Ethanol Conspiracy Theories Ignore Fuel's Legitimate Shortcomings

WASHINGTON, Oct. 18  /PRNewswire-USNewswire/ -- Yesterday, Renewable Fuels Association President Bob Dineen issued a statement urging Congress to pump billions of subsidies into ethanol.  Dineen's rhetoric begs lawmakers to create an artificial market for ethanol, build the extra infrastructure needed for transport, and condemns anyone who speaks about its shortcomings as part of a "coordinated offensive of mistruths".  These statements undermine the effort to have a serious debate about the right way to diversify our energy sources and increase America's energy security. The ethanol industry has been getting super-sized subsidies for more than two decades. Throughout that time, cellulosic ethanol has always been "right around the corner."  We should be looking to innovators and entrepreneurs to develop the next great technological breakthroughs in energy -- not to lobbyists seeking more handouts in Washington.

Despite Dineen's accusation of an "insidious campaign" by the fossil fuels industry against biofuels, there are a myriad of legitimate concerns about ethanol. Those concerns include, but are not limited to, ethanol's effect on food prices, its huge water demands, and its overall financial cost. (For more on this see the recent Wall Street Journal editorial, "Ethanol's Water Shortage".)

The Institute for Energy Research supports energy diversity, tapping into the most efficient traditional, alternative, and renewable sources capable of sustaining themselves in a free market, including using ethanol as a gasoline blend. However, propping up less efficient producers with endless subsidies and mandating production of biofuels will not increase our energy security, and will likely produce a host of negative unintended consequences.

The U.S. Energy Information Administration believes that the practical limit for domestic ethanol production is about 13.8 billion gallons by 2030, or about 7 percent of the transportation fuels market (Annual Energy Outlook 2007). Mandating the production of 36 billion gallons of ethanol by 2022 will require a fleet of flex-fuel vehicles, but currently, less than one percent of retail stations sell E85, a blend of 85 percent ethanol and 15 percent gasoline.

According to IER Adjunct Scholar Jerry Taylor, virtually all studies show that greenhouse gases associated with ethanol are about the same as those associated with conventional gasoline once the entire life cycle of the two fuels are compared. Further, as more land is harnessed for corn production, less fertile soils will be brought into production, requiring more energy intensive inputs into the corn production process, primarily in the form of increased use of fertilizers and irrigation.

"As we re-open previously dormant land to produce corn for ethanol -- we may be unwittingly emitting tons of carbon dioxide with simple land-use changes," warned Amy Kaleita, assistant professor of agriculture and bioengineering at Iowa State University.  Such a massive increase in corn production for ethanol poses other serious environmental risks emerging in the so-called "Dead Zones" in the Gulf of Mexico and the Chesapeake Bay.

Dineen claims that we are close to making cellulosic ethanol a reality, but Robert Bryce, a fellow with the Institute for Energy Research, wrote, "cellulosic ethanol is akin to the tooth fairy: it's an entity that many believe in, but no one ever actually sees. There are plenty of believers in cellulosic ethanol, but there's no reason to expect that the industry will be able to grow fast enough." ("The Senate's Ethanol Delusion," Energy Tribune).

These are legitimate concerns that require serious thought before Congress mandates the use of billions of gallons of renewable fuels.  The breakthroughs in technology necessary to produce new energy sources will come from entrepreneurs and innovators.  Academic energy experts are researching and evaluating the best options to secure a robust supply of energy well into America's future.  The free market should pick the next great technology, not the lawmakers and lobbyists on Capitol Hill.

The Institute for Energy Research (IER) (http://www.energyrealism.org/) was founded in 1989 to conduct historical research and evaluate public policies in the oil, gas, coal, and electricity markets.  Click here for more information (http://factsonenergy.com/). 

Institute for Energy Research