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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 ().
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 ).
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 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 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.
The singular reason that soy has become the primary substrate
for biodiesel? Government subsidies.
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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 /).
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 —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.
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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: ).
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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