Ethanol: Fueling the future in rural America
This is early in the driving season, and with gasoline prices lower than a year ago, Americans are hitting the highways again. The recession seems to have bottomed out and consumer confidence is up.
Should we now renew our concerns about relying heavily on oil imports from countries with unstable or unfriendly governments? And should we also be concerned about the amount of carbon we are adding to the Earth's atmosphere?
Yes on both counts!
As we ponder those formidable challenges we should also recognize that there is some good news on the fuel supply front. We produced 9 billion gallons of ethanol in 2008, accounting for 7 percent of our gasoline sales. In doing so we eliminated the need for more than 300 million barrels of imported oil. That's the equivalent of halting oil imports from Venezuela for 10 months (not a bad idea!) or halting all oil imports for 33 days. It also saved us $30 billion.
Notwithstanding that success, we still import about 70 percent of our oil, at a cost of about $475 billion a year. Could we not do better, accelerating our own production, thereby creating jobs while also reducing our trade deficit?
We can do that through greater reliance on biofuels, where promising research suggests that we'll soon be using feed stocks from products such as wood chips, agricultural waste and even trash, while we also benefit from increasing productivity in corn ethanol.
Just a few weeks ago President Barack Obama announced that the U.S. Department of Agriculture, the Department of Energy and the Environmental Protection Agency will form a working group to "aggressively accelerate the investment in and production of biofuels." As former secretaries of agriculture under Presidents Ronald Reagan, George H. W. Bush, and Bill Clinton respectively, we are proud that "our" department will direct this effort for we know that biofuels can revitalize rural America while also contributing to humanity's search for abundant foods and fuels.
For all the obituaries that are written for it, the U.S. ethanol industry promotes economic growth, environmental sustainability and energy independence. In the midst of a recession, the industry last year opened 31 new bio-refineries and created 240,000 jobs. Production will rise again this year, to more than 10 billion gallons, constituting nearly 10 percent of our gasoline supply.
We're supportive of all our domestic energy sources — oil, gas, solar, wind, coal, biofuels and anything else that might emerge. But, in our view, biofuels presently hold far more promise than any of the alternatives. Much attention has recently been given to wind power, for example. But it provides less than 2 percent of our electricity, and it fuels no car or truck engines.
Ethanol, the leading biofuel, is beneficial to the environment as well. One recent scientific study indicates that substituting ethanol for gasoline can reduce greenhouse gas emissions by 48 percent to 59 percent. And what the critics of ethanol conveniently forget is that its production process is becoming more efficient every year. It takes a lot less water, and a lot less energy, to produce ethanol (even from corn, let alone from cellulosics) today than it did two years ago or five years ago. We should be wary of studies challenging the merits of ethanol, for many (if not most) of them have evaluated production processes that are now obsolete.
The production of ethanol and other biofuels is increasing elsewhere in the world too. That is helping to reduce global gasoline prices from levels that would otherwise prevail. One estimate is that they're about 50 cents per gallon lower.
That's the good news. But there are critics who contend that biofuels may be helping on the energy front, but those benefits are more than offset by an adverse effect on food production. This is the "food vs. fuels" argument.
As former secretaries of agriculture, the three of us have been involved with all facets of the food industry for years. We believe this to be a choice that need not be made by the nations of the world. Food and fuel are not mutually exclusive; we need not forgo one to have the other. Farmers worldwide have the production capability to provide both, and they're prepared to do so if governments give them a fair chance.
Ethanol production is not swallowing up vast quantities of farmland here in the United States or elsewhere in the world. In the United States, we grow twice as much corn on the same acres as we did in 1967, and we have by no means reached a peak in yields. Biotechnology will produce still higher yields in the future, while also making corn and other crops more drought resistant than they are today. The same will occur outside the United States as biotechnology advances are adopted by more and more countries.
But will we not soon reach a situation where forests must be destroyed in order to open up additional cropland? Not in our view. There is still a lot of land globally that could be farmed, but is not being so used today, for economic or other reasons. And even if we assume that no additional land is brought into production, the use of biotechnology and modern farming practices should double worldwide grain production by 2030. That means the world's farmers, for as far in the future as we can see, should be able to provide adequate food supplies for the earth's occupants while also meeting consensus estimates of the demand for biofuels.
We are proud and confident that America's farmers will do their share and more.
John Block served as secretary of agriculture under President Ronald Reagan. Clayton Yeutter served as secretary of agriculture under President George H.W. Bush. Mike Espy served as secretary of agriculture under President Bill Clinton.