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How Bad is Corn Ethanol?

Posted by: John Carey on February 02, 2009

Once touted as a savior—a way to reduce dependence on foreign oil while slowing global warming and helping farmers—ethanol from corn quickly became a fuel many people hated. Critics blamed ethanol for driving up world food prices and for costing taxpayers billions of dollars in subsidies. Plus, some analyses showed that replacing gasoline with ethanol doesn’t even help much in combating climate change, because of all the energy expended in making the stuff, and because the diversion of corn to fuel means crops have to be grown elsewhere in the world.

But recent developments suggest corn ethanol may not be such a bad guy after all. Prices of corn and other crops have plunged from their peaks earlier this year—even as ethanol production has increased to 9 billion gallons in 2008. And now comes a new analysis from the University of Nebraska that shows that the corn ethanol industry has a much lower carbon footprint than it did just a few years ago. “The first point to make is that nobody is wrong in this debate. It all depends on assumptions and parameters you put in,” explains Kenneth G. Cassman, professor of agronomy & horticulture at the University of Nebraska-Lincoln.

One of the wrong assumptions, though, is that the corn ethanol industry of today is the same as the one five or six years ago. “The industry is rapidly changing and evolving,” says Cassman. He put together a team to do an up-to-date life-cycle analysis of corn ethanol, covering soil effects, agricultural practices, refinery engineering, fermentation technology, and the use of the key co-product of corn ethanol, distillers grains. “The bottom line is that when you put all that together, looking at the industry as it is today, including improvements in crop production, innovation in making ethanol, and how the co-products are actually used, you get a number two or three times more favorable than the existing numbers,” says Cassman.

In the older estimates, even the most efficient corn ethanol

production only reduced greenhouse gas emissions by about 25% compared to gasoline. Cassman’s number? A bigger 50-60% reduction. Similarly, the old estimates showed only a small (10-20%) improvement in net energy over gasoline. “We get 50-80%,” says Cassman.

Why the differences? Here are some of the reasons:

-- Corn yields are up, yet “we find that farmers are not increasing the inputs,” says Cassman

-- Faced with higher costs for natural gas or electricity, ethanol companies have figured out how to make production more efficient. “We find today that energy use in the ethanol plant is 25% lower than amount of energy attributed to the ethanol plant in earlier studies,” says Cassman.

-- Since the early days of ethanol, a lot of the capacity to make the stuff has moved West. Iowa is still the largest producer, but now Nebraska comes in second (compared to Illinois in 2004). What that means is that the distillers grain (which a high-value animal feed, because it is high in protein) can be used in nearby cattle feedlots, saving the energy normally used to dry it. That cuts energy used by 30% , says Cassman. “It is a tremendous energy saving if the ethanol plants are close to feedlots.”

-- Studies show that distillers grain increases the fertility rate of heifers compared to corn or soybean feed. “When distillers grain is used to replace corn in cattle diets, one pound of distillers grains can replace 1.25 lbs of corn,” Cassman explains. “So even though [the production of ethanol] is withdrawing corn from feedstocks, you get the equivalent of about 40% of the weight of corn back in the distillers grains.”
“None of this was included in the earlier analyses,” he adds.

Of course, all of this is about the direct effects of ethanol production. What about the fact that taking land to grow corn for ethanol may cause land elsewhere in the world to be converted to farmland, releasing more CO2 in the process? Cassman readily admits this is a thorny issue, but says that the idea of requiring that indirect land use changes be considered has all sorts of bizarre consequences if applied to agriculture generally. For instance, “if you applied the concept of indirect land use change and carbon debt, then the Conservation Reserve program would never have existed,” he says. The program, which has been hailed as a great success, pays farmers to take environmentally sensitive land out of production. But while that helps the environment in the United States, the loss of production means that crops may have to be grown elsewhere in the world, potentially at high environmental cost. If indirect land use changes had to be taken into account “we would never have had the conservation reserves, which is a great program,” says Cassman.

Cassman’s study was funded by the Western Governors’ Association, Environmental Defense Fund, the University of Nebraska, USDA and others (but no industry funding).

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Reader Comments

Hugo van Randwyck

February 3, 2009 08:11 AM

The growing of crops in other parts of the world will help increase farmers incomes and generate more livelihoods - a good thing, after all the income reductions from subsidised imports. Thank you for this article showing 'continuous improvement' in this alternative fuel. Brazil uses sugar cane, and some estimates show a better conversion rate, approx 3 times more than corn. Are there also sugar cane growing opportunities in America?


February 3, 2009 10:20 PM

Interesting stuff. It's wild how a mere four years can mean such significant changes. Of course, it's also apples and oranges in some ways, since different studies from different times use different assumptions and parameters. Even still, there might be just a wee bit of hope for E85 after all. All that said, enough ethanol to make a difference for global warming would unquestionably wreak havoc with food prices. Though the industry is growing pretty fast, it's still relatively small, so some of those effects aren't coming clear just yet.

Dwight Nager

February 6, 2009 06:25 AM

Commodity prices are made at the margin. Look at pulp, for making paper. It fluctuates from a low of $300 to a high of $900 over the business cycle. We can't judge average commodity prices on 3 year intervals -- it's just not enough time for market adjustments to work through. The corn price has fallen hard. And the outlook isn't good for a big pick up. US Ethanol will live to see another day it seems.


February 6, 2009 10:54 AM

Ethanol production can be compared to the oil industry in the 1900s. In it's infancy. As the energy input to produce the ethanol moves to renewables instead of coal and natural gas, the carbon footprint is reduced from 80% to almost 0%. Movement of ethanol production west where wind power is available and could be coupled to an ethanol plant make an ideal paring. Wind power will become cheaper and cheaper as supply of turbines catches up with demand and investment costs are recouped. The cost of wind power will tend toward maintenance costs. New, more efficient and larger turbines are being designed as we speak. The current maximum size is only limited by the size of the cranes required to erect the turbine. The current record is a 7.5 MW unit capable of generating power at a wind speed from 5mph to 75mph.


February 6, 2009 11:40 AM

With grain prices improving, does that mean we can quit paying subsidies to American farmers? Also, what about alternative sources of the corn we eat? Can humans eat distillers grain? Is it good for us?

John Carey

February 6, 2009 12:55 PM

Squeezebox asks a question about whether there are alternative foods to the corn we eat. "Can we eat distillers grain?" she asks.

I have discovered that many people don't know that the corn used to make ethanol does not come out of the human food supply. Instead, it would otherwise be used as animal feed. Indeed, about 3/4 of the whole corn crop is used for animal feed. After making ethanol, a lot of that animal feed value is still left in the form of distillers grains.

On a related note, one of the most effective ways to reduce greenhouse gas emissions is to eat less beef. Raising cattle creates many times the emissions generated by, say, raising chickens or pigs. Eating less beef would also have the advantage of freeing up more feed corn for biofuel production


February 6, 2009 03:35 PM

This one-sided and glossy update for ethanol does not mention that they are trying to hit up taxpayers for a govt. funded, dedicated ethanol pipeline to make up for the fact that it has become a major safety hazard for railroads and the stuff has to have special pipelines and tanks just for its special chemical characteristics. That is not even getting to the engine issues for users. Rubber stamps for industry special interests are not needed now. We already have profoundly biased political leaders falling over themselves to subsidize it at every level, including high tariffs to keep out Brazilian ethanol.


February 6, 2009 03:44 PM

John Carey wrote..."On a related note, one of the most effective ways to reduce greenhouse gas emissions is to eat less beef. Raising cattle creates many times the emissions generated by, say, raising chickens or pigs. Eating less beef would also have the advantage of freeing up more feed corn for biofuel production"

Hey Jim, tell that to the poultry workers that are losing their jobs at a rapid clip. Your fantasizing with policy without a full understanding of the industries and interconnections involved can do a lot of damage on top of what is already taking place. How about a Michael Moore movie in your honor called "John Carey and Me"?


February 6, 2009 06:40 PM

Just as well that it was not included in the first analyses.

The Cassman analysis falls short of going the full life cycle. If you include the distillers grain fed to cattle, you must also include the GHG's produced by the cattle.

The feed conversion ratio for beef is about 7:1, 7 lbs of feed per pound of gain, so for argument 7,000 lbs of DDG's generates 1,000 lbs of beef on the hoof. Average slaughter weight is between 1,100 and 1,300 lbs. per animal.

One pound of beef produces about 35 lbs of CO2 equivalent(CO2+methane+NO2). Or 35,000 lbs of CO2 or approx. 17 ton per animal. This an SUV level of CO2 production per animal.

10,000 head in a feedlot produce 170,000 tons of CO2 equivalent. Visualize 10,000 SUV's idling in a big parking lot.

And, yes chicken is better - about 1 pound of CO2 per pound of meat.


February 6, 2009 08:10 PM

Ethanol only has about 70% of the BTU's of gasoline and required natural gas and/or coal energy inputs in the distillation process, and energy intensive nitrogen fertilizer production. It is not renewable as growing corn required phosphate and potash (potassium) fertilizer mining of non renewable minerals vital to the human food chain. It is a quick fix that is heavily subsidized by the government and is currently causing major business losses and bankruptcies in the ethanol industry including losses at ADM and the bankruptcy of Verasun and others. Ethanol was required to reduce ozone yet emmited harmful compounds that were carcinogenic in animal studies. In some studies there was very little energy gain (EROEI) and no net decrease in carbon emissions compared to other transport energy systems.


February 9, 2009 09:38 PM

PPD, you're doing some double counting. Part of the calculation that goes into the standard statistic of how much greenhouse gas is emitted by a pound of beef is the energy and other inputs that went into producing the feed for the cattle. If you've already counted the ghg emissions that are part of the process that ends up giving you the distillers grain, then a very significant fraction of the cattle-ghg emissions story has already been accounted for.

As might have been noted on this blog (or maybe I'm remembering wrong), different methods for raising cattle result in hugely different amounts of ghg emissions. In fact, David Pimentel, the long-time bete noire of the ethanol industry (because his calculations have traditionally shown ethanol to be a net energy loser) is currently researching grazing methods that--if they pan out in the research--promise to result in net ghg reductions. The jury is still out, but there's good reason to think it'll come in with a smile on its face. The trick, of course, is that these climate-friendly cattle-raising methods are strictly a grass-fed, free-range thing. No feedlots allowed. So that doesn't help the situation with ethanol, since the distillers grain is only good feed for feedlot animals. Feedlot cattle are more prone to disease, so need more antibiotics; have digestive troubles (they didn't evolve to eat large quantities of grain) and so, well, fart a lot more than their free-range cousins--and that means more methane, a potent ghg; and the meat on a feedlot animal ends up with an industrially skewed ratio of omega fatty acids, meaning that that's the meat that is bad for your heart. Meat from cattle that are grass-fed from start to finish has a much healthier balance of fat components, so much so that meat of that sort may not be merely "less unhealthy" but might be distinctly and actively healthy (when eaten in moderation, of course!) (I think it's fair to say the jury is still out on that one as well).

But then there's the catch: you simply can't raise as much beef on range as you can with feedlots, so if we wanted healthy, climate-friendly, non-antibiotic-resistance-promoting meat for everyone, there'd be a lot less to go around. Certainly not enough for the McDonaldsification of the world.

Econguy2: what are you talking about? First of all, you seem distressed that workers in the chicken industry are losing their jobs, but Carey's message would--if anything--lead people to eat more chicken, and so prop up the jobs in that industry. And most of all, in what conceivable way does a blogger on the BusinessWeek website have the kind of job-killing power than is in the hands of mega-corporate CEOs? If Carey dedicated his life to eliminating jobs in the chicken industry, I doubt he'd succeed in getting more than 10 people laid off. That's something you'd make a movie about?

The Ask Force

November 19, 2009 01:32 PM

Great discussion.
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BusinessWeek correspondents John Carey and Mark Scott, cover the green scene, keeping on top of the business aspects of energy, the environment and climate change, as well as the technologies, policies, markets and people that are shaping how the earth's resources will be used in the century ahead.

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