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In ethanol debate, perception trumps science and sound policy

Madison, Wis. - You have to admire Kay Bailey Hutchison's chutzpah, if nothing else. The veteran U.S. senator from Texas, a state that holds one-third of known U.S. petroleum reserves, thinks the federal government should stop subsidizing production of biofuels such as ethanol.

Hutchison is apparently fine with the visible and hidden subsidies Uncle Sam has provided Big Oil for generations - such as reduced corporate income taxes, federal funding for programs specific to the oil industry, increased national security costs to protect oil shipping lanes and the shifting of environmental costs to taxpayers. But when it comes to investing in a possible energy competitor, Hutchison and friends are suddenly laissez-faire capitalists.

The future of biofuels in the United States is being threatened by perceptions and politics versus science and sound energy policy. That's a problem for the United States, which must secure its long-term energy independence, and for Wisconsin, which could become a collateral victim if the drive-by assaults on biofuels continue.

Twenty-four Republican senators, Hutchison and presumptive presidential nominee John McCain included, recently called for a halt to the expansion of ethanol production as a response to rising food prices. Never mind that most economists question whether ethanol is a major contributor to food inflation: Rising food prices are a pocketbook issue in a down economy, and people are clamoring for a scapegoat.

The story is much the same in Wisconsin, where some policymakers have questioned the state's investment in biofuels. Before the public's mind is closed on an infant industry, some important facts should be heard:
Fuel versus food is mostly a fallacy

Most economists agree a number of factors have contributed to rising food prices, not the least of which is a steady drawdown of world rice reserves (rice is not used for biofuels), the protein demands of a growing and more affluent Asian population, rejection of genetically improved crops by some developing nations, global climate change, and rising oil prices.

Commodity prices typically make up about one-fifth the cost of food to consumers; transportation, packaging, and labor account for the rest. With oil prices surging past $120 per barrel of sweet crude, the ripple effect is finally hitting the food chain.

Finally, it's worth noting that corn used to produce ethanol is not entirely removed from the food chain. A byproduct of the ethanol distillation process is “distillers grain,” a high-nutrient, concentrated form of ground-up corn used as livestock feed by farmers here and abroad.

Cellulose versus corn is the future

No one believes corn-based ethanol will forever remain the world's primary biofuel, given the need for greater energy efficiency and rapid changes in technology. Wisconsin has the potential to produce next-generation biofuels, such as cellulosic ethanol, from sustainable forests, corn stover, switchgrass, waste from timber harvests, and even pulp used for papermaking.

Research at the $130 million Great Lakes Bioenergy Research Center, headquartered in Madison, will help to remove the bottlenecks in the production of those advanced biofuels.

Research subsidies versus production subsidies

The alternative energy grants and loans that will become available through state government, like most of those at the federal level, are aimed at financing research. Gov. Jim Doyle's “Wisconsin Energy Independence Fund” will target relatively small ($100,000 to $500,000) grants and loans at a variety of emerging technologies, and indirectly leverage some of the work taking place at the Great Lakes Bioenergy Research Center.

Corn ethanol production subsidies should and will go away in time, but peer-reviewed research is the “seed corn” for the next generation of biofuels.

Science versus perception

The Wisconsin Legislature is taking a deliberate approach to sorting through the claims and counterclaims. The bipartisan Legislative Council is forming a Special Committee on Domestic Biofuels to help set a logical course.

“I would urge the Legislature not to make any sudden or drastic changes to our state's renewable fuels policies until (the committee) has had an opportunity to discuss both the benefits and the costs of renewable fuel development in our state,” said Sen. Pat Kreitlow, D-Eau Claire. “We will rely on responsible, scientific, long-term perspectives to guide our deliberations.”

Today's biofuels will not be tomorrow's biofuels. Technology, economics, environmental concerns, and more will dictate market changes in fairly rapid order. The trick is avoiding a political and public opinion stampede while giving science a chance to work.

Recent articles by Tom Still

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Tom Still: Food versus fuel and other biofuel fallacies

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Tom Still: If climate change is the issue, environmentalists should rethink nuclear

Tom Still is president of the Wisconsin Technology Council. He is the former associate editor of the Wisconsin State Journal in Madison.

The opinions expressed herein or statements made in the above column are solely those of the author, and do not necessarily reflect the views of Wisconsin Technology Network, LLC.

WTN accepts no legal liability or responsibility for any claims made or opinions expressed herein.


Barry Chaiken responded 7 years ago: #1

It is insulting for Mr. Still to suggest that perception is trumping science without providing any science to support his views. I refer him and other readers to the National Geographic issue on global warming and alternative fuels that listed corn-based ethanol fuels as dead last of our choices for alternative fuels.

Ethanol using corn as the base delivers no more than 1.3 X the energy needed to produce it. This estimate is optimistic at best with some scientists believing that more oil-based energy goes into ethanol production than is produced. Sugar cane ethanol delivers a much better ratio (see Brazil) but it might be quite hard to grow sugar cane in WI, unless we wait a few more years and allow global warming to make WI warm enough for sugar cane.

The WI technology community includes great scientists and leaders with sufficient imagination to help our country solve our energy problems. Corn-based ethanol utilizing generous government subsidies to make it economically viable is exactly opposite of what WI can accomplish.

OhContrare responded 7 years ago: #2

Ditto... I'm with Barry.

First, we know that ethanol cannot solve our energy crisis. There is not enough land to produce enough corn to make enough ethanol to replace our oil consumption. Besides, ethanol is hydrophilic making it a poor substance for use in engines.

Second, let's end all government subsidies, for corn-ethanol and oil companies. Then, the most fiscally sound alternative will prevail, right? That's what all the so called "free-market" capitalists claim, unless it's not convenient to their profit margins.

Third, with growing demands for food. We could use our cropland to make food for people. And yes, corn for feeding animals that becomes food on the table is also a human food use.

Fourth, lets get rid of high fructose corn syrup as a sweetener for soft-drinks and other products, now that we know that it has poor health effects.

Fifth, let's focus on growing the most nutrious crops. Many of our hybrid corns make inferior food crops with low protein and high starch content. Our so called green revolution is not healthy for people. Growing more bad food is not the optimal solution.

Finally, let's acknowledge that some people will defend ethanol because they want to defend corn because they want to defend local farmers. Farmers are smart enough to grow what makes sense. As long as we distort the economics, they will grow corn for ethanol. But, that doesn't mean that they wouldn't grow something else if it made more sense.

Tom Tikusis responded 7 years ago: #3

Tom Sill is silly. Mr. Sill admits that corn is not a good biofuel for the future. Then why is it good in the present? Technology-wise, there is nothing to learn. Its a simple process. I say wait for cellulosic ethanol, if at all. Just look at our own country and how food costs have spiked. You can not take 20%-25% of the U.S. corn crop away without having a great impact on food prices here at home. Corn, corn, corn, we are made of corn, every last cell in our body. By the way, the left over distillers grain is only low end food source. Cows need carbohydrates to produce flavorful meat.

Bob Douglas responded 7 years ago: #4

Tom Sill is wrong in his push for tax money to be spent on corn-ethanol. This is a disaster for all the reasons listed above; however it is also wrong to allow companies like ADM to reap big profits from the fifty cent per gallon tax. Federal funding should, in stead, be directed toward producing non-corn based ethanol at a competitive cost. Until a closed loop test is run where ethanol is the only source of energy used, in addition to the sun, and the test produces more ethanol than it consumes, will I believe that ethanol production is sustainable.

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