Richard Moore

Corn Dog
The ethanol subsidy is worse than you can imagine.
By Robert Bryce
Posted Tuesday, July 19, 2005, at 8:12 AM ET

For the last generation, ethanol has been America's fuel of the future. But 
there has never been more hype about it than there is today. Green-energy 
analysts like Amory Lovins, environmental groups like the Natural Resources 
Defense Council, neoconservatives like James Woolsey, and farm groups like the 
American Coalition for Ethanol are all touting the biofuel.

Making ethanol, they claim, will help America achieve the elusive goal of 
"energy security" while helping farmers, reducing oil imports, and stimulating 
the American economy. But the ethanol boosters are ignoring some unpleasant 
facts: Ethanol won't significantly reduce our oil imports; adding more ethanol 
to our gas tanks adds further complexity to our motor-fuel supply chain, which 
will lead to further price hikes at the pump; and, most important (and most 
astonishing), it may take more energy to produce a gallon of ethanol than it 
actually contains.

The greens, hawks, and farmers helped convince the Senate to add an ethanol 
provision to the energy bill‹now awaiting action by a House-Senate conference 
committee‹that would require refiners to more than double their use of ethanol 
to 8 billion gallons per year by 2012. The provision is the latest installment 
of the ethanol subsidy, a handout that has cost American taxpayers billions of 
dollars during the last three decades, with little to show for it. It also 
shovels yet more federal cash on the single most subsidized crop in America, 
corn. Between 1995 and 2003, federal corn subsidies totaled $37.3 billion. 
That's more than twice the amount spent on wheat subsidies, three times the 
amount spent on soybeans, and 70 times the amount spent on tobacco.

The stickiest question about ethanol is this: Does making alcohol from grain or 
plant waste really create any new energy?

The answer, of course, depends upon whom you ask. The ethanol lobby claims 
there's a 30 percent net gain in BTUs from ethanol made from corn. Other 
boosters, including Woolsey, claim there are huge energy gains (as much as 700 
percent) to be had by making ethanol from grass.

But the ethanol critics have shown that the industry calculations are bogus. 
David Pimentel, a professor of ecology at Cornell University who has been 
studying grain alcohol for 20 years, and Tad Patzek, an engineering professor at
the University of California, Berkeley, co-wrote a recent report that estimates 
that making ethanol from corn requires 29 percent more fossil energy than the 
ethanol fuel itself actually contains.

The two scientists calculated all the fuel inputs for ethanol production‹from 
the diesel fuel for the tractor planting the corn, to the fertilizer put in the 
field, to the energy needed at the processing plant‹and found that ethanol is a 
net energy-loser. According to their calculations, ethanol contains about 76,000
BTUs per gallon, but producing that ethanol from corn takes about 98,000 BTUs. 
For comparison, a gallon of gasoline contains about 116,000 BTUs per gallon. But
making that gallon of gas‹from drilling the well, to transportation, through 
refining‹requires around 22,000 BTUs.

In addition to their findings on corn, they determined that making ethanol from 
switch grass requires 50 percent more fossil energy than the ethanol yields, 
wood biomass 57 percent more, and sunflowers 118 percent more. The best yield 
comes from soybeans, but they, too, are a net loser, requiring 27 percent more 
fossil energy than the biodiesel fuel produced. In other words, more ethanol 
production will increase America's total energy consumption, not decrease it. 
(Pimentel has not taken money from the oil or refining industries. Patzek runs 
the UC Oil Consortium, which does research on oil and is funded by oil 
companies. His ethanol research is not funded by the oil or refining 

Ethanol poses other serious difficulties for our energy economy. First, 8 
billion gallons of ethanol will do almost nothing to reduce our oil imports. 
Eight billion gallons may sound like a lot, until you realize that America 
burned more than 134 billion gallons of gasoline last year. By 2012, those 8 
billion gallons might reduce America's overall oil consumption by 0.5 percent. 
Way back in 1997, the General Accounting Office concluded that "ethanol's 
potential for substituting for petroleum is so small that it is unlikely to 
significantly affect overall energy security." That's still true today.

Adding more ethanol will also increase the complexity of America's refining 
infrastructure, which is already straining to meet demand, thus raising pump 
prices. Ethanol must be blended with gasoline. But ethanol absorbs water. 
Gasoline doesn't. Therefore, ethanol cannot be shipped by regular petroleum 
pipelines. Instead, it must be segregated from other motor fuels and shipped by 
truck, rail car, or barge. Those shipping methods are far more expensive than 

There's another problem: Ethanol, when mixed with gasoline, causes the mixture 
to evaporate very quickly. That forces refiners to dramatically alter their 
gasoline to compensate for the ethanol. (Throughout the year, refiners adjust 
the vapor pressure of their fuel to compensate for the change in air 
temperature. In summer, you want gasoline to evaporate slowly. In winter, you 
want it to evaporate quickly.) In a report released last month, the GAO 
underscored the evaporative problems posed by ethanol, saying that compensating 
for ethanol forces refiners to remove certain liquids from their gasoline: 
"Removing these components and reprocessing them or diverting them to other 
products increases the cost of making ethanol-blended gasoline."

In addition to the transportation and volatility issues, ethanol will add yet 
more blends of gasoline to the retail market. Last year, American refiners 
produced 45 different types of gasoline. Each type of gasoline needs specific 
tanks and pipes. Adding ethanol to the 45 blends we already have means we will 
be "making more blends for more markets. That complexity means more costs," says
David Pursell, a partner at Pickering Energy Partners, a Houston brokerage.

There's a final point to be raised about ethanol: It contains only about 
two-thirds as much energy as gasoline. Thus, when it gets blended with regular 
gasoline, it lowers the heat content of the fuel. So, while a gallon of 
ethanol-blended gas may cost the same as regular gasoline, it won't take you as 

What frustrates critics is that there are sensible ways to reduce our motor-fuel
use and bolster renewable energy‹they just don't help the corn lobby. Patzek 
points out that if we channeled the billions spent on ethanol into 
fuel-efficient cars and solar cells, "That would give us so much more bang for 
the buck that it's a no-brainer."

Correction, July 20, 2005: The article originally stated that ethanol critics 
David Pimentel and Tad Patzek received no oil-industry funding. Pimentel 
receives no such funding, but Patzek runs the UC Oil Consortium, which does 
research on oil and is funded by oil companies. His ethanol research is not 
funded by the oil industry. Return to the corrected sentence.

Robert Bryce is the managing editor of Energy Tribune. His book on the mirage of
energy independence will be published in February.

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