It is not just the short-term economics of ethanol that concern agricultural experts. They also warn that corn-derived ethanol is not the “green fuel” its advocates have described. That’s because making ethanol takes a lot of energy, both to grow the corn and, even more important, to run the fermentation facilities that turn the sugar gleaned from the corn kernels into the alcohol that’s used as fuel. Exactly how much energy it takes has been the subject of intense academic debate in various journals during the last few years.
According to calculations done by Minnesota researchers, 54 percent of the total energy represented by a gallon of ethanol is offset by the energy required to process the fuel; another 24 percent is offset by the energy required to grow the corn. While about 25 percent more energy is squeezed out of the biofuel than is used to produce it, other fuels yield much bigger gains, says Stephen Polasky, a professor of ecological and environmental economics at Minnesota. Making ethanol is “not a cheap process,” he says. “From my perspective, the biggest problem [with corn ethanol] is just the straight-out economics and the costs. The energy input/output is not very good.”
The high energy requirements of ethanol production mean that using ethanol as fuel isn’t all that much better for the environment than using gasoline. One might think that burning the biofuel would release only the carbon dioxide that corn captures as it grows. But that simplified picture, which has often been conjured up to support the use of ethanol fuel, doesn’t withstand closer scrutiny.
In fact, Polasky says, the fossil fuels needed to raise and harvest corn and produce ethanol are responsible for significant carbon emissions. Not only that, but the cultivation of corn also produces two other potent greenhouse gases: nitrous oxide and methane. Polasky calculates that corn-derived ethanol is responsible for greenhouse-gas emissions about 15 to 20 percent below those associated with gasoline: “The bottom line is that you’re getting a slight saving in terms of greenhouse-gas emissions, but not much.”
If corn-derived ethanol has had little impact on energy markets and greenhouse-gas emissions, however, its production could have repercussions throughout the agricultural markets. Not only are corn prices up, but so are soybean prices, because farmers planted fewer soybeans to make room for corn.
In the May/June 2007 issue of Foreign Affairs, C. Ford Runge, a professor of applied economics and law at Minnesota, cowrote an article titled “How Biofuels Could Starve the Poor,” which argued that “the enormous volume of corn required by the ethanol industry is sending shock waves through the food system.” Six months later, sitting in a large office from which he directs the university’s Center for International Food and Agricultural Policy, Runge seems bemused by the criticism that his article received from local politicians and those in the ethanol business. But he is steadfast in his argument: “It is clearly the case that milk prices, bread prices, are all rising at three times the average rate of increase of the last 10 years. It’s appreciable, and it is beginning to be appreciated.”
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- University of Minnesota researchers explore the future of biofuels.
- C. Ford Runge explains the problems of corn ethanol.
- Venture capitalist Vinod Khosla details the market potential of alternative energies.
The recent OECD report, released in early September, is just the latest confirmation of his warnings, says Runge. And because a larger percentage of their income goes to food, he says, “this is really going to hit poor people.” Since the United States exports about 20 percent of its corn, the poor in the rest of the world are at particular risk. Runge cites the doubling in the price of tortillas in Mexico a year ago.