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FinalCall.com News
Perspectives
How corn-based ethanol can lead to environmental disaster
By Eliana Montefote
Updated Jul 5, 2007 - 12:32:00 PM
Maize of Deception - Part 1
[Editor’s note: The first installation of the following commentary by Council on Hemispheric Affairs (COHA) Research Associate Eliana Montefote was originally published June 14 on Caribbean Net News.]
Ethanol fuels are not necessarily the universal cure
As the Bush administration continues to push its alternative fuels agenda, it has become increasingly evident that corn-based ethanol could be as much the global villain as a boon to society. Instead of improving the environment and moderating oil prices, corn-based ethanol could result in mass deforestation, strained land and water resources, increased food prices, augmented poverty and swarms of farmers uprooted from the land. While the negative effects of corn-based biofuels are obvious, Washington continues to emphasize their importance, while increasing the size and number of subventions to the ethanol industry. This is being done despite the adverse ramifications that its cultivation is having on the sites where it already is being produced, with the situation likely to further deteriorate in the near future.
The emergence of ethanol
Ethanol is a substance created by the fermentation of simple sugars. In the United States, corn is the main source for ethanol production, while other countries like Brazil rely on a sugar cane process as well as other plants and byproducts to be used in making alternative energy sources. Typically, ethanol is mixed into gasoline creating “gasohol,” resulting in higher octane ratings, improved combustion, and is viewed as more environmentally friendly. Currently, around 30 percent of gasoline in the United States contains some ethanol, and U.S. initiatives indicate the possibility for much larger concentrations in coming years.
Before corn-based ethanol became prominent in U.S. industries, lead was used as a performance enhancer when added to gasoline. It was not until the 1970s and 1980s that corn-based ethanol began to replace lead—a very toxic substance—mostly due to the oil embargo that the Oil and Petroleum Exporting Countries (OPEC) imposed in 1974. Amid the clamor of American voices calling out for energy independence, President Jimmy Carter gave his memorable speech on April 18, 1977, ushering in a new era in U.S. economic history. From this point on, the U.S. would try to cater to its high energy demand from its own domestic resources. To former President Carter, this decision was the “moral equivalent of war” between the U.S. and OPEC. Thirty years later, it seems that America is losing its own self-designated “war” and is likely to continue to suffer unnecessary losses in this conflict unless it pursues a fundamental change in its economic policy.
An economic giant
Over the past few years, a combination of increasing oil prices and generous government subsidies has resulted in the continued expansion of the U.S. ethanol industry. According to the Council on Foreign Relations, as of 2006, 110 ethanol refineries have been built in the U.S., with 73 more under construction. It is estimated that by the end of 2008, ethanol production will have reached 11.4 billion gallons a year. In his 2007 State of the Union address, President George W. Bush set out goals to produce over 35 billion gallons of ethanol fuel by the year 2017. He added that the U.S. also plans to cut petroleum consumption by 20 percent over a 10-year time span.
The tumultuous ethanol industry receives Midas-like support as a result of direct government subventions which equaled about $8.9 billion in 2005. These include tax cuts, grants, and government loans in order to encourage production and remain economically competitive with conventional gasoline. The federal government, for example, already has established a tax credit of 51 cents for every gallon the industry produces. Although accompanied by severe consequences, with continued government support at such a high level, it is quite possible that Bush’s consumption goals could be fulfilled within the stipulated time period.
Feeding cars and starving the poor
On March 29, 2007, Cuban leader Fidel Castro berated Bush’s economic initiatives for ethanol production in the Cuban Communist party newspaper Granma, stating that using corn, or any food source, to produce ethanol could result in the “premature death” of upwards of three billion people. He explained that the drive to produce corn-based ethanol would hike up food prices around the world, adversely effecting poverty in developing countries. Pres. Castro then restated his beliefs in a second article, also published in Granma, on April 3. Although the ailing Cuban president is known for adamantly and automatically opposing U.S. foreign policy initiatives, it would be foolhardy for the U.S. to ignore his foreboding message on this subject.
As a result of the Washington-backed initiatives, an enormous volume of corn is being consumed for ethanol production. Consequently, the decreasing availability of it as a food crop and for livestock has contributed to the rise of corn futures from $2.80 to $4.38 a bushel. This recent price hike occurred over the course of several months and is said to be the sharpest increase in the past 10 years. Thus, fewer low income consumers are able to purchase corn-based products, which is a very serious detriment to countries where corn is a staple of a population’s diet.
Click here for part 2 of this article.
(The Council on Hemispheric Affairs, founded in 1975, is an independent, non-profit, non-partisan, tax-exempt research and information organization. It has been described on the Senate floor as being “one of the nation’s most respected bodies of scholars and policy makers.” For more information, visit www.coha.org or email coha@coha.org.)
