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
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.
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
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 administration instated taxes on ethanol imports and, in 1978,
The Energy Tax Act gave an exemption for gasohol (gasoline cut with
no less than 10 percent ethanol). In 1997, Doug Bandow’s article
“Ethanol Keeps ADM Drunk on Tax Dollars” appeared in Investor’s
Business Daily and spoke to the 54 cents tax exemption per gallon
on ethanol: “This special-interest loophole accounts for the
bulk of more than $10 billion in subsidies to ADM since 1980,”
this article by the Cato Institute senior fellow stated.
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
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
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 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.
The singular reason that soy has become the primary substrate for
biodiesel? Government subsidies.
For either biodiesel or ethanol, land mass necessary to satiate a
portion of oil consumption would compete with other food crops and
translate to big bucks at the gas pump. “Abusing our precious
croplands to grow corn for an energy-inefficient process that yields
low-grade automobile fuel amounts to unsustainable, subsidized food
burning" Dr. Pimemtel states in his findings on the ethanol industry
published in the September 2001 issue of the Encyclopedia of Physical
Sciences and Technology. Dr. Pimentel calculates that an acre of U.S.
corn yields about 7,110 pounds of corn for processing into 328 gallons
of ethanol. For biodiesel a conservative estimate shows that soybeans
yield 48 gallons per acre. Although other crops have higher yields
(rapeseed yields 127 gallons per acre) the low cost of subsidized
soybeans make them the best candidate for a biodiesel substrate (find
out more at http://journeytoforever.org/).
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
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,