax subsidy and an import tariff.
So, what are taxpayers getting for their money?
Ethanol is first and foremost a way to make corn more valuable, according to Bill Kovarik, a journalism professor at Radford University in Radford, Va.
More than a century ago, Henry Ford built cars to run on it, with just that in mind.
“So, you could replace the transportation income that farmers used to have, by growing fuel for the cars, instead of growing horses and feed,” said Kovarick, who explores the history of ethanol in his book “The Forbidden Fuel.”
Prohibition killed that fuel idea, but the farm crisis, oil shocks and environmental concerns revived it. Lawmakers gave gasoline blenders a tax credit, currently 45 cents a gallon or more than $5 billion a year, for blending ethanol with gasoline.
The Environmental Protection Agency forces blenders to use it … almost 13 billion gallons this year. And there’s a high tariff on imports, to boot.
According to ethanol industry ads, the payback is huge: “Fueling the economy and nearly 400,000 jobs… “
But David Swenson, an economics professor at Iowa State University in Ames, said the number of ethanol jobs isn’t as many as people think.
“Probably in the territory of 30,000 to 35,000,” said Swenson, who doesn’t count farm jobs in his equation.
But, he noted, ethanol does spread money across the Midwest, and even all the way back to Washington, in a way.
Ethanol uses a lot of corn, which makes it and other row crops more valuable. These days, grain never gets cheap enough to trigger federal price support payments, and that used to happen all the time.
But,“Support for ethanol effectively replaces other farm subsidies!” …doesn’t make a great slogan, so, back to the ad:
“…turning everyday abundant, renewable ingredients into clean, sustainable energy”
Well, farmers are growing a lot more corn, but ethanol’s voracious appetite keeps supply tight, and prices high.
Ethanol does burn much cleaner than gasoline — no soot — but water pollution from the extra corn farming muddies the environmental benefit. Corn does require a lot of water, more and more of which comes from ancient aquifers.
Of course, ethanol boosters aren’t the only ones talking.
“We’re importing oil to produce this ethanol, said David Pimentel, an entomology professor at Cornell University in Ithaca, N.Y.
Pimentel adds all the energy used in growing corn — the fertilizer, the tractor fuel , the tractor manufacturing, everything — plus the energy needed in ethanol plants, and calculates that making a gallon of ethanol, uses about a one and a third gallons, or equivalent, of petroleum. His first study came out 30 years ago. His findings haven’t changed.
“There’s been no net gain,” he said. “Not only is corn ethanol wildly inefficient … it takes more energy to produce it than it ends up providing.”
Pimentel’s analysis of corn ethanol as an energy black hole has been widely cited by the diverse coalition lined up against corn ethanol….spanning everyone one from former Vice President Al Gore to conservative commentator Glenn Beck.
Problem is that Pimentel uses what many researchers believe are outdated or worst-case scenarios for growing corn and producing ethanol. Factoring in dramatic tech advances in both fields, most researchers figure that corn ethanol delivers an energy gain of about 40 percent
“But that’s not really good enough,” Kovarik said. “What we need is something in the neighborhood of 12 to 1, not 1 to 1.4.”
He said that will come only after solving wickedly complex scientific, logistic and financial problems to make ethanol from grass, trees or waste… instead of corn.
“The corn ethanol industry is not really a long-term solution to oil dependence. It’s just an octane booster,” he said.
Ethanol’s safer than banned gasoline additives such as lead, benzene and MTBE.
So while corn ethanol does create domestic energy and jobs — though not as much or as many as backers had hoped — it has helped some farmers get off other subsidies and improved the rural economy.
But, does it deserve a multibillion dollar tax credit, on top of a tariff, on top of a huge and growing mandate to use it? When it comes to ethanol that question looms large.
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