Industry Argues That Ethanol Delivers

Rooster News Network
Tuesday, September 4, 2001

Last month, David Pimentel of Cornell University published a rather critical analysis of the viability (or lack there of) of ethanol production in the United States. He concludes 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.

Those in the ethanol industry -- scientists, grain processors and several commodity groups -- have been quick to refute his studies with some research of their own. The National Corn Growers Association (NCGA) points to work done by Michael Graboski, professor of engineering at Colorado School of Mines. Following is Graboski's response to each of these claims made by Pimentel.

A renewable resource

Contrary to Pimentel's calculations, corn ethanol yields a very net positive energy balance, and has a positive impact on U.S. energy supplies. Researchers at Argonne National 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 U.S. 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 and harvest corn. Pimentel ignores publicly available information supplied by the U.S. 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 U.S. fertilizer nitrogen requires 33,500 Btu to produce today, while the U.S. industry actually used only 22,600 Btu in 1987, 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 U.S. 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 seven 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 bil. bu. in 1980 to over 10 bil. bu. today. The increase in corn production greatly exceeds the U.S. 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 bil. bu. in 1980 to over 10 bil. bu. today with no change in planted acreage.

Energy security

Pimentel speculates that essentially all of the U.S. would have to be planted in corn to satisfy U.S. liquid fuel demand sometime in the future. This is a totally unrealistic view of the role of corn-based agriculture in U.S. energy policy. In the long term, USDA analysts estimate that corn ethanol may be practically limited to about 6 bil. gal./year, or 4% of current liquid fuel use, consuming about 10% of the corn crop. According to the USDA baseline, the additional 1.5 bil. bu. 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.


According to Pimentel, federal "subsidies" for ethanol are paid to large corporations at a more than $1-bil. 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 bil. gal./year corn-based ethanol program is 25 cents/bu. 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/bu.l by his estimate compared to the USDA cost of about $1.14 based upon its comprehensive survey of corn production. 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/gal. 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/gal. 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.

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