http://www.sfgate.com/cgi-bin/article.cgi?file=/g/a/2008/04/02/cstillwell.DTL&type...

Fuel or folly?

Ethanol and the law of unintended consequences

by Cinnamon Stillwell Wednesday, April 2, 2008

In the pantheon of well-intentioned governmental policies gone awry,
massive ethanol biofuel production may go down as one of the biggest
blunders in history. An unholy alliance of environmentalists,
agribusiness, biofuel corporations and politicians has been touting
ethanol as the cure to all our environmental ills, when in fact it may
be doing more harm than good. An array of unintended consequences is
wreaking havoc on the economy, food production and, perhaps most
ironically, the environment.

Biofuels are fuels distilled from plant matter. Ethanol is corn-based,
but other common biofuel sources include soybeans, sugar cane and palm
oil, an edible vegetable oil. In the search for alternatives to fossil
fuels, many countries have turned to biofuels, which has led to a
booming business for those involved. In the United States, ethanol is
the primary focus and, as a result, corn growers and ethanol producers
are subsidized heavily by the government.

But it turns out that the use of food for fuel is wrought with
difficulties. Corn, or some derivative thereof, is a common ingredient
in a variety of packaged food products. So it's only natural that, as
it becomes a rarer commodity due to the conflicting demands of biofuel
production, the prices of those products will go up. The prices of
food products containing barley and wheat are also on the rise as
farmers switch to growing subsidized corn crops. During a time of
economic instability, the last thing Americans need is higher prices
at the grocery store, but that's exactly what they're getting.
At the same time, corn is the main ingredient in livestock feed and
its dearth is causing prices of those products to rise as well.
Farmers have had to scramble to find alternative sources of feed for
their livestock and, in some cases, have had to sell off animals they
can no longer afford to feed. This, in turn, has led to an increase in
the price of meat and dairy products for consumers.

The hit on the livestock industry has also affected jobs, with
countless employees being laid off due to the downturn. Pilgrim's
Pride Corp., the nation's largest chicken producer, announced in March
that it was closing a North Carolina chicken processing plant, and six
of 13 U.S. distribution centers, due to the jump in feed costs. Even
Iowa, the state that produces the most corn and therefore the supposed
beneficiary of new jobs due to ethanol production, has seen its
unemployment rate rise over the past year. The plant layoffs and
closings already underway due to global competition and the
fluctuating market have continued unabated.

Another adverse impact of ethanol production is potential water
shortage. One gallon of ethanol requires four gallons of water to
produce. According to a recent report from the National Research
Council, an institution that focuses on science, engineering,
technology and health, "increased production could greatly increase
pressure on water supplies for drinking, industry, hydropower, fish
habitat and recreation."
Not only is ethanol less productive than gasoline as a fuel source,
its production is hurting the environment it was intended to preserve,
particularly in the Third World. The amount of land needed to grow
corn and other biofuel sources means that their production is leading
to deforestation, the destruction of wetlands and grasslands, species
extinction, displacement of indigenous peoples and small farmers, and
loss of habitats that store carbon.

Scientists predict that the Gulf of Mexico, already polluted by
agricultural runoff from the United States, will only get worse as
demand for ethanol, and therefore corn, increases. Meanwhile, rain
forests throughout Central and South America are being razed to make
way for land to grow biofuel components. Tortilla shortages in Mexico,
rising flour prices in Pakistan, Indonesian and Malaysian forests
being cut down and burned to make palm oil, and encroachments upon the
Amazon rainforest due to Brazilian sugar cane production -- all these
developments indicate that biofuels are turning out to be more
destructive than helpful.

The latest issue of Time magazine addresses the subject in frightening
detail. Michael Grunwald, author of the cover story, "The Clean Energy
Scam," posits a worldwide epidemic that could end up being a greater
disaster than all the alleged evils of fossil fuels combined. As he
puts it:
"Deforestation accounts for 20 percent of all current carbon
emissions. So unless the world can eliminate emissions from all other
sources -- cars, power plants, factories, even flatulent cows -- it
needs to reduce deforestation or risk an environmental catastrophe.
That means limiting the expansion of agriculture, a daunting task as
the world's population keeps expanding. And saving forests is probably
an impossibility so long as vast expanses of cropland are used to grow
modest amounts of fuel. The biofuels boom, in short, is one that could
haunt the planet for generations -- and it's only getting started."

Accordingly, the United Nations has expressed skepticism about ethanol
and other biofuels. But the European Union seems to have bought into
the biofuel craze with proposed legislation to mandate its use. This
proposal has set off alarm bells in the United Kingdom, particularly
with the British government's chief science advisor, Professor John
Beddington, who has warned that a food and deforestation crisis is
likely to overtake any climate concerns. "The idea that you cut down
rainforest to actually grow biofuels seems profoundly stupid," he
stated. Similarly, the British government's top environmental
scientist, Professor Robert Watson, called the policy "totally
insane."
Some British environmentalists apparently agree, as do members of the
American environmental movement. As noted in the aforementioned Time
article, the Natural Resources Defense Council's Nathanael Greene, the
author of a 2004 report that rallied fellow environmentalists to
support biofuels, is "looking at the numbers in an entirely new way,"
now that biofuel production exists on such a large scale.

None of this has deterred American politicians from jumping on the
ethanol bandwagon. No doubt, they see it as a means of garnering
political support from the farm lobby and in particular ethanol
producers, to whom they have provided generous federal subsidies.
Indeed, President Bush, who according to his 2006 State of the Union
address is a switchgrass enthusiast, has signed a bipartisan energy
bill that will greatly increase support to the ethanol industry, as
well as mandating the production of 36 billion gallons of biofuel by
2022.

In an election year, there has been no shortage of environmental
platitudes aimed at voters and, inevitably, ethanol has been a
mainstay. Democratic presidential candidate Hillary Clinton has been
singing the praises of ethanol in Iowa, while her rival, Barack Obama,
merely criticized her for not doing so earlier. Republican candidate
John McCain, once an ardent opponent of ethanol, has suddenly become a
convert.

The motto among both Democrats and Republicans on this issue seems to
be "If it sounds good, push it," and a gullible public -- seduced by
climate change hysteria and a "Going Green!" advertising onslaught --
is buying into it.

While the search for alternatives to fossil fuels, and in particular
the dependence upon foreign sources thereof, is laudable, future
avenues must be considered more carefully. As the looming ethanol
disaster has demonstrated, yet again, the road to hell is paved with
good intentions.