Blatant Reality

By Jonathan Williams

Judging from the comments posted on two of my posts about ethanol (seen here and here), I need to go a little more in depth about why I do not like the idea of growing our next source of fuel on farmland.

 

There are many reasons why I don’t like the idea of growing ethanol crops on farmland no matter if you are growing corn, sugar cane, beets, switch grass or any plant that requires space and water. One thing that none of the major proponents of any of these ethanol sources are confronting is the reality that in our capitalistic economy, using these crops as fuel would give farmers more incentive to plant them.

 

You can already see this with farmers planting the most acres of corn in 2007 since 1944. This year (2008), farmers were expected to plant less corn but thank goodness they didn’t because floods have affected a lot of the farmland devoted to this crop.

 

Bad for Aquifers

 

Underground aquifers are found all over the world and they are basically natural reservoirs. These aquifers have been tapped and are used for irrigation and the like. More farmland means more water use and this can be bad news for these aquifers. For example, one of our largest aquifers, the Ogallala, has gone down roughly 100 ft due to our use of it for irrigation. Normally, the aquifer would refill itself with rain but our withdrawal rate far outstrips the replenish rate so as of now, every year the aquifer gets lower and lower.

 

Now, I am not arguing that we stop using this aquifer (though I would argue that we should use it more efficiently by eliminating water subsidies for farmers) but I don’t like the idea that we could potentially increase the withdrawal rate due to increased crops being used for fuel. Freshwater is an important resource in general so I don’t like the idea of using it for creating fuel in the heavily subsidized ethanol industry.

 

Massive Subsidies

 

And thats another thing about ethanol, it is a very heavily subsidized industry. Sure the oil industry is subsidized as well, but the ethanol industry receives a subsidy almost twice as big as the oil industry. For example, Minnosota’s Department of Agriculture tries to make the argument that the oil industry gets larger subsidies. Take a look:

It is important to compare “apples to apples” when discussing fuel subsidies. According to the Government Accountability Office (GAO), the U.S. has spent more than $130 billion over the last three decades in subsidies to the oil industry. Add to this the amount of money that the U.S. spends to maintain a major presence in the Middle East, and you begin to see the “embedded” cost in our gasoline coming from the oil imported from this region.

 

Ethanol has received government subsidies as well. However, with the rise in today’s market price of corn, agricultural subsidies in their current form will be reduced from more than $10 billion/year to approximately $2 billion/year. Even by factoring in the current cost of the U.S. excise tax credit to gasoline blenders, which amounts to $3 billion/year, the subsidy level is greatly reduced from previous norms.

These two paragraphs try to make the argument that the subsidies to ethanol are “modest” in comparison to oil. Well if the subsidies are truly modest, I would really like to see a dictionary on how Minnesotans define modest. If one uses my definition of modest, the two paragraphs above show that the subsidies are anything but modest in comparison.

 

First off, they try to confuse you by saying that “the US has spent more than $130 billion over the last three decades.” Not per year people. Talk about not comparing “apples to apples.” $130 billion per three decades comes out to about $4.33 billion/year.

 

Now lets look at the second paragraph, keeping the $4.33 billion/year in mind. First of all, they use the phrase “will be reduced” which means the ethanol subsidy is still at $10 billion/year. I, for one, have great faith in our lobbying industry and their ability to keep subsidies coming no matter if they are needed or not so I doubt the subsidies will be disappearing anytime soon. Therefore, instead of Ethanol subsidies being “modest” in comparison, they are over two times more than oil per year!

 

Even if you take their approximate $5 billion/year subsidy ($2 billion + $3 billion stated about), you still get a subsidy amount that is above the oil industry’s average $4.33 billion/year. Another estimate puts the ethanol industry subsidy at $7 billion for the year 2006 so any way you look at it, subsidies for ethanol are definitely not modest.

 

Bad for Biodiversity

 

Anyways, back to the environmental aspect of ethanol production. As I have stated in the past articles linked to above, with the increase in demand for ethanol producing crops, people are going to either switch from food crops to crops that produce and/or clear more land for farmland. The latter part means that farmers might actually see that it is economically worth clearing acre upon acre of forests or prairie which, as we have heard the Greens say multiple times, is bad for the environment. By clearing these lands, farmers are hurting the biodiversity of that particular region.

 

One example of this can be seen in Indonesia where there is a large palm oil industry. This oil is a big component in some biofuels and Europe is helping drive Indonesia’s palm oil industry by mandating that 10% of their fuel comes from biofuels by 2020. Thanks to the central planning of Indonesia’s government, 75,000 square miles of land are set to be converted to palm oil production by 2020 (“The Really Inconvenient Truths“). The land being converted consists of forests that are being cut with the fauna (tigers, orangutans, elephants, etc.) being killed (see the book link above for more).

 

Now the United States wouldn’t mandate a certain number of acreage to be put under for ethanol crop production, would they? No, but with legislation that has already been passed, they really don’t have to. Instead of mandating a specific number of acreage devoted to ethanol production, the government has mandated the use of 7.5 billion gallons of ethanol by 2012 with goals of renewable fuels in general reaching 36 billion gallons by 2022. With tariffs on cheap foreign sources of ethanol (like sugarcane from Brazil) impeding importation, it looks like we will be growing our own, hence the need to cultivate more land.

 

Conclusion

 

Now, do I believe that oil is the best form of energy in the world? Of course not. Do I believe that it is something that we are going to be primarily using for a while? Yes I do. Do I believe we should relax restrictions on drilling in ANWAR and offshore? Absolutely. However, I also like the idea of alternative energy, as long as it is economically feasible and can basically stand on its own.

 

My problem with crop based ethanol is that it is going to give farmers the incentive to grow crops specifically for fuel instead of for food and as prices rise due to increasing demand(be it for ethanol or increasing demand for food worldwide), more and more farmers are going to get on the action. This means more land under cultivation which will end up hurting the environment more than any alternative fuel might help it. I’m no environmentalist but I do appreciate nature (conservationist) and hate to see forests get chopped down for unnecessary reasons.

 

So why add any extra demand on farmland for things other than growing food when there are viable fuel alternatives out there?

 

The Algae Alternative

 

At this point you are all probably wondering that since I absolutely abhor crop-based ethanol, what other feasible alternatives are there? Well there is at least one that looks pretty promising (or at least more friendly to the environment and our food supply).

 

Farming algae for either ethanol or biodiesel could potentially be the answer for growing renewable fuels.

 

Now hold on a minute, I bet your about to comment something to the affect that “Algae basically lives in water! How will using algae lesson our water usage?” Well that is a great question and I’m glad you asked it.

 

The great thing about algae is that it can be grown in wastewater or even saltwater. Obviously there is little demand for those two sources of water and since we are not going to be eating it, it really doesn’t matter what the water source is. This flexibility would allow us to save freshwater for our food crops and drinking water.

 

Another great this about algae is that these algae farms could be located next to power plants and the CO2 they produce can be used as nutrients for the algae. Therefore, instead of investing in carbon sequestration methods which basically just cost money to the power plants, they could potentially make money by selling the CO2 to the farms.

 

Some of you might also be thinking that algae is just as bad as farms because land will have to be used to produce this algae harvest. Well this is where I would tell you that you’re not entirely correct. The first benefit of algae is that you don’t have to use land that has agricultural value (basically it can grow anywhere as long as the temperature and nutrients are right). Another benefit is that with algae, you don’t have to grow it horizontally. What I mean by this is that you could theoretically have a skyscraper that house algae producing vats.

 

And do you know what the best part about algae is? It’s a whole lot more efficient at producing oil than crops. Take a look:

Companies in California, Texas and Florida are leading the effort to produce and market fuel from algae. PetroSun of Rio Hondo, Texas, began producing fuel in April 2008. The company says it can produce 4.4 million gallons of oil every year from its 1,100 acres of algae ponds – roughly 4,000 gallons per acre. In contrast, one acre of corn produces about 330 gallons of ethanol, according to industry reports.

So there you have it, more reasons why crop-based ethanol is a bad idea and an alternative that is better in every single aspect that we could focus on producing instead.