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Nathanael Greene’s Blog

Hell hath no fury like the corn ethanol industry scorned

Nathanael Greene

Posted November 1, 2010 in Moving Beyond Oil, Solving Global Warming

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Last week, the old line corn ethanol lobby, the Renewable Fuels Association, took NRDC, and me in particular, to task for having supported corn ethanol as a bridge to advanced biofuels back in 2005 and for changing my mind as the science changed. Back in 2005, the best peer reviewed science suggested that corn ethanol was modestly better for our climate than gasoline. But as the science changed, especially in 2007 and 2008, as the issue, scope and scale of emissions from indirect land-use change came into focus, NRDC changed its position. Now we're working to end the wasteful corn ethanol tax credit and pass policies that pay for environmental performance to speed the development and deployment of truly low-carbon and broadly environmentally beneficial biofuels.  At the same time, and contrary to RFA’s assertions, any pretense that the corn ethanol industry is somehow a partner in laying the groundwork for this transition to advanced biofuels has entirely evaporated over the last year as we watched the industry's lobbysts push to continue to suck up all the public dollars, kill investment in adavanced biofuels, and try to lock our infrastructure into ethanol.

RFA calls the evolution of NRDC's position hypocritical. We call it following the science.

Of course following the science means we have to review a lot of reports on the GHG emissions from biofuels. So also last week, my colleague, Sasha, and I both reviewed an early summary of an analysis forthcoming from Oak Ridge National Labs (ORNL). The analysis provides a detailed look at how the supply of grains and oilseeds shifted in the US while meeting the demands of a growing corn ethanol industry. The problem as Sasha and I pointed out is that the ILUC impacts of our policies have to be calculated compared to a forecast of what land-use would be if we weren't mandating and subsidizing biofuels. The ORNL report only says that supply kept growing but doesn't compare it to anything, so the authors were wrong to claim that the analysis suggested "minimal to zero" ILUC had happened.

Not surprisingly, NRDC's assessment of the ORNL report doesn't sit well with RFA, and one of their lead analysts, Geoff Cooper, commented with obvious frustration on my post:

Well, I’m officially challenging you to join the rest of us in the real world. In the real world, we don’t have a nice and tidy baseline to which we can compare actual events to determine the exact impacts of certain policy decisions. In the real world, we don’t have a “what if” crystal ball that perfectly isolates and reveals the exact reflexes of the marketplace to certain policy decisions. The real world is noisy and messy.

Later in his comment he says:

You’re trying to downplay the importance of exports. But as you know, exports are tremendously important to the whole ILUC calculus. As you know, reduction in exports from the baseline is the primary mechanism by which global commodity prices increase in the economic models used by EPA and CARB. And the price increase is what leads these models to convert land to crops. So why is it improper to suggest that ILUC is unlikely to occur or be significant if exports aren’t decreasing from pre-biofuels era levels (and, rather, are increasing) and global cropland expansion trends are no different today than they were before we were producing biofuels?

Two problems: first as I mentioned earlier, the ORNL doesn't assess any no-policy baseline, and second, Geoff shifts from a baseline comparison to talking about historic trends. Sasha had a great analogy in her post that illuminates why historic trends aren't enough. Imagine, she wrote, you're in a plane trying to go over a mountain. Geoff and the ORNL report would have us believe that as long as you're upward trajectory that's enough, but of course it's not. You have to be going up at a rate that's fast enough to clear the mountain or you'll crash into its side.

But Geoff's question got me thinking about what has happened to grains and oilseeds since the "pre-biofuels" era. The ORNL presentation includes the following slide making the point that Geoff focuses on--namely, that exports of corn from the US have gone up.

ORNL report corn exports_Page_15.jpg

While exports have gone up, that's not enough to get us over the mountain. Furthermore, eyeballing this figure it struck me that the US share of global exports appears to be going down. So I asked Daniel Lorch, a junior researcher here at NRDC, to dig up the USDA data that makes up this figure. It was no easy task, but my eyeballs did not deceive me.

corn exports with us share.bmp

From 1990 to 2010, the US share of world corn exports dropped from 75% down to 54%.  The same trend is true in soybeans, total grains and total oilseeds. The U.S. exports have gone up, but their share of the global market has gone down. The U.S. is feeding less and less of the world because demand is growing faster than our supply.

Now I would be the first to say that this is not evidence of ILUC, but it does highlight why simply looking at the supply side of the market is inadequate. What the historical trends actually tell us is that the slope of the mountain is steeper than our airplane's current trajectory. Going up is not enough. Going up a little bit less has real impacts, since even a little bit of clearing in carbon-dense rainforests can result in massive amounts of carbon emissions.

Geoff's right in that I can't prove that ILUC is occurring any more than I can prove that gravity will still apply tomorrow. But that's the funny thing about fundamental laws like gravity and supply and demand--as messy as the real world gets, they still apply.  I wouldn't trust a pilot who thought that just going up was enough and I sure hope we won't trust our global energy and climate policy to an industry that thinks rising corn exports means they have no impact on land-use globally.

P.S. To be clear, having the rest of the world feed itself is largely a good thing, but we should support it by reforming our agricultural polices rather than inducing it unintentionally. Smart ag tech transfer policies would encourage higher yields with lower land-use and other impacts. Indirectly induced supply just draws in whatever is cheapest.

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Comments

Charlie PetersNov 2 2010 09:08 PM

Corn fuel ethanol stinks.

Stop using food in my gas.

Russ FinleyNov 2 2010 10:10 PM

That graph is proof people are planting more grains. To do that, they have to change land use (directly or indirectly). Now to ask why this land is being converted to grain fields. My guess, it is becoming cheaper to do that than to buy our grains at ethanol pumped prices (100% higher than before the biofuel mandates were put in place).

You know you're having an impact, Nathanael when you start drawing fire.

This "IDLUC is a myth" propaganda from big corn and big biofuel is analogous to the "Global Warming is a myth" propaganda from big coal and big oil. The profit motive warps reality.

Geoff CooperNov 3 2010 04:32 PM

Nathanael,

Interesting post. I applaud you for digging into the empirical data to see what we might learn from it. I do believe that, in the absence of a "nice and tidy baseline," we can learn a thing or two about current responses from looking at trends and patterns from the "pre-biofuels" era.

But, as you can imagine, I disagree with some of your inferences above (for one thing, why didn't you include exports of DDGS and corn gluten meal in your corn export figures? Those products do, after all, substitute for corn--and some soymeal--in livestock rations around the world and they do displace the need for some amount of U.S. corn exports. This year alone, we'll be exporting some 10 mmt of DDGS and CGF. How would your chart look with those co-product exports included?)

In any case, I plan to post a response over on our blog sometime in the next few days. www.ethanolrfa.org/exchange

Best,

Geoff

Kendall LinzeeNov 6 2010 02:14 AM

I am confused, but by the time I figure out what I should think comments will be closed. Sounds like a rate of travel problem. Are we assuming export of food crops are in n D3. I have difficulty believing the "food" in my fuel is more harmful than the petroleum. How much more abuse can the earths greatest filter withstand?. Not to mention the energy currently expended to drill into the land under the ocean. But this is above my UI paygrade. I have observed a land use change lately while visiting my hometown. The farm land of my ancestors has been cut up into some smaller, some near original farm size , horse boarding establishments. While other once arable land has fallen prey to the McMansion developers. Of course the keys to many of these energy hogs are most likely in the mail box awaiting the"society of ownership" to resume full swing. Since reading my first NG article, I'm reaching the same silo. Perhaps focusing on greening up Corn based, be viewed as a possibility, before fretting over land use. If that sounds oxy-moronic , talk to a farmer or two for some real world. I've also observed locally, farmers growing seed crop to produce B-100, to run the equipment on, mostly in an effoert not to purchase diesel. Big Ethanol, who ever that is ADM, BP eventually. I can't imagine they're doing that. Hasn't BP bought up advanced biofuels? Have I missed that article.?
P.S. My converted Camry is doing fine on E-85 still. The only precious metals involved are the Iridium spark plugs.

Russ FinleyNov 6 2010 01:27 PM

Riiiight, "I applaud you for digging into the empirical data to see what we might learn from it? '

Sometimes, you just have to use some common sense.

1) Prices rise when demand exceeds supply.

2) Prices drop when supply exceeds demand.

3) Fueling cars with food increases demand.

4) Demand is being met by putting more land under the plow, here and abroad. That is called land use change.

This reminds me of the ongoing battle over corn ethanol's energy balance. Back in 2006 Ferral et al published in Science a meta study on the energy balance of corn ethanol.

They looked at six conflicting studies, consolidated methods, checked sources and concluded that it did indeed produce more energy than it consumed. For every 10 units of fossil energy, you got back 12 units of ethanol energy.

They also concluded that it did indeed reduce GHG emission by 18% (excluding land use change).

Just four years later the USDA (now officially chartered to provide fuel as well as food) has cobbled together enough assumptions to claim that you get over 23 units of ethanol energy for every 10 units of fossil energy.

From

10 gallons of (equivalent) fossil energy to get 12 gallons ethanol

to ...

10 gallons of fossil (equivalent) energy to get 23 gallons of ethanol.

...in four years. Almost double. Almost a 100% increase just by screwing with arbitrary assumptions.

See Fun With Numbers:

http://www.consumerenergyreport.com/2010/07/07/fun-with-numbers-the-new-usda-report-on-corn-ethanol/


Kendall LinzeeNov 7 2010 04:53 AM

I apologize for being a tangental ranting lunatic. Midterm was dramatic. Plus some of us have had to choose things like more commercial fishing seasons over grad school, So if you don't apreciate what I have to say because I don't sound like your familiar educated class ,excuse me. I guess it's just a feeling, but when I use an arbitrary assumption, like 75% of the seafood I caught and processed went to Japan, I know I'm not just cobbeling.
I can appreciate a magnification of empirical data. In fact, I get more than a little frustrated when Nathaniel or Sasha report going to such lenths to conclude that "smart ag tech transfer policy" is the "historic trend" missing from the entire "baseline." Personally I wonder why it took so long to come up with the cat? I had to get on the phone with the CARB to find out why I couldn't purchase my fuel injector prom kit in CA. They wanted a pile of cert money etc. etc. The engineer who makes it , finally met Schwarzenegger thru a friend and now our former Gov. has had the sam kit etc. I will most likely have to remove the kit, pass smog, with 50% more CO2 etc. then re-install the kit. Oh, I forgot. were talking about land use.
Anyway folks, I'm not convinced there's a real world called supply and demand. Sounds like some 1950's or pre multi-national, American corporate giant ,era ,concept.
I'm buyin the 10 to 23 report "fun with numbers or no" because my work experience told me almost as much before I ever read anything by Searchinger or Goode or Nathaniel. My own family farm experience and friends who grew field corn years ago. Plus the huge differance between a typical US consumer 3.0 to 4.0L V-6 , asian auto makers included and a 1.8L used in the Audi A-3. Why things of this nature don't occur to other working people I can't say .
But sounding like John Kerry's dorkier brother isn't going to help.

Geoff CooperNov 8 2010 04:16 PM

Nathanael,

Good afternoon. I've posted a response to your comments on our blog. http://www.ethanolrfa.org/exchange.

Thanks,

Geoff

Geoff CooperNov 8 2010 05:26 PM

I've been told the link I provided doesn't work very well with the period! Try this instead:

www.ethanolrfa.org/exchange

Russ FinleyNov 10 2010 10:31 AM

I dropped in to Cooper's blog and left this response to one of the commenters there who begins with the following quote:

" You can't reason with someone whose bias is based on a theory that is truly speculative, like iLUC ".

...or inversely:

"It is difficult to get a man to understand something [the reality of iLUC] when his job depends on not understanding it."--Upton Sinclair

The only people denying the reality of iLUC are the lobbyists for the corn ethanol industry and those who have bought their propaganda. It is in many ways analogous to the denial of global warming. Why is iLUC a reality in Europe but not here?

Anticipated Indirect Land Use Change Associated with Expanded Use of Biofuels and Bioliquids in the EU

"Based on this assessment, and the assumptions adopted, use of additional conventional biofuels up to 2020 on the scale anticipated in the 23 NREAPs would lead to between 80.5% and 167% more GHG emissions than meeting the same need through fossil fuel use."

Continuing:

" It might be easier to argue - and more relevant to a defense of natural resources - whether a nation that has a flexible fuel economy (like Brazil) is better off than one that is addicted to oil."

Brazil is also addicted to oil. They consume almost all of their own domestic oil production as well as their ethanol, which comes from a plant that produces almost ten times more ethanol per acre than corn. When sugar prices soar because of crop variability (analogous to a small oil embargo), they use less ethanol and import more oil. In addition, an American uses three times more oil than a Brazilian, not to mention there are 116 million more of us. Brazil is not a model the Untied States can emulate.

From Lessons from Brazil:

" if the U.S. had the same per capita energy consumption as Brazil, we would be net oil exporters. In fact, our per capita energy consumption could be 11 barrels per person per year – triple the consumption of Brazil – and our production and demand would be in balance. We would be energy independent. "

Continuing:

" the addiction he cited in 2006 forced him (and continues to force US) into an aggressive posture to protect Western access to Mideast oil. Then the question becomes which consequence is more important - the impact of wars or indirect land use change? "

This is all about corn ethanol, which is not only "not" a bridge to competitors that could crush it, but a stumbling block that hogs up the entire (artificial) market, and it can't provide enough fuel for even a modicum of energy independence. It's ability to reduce imports is so small it can't even be verified.

Note that our military budget is not impacted in the least by increased corn ethanol production. The whole world runs on oil, including our trading partners. It's in our best interest to seek peace in the Middle East even if we imported no oil from there. It's beyond naive to think that corn ethanol is going to end mankind's proclivity to go to war over resources, be they oil or biofuel.

" With biofuels we have flexible choices - nacent infrastructure, vehicles, and base technologies to improve upon - rather than a Luddite cave-in to the status quo "

The Luddite position would be to continue promoting big oil's business model, which is a century old technology called the internal combustion engine which throws away 80 percent of the energy in every tank of liquid fuel, gasoline or ethanol.

Russ FinleyNov 10 2010 10:39 AM

Looks like the software is scrubbing links to minimize spammers. Oh well.

Comments are closed for this post.

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