Grain Bins


SDCGA president responds to WSJ attack on ethanol

Posted on June 04, 2009

South Dakota Corn Growers Association president responded to a negative editorial which appear in the Wall Street Journal on June 2. Following is SDCGA president Bill Chase's response to the outlandish comments. Below Chase's response is the original editorial from WSJ.

Response by Bill Chase, SDCGA president:

If a tree falls in the rain forest, is ethanol to blame? The Wall Street Journal (WSJ) would like U.S. consumers to believe that along with pegging ethanol for a myriad of other maladies that require complicated strategies to solve.

Such head-in-the-(tar) sands, sensational so-called “journalism” irresponsibly ignores the fact that the nation has a debilitating dependence on foreign oil and WSJ obviously supports unraveling the only progress we’ve made to keep oily hands off our children’s future.

WSJ’s flawed calculations of “ethanol’s grocery bill” conveniently leaves out in its laundry list of “the cost of ethanol”, the impact energy has on the increase of food prices and the subsides the oil industry currently receives along with the human and financial burden of protecting our country from terrorists. A 2007 study from the National Defense Council Foundation calculated the real cost of gasoline refined from Middle Eastern oil to be $8 more per gallon the motorists are paying due to resources spent protecting shipping lanes and other petroleum infrastructure investments in Saudi Arabia, the Persian Gulf and elsewhere.

Ethanol is one solution available today and as consumers demand higher blends of ethanol, it will allow us to continue to replace foreign oil with domestically produced renewable energy. Use of E15 instead of gasoline could result in the displacement of 900,000 barrels of oil per day with a more energy-efficient fuel. A March study by North Dakota State University showed that increasing the ethanol blend from 10 to 15 percent could create and support more than 136,000 new jobs and inject $24.4 billion into the American economy annually.

Ethanol is also contributes to the reduction in green house gas. According to the U.S. Department of Energy, the use of E15 instead of gasoline would offset more than 40 million tons of CO2 per year- or the greenhouse gas emissions equivalent removing 10.5 million cars from the road each year. The environmental benefits have been proven over and over again, yet those determined to find fault with ethanol ignore the science.

And finally, the notion that rain forests and grasslands are being cleared to expand the biofuels industry can be answered by advancements in technology and farming practices. A February 2009 study conducted by Air Improvement Resource, Inc. found that using an expected yield improvement path to 183 bushels of corn per acre in 2015, the increase in corn use for U.S. ethanol production can be met without a decline in corn exports or stocks. Which means the current Renewable Fuels Standard requiring 15 billion gallons of corn ethanol by 2015 would not result in new forest or grassland conversion domestically or abroad.

We have an energy shortage in this nation. The only solution in the pipelines today is ethanol. So if not corn ethanol, what is YOUR solution WSJ? Sit and wait? As for me, I prefer to move forward using peer-reviewed science to make our decisions as we move from corn ethanol to cellulosics to energy independence.

Bill Chase, Wolsey, SD

Wall Street Journal editorial from June 2, 2009:

Ethanol's Grocery Bill

Two federal studies add up the corn fuel's exorbitant cost.

The Obama Administration is pushing a big expansion in ethanol, including a mandate to increase the share of the corn-based fuel required in gasoline to 15% from 10%. Apparently no one in the Administration has read a pair of new studies, one from its own EPA, that expose ethanol as a bad deal for consumers with little environmental benefit.

The biofuels industry already receives a 45 cent tax credit for every gallon of ethanol produced, or about $3 billion a year. Meanwhile, import tariffs of 54 cents a gallon and an ad valorem tariff of four to seven cents a gallon keep out sugar-based ethanol from Brazil and the Caribbean. The federal 10% blending requirement insures a market for ethanol whether consumers want it or not — a market Congress has mandated will double to 20.5 billion gallons in 2015.

The Congressional Budget Office reported last month that Americans pay another surcharge for ethanol in higher food prices. CBO estimates that from April 2007 to April 2008 "the increased use of ethanol accounted for about 10 percent to 15 percent of the rise in food prices." Ethanol raises food prices because millions of acres of farmland and three billion bushels of corn were diverted to ethanol from food production.

Americans spend about $1.1 trillion a year on food, so in 2007 the ethanol subsidy cost families between $5.5 billion and $8.8 billion in higher grocery bills.

A second study — by the Environmental Protection Agency's Office of Transportation and Air Quality — explains that the reduction in CO2 emissions from burning ethanol are minimal and maybe negative. Making ethanol requires new land from clearing forest and grasslands that would otherwise sequester carbon emissions. "As with petroleum based fuels," the report concludes: "GHG [greenhouse gas] emissions are associated with the conversion and combustion of bio-fuels and every year they are produced GHG emissions could be released through time if new acres are needed to produce corn or other crops for biofuels."

The EPA study also explores a series of alternative scenarios over 30 to 100 years. In some cases ethanol leads to a net reduction in carbon relative to using gasoline. But many other long-term scenarios observe a net increase in CO2 relative to burning fossil fuels. Ethanol produced in a "basic natural gas fired dry mill" will over a 30-year horizon produce "a 5% increase in GHG emissions compared to petroleum gasoline."

When ethanol is produced with coal burning mills, the process "significantly worsens the lifecycle GHG impact of ethanol" creating 34% more greenhouse gases than gasoline does over 30 years.

Both CBO and EPA find that in theory cellulosic ethanol — from wood chips, grasses and biowaste — would reduce carbon emissions. However, as CBO emphasizes, "current technologies for producing cellulosic ethanol are not commercially viable." The ethanol lobby is attempting a giant bait-and-switch: Keep claiming that cellulosic ethanol is just around the corner, even as it knows the only current technology to meet federal mandates is corn ethanol (or sugar, if it didn't face an import tariff).

As public policy, ethanol is like the joke about the baseball prospect who is a poor hitter but a bad fielder. It doesn't reduce CO2 but it does cost more. Imagine how many subsidies the Beltway would throw at ethanol if the fuel actually had any benefits.

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