Corn-Based Ethanol an Unexpected Obstacle to Sustainability

In addition to driving up food prices, corn-based ethanol is standing in the way of developing other alternative fuels.

By Dave Fusaro, Editor in Chief

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“This Earth Day, an unlikely foe: biofuels.” That was the headline on an April news release announcing a telephone conference of “three top environmental experts” talking about the “serious consequences of the Congressional food-to-fuel mandates on the environment, American consumers and global stability.”

It was typical public relations agency hype, provocative headlines and scary predictions (although Grocery Manufacturers Assn. was the sponsor). Yet as the month of April wore on, the words began to look less like hyperbole and more like a rude awakening. I could even buy the “global stability at risk” part.

When I picked up my flex-fuel Ford Taurus in 2001, the salesman had to do quite a bit of educating to get me to appreciate the $1,000 optional engine I had gotten for free, just luck of the draw. “It means energy independence for the U.S.,” he said back then, which meant relatively little to me when the gas station across the street was charging $1.39 a gallon. “More income for farmers,” he continued, “and less air pollution.”

I reflected on his predictions a few weeks ago when we more or less celebrated Earth Day 2008 (April 22). Instead of “living green [by] going yellow,” as General Motors would have you believe, I see only more greenhouse gases, shrinking polar ice caps and – this from personal experience – 30 percent worse fuel economy in that Taurus of mine and a noticeably worserunning engine when I fill up with ethanol. Usually, the fuel is only about 10 percent cheaper than pure gas. The lower MPGs mean I have to buy and burn 30 percent more of it.

And now there’s rioting in the streets of Haiti because of food shortages. People in Bangladesh starving – moreso than before – because India needs to cut rice exports to feed its own people. Egypt’s army is baking subsidized bread for people who can’t afford anything else.

And perhaps the final straw, moving even for a hardened industrialist and capitalist like me: rice rationing at Sam’s Club and Costco. I’ve had enough. And, apparently, so have many of you. “Our company and industry are struggling to cope with unprecedented increases in feed-ingredient costs this year due largely to the U.S. government’s ill-advised policy of providing generous federal subsidies to corn-based ethanol blenders,” said Clint Rivers, president/CEO of poultry processor Pilgrim’s Pride, in announcing the closing of seven facilities and the loss of 1,100 jobs. “The cost burden is already enormous, and it’s growing even larger. Based on current commodity futures markets, our company’s total costs for corn and soybean meal to feed our flocks in fiscal 2008 would be more than $1.3 billion higher than what they were two years ago.”

Biofuels derived from food crops such as corn and soy were promoted as a “homegrown” solution to rising gas prices and climate change. “Now, with over 25 percent of American corn being diverted to replace only 4 percent of America’s oil consumption, prices of all foods are rising twice as fast as the rate of inflation,” GMA said in announcing the teleconference.

The 25 percent-4 percent figures I’ve seen elsewhere, and I believe. I’ll have to take GMA at their word when they say, “The biofuel boom has led to increased environmental damage in the form of pollution from coal-fired ethanol refineries, use of previously protected land to grow additional fuel crops and deforestation in the developing world. At the same time, resulting increases in food prices are affecting U.S. consumers and populations abroad, where food riots have become widespread.” No more doubts about that last sentence.

The Energy Policy Act of 2005 mandated 4 billion gallons of “renewable fuel” in 2006, growing to 7.5 billion gallons by 2012. And it provided generous subsidies for companies assisting in that conversion. So things are only going to get worse unless we reverse this now.

While food-to-fuel mandates are not the sole cause of increasing food prices, they are one factor within our control. Let’s write off the whole corn-to-ethanol thing as a worthy experiment, but one that has failed. There are so many other alternatives waiting to be explored – switchgrass and other non-food crops for ethanol, food plant waste for biodiesel, several varieties of electric cars – and corn-based ethanol is standing in the way of their further development. Let’s move onto some other potential solution before more people starve and grocery stores erect gas station-like signs outside advertising skim, 2% and whole milk prices – right down to the nine-tenths of a cent.

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