Petroleumworld`s
Opinion Forum:
viewpoints on issues in energy & international
politics.
Saturday's
Lagniappe
Ethanol
isn't a good answer for replacing oil
By
Jeremy Cato
The truth is, it is not as environmentally friendly as its most
ardent supporters say and vehicle performance is compromised.
At
first glance, you would think ethanol is not only the cure for
global warming, but also a way to reduce our dependence on costly
oil imported from trouble spots in the Middle East and elsewhere.
It's
not. But that hasn't stopped governments, auto makers and various
industry lobby groups from pushing ahead enthusiastically on
the ethanol front.
Let's
start with governments, which have set up new rules for ethanol
that are aimed at reducing vehicle emissions.
Ethanol,
an alcohol fuel which in Canada is refined primarily from corn,
must make up 5 per cent of all gasoline sold in Ontario by 2007.
In Saskatchewan, the figure is higher at 7.5 per cent. Nationally,
the provinces and the federal government have agreed to boost
the amount of ethanol mixed into all Canadian gasoline to 5
per cent by 2010, up from the current 1-per-cent requirement.
Then
we have the lobbyists who have begun to make what they hope
are pre-emptive strikes in their favour prior to the federal
government's releases of a comprehensive energy strategy in
the fall.
If
the supporters of E85, ethanol and biodiesel have their way,
the feds will begin offering major tax credit subsidies for
a renewable fuel that is highly unlikely ever to unseat gasoline
and diesel as the fuel of choice for drivers.
The
fuel in question is E85, a brew of 85-per-cent ethanol (mainly
made from corn and other grains) and 15-per-cent gasoline that
is now generating a lot of buzz.
E85
is seen by many as the answer to spiking pump prices, concerns
about oil supplies from the Middle East and elsewhere and a
growing concerns about global warming, not to mention the costs
and environmental worries associated with tapping Canada's massive
oil supplies in the tar sands of Alberta. Ethanol is being touted
as the green alternative motor fuel.
The
lobby group pushing E85, ethanol as an additive in general and
biodiesel is the Canadian Renewable Fuels Association. Last
month, it released a plan calling for numerous tax incentives
and subsidies for companies in the renewable fuels business,
not to mention outright grants for farmers.
The
predicted economic benefit: 14,000 new jobs and higher revenues
for farmers who grow corn that is turned into ethanol. The predicted
environmental benefit: a 4.2-megatonne reduction in greenhouse
gases from transportation fuels. That's the carrot.
The
stick comes in the form of a warning: If Canada does not subsidize
its renewable fuels industry, the country will be swamped by
cheap imports from the U.S., warns the renewable fuel lobby
group. However, the Canadian government already exempts renewable
fuels from a 10-cent-a-litre excise tax, and some provinces
offer additional breaks.
Certainly
there is interest in flex fuels like E85 among car buyers, though
it is hardly overwhelming. A recent study by Synovate, a global
market research firm, found that 37 per cent of U.S. consumers
would consider purchasing a Flex Fuel vehicle that runs on gasoline
or E85. However, more than a third of those same consumers lose
interest in E85 Flex Fuel vehicles when they learn that there
is a reduction in fuel economy.
The
truth is, ethanol is not as environmentally friendly as its
most ardent supporters say and vehicle performance is compromised,
too. True, compared with gasoline, ethanol produces 12-per-cent
less so-called greenhouse gasses linked to global warming, notes
a recent study from the University of Minnesota.
But
the researchers also said it has environmental drawbacks, including
"markedly greater" releases of nitrogen, phosphorous
and pesticides into waterways as runoff from cornfields. Ethanol,
especially at higher concentrations in gasoline, also produces
more smog-causing pollutants than gasoline per unit of energy
burned, the researchers said.
In
addition, the researchers say ethanol would supply only 12 per
cent of U.S. motoring fuel requirements even if every hectare
of corn grown were used to fill gas tanks rather than hungry
bellies. Biodiesel from soybeans is the better choice compared
with corn-produced ethanol, say the researchers. But "neither
can replace much petroleum without impacting food supplies,"
the researchers concluded in the paper, which was published
in the Proceedings of the National Academy of Sciences.
In
a blow to those who support the kind of farmer subsidies that
are rampant in Europe and North America, the paper supports
an alternative to corn-based ethanol. The development of non-food
materials such as switchgrass, prairie grasses and woody plants
to produce cellulosic ethanol would be a major improvement with
greater energy output and lower environmental impacts.
Unfortunately,
the creation of cellulosic ethanol remains in the laboratory
research stage. And even non-food sources of ethanol would fall
far short of replacing gasoline, most researchers agree.
The
point is, biofuels such as ethanol are "not a practical
long-term solution" and their widespread use could have
a devastating impact on agriculture, two researchers at the
Maglev Research Center of the Polytechnic University of New
York argued recently in the Washington Post.
More
than one researcher argues that ethanol derived from food crops
such as corn and soybeans comes with more negatives than positives.
Start with the energy gains. Fuel ethanol from corn produces
a modest 25-per-cent more energy than is consumed in growing
the corn, converting it into ethanol and shipping it for use
in gasoline.
Still,
major auto makers such as Ford and General Motors are putting
their weight behind the ethanol push. GM is the most active.
The big auto maker offers ethanol FlexFuel technology on most
of its larger vehicles and plans to expand its offerings in
2007.
Why?
GM has a lot of ethanol expertise. It has developed E85 technology
largely to meet competitive demands in the South American market
where GM is a major player. However, in South America the ethanol
is produced from sugar cane, not corn.
Still,
it's nice to have alternative fuel vehicles out there; if only
there were places to fill them up. GM is interested in developing
a service station infrastructure in Canada and the United States,
but one doesn't exist now and there isn't likely to be one any
time soon.
In
Canada, there are only about 1,000 service stations selling
ethanol-blend gasoline and there are only two E85 pumps in all
of Canada -- both in Ottawa. There are less than 700 E85 filling
stations in the U.S. out of a total of 165,000.
GM
would like the oil companies to build a lot more ethanol pumps,
but Chevron estimates that installing a single one and its related
equipment costs more than $200,000 (U.S.). Expect the oil industry
to move slowly on this.
So
where does this leave consumers and taxpayers? First, taxpayers
should be alert to pleas for government subsidies designed to
promote the ethanol business. If the oil industry is unlikely
to build the pumps, why produce the fuel? Over all, the benefits
of ethanol refined from corn are questionable on many fronts.
The fuel is not energy-efficient and the impact on food sources
could prove "devastating."
As
for consumers, the auto makers are working hard to get more
ethanol-capable vehicles on the road at no extra charge, even
though they require special fuel injectors and other parts.
In some cases, in particular where the fuel is properly produced
not from corn but something else, these efforts are laudable.
These vehicles do offer some environmental benefit and help
reduce our dependence on oil from questionable sources. Who
can argue with that?
But
anyone who has done the research knows there are solid arguments
to be made against a wholesale push to ethanol. Before taxpayers
start footing a large bill, let's have those arguments addressed
by both governments and all the various industries involved.
