The Corn Ethanol Deception: How Politicians and Agribusiness Tried to Silence the Critics and Promote a Bad Idea
The following article is adapted from Edwin Black's bestselling 2006 book Internal Combustion, which won numerous awards for editorial excellence, including Best Book of the Year from the American Society of Journalists and Authors, plus the Green Globe, Thomas Edison Award and Best Investigation of the Year. Learn more at www.internalcombustionbook.com.
From The Cutting Edge (TheCuttingEdgeNews.com)May 5, 2008
What began as an additive functioning as a 10 and 15 percent gasoline extender has become elevated to a potential major ingredient in a gallon of gas. E85, for example, is an emerging blend of automobile fuel composed of 85 percent ethanol and only 15 percent gasoline. Dedicated E85 pumps are now being established at gas stations, mainly in the Midwest’s corn-rich farm belt.
At first blush, ethanol from corn appears to be a solution from America’s heartland, a win-win proposition in the struggle to free the world from harmful hydrocarbons and politically embroiling fuel. But American corn ethanol cannot stand on its own. Ethanol actually depends upon the continued use of petroleum and by necessity increases petroleum consumption and greenhouse gases. Many experts say ethanol simply uses more petroleum than it saves. For example, a key series of studies was conducted by Tad Patzek, a University of California geoengineer and David Pimentel, a Cornell University expert in life sciences, energy, and sustainable agriculture. Pimentel’s and Patzek’s studies asserted that, “ethanol production using corn grain required 29 percent more fossil energy than the ethanol fuel produced” and that even proposed alternative ethanol cellulosic sources other than corn, such as switchgrass, wood, and straw, “required 50 percent more fossil energy than the ethanol fuel produced.” Those energy expenditures cover a range of hydrocarbon users from the diesel-burning tractors and combines on the farm to the ordinary trucks needed for transport to and from the industrial centers.
“In plain words,” Pimentel explained, “it takes 1.29 gallons of petroleum or petroleum equivalents to produce one gallon of ethanol.”
The conclusion that ethanol drank more petroleum than it saved subjected the two researchers to a vilification campaign by ethanol industry lobbyists, according to Pimentel. “Our first such report was reviewed by 26 top scientists who advised the Secretary of Energy,” he said, “and they unanimously approved it. But two members of Congress from ethanol-producing states had us investigated—our very honesty was investigated,” said Pimentel. Patzek and Pimentel say they welcomed the investigations, which they say only sustained their findings. “But now I would like another investigation,” Patzek insisted, “a thorough investigation of this entire affair.”
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When asked about the Pimentel and Patzek studies, a National Ethanol Vehicle Coalition spokesperson stated that such studies were “discredited,” adding, “Only uneducated people would write such a thing, or believe such a thing.” A second official from the organization stated, “I concur. Such people are uneducated.”
Patzek denied he was uneducated, citing his coauthorship of 177 scientific papers, and at least five books. His resume includes degrees in chemical engineering and engineering physics, as well as a prior stint with Shell Development where he worked on “enhanced oil recovery methods and evaluated the future of U.S. energy supply from tar sands, heavy oil, and coal.” He added, “I have taken more courses in thermodynamics than almost anyone at Berkeley.” Patzek, who has published his findings widely, says he will not back down and has more scientific peer-reviewed journal articles on the topic coming out. However, said Patzek, he must now must keep future articles a secret until after publication to avoid pressure on academic editors by ethanol interests.
Pimentel also denied he was uneducated, explaining he was an Oxford University graduate and author of 600 scientific papers and twenty-five books. “The problem is the ethanol people have a lot of money,” says Pimentel, adding staunchly, “This is not about energy or science. What is driving ethanol is politics and big money. You can quote me!”
A senior alternative fuels expert from a leading company within the automotive industry that has abstained from the ethanol bandwagon concurred. “Ethanol is just a scam,” the source said, “and I hope you have the courage to say so publicly!”
Criticizing corn carries a price. Even a March 1997 study by the Government Accountability Office (GAO) documenting the adverse energy tax effects of ethanol was viciously attacked by corn interests. After the study, Sen. Charles Grassley of Iowa in a long letter written June 6, 1997 demanded an official explanation and a self-investigation by the GAO of itself. Throwing down the gauntlet, Grassley demanded answers to a series of fiery, accusatory questions.
Question 2: “[Explain why] the report is most egregiously flawed by giving the appearance of being a cost benefit analysis when it clearly is not.”
Question 4: “Was it your intention to deceive Congress and the public, or was this the unavoidable outcome given the narrow, specific nature of the questions you were required to answer?”
Questions 5 and 6: “Why did you bury your admission on page 23 that this report should not be viewed as a cost-benefit analysis, instead of highlighting this crucial point at the beginning?”
Question 9: “Why did you fail to report that the elimination of the alcohol fuels tax incentives would create additional consumer costs in the reformulated gasoline markets?”
Questions 12, 13, and 14: “Did you not realize that by framing your discussion of energy impact by measuring ethanol’s energy security benefit in relation to its displacement of crude oil instead of [the deadly additive] MBTE, that you would be obscuring the importance of ethanol in reducing [deadly] MBTE imports?” Grassley’s letter even excoriated the GAO for including the history of congressional action on behalf of ethanol.
Question 16: “What purpose was served by Appendix I, Chronology of the Legislation and Events Affecting Ethanol Fuel Use?”
Despite Grassley’s J’Accuse, GAO officials answered point by point and reiterated their assertion about ethanol, appending that the additional attendant military cost was therefore a foregone conclusion: “We concluded in our report,” reaffirmed the GAO, “that the alcohol fuels incentives do not significantly reduce petroleum imports. Therefore, defense expenditures and foreign assistance to protect oil supply lines from the Middle East were appropriately beyond the scope of this report.”
The ethanol industry itself advocates the least negative study available, this one by Argonne National Laboratory, which concluded that only three-quarters of a billion BTUs of fossil fuels are required for each 1 million BTUs of ethanol delivered, or about three quarters of a gallon of petroleum or equivalents to produce a single gallon of ethanol. But, says Pimentel, “Argonne left out many of the energy inputs, such as the energy used by farm machinery and their maintenance. They left out processing equipment. They even left out the petroleum used in the production of hybrid corn.”
The ethanol industry trumpets the Argonne analysis because the same study also concludes that traditional gasoline production requires even more petroleum, about 1.23 million BTUs of fossil energy consumed for each million BTUs of gasoline delivered. The higher cost of producing a traditional gallon of gasoline sets forth the ecologic and economic sophistry that because it takes more gasoline to make gasoline than to make ethanol, ethanol is therefore preferred. iIn other words, by this thinking, ethanol functions not as a solution, but the lesser of two energy evils. Either way, these studies ipso facto demonstrate the inherent inefficiency of the whole concept of gasoline-based internal combustion. Numerous studies do agree that it takes more than a gallon of petroleum to produce and deliver a gallon of gasoline. Importantly, all the key studies generally bypass the oil burned by the tanks, trucks, aircraft, and naval ships incidental to the oil industry.
American ethanol by definition must work with gasoline. An oil disruption today would halt or radically reduce ethanol production, depending upon the severity of the disruption. Therefore, ethanol is not an alternative as much as an adjunct with a strong lobbying and advertising movement behind it. For those concerned about an oil addiction, corn ethanol can be compared to a filter-tip cigarette.
Moreover, ethanol requires massive farmland and heavy petroleum-burning farm machinery. There is not enough farmland to produce all the ethanol the nation needs to replace gasoline. Indeed, ethanol industry proponents and experts believe ethanol comes with a built-in ceiling: only 30 percent of the nation’s needs could be solved by ethanol and even that would require an estimated two to three decades of additional farm, distillery, and distribution expansion. Even if do-able, that expansion in ethanol comes at a significant cost.
The American government pays an unnecessary 51-cent-per-gallon subsidy for every gallon of ethanol, a price support achieved by a convergence of lobbying and commercial interests. This subvention is granted to the oil company blenders as an “incentive” to blend the ethanol yielded by such giant agribusiness concerns as Cargill and ConAgra. One of those leading corn interests, Archer Daniels Midland, has been the subject of multiple criminal investigations, and in October 1996 it agreed to pay the largest criminal antitrust fine in history, $100 million, this for lysine price fixing. The company’s executives in Decatur, Illinois, were indicted right along with the company. Among the statements secretly videotaped by the FBI’s mole was the assertion: “the customer is the enemy.”
The 51-cent-per-gallon subsidy comes by way of HR 4520, the American Jobs Creation Act of 2004, signed into law on October 22, 2004, by President George W. Bush. Within the Jobs Creation Act was the little-noticed Volumetric Ethanol Excise Tax Credit. The next year, 2005, $2.1 billion in tax credits were issued to oil companies to blend some 4 billion gallons of ethanol. These were not tax deductions, but tax credits that allow a write-off directly from the oil companies’ bottom line tax bill. In turn, the 51-cent subsidy boosted ethanol demand which in turn raised the price of a bushel of corn for producers such as Cargill, and concomitantly inflated the cost of ethanol at the pump by as much as 30 percent. Sources in the ethanol industry readily concede this subsidy functions as “a pass-through subsidy” to corn and ethanol producers.
The fast growth of ethanol in large measure is also pegged to the introduction of so-called Flex-Fuel cars from General Motors and Ford. These cars, which employ a capability first achieved decades earlier by Henry Ford in the Model T, enable twenty-first-century vehicles to seamlessly operate on a combination of fuels, from traditional gasoline to ethanol-rich E85. From first appearance, the introduction of Flex-Fuel cars appears to be a dynamic move toward home-grown energy independence. Ford has already sold some 2 million such vehicles in the U.S. through the beginning of 2007 and adds many thousands more each month. GM is aggressively marketing E85 in various parts of the Midwest. Flex-Fuel vehicles make enormous sense for combustibles other than corn ethanol. But every gallon of American corn ethanol consumed requires the world consume and endure more petroleum-burning.
America’s ethanol industry is keenly aware of its dependence upon petroleum. Its industry trade group has called for new processing plants to be partially driven by renewables and is also investigating utilizing other cellulose products, such as switchgrass. But those developments are many years away.
However the 51-cent-per-gallon corn ethanol subsidy is here today. That has started a frantic gold rush to produce corn to sell to oil companies to blend. Those GM and Ford Flex-Fuel vehicles and pumps sprouting throughout the Midwest and beyond only telescope the market. In 2006, 97 ethanol plants produced 4 billion gallons. But the industry hopes to double its output by 2012. Scores of plants are now under construction and many more are fast jumping from drawing board to construction. But coal is cheaper than natural gas, so ethanol will now also become a consumer of tons of daily coal. Hence, many of those new ethanol plants will be rushed into operation as cheap coal-burning facilities.
For example, as of 2007 the Gold-Eagle Cooperative of Iowa was burning 300 tons of coal daily—three railroad carloads—to produce 150,000 gallons of ethanol a day. Affable Gold-Eagle Cooperative general manager Brad Davis happily explained that hazardous particulate matter was greatly reduced by his refineries. “This is clean coal,” he said proudly. “You can’t even see the smoke coming out of the chimney.” Asked if the coal was mined by traditional smoke-spewing, heavy, diesel-thirsty coal mining equipment, and then transported by diesel trains, and offloaded and processed by any number of greenhouse-inducing diesel processes, Davis answered, “I guess it is.”
Ironically, ethanol is achieving genuine green independence for Brazil. Brazilian ethanol comes from sugar cane, which American soil cannot grow in cheap abundance. Most importantly, ethanol refineries are driven not by coal or hydrocarbons but by a sugar cane by-product called bagasse. Hence, Brazilian ethanol is genuinely renewable and sustainable. Flex Fuel vehicles manufactured by Ford and GM for the Brazilian market can use ethanol that exceeds an 85 percent admixture. They can run on E100, that is, 100 percent ethanol. Zooming petroleum prices in 2006 pushed Brazilian ethanol into profitability and has already ended the country’s importation of foreign oil. Indeed, Brazil has been exporting millions of gallons of ethanol to the United States. Today, most Brazilian vehicles operate on either 100 percent sugar cane ethanol or a substantial petroleum mix. Brazil owes its success story to more than two decades of ethanol production heavily subsidized Manhattan Project-style by the government, plus an intelligent choice of sugar cane as feedstock choice, and the ability to drive the industry by burning alternative bagasse. Today, Brazilian ethanol stands on its own, almost free of subsidy, as a free market fuel—homegrown and almost pollution free.
Brazilian sugar cane ethanol is produced in a process ultimately eight times more efficient per gallon than corn ethanol. Yet the American importation of Brazilian ethanol is profoundly obstructed by a 54-cent per gallon special tax designed to keep this energy solution out of the country in favor of petroleum-dependent corn ethanol. Indeed, even American investment in Brazilian sugar cane ethanol has been restricted by Washington-imposed restrictions.
The current state of affairs swirling around corn ethanol was not created by any one branch of government but by a lobby-dollar hungry Congress working in tandem with a petroliferous White House. The corn lobby drove this process because the Iowa Caucuses makes corn power indispensable to political power. That is even truer in a presidential year.