Senator Grassley -
Now, ethanol and alternative fuels are being made
the scapegoat for a whole variety of problems. Never before have the
virtuous benefits of ethanol and renewable fuels been so questioned
and criticized.
The problem is, none of these criticisms are based
on sound science, economics or even common sense.
Even Mort Kondracke, an intelligent veteran
journalist has fallen prey to some of the same erroneous talking
points that we’ve heard over and over the past couple weeks.
Maybe he’s just spent too much time inside the
beltway and could use a little real-world explanation from a family
farmer from the Midwest.
Some of my colleagues here in the Senate have also
gotten involved in this misinformation campaign.
It seems there is a “group-think” mentality when it
comes to scapegoating ethanol for everything from high gas prices,
global food shortages, global warming and deforestation.
But, as was recently reported, this anti-ethanol
campaign is not a coincidence. It turns out that a $300,000,
six-month retainer of a beltway public relations firm is behind the
smear campaign, hired by the Grocery Manufacturers Association.
They’ve outlined their strategy of using
environmental, hunger and food aid groups to demonstrate their
contrived “crisis.”
I think it’s important for policy-makers and the
American people to know who’s behind this effort.
According to reports, downtown D.C. lobbyists, the
Glover Park Group and Dutko Worldwide, are leading the effort to
undermine and denigrate the patriotic achievement of America’s
farmers to reduce our dependence on foreign oil while also providing
safe and affordable food.
It’s time to dispel the myths perpetuated by Mr.
Kondracke, the Glover Park Group and others.
One myth that pops up again and again is that
ethanol takes more energy to produce than it provides.
A 2005 Argonne National Laboratory study concluded
that it takes seven-tenths of one unit of fossil energy to make 1
unit of ethanol. That is a positive net energy balance.
In comparison, it takes 1.23 units of fossil energy
to make 1 unit of petroleum gasoline. Gasoline requires more than
one Btu of energy to deliver one Btu to your car. That’s a negative
net energy balance.
A 2004 USDA study concluded that ethanol yields 67
percent more energy than is used to grow and harvest the grain and
process it into ethanol. These figures take into account the energy
required to plant, grow and harvest the corn—as well as the energy
required to manufacture and distribute the ethanol.
Of the 15 peer-reviewed studies conducted on this
issue, 12 found that ethanol has a positive net energy balance. Only
a single individual from Cornell University, who authored the other
three studies, disagrees with this analysis.
The Cornell studies have consistently used old data,
some from 1979. In 1979, corn yields averaged 91 bushels per acre.
It was at 137 bushels per acre in 2000, and averages about 150-160
today.
The flawed study also relies on 1979 figures for the
energy used to manufacture ethanol. This energy consumption was cut
in half between 1979 and 2000, and continues efficiency gains every
year.
The Cornell conclusions have been refuted by experts
from entities as diverse as the USDA, the Department of Energy,
Argonne National Laboratory, Michigan State University, and the
Colorado School of Mines.
The fact is, studies using old data overestimate
energy use by not taking into account efficiency gains in
agriculture, fertilizer production, and ethanol production.
I don’t understand how intelligent people can
continue to argue that ethanol has a negative net energy balance.
The net energy balance of ethanol production
continues to improve because ethanol production is becoming more
efficient. A March 2008 study by the Argonne National Laboratory
found significant gains just since 2001.
Ethanol production since 2001 has reduced water use
by 27 percent, reduced electricity use by 16 percent, and reduced
total energy use by 22 percent.
Another myth being perpetuated by opponents of our
renewable fuels efforts and Mr. Kondracke is that ethanol harms the
environment and contributes more in greenhouse gasses than petroleum
fuels.
This claim is just hogwash.
Science magazine and Time magazine made wildly
erroneous claims about corn ethanol that are now being used by
detractors.
They claim that ethanol production is the driving
force behind rainforest deforestation and grassland conversion to
agriculture production.
This is an oversimplification to say the least.
How could intelligent people simply ignore the
effects of a growing global population? How can one simply ignore
the surging global demand for food from growing populations in China
and India?
Wouldn’t urban development and sprawl also be a
contributor to the increased demand for arable land?
Secretary of Agriculture Ed Schafer and Energy
Secretary Sam Bodman stated in a letter to Time Magazine that their
piece on ethanol, based on the Science magazine article, was
“one-sided and scientifically uninformed.”
They further stated that the Science magazine
article has been “thoroughly rebutted by leading scientists at the
Department of Energy’s Argonne National Laboratory.”
Dr. Wang of that Laboratory stated, “There has also
been no indication that U.S. corn ethanol production has so far
caused indirect land use changes in other countries.”
No claim can be made that U.S. ethanol production
leads to the clearing of rainforests.
In fact, since 2002, U.S. corn exports increased by
60 percent. Even with the growth in the ethanol industry, our corn
exports have steadily increased, meeting the growing global demand.
While some claim that corn ethanol increases
greenhouse gas emissions because of land-use changes around the
globe, they should think again.
According to the U.S. Department of Energy, today’s
corn ethanol produces about 20 percent fewer greenhouse gas
emissions on a lifecycle basis. Ethanol blended fuels emit cleaner
tailpipe emissions and unlike petroleum, ethanol doesn’t harm the
environment or groundwater.
In recent weeks, a new argument has come forward
about the effect of corn ethanol on domestic and global food prices.
Food prices are going up, and I’m sympathetic to
those at home and abroad who are struggling with the higher prices.
But to put all the blame at the feet of the U.S. ethanol industry is
outrageous and misplaced.
Watching the news and listening to some of my
colleagues, I’ve heard the domestic ethanol industry being blamed
for price hikes and shortages of apples, broccoli, rice, wheat,
lentils, peppers and even bananas.
With regard to wheat, rice and lentils, the global
demand for food from a growing middle class in China and India have
the most impact.
Weather trends including a drought in Australia and
poor growing conditions in Southeast Asia and Eastern Europe have
had a much greater impact on the supply of rice and wheat.
Many of these countries also have government
production policies that manipulate the production, supply and
trading of these commodities.
The fact is, the global demand and price for all
commodities has increased. Some of this could be due to speculation.
But, the biggest culprit behind the rising food
costs is $125 a barrel oil.
A recent Texas A&M study concluded that the biggest
driving force behind the higher food costs is higher energy costs.
Joseph Glauber, Chief Economist at the U.S.
Department of Agriculture recently testified that rising prices for
corn and soybeans have had little or no effect on the high prices
for wheat, rice and other food commodities.
He cited the worldwide economic growth, global
weather problems, rising marketing costs and the weak U.S. dollar as
having a greater role than biofuels.
A U.N. official has recently referred to biofuels as
“a crime against humanity.” Mr. Ziegler, from Switzerland, might
benefit from a review of European policies that ban or restrict the
growth and import of genetically modified crops.
While U.S. farmers are taking great strides to feed
the world, Europe is taking a step back.
As a result, African countries are reluctant to grow
GMO’s, even though their potential production gains are great,
because European countries will restrict their import.
I might suggest Mr. Ziegler focus more of his
efforts on opportunities lost due to Europe and GMO’s rather than
our biofuels policies.
U.S. farmers responded to the demand and produced a
record corn crop in 2007. Over 2.6 billion more bushels of corn were
harvested in 2007 over 2006.
The ethanol industry only increased its usage during
that time by the equivalent of 600 million bushels. So, there was an
additional 2.1 billion bushels of corn available in 2007 for feed,
food and export.
And, exports have been growing. USDA estimates that
this year’s corn exports will be a record 2.5 billion bushels, up 18
percent over last year.
With these facts, it’s hard for the critics to argue
that the domestic ethanol industry is “diverting” corn from feed or
food markets.
It’s also important to keep in mind that a tiny
fraction of the cost of retail food is a result of farm inputs.
Of a retail dollar, the farm value is around 19
cents. In a $5 box of corn flakes, there is less than 10 cents worth
of corn. The value of the corn in a pound of beef or pork is only 20
to 30 cents.
Yet, some have suggested that we should suspend our
policies that promote the use of renewable fuel to help drive down
food prices.
If all the evidence suggests that biofuels have
little if any impact on the rising cost of food, what good can come
of lifting our biofuels policies?
I was pleased to be joined by 15 of my Senate
colleagues in a letter to the Environmental Protection Agency
expressing our opposition to this misguided idea.
I’d ask unanimous consent that the letter be placed
in the Record at the conclusion of my remarks.
An investment researcher with UBS recently said that
lifting the biofuels mandate won’t ease corn or food prices, because
energy costs and commodity speculation are greater factors.
Lifting the renewable fuels mandate won’t drive down
the cost of corn or the price of groceries.
But, it will increase our demand for crude oil—dirty
burning crude oil. Big Oil wins! A Merrill Lynch analyst recently
estimated that oil and gas prices would be 15 percent higher without
biofuels.
Iowa State University estimates that ethanol use
lowers gas prices by 30 to 40 cents a gallon.
Another economist estimated that gas prices would be
$1.40 more a gallon if you removed 50 percent of the ethanol
scheduled to be used this year.
It’s clear: reducing the amount of ethanol in our
nation’s fuel mix will have little if any impact on food prices and
will actually increase prices at the pump for all Americans.
So, to the critics, let me say loud and clear:
Ethanol is not the cause of all that ails you.
While it’s easy to blame, it’s intellectually
dishonest to make these claims. It’s time for critics to take an
independent look at the facts.
They have a responsibility to brush aside this “herd
mentality” among the pundits and talking heads who claim that
everything about ethanol is bad.
Here’s the truth: Ethanol is reducing our dependence
on foreign oil. Ethanol has a significant net energy balance – the
same cannot be said for gasoline. Ethanol is reducing our greenhouse
gas emissions.
Ethanol is not the culprit behind rising food and
feed prices here at home or abroad. Ethanol is lowering the price of
crude oil and lowering the price of gasoline.
Ethanol is increasing our national security, helping
our balance of trade, and reducing our dependence on Middle East oil
and the whims of Big Oil.
It’s time we clear the air, look at the facts, and
recognize once again that everything about our domestic renewable
fuels industry is good, good, good.
