DR: On our site there are many people highly skeptical about biofuels. For lots of reasons: corn ethanol barely breaks even on energy balance. It’s an environmental nightmare, with nitrogen fertilizers in the dead zone in the Gulf of Mexico. It is a commodity sector governed by a few massive multinational corporations, which are lavished with subsidies — seems awfully reminiscent of the petroleum sector.

The inevitable response to any criticism of corn ethanol is to gesticulate toward cellulosic ethanol. My question, then, is: where is all this cellulosic ethanol? Even if you buy that cellulosic ethanol is going to be great, how is that an argument in favor of lavishing Archer Daniels Midland with subsidies and setting up this huge corn ethanol infrastructure?

I just went on a soliloquy there …

TT: Well Mr. Shakespeare, let me put it this way: I don’t disagree with anything you said.

((terry_include))

Right now, obviously, corn ethanol is not a very good bargain — depending on where it’s made. It might make some sense if you’re producing it in Kansas or Iowa and using it there to power farm machines. If you’re putting the corn on a train, you’re consuming lots and lots of fuel and dumping tons of CO2 and particulate matter into the air moving that train out to California. And then using more energy to convert it into ethanol. Now you’re negating a lot of the potential benefits.

So you’re absolutely right. There are companies in California experimenting with switchgrass — at best you can get 5 tons an acre yield. They acknowledge you won’t make ethanol from switchgrass economically feasible until you get to 15-20 tons an acre yield. Despite all our years of genetic engineering, we haven’t been able to figure out how to get those kinds of yields, but they think they will.

That sets aside whether or not any farmer wants a genetically modified crop growing next to his crop, which he wants to sell to Europe or some other country.

DR: Or Northern California.

TT: Yeah, exactly. There are tons of those kinds of problems. Cellulosic is still a challenge because, despite many advancements, we are certainly not there in terms of yield. If you’ve got to send out trucks over 50 miles to get enough cellulosic material to come into your central refining station, you just used up all the energy you otherwise would have saved, dumped all the CO2 into the atmosphere, and so on. We’re just not there yet.

We may get there. I would argue that it’s a benefit to go ahead, even with corn ethanol and even with some subsidies. You’re building a marketplace for something that displaces petroleum, and then if smarter people can make it out of cheaper materials — and there’s a lot of investment going on in that area — they’ve got someone to sell it to. They’ve got cars that run on the stuff, they’ve got refiners who are willing to blend it into fuel or even sell it as E85, and so on. You’re building a marketplace, albeit with an imperfect starting product.

I’m agnostic about it. I would love to see development go further, but what I take issue with are people who think we could somehow displace any significant amount of our petroleum with biofuels. The best research I can find shows that you’re going to displace 10, 15, 20 percent maybe, if there are a lot of efficiencies in the automotive sector. What do you do with the other 80 percent?

DR: I just read that Bush is going to come out with a bold new energy initiative. But you read between the lines and what is it? A massive increase in subsidies to international corn growers. Somehow, at the federal level, energy policy has become synonymous with corn ethanol.

TT: Bush can’t implement those policies. He can say in a State of the Union address, here’s what I’d like to do, but he has to work with this now Democratic and more thoughtful Congress if he wants to get it implemented. I think they’re going to have some ideas of their own about what a more thoughtful energy policy ought to look like. It ain’t going to be the federal energy act of 2005 — with a stroke of a pen he added $6 billion more in subsidies to oil companies and gas companies, exempted them from even more aspects of the Clean Water Act, the Safe Drinking Water Act.

I suspect energy policy will work a little different under this Congress.