Why Won't Ethanol Just Go Away?

Lynne Kiesling points out that, like swallows returning to Capistrano, a new energy bill debate in Congress has brought out the Ethanol advocates.  Lynne takes several good swipes at this stupidity:

I actually just heard John Thune say that ethanol is a clean fuel that will
lessen our dependence on foreign oil. Spare me. Ethanol is neither clean nor a
silver bullet to make us self-sufficient in energy. Ethanol production is
filthy, just as dirty as other manufacturing processes, particularly when you
take into account the appalling effects of fertilizer runoff killing fish in the
Gulf of Mexico when growing the corn for the ethanol. Why don't the Senators
from Louisiana open up a can of whup ass on this one?

Reducing dependence on foreign oil is a specious objective when you recognize
that oil is traded in integrated world markets and we are not low-cost
producers. So even if we reduce our oil consumption the marginal barrel of oil
will still come from somewhere in the Middle East. That won't change. Reducing
our consumption would be likely to reduce oil prices (but only marginally,
because China's demand is the big price driver right now) and would be good from
a conservation perspective, but it won't change the fact that we import oil from
places we don't think we can trust.

What she does not mention, probably because she is tired of repeating the obvious, that most careful studies show that producing ethanol requires as much or more energy than it provides.  In other words, it takes more than a barrel of oil to make the fertilizer, run tractors, harvest the corn, take it to market, and process it into a enough ethanol to replace a barrel of oil. 

To prove this, I would point to a lot of studies from ethanol opponents, but I will instead use data from an ethanol supporter.  From this biofuel support site:

In the US most ethanol is
made from corn (maize). A US Department of Agriculture study concludes
that ethanol contains 34% [sic, see below] more energy than is used to grow and harvest
the corn and distill it into ethanol.

Here are a couple of observations.  First, 34% is incorrect.  The first paragraph of the study they link says 24%, not 34%.  Second, this is the only study I have ever seen that shows the energy balance positive, which may be because it is from the Department of Agriculture and not the Department of Energy.  Third, to get to even this small positive balance, their number is based on the theoretical best number if every single stage of the agriculture and production process uses best known practices.  Using current practices that are actually in place in the production chain, even this study says the energy balance is probably negative.  Fourth and finally, 24% is pathetic.  Supporters imply that one gallon of ethanol replaces one gallon of oil.  It does not -- using these numbers, and factoring the .8 gallon of oil needed to produce that one gallon of ethanol, then one gallon of ethanol replaces at best only .2 gallons of oil.  This means that if we subsidize ethanol 30 cents per gallon (which is probably low) then the effective subsidy per gallon of gasoline replaced, which is what is relevant, is $1.50!  Ouch! And remember, this is based on ethanol's supporters numbers.  Based on most everyone else's numbers, the subsidy per gallon replaced is infinite.

Ethanol subsidies do nothing to add energy to the US market and just pass tax dollars to Archer Daniels Midland and other similar Ag conglomerates.  Stupid, stupid, stupid.  The only thing uglier than these distortions in the energy bill is the scene of Republican and Democratic candidates falling over themselves every four years to support these subsidies in order to compete in the Iowa caucuses.

  • http://chocolateandgoldcoins.blogspot.com/ Michael H.

    Hi Coyote
    There was an interesting article about ethanol production in Brazil. They can produce ethanol very profitably there. We try to keep it out with stiff tariffs but it can still beat our U.S. ethanol even with the 51 cent/gallon subsidy.
    Here's a link:
    http://www.washingtonpost.com/wp-dyn/content/article/2005/06/17/AR2005061701440.html

  • http://www.marketpowerblog.com Phil Miller

    Hi Coyote, I have a blog post coming up tomorrow on an article similar to that Michael H. has linked to above. But as you say, it's the farm lobby that's controlling this stuff.

  • http://www.alamn.org/media/blogger.html Bob from the ALAMN

    The American Lung Association of Minnesota supports E85 fuel because it is cleaner-burning than gasoline.

    See our website for more details:

    http://www.CleanAirChoice.org

  • Mike

    How much, in dollars and cents, is our oil industry subsidized with military equipment and human lives?? So, if ethanol is currently priced at $1.25 per gallon and I pay $2.34 a gallon for regular unleaded grown in a terrorist supported country, why shouldn't I use ethanol as an alternative fuel?

  • http://www.e85fuel.com Paul

    Clearly, infrastructure for ethanol distribution is inversely-proportional to price. Hence, if a stronger structure is built (as is currently happening), prices will become increasingly competitive. That is the only thing that the analysis proves.

    Brazil's success with ethanol as a fuel and independence from foreign energy is not an accident.

  • Paul from OKC

    I also think it is interesting that Lynne Kiesling conviently left out cellulosic ethanol, which is where the real ethanol source will soon come from in the US. At this point ethanol will become pennies on the dollar to manufacture. I am certinaly not going to argue that we could not support our fuel dependencies on corn ethanol as we clearly could not. Cellulosic ethanol, however, will easily take care of the US motor fuel needs and then some. I would like to see her arguments (or anyone else's for that matter) on cellulosic production.

  • Max Reid

    Yes, Ethanol from Corn yields only 30 % more energy than input, but Cellulose Ethanol from other sources yields 200 % more energy and that will be much cheaper.

    Oil Lobby knows that Ethanol is the threat to their big profit and will cry foul on that source.

    No matter what they cry, Ethanol consumption continues to grow and Oil prices continue to grow.