Drunk on Ethanol

The Bush administration perpetuates this kind of corporate welfare, but it is no worse in this regard than any administration since Richard Nixon's, when the Soviet grain deal and bad weather in the Corn Belt caused a spike in domestic food prices. The ensuing political heat induced Nixon to initiate direct payments to farmers and urge them, in the words of his Secretary of Agriculture, Earl Butz, to plant "fencerow to fencerow." Thus did four decades of farm policy designed to discourage overproduction evaporate like gasohol on hot asphalt.

The Arab-oil embargo and the resulting energy panic spawned the Energy Tax Act of 1978, which subsidized the cost of adding ethanol to gasoline. But when corn prices soared in the mid-1980s, ethanol fell into disfavor among gasoline producers. In 1986 the U.S. Department of Agriculture (USDA) made perhaps its most honest and perceptive assessment of the ethanol industry: that it could not survive without more "massive government subsidies." It got them. 

If you're talking to an ethanol fan and the conversation starts to drag, bring up the name of David Pimentel, the Cornell University agricultural scientist and former Audubon board member who has exhaustively studied the economics, efficiency, and alleged environmental benefits of ethanol, and who chaired a U.S. Department of Energy panel that investigated these same issues. After you've heard all the expletives you'll get a list of researchers who have divined that ethanol is really an elixir for clean air and energy self-sufficiency (see Letters to the Editor, next issue).

In his latest project, Pimentel calculated the real energy costs of raising corn, including the enormous amounts of fossil fuel required to power irrigation pumps, run planting and harvesting machinery, cook the corn in the fermentation/distillation process, and make the fossil fuel-based nitrogen fertilizer that agribusiness is hooked on. Without even factoring in the fuel that's required to ship ethanol to blending sites, Pimentel found that it takes about 29 percent more energy to produce ethanol than you get from burning it.

Then, figuring in state and federal subsidies, Pimentel found that ethanol costs $2.24 a gallon to produce, compared with 63 cents for gasoline. Other costs of allocating corn to ethanol production, reports Pimentel, include higher food prices, because about 70 percent of the corn grown in the United States is fed to cattle. "Increasing the cost of food and diverting human food resources to the costly, inefficient production of ethanol fuel raise major ethical questions," Pimentel writes. "These occur at a time when more than half of the world's population is malnourished. The ethical priority for corn and other food crops should be for food and feed. Abusing our precious croplands to grow corn for an energy-inefficient process that yields low-grade automobile fuel amounts to unsustainable, subsidized food burning."

I asked Pimentel how he would respond to the researchers—such as the ones employed by the ethanol-promoting USDA—who say he's got it all wrong and that ethanol is really economical and efficient, and a ticket out of foreign-oil dependency. He told me he had "gotten on" the USDA for ignoring or not fully taking into account energy values for such things as the operation and repair of farm machinery, and for the fossil fuel-based fertilizers required for corn production. And he has chided the agency for taking planting and yield data only from the states with the best soils and productivity. Thus does the ethanol lobby cook the books. "If I did everything they did, I think I could get my figures to be positive, too," says Pimentel.

But maybe the most convincing statement about the economics of ethanol comes not from any scientist but from the stock market, which clearly perceives that what is really being protected by this allegedly efficient, cost-effective, homegrown, salubrious oxygenate is the high price of gasoline. On April 1 Energy Secretary Spencer Abraham declared that the EPA was considering granting the oxygenate-requirement waivers long sought by California, New York, and Connecticut. The EPA quickly announced that no decision was imminent, but within minutes of Abraham's comment, gasoline futures fell almost six cents a gallon.

Ted Williams’ Appalachian ancestors made ethanol, although not for cars and not legally.

WHAT YOU CAN DO

Urge your state and federal legislators not to support corporate welfare for the ethanol industry.