Why Ethanol Is Not "The" Answer

One of the questions that's bugged me ever since Congress mandated the use of ethanol was whether ethanol production could really satisfy the US' appetite for oil, or whether this was some kind of stop-gap, knee-jerk, politicized reaction to the energy crisis that would have unintended results.  I am becoming pretty convinced that it is the latter.  Here's why.

First, the amount of ethanol that would be needed is greater than the current farmland in the United States can produce.  Millions of more acres of farmland would be needed, and I'm not convinced one can ever come up with enough to do the trick.  Where is it going to come from? Open land in this country is being continuously swallowed up by development, a result of our country's and the world's continuing population explosion. Even as oil prices climb, the price of developed property will continue to exceed it, making it simply unprofitable to reserve those lands for farm use. 

Secondly, ethanol releases 1.34 times the total amount of energy needed to produce it according to the U.S. Dept, of Energy, though some critics believe the actual “energy balance” is negative. It takes one bushel of corn (35 liters) to make 2.8 gallons (10 liters) of ethanol, and ethanol provides about 34% fewer miles per gallon than gasoline does.  Some data suggests that this reduction in efficiency can be recovered using “designed for ethanol” and even flex engines.  But for those of us still driving gasoline powered vehicles, the mandated 10% ethanol is actually reducing our gas mileage, causing us to consume more fuel, though the data suggests the impact is small (~3%).

Consumers have yet to wake up to the real economic impacts of the use of ethanol, but we are about to see the first shot across the bow.  Corn is used for feedstock, which means that as ethanol use increases and the cost of corn increases, which it is already doing, the price of food commodities such as milk, beef, and any other food production that uses a lot of corn, will increase.  This is a true case of paying Peter vice Paul, where the rising cost of energy production feeds directly into other areas of the economy.  While the price of gas also has an impact on these industries, the cost is more indirect since it resides around costs of transportation and perhaps packaging.  To me, the use of ethanol appears to be an economic shell game where it's harder to track the direct impacts of the energy shortage; and the problem with that is it may prevent government and industry from pursuing better long term solutions to the energy crisis.  Worse, the cascading costs, hidden at first, may well push the country or make it easier to push the country into a recession more readily than the cost of gasoline alone could do.

Ethanol, at best, is a short-term, stopgap solution to today’s energy problems. It may be part of the energy picture, but it is not the answer to replacing oil in the US energy scheme.  I believe that over the long term, hydrogen holds a better long-term answer.

Most of all, I believe the US needs to separate its energy and food stock resources. Ethanol more directly links food stocks to the energy sector than anything else has done and perhaps promises to do.  To make one of two essential human needs the hostage of the other, as our current policies are doing, can be a near-fatal mistake.