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Should the U.S. Halt Corn Ethanol Production During the Drought?

RP Siegel | Wednesday August 15th, 2012 | 17 Comments

Last week, the director-general of the UN Food and Agriculture Organization, José Graziano da Silva told the Financial Times (login required) that the U.S. should suspend its binding biofuel mandates in light of the looming food crisis. “An immediate, temporary suspension of that [ethanol] mandate would give some respite to the market and allow more of the crop to be channeled towards towards food and feed uses.”

U.S. Agriculture Secretary (and former Iowa governor) Tom Vilsack pushed back, saying that the U.S. biofuel industry had reduced gasoline prices and created jobs. He doesn’t bother to mention that corn ethanol has a 20 percent lower carbon footprint than gasoline or that “growing our own,” is helping to move the U.S. closer to energy independence.

So what is really at stake here and what is the right thing to do? That’s up to you to decide, but let’s look at some of the background.

The food crisis
Because of the drought and the extreme heat this summer, the level of U.S. corn stocks is the lowest it’s been since 1995. The USDA forecasts a U.S. corn production drop of almost 13 percent from last year. Exports will be the lowest in 19 years. In recent years some 36 percent of those exports have gone to developing countries. In fact, the U.S. expects to double the amount of corn it will import this year (to 1.9 million tons).

Rising prices are expecting to lead to increased planting in South America and elsewhere which will pick up some of the slack. But production increases overseas will not offset the falloff in U.S. production. Overall global production, of which the U.S. contributes one-third, is expected to fall 3 percent. That may not sound like a lot, but considering population growth and the fact that the severe weather that has impacted some areas disproportionately, it is.

Drought conditions in Russia and Eastern Europe have cut production there as well. And excessively heavy rains have had the same effect in other areas, such as Brazil, Indonesia and Australia. All of this has led to higher food prices. Most of the impact on food prices in the US will not be seen until next year, when the cost of beef, chicken, pork, and milk are expected to rise by approximately five percent.

No place has suffered more than Africa. More than 18 million people across the Sahel region of Western and Central Africa are facing a food shortage of crisis proportions due to erratic rains in that part of the world.  In a region where people spend as much as 80 percent of their income on food, they simply can’t absorb a doubling of food prices which is what they are seeing. This is made even worse by widespread unrest in the region, fueled by a flood of arms in the aftermath of Gadaffi’s downfall, a longstanding ethnic conflict among the Tuaregs, and the growing presence of Al Qaida-linked insurgence movements. The violence has forced many families to flee their villages and crowd into other already-crowded regions seeking refuge. And these places, such as Niger and Burkina Faso, were already struggling to feed their own people. According to Action Against Hunger, one in five of the fleeing families has at least one child suffering from severe acute malnutrition.

The push for biofuels
The biofuel “mandate,” which was instituted after the DOE estimated that as much as 30 percent of our current fuel consumption could be met by plant-based fuels, which, last year, diverted some 40 percent of the U.S. corn crop into ethanol production. The mandate, otherwise known as the Renewable Fuel Standard, is overseen by the EPA. It initially required, under the Energy Policy Act of 2005, that 7.5 billion gallons of renewable fuel be blended into gasoline stocks by 2012. That target was raised in the Energy Independence and Security Act of 2007, to the point that by 2022, a total of 36 billion gallons will be incorporated up to a 15 percent blend of the fuel by volume. EISA also placed a cap of 15 billion gallons on the amount of corn ethanol that could be produced, in order to not overly interfere with food production. Much of the difference is expected to come from cellulosic biofuel, which consists of wood scraps and forest trimming and are not seen as competing directly with food. However, cellulosic ethanol production has been slow coming on line and this year is expecting to contribute 10.45 million gallons, well short of the 250 million gallons originally proposed. Biodiesel and unspecified advanced biofuels are expected to make up the rest.

Actual production of corn ethanol last year was around 14 billion gallons, boosted by a federal subsidy of 45 cents per gallon, which ended at the end of last year. The subsidy contributed to a drop in corn prices which, among other things, led to a flood of high fructose corn syrup, which challenged waistlines all around the country. What a difference a year can make. Take away the subsidies and add a record drought, and suddenly corn prices are soaring

What does this have to do with the price of gas?
Just to put this in perspective, back in 2008, the National Renewable Energy lab (NREL) estimated that the impact of ethanol on fuel prices was a reduction of roughly approximately 17 cents per gallon. Another, more recent study conducted in the corn-friendly state of Iowa, shows cost savings of as much as $1.09 a gallon at the point in time when gas prices were peaking. The same study said that the average savings over the period from 2009-2011 was 29 cents per gallon. However, as Marlo Lewis points out on globalwarming.org, this does not take into account the fact that due to the lower energy content of ethanol, the cost per mile of 15% ethanol-blended fuel can actually be higher than straight gasoline.

So what do we do?
Price of gas notwithstanding, this is not a simple question to answer. Of course, no one wants to say no to starving children. Compassion urges us to follow the UN director-general’s advice. But if we divert corn production away from ethanol, that means we will be burning more gasoline, which will increase our carbon footprint and very likely lead to even more severe droughts in the future. This is the kind of difficult, short-term vs. long-term choice that we can expect to see more of going forward as we deal with the unintended consequences of the 20th century way of life. If we don’t take the longer term option much, if not most of the time, then we will likely not improve our sustainability quickly enough to make a difference. My inclination would be to temporarily relax the ethanol quota, while at the same time making enough additional investments in cellulosic ethanol, advanced biofuels and other renewables to offset the long term impact. This would also help to create jobs and stimulate the economy Since we already know that corn ethanol is far from optimal as a biofuel, this move could help to accelerate us into more productive options.

The other valuable lesson we can learn from this is: shame on us from allowing ourselves to become so dependent on a single crop, thanks in no small measure to the strenuous efforts of the corn lobby. Especially when that single crop is as vulnerable to drought as corn is. This approach is clearly the opposite of resiliency, which is what we are going to need to get through the challenging times that lie ahead.

[Image credit: agrilifetoday: Flickr Creative Commons]

RP Siegel, PE, is an inventor, consultant and author. He co-wrote the eco-thriller Vapor Trails, the first in a series covering the human side of various sustainability issues including energy, food, and water in an exciting and entertaining format. Now available on Kindle.

Follow RP Siegel on Twitter.


▼▼▼      17 Comments     ▼▼▼

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  • CharliePeters

    Lots of corn along I-5
    south of Sacramento that is reported to use 2000 gal of water to grow corn for
    1 gal of ethanol for my gas tank.

    Should Governor Brown consider a waiver supported by the UN?

    Is fed EPA confused when a Lodi bread baker is taken to fed court to collect
    $625,000.00 fine for generating ozone from the ethanol made by baking bread
    while mandating millions of tons in our gas that may be a bigger deal than MTBE
    to our ground water supply? Do water folks check for ethanol in our drinking
    water?

    Drinking ethanol maybe rated as causing cancer but MTBE never has.

    Does ATF audit for the payment of $17 tax of moonshine from the GMO corn fuel
    ethanol?

    Let’s see, a 10,000 gal tanker truck can move around a $170,000.00 tax and a
    reported $0.50 cent process can move fuel grade to food grade.

    • Dave shires

      Charlie… Can you give us a little contex here?

      • CharliePeters

        Bill Clinton, Al Gore & Senator Obama supported the California
        2006 Prop. 87, a GMO corn ethanol welfare program.

        Bill, Al, have changed opinion on the ethanol mandate, I wonder if California
        will make this the time for CHANGE?

        I support a waiver of the ethanol mandate, voluntary use of ethanol in my gas.

        Federal ethanol policy increases Government motors oil use and Big oil profit.

        It is reported that today California is using Brazil sugar cane
        ethanol at $0.16 per gal increase over using GMO corn fuel ethanol. In this
        game the cars and trucks get to pay and Big oil profits are the result that may
        be ready for change.

        We do NOT support AB 523 or SB 1396 unless the ethanol mandate is
        changed to voluntary ethanol in our gas.

        Folks that pay more at the pump for less from Cars, trucks, food,
        water & air need better, it is time.

        The car tax of AB 118 Nunez is just a simple Big oil welfare
        program, AAA questioned the policy and some folks still agree.

        AB 523 & SB 1326 are just a short put (waiver) from better
        results.

        GOOGLE: Prop 87 (510)
        537-1796

  • http://www.triplepundit.com Nick Aster

    I’ve seen a lot of conflicting info on Corn Ethanol, including that it’s carbon footprint is actually a lot higher after you consider the amount of fertiliser used… I guess I was wrong on that.

    What I’d really like to know is what’ holding this miracle switchgrass stuff back? Surely we could turn over some cornfields to this hardy plant and have plenty of corn left over for food?

  • http://twitter.com/brendanmcl brendan mclaughlin

    The claims that corn ethanol lowers the price of gas have been roundly discredited, and it’s disappointing that Vilsack is still parroting those stats. This study shows that the calculations used to back the claim are essentially nonsense. The same models conclude that ethanol increases unemployment (nonsense) and increases the age of children (downright silly): http://web.mit.edu/knittel/www/papers/knittelsmith_latest.pdf

  • Carney3

    Ethanol gets a bum rap from both right and left. The reality is, it’s the most widely used alternative fuel and without competition oil would be even more expensive. Even the anti-ethanol Wall Street Journal published a study from Merrill Lynch showing that without biofuels oil would have risen 15% higher than it did in its 2008 peak, so we can thank biofuel for saving the USA more than $100 billion. Food vs fuel is nonsense; while ethanol corn production went up threefold, food corn production rose 45% and other staple crops such as soy saw their production levels rise as well. Droughts come and go – let’s not panic and destroy the only competition the oil cartel has. In fact, we should make compatibilty with not only ethanol, but also methanol with an M (made from natural gas, coal, or ANY biomass) a required standard feature in all new cars, like seat belts. See OpenFuelStandard dot org .

    • RPSiegel

      Yes, ethanol has made a significant contribution to our energy supply. But there are far more efficient ways to produce ethanol from other crops beside corn. See http://grist.org/article/biofuel-some-numbers/

      • Carney3

        That link doesn’t work. In any case, I’m sure it advocates cellulosic ethanol, which for now is too expensive and can’t be produced in sufficient scale.

        It’s easier and cheaper to make methanol rather than ethanol from non-sugar non-starch biomass.

        That’s why we need to make sure that flex fuel vehicles are able to run not just on ethanol but on methanol as well.

        • RPSiegel

          Actually #1 and #2 are sugar beets and sugar cane which have twice the ethanol yield per acre of corn. Brazil now runs largely on sugar cane. My understanding is that methanol is quite dangerous in the environment, especially around water.

        • Carney3

          You’re confusing methanol with methyl tert-butyl ether (MTBE), the octane boosting, knock-preventing additive that preceded ethanol. MTBE is indeed very bad news if it leaks into groundwater.

          Methanol, while toxic, also dissolves easily and breaks down naturally into harmless components. Methanol is the active ingredient in windshield washer fluid, for example – think of the zillions of gallons of it that is flushed into the environment, but nobody complains. Why? Because regulators, activists, etc know it is all but harmless in context and as used.

        • RPSiegel

          I know the difference between methanol and MTBE. Methanol is also quite toxic.
          http://emedicine.medscape.com/article/1174890-overview As little as 2 ounces can be fatal. The fact that it is used in windshield washer fluid does not make it safe. That is why newer, safer alternatives are now coming to market. http://ecoki.com/eco-friendly-windshield-wiper-fluid-solutions/

        • Carney3

          Drinking or even bathing in gasoline is unsafe too. As a practical matter, however, both “toxic” gasoline and “toxic” methanol are safe for daily use. Methanol was used for years in the late 80-early 90s in a very large scale study in California in the punishment of daily commutes, etc. Both cars and humans were unharmed.

    • nikki

      Ethanol from corn is a bad idea all around. Nearly all the corn grown today is from gmo crops which are horrific for biodiversity, aquatic systems, and soils, are chemical and water intensive, and are creating health problems in all who eat it.

      Better biofuels come from algaes and recycled (food) oils (I realize most of those are gmo as well, but at least they do not go into the landfill).

      We should not be using a toxic, subsides crop for anything, period.

      • Carney3

        GMO fear is ignorant superstition. It’s actually much safer, less disruptive, and with less guesswork, side effects, and risk to target only exactly the gene and change you want, and only change that, than to do traditional agriculture and breeding which brings along many unwanted other traits to get the desired result. Anti GMO cultists fear a GMO organism will have other extra traits, but that’s exactly what will NOT happen and why GMO is smarter and better. But they are deaf to irony, let alone facts and logic.

        • RPSiegel

          Not that this has much to do with the original topic, but where exactly does your great confidence in the safety and precision of GMO’s come from? Do you even know how they are made? Many distinguished scientists have serious concerns over a wide range of issues. Numerous developed countries have banned them outright, while others have required labeling. There have been numerous documented instances of Genetic modifications gone wrong, though the industry has made great efforts to suppress these stories. See: http://www.triplepundit.com/2012/02/monsanto-fails-ucs-test-sustainable-agriculture/ See also http://read.uberflip.com/i/62166 Page 13

        • Carney3

          GMOs were banned in Europe not because of legitimate concerns, but because the political party system there enables tiny crackpot ultra-”green” parties to demand concessions to their radical agenda to give more mainstream center-left parties a working parliamentary majority.

          The UCS has zero credibility. To its everlasting shame, it worked diligently to undermine efforts to counteract the Soviet threat during the Cold War.

  • Naive

    Start using sunchokes instead of corn for ethanol. Few people eat them, yields are high, and they are hardy. They do lack a powerful lobby however.