Frantically focused special interest groups have a habit of defeating their own goals, hurting their own self-interest by an excessive pursuit of it. Labor unions are a classic instance: they have often been so greedily intent on exacting every concession from the companies they are bargaining with that they put the companies out of business, and their own members out of work.
Environmentalist groups are another classic case. They have routinely pushed programs that allegedly benefit the environment, but in reality do not. For example, they helped stop nuclear power 30 years ago, an act that exacerbated the very problem — global warming — that so concerns them now. A number of prominent Greens now realize their error.
A recent instance of this phenomenon is none other than the Green giant himself, Al Gore. He just came out against the federal government’s subsidy of ethanol. As he remarked to a green energy conference in Athens, “It is not a good policy to have these massive subsidies for first generation ethanol. First generation ethanol I think was a mistake. The energy conversion ratios are at best very small.”
More surprising still was his admission that his original support had been based on his presidential ambitions, specifically, his desire for the support of corn farmers in Iowa and Tennessee. But one wonders what took Gore so long to wake up. Subsidized corn-derived ethanol has been a dubious program from the day it was first conceived.
The American ethanol program began in 2004 when Congress established a subsidy of 51 cents per gallon for gasoline containing 10% ethanol. (In 2008, the subsidy was lowered to 45 cents per gallon.) It did this in spite of the obvious drawbacks of making ethanol from corn. Ethanol is the alcohol derived from fermenting sugar, and corn is only 40% sugar to begin with.
Very rapidly, corn that was being used to feed animals and people was diverted to the ethanol boondoggle, until the U.S. ethanol industry used, as it does today, over 40% of all the corn grown in the United States, and fully 15% of the corn produced worldwide. One unintended consequence was rapidly discovered — shortages in cattle feed and human food. This was folly incarnate: taking perfectly good food and trying to use it to derive fuel. As a consequence, food prices increased, especially in countries (such as Mexico) where corn, or meat derived from animals fed on corn, is a staple of the average person’s diet. By 2008 food prices stood at record levels.
The ethanol subsidy program was questioned from the start. In 2005, a major study by Pimental and Patzek (the first a professor of ecology at Cornell, the second a professor of environmental engineering at Berkeley) argued that ethanol actually requires 29% more fossil fuel energy to produce than the energy it delivers.
The reason ethanol advocates didn’t realize this is that they didn’t count the unseen cost of the energy needed to produce the fuel, such as the energy used to make the fertilizer required to grow the crops, the energy used to power the farm equipment required to plant, irrigate, and harvest the crops, and the energy used to transport and grind the crops and distill the alcohol from the mash.
While many pro-ethanol spokespeople have attacked the work of Pimental and Patzek, it still seems clear — now even to Gore — that the input-yield ratio from ethanol is disappointing at best.
Besides the inefficiency factor, there are other drawbacks to ethanol. It is hard to keep water from mixing with it, which makes shipment hard. And it can be destructive to the rubber components of automobile engines.
Worse yet, a major study published this year by the Congressional Budget Office — hardly a right-wing source — revealed that the use of ethanol to reduce greenhouse gas emissions runs about $754 per metric ton of CO2. That’s about 38 times the average price, on the European Climate Exchange, that a European company would pay to be allowed to emit a ton of emissions over its allotment.
The ethanol subsidy program expires at the end of the year. Perhaps the Republicans, bolstered by their support in the recent election, will work to end this pointless program for good. Ending it would save $5 billion a year, and show some common sense about environmental and energy policy.
And maybe they could call Al Gore to testify.