The ethanol mystery

Corn farmer in ZimbabweDoes ethanol make environmental sense given the way the inputs are actually produced on the ground? Can’t tell. Does it make economic sense? Can’t tell that either. Could it make sense, without causing the developing world to cut down forests and not be able to afford tortillas so we can put ethanol blends in our SUVs? Don’t know. In all three cases, the truth is obscured by ropy spiderwebs of subsidies and mandates and special programs that make it not only impossible to do the right thing, but impossible even to tell what the right thing is.

In the Guardian today, George Monbiot rips into biofuel mandates, government orders that gasoline contain certain proportions of ethanol. Monbiot writes that the U.S. is aiming for 24-per-cent ethanol in its transport fuel by 2017; the Brits are aiming for 5 per cent by 2010. Canada is aiming for 2 per cent by 2010 and the Harper government’s last budget allocated $2 billion for ethanol and biodiesel research over seven years.

Ethanol is just alcohol, the same kind you get in a bottle of liquor, and potentially from the same source: sugar-bearing crops like wheat or corn or sugar cane, digested and processed and distilled. You can add it to regular gasoline and pump it into most any gasoline-using car and have it work.

The appeal:

  • Because it comes from vegetation, the source of ethanol is renewable.
  • It burns cleaner than gasoline, producing dramatically less particulates (the basis of smog) and slightly less greenhouse gas. The Canadian Renewable Fuels Association, admittedly not an unbiased source, estimates that a five-per-cent renewable-fuels mandate would cut Canada’s greenhouse-gas emissions by four megatonnes, a noticeable step between the 758 megatonnes we produce each year now and the 563 megatonnes we’re supposed to get to under Kyoto.
  • If your country is producing a gross glut of grain because farm subsidies have totally distorted the market, ethanol plants give you something to do with all the extra stuff.

So it’s no surprise that ethanol’s very popular among politicians, especially in North America. It sounds like a green fuel, it reduces smog (which climate-change skeptics seem to be exceptionally vocal about), and above all, it makes farmers very, very happy. In the United States, the campaign for president begins in agriculture-dependent Iowa, so you can scarcely find a serious candidate who isn’t an ethanol freak. In Canada, ethanol mandates let the Conservatives curry favour with farmers, mitigate some of the effects of multibillion-dollar farm subsidies, and suck up to moderate environmentalists alike. It’s the rare win-win-win, right?


First, Monbiot’s objections:

So what’s wrong with these programmes? Only that they are a formula for environmental and humanitarian disaster. In 2004 I warned, on these pages, that biofuels would set up a competition for food between cars and people. The people would necessarily lose: those who can afford to drive are richer than those who are in danger of starvation. It would also lead to the destruction of rainforests and other important habitats. I received more abuse than I’ve had for any other column – except for when I attacked the 9/11 conspiracists. I was told my claims were ridiculous, laughable, impossible. Well in one respect I was wrong. I thought these effects wouldn’t materialise for many years. They are happening already.

Since the beginning of last year, the price of maize has doubled. The price of wheat has also reached a 10-year high, while global stockpiles of both grains have reached 25-year lows. Already there have been food riots in Mexico and reports that the poor are feeling the strain all over the world.

In Canada, according to Agriculture Canada, the price of corn has shot from $96 a tonne to a projected $150 to $170 a tonne in 2007–08 and we’re increasing imports by 10 per cent while farmers seed loads of extra acres. (Keep this in mind the next time you hear anyone who grows corn complain about prices.)

Anyway, the government blames/credits ethanol. Great for our farmers, not so much for the Third World, as Monbiot points out. So what about the other two points of the win-win-win?

Ethanol itself is great stuff, but it doesn’t come out of nowhere. We grow corn industrially, on soil jacked up with fertilizers created and transported with fossil fuels, using heavy equipment run on fossil fuels. Ethanol plants, what few we have, require massive inputs of heat and electricity to turn corn (or wheat, or whatever) into liquid fuel. Nevertheless, scientific opinion seems to have converged on the conclusion that despite all the fossil fuels that go into creating ethanol, it still provides a net gain of energy — but not of money.

We have so few plants because they’re rarely profitable; in Eastern Ontario they’ve been trying to build one forever, with loads of government support, but even as a co-op they haven’t been able to make it fly and the city of Cornwall has taken back the land it offered for the thing. (A corporation is trying to build another not far away.) There is, according to the Globe and Mail, a single functioning pump offering an ethanol-gasoline blend of fuel in all of Canada, and there’s a reason for that.

The Globe has opposition parties in Parliament complaining that the only reason the Flaherty budget included cars that can handle more aggressive ethanol fuel mixes on its list of green-rebate-eligible vehicles is that they’re made in a factory in the riding next door to Flaherty’s,  which employs a bunch of his constituents. You can’t prove anything, but it’s a difficult assertion to challenge since the Impalas and Monte Carlos in question aren’t terribly fuel-efficient on their own.

This is exactly typical of ethanol-related policy throughout the developed world.  We need to hack away at the mess of subsidies and mandates that make it so difficult to tell whether ethanol makes sense. That includes finding a way to assess and charge for its carbon dioxide output (both direct and through the production cycle) in the same way as we should for gasoline and diesel, but more importantly it means letting the stuff stand on its own two financial feet so consumers can decide for themselves whether to use gas, ethanol, or stuff the whole thing and walk.


Photo by Flickr user babasteve,
used under a Creative Commons attribution licence.


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