Ethanol costs more than it delivers


Looking beyond the hype to the real costs
Kevin Hassett runs the numbers.

Such sound bites work wonders when it comes to raising money. And the amount involved is mind-boggling. The federal government subsidizes ethanol producers with a tax credit of 51 cents per gallon of fuel ethanol; those subsidies will total about $1.4 billion this year.

Corn Money

The Energy Department and the Agriculture Department spend tens of millions of dollars every year on biomass-based energy research and development. This is in addition to the billions of dollars -- more than $4 billion in 2004 -- the U.S. provides in subsidies for the production of corn, from which most domestically produced ethanol is derived.

If you look at the facts, the spending makes no sense whatsoever.

Consider how ethanol is produced. Corn is grown, harvested, and delivered to an ethanol plant. There the corn is finely ground and mixed with water. After fermentation, a mixture that is about 8 percent ethanol must be repeatedly distilled until it is 99.5 percent pure ethanol.

Growing and harvesting the corn, and heating and reheating the fermented corn to produce ethanol of a high enough quality to replace some of the gasoline in your car requires an enormous amount of energy. How much?

Adding It Up

A recent careful study by Cornell University's David Pimentel and the University of California at Berkeley's Tad Patzek added up all the energy consumption that goes into ethanol production. They took account of the energy it takes to build and run tractors. They added in the energy embodied in the other inputs and irrigation. They parsed out how much is used at the ethanol plant.

Putting it all together, they found that it takes 29 percent more energy to make ethanol from corn than is contained in the ethanol itself.

It's not that corn is a bad source for ethanol. The other sources mentioned by the president look even worse. Wood biomass takes 57 percent more energy to produce than it contains. Switch grass takes about 50 percent more.

Ethanol is just a highly uneconomical product. Some other authors have disputed these findings, but they invariably come up with more favorable calculations by excluding some of the costs.

Absurd Waste

Indeed, no matter how expensive fossil fuels become, ethanol will never be economical because it takes so much fossil fuel to produce. It might be possible that someday technological processes will emerge that make production of ethanol less reliant on fossil fuels, but the billions in subsidies to this point have left us with a process that is still a disgrace and an absurd waste of energy and taxpayers' money.

At least ethanol reduces pollution, right? Maybe the subsidies are worthwhile because they will buy us a cleaner environment.

Guess again. First, corn production, according to Pimentel and Patzek, ``uses more herbicides and insecticides than any other crop produced in the U.S.''

And the Environmental Protection Agency has cited ethanol plants themselves for air pollution. In a letter to the industry's trade group, the EPA noted that pollution was a problem in ``most, if not all, ethanol facilities.'' These plants produce large quantities of waste water as well.

Here's one of my rules of thumb. Be very suspicious of any product subsidized by a government. The real costs are always hidden in the subsidies. Over the long term, free markets produce more efficient and cheaper products.

As a Neopagan, I'm supposed to be "green." I don't embrace the anti-free market trends that most of the green movement is based on. When you have a group that is talking about taking away freedom from everyone "for their own good," I get suspicious. The push for alternative energy sources has been going on for almost thirty years. What are the results?

In that same time, cars have become more efficient and can do more. Most of that is because of customer demand, not government regulation.

Hat tip to Sunni Maravillosa and the Conspirators

— NeoWayland

Posted: Tue - February 14, 2006 at 04:14 PM  Tag


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