Biofuels — more trouble than they’re worth

I’m reading a great book right now called Cool It: The Skeptical Environmentalist’s Guide to Global Warming, by Bjørn Lomborg. Lomborg’s premise is simple: global warming is real and we contribute to it significantly, but our understanding of its impact and our clunky, government-driven solutions are impractical and, quite often, very harmful. A good example is biofuel. Here, David Strom explains why, with regard to biofuels, government backed plans to convert our fuel sources from petroleum to corn are increasingly problematic and, as is usually the case, hit the poorest people hardest:

A new coalition of—believe it or not—environmentalists and advocates for the poor have started raising tough questions about the tax breaks, subsidies and mandates that have fueled the growth of the Ethanol and biodiesel industry.

Ethanol, it turns out, may be great politics in Midwestern corn growing states, but it is terrible environmental and economic policy. As more and more food is diverted from human consumption to producing fuel, prices for basic food are skyrocketing around the world. Deforestation is on the rise as third world countries try to cash in on the boom, and violence has broken out as small landholders are being kicked off their land to make way for large palm oil farms.

A coalition made up of Oxfam, the World Wildlife fund, and other groups is raising concerns about the current rush to replace fossil fuels with biofuels. Increased Ethanol production has led to a spike in corn prices that has caused food shortages in third world countries, including our neighbor to the South, Mexico. African and Asian countries that are currently unable to produce enough food for their own populations are clearing cropland to supply Ethanol for Europe’s new mandate of 10% Ethanol in all their gasoline.

The environmental benefits of using Ethanol are miniscule to non-existent—some estimates even show that it takes more fossil fuel to make a gallon of Ethanol than it yields as a fuel. Water resources are being stretched to the point of disaster, and food prices are spiking across the world. The Japanese car companies warn consumers to avoid biodiesel as it lowers the life-span and efficiency of their engines.

I’ll say again what I’ve said before: I would love to see us released from our addiction to Middle Eastern oil, especially because that addiction means that we’re paying the costs for those who plan our destruction. However, that doesn’t mean that our response to decreasing the addiction should be to embark half-cocked on a plan that will also destroy the environment, while starving many of us to death. To that end, I love Strom’s last word on the subject:

As usual, government “solutions” to our woes have made things worse, not better for the average person. When government gets into the job of picking winners and losers, you can almost be certain that the loser will be you.


8 Responses

  1. Sometimes people just don’t seem to get the embedded energy costs. Here’s a great example on cars.

    A fuel saving vehicle may actually be worse in the long run dependent on it’s embedded energy.

  2. I have some doubts about Mr. Lomborg — on a few points he played fast and loose with the statistics — but on this point he is dead on. This whole biofuels thing is a costly mistake. It is happening only because it’s a great way for politicians to buy support in Iowa and the MidWest. There is a possibility that a new generation of technology based on enzymatic processing of cellulose will prove more cost-effective, but the current ethanol system is sham.

  3. Actually, I have been involved in this industry of late.

    Ophi, the tract on biofuels was not written by Lomborg but by David Strom.

    Care to share with us your reasons why you believe that it has been a costly mistake?

    Here are some facts:

    1) The ratio of fuel produced to fuel utilized is about 2:1, right now, and getting better.

    2) According to the USDA, the major source of rising commodity prices has not been ethanol but exports to Asia to feed a growing demand for meat products by consumers as their income increases. The USDA and AgCanada believe that there is more-than adequate land to produce biomass for biofuels development AND food.

    3) Increases in demand for corn for ethanol production are expected to be met by increased agricultural productivity.

    4) The major benefit of corn-based ethanol is that it is putting into place an infrastructure to handle cellulose-based ethanol when the technology is ready to come on line. At that point, ethanol production becomes extremely cost-competitive with conventional petroleum-based fuels.

    5) ALL energy in the U.S. is government subsidized to some degree. Subsidization of new industrial infrastructures is hardly new, either (e.g., railroads in the 19th Century, airlines today).

    Frankly, Strom’s screed is hysterical, inflammatory and simply wrong. Nobody is saying that ethanol is THE solution, it is only one of many solutions. New hybrid motor vehicle technologies in development will be an even bigger solution.

  4. A lot of things are costly. It takes wisdom to realize that whether it is a mistake or not, is not written in stone. Hard effort can turn defeat into victory, as Giap did. Lazy work can turn victory into defeat, just as easily.

  5. Thanks for the information, Danny. Yes, the technology can be expected to improve. But even with improvements, I’m still not at all enthusiastic about it. If the enzymatic cellulose technology works out, then I may well change my mind, but the current technology seems a bad choice to me. My reasons:

    1. It’s taking way too much in subsidies. Yes, lots of other industries get subsidies, but subsidies are just plain the wrong way. There’s no indication that the industry is struggling to get up its economies of scale. I don’t mind subsidies into research into the enzymatic cellulose technologies, but the subsidies to the ethanol industry are just too large. I think they’re political plums, not honest energy strategy.

    2. I disagree with the USDA on the effects of diversion of corn production to ethanol. There’s no question that diverting that product into another area creates a lessened supply, which must surely drive prices up. There remains a question over the degree to which prices are driven up, but I don’t buy the USDA’s story. I’d have to see the numbers on beef production, corn production, the prices over the years, and the diversion of corn to ethanol production before I came to any firm conclusions. Did the USDA publish its numbers?

    3. Even if we exploited ethanol to the hilt, it would still provide us with only some 10% of our liquid fuel needs. Now, I realize that 10% is nothing to snort at, and that anything helps, but let’s recognize that this is at best one small part of the overall solution.

    4. What worries me most is the opportunity cost. There are so many other technologies that seem more promising to me. Nuclear fission is one — I think we could, in the extreme, power the entire country solely on nuclear (although I admit that the capital intensity of that strategy would be staggering.) We can pick up a few percentage points here and there from greater utilization of deep geothermal, wind, and maybe even tidal. There are all sorts of crazy ideas for wave power, ocean thermal, solar thermal, and so forth. Some of these have been experimented with and found wanting, but I’d like to see the billions being spent on ethanol subsidies diverted to research on some of these wacky ideas — there might just be something workable in there.

    BTW, the comment that “The USDA and AgCanada believe that there is more-than adequate land to produce biomass for biofuels development AND food.” evoked a wry smile. Yes, they”re right, there is plenty of land. What they don’t mention is the adequacy of the supply of water. Land is in Great Plains is being taken out of production because the Ogallala Aquifer is being pumped dry, and it’s too expensive to pump it in some places. So, yes, there IS plenty of land…

    I like your point about ethanol paving the way for the cheaper fuel. That’s a sound point. I don’t think it’s compelling, but it is definitely a tick mark in the positive column.

  6. Ophi, I don’t have much time to respond, but quickly:

    1) As you said, 10% of our oil consumption is nothing to sneeze at. It is also just about equivalent to what we import from the Middle East. Don’t overlook the fact that North America’s petroleum reserves exceed those of the Middle East – we just haven’t wanted to develop them at this time.

    2) You point about water is correct – I agree. This will place limits on just where ethanol production will be feasible in the U.S. Water-rich Brazil, on the other hand, is preparing to export supertankers of the stuff to us. The North Central states and Canada have plenty of fresh water resources, however.

    3) Nuclear fission – I agree. Nuclear fusion – not there, yet. Certainly, the French have been very successful harnessing nuclear power. However, 60-70% of our petroleum needs are for transportation. I believe that ethanol will be a big part of the solution: combined with new hybrid technologies in development, we aren’t that far away from getting 100 miles per HALF gallon of petroleum products. When that happens, OPEC collapses and our defense expenditures in the Middle East go way down.

    4) Diversion of feedstuffs is not for feeding livestock in the U.S. but as for livestock feed demand overseas. I got the information straight from an Under-Secretary at the USDA. Look at Ag Export data for corn and soybeans over the past two years.

    As you say, ethanol is only one small part of the equation. There are no magic bullets. Corn and soy farmers and the communities they live in here in the Midwest are pretty happy about this, though.

  7. Ophiuchus,

    Interesting comment. What I believe is lacking is a discussion about cost/benefit. A simple example is the nuclear fuel cycle the US has adopted. As opposed to others.

  8. It’s about time someone paid attention to this aspect. Very un-PC of you, though.

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