Is the New York Times on a bit of a jihad against corn-based ethanol? It certainly looks that way, judging from the spate of critical stories, editorials and blog posts emanating from the NYT in the past month. Consider the following selection and keep the information in mind if you’re considering investing in the ethanol industry…
Ethanol and the Tortilla Tax, NYT’s “Wheels” blog, September 6:
The spin is that ethanol is good for the environment because it will “reduce our dependence on foreign oil.†But there are mixed opinions over the energy gains from ethanol. In 2006, a study out of the University of Minnesota found that ethanol returns only 25 percent more energy than it takes to produce it — and critics have suggested that the study didn’t calculate all the variables that go into producing it, such as the power to irrigation equipment to water the corn crop being used, the power consumed in making the fertilizers that nourish the crop, the cost of the farm equipment used to harvest it (and the fuel to power that farm equipment).
Recent scientific studies have also found ethanol will make smog - particularly ozone pollution - worse, not better. United States ethanol production increased from 1.6 billion gallons in 2000 to 5 billion gallons in 2006. Ethanol production is now diverting 20 percent of the U.S. corn crop – and that percentage could go as high as 50 percent this year - away from food production. Hence, a so-called “tortilla crisis†has erupted in Mexico, where corn meal and flour (used in tortilla production, among other things) prices have gone up at least 25 percent recently. This “tortilla tax†becomes a public relations challenge: How is it more socially and environmentally responsible to starve the poor to run your S.U.V?
The High Costs of Ethanol, NYT editorial September 19
Backed by the White House, corn-state governors and solid blocks on both sides of Congress’s partisan divide, the politics of biofuels could hardly look sunnier. The economics of the American drive to increase ethanol in the energy supply are more discouraging.
American corn-based ethanol is expensive. And while it can help cut oil imports and provide modest reductions in greenhouse gases compared to conventional gasoline, corn ethanol also carries considerable risks. Even now as Europe and China join the United States in ramping up production, world food prices are rising, threatening misery for the poorest countries.
As Prices Soar, U.S. Food Aid Buys Less, NYT story, September 29
Soaring food prices, driven in part by demand for ethanol made from corn, have helped slash the amount of food aid the government buys to its lowest level in a decade, possibly resulting in more hungry people around the world this year. The United States, the world’s dominant donor, has purchased less than half the amount of food aid this year that it did in 2000, according to new data from the Department of Agriculture. “The people who are starving and have to rely on food aid, they will suffer,†Jean Ziegler, who reports to the United Nations on hunger and food issues, said in an interview this week.
Corn Ethanol: Biofuel or Biofraud?, NYT “Wheels” Blog, September 24
Here’s an interesting bit of scientific research, courtesy of a recent report from the Organization for Economic Co-operation and Development, a Paris-based global economic think tank, on the difference in greenhouse gas emissions from cars burning gasoline-only fuel and fuels made from various forms of ethanol:
Corn ethanol: 0-3 percent greenhouse gas emission reduction.
Sugar cane ethanol: 50-70 percent reduction.
Cellulosic ethanol: 90-plus percent.
But wait, there’s more:
Which form of ethanol production is the United States government (and its taxpayers) subsidizing? Corn, of course.
Which form of ethanol production does the United States government levy a 53-cents-a-gallon import tariff on? Sugar cane, naturally.
And which form of ethanol production is under-funded, under-researched, and furthest from commercial production? The cleanest choice, obviously.
Ethanol’s Boom Stalling as Glut Depresses Price, NYT story, September 30
NEVADA, Iowa, Sept. 24 — The ethanol boom of recent years — which spurred a frenzy of distillery construction, record corn prices, rising food prices and hopes of a new future for rural America — may be fading. Only last year, farmers here spoke of a biofuel gold rush, and they rejoiced as prices for ethanol and the corn used to produce it set records. But companies and farm cooperatives have built so many distilleries so quickly that the ethanol market is suddenly plagued by a glut, in part because the means to distribute it have not kept pace. The average national ethanol price on the spot market has plunged 30 percent since May, with the decline escalating sharply in the last few weeks. “The end of the ethanol boom is possibly in sight and may already be here,†said Neil E. Harl, an economics professor emeritus at Iowa State University who lectures on ethanol and is a consultant for producers. “This is a dangerous time for people who are making investments.â€
While generous government support is expected to keep the output of ethanol fuel growing, the poorly planned overexpansion of the industry raises questions about its ability to fulfill the hopes of President Bush and other policy makers to serve as a serious antidote to the nation’s heavy reliance on foreign oil. And if the bust becomes worse, candidates for president could be put on the spot to pledge even more federal support for the industry, particularly here in Iowa, whose caucus in January is the first contest in the presidential nominating process.
The politics of corn-based ethanol currently is pushing for its expansion, but the economics and the environmental factors suggest caution.
3 Comments
Regarding the ethanol debate, it has become the classic mantra..”food vs: fuel”. I can tell you that I have not seen one drop of ethanol in my area. It is just not available.
I can also report that my feed prices for the horses have gone up about $1.50 per 100 pounds this year due ethanol production. Corn is going to the ethanol plants and not into our livestock.
We are now supplementing other grains when we can in an attempt to decrease the need for corn.
Where did our country’s CONSERVATION PROGRAMS go?
The feature story of National Geographic this month makes the same assertions and weighs the pros and cons of switchgrass, biomass, and algae.
The New York Times recent coverage of ethanol has been an absolute propaganda lead parade of age old myths and half truths about ethanol that also lacks any context, perspectives, or comparisons to help their readers understand this very complex issue. When people talk about increasing the price of food one should also realize processing, packing and transportation account for 80% of the price of food. Also consider since 2002 consumers have spent $250 billon more on higher gasoline prices and $600 billion on a war that is supposed to protect our oil supplies and keep prices low. All money is green, even if it is our tax dollars. Research also shows energy prices have twice the impact on food prices when compared to ethanol. So let’s bring the food vs. fuel debate to an end and once again focus on the real issue for many consumers “gasoline vs. food.â€
Acting USDA Secretary Chuck Conner recently said “clearly ethanol demand is having some impact” on food price inflation, but the fuel is getting too much of the blame for what’s happening in grocery store aisles. Food prices have increased about 2.7 percent in each of the last three years. But a jump of between 3.5 percent and 4.5 percent is expected this year before retreating a bit to between 3 percent and 4 percent in 2008. Global weather conditions, including droughts in Australia, as well as rising demand in China and elsewhere drove up wheat prices. And the recent record highs for retail oil prices also add to inflation by increasing the costs of everything from packaging to transportation.â€
A couple questions readers should pose to themselves with regard to all of the recent negative press articles about ethanol. If the ethanol program is not working, why is there a glut? If the polls show consumers are willing to fight climate change and pay more for cleaner and better fuels – where are their choices at the pump? If there are other good choices for alternative fuels beyond ethanol (e.g., hydrogen, natural gas, electricity) why don’t automakers produce those vehicles? If there were performance concerns with 10% ethanol blends why do all the auto makers warranty its use, some up to 100,000 miles? If corrosion or safety were an issue with ethanol, why are there six million Flexible Fuel Vehicles (85% ethanol capable) on the road with the same warranty?
If you were in charge of changing fuel policy and had to come up with a fuel that was compatible with existing cars (liquid) and could be sold at every existing gasoline station (liquid), could get to market fast, could use diverse feedstocks from all regions, and was already proven to work after 30 years of market place deployment – what would you choose? That’s why we have ethanol, that’s why it’s working, and that’s why you see all of the negative press. Ethanol is lowering gasoline prices. According to the The Associated Press, October 5, 2006, “Nigel Gault, an economist at the Massachusetts consultancy Global Insight, estimated consumer spending will get a $1 billion monthly boost for every sustained, 10-cent drop in the retail price of gasoline. That means the recent 70-cent drop in gas prices from August to September, if sustained, will free up $7 billion per month.â€
And finally, where is the money and time for all of this research against ethanol coming from? Enough said. The New York Times needs to go back to its leadership position of supporting the free market and entrepreneurship, consumer protection and help Americans understand how they can get to where they want to go. In the meantime I suggest folks Google the “Big Oil’s Big Stall On Ethanol” and the “Ethanol Fact Book”