Don’t let the headlines fool you - there is actually some pretty positive news for ethanol in the Congressional Budget Office report issued yesterday, “The Impact of Ethanol Use on Food Prices and Greenhouse-Gas Emissions.”
Despite the decidedly negative spin in the media, the report actually shows that a) other factors actually had a bigger impact on food prices last year than ethanol did and b) that ethanol is reducing greenhouse gas emissions.
The CBO considers the period from from April 2007 to April 2008 and determines that “the rise in the price of corn resulting from expanded production of ethanol contributed between 0.5 and 0.8 percentage points of the 5.1 percent increase in food prices measured by the consumer price index (CPI).”
However, the next sentence in the report summary states that over the same period, “certain other factors—for example, higher energy costs—had a greater effect on food prices than did the use of ethanol as a motor fuel.” But, when talking about how much impact the higher food prices are having on federal food assistance spending, the report only focuses on that portion attributable to ethanol use, which is not really fair. Those “certain other factors” should have taken their share of the blame as well, don’t you think?
In addition, the report notes that ethanol’s effect on future food price inflation is “uncertain because the forces determining that impact move in opposite directions.”
Federal mandates now in place require additional use of ethanol in the future, which would continue to put upward pressure on prices. In contrast, increases in the supply of corn from cultivating more cropland, increasing crop yields, or improving the technology for making ethanol from corn or other feedstocks (raw materials) would tend to lower food prices.
Regarding the emissions side of the equation, the report states that “in the short run, the production, distribution, and consumption of ethanol will create about 20 percent fewer greenhouse gas emissions than the equivalent processes for gasoline. For 2008, such a finding translates into a reduction of about 14 million metric tons of carbon dioxide and equivalent gases (a standard measure of greenhouse-gas emissions).”
The report also indicates that could improve substantially if cellulosic ethanol becomes commercially available, although they don’t seem to be very optimistic that will happen. Meanwhile, those of us who believe in good old American know-how and ingenuity believe it will.
Mike Sawyer, president and owner of ethanol plant Western New York Energy, was interviewed by Rochester, NY TV station WHAM, where he goes head to head with Kent Gardner of the Center for Governmental Research.
Mike talks about food and gas prices, as well as subsidies and ethanol’s impact on the environment.
Ethanol emissions are environmentally friendly when compared to gasoline. The energy conversion at his plant is nearly 3-to-1, meaning 3 units of energy for every one invested into. Even when the growth, transportation, and production of corn is taken into account the energy conversion is positive. As for the energy his plant uses? Most is natural gas, a domestic and clean energy supply. A wide variety of studies taking aim at Corn Ethanol are being funded by its one market competitor – “Big Oil.” (NOTE: That was not the case with the Stanford study referenced.)
Energy Business Daily, an energy market blog, has posted an interesting story today addressing four main criticisms of ethanol:
1. Little is gained with respect to reducing overall oil consumption in the U.S. and the world.
2. The enormous quantity of corn and soybeans diverted from the food chain in the process of manufacturing ethanol is creating serious food shortages throughout the world.
3. The amount of greenhouse gases (GHG) emitted into the atmosphere in the production of corn ethanol exceeds the reduction of GHG achieved by using ethanol in place of gasoline.
4. The destruction of forests in various countries of the world in order to grow fuel crops is removing valuable CO2 absorption sinks from the earth resulting in greater amounts of CO2 going into the atmosphere, thereby exacerbating climate change.
The blog then goes on to address each of these complaints one by one, methodically pointing out unfair and/or wrong assumptions.
Their final conclusion?
Ethanol production from biomass is far and away a positive means of relieving our dependence on oil. According to the Energy Information Administration ethanol already represents about 9 percent of the total U.S. gasoline supply. Overall, its shortcomings are offset by its many advantages. Not only does it reduce our need for oil but it also provides many new domestic jobs, increases farmer liquidity, and lowers fuel prices (according to Merrill Lynch “without biofuel programs, the price of oil would be about $21 a barrel higher than it is now”). While ethanol is not without its faults, it is a positive contributor to our nation’s oil independence and should not be sold short.
“Any intelligent fool can make things bigger, more complex, and more violent. It takes a touch of genius — and a lot of courage — to move in the opposite direction.” - Albert Einstein
According to a Genius, ethanol use really is helping to reduce in greenhouse gases on a global scale, contrary to what some “intelligent fools” may claim. That finding is from a report that was commissioned by the International Energy Agency (IEA) Bioenergy Task 39. The results were announced today by the Global Renewable Fuels Alliance (GRFA), an organization which represents over 60% of the global biofuels production from 30 countries.
Using a model for lifecycle assessment of transportation fuels called GHGenius, report author Don O’Connor examined greenhouse gas (GHG) reductions from grain ethanol since 1995 and projected GHG reductions from ethanol out to 2015. The important conclusion was that GHG reductions will grow by over 100% from 1995 to 2015.
In addition, the research also found ethanol’s energy balance continues to improve as well. In 2005, the energy balance ratio for grain ethanol was estimated at 1:1.42, meaning every unit of energy used to produce ethanol returned 1.42 units of usable energy to the consumer. By 2015, the energy balance ratio is expected to be 1:1.93, a 55% increase in energy efficiency in just 10 years.
GRFA spokesperson Bliss Baker says the report clearly illustrates the improving environmental performance of ethanol compared to gasoline. “This report demonstrates that governments must develop energy policies that take into account the increasing efficiency of global ethanol production and do not rely on out-of-date data and out-dated straw man arguments,” said Baker.
“The rapid development of new technologies will make existing ethanol production as well as next generation biofuels increasingly beneficial to global energy and environmental goals,” Baker said. “The bottom line is simple: renewable fuels like ethanol are a simple and effective alternative to increased used of petroleum.”
Or, as Einstein once said, “We can’t solve problems by using the same kind of thinking we used when we created them.”
Read the entire report here.
Listen to audio from the press conference today announcing the report findings.