feedstock - The Environment Report

Some people are warning there are hidden costs
to the drive for ethanol. The demand for corn-based
ethanol for fuel has pushed the price of corn close
to the highest price it’s been in 10 years. In the
first of our two-part series on ethanol, Rebecca Williams
reports that economists say the push for more ethanol will
mean higher prices at the supermarket:

Transcript

(Sound of burger sizzling)

Everything in your classic American meal has one thing in common.

(Sound of soda can opening and fizzing)

The burger, chips, soda, even the ketchup. They all depend on corn.

Cows eat corn. Chips have corn oil in them. And your soda and ketchup
have high fructose corn syrup as a main ingredient. Supermarkets are
loaded with food that has something to do with corn.

And lately, corn’s been near its highest price in ten years. The price
has nearly doubled. Everyone from livestock producers to beverage
companies has been feeling the squeeze of more expensive corn. And
that’s been starting to show up at the grocery store.

The US Department of Agriculture predicts our food is going to get more
expensive this year, and maybe for many years to come.

Ephraim Leibtag is a USDA economist. He says we’ll probably be paying
between two and a half and three and a half percent more this year at
the store:

“That’s on average for your food bill. So if you’re buying an average
basket of products and you spend $100 when you go to the store, now
you’ll be spending $103. But you’ll see it first in products most
related to corn. In addition you’ll see some after-effects because if
more corn is produced that may drive up the price of other commodities
if the tradeoff in land is between, let’s say, corn and other potential farm
products.”

So if farmers plant more corn for ethanol instead of soybeans, that
will drive up the price of soybeans, and in turn, the food that’s made
from them.

It turns out that’s exactly what farmers are planning to do this year.
A recent USDA report says farmers will be planting 12 million more
acres of corn than last year… and less soybeans, and rice.

Leibtag says high corn prices have been great for corn farmers, but he
says it’s been rough on a lot of other people:

“If you use corn as a main ingredient you’ve already noticed your costs
go up quite a bit. Some companies have explored the possibility of
substituting or using other products. But certainly producers of livestock and
poultry have higher feed costs. They have to think about exactly how they’re
going to produce their product when one of their inputs goes up 20, 30,
50, 80 percent in price.”

Ethanol backers say it’s just a matter of time before the market will
adjust to more expensive corn. Bob Dinneen is the president of the
Renewable Fuels Association:

“Corn prices are indeed going up… Our own industry is paying more for feedstock for ethanol today. But
at the end of the day, as the marketplace adjusts, we’ll be able to grow
more than sufficient grain to satisfy the country’s demand for food,
fuel and fiber and rural America will be better for it.”

But others argue it won’t be possible to have it all forever. Lester
Brown is the president of the Earth Policy Institute:

“Usually in the past, rises in food prices come when we have a poor
harvest somewhere in the world as a result of weather and therefore is temporary. It usually
lasts a year or so and weather comes back to normal and we get a good
harvest again. What we’re looking at now is continuous pressure on
prices as far as we can comfortably see in the future, simply because in
agricultural terms, the demand for automotive fuel is insatiable.”

Brown says we’re at risk of trading food for ethanol fuel. And he says
it’s not just going to impact food prices in the US. It’s also going
to affect food supplies worldwide, especially in developing countries.

“The biggest effects are hitting people in other countries who consume
corn more directly, like Mexico for example, which has a corn-based diet and there
the price of tortillas has gone up about 60 percent.”

Brown says many US politicians have what he calls “ethanol euphoria.”
He’s called for a moratorium on licensing new ethanol plants. He wants
the government to think about whether it makes sense to keep
subsidizing ethanol made from corn.

Many people, even some in the ethanol industry, say ethanol from corn
is a limited solution. So researchers are looking for ways to make
ethanol from other sources, such as woody plants like switchgrass.

In the meantime, ethanol from corn is still the most viable option.
Economists say if corn gets diverted into ethanol on a large scale,
that might mean we’ll all be paying higher food prices for the next
several years.

For the Environment Report, I’m Rebecca Williams.

Transcript

Researchers are looking at ways to use corn-based ethanol as a way to power hydrogen fuel cells.
It would appear to be an environmentally friendly way to get into the hydrogen fuel economy.
However, ethanol might not be as environmentally friendly as its proponents claim. Back by the
farm lobby and ag industry such as Archer Daniels Midland, ethanol has plenty of political
support. But some researchers say corn-based ethanol is a boondoggle. The Great Lakes Radio
Consortium’s Mary Stucky reports…

This reactor is in a laboratory at the University of Minnesota ticking as it converts ethanol into
hydrogen. Researchers here envision thousands of these inexpensive reactors in communities
across America using ethanol to create hydrogen, which would then be used in fuel cells to
generate electricity.

Lanny Schmidt, a Professor of Chemical Engineering, directs the team that created the reactor.

“We’re not claiming our process is the cure-all for the energy crisis or anything like that. But it’s
a potential step along the way. It makes a suggestion of a possible way to go.”

Hydrogen is usually extracted from fossil fuels in dirtier and more costly refineries.

Schmidt says it’s much better to make hydrogen from ethanol.

“It right now looks like probably the most promising liquid non-toxic energy carrier we can think
of if you want renewable fuels.”

Not so fast, says David Pimentel, an agricultural scientist at Cornell University. For years,
Pimentel has warned about what he calls the cost and efficiency and boondoggle of ethanol.
Pimentel says ethanol is a losing proposition.

“It takes 30-percent more energy, including oil and natural gas, primary those two resources to
produce ethanol. That means importing both oil and natural gas because we do not have a
sufficient amount of either one.”

Pimentel says most research on ethanol fails to account for all the energy needed to make the fuel,
such as energy used to make the tractors and irrigate crops. Adding insult to injury, says
Pimentel, ethanol relies on huge government subsidies going to farmers and agri-business.

“If ethanol is such a great fuel source, why are we subsidizing it with 2-billion dollars annually?
There’s big money, as you well know, and there’s politics involved. And the big money is leaking
some of that 2-billion dollars in subsidies to the politicians and good science, sound science,
cannot compete with big money and politics.”

Pimentel also points to environmental damage of growing corn – soil erosion, water pollution
from nitrogen fertilizer and air pollution associated with facilities that make ethanol. But
Pimentel has his detractors.

David Morris runs the Institute for Local Self Reliance in Minneapolis. Morris is not a scientist,
but he commissioned a study on ethanol. He says Pimentel relies on out-of-date figures and fails
to account for the fact that ethanol production is getting more efficient.

Morris’ findings – a gallon of ethanol contains more than twice the energy needed to produce it.
As for subsidies…

“There’s no doubt that if we did not provide a subsidy for ethanol it would not be competitive
with gasoline. But what we need to understand is that we also subsidize gasoline, and if you took
the percentage of the Pentagon budget, which is spent directly on maintaining access to Middle-
Eastern oil, and impose that at the pump, it would add 25- to 50-cents a gallon. At that point,
ethanol is competitive, under the assumption that you will not need a large military budget to
protect our access to Iowa corn.”

But more efficient than making ethanol from corn might be grass, or even weeds. David Morris
says that’s because you don’t have fertilize or irrigate those kinds of plants, the way you do corn.

“So if we’re talking about ethanol as a primary fuel to truly displace gasoline, we have to talk
about a more abundant feedstock. So instead of the corn kernel, it become the corn stock, or it
becomes fast-growing grasses, or it becomes trees, or sawdust or organic garbage. And then
you’re really talking about a carbohydrate economy.”

Pimentel scoffs at that idea.

“You’ve got the grind that material up, and then to release the sugars, you’ve got to use an acid,
and the yield is not as high. In fact, it would be 60-percent more energy using wood or grass
materials.”

While scientists and policy people debate whether ethanol is efficient or not, Lanny Schmidt and
his team soldier on in the lab undeterred in their efforts to use ethanol for fuel. Schmidt
understands some of Pimentels’s concerns, but he thinks scientists will find an answer, so ethanol
can be used efficiency enough to help power the new hydrogen economy.

For the Great Lakes Radio Consortium, I’m Mary Stucky in Minneapolis, Minnesota.

Tag: feedstock

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