Ethanol is suddenly all the rage in D.C. and Detroit
It’s as befuddling to see the “Live Green, Go Yellow” slogan splashed across the General Motors ads running throughout the Olympics as it was to hear the term “switchgrass” uttered by President Bush in his State of the Union speech last month. Here we have GM and Dubya, two of the world’s most entrenched and heavy-hitting advocates of fossil-fuel consumption, suddenly trumpeting homegrown biofuels as the up-and-coming alternative to oil.
Greenwashing, you wonder?
On some level, of course. But there’s more to it. GM’s new high-budget campaign, which promotes the use of ethanol (hence the “yellow”), is tethered to a decision to manufacture 400,000 flexible-fuel vehicles (FFVs) in 2006 that are capable of burning either gasoline or an ethanol/gasoline blend. That’s nearly 50 percent more than the company produced last year.
GM wants to do for FFVs what Toyota has done for hybrids. It’s working with politicians and other companies including Chevron to expand the distribution of E85, a blend of 85 percent ethanol and 15 percent gasoline, to gas stations across the nation. “Our goal is to eventually remove the automobile from the energy and environment debate, to neutralize its impact on the planet,” GM spokesperson Dave Barthmuss told Muckraker. “That’s why we’re so bullish about alternative fuels.”
Nicholas Eisenberger of the environmental consulting firm GreenOrder, which has been working with GM on its FFV campaign, says, “It’s hardly just a PR gambit — it’s a big bet. You can’t put that many vehicles on the road — before a nationwide infrastructure exists, mind you — and put all this energy into helping fuel providers and retailers make the switch to ethanol if you don’t believe in it.”
Bush, for his part, pledged last month to promote the development of “cellulosic” ethanol, which can be efficiently produced from agricultural waste products like wood chips or from, yes, switchgrass, and which is far more environmentally beneficial than the corn-derived variety. “Our goal is to make this new kind of ethanol practical and competitive within six years,” he said in the State of the Union — a far more definitive show of support for oil alternatives than we’ve heard from him in the past.
There’s plenty of reason to doubt the president’s sincerity — for one thing, he has not yet committed nearly the level of funding necessary to pull off such a feat. But some enviros are hopeful nevertheless. “We were amazed to hear him voice this commitment,” said Nathanael Greene, a renewable-energy analyst at the Natural Resources Defense Council. “He framed it exactly as we would have.”
And rather than temper his ethanol boosterism in the weeks since the State of the Union, Bush has been pumping it up. “All of a sudden, you may be in the energy business,” Bush joked to a crowd of supporters in Nashville, Tenn., earlier this month. “You know, by being able to grow grass on the ranch and have it harvested and converted into energy. And that’s what’s close to happening.”
This week, Bush sent six cabinet secretaries to over a dozen states to tout renewable energy; he alone hit three states in two days to promote the cause. Tuesday, the president planted his biofuels bully pulpit in Golden, Colo., at the National Renewable Energy Laboratory (which, in preparation for the visit, scrambled to rehire nearly three dozen researchers who’d been given the boot because of budget cuts approved by Bush’s own pen). “There is a fantastic technology brewing — I say brewing, it’s kind of a catch on words here — called ethanol,” he said to an audience well aware of this development. “I mean, it’s — there’s a lot of folks in the Midwest driving — using what’s called E85 gasoline … This is exciting news for those of us worried about addiction to oil.”
The unexpected commitments coming from both the White House and Detroit are occurring against a backdrop of other public- and private-sector efforts to promote biofuels. Ford has increased its FFV production by about 15 percent this year. Bipartisan coalitions in Congress, state-level officials, venture capital firms, and environmental groups have also been ramping up their efforts to promote both FFVs and E85.
Against the Grain
Though we’re witnessing a sudden onslaught of interest in ethanol, there’s nothing new about the technology. Ethanol is essentially grain alcohol, and was used in early versions of Ford’s Model T. FFV technology has been around for decades and spread through parts of Europe and the developing world. About half of the vehicles sold in Brazil last year were FFVs. In fact, there are already some 5 million FFVs on the road in the U.S. — the vast majority just rarely if ever run on E85 because it has such limited availability. Only about 600 of the approximately 168,000 fueling stations in the U.S. sell the ethanol blend.
And though ethanol is often touted as a boon for the environment, the scientific and green communities have long been divided over its eco-benefits. Most ethanol is made from corn, and industrial corn production utilizes significant inputs of fossil-fuel-based products, from fertilizers to the gasoline used to run farm equipment. A number of scientists — most prominent among them David Pimentel, a professor of agricultural sciences and insect ecology at Cornell University — have argued that the fossil-fuel inputs required to grow corn actually exceed the amount of energy yielded by the resulting ethanol, a discrepancy known as a “negative energy balance.”
Which is why it came as a surprise — and a relief — to many to see a peer-reviewed paper commissioned by NRDC published two weeks ago in Environmental Science and Technology arguing that ethanol yields significant fossil-fuel savings.
“There is no longer any question that biofuels can deliver major net savings in energy and emissions,” said NRDC’s Greene. “The corn-based ethanol in wide use in many parts of the country is delivering clearly positive results already.”
Positive, but far from impressive. The report found that the “energy balance” of fossil fuels to corn-based ethanol is only about 1:1.3 — meaning you have to invest 1 unit of fossil-fuel energy to get a return of 1.3 units of corn-ethanol energy. By comparison, it found that the energy balance of cellulosic ethanol, which can be derived from wood chips, switchgrass, corncobs, and other materials that require negligible fossil-fuel inputs, can be as high as 1:6. Either way, Greene’s NRDC colleague Ashok Gupta argues that ethanol detractors like Pimentel “are about as credible as the scientists who say climate change isn’t a manmade problem.”
Yet the NRDC-commissioned study does not address the concern that corn-based ethanol is no great help in cutting greenhouse-gas emissions. A study by UC-Berkeley researchers published last month in the journal Science found that burning corn-based ethanol instead of gasoline yields a 13 percent reduction in planet-warming gases, while a 2002 USDA study [PDF] found a reduction of about 28 percent. These numbers are nothing to sneeze at, but they simply don’t compare to the kind of emissions savings you get from substantial improvements in fuel economy.
That’s a big concern for Dan Becker, director of Sierra Club’s Global Warming Program, who says ethanol could distract from the much more immediate concern of raising the gas mileage of American cars. He condemns GM’s “Live Green, Go Yellow” campaign as “unmitigated, total fraud.”
The only reason GM and Ford are churning out FFVs, says Becker, is the hefty CAFE (Corporate Average Fuel Economy) boost they get in return. The feds credit FFVs with getting markedly better gas mileage than they actually do, so the vehicles artificially inflate the overall fuel economy of an automaker’s fleet by as much as 1.2 miles per gallon, according to Becker. That means, in essence, car companies that manufacture enough FFV passenger vehicles only have to meet a CAFE standard of 26.3 mpg, compared to the already paltry national standard of 27.5 mpg for passenger cars.
“It boils down to this: They get to make two more gas-guzzlers for every FFV they put out,” said Becker. And since producing FFVs costs automakers about $100 extra per vehicle (it simply involves a different coating in the fuel-delivery system and a sensor that detects the ratio of ethanol to gasoline), the trade-off is a no-brainer. “There’s no way Detroit would be producing these cars if they weren’t allowed to weaken miles-per-gallon standards in return,” Becker contends.
GM admits that the CAFE benefit has been an important driver of its FFV production in the past, but insists that today the company would be willing to do without it. “We really would continue to aggressively invest in FFVs even without the credit,” Barthmuss told Muckraker.
Price, of course, is another key concern about ethanol. On a per-gallon basis, E85 is between 5 and 25 percent cheaper than gasoline, but it contains about 30 percent fewer units of energy than a gallon of gasoline, meaning it’s more expensive than gasoline on a per-mile-driven basis.
And E85 would be far more expensive were it not for huge corn and ethanol subsidies from the federal government — and the huge sway of the Iowa caucus in determining presidential nominees. “Clearly politicians are better off when they are handing sack-loads of loot to farmers,” Jerry Taylor of the libertarian CATO Institute told Reuters this week. “If you’re interested in the 2008 elections, ethanol is surely going to interest you.”
But, counters NRDC’s Greene, “ethanol subsidies are dwarfed by those offered to oil producers.” Indeed, the energy bill signed into law last summer earmarked roughly $8 billion in subsidies for ethanol interests over the next five years, while oil and gas interests got nearly twice as much, roughly $15 billion, according to Keith Ashdown, vice president for policy at Taxpayers for Common Sense.
Leaving the question of subsidies aside, Phil Lampert, executive director of the nonprofit National Ethanol Vehicle Coalition, insists that E85 will be cost-competitive with gasoline within a few years. And he says the number of fueling stations that offer it is expected to more than quadruple to 2,600 this year, owing largely to the energy bill signed into law last summer, which offered a 30 percent federal tax credit to fueling stations that add E85 or similar fuels to their offerings. (It costs stations anywhere from $5,000 to $100,000 to make the leap.)
The Chicken-or-the-Egg Challenge
Members of Congress are angling to give ethanol a further lift. The bipartisan Fuel Security and Consumer Choice Act, sponsored by Sens. Tom Harkin (D-Iowa), Richard Lugar (R-Ind.), and Barack Obama (D-Ill.), calls for all vehicles sold in the U.S. to be FFVs within 10 years, and would phase out the existing FFV CAFE credit. Another measure sponsored by Obama would further increase tax credits for fueling stations that add pumps for ethanol and other alternative fuels, as would the Vehicle and Fuel Choices for American Security Act, sponsored by Sens. Evan Bayh (D-Ind.) and Sam Brownback (R-Kan.).
State and local officials across the country are also unveiling ethanol-promoting initiatives this year, including such high-profile figures as California Gov. Arnold Schwarzenegger (R), New York Gov. George Pataki (R), and Chicago Mayor Richard Daley (D).
These proposals could go a long way toward advancing marketplace acceptance of E85 and FFV technology, according to GM’s Barthmuss. “It’s a chicken-or-the-egg challenge at this point: Fueling stations won’t want to invest in E85 if the cars aren’t on the market to demand it,” he said. “Moreover, consumers won’t buy the cars if they don’t understand the advantages.” That’s why GM is dropping such a pretty penny — “hundreds of millions” of dollars, according to a GM insider who spoke on condition of anonymity because the figure is proprietary — on its “Live Green, Go Yellow” campaign.
“There’s no question that the environmental benefits [of ethanol] are negligible given the inaccessibility of E85 to most consumers, and the emphasis on corn-based ethanol. But let’s not throw the baby out with the bathwater,” said Gupta of NRDC. “We see it as just the beginning of a transition to widely available cellulosic.”
That transition won’t be simple — the U.S. will need to dramatically expand its ethanol infrastructure, close off the CAFE loophole, and make a wide-scale switch from corn to higher-cellulose (and lower-impact) sources of ethanol.
But perhaps enviros can take heart knowing that when it comes to switchgrass, they’re on the same side as Dubya.