The Ethanol Lobby: Profits vs. Food

If the ethanol lobby really believes in the biofuel, why are there so few E85 pumps in corn-growing states?

By Ed Wallace

If you had two customers for the same product and one paid more than the other, which customer would you choose? That's the situation in which ethanol producers in the U.S. find themselves. They could grow corn and other crops for food and get one price, or produce the same crops for biofuel and get a higher price and tax credits. The problem is that by focusing on more profitable biofuels, farmers not only deplete the food supply, they are also producing an alternative fuel whose usefulness is still hotly debated.

Last year 17 billion gallons of biofuels were created and used worldwide. The previous year 100 million tons of grain had been turned into biofuels. According to Ronald Bailey at Reason magazine, enough food was turned into fuel for our vehicles in 2007 to feed 450 million people for a year.

On Apr. 10 this year the Congressional Budget Office published a report saying that "Higher use of the corn-based fuel additive accounted for about 10% to 15% of the rise in food prices between April 2007 and April 2008." That's just for one year.

Ethanol use has much more impact on prices of foods directly connected to corn, whether it be Kellogg's Corn Flakes or beef from the butcher's department at your local grocery store. An especially alarming CBO statistic shows another hidden cost of ethanol: Increased food prices could cost Americans $900 million more for food stamps and nutritional programs for children.

Growing crops for fuel also carries a serious environmental cost. Last month the International Council for Science released a new study, which in turn validated work from 2007 by Paul Crutzen at Germany's Max Planck Institute for Chemistry. These studies show that the amount of nitrous oxide released as a result of farming corn or rape for biofuels had been underestimated by a factor of 3 to 5 times. Nitrous oxide is a greenhouse gas 300 times more potent than carbon dioxide. That inconvenient truth negates any savings from so-called carbon neutral fuels.

Save the Rainforests: Avoid Ethanol!

But let's look at the claim that using biofuels lowers overall carbon dioxide emissions. Essentially it isn't true.

Take Brazil. The region around São Paulo is their main ethanol production center. It was once a major center for cattle ranching, but the ranchers have often been supplanted by sugar cane plantations, whose proximity to the city make them efficient producers of ethanol for the urban market. Cattle and other agriculture have been pushed farther west, requiring that large patches of the Amazon rainforest be cleared. Yes, the world's greatest natural carbon dioxide trap, the Amazon rainforest, is being cut down so the world can have all the ethanol it thinks it needs.But ethanol isn't the No.1 fuel in Brazil either: It's diesel.

According to a Time magazine article from March 2008, not only does deforestation create 20% of the world's current carbon emissions, but in the second half of 2007 alone an area the size of Rhode Island was cleared from the Amazon forest. That year a study in Science magazine stated that when you take deforestation into account, ethanol and biodiesel produce twice as much carbon dioxide emissions as regular gasoline.

The Time article also covered the 2003 study at the University of Minnesota, which found that the increased use of biofuels would double the amount of hunger in the world by 2025, to 1.2 billion people.

Killing the Gulf's Wildlife

The damage doesn't stop there. A 2008 study by Simon Donner of the University of British Columbia and Chris Kucharik of the University of Wisconsin-Madison shows that the increased use of fertilizers required by additional corn production due to ethanol will widely increase the dead zone in the Gulf of Mexico. That is because the runoff from farms throughout the Midwest feeds into the Mississippi's tributaries to the Gulf.

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