Ethanol is 'oversold' a new report says.

The future of biofuels is not in corn, says a new report released today by Food & Water Watch. The corn ethanol refinery industry, the beneficiary of new renewable fuel targets in the proposed energy legislation as well as proposed loan guarantee subsidies in the 2007 Farm Bill, will not significantly offset U.S. fossil fuel consumption without unacceptable environmental and economic consequences.

"Rural communities won't benefit from the Farm Bill becoming a fuel bill. In the long run, family farmers and the environment will be losers, while agribusiness, whose political contributions are fueling the ethanol frenzy, will become the winners,” said Food & Water Watch Executive Director Wenonah Hauter.

"Rising oil prices, energy security, and global warming concerns have led to today's 'go yellow' hype over corn ethanol," explained Scott Cullen, Senior Policy Advisor for the Network for New Energy Choices. "But all biofuels are not equal. Expansion of the corn ethanol industry will lead to more water and air pollution and soil erosion of America's farm belt, while failing to significantly offset fossil fuel use or combat global warming."

The report, The Rush to Ethanol: Not all BioFuels are Equal, is a comprehensive review of the literature on the environmental and economic implications of pinning our hopes on corn ethanol to reduce dependency on fossil fuels. Report findings include the following:

  • Not all biofuels are equal. Corn – now used to produce 95 percent of U.S. ethanol and the only commercially viable ethanol feedstock prepared to capitalize on refinery subsidies in the Farm Bill – is the least sustainable biofuel feedstock of all raw materials commonly used.
  • The capacity of corn ethanol to offset U.S. fossil fuel use is extremely limited. Dedicating the entire U.S. corn crop to ethanol production would only offset 15 percent of gasoline demand. Conversely, modest increases in auto fuel efficiency standards of even one mile per gallon for all cars and light trucks, such as those passed by the Senate last month could cut petroleum consumption by more than all alternative fuels and replacement fuels combined.
  • Corn ethanol is the wrong biofuel for combating global warming. The most favorable estimates show that corn ethanol could reduce greenhouse gas emissions by 18 percent to 28 percent, while cellulosic ethanol is estimated to offer a reduction of 87 percent compared to gasoline.
  • Ethanol is not the solution to revitalizing rural America. While higher commodity prices and cooperatively owned ethanol refineries could be a boon to independent farmers, unregulated ethanol industry growth will further concentrate agribusiness, threatening the livelihood of rural communities.

" As long as we spend more on subsidizing energy suppliers than we do on investments in energy efficiency, we are on a path to pain. We are already subsidizing corn-ethanol with more money than we spend on high-mileage cars or on quality mass-transit. That’s good for some companies and some politicians, but it’s bad for our nation and our world.," said Michael Dworkin, of the Vermont Law School Institute for Energy and the Environment

Both the farm and energy legislation being debated in Congress contain provisions that will set biofuels policy for years to come. While the politicians promise that America will be driving on switchgrass-based ethanol instead of gasoline in the next decade, the majority of the subsidies will go to corn-based ethanol refiners in the near term.

The groups made recommendations on U.S. biofuels policy including the following proposed reforms to ethanol provisions of the 2007 Farm Bill:

  • Biofuels promotion policies should be tied to a sustainable fuel standard that ensures best management practices of land, water, and soil use, and other measures to reduce impacts on wildlife and natural ecosystems.
  • Any ethanol funding in the U.S. Farm Bill should focus on research and development of cellulosic ethanol. There is sufficient private investment in corn ethanol development and refining already. Because cellulosic ethanol is not ready for market, any subsidies for refining in this year's bill will only lock U.S. ethanol production even more tightly to corn.
  • No coal-fired ethanol refineries should be eligible for federal subsidies. Instead, small scale ethanol refineries should be encouraged to use lignin, a cellulosic byproduct, as fuel.
  • Loan guarantees for refineries should be directed to locally owned facilities that benefit farmers and rural communities. The farm bill should include measures similar to those in place in Minnesota to ensure that subsidies are only provided to refinery operations that are farmer majority-owned.

Source: Network for New Energy Choices