Everyone can agree that curtailing oil and gas subsidies is a no-brainer. Spending tax dollars on a mature, profitable (and polluting) industry doesn’t make sense economically or environmentally. But what about ethanol? Ethanol is a home grown renewable resource that reduces our dependence on oil.

Turning corn into fuel is an energy intensive process. When the emissions from growing, transporting, and processing corn are added up, one gallon of ethanol causes 70% to 90% of the carbon emissions as a gallon of gasoline.

Corn ethanol is also a resource hog. In 2010 the ethanol industry ingested 41% of the US corn crop (that’s 15% of global production!) with commensurate consumption of water, pesticides, and petroleum based fertilizers. All this demand for ethanol feedstock is displacing global food production and pushing up food prices. According to a 2008 study by Searchinger et al. in the journal Science, upward pressure on the global food market caused by ethanol production is driving conversion of forests and grasslands into agricultural fields. Counting carbon emissions from these land use changes, its difficult to tell if corn ethanol lowers our carbon footprint at all.

With this evidence, it is difficult to comprehend why the US government spent over $6 billion last year directly subsidizing corn ethanol production. This Blender’s Credit is set to expire in December, but may be forced to expire sooner.

This hardly signals the end to the ethanol industry. With gasoline prices above $3 per gallon, corn ethanol is competitive even without the subsidy. Current talks are unlikely to end federal and state ethanol mandates that require a certain percentage of ethanol in every gallon of gasoline, guaranteeing a market for years to come, and ethanol producers benefit implicitly from general corn subsidies.

Techniques to produce cellulosic ethanol, ethanol produced from any part of a plant rather than just the starches and sugars, have the potential to be much more efficient. More importantly, these alternate sources of ethanol can be produced from non-food sources such as crop residue and food processing byproducts.

Notwithstanding the potential benefits of ethanol use, today it only displaces 8% of national gasoline consumption by volume. Regardless of how its produced, the carbon savings of ethanol will pale in comparison to an increase in automobile fuel efficiency.


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