Biofuel Mandate: Not the Energy Elixir It Was Once Thought to Be

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WASHINGTON–(BUSINESS WIRE)–National Petrochemical & Refiners Association (NPRA):

What They’re Saying…

• Run-Off Harms the Chesapeake. “Despite rising food prices, it seems that nearly everyone is turning to corn-based ethanol as their choice for alternative fuel. Hidden behind these headlines, though, is an equally important but less visible cost: water pollution. Corn is a ‘leaky’ crop, losing more nitrogen per acre than most other crops. In the Washington region, much of this excess nitrogen ends up polluting the Chesapeake Bay and robbing fish, crabs and oysters of oxygen. For farmers, the demand for alternative fuels has brought much-needed, and deserved, increases in corn prices. Unfortunately, this summer’s drought will keep mid-Atlantic farmers from realizing their potential windfall, and any unused nitrogen will wash into the bay this winter.” (Tom Simpson and Daphne Pee, op-ed, “How Corn Ethanol Could Pollute the Bay,” The Washington Post, August 26, 2007 [emphasis added])
• Increased Levels of Farm Waste Are Hurting Gulf Waters. “The crop that is bringing prosperity to farmers is making it harder for commercial fishermen in Louisiana to make a living. U.S. farmers this spring planted the most acreage with corn since 1944, after demand for ethanol pushed the grain’s price to a 10-year high. That has increased the level of farm waste flowing into the Mississippi River basin, which scientists blame for creating a pocket along the Louisiana coast where shrimp and other sea life cannot survive. The Gulf of Mexico’s so-called Dead Zone is expected to cover a record 8,543 square miles, or 22,126 square kilometers, this year and stretch into waters off Texas, said Nancy Rabalais, chief scientist for a study team at the Louisiana Universities Marine Consortium. … Corn fuels the zone because it requires more nitrogen-based fertilizer than crops like soybeans, said Eugene Turner, a Louisiana State University oceanographer. Nitrogen and other nutrients eventually reach the Gulf of Mexico, feeding microscopic organisms that deplete oxygen levels as they die and decompose on the sea floor. Shrimp and fish suffocate unless they escape. … ‘The rah-rah sort of drowns out the environmental side,’ [Rabalais] said. ‘If our federal government subsidizes more corn, they’re working against water quality.’” (Tony Cox, “Ethanol Demand Seen Harming U.S. Fishermen,” Bloomberg, July 23, 2007 [emphasis added])
• Little or No Net Savings in CO2 Emissions. “Unfortunately, what passes for mitigation and aversion of global warming often amounts to doing nothing under the guise of doing something. Take the nation’s new infatuation with ethanol. Ethanol derived from corn, as it is in the United States, is so energy intensive to produce that it provides little or no net savings in carbon dioxide emissions. Meanwhile, the diversion of corn from the food supply to government-subsidized energy production has some unintended consequences of its own, driving up feed and corn syrup prices at home and tortilla prices in Mexico. Ethanol is a boon for corn farmers. As a way to limit global warming, it’s a spectacularly inefficient bust.” (Editorial “Climate solution too hot for left to handle,” San Antonio Express-News, February 11, 2007 [emphasis added])
• All Cost, Little – If Any – Benefit. “The United States, in its quest to reduce its reliance on expensive imported oil, may soon consume as much as half its domestic corn crop for fuel production, although the economic benefits have yet to materialize. Ethanol produces one-third less energy than a gallon of gasoline at an average wholesale cost of 33 percent more, according to a study by the U.S. Government Accountability Office. … All told, ethanol has cost Americans an additional $14 billion in higher food prices. … Meanwhile, the U.S. government has yet to discover whether its 51- cent-per-gallon ethanol subsidy is efficiently stimulating production of the fuel. One thing the bureaucrats know for sure: It cost the U.S. Treasury $2.7 billion last year with possibly more subsidies on the way.” (John F. Wasik, op-ed, “In Ethanol Debate, Don’t Forget Realities,” Bloomberg, July 23, 2007 [emphasis added])
• Food, Other Consumer Goods Prices Are Rising. “A steak dinner, a cold beer, a tank of gas, a bowl of cornflakes. Prices on these items and others are rising, all in the quest to produce more ethanol, the corn-based product touted as a way to reduce dependence on foreign oil and lessen the impact of global warming. America has embraced the promise of the renewable fuel, pouring billions of tax dollars into its development. But as Congress prepares to spend billions more for ethanol use and production, people are starting to see higher costs for a wide range of consumer goods. ”(Anna M. Tinsley, “Push for ethanol has ripple effect across economy,” The Fort Worth Star-Telegram, August 5, 2007 [emphasis added])
• More Energy to Make Ethanol Than What’s Produced. “The big problem with ethanol is in the chemistry, said Henry Groppe, founder of Groppe, Long & Littell, an energy consulting firm in Houston. It takes more energy to make ethanol than the ethanol produces, he said. Corn must be grown, fertilized and harvested, which takes oil-powered machinery. It must be processed, refined and then shipped, which takes more oil. ‘You’re having to use as much oil to produce that gallon of ethanol as the energy that you produce from it,’ Groppe said.” (Loren Steffy, “A test tells the story of ethanol vs. gasoline,” The Houston Chronicle, March 11, 2007 [emphasis added])
• Distribution Problems. “The link is corn — impact of growing the corn and producing the ethanol, not only in greenhouse gas emissions from farm equipment, but from the trucks, ships and trains that haul the ethanol (nearly all of which comes from Midwest corn) for delivery to refineries. Because of its corrosive qualities, it can’t be shipped through pipelines.” (Editorial, “Corn, ethanol and other subsidized stupidities,” The Sacramento Bee, August 8, 2007 [emphasis added])
• Ethanol Will Not Replace Gasoline. “[C]orn ethanol will neither replace gasoline nor lower its price. It may even raise gas prices. First, at the pump, ethanol is priced according to what consumers will pay, not what it costs to make. So, according to research by Soren T. Anderson of the University of Michigan, ethanol prices follow gas prices very closely. It’s unlikely that gas will make a U-turn and start following ethanol. Second, even if a ready supply of ethanol does put a bit of downward pressure on gas prices, ethanol’s real cost is much higher than whatever we shell out at the pump. Consumers actually pay twice for this corny goodness: once when they fill up and once on April 15. In 2006, ethanol makers and sellers received subsidies of $1.87 for every gallon of gas they managed to displace, according to Doug Koplow of Earth Track, a Boston-based consultancy. Finally, even if we can stomach these nutty subsidies, illogical incentives to tempt automakers to produce ethanol-friendly cars actually increase the amount of oil we use. Blame a little-discussed loophole: In exchange for producing ethanol-ready ‘flex fuel’ vehicles, Congress lets auto manufacturers make their cars less fuel-efficient than corporate average fuel economy (CAFE) standards require.” (Lisa Margonelli, op-ed, “Myths About That $3.18 Per Gallon,” The Washington Post, June 3, 2007 [emphasis added]

National Petrochemical & Refiners Association (NPRA)
Bill Holbrook