Sunday, April 29, 2007

Corn: Food or Fuel?

At CARE we advocate on behalf of energy—responsible energy. Ethanol sounds like a good idea, until you look deeper. Then you have to ask whether or not it is really responsible. After taking a closer look, one has to question this enlightened proposal. When there are starving children around the world, does it make sense to take food from their mouths to make automotive fuel—especially when we do have oil; albeit it places where portions of the population do not want drilling to take place? In this posting we present a selection of thoughtful pieces collected from apparently diverse sources—an energy industry magazine: The Energy Tribune; an environmental news and commentary publication: Grist; and from the author of The Bottomless Well. Read on. We’d love to have you add your comments.

Food or Fuel? The Ethanol Question
In January, three U.S. senators – two Democrats, Tom Harkin of Iowa and Barack Obama of Illinois, and Indiana Republican Richard Lugar – introduced a bill promoting the use of ethanol. It also mandates the use of more biodiesel and creates tax credits for the production of cellulosic ethanol. They called it the “American Fuels Act of 2007.”

The most amazing part of the press release is its fourth paragraph, in which Lugar declares that “U.S. policies should be targeted to replace hydrocarbons with carbohydrates.”

Let’s consider that statement. In the 18th and 19th centuries, the U.S. economy was primarily based on carbohydrates. Horses were the main mode of transportation. They were also a primary work source for plowing and planting. Aside from coal, which was used by the railroads and in some factories, the U.S. economy depended on the ability of draft animals to turn grass and forage into usable toil. America’s farmers were solely focused on producing food and fiber. And while the U.S. was moderately prosperous, it was not a world leader.

Oil changed all that. After the discovery of vast quantities of oil in Texas, Oklahoma, and other locales, America was able to create a modern transportation system, with cars, buses, and airplanes. That oil helped the U.S. become a dominant military power. Humans were freed from the limitations of the carbohydrate economy, which was constrained by the amount of arable land.

Thus while Lugar and his ilk promote ethanol, they are ignoring a pivotal question: should our farms produce food or fuel?

Last September, Lester Brown, the president of the Earth Policy Institute (a group that promotes “an environmentally sustainable economy”) wrote in a Washington Post opinion piece that the amount of grain needed to make enough ethanol to fill a 25-gallon SUV tank “would feed one person for a full year. If the United States converted its entire grain harvest into ethanol, it would satisfy less than 16 percent of its automotive needs.” Brown said the ongoing ethanol boom in the U.S. was “setting the stage for an epic competition. In a narrow sense, it is one between the world’s supermarkets and its service stations.” More broadly, “it is a battle between the world’s 800 million automobile owners, who want to maintain their mobility, and the world’s 2 billion poorest people, who simply want to survive.”

Using food to make fuel bothers many analysts, and whether their affiliation is liberal or conservative doesn’t seem to matter. Dennis Avery, director of global food issues at the Hudson Institute, a conservative think-tank in Washington, D.C., has concerns that are remarkably similar to Brown’s. A few days after Brown’s piece appeared in the Post, Avery published a paper showing that ethanol simply cannot provide enough fuel to make a significant difference in America’s consumption. And like Brown, he laid bare the essential question: food or fuel?

“The real conflict over cropland in the 21st century,” wrote Avery, “will set people’s desire for biofuels against their altruistic desire that all the children on the planet be well-nourished.” He continued, “The world’s total cropland resources seem totally inadequate to the vast size of the energy challenge. We would effectively be burning food as auto fuel in a world that is not fully well-fed now, and whose food demand will more than double in the next 40 years.” Avery says that even if the U.S. adopted biofuels as the antidote for imported crude oil, “It would take more than 546 million acres of U.S. farmland to replace all of our current gasoline use with corn ethanol.” That’s a huge area, especially considering that the total amount of American cropland covers about 440 million acres.

Thus, while farmers and Big Agriculture prefer to cast the use of ethanol in terms of national security, foreign oil, and rural development, the larger issue is a moral one: will we use our precious farmland to grow food, or will we subsidize the growth of an industry that turns food into a commodity – motor fuel – of which we already have an abundant supply? The answer should be obvious.

Robert Bryce, posted in the March issue of the Energy Tribune

Feeding the Beast
Can U.S. farmers keep filling the nation's bellies as they scramble to fuel its cars?

Given its evident gravity, the question has drawn remarkably little debate. Like it or not, though, more and more food is being devoted to fueling the nation's 211-million-strong auto fleet. High gasoline prices, a dizzying variety of government supports, and an investment frenzy have caused corn-based ethanol production to more than triple since 1998.

As recently as a year ago, corn seemed wildly overproduced. Suddenly, it's a hot commodity. In 1998, about 5 percent of the corn harvest (526 million bushels) went into ethanol production, according to the National Corn Growers Association. This year, the U.S. Department of Agriculture expects ethanol producers to use upward of 2 billion bushels, or nearly 20 percent of the crop. And ethanol's voracious appetite for corn isn't expected to abate anytime soon. According to the pro-ethanol Renewable Fuels Association, 109 ethanol refineries currently churn out 5.3 billion gallons of ethanol a year—and an additional 56 plants (plus expansions at seven existing ones) have broken ground. When these new plants are on line, the industry's capacity will nearly double, to 9.7 billion gallons a year.

Presumably, its demand for corn will nearly double, too—and that means higher food prices for consumers.

Corn Hits a 10-Year High
For most of the past five years, steadily rising ethanol demand has had little effect on corn prices. Bolstered by generous subsidies, corn farmers churned out more than enough product to satisfy demand from ethanol plants while holding prices steady.

This year, though, after the gasoline industry abruptly abandoned MTBE and embraced ethanol as an oxygenate enhancer, ethanol demand spiked, and the price of corn finally followed suit. A bushel of corn currently fetches about $3.45—a 10-year high that leaves last year's low of $1.50 in the dust.

Considering that corn suffuses the U.S. food system—it's the main feed for beef, poultry, egg, dairy, and hog production, and provides sweetness for candy, cereal, soft drinks, and other supermarket staples—its price can't suddenly jump without causing repercussions. In the early 1970s, a sudden spike in grain prices quickly upped the cost of meat, making it a luxury even for many middle-class families. (Hamburger Helper, anyone?)

Tyson Foods, the world's largest meat and poultry processor, has already signaled that a similar scenario might be on the way now. "I believe the American consumer is going to have to pay more for protein," Tyson CEO Richard L. Bond recently told investors. "Quite frankly, the American consumer is making a choice here ... either corn for feed or corn for fuel."

Elsewhere, The Wall Street Journal recently explained succinctly why poultry prices will soon reflect corn's new popularity as a fuel source. Because of higher corn prices, "It costs nearly a nickel more to produce a pound of chicken today than at the end of 2005, yet the 20-year average industry profit margin per pound of chicken is two cents. This means poultry producers either will have to raise prices or slash other costs."

It should be noted that any farmer who has survived the last 20 years in the poultry business has already slashed costs to the bone; higher prices seem inevitable. And adding a nickel a pound for whole chickens at the farm level will ripple up the food system, translating to higher increases on the supermarket shelf.

The Boom Heard 'Round the World
While the industrial-food system is easy to criticize, it's important to recognize that vast numbers of people rely on it for cheap sustenance. For more than 30 years, real growth in average wages has, at best, floundered. According to University of Massachusetts economist Robert Pollin's Contours of Descent: The Economic Consequences of Clinton, Bush, and Greenspan, real hourly wages peaked at $15.73 in 1973 and by 2000 stood at $14.15 (in 2001 dollars). And that was after a rare three-year growth spurt provoked by the stock-market bubble; since 2000, wages have essentially flatlined.

Not surprisingly, tens of millions face what the USDA calls "food insecurity," which the agency defines as the condition of households being "uncertain of having, or unable to acquire, enough food to meet the needs of all their members because they had insufficient money or other resources for food."

In that context, the federally funded effort to divert billions of bushels of corn into ethanol with scant public debate seems cavalier.

Moreover, the pattern of booming biofuel production driving up feedstock prices is also taking root in developing countries—where, the U.N. Food and Agriculture Organization claims [PDF], some 800 million people face persistent hunger and malnutrition.

In a blunt report, The Wall Street Journal vividly illustrated the effect of booming European demand for biodiesel on Southeast Asian palm-oil production. Prices for the tropical fat have jumped more than 30 percent in 2006, spurring rapid deforestation as landowners scramble to plant more palm, the Journal reports.

Meanwhile, Brazil's successful sugarcane ethanol program has inspired copycats—and a rally in sugar prices. Sugar prices recently came off 25-year highs, but that's only because growers in other areas are scrambling to plant cane and thus increase supply. According to the Journal, "In India, environmental activists say, water tables are dropping as farmers try to boost production of ethanol-yielding sugar."

Deforestation, falling water tables—these are hardly the hallmarks of a fuel source that can reasonably be called "renewable," much less an agriculture strategy designed to maintain food-production capacity. And rising prices for food commodities, without other social reforms, will only translate to more misery for the global south.

Already, the FAO is sounding the alarm. The agency claims that world grain prices are at ten-year highs in part because of "fast-growing demand for biofuel production." These high prices, the FAO warns, cause "dismay [for] many developing countries that rely on the international market to meet their staple food needs," many of which will "reduce food purchases, not always in response to their own improved domestic supplies but rather because of the high international prices."

Covering Every Inch
Here in the United States, cellulosic ethanol, which could theoretically utilize non-food crops such as switchgrass, is often held up as the panacea for a truly green biofuel that needn't have much effect on food prices.

Yet the process for extracting sugars from cellulose remains, 30 years since the government first started investing in research for it, just beyond the grasp of viable commercial-scale production. USDA chief economist Keith Collins recently told Congress not to expect significant fuel contributions from cellulose for "some years into the future."

In that testimony, Collins articulated the official response to reining in food prices as ethanol production booms: grow more corn. That's a bracing strategy in a nation that already produces 42 percent of the world's supply of the crop.

Because of the ethanol boom, "The United States will need substantial increases in corn acreage to prevent exports from declining and livestock profitability from falling," Collins declared. He reckoned that by 2010, the 80 million acres currently devoted to corn would need to expand by an additional 10 million acres to meet rising demand for ethanol. Where to find them? Collins points to the Conservation Reserve Program, the 36 million acres of marginal, environmentally sensitive land the government now pays farmers to keep fallow.

Moreover, per-acre corn yields—driven by copious dousings of fossil-fuel-derived fertilizers, genetically modified seeds, pesticides, and investments in heavy farm machinery—must rise, from about 148 bushels per acre in 2005 to 155 bushels by 2010, Collins claimed.

Even with these measures, Collins predicts, corn prices will likely "set new record highs over the next five or six years." And he acknowledges that the strategy will offset little fossil-fuel use. "Corn ethanol alone," he told Congress, "cannot greatly reduce U.S. dependence on crude oil."

Mano a Monocrop
Given the environmentally ruinous nature of corn production, the economist Collins presents an odd plan for clean energy.

Indeed, squeezing yet more corn from the land to make a relatively small amount of auto fuel might not even deliver a net reduction in greenhouse gases. Michael B. McElroy, professor of environmental studies at Harvard, recently wrote that "the reduction in net emissions of carbon dioxide obtained by using corn rather than petroleum as a 'feedstock' for motor fuel is largely offset by additional emissions of the several hundredfold more potent greenhouse gas, nitrous oxide, formed as a byproduct of the nitrogen fertilizer used to grow the corn."

Such a corn-centric strategy might even impede our ability to grow food. Blanketing even greater swaths of the Midwest with ever-intensely cultivated, monocropped, chemically reliant corn plants seems like a recipe for further degrading the nation's richest store of topsoil.

Yet current public policy is pushing us decisively in that direction. In his exhaustive study of the complex array of biofuel subsidies, Doug Koplow estimated [PDF] that total government support for ethanol will soon reach between $6.3 billion and $8.7 billion. (In fiscal year 2005, by contrast, Amtrak received $1.2 billion in federal funding.)

Despite the gargantuan annual outflow of government cash, public discussion of the ethanol question has been muted. In the last election, the political debate centered on which of the two major parties embraced ethanol more.

That must change. Hinging so much of the U.S. food system on monocropped corn agriculture was always a dubious decision. Extending corn's domain to the nation's gas tanks compounds the error, and can hardly be counted on to provide a sustainable supply of food or fuel.

With food prices rising and environmentally sensitive land in the U.S. and the global south alike going under the plow to plant fuel crops, it's time for a blunt international debate on the wisdom of biofuel.

Tom Philpott, posted on Grist, December 13, 2006

“Even if you took every bit of our corn you could not replace oil. It just can’t be done. Since it can’t be done, we should be doing both: drilling for oil and producing ethanol. If you want to grow corn, go ahead. But the demand for ethanol has already doubled the price of corn. Serious environmentalists are really concerned about it. You can’t eat oil, but you can eat corn.”

Friday, April 6, 2007

What is the True Cost of Ethanol?

A copy of Flyrod & Reel Magazine landed on the desk in the CARE offices because of an article it contained about ethanol. A fishing magazine talking about ethanol? Interesting. A further look revealed that it is indeed interesting. This article, written by Flyrod & Reel’s “Conservation Editor” piqued our interest in ethanol—of course, as an advocacy organization for responsible energy, CARE has always been interested in ethanol. But, here we offer you some fresh perspectives gathered from several sources (with some editing for brevity). Give them a look. Does this make you think? What does this have to do with the price of tortillas? More on that later.

Under the Influence of Ethanol
America's Corn-Based Ethanol Program Carries High Costs In Fish, Wildlife And Tax Dollars

Ethanol is even more popular now than when Americans made it to fuel themselves rather than their cars, and some of the behavior it generates is no less silly. The cornbelt, Congress, and the departments of Energy and Agriculture are hawking the stuff as if it were Dr. Kickapoo's Elixir for Rheum, Ague, Blindness and Insanity. In the last five years the amount of corn poured into ethanol distilleries has tripled to 55 million tons. At this writing, projections by the Department of Agriculture have world grain use growing by 20 million tons in 2006, 6 million tons of which will be consumed by the world's rapidly proliferating and hungry human beings, 14 million tons of which will be consumed by America's proliferating and gas-guzzling cars. Eighteen percent of all the corn we grow goes into ethanol production, and goals mandated by Congress will sharply increase that percentage.

It all started in 1990 with amendments to the Clean Air Act, revolutionary in that they regulated not just how we burn gasoline but how we make it. In areas out of compliance with air-pollution standards, gasoline had to include at least two percent oxygen-containing chemicals (oxygenates), the better to combust carbon monoxide, toxic hydrocarbons, and smog-producing volatile organic compounds. There were only two choices—ethanol and the petroleum-based methyl tertiary butyl ether (MTBE). This was precisely what the cornbelt had fantasized about and lobbied for. Suddenly the moribund ethanol industry had a future. City air would become breathable. We'd have plenty of fuel. It was going to be a win-win-win.

But instead of cleaning up America, ethanol has added to the mess we're making out of our water and air. Now the Bush Administration has decreed that ethanol replace the far more efficient MTBE as an oxygenate. But with current refining technologies and anti-pollution paraphernalia on motor vehicles there's no need for any oxygenate, a fact the powerful agribusiness lobby doesn't want you to know. Under its withering pressure, Congress and the executive branch have committed the nation to ethanol as both oxygenate and fuel.

The Energy Policy Act of 2005 requires that US gasoline contain 7.5 billion gallons of ethanol by 2012, up from 4 billion. One hundred and one ethanol plants are online, and 44 are under construction. Eighty million US acres were planted to corn in 2006; and the ethanol boom will require 10 million more just in 2007. Ethanol, we are being told, is going to "reduce our dependence on foreign oil" and "lead us to energy independence." "Live Green, Go Yellow," effuses General Motors—one of the major roadblocks to fuel-efficiency standards. "Fill Up, Feel Good," gushes the Ethanol Promotion and Information Council, a front for agribusiness.

How will ethanol affect fishing? First, no crop grown in the United States consumes and pollutes more water than corn. No method of agriculture uses more insecticides, more herbicides, more nitrogen fertilizer. Needed for the production of one gallon of ethanol are 1,700 gallons of water, mostly in the form of irrigation taken from streams either directly or by snatching the water table out from underneath them. And each gallon of ethanol produces 12 gallons of sewage-like effluent.

Ethanol plants are gross polluters of air and water, and because of the exorbitant price of natural gas some of the new ones will be coal-fired, adding to the already dangerous mercury content of fish. The response of the Bush administration has been a proposal to relax pollution standards for ethanol production.

The toxic, oxygen-swilling stew of nitrates, chemical poisons and dirt excreted from the corn monocultures of our Midwest pollutes the Mississippi River and its tributaries, limiting fish all the way to the Gulf where it creates a bacteria-infested, algae-clogged, anaerobic "Dead Zone" lethal to fish, crustaceans, mollusks and virtually all gill breathers. In some years, depending on seasonal heat and water conditions, the Dead Zone can cover 8,000 square miles. And it's expanding.

No habitat is more important to fish and wildlife than wetlands. They filter out pesticides and sediments, and they consume phosphates and nitrates. At least 70 percent of the wetlands in the cornbelt have already been lost. But, in order to produce surplus corn for ethanol, remaining cornbelt wetlands are being drained. In some areas—Nebraska, for instance—corn has to be irrigated by pumps that suck water from the ground faster than it percolates back in.

Where is the land to grow all the extra corn needed for ethanol supposed to come from? Well, the Bush administration has an idea: In testimony to Congress, the USDA's chief economist, Keith Collins, has raised the possibility of using land enrolled under the Farm Bill's Conservation Reserve Program (CRP). Not so coincidentally, it happens that this is precisely the idea that the corn lobby had come up with. In an op-ed in the December 6, 2006 Des Moines Register, Bruce Rastetter, CEO of Hawkeye Renewables, Iowa's largest ethanol producer, writes: "First, the government should immediately release some of the 37 million acres that now sit idle in the US Department of Agriculture's Conservation Resources [sic] Program."

"We're hearing rumors every day that the [USDA's] Farm Services Agency is on the verge of announcing they're going to allow people to liquidate CRP contracts to grow more corn for ethanol," says Julie Sibbing, point person for the National Wildlife Federation's agriculture and wetlands program. "That's a huge concern. They've been studying CRP to see if there's land they can pull out to grow more corn. We're hearing from folks up in the plains that farmers are going in and breaking up virgin prairie. It's lousy land for agriculture, but they're planting it because of the high price of corn brought on by this ethanol boom. It's scary. And there are huge water requirements. People are building these ethanol plants anywhere, paying no attention to the water needs. We're worried about instream flows."

Thanks to CRP and other Farm Bill conservation programs, Iowa—the corn capital of the nation—is suddenly teeming with smallmouth bass and, in the state's northeast hill country, wild trout. Yes, wild trout. "Our trout fishery is one of the best kept secrets in the country," declares Rich Patterson, who directs the Indian Creek Nature Center in Cedar Rapids and serves on the Circle of Chiefs of the Outdoor Writers Association of America. "When I first came here 28 years ago it was all put-and-take, guys tossing corn to stupid hatchery trout. I'm catching incredible wild trout in streams that were mucky in the 1980's. And there has been a tremendous turnaround on smallmouths. They're sight feeders, and with clearing water they're increasing like crazy."

But America's ethanol orgy frightens Bill Kalishek, northeast fisheries division's supervisor, and his colleagues. "I've seen some of the results already," he says. "The bulldozers are out there on the little corners of cornfields that used to be brushy draws or old fence lines so farmers can grow more corn. A lot of our general-signup CRP enrollments—where whole, erodible fields were taken out of production—are expiring in the next two or three years. And I'm worried that with this increase in corn production we're going to take a big step backwards in water quality and stream habitat and in our trout populations."

Well, as we so frequently tell ourselves and are told by our federal government, we all have to make sacrifices for energy self-sufficiency. But the sacrifices fish-and-wildlife advocates and taxpayers are being asked to make for ethanol do not and cannot decrease our dependency on foreign oil. In fact, they do just the opposite. This is because it takes more energy in the form of fossil fuels to make corn-based ethanol than we get from it.

Some researchers dispute this, but almost without exception they are directly or indirectly funded by or otherwise allied to agribusiness or the USDA (a wholly owned subsidiary of agribusiness). The credible stats issue from independent researchers whose studies have been published in peer-reviewed scientific journals and who have no irons in the fire. Two of the more notable ones are Dr. Tad W. Patzek, a chemical engineer from the University of California at Berkeley, and Cornell University's Dr. David Pimentel.

Pimentel, author of 24 books and nearly 600 scientific papers and selected by the Department of Energy to chair two scientific panels on ethanol production, told me this: "Ethanol is a boondoggle. Optimistically, using Department of Energy numbers, it amounts to one percent of our petroleum use. Ethanol requires almost 40 percent more energy to produce than you get out of it; we're having to import oil to make this stuff. And, of course, the environmental impacts to water, air and soil are enormous. During the fermentation process, when yeast is working on the starches and sugars, large quantities of carbon dioxide are released. In fact, some plants collect it and sell it to beverage companies. So it's a double whammy for global warming—not only burning fossil fuel but carbon dioxide production."

Pimentel reports that ethanol, which yields only two-thirds the energy of gasoline, gets 45 times more federal subsidy per gallon than gasoline. "That's what's attracting all the flies," he says. All told, you and I are spending at least $3 per gallon on ethanol subsidies for a total of $6 billion per year. Without all this gravy train, Pimentel has calculated that the cost for 1.33 gallons of ethanol (the equivalent in energy yield to a gallon of gasoline) would be $7.12.

The subsidies aren't going to family farms but to bloated, effluent-spewing agribusiness giants that get hungrier and dirtier with each feeding. According to one estimate—by financial analyst James Bovard of the Cato Institute—every dollar in profits earned by the nation's largest ethanol producer, Archer Daniels Midland (ADM), costs taxpayers $30.

In February 2006 Energy Secretary Sam Bodman showed up at ADM's Decatur, Illinois, headquarters to pose with CEO Allen Andreas and announce that the Department of Energy would offer $160 million for the construction of three biorefineries for ethanol production. "This funding will support a much-needed step in the development of biofuels and renewable energy programs," declared Bodman. "Partnerships with industry like these will lead to new innovation and discovery that will usher in an era of reduced dependence on foreign sources of oil, while strengthening our economy at home."

This is the same ADM that made it to number 10 on the University of Massachusetts' Political Economy Research Institute's "Toxic 100" list of America's worst corporate polluters, the same ADM that in 2003 was assessed $351 million in fines by the EPA for Clean Air Act violations at 52 plants in 16 states, the same ADM currently slugging it out with the state and feds in 25 judicial and administrative proceedings regarding its contamination of air, soil and water. ADM is just one of many offenders.

"I've been following this ethanol development very closely," says Iowa Fish and Wildlife's Kalishek. It looks like the demand for corn for ethanol is going to continue to increase. Every prediction I've seen, and the most recent one came out of Iowa State University, is that demand for corn is going to outstrip Iowa's ability to produce corn. If you've ever driven across our state, you'd scratch your head and say, 'Huh? All that corn is not going to be enough to feed the ethanol plants?'"

So, if not corn based ethanol, where are we going to find the fuel to run our cars? Berkeley's Dr. Tad Patzek makes the point that corn is merely one way of converting solar energy to fuel. Solar cells, far more efficient, could make hydrogen fuel. That's where the subsidies need to go, he contends. But technology for practical, affordable hydrogen fuel, like technology for practical, affordable ethanol fuel, doesn't exist yet.

We do, however, possess the technology to build fuel-efficient automobiles. In the current charade designed by and for agribusiness we're allocating 18 percent of the corn we grow to ethanol, thereby cutting our petroleum consumption by one percent. But Patzek has calculated that if we doubled automobile fuel efficiency, we'd cut petroleum consumption by 33 percent or, put another way, we'd increase our petroleum supply by a third. It's a revolutionary concept that America has never tried. Fish-and-wildlife advocates are calling it conservation.

Ted Williams, Conservation Editor, Flyrod & Reel Magazine


The Iowa Imperative: Ethanol
When looking for a root cause of the ongoing ethanol scam, look no further than Iowa. Indeed, the dearth of rationality in America’s choice of motor fuels can be blamed on a single fact: the Iowa Caucus is the first presidential primary. That accident of the calendar has led to some of the most egregious examples of flip-flopping, pandering, and groupthink in modern American political history. The Iowa imperative has also allowed the U.S. to continue tariff policies that are blatantly protectionist and anti-consumer. The ethanol madness now underway is largely due to the economic needs of a state with less than 1 percent of the U.S. population—or to be more precise, the economic desires of a tiny subgroup of that 1 percent: Iowa’s corn farmers and ethanol producers.

There’s plenty of evidence of the way the ethanol lobby made Iowa the make-or-break state for presidential contenders. Back in the 1990s, former New Jersey senator Bill Bradley was a leading critic of ethanol, saying the ethanol subsidy meant higher gasoline prices for his New Jersey constituents. But once Bradley began eyeing the White House, he became an ethanol convert. Thus in 1999 and 2000, he campaigned in Iowa claiming he had changed his mind on ethanol, stating that the U.S. had to “help our family farmers get a bigger chunk of the food dollar.” During the 2000 presidential race, every candidate who campaigned in Iowa supported the ethanol subsidy. The only candidate opposing it: Republican John McCain, who refused to campaign in Iowa.

During the 2000 race, the campaign coverage made much of the ethanol issue, with several newspapers taking a dim view of it. The San Diego Union-Tribune, in a January 2000 editorial, wrote that there was “simply no justification” for the continued ethanol subsidies. Esquire magazine lauded Bradley’s opposition to ethanol prior to the Iowa causes, calling the subsidies a “preposterous boondoggle.” As the primaries ended, the late, great Texas columnist Molly Ivins declared the ethanol subsidy was “a useless piece of junk” and a “total failure.”

But now eight years later, with energy independence as key buzzwords in Washington, ethanol subsidies are alive and well, the media is largely prostrate, and old opponents of the corn-based fuel are flip-flopping like a fish on a hook. Why? The numbers explain it: Iowa produces about one-third of all of the ethanol in the U.S. Since 2002, the amount of Iowa corn going into ethanol production has tripled. The state has 21 producing ethanol plants and another 23 plants are planned or under construction. About 2,500 jobs in Iowa are directly related to ethanol production and another 14,000 have jobs—according to—that are “affected” by ethanol.

For John McCain, it appears that genuflecting before Iowa’s ethanol interests is now more important than sticking to his long-held belief that ethanol is a bad deal for taxpayers. Back in 2002, the Republican senator from Arizona declared that ethanol is a “giveaway to special interests in corn-growing states at the expense of the rest of the country.” In 2003, McCain declared that ethanol wouldn’t exist if Congress hadn’t “[created] an artificial market for it.” He also said it “does nothing to reduce fuel consumption, nothing to increase our energy independence, nothing to improve air quality.” In 2005, McCain voted against the big energy bill that passed Congress because its ethanol mandates would “result in higher gasoline costs for states, like Arizona, that do not have an abundant in-state supply” of ethanol.

That was the old McCain. The new McCain, who has his eyes on the Oval Office, loves the stuff. In August 2006 during a speech in Grinnell, Iowa, he said ethanol is “a vital alternative energy source not only because of our dependency on foreign oil but its greenhouse gas reduction effects.”

The same flipping and flopping is afflicting Hillary Clinton, who as senator from New York voted against ethanol some 17 times. In 2002, she signed a letter saying that the ethanol subsidies were “equivalent to a new tax” on gasoline and that there is “no sound public policy reason for mandating the use of ethanol.” But in January, during a visit to Des Moines, Clinton said that the U.S. needs to work on “limiting our dependence on foreign oil. And we have a perfect example right here in Iowa about how it can work with all of the ethanol that’s being produced here.”

Then there are the protectionists, a group that includes another presidential contender, Barack Obama. Last year the Democrat from Illinois, along with four other farm-state senators, sent a letter to President Bush asking him to ignore calls to reduce tariffs on Brazilian sugarcane-based ethanol. Lowering the tariff, they said, would make the U.S. dependent on foreign ethanol. “Our focus must be on building energy security through domestically produced renewable fuels,” they wrote. Perhaps it’s just a coincidence, but during his first year in office, Obama twice used corporate jets belonging to agribusiness giant ADM, the world’s biggest producer of corn-based ethanol.

Many of the neoconservatives who pushed for the war in Iraq and are now pushing for the U.S. to decrease its imports of foreign oil, are trying to get the import tariffs on ethanol removed. In January, one of that group’s leaders, Ariel Cohen, a prominent neocon who works at the Heritage Foundation, lauded Bush’s State of the Union speech, in which he laid out a plan to reduce American gasoline consumption. Cohen claims that imported oil is a “dire geopolitical threat.” But he complained that Bush’s proposals do not “address the need to bring into the U.S. the most competitive ethanol, sugar-cane ethanol, which is now penalized with punitive tariffs.”

Those tariffs are going to stay in place for one simple reason: they protect the Iowa ethanol business. That point was made clear by Iowa Senator Charles Grassley, a Republican, shortly after Bush’s speech. “Lifting the ethanol tariff would undermine faith in the domestic renewable fuels industry,” Grassley declared. “We need to continue the current supportive policies of the domestic industry….Lifting the tariff would only undercut our domestic efforts, virtually eliminate any chance of developing ethanol from other sources, and potentially leave us dependent on foreign sources for our ethanol.”

Thus, for Iowans like Grassley, and for the leading candidates for the White House, foreign oil is bad. But foreign ethanol is even worse. And that worldview is going to get a lot of play between now and January 18—the date of the Iowa Caucus.

Robert Bryce's work has appeared in numerous publications including Atlantic Monthly, Slate, New York Times, Washington Post and The Guardian. A contributing writer for the Texas Observer and managing editor of Energy Tribune, he lives in Austin.

Wednesday, April 4, 2007

Carbon Credits Don't Do Much to offset The Damage Done By Energy Guzzling Spendthrifts

Obviously, we are not the only ones wondering about the "carbon credits" issue. The following is a slightly edited(for brevity) commentary from the March 26 issue of TIME Magazine.

Remember the Leonardo DiCaprio and Al Gore global-warming pitch at the Academy Awards? Before they spoke, the screen at the back of the stage flashed not-so-subliminal messages about how to save the planet. My personal favorite was “Ride mass transit.” This to a conclave of Hollywood plutocrats who have not seen the inside of a subway since the moon landing and for whom mass transit means a stretch limo seating no fewer than 10.

Leo and Al then portentously announced that for the first time ever, the Academy Awards ceremony had gone green. What did that mean? Solar panels in the designer gowns? It turns out that the Academy neutralized the evening's "carbon footprint" by buying carbon credits. That means it sent money to a "carbon broker," who promised, after taking his cut, to reduce carbon emissions somewhere on the planet equivalent to what the stars spewed into the atmosphere while flying in on their private planes.

In other words, the rich reduce their carbon output by not one ounce. But drawing on the hundreds of millions of net worth in the Kodak Theatre, they pull out lunch money to buy ecological indulgences. The last time the selling of pardons was prevalent--in a predecessor religion to environmentalism called Christianity--Martin Luther lost his temper and launched the Reformation.

What is wrong with this scam? First, purchasing carbon credits is an incentive to burn even more fossil fuels, since now it is done under the illusion that it's really cost-free to the atmosphere.

Second, it is a way for the rich to export the real costs and sacrifices of pollution control to the poorer segments of humanity in the Third World. (Apparently, Hollywood's plan is to make up for that by adopting every last one of their children.) For example, GreenSeat, a Dutch carbon-trading outfit, buys offsets from a foundation that plants trees in Uganda's Mount Elgon National Park to soak up the carbon emissions of its rich Western patrons. Small problem: expanding the park encroaches on land traditionally used by local farmers. As a result, reports the New York Times, "villagers living along the boundary of the park have been beaten and shot at, and their livestock has been confiscated by armed park rangers." All this so that swimming pools can be heated and Maseratis driven with a clear conscience in the fattest parts of the world.

The other form of carbon trading is to get Third World companies to cut their emissions to offset Western pollution. The reason this doesn't work—and why the carbon racket is a farce—is that you need a cap for cap-and-trade to work. Sulfur dioxide emissions in the U.S. were capped, and the trading system succeeded in reducing acid rain by half. But even the Kyoto treaty doesn't put any cap on greenhouse gases in China and India, where billions of these carbon credits are traded. Sure, you can pretend you're offsetting Western greenhouse pollution by supposedly cleaning up a dirty coal plant in China. But China is adding a new coal plant every week. You could build a particularly dirty "uncapped" power plant, then sell hundreds of millions in carbon credits to reduce it to a normal rate of pollution. The result? The polluter gets very rich. The planet continues to cook. And the Gores of the world can feel virtuous as they burn up the local power grid.

If Gore really wants to save the planet, he can try this: Turn off the lights. Ditch the heated pool. Ride the subway. And spare us the carbon-trading piety.

Charles Krauthammer