Ethanol clouds senators’ judgment

The urge to be seen as doing something about our energy problems is giving rise to
legislation that has the potential for more harm than good. The ethanol amendment approved by
the Senate yesterday is a case in point.

Yesterday the U.S. Senate approved on a 70-26 vote the href=""> Renewable Fuel
Standard Amendment to what is to become the Energy Policy Act of 2005. The amendment
requires that 4 billion gallons of the motor fuel sold in the U.S. in 2006 be blended with
renewable source fuel, rising to 8 billion gallons by 2012.

Whatever the argument in favor of such a measure, it isn’t to provide a new energy source.
Pimental of Cornell concluded that when you take into account the energy required to plant,
grow, harvest, and process the corn, 1.7 Btu of energy inputs get used up to produce 1 Btu
equivalent in ethanol; href="">
Resource Insights and href=""> Energy
Outlook have more discussion of this.

Which is not to endorse an energy theory of value, as if energy were the only wasted input
that we should be concerned about. When you add up the value of the land, labor, and capital
also used to produce that 1 Btu of ethanol, the economic loss is really quite considerable.
Even the current use of ethanol for fuel would not remotely survive without huge public subsidies already in place.

Nor does the justification for ethanol appear to be in its environmental benefits. For
example, Knowledge Problem
(also here) calls our attention to this href=""> study for the
California Air Resources Board which concluded that ethanol produces more air pollution than
conventional gasoline.

So what is the point of the amendment? Hard to come up with a good answer other than to
throw a new benefit to farmers, not to mention Archer Daniels Midland. It looks to me less like
an energy plan and more like the usual pork barrel, in this case, corn-fed pork.


13 thoughts on “Ethanol clouds senators’ judgment

  1. cabbott

    Actually, this argument is a bit out of date. What you’re saying is true for ethanol distilled from corn. But the new technology, explicitly mentioned in the amendment, is ethanol from cellulosic plant material using biotech enzymes. It is much more energy efficient.

  2. Gast

    The colours in your page are very dull. You might want to change the “pale blue” to BLue.
    please see Brad Setsers for example colours.
    Also check if u can expand the width a bit, as now 5 inches on the left side and 5 inches on the right side are waste and we had to scroll a lot to read big posts.
    A bit of aesthetic changes and urs is one of the top in the econoblogosphere . :-)

  3. Jonathan Lundell

    The 1.7:1 energy ratio may be on the pessimistic side, but even the most optimistic studies show only a minuscule energy surplus.
    But, as James points out, there’s more to the question than simply the energy differential.

  4. John Day

    The California report only finds that emissions increased from “permeation effects of ethanol”. The report explains, “Permeation is a diffusion process whereby fuel molecules migrate through the
    elastomeric materials (rubber and plastic parts) that make up the vehicle?s fuel and fuel vapor
    Use of ethanol-blended gasoline reduces tailpipe emissions. Since the energy bill increases the use of ethanol, replacing an equal amount of regular gasoline in each gallon pumped, air polution will be reduced. “Permeation effects” may reduce the benefit slightly, but the net will be positive. And, replacing MTBE with ethanol will remove a carcinogen from auto emissions.
    As to the “economic loss” from use from use of ethanol. Newer studies have shown a net GAIN, not net loss.

  5. Jack Krupansky

    Silly me… I thought it was completely obvious that the primary benefit of *any* “alternative” energy source was simply to reduce our dependence on imported oil (and gas).
    Maybe you could offer up some damning evidence that my own misguided view is inherently false.
    Also, for the record, *everything* done in Washington is related to “pork”; no decisions are made in Washington for anything even remotely resembling optimal economic value or altruism.
    I do recognize that my own views are distinctly in the minority.
    – Jack Krupansky

  6. Steve

    don’t change the width!
    its well known that the human brain processes what it read better when it does not have to read across a page. Its why newspapers and magazines still use small width columns in their writing.
    the color can do for a change though ;-)
    and as far as the story. both economically and efficiency wise, we’re best to keep advancing modern engine designs and burning away our fossil fuels. nothing is even close to the efficiency or low cost of fossil fuels. its sucks, but its true. lets use the time in between to figure out its replacement and stop worrying so much about replacing them tomorrow.

  7. JDH

    I fixed the colors for you, Gast. Thanks for urging me to improve that. I’ll leave the width as is for now, though, since I’m worried it can appear quite different with different screens and different browsers, plus I’m not sure what all I could mess up by tinkering with the default here.

  8. Hal

    So how come Brazil is doing so well with ethanol? The Los Angeles Times had a big article on their success Wednesday,,1,6833300.story (link may not work for non-subscribers). Supposedly they are doing very well with E85, and cars able to run on it have increased in sales volume from 4% of new models in 2003 to almost 50% last month.
    And they’re not burning fossil fuel to make it either.
    Is it just that sugar cane is a lot better suited than corn to being converted to ethanol? Unfortunately the U.S. climate isn’t able to grow sugar cane most places. But I can’t help wondering if there is something more going on than a mere difference in the specific crops that are used.

  9. Barry P.

    The ethanol rent-seekers talk a lot about “new technology”, but just about every last ethanol plant built over the last 10 years used old-fashioned corn as a feedstock. *All* of the ones under construction right now use corn. This info is available at:
    The ethanol lobby talks a lot about new, high-efficiency technology, but they do not employ it.
    Why do you want to reduce oil imports? If individuals want to pay more for domestic ethanol, give them that option, but don’t try to stop me from buying my fuels from the cheapest possible source.

  10. Eric H

    I think the Brazilian experience shows that cane is a better source for ethanol (they claim to have stopped subsidizing it), but I think it is now well-known that corn is a poor choice for renewable energy. For that matter, biodiesel is probably a better choice for a renewable energy source than any type of ethanol because diesel engines are more efficient than spark-ignition engines. The cellulosic technology sounds good, but let’s see if it can hold its own without subsidization. The entire ethanol market in the US seems to have ADM written all over it.
    As far as reducing oil imports, I’m on the fence. I’m a strong advocate of free trade, but I’m concerned that our oil imports cause more trouble than they are worth. Our oil imports prop up a number of autocratic regimes that could use a regime change, and I’d rather see such change driven internally, but that won’t happen as long as those regimes can hold the nationalized oil industries hostage and use them to buy or kill off their adversaries. I’m not a conspiracy theorist, but I doubt we would be in Iraq right now if their primary export was asparagus. It’s not that we wouldn’t want asparagus, but Saddam probably wouldn’t have been able to fund his internal and external wars, an airplane hijacking school, and multiple-use nuclear programs on the profits of a nationalized asparagus industry. Oil is insidious because finding and extracting it doesn’t build the kind of cultural infrastructure needed to build a civil society – you don’t have to learn about property rights, contract law, trust, and so on when you have the good fortune of having a kingdom located on top of a natural resource whose extraction you can nationalize and operate “in the public interest”.
    Still, I’d rather see people choose renewable energy because it’s cheaper than oil. Now all we need is a renewable source that is consistently cheaper than oil. No problem, eh? ;~)

  11. Leonard Wheeler

    E 85 has shown promise but it is also a hydrocarbon structure with C and H and with some more processing it can be gas, diesel or jet fuel. Several combined processes can do this using high order heat to 23,000F. I was most impressed with a Fla made gasifier/ pyrolsis/ plasma system. It actually did it in 1994.
    Another problen with Ethanol is transport. Syngas, gas, diesel made in the 4th oprder temperature redux process is able to be distributed in existing pipelines and used in existing technology. It is also a continous process totally EPA permitted using a system that is 95% off the shelf parts and portable.

  12. Barry P.

    The pipelining problem is often overlooked. This compounds the blending problem: ethanol has to be trucked to regional distribution terminals and blended there, usually using a process called “splash-blending”. That’s a fancy name for “pouring ethanol into gas tanks.”
    Such practices drastically increase evaporative emissions, and create many more spills.

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