The UN Chronicle

Ethanol from Corn:
A Solution to Oil Dependence?

By Paritosh Kasotia

Only recently, ethanol has gained the popularity that is reserved for major breakthroughs, even though it has been used as a fuel since 1908, when Henry Ford produced the first ever vehicle that could run on ethanol or gasoline, or a combination of both. At present, countries, such as Brazil and the United States are tapping into the enormous potential ethanol has to offer. In the United States, ethanol is produced using corn, while in Brazil, sugarcane is used. Many see this as an opportunity to shift away from the reliance on non-renewable energy sources.

Ethanol, compared to gasoline, is not only an efficient fuel but also offers numerous environmental benefits. However, as some argue, too much focus on this biofuel can pose a danger to the economies of countries that are heavily dependent on corn imports. Shifting from crops that are mainly grown for food or feed usage to crops grown for fuel usage can significantly disrupt the stability and sustainability of an economy, especially those that are unstable to begin with. Besides, other sources of biodiesel promise more environmental benefits and energy efficiency than ethanol from corn.

Ethanol, an alternative fuel, is produced using starch crops. In simpler terms, crops such as corn and sugar cane are broken down into plain sugars, and are then are fermented and distilled.¹ Other crops, such as sorghum, potatoes, wheat and even fruit and vegetable waste, can be used to produce ethanol. According to the Earth Policy Institute, Brazil, followed by the United States and China, is the largest producer of ethanol in the world. Due to the increases in oil prices, many corn producers in the United States have reaped the benefits of ethanol production, and many others are headed in the same direction. According to The World Ethanol and Biofuels Report, 54 new ethanol distilleries have been built in the United States between October 2005 and 2006.

Ethanol, a renewable and biodegradable source of energy, undoubtedly provides numerous environmental benefits, the most obvious being that it reduces greenhouse gas (GHG) emissions, including carbon monoxide (CO), hydrocarbons and nitrogen oxide. The United States Department of Energy, Energy Efficiency and Renewable Energy estimates that corn ethanol can reduce GHG by as much as 52 per cent over petroleum-based fuels. The Canadian Renewable Fuels Association states that ethanol usage can result in a 30-per-cent reduction in CO and a 6 to 10-per-cent reduction in net carbon dioxide. Similarly, the United States Environmental Protection Agency states that due to ethanol’s high oxygen content, CO-emission levels are reduced by 25 to 30 per cent and nitrogen oxide emissions by 20 per cent. Moreover, ethanol production fuel requires less fossil-fuel energy than its petroleum-based counterpart. The United States Renewable Fuels Association, an organization based in Washington, D.C., concludes that ethanol produced from corn or other biomass feedstock generates more energy than is used for its entire production, from field to vehicle.

Besides the environmental benefits, ethanol also provides societal and economic advantages. First, ethanol production supports local farmers, as the revenue generated from ethanol stays in the community. Many of the ethanol plants are owned by local farmers who hire local workers and contract local transportation companies, thus creating a multiplier effect. Therefore, it not only creates job opportunities but also distributes the revenue to many stakeholders, instead of just a few. Such an effect creates a positive impact on the overall economy. Ethanol plants also create economic development opportunities in rural areas. As income increases in a community, it also increases the tax base, allowing the city to provide more social and welfare services. On the property front, ethanol plants are comparably better than nuclear plants or windmills, as they do not negatively impact property values.

Another added advantage of ethanol is that its production does not require the creation of any new product, compared to other renewable energy sources. Since many countries, including developing ones, already produce corn or other comparable crops and plants, they too can benefit from the production of ethanol.

However, many researchers and consumer advocates are skeptical about ethanol as an economically viable energy source. A study by the University of Minnesota, in the United States, finds that even if every acre of corn were used to produce fuel and not food, ethanol would still only supply about 12 per cent of America’s motoring fuel. Many researchers are also calling the corn-based ethanol the least sustainable biofuel. Additionally, there are unaccountable costs associated with ethanol production, such as long-term agricultural operations, infrastructure and investment, including water, land and energy. The Governments of developed countries spend hefty sums of money in subsidies to encourage ethanol production. In the United States, the Government has spent $51 billion between 1995 and 2005, which is twice as much as wheat subsidies and four times that of soybean subsidies. Despite all that, the ethanol industry has shown only mediocre results.

One of the biggest criticisms of ethanol comes from University of Minnesota economists C. Ford Runge and Benjamin Senauer, who claim that growing ethanol for fuel can disrupt the food production for human consumption, as it would take vast acres of land. They also claim that increase in food prices due to ethanol demand could cause as many as 600 million more people to go hungry worldwide. An article in Rolling Stone, “The Ethanol Scam: One of America’s Biggest Political Boondoggles”, by Jeff Goodell mentions that the demand for corn used for ethanol production in the United States has disrupted the food economies of many countries. Since the United States supplies two thirds of all global corn exports, the effect of rising costs of corn is being felt by other countries in the world. For example, in Mexico, tortilla prices have jumped 60 per cent, resulting in food riots. Similarly, big importers of corn, such as Japan and Egypt, fear that a reduction in corn export could disrupt their livestock and poultry businesses.² The high demand for corn has increased its price, which, in turn, affects the price of wheat and rice. This phenomenon, according to the Earth Policy Institute, could result in food riots and political instability in lower-income countries that import grains, such as Indonesia, Mexico and Nigeria, among others.

In contrast, Brazil is an example of a country that has rightfully realized the need for biofuels and has truly benefited from it without disturbing the international trade market. The use of ethanol in the country truly came about as a necessity. The oil shocks faced by the Brazilian economy led the Government to invest in the ethanol industry. Brazil still continues to produce ethanol and has taken measures to commercialize ethanol use. According to Mr. Goodell, ethanol from sugar cane in Brazil has an energy balance of 8 to 1—that is, when you add up the fossil fuels used to irrigate, fertilize, grow, transport and refine sugar cane into ethanol, the energy output is eight times higher than the energy inputs. That is a better deal than gasoline, which has an energy balance of 5 to 1. In contrast, the energy balance of corn ethanol is only 1.3 to 1, making it practically insignificant as an energy source. An article in the USA Today mentions that it takes a gallon and a half of ethanol to give the same energy as a gallon of gas.³ Therefore, ethanol from a corn source might not be the right direction in order to achieve oil independence and environmental sustainability. There are other concerns associated with ethanol use. First, corn is not produced year-round, thus limiting a steady energy source. Second, a great amount of capital and resources is needed to create ethanol production plants. Additionally, diesel fuel and petroleum-derived products, such as fertilizers and pesticides, are needed for the cultivation of corn and other ethanol-producing crops.⁴

Despite the benefits ethanol offers, there are far better options that can be utilized to move from our dependence on non-renewable energy sources towards renewable energy sources, but one which takes into account all the costs and the global impact. There are other plant-based biodiesels that are more energy efficient than corn-based ethanol. For example, according to the study by the University of Minnesota, soybean biodiesel yields 93 per cent more energy than the energy invested compared to ethanol, which yields only 25 per cent. Similarly, according to the Department of Energy, ethanol produced from biomass feedstock that is not food-based, such as switchgrass and agricultural residues, carry the potential to reduce GHG by as much as 86 per cent. To conclude, one must weigh all the strengths and weaknesses of a renewable source of energy to ensure that it will be a long-term solution without creating other problems during the process. Ethanol from corn is a good start, but to make it efficient, more research and work needs to be done. Too much investment in corn-based ethanol should not be granted unless it addresses the challenges of food security and energy efficiency, among other factors.

Notes

1 http://www.energyrefuge.com/archives/what_is_ethanol.htm

2 Lester R. Brown “Exploding U.S. Grain Demand for Automotive Fuel Threatens World Food Security and Political Stability” Eco-Economy Updates, November 3, 2006, Earth Policy Institute

3 http://www.usatoday.com/tech/columnist/andrewkantor/2004-02-20-kantor_x.htm

4 http://journeytoforever.org/biofuel_food.html

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