Ever since the Arab oil embargo of the 1970s, ethanol has been touted as a substitute for gasoline that would reduce our dependence on imports of foreign oil. But ethanol was found to be a net energy loser. It requires more energy to produce than you can get from burning the ethanol. Two studies by panels of the U.S. Dept. of Energy in 1980 and 1981 came to this conclusion. Those studies were reviewed by 26 independent scientific experts, who unanimously agreed with their findings. Many other studies since produced the same result.
In recent years, however, it has become politically popular to claim the old studies are obsolete and that better technology now makes it possible to produce a significant energy gain from ethanol. But such assertions are really based not on technology but on patently fraudulent manipulation of numbers! The truth about ethanol has been brushed aside by the promoters of ethanol and by politicians anxious to champion a program for reducing dependence on foreign oil and shovel money to corn farmers and the ethanol industry in return for votes and campaign contributions. Studies—some very recent—reaffirm that ethanol not only has no net energy benefit but that it also has no economic or environmental benefit. It is a loser all the way around—except for those who receive the government subsidies. The January 2007 edition of Scientific American quoted a federal official experienced in both energy and pollution as saying: “Congress didn't do a life-cycle analysis [of ethanol]; it did an ADM analysis”—ADM being Archers Daniels Midlands, the agricultural industry giant, for years the largest producer of ethanol. ADM has been contributing millions of dollars since at least the 1970s to both Republicans and Democrats, often contributing to opposing candidates in the same race.
The most extensive study ever done on ethanol is by Prof. David Pimentel of Cornell University, which is featured in the current Encyclopedia of Physical Sciences and Technology. The leading advocate of claims that ethanol produces a net energy benefit is an economist for the U. S. Dept. of Agriculture, Hosein Shapouri, principal author of a 2004 study. Pimentel has updated his original study, and with his colleague Tad Patzek, wrote in Bioscience, November 2006: “Our up-to-date analysis of the 14 energy inputs that typically go into corn production and the 9 invested in fermentation and distillation operations confirms that 29 percent more energy (derived from fossil fuels) is required to produce a gallon of corn ethanol than is contained in the ethanol.” So much for conservation and reducing our dependence on foreign oil. Further, Pimentel said, “The reason [the ethanol advocates] come up with positive returns and we do not is that they omit about half of the inputs.” One he has cited is the energy needed to make and maintain farm equipment. Are there many American farmers who plant and harvest corn by hand?
Also, the production of hybrid seeds is very energy intensive, requiring seven times more energy than the production of corn for grain. Shapouri did not include this energy requirement.
Even more egregious manipulations have been employed to make ethanol look good. The most important is the allocation of energy costs. The residues from the production of ethanol can be used for animal feed, just like soybean meal, although the latter is much more effective. Shapouri assigns 26.6 percent (19,167 Btu per gallon) of the energy cost of the entire ethanol production cycle to this byproduct, more than two-and-one-half times Pimentel's figure of 6,684 Btu. Pimentel says the energy allocated for this should not be larger than the energy cost of the market alternative, which is soybean meal.
Furthermore, Shapouri assigns an additional energy credit of 34 percent (7,084 Btu per gallon) to ethanol from producing the corn and transporting it, because of the alleged value of the residues. Ethanol is made from the starch in corn, which is 66 percent of its weight. So Shapouri assigns to ethanol only 66 percent of the energy to produce the corn and transport it. This would be like saying that a mining company with ore that has a 5 percent metal content would charge only 5 percent of the cost of mining and transporting the ore to the cost of producing the metal. Once again, a fraudulent accounting gimmick has been employed to simply write off a substantial part of the energy cost of producing ethanol by making the leftovers even more uneconomic. Ethanol is then touted as producing an energy gain, but the combined operation nevertheless produces a large net loss.
Tad W. Patzek is a professor of civil and environmental engineering at the University of California, Berkeley. In addition to participating in the Pimentel study, he has produced his own study titled Thermodynamics of the Corn-Ethanol Biofuel Cycle, (2006). We believe this to be a unique study; we know of no other study that examines this issue from the perspective of thermodynamics. This 105-page study contains very technical material that will not be understandable to nonscientists or those without a substantial background in physics and chemistry. But Patzek makes some important points in clear, simple language that almost anyone can understand. Even a politician. Here are some excerpts:
"The purpose of this paper was to prove beyond any reasonable doubt that the industrial corn-ethanol cycle accelerates the irrevocable depletion of natural resources: fossil fuels, minerals, top soil, surface and subsurface water and air, while creating wide-spread environmental damage throughout continental United States. My arguments relied entirely on the First and Second Law of Thermodynamics, and the Law of Mass Conservation.
"The industrial corn-ethanol cycle brings no net energy savings and no lessening of the U.S. energy dependency on foreign [sources]...The opposite happens....(Italics are Patzek's).
"[We] increase the extent of environmental damage beyond that caused by burning the same fossil fuels directly in the cars.
"The recently-advertised ethanol production from 'agricultural waste,' i.e., plant leaves, stems and roots is even more unsustainable....[Whole plant harvesting] removes 1.5 times as much nitrogen, 1.6 times as much phosphorus, 4 times as much potassium, 13 times as much calcium and 6 times as much magnesium as when this crop is harvested for grain.
"Analysis of the carbon cycle shows that all leftovers from the ethanol production must be returned back to the fields to limit the irreversible mining of soil humus. Thus, production of ethanol from whole plants is unsustainable.
"The minimum cumulative exergy consumption in restoring the environment polluted and depleted by the industrial corn-ethanol cycle is over 7 times higher than the maximum shaft work of a car engine burning the cycle's ethanol. (Italics, Patzek)
"The industrial corn cycle is not renewable, and it is unsustainable by a wide margin (as least 2.3 - 7 times)....No process changes can make this cycle more viable. (Italics, Patzek)
"The recent growth of ethanol production could occur only because of the massive transfer of money from the collective pocket of the U.S. taxpayers to the transnational agricultural cartel represented most notably by Archer Daniels Midlands Co., Cargill Inc., Monsanto Co., and A.E. Stanley Manufacturing Co. This flow of billions of dollars from the pockets of the many to the pockets of the few was accomplished by federal subsidies of corn producers, and federal and state tax subsidies of the ethanol producers."
There are many other problems with producing ethanol. Each gallon requires 1,700 gallons of water and creates 6 to 12 gallons of noxious organic effluent. A recent report by the National Academy of Sciences warns that ethanol could strain water supplies. The huge Ogallala Aquifer, which underlies parts of eight Great Plains states, has dropped 100 feet in some areas in scarcely a half century, due in no small part to irrigation and overproduction stimulated by decades of government crop subsidies. Promotion and subsidies of additional ethanol production can only accelerate depletion of groundwater.
The rising production of ethanol has increased the price of corn, resulting in higher costs for American consumers. In addition to such products as corn flakes, canned and frozen corn, and tortillas, there are many products in which food processors and beverage manufactures utilize high fructose corn syrup (e.g., soft drinks, candy, ice cream) and their prices, too, must reflect rising corn prices. The largest user of corn in the U.S. is the livestock industry, and higher corn prices are hurting exports of beef and pork and worsening America's trade deficit, as well as raising meat and poultry prices for American consumers.
Due to higher corn prices, the profits from ethanol have been dropping. A year ago ethanol returned $2.30 per gallon in profit, but now only 25 cents. In 1973 Chevron, Texaco, and Ashland Inc. began producing corn-based ethanol to add to gasoline. But when the Arab oil embargo ended and oil prices dropped, ethanol was overpriced, and all the plants eventually ceased operations. (Is there a lesson here?)
Ethanol is not only an inefficient and expensive fuel; corn is an inefficient and expensive way to produce it. According to a recent report by Goldman Sachs, it is almost twice as expensive to produce ethanol from corn than from sugar cane. Ethanol from corn costs $83 per barrel, compared to $45 per barrel from sugar cane. The difference is illustrated by the fact we claim ethanol cannot be produced in the U.S. without the federal subsidy of 51 cents per gal—while Brazil can export it profitably to us despite having to pay a 54-cent per gallon penalty in the form of a tariff! The purpose of the tariff is to discourage imports and keep the price artificially high for U.S. corn farmers. Still, Brazil exported over 420 million gallons of ethanol to the U.S. in 2006 compared to only 31 million gallons in 2005. We even import ethanol from such countries as Pakistan, China, Jamaica and the Netherlands, most of which have to pay significant shipping costs as well as the 54-cent tariff. According to the International Trade Commission, our imports of ethanol from all countries quadrupled in 2006, compared to 2005. What is the sense in policies that artificially raise the price of fuel for everyone in America in order to benefit a select few and encourage them to produce a product that can be produced more cheaply in other countries?
The government talks of producing ethanol from cellulose by a process that hasn't even been invented yet, and which may not even be possible. The Goldman Sachs report puts the cost of ethanol from cellulose with current technology at $305 per barrel. Meanwhile, technology that already exists is expanding petroleum reserves and increasing production. Drilling rigs are now extracting oil from 10,000 feet deep in the sea bed at a cost approaching that of drilling 100 feet down in the richest fields of Texas or Saudi Arabia 40 years ago. Just a little over a year ago it was reported that a major new oil source was discovered in the Gulf of Mexico, 270 miles from New Orleans in ultra-deep water. This new finding could boost the nation's reserves by 50 percent. Moreover, the report of this new discovery notes that it paves the way for ultimately dozens of similar discoveries in the Gulf's lower tertiary rock formation.
Carbon sequestration technologies could soon add 89 billion barrels of oil (BBO) to our existing total and eventually add 430 BBO. Saudi Arabia's reserves, the largest in the world and currently about 261 BBO, could go to 461 BBO.
Oil can also be made from coal. South Africa has been doing this since 1955, and several other countries now do so economically as well. The high price of oil has also made it profitable to refine oil from Canada's Athabascan Tar Sands and heavy crudes around the world that were infeasible to develop when the world oil price was much lower. The Canadian deposits—which contain 1 to 4 trillion barrels of oil—have been known for decades, but now technology and the high price of oil have come together to make this the hottest, fastest growing oil-producing region on the planet. Then there is shale oil, abundant all over the world but previously too costly to exploit. At the current rate of petroleum consumption, there is enough shale oil in the world to supply human needs for 40,000 years! There are 800 billion barrels of it just in deposits in Colorado, Utah and Wyoming. A report in the Wall Street Journal in October 2005 states that analysts believe an oil price consistently around $70 per barrel would make this financially feasible to extract. Has our government considered all these factors before deciding to subsidize an inferior substitute for gasoline at an artificially high price for the American public? Of course not. Even if it wanted to, there is no way it could evaluate and integrate these complex, diverse factors into a successful national policy.
What, then, should our government's energy policy be? It shouldn't have an energy policy. It should leave the problem to the marketplace. There is nothing the government could do that would handle this complex situation as efficiently and rationally as the free market. Whatever the government would do would be less effective because it would distort the market, just as its current policies do. Substituting new distortions for old ones is no solution.
As to the supposed air quality benefits from ethanol, they don't exist. As far back as 1991 a report by the National Academy of Sciences stated “using ethanol as a blending agent in gasoline would not achieve significant air quality benefits, and, in fact, would likely be detrimental.” Even EPA admits ethanol produces more hydrocarbons, oxides of nitrogen, and ozone, which are components of smog, than plain gasoline. Ethanol proponents claim it reduces carbon monoxide emissions from automobiles, but a study by the National Research Council in 1996 found this was not true. This conclusion was especially significant because the study was done in Colorado, where ethanol would be most likely to be effective because of Colorado's high altitude. Colorado was selected for the study because it was the first state to require oxygenated fuels and thus had the longest data record. An article in the journal Science by J.G. Calvert of the National Center for Atmospheric Research states: “No convincing argument based on combustion or atmospheric chemistry can be made for the addition of ethanol to gasoline.” And an Arizona Department of Transportation test covering 1 million miles by state vehicles found oxygenates—including ethanol—produced no reduction of carbon monoxide, and in some cases carbon monoxide levels actually increased.
For more on ethanol, link to American Liberty Publishers and then click on FREE ESSAYS at the top of the page. More information is also available in my book Makers and Takers.