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Conservation
NCGA Refutes Claims
of Energy Imbalance of Ethanol
News reports released
Aug. 6 cited claims by Dr. David Pimentel of Cornell University that
ethanol production is not a renewable energy source, does not enhance
energy security, is not an economical fuel, and does not insure clean
air. The following points, provided by Dr. Michael Graboski, professor
of engineering at Colorado School of Mines, address each of these claims
made by Dr. Pimentel. Other documents comparing USDA and Dr. Pimentel's
energy analysis and an analysis by Argonne National Laboratories are
also provided.
Ethanol is a renewable
resource:
- Contrary to Pimentel's
calculations, Corn ethanol yields a very net positive energy balance,
and has a positive impact on US energy supplies. Researchers at Argonne
Laboratories found, based on 1997 agricultural data that the energy
in corn ethanol was 1.37 times the energy in fossil inputs (BTU in
ethanol/BTU in inputs). Likewise USDA researchers found a net energy
ratio of 1.24 based upon agricultural data collected in 1991 to 1995.
- In producing
ethanol from corn, wastes and energy crops, low-grade fuels like coal
and natural gas are effectively transformed into high quality liquid
transportation fuels. About 84% of the energy consumed in producing
corn-based ethanol comes from coal and natural gas, while only 16%
is petroleum based. Thus, corn ethanol represents a very efficient
way of increasing US gasoline and diesel supply. Because of increased
supply, ethanol acts to depress the price of gasoline and fuel oil.
- Pimentel's analysis
is based upon older data, and contains a number of inaccuracies. It
does not properly account for the efficiency of much of the industrial
processing related to ethanol. Pimentel's energy balance is based
upon the performance of 1979 ethanol conversion facilities.
- According to
USDA, fertilizer accounts for about 45% of the energy required to
grow, harvest corn. Pimentel ignores publicly available information
supplied by the US fertilizer industry trade association regarding
the energy efficiency of the U.S. fertilizer industry and instead
assumes that it performs like a third-world industry in accordance
with a UN FAO world average analysis. He thus assumes a pound of US
fertilizer nitrogen requires 33,500 BTU to produce today, while the
US Industry actually used only 22,600 BTU in1987 according to The
Fertilizer Institute.
- Pimentel significantly
overstates the energy requirement for corn production. He uses the
national average yield of corn from both natural rainfall and irrigated
areas, but assumes farming energy as if all corn in the US is irrigated.
In fact, only 15% of the crop is irrigated. Furthermore, in irrigated
areas, the yield of corn may be 75% higher than areas dependent on
natural rainfall.
- Pimentel argues
that corn should be used for food, not energy. In fact, ethanol plants
produce food and energy. In ethanol production, only starch is removed
from the corn. The corn is converted to 1/3 each by mass of ethanol,
food and carbon dioxide. All of the protein, fiber, corn oil and trace
nutrients in the corn are recovered as high quality products for human
and animal consumption.
- Pimentel states
that 7 times more cropland are required to produce fuels for Americans
than to feed Americans. The acreage for corn production has been essentially
constant since 1980. Yet, because of increased yield due to better
farming practices and technology, the corn crop has grown from 6.6
billion bushels in 1980 to over 10 billion bushels today. The increase
in corn production greatly exceeds the US population increase. Thus
today, Americans are receiving both food and fuel from land formerly
dedicated only to food.
- According to
Pimentel, U.S. farming practices are not sustainable. Soil erosion
and depletion of ground water result in an irreversible degradation
of the environmental system in which corn is being produced. Yet,
because of increased yield due to better farming practices and technology,
the corn crop has grown from 6.6 billion bushels in 1980 to over 10
billion bushels today with no change in planted acreage.
Energy Secutity:
- Pimentel speculates
that essentially all of the US would have to be planted in corn to
satisfy US liquid fuel demand sometime in the future. This is a totally
unrealistic view of the role of corn based agriculture in US energy
policy. In the long term, USDA analysts estimate that corn ethanol
may be practically limited to about 6 billion gallons per year, or
4% of current liquid fuel use, consuming about 10% of the corn crop.
According to the USDA baseline, the additional 1.5 billion bushels
required can be supplied by growth in corn production between 2000
and 2010. Considerably more ethanol will be produced from energy crops
and crop residues in the future.
Economics:
- According to
Pimentel, Federal "subsidies" for ethanol are paid to large
corporations at a more than $1 billion cost to the public. Ethanol
is not subsidized, but is taxed differently than petroleum fuels.
Natural gas enjoys a similar tax benefit when used in automobiles
and trucks. In his analysis, he ignores the fact the public pays a
lower price for gasoline and fuel oil because ethanol increases the
supply of domestic petroleum products.
- Pimentel argues
the cost to the public is even greater because of higher corn prices
that result in higher food prices. According to USDA, the cost of
a 6 billion gallon per year corn-based ethanol program is 25 cents
per bushel of corn, or less than a 10% increase in the cost of corn.
The cost of grain represents a very minor component of food cost.
- Pimentel sets
the cost of production of corn at $2.75 per bushel by his estimate
compared to the USDA cost of about $1.14 based upon its comprehensive
survey of corn production (for example Ali,B., McBride,W.D., "Corn
State Level Production Costs, Characteristics, and Input Use- 1991",
USDA/ERS Statistical bulletin 891, September 1994. ). It is evident
that Pimental doesn't understand the cost and inputs of corn farming.
- Pimentel estimates
the cost of production of ethanol from corn to be about $1.75 per
gallon. In recent years, the market price of ethanol has been more
nearly $1.20 and has been less that $1.00 for extended periods. USDA
recently estimated from an ethanol industry survey that the industry
average variable cost of manufacturing ethanol was 95 cents per gallon.
Pimentel clearly does not understand the economics of ethanol manufacture.
Clean Air:
- Pimentel assumes
that oxygenates including ethanol provide no environmental benefits.
EPA recently rejected California's request for a waiver from the oxygen
requirement for RFG because they concluded that oxygenates are beneficial
by themselves and more importantly because using oxygenates limits
the use of aromatics in gasoline.
- Pimentel assumes
that oxygenates including ethanol provide no environmental benefits.
EPA estimates that the cost and benefits of the Clean Air Act between
1970 and 1990 were 0.5 trillion and 22.5 trillion dollars respectively.
90% of the benefits were attributed to fine particulate reduction.
Oxygenates like ethanol have been shown to highly effective in reducing
particulate emissions from gasoline powered cars and diesel trucks.
Use of oxygenates will greatly reduce long term public health costs.
Last reviewed
August 22, 2001
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