Note: this was first published as a Calgary Herald guest column on April 7th, 2007.
There's no better way to score points with the environmentally conscious than to drive an alternative fuel vehicle or, if you can't do that, at least be seen supporting the ethanol sustainable fuels revolution - in which environmentalists have us diverting eight million tons of corn just in the United States to make an expensive and inefficient substitute for cheap gasoline.
But it's sustainable - a way of turning limitless solar energy into liguid fuel, right?
Credible estimates of the net energy balance for grain ethanol - the total energy used to make it less the energy derived from burning it - vary from 25% negative to about 40% positive depending mainly on the assumptions the authors make about what to include. Basically, those who count the energy value of fixed inputs, like farm equipment, come out with negative numbers while those who limit themselves to variable inputs like fertiliser find net gains.
Thus MIT's Tiffany Groode gives away the environmentalist's store on sustainability when she summarises her recent review of major studies on the subject by saying that "everybody is basically correct, the energy balance is so close that the outcome depends on exactly how you define the problem." Since it's not actually possible to grow corn or make ethanol without fixed assets like farm land or trucks, this means that the real energy balance is negative: every gallon produced depletes somebody's capital stock, and production is therefore not sustainable.
But if it actually takes more energy to produce ethanol from grain than we get from it, well, at least using it reduces CO2 emissions, right?
Ethanol has a lower energy content than gasoline - 76K BTU per gallon versus 115.5K - and yields two thirds more water that has be heated and vented during combustion. As a result, EPA fuel economy estimates for 2007 show that you need far more ethanol to go a mile than you need gasoline. A Ford 150 4WD, for example, should get 14/18 MPG on gasoline but only 10/13 MPG on E85 (a blend containing 15% corn ethanol) - and it costs more per year too: an estimated $2,651 for heavily taxed gasoline versus $3,000 for the heavily subsidised E85.
A detailed Department of Energy analysis comparing the life cycle CO2 burdens generated by gasoline and ethanol couches its public results in terms of grams of CO2 emitted per hypothetical vehicle mile travelled. On this basis, they found that regular gas emits 272.4 grams/mile of CO2 when burnt while ethanol emits 301.1 grams/mile -making it 11% dirtier than gasoline in the vehicle.
On a lifecycle basis, however, they found that gasoline "costs" 347.3 grams/mile to make, distribute, and use while ethanol's lifecycle CO2 "cost" of 624.6 grams/mile can be reduced by a 299.1 "sequestration credit" (because the corn plant absorbs atmospheric CO2 during growth) to net out at 325.5 grams/mile - 6.2% better than gasoline.
Not giving gasoline a comparable credit seems logical - but implies that the farm land used to grow grain for ethanol would be completely barren of water or vegetation if that ethanol were not made and used. That's wrong, in fact the land used to grow corn for ethanol typically grew corn for other uses before the ethanol market developed - meaning that the same amount of carbon would be sequestered whether the farmer sells his corn to make ethanol or industrial glue and therefore that what counts is the total CO2 produced in the manufacturing, distribution, and combustion of both products - and, for ethanol, that's 624.6 grams/mile or just about twice gasoline's 347.3.
So it's much dirtier with respect to CO2 than gasoline, that's bad: but it gets worse: there's still the matter of how your tax dollars make all this work.
Gasoline production gets taxed every step of the way from the drill rig to the pump.
Ethanol gets the opposite treatment: tax exemptions on most of its input energy costs, tax abatements on investment, and tax supported pricing on distribution.
If gasoline and and ethanol production suddenly switched tax regimes, gasoline prices would be cut roughly in half in the United States and fall by something like three quarters in Canada, while ethanol prices would more than double in both countries.
But that's just the obvious stuff - there's more. In the last year "green demand" has driven corn futures from $2.22 per bushel to $4.08 - and corn derivatives go into thousands of consumer products from beef to shoe polish. In the short term this price change will work its way through the economy as inflation: ultimately raising your mortgage rate while devaluing your home - and in the long term it will affect producer choices, averaging the increase across all food costs.
Both adjustments are likely to be small in the long term, but both reflect taxes placed on you by politicians willing to suspend disbelief in the face of environmentalist rhetoric - and the farm lobby.
So what's the bottom line on gasoline versus grain ethanol? gasoline is cheaper to make, cheaper at retail, contributes taxes to government, works better, is less polluting, doesn't raise food prices worldwide, won't have your grandchildren asking why you choose to burn grain in your SUV when others were going hungry, and doesn't use your tax dollars to raise your cost of living.