Environmentalist questions popularity for green fuels

WASHINGTON, DC, US, July 26, 2006 (Refocus Weekly) The head of a U.S. environmental think tank says the focus on ethanol to reduce reliance on oil is ill advised.

Lester Brown, founder of the Earth Policy Institute, says the focus of automobile manufacturers on flex-fuel vehicles that use corn-derived ethanol instead of electric cars is the wrong strategy. Even with a major push to produce ethanol from corn, ethanol provides only 3% of transportation fuel in the country and has not reduced demand for gas sufficiently to lower prices.

A study published by the National Academy of Sciences concludes that, if all the corn and soybeans produced in the U.S. were used for ethanol and biodiesel, it would provide only 12% of demand for gasoline and 6% of demand for biodiesel. As a result, using grain-based alcohol products to replace petroleum-based automotive fuel is not going to make much of a difference.

“Cars, not people, will claim most of the increase in world grain consumption this year,” says Brown. The U.S. Department of Agriculture projects that world grain use will grow by 20 million tons in 2006, of which 14 million tons will be used to produce fuel for cars, leaving only 6 million tons to satisfy the world’s growing food needs.

“In agricultural terms, the world appetite for automotive fuel is insatiable,” and the grain required to fill a 25-gallon SUV gas tank with ethanol would feed one person for one year, while the grain to fill the tank every two weeks over a year will feed 26 people.

“Investors are jumping on the highly profitable biofuel-bandwagon so fast that hardly a day goes by without another ethanol distillery or biodiesel refinery being announced somewhere in the world,” he notes. “The amount of corn used in U.S. ethanol distilleries has tripled in five years, jumping from 18 million tons in 2001 to an estimated 55 million tons from the 2006 crop.”

In some U.S. states, ethanol distilleries are taking over the corn supply and, in Iowa, 55 ethanol plants are operating or have been proposed and economists warn that, if they are all built, they would consume “virtually all the corn grown in Iowa.” In South Dakota, ethanol distilleries already consume more than half of the corn harvest.

“With so many distilleries being built, livestock and poultry producers fear there may not be enough corn to produce meat, milk, and eggs and, since the U.S. supplies 70% of world corn exports, corn-importing countries are worried about their supply,” he adds. “As the price of oil climbs, it becomes increasingly profitable to convert farm commodities into automotive fuel, either ethanol or biodiesel.”

Crop-based fuel production is concentrated in Brazil, the U.S. and western Europe, with the U.S. and Brazil each producing 16 billion liters of ethanol last year. Brazil uses sugarcane as the feedstock but U.S. distillers use grain, and the 55 million tons of corn going into ethanol this year represent one-sixth of the U.S. grain harvest but will supply only 3% of its automotive fuel, he adds.

Brazil is the world’s largest sugar producer and exporter, but now converts half of its sugar harvest into fuel ethanol. With 10% of the world’s sugar harvest going into ethanol, the price of sugar has doubled and “cheap sugar may now be history.”

In Europe, the emphasis is on producing biodiesel and, in 2005, the European Union produced 1.6 billion gallons of biofuels. Of this, 858 million gallons were biodiesel from vegetable oil and 718 million gallons were ethanol from grain, he adds. China and India are building ethanol distilleries and China converted 2 million tons of grain last year into ethanol.

“The profitability of crop-based fuel production has created an investment juggernaut,” he explains. “With a U.S. ethanol subsidy of 51¢ per gallon in effect until 2010, and with oil priced at $70 per barrel, distilling fuel alcohol from corn promises huge profits for years to come.”

“For the two billion poorest people in the world, many of whom spend half or more of their income on food, rising grain prices can quickly become life threatening,” he warns. “The broader risk is that rising food prices could spread hunger and generate political instability in low-income countries that import grain, such as Indonesia, Egypt, Nigeria and Mexico. This instability could in turn disrupt global economic progress.”

“If ethanol distillery demand for grain continues its explosive growth, driving grain prices to dangerous highs, the U.S. government may have to intervene in the unfolding global conflict over food between affluent motorists and low-income consumers,” and he says “the equivalent of the 3% gain in automotive fuel supplies from ethanol could be achieved several times over - and at a fraction of the cost - simply by raising auto fuel efficiency standards by 20%.”

“While there are no alternatives to food for people, there is an alternative source of fuel for cars, one that involves shifting to highly efficient gas-electric hybrid plug-ins,” he concludes. “If wind-rich countries such as the U.S., China and those in Europe invest heavily in windfarms to feed cheap electricity into the grid, cars could run primarily on wind energy, and at the gasoline equivalent of less than $1 a gallon.”


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