In an effort to reduce America’s dependence on foreign sources of energy, namely Middle Eastern nations from whom we buy oil, President Bush, called for a reduction in our use of foreign sources of oil. The White House believes that the use of ethanol can replace up to thirty percent of foreign oil use by 2012. (Bush). In his 2007 State of the Union speech, President Bush introduced the specific goal of reducing U.S. gasoline consumption by twenty percent in ten years. He proposed creating “mandatory fuel standards to require 35 billion gallons of renewable and alternative fuels in 2017.” While not explicitly stated, the President was thinking about the use of ethanol. Ethanol blended with gasoline is already offered at some gas stations. In order to draw attention to its use, President Bush made a trip to Brazil, which is already a heavy user and producer of ethanol. Since then, ethanol research and development has exploded on the American scene. But the question remains, will ethanol use remove our dependence on foreign oil producers? And how will our economy be affected by using a significant food source for energy production?
So what is ethanol? According to the American Coalition for Ethanol, “ethanol is a clean-burning, high-octane fuel that is produced from renewable sources. At its most basic, ethanol is grain alcohol, produced from crops such as corn.” Ethanol is produced “similar to beer and hard alcohol,” when “the corn is ground and mixed with enzymes to break it down… Yeast is added, creating alcohol, carbon dioxide and the scent of a brewery.” The ethanol is then blended with gasoline to create either E10 a ten percent ethanol ninety percent gasoline mix, or E85 an eighty-five percent ethanol fifteen percent gasoline blend.
One farm in Arizona, Pinal Energy, decided to build an ethanol refinery near its fields and hopes to sell its products, including the carbon dioxide byproduct of ethanol, exclusively within Arizona. (Randazzo). Some groups are trying to create a “super ethanol” from waste sources such as “sewage sludge, switchgrass, plant stalks, trees, even coal -- virtually anything that contains carbon.” (Heargraves). Native prairie grasses grown on degraded farmlands can improve soils, and require less energy to grow and harvest. (Tillman, Hills). The technology is not as far advanced for these sources as it is for corn, but creating fuel from our waste has obvious benefits.
The processes used to make corn ethanol have been criticized for creating more demand for energy than they satisfy. Consuming energy in the production process, farmers must plant, fertilize, irrigate and harvest the corn using gas-powered machinery. The corn must then be transported to refineries, refined, and transported to fuel stations using more energy. Ethanol cannot be transported through pipelines without degrading and therefore must be transported by truck.
Many U.S. citizens believe that because it is domestically produced, from renewable resources, ethanol helps reduce America's dependence upon foreign sources of energy. This has been called into question by some experts. By some estimates, the process of growing, refining and processing ethanol will realize only a twenty percent energy savings, meaning that for every one hundred gallons displaced, eighty gallons will be used in producing the ethanol. But others point to innovations in farming to claim that this is an inaccurate figure. (Svoboda). Farming practices, like ethanol production, are regularly evolving more efficient practices and some estimates of the energy derived from corn based ethanol do not take this into account. The claims vary widely, some claiming it will save energy while others claim ethanol use will cost us more energy than we currently use. This technology revolution is producing innovative new methods. For instance, in Mead Nebraska, E3 Biofeuls, an ethanol producer, is using 100 percent cow manure to power its plants rather than natural gas. Because of the replacement of this unpredictably priced energy source much of the cost of powering the plant is removed reducing the risk of building new plants. (Johnson). Mead residents have noticed a better smell in the air too. Innovations such as these will contribute to the popularity and energy savings that ethanol can provide.
In addition, the fuel efficiency of ethanol blends have been called into question by the Detroit News Weekly. Comparing these cars to those that run on diesel gasoline, they found that burning E85 "cars modified to run on E85, consume on average between 20 and 30 percent more fuel than those operating on gasoline.” (Winton). Arco also admits E10’s lower fuel efficiency on its website.
Arco currently blends its fuel with ethanol creating an E10 mixture. They assert on their website that this increases the savings to their customers. Another benefit they stress is that this is a renewable domestic source. However, they acknowledge that the product results in a one to three percent loss in fuel economy. Thus the ten percent savings in oil consumption that would seem to be the result of selling E10 needs to be reduced to take into account the more frequent fill ups that customers will require. This seems to be at the heart of the debate about the utility of ethanol blends.
The jury is still out on whether ethanol blends will benefit America. Until ethanol’s production processes are settled and its fuel efficiency is studied there is not really an accurate way to anticipate whether President Bush’s vision of twenty percent reduction in foreign sources of oil can be realized through the use of ethanol.
In the meantime, the side effects of producing energy from corn, a significant food crop, are beginning to surface in our economy. In anticipation of the sharp increase in demand for corn, and therefore high corn prices, corn farmers are planting corn everywhere. The USDA expects farmers “to plant 90.5 million acres of corn, the largest area since 1944 and 12.1 million acres more than in 2006.” That is a fifteen percent increase in corn acres over 2006. When supply is short of demand, as is currently the case with corn, the shortage will drive up the price levels, and therefore profits, for corn farmers. So far, increased production has not been enough to avoid price level increases. A dramatic increase in the amount of corn supplied will be necessary to meet the anticipated demand for ethanol and keep up with food demands as well.
Illustrating the increased demand for corn, Ag Weekly in June reported that “corn prices [hit] above $4 a bushel several times this year, compared with a 10-year average price of about $2.50 a bushel.” (Villagran). According to the Washington Post, “If every one of the 70 million acres on which corn was grown in 2006 was used for ethanol, the amount produced would displace only 12 percent of the U.S. gasoline market.” (Tillman, Hill). This is short the twenty percent goal of the Bush Administration and would not provide corn for any of its many current uses. So its it even possible for farmers to grow enough corn for fuel and food?
The ripples from the increased demand has been felt in markets that many Americans did not anticipate. Corn is used in many food products from corn syrup based products like soda and candy, to feeding animals for meat and dairy products. Recent genetic modification has increased yields in the past and may contribute to a solution. In the future, more arable land needs to be developed to meet this increased demand, but for now the trend is to substitute corn for other crops in existing fields to try to fill the shortage. In anticipation of higher profits, corn is displacing rice, cotton and soybeans in fields. The USDA reports a fifteen percent reduction in soybean planting this year, seven percent reduction in rice, and eleven percent less soybeans. This practice has upset equilibrium prices across the economy and may upset supplies of these resources resulting in higher prices for products such as clothing as well as rice, corn and soy based products. Even Starbucks has seen costs go up as milk prices rise. (Sullivan). Until the supply of corn and fuel becomes stable, prices may be affected in many areas not anticipated by average Americans. This kind of ripple will continue in food markets until a new equilibrium is found.
So will ethanol use reduce our dependence on foreign oil for energy? It appears that with the current fad of corn based ethanol it could, but at a high cost to other necessary products we buy. What is becoming apparent is that its use will not save us money unless significantly more farmland can be developed for growing corn. However, innovations are abundant and may provide answers to the current problems. In balancing our need for food and fuel, the market will eventually settle on a favorite product that will satisfy the demands currently placed on it by our government and Americans who want to reduce our dependence on foreign sources of oil, along with affordable food production.
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