By Eliza Krigman

The Senate is expected to vote this week on a much-anticipated energy bill that would raise vehicle mileage standards for the first time in 32 years. The bill would also expand the nation's renewable fuel standards, or RFS, by requiring U.S. consumers to use 36 billion gallons of renewable fuel annually by 2022. More than half of those 36 billion gallons would be required to come from advanced biofuels such as cellulosic ethanol.
While oil provides more than 97 percent of the fuel for our vehicles today, ethanol advocates assert that it is an environmentally friendly energy source that could provide the United States a bridge to energy independence. And support for ethanol has been growing steadily among U.S. lawmakers, in Congress and on the campaign trail. With the Iowa caucus only weeks away, ethanol’s political popularity has extended beyond farm-state politicians to presidential candidates, who are keenly aware that the nation’s top 10 corn-growing states hold nearly 40 percent of electoral college votes. Candidates from both major parties have already been asked to take ethanol pledges .
But despite the corn-based fuel's popularity, ethanol won’t be widely available at a competitive price until its supporters overcome a handful of operational, environmental, and political concerns. Even if America is “ addicted to oil ,” ethanol should be considered only one part of the solution—not the solution.
What is ethanol?
Ethanol is ethyl alcohol made by fermenting and distilling simple sugars—the same compound found in alcoholic drinks. In the United States, corn is the primary feed-source for ethanol production. Through the process of dry milling, corn is ground into “meal” and then mixed with water to form “mash.” Enzymes and yeast are added to the mash to transform it into a sugar, which is then converted into ethanol through fermentation. Corn-based ethanol is available as fuel for vehicles in two forms: E10, a blend of gasoline and roughly 10 percent ethanol, and E85, which is composed of 85 percent ethanol. While E10 represents 99 percent of the ethanol consumed in the United States, E85, with its much higher ethanol-to-gasoline ratio, is a more environmentally friendly option.
What are the drawbacks of corn-based ethanol?
As of June this year, only about 1,133 out of 170,000 gasoline stations around the country offer E85, and there are several significant operational obstacles to expanding that number. Although E85 ethanol is a good option, it’s not used prominently enough to make a real difference. This is primarily because ethanol is difficult and expensive to transport. Because of its tendency to pick up water in gasoline pipelines, ethanol is primarily transported by ship and rail. The buy-in for gas stations sets a high barrier because of stiff blending regulations. And then there's the price. Installing an E85 pump is incredibly expensive—Business Week puts the cost at roughly $200,000.
Corn-based ethanol also faces many environmental concerns. Corn is among the most energy- and water-intensive crops to grow, and harvesting land to prepare it releases a significant amount of carbon into the air. This only increases global warming, the phenomenon our use of ethanol is trying to combat in the first place.
A report by the Organization for Economic Cooperation and Development entitled “ Biofuels: Is the Cure Worse Than the Disease? ” argued that the “overall environmental impacts of ethanol and biodiesel can very easily exceed petrol and mineral diesel.” With our present technology, the environmental improvement of ethanol biofuel over petrol is modest at best. According to a fuel-cycle study (see figure 10) by the Argonne National Laboratory, using E10 ethanol leads to a three percent reduction in fossil energy use per mile, while using E85 ethanol leads roughly to a 40 percent reduction.

Top ten ethanol-producing states. Source: USDA’s National Agricultural Statistics Service report on crop production, released Dec. 11, 2007. [PDF] Graphic: Kasie Coccaro
How did corn-based ethanol become politicians' favorite renewable fuel?
Agriculture companies like Archer Daniels Midland, the biggest ethanol producer in the country, have spent decades lobbying Congress and the White House to warm up to ethanol as an alternative to fossil fuels. Their efforts have paid off: The Energy Policy Act of 2005 established a renewable fuel standard requiring the United States to use 7.5 billon gallons of renewable fuels by 2012.
The corn industry has poised itself to benefit from this requirement. The number of corn ethanol plants in our country jumped from 81 in January 2005 to 129 in 2007. Moreover, the industry relies heavily on government subsidies. Ethanol producers receive a federal tax credit of 51 cents per gallon and economic protection from cheaper sources of ethanol. Brazil’s sugarcane ethanol, for example, is subject to a 54-cents-per-gallon tariff.
What does the future of biofuels look like?
There is an emerging consensus that the federal government should invest in advanced biofuel, fuel from renewable non-starch biomass, such as cellulosic ethanol. Cellulosic ethanol, derived from switch grass and agricultural waste, is a more environmentally friendly and mobile source for biofuel because it does not require as many fossil-fuel inputs and can be produced outside of the Corn Belt. Proponents of cellulosic ethanol say the fuel would provide a 50 to 60 percent improvement over corn-based ethanol in terms of greenhouse gas emissions. The drawback is that cellulosic ethanol is more expensive to produce.
The Organization for Economic Cooperation and Development report recommends that national governments stop creating new mandates for biofuels, investigate ways to phase them out, and replace them with technology-neutral policies such as a carbon tax. Energy expert David Sandalow argues that beyond ethanol, our government should support plug-in hybrid vehicles and create an “oil addiction index” to stimulate and track our progress. Many energy experts believe that the right way to look at our fuel problem is to find ways to reduce our consumption of energy . Lisa Margnoelli at the New America Foundation maintains that the focus should be on creating an energy efficient trading system which ultimately reduces our consumption of energy.
Anyway you look at it, it’s clear that much more research needs to go into our search for an alternative fuel source. Corn-based ethanol will be a part of the solution, but there is a need for more options.
Eliza Krigman is a staff and research assistant for the Brookings Institution's economic studies program. She graduated from the University of Wisconsin-Madison in 2005.
--------
Comments
You’ve done a really excellent job of summing up the issues here. (You guys have a killer cafeteria at Brookings, by the way, even if it’s a bit pricy… I was working in the Carnegie building this past semester, found myself sneaking over for food at least a few times a week)
There’s one issue, though, that I’m surprised you didn’t touch on — how the rising price of corn due to artifically inflated corn-based ethanol consumption is directly hurting the poor around the world by raising the cost they pay for food.
I’m far from an expert on this issue, so perhaps there are mitigating factors I haven’t heard about that mean that’s not really a concern?
Even if so, I’d imagine it merits at least a mention.
But again, thank you for putting together an insightful and generally comprehensive summary.
— Joe - Dec 11, 05:18 PM - #Does corn fuel ethanol policy increase oil useaqnd oil profit?
* Some folks think so * Clean Air Performance Professionals — Charlie Peters - Dec 11, 08:52 PM - #Why must “corn-based ethanol be a part of the solution” if the market for it wouldn’t even exist without massive and continuing government subsidies? That doesn’t make sense. Grist recently named corn-based ethanol perhaps the biggest greenwash ever. http://gristmill.grist.org/story/2007/3/28/16510/3803
— Justin - Dec 12, 01:03 AM - #I know the guy who writes the anti-ethanol rants for Grist. We have a different opinion on bifuels. See more at our website: CleanAirChoice.org
One correction to the story above: South Dakota’s POET, not ADM, is the nation’s largest producer of ethanol.
— Bob from ALAMN - Dec 12, 08:58 AM - #Oops! Biofuels, not “bifuels.”
Not that there’s anything wrong with that…
— Bob from ALAMN - Dec 12, 09:00 AM - #You’ve written a great article about why we should not be using corn ethanol; just change the headline to “Corn ethanol is not a solution of any kind” and you’ll be golden.
— LS - Dec 12, 03:00 PM - #I see Bob on a ton of blogs, whenever Ethanol needs to be shilled for. He puts a happy face on a greedy lobby, in the grand ‘Thank You For Smoking’ tradition.
I’m sure nobody here would be shocked to discover that Bob’s organization, the American Lung Association of Minnesota (ALAMN) has a partnership with the Minnesota Corn Growers’ Association.
I love how he tells us that he ‘knows the guy’ who writes the ‘rants’ for Grist, as if that’s supposed to discredit the article, without offering anything that refutes the article’s content.
The massive corn industry is trying to co-opt the progressive movement because they think it’ll buy them more subsidies beyond what their product would ever legitimately warrant.
It’s a smart move on their part, but shame on us if we buy into it.
— Joe - Dec 12, 03:24 PM - #why hasn’t anyone talked about what the cost of petroleum diesel fuel has added to the price of food. everything today is touched by diesel fuel and its is far more responsible for high prices that corn ethanol.
— Bill S - Dec 13, 11:26 AM - #we are working to make ethanol from garbage in the landfill. With the tipping fees paid we can effectively make ethanol from all forms of waste today.
Ethanol is not the solution. For the auto the answer is water in the tank to create hydrogen energy to be stored in onboard storage battery. Process was developed by a good friend in San Jose, Ca. and witnessed by me in 1980 and written about in some science journal. I witnessed four 5th scale model cars with electric drive train operating this way in perpetual motion. All my friend had failed to do is add a generator belted from drive train to recharge small feed battery which somehow sent a charge into water to create a process of accumulating electric from water and storing in large storage battery to run vehicle. He had years before tried hydrogen fuel and nearly killed himself, so he said. Water is plentiful, clean, and if you haven’t noticed from thunderheads, generates a lot of electric energy. Water is the answer!
— Bob M. - Dec 13, 10:56 PM - #ZOMG Bob M., that’s either the best ironic blog comment ever or you are a living cartoon
— LS - Dec 14, 03:03 AM - #How does corn-based ethanol stack up against hemp oil as a fuel? I went to a hemp rally 15 years ago, where hemp was touted as a great source for paper, clothing, fuel, and fodder. This may be one of the real reasons why hemp/marijuana is illegal; it would be stiff competition for industries with a vested interest in hemp NOT being on the market.
— Jill P. - Dec 14, 02:36 PM - #Ethanol is part of the answer because it doesn’t require an entire reengineering of the automobile to use it. It is available today in many places and growing in distribution. It has little if any effect on the price of food as the corn used for ethanol production is not food corn (sweet corn) it is cattle feed (field corn) and after you remove the ethanol and biofuel grade oil from it you still have very high protien feed for livestock. So it isn’t taking anything out of the ‘food chain’ and the price that producers (farmers) are paid is a tiny part of the retail price of food. Farmer Brown only gets a couple of cents from each box of Cornflakes that are sold, the largest part of the cost increases has been the almost 300% jump in fuel costs. BP gets more profit from our food than corn belt farmers.
— Jay V. - Dec 18, 10:46 AM - #We have trade restrictions against importing cheaper ethanol from countries that make ethanol from sugar cane. Eliza, would you support lifting these restrictions?
— Kevin - Dec 24, 05:28 PM - #