| Exploiting clean
energy for profit By John Orr |
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Editor’s note: This is the first in a three-part series on biofuels. The series will look at problems with the current industry, explore how family farms and local economies might play in a better model, and offer how-to advice for creating and sustaining that model. Part 2 will run mid-August. June 30, 2004: The biomass fuels industry is exploding in the wake of war in Iraq, a country touting the second largest oil reserve on the planet. The Organization of the Petroleum Exporting Countries (OPEC) has initiated a slowing of oil production and the Pentagon warns us about the eminent dangers of global warming and greenhouse gasses. Fuel prices continue to rise while fuel consumption steadily increases. In searching for solutions to these challenges, renewable and cleaner-burning biomass fuels such as ethanol and biodiesel are gaining ground with environmentalists, economists, farmers, and the general public. However, it seems good public relations and government support for biofuels are being exploited by the corporate giants now forwarding commercialization of the technology. The current agribusiness model for biofuels’ cycle from the farms to vehicles is more a house of cards—and a profitable one until it collapses—than a logical fuel infrastructure. The EPA estimates U.S. petroleum consumption to be more than 20,000,000 barrels a day, which translates to 1,909,000,000 metric tons of greenhouse gasses being dumped into the atmosphere each year. In the hopes of reducing these numbers by using less polluting, domestically produced fuels, federal legislation has been encouraging the development of ethanol and biodiesel technologies. Today, an estimated 36,533 gallons of soybean-derived biodiesel and 2,052,000 gallons of ethanol (distilled grain alcohol) are being produced and used annually in the United States (http://www.eia.doe.gov/oil_gas/petroleum). The ease and immediacy with which these fuels can be incorporated into the existing transportation infrastructure has sparked a growing demand for these leading alternatives to petroleum oil. The demand is being met by corn and soybean farmers, and particularly by agribusiness giants such as Decanter, Ill.-based Archer Daniels and Midland Co. (ADM). Policy analyst James Bovard observes in Archer Daniels Midland: A Case Study in Corporate Welfare (1995, Cato Institute) that ADM “has been the most prominent recipient of corporate welfare in recent U.S. history.” The world’s largest producer of corn and soybeans also produces more than 40 percent of U.S. ethanol. Soybeans and corn are two of the five subsidized staple crops in the United States, and ethanol production has been instigated by subsidies for three decades. The following October 2003 Los Angeles Times opinion piece entitled “A Complete Waste of Energy”, submitted by Sierra Club Director Dan Becker and the libertarian Cato Institute’s Jerry Taylor characterizes the subsidy program this way: “The Midwest is a region that throws its presidential and congressional vote to those who promise farmers the biggest sack of federal loot, so ethanol we shall have regardless of its merits as a fuel.” Over the past 30 years, ADM has racked in billions of dollars from ethanol subsidizes and, detractors say, has used these revenues to add politicians on the payroll through substantial campaign contributions (learn more at http://www.cato.org/). That ’70s Show and beyond—from Carter to Clinton The Arab oil embargo of 1973 catalyzed the renewable fuels industry. In order to lessen U.S. dependency on foreign oil, the Carter administration backed alternative fuels research. Ethanol was the closest technology ready for immediate commercialization, and loans were ensured for the construction of ethanol plants.
The Reagan administration maintained the subsidies program to the Corn Belt states and actually gave free corn to fuel producers (in 1986, this translated to about $29 million for ADM). The Clinton administration imposed an order to include ethanol in gasoline, which meant direct profits for the companies controlling the industry and no choice for consumers at the gas pump. Bovard reports that “every $1 of profits (ADM) earned by its ethanol operation costs taxpayer $30.” Nonpartisan bad policy According to Nicholas E. Hollis of the Agribusiness Council, Senators Tom Daschle (D-S.D.), Tom Harkins (D-Iowa), Charles Grassley (R-Iowa), and Richard Durbin (D-Ill.) and Representative Dick Gephardt (D-Mo.) are among the main players in continuing the ADM-funded fight for ethanol subsidies. Hollis outlines how ADM has lavishly funded both political parties with million of dollars in handouts in his commentary “Monitoring Corporate Agribusiness From a Public Interest Perspective” in the December 2, 2003, issue of the Agribusiness Examiner. Campaign contributions, says Hollis, have rallied the eloquent spokespersons of agribusiness to make it seem that the very survival of Midwest farmers rides on the shoulders of the subsidies program. And so, he says, the votes are cast according to the candidate who promises to keep federal dollars flowing into the subsidies. But, as Hollis points out, the reality of the subsidy program is very different from the rosy picture painted by the politicians. Farmers have had their lands consolidated by large corporations, the local waters and overall physical and social landscapes of their communities desecrated by corporate agricultural practice, and their tax aid swallowed up by about the wealthiest 7 percent of the industry. Protecting ethanol subsidies in the new Energy Bill is a major issue now on the table for ADM’s political partners (conspicuously absent has been any major media coverage—between ADM advertisements—of any opposition to ethanol). ADM-formed groups like the Renewable Fuels Association and National Corn Growers continue to stir up plenty of support among farmers for their cause. These groups, along with Daschle et al., make the case that the biofuels market presents an important economic opportunity for family farms. However, the subsidy program cloaked as financial aid to farmers has actually crushed thousands of corn farmers under the foot of ADM and other top agribusiness corporations. The problem with ethanol
The most blatant argument against the biofuels industry in its current form, from a sustainability perspective, is that it does not represent good farming. Maximizing profits under a subsidized program dictates large-scale, monocropped farms. This lack of crop integration is a leading cause of soil erosion and invites pests and disease. Heavy fertilization is used to replenish the soil. This leads to non-point source pollution that has been the root of incalculable environmental degradation rendering a vast majority of the waters of the Corn Belt states unsuitable for drinking or swimming. The wanton application of petrochemical pesticides and herbicides is leaving a legacy of toxic and non-biodegradable residue in the watersheds of our amber waves of grain. The seeds for a large majority of the corn and soybeans grown in this country are genetically engineered and are threatening the integrity of the crops throughout the continent. In sharp contrast, carbon dioxide (the number-one greenhouse gas involved in fuel combustion) is constantly recycled in biomass fuel life cycles. Each year, the fuel crops remove carbon dioxide from the atmosphere during photosynthesis (whereas petroleum fuels release carbon gases sequestered tens of millions of years before animal life was even possible on the planet). Ethanol, when used to oxygenate fuel, is a great alternative to using methyl tertiary butyl ether (MTBE). MTBE, the only other oxygenate used in this country, is known to contaminate both ground and surface water. But the main case against ethanol still stands: It takes as much or more energy to grow and process the crops as is returned in burning the fuel. Although technological advances have increased the energy efficiency of the entire ethanol process, the conversion of corn to liquid fuel uses plentiful stores of coal and natural gas. As agro-economist David Pimentel of Cornell University, the U.S. Department of Agriculture (USDA) and other research groups have shown, there is not a large return of invested energy from ethanol. The ratio of energy output of ethanol to energy input is not more than 1.34 by USDA numbers (and, arguably, lower). This means that for every BTU spent to grow and process corn into fuel, there is 34-percent energy gain. The U.S. General Accounting Office has argued that over the past 30 years ethanol has not been cost affective and has done little to relieve our dependency on foreign oil. Ethanol has also been found to contribute to smog in arid climate due to its volatile nature. And the highly corrosive material is expensive to transport, a service currently monopolized by ADM. Ethanol or Biodiesel? The soybean farmers of the biodiesel industry have a similar story to that of the corn farmers; ADM has secured most of the market and subsidies. And whether you’re producing soybeans or corn, current large-scale
agribusiness practices demand abundant amounts of fossil fuels.
Although biodiesel is more energy efficient than ethanol—with
a 320 percent return on invested energy—petroleum derived
alcohol is one of the main ingredients in its processing. Plus,
soybeans are far from the best crop to be growing for fuel oil in
the North American climate. Nutrition expert Mary G. Enig, Ph.D.
credits the processed food industry for the rise of the use of soybean
oil and the related growth of the low-fat and low-cholesterol soybean
byproducts. Enig and food guru Sally Fallon in the co-authored article
Soy Alert report how ADM has spent $4.7 million to advertise the
health benefits of soy products. This campaign contradicts increasing
amounts of research pointing to the ill health effects of consuming
too much soy, including estrogenic buildup and related thyroid problems.
Ethanol Alternatives Without corporate welfare, the U.S. biofuels industries would likely collapse under the combined costs of fertilizers, machinery, pesticides and herbicides, processing, transportation and labor as well as the growing scarcity of arable land. On the other hand, Brazil, the second largest producer of ethanol, has dropped the subsidies and successfully relied on smaller, more integrated agriculture and processing. Journey to Forever http://journeytoforever.org—a mobile NGO involved in rural and environmental development—explains: “We are looking at a very interesting integrated distillery approach being developed by the Brazilians, where instead of going for the large 300,000 litres per day plants, a fully integrated approach is taken with a 1,500 hectare area, farmed by small growers, and feeding sugarcane and sweet sorghum into a 20,000-litres-per-day plant, with cattle feedlots at the distillery, the manure going into [biogas] digesters with the stillage, producing enough energy for the distillery, leaving the bulk of the bagasse (residue of sugar can production) to be used for power generation to supply the surrounding areas.” It seems that the most economically and environmentally responsible ways to switch to grassolines are the local, small-scale, sustainable methods, as many farmers across all sectors of agriculture are finding out in this country. There are more efficient ways to tap into the sun’s energy via biomass fuels. Bioethanol is ethanol derived from the cellulose of plants. Where ethanol can only be produced from the starch source of a crop, bioethanol processors utilize nearly the entire plant. Research into this technology began in the 1970s and is now nearing the starting gate for commercialization. Excitement for the sustainable alternative is growing as potential for a large-scale impact develops. The Original Petroleum Researchers have suggested that most of the petroleum stores were created from accumulation of micro-algae that produced long chain hydrocarbons like the species Botryoccocus braunii.
A few decades ago, the U.S. Department of Energy (DOE) funded the Aquatic Species Program, which analyzed methods for culturing algae to produce biodiesel. Michael Briggs of the University of New Hampshire assesses the findings from the 20-year study and outlines the possibility of growing algae to make biodiesel in the article Widescale Biodiesel Production from Algae from the University of New Hampshire algae biodiesel website (find out more: http://www.unh.edu/p2/biodiesel/article_alge.html). Briggs estimates a cost of “$33.8 billion per year for all the algae farms to yield all the oil feedstock necessary for the entire country. Compare that to the more than $100 billion the U.S. spends each year just on purchasing crude oil from foreign countries.” Oceanic salt water or secondarily treated waste-water could be used to grow the algae, neither of which could then be used by humans, animals, or for irrigating crops. In order for these emerging technologies to be forwarded, politics
must take a backseat to a true assessment of their merits. According
to alternative energy policy experts, this means supporting candidates
of either party who possess both the will and desire to stand up
to corporate welfare and fight to keep free enterprise in the new
Energy Bill. It means, say these champions of fossil- fuel-free
enterprise, a grass-roots galvanization of citizens, constituents
willing to educate their elected representatives in Congress about
the unfair costs to family farmers, rural communities, and taxpayers
of subsidizing the ADMs and other agribusiness behemoths as they
continue to suckle at the ethanol pumps. Despite the “get
big or get out” mantra of industrial agriculture, it just
may be that integrated technologies and small-scale sustainable
farm practices will offer the solution that provides rural communities
with the economic shot in the arm they so desperately need and the
U.S. citizenry with a fair return on its collective tax dollar in
the form of cleaner air and energy independence. John Orr is director of the Biodeisel Production Project of Long Trail Biofuels, LLC, and Green Technologies, LLC, in Burlington, Vermont. |
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