Corn Ethanol is a Destructive Economic Force, Not the Basis of Our Energy Future
Building the Green Economy, Food Security: Africa, Quipu Economic Forum ::
24 June 2008 :: by J.E. Robertson
CafeSentido.com :: Corn-ethanol, long a fascination for US politicians and for the farm lobby that courts their support for ethanol subsidies, may play some role in remediating the economic fallout of soaring gasoline prices, though it seems unlikely, for a number of reasons. First and foremost is the fact that the numbers work against us: in order to produce more corn-ethanol, we must divert cropland destined for food production to fuel production, and that has a severely negative impact on the availability and affordability of corn for human consumption.
The economic fallout of this diversion of grain is far more severe than any symbolic softening of the cost of petroleum-based fuels, in the short-term. In hard economic times, the last thing any economy, no matter how wealthy or dynamic, can afford, is to force consumers to choose between food and fuel. Food is more necessary and will win out, and a reduction in mobility means robbing that economy of the dynamism that might save it from impending ruin. In short, ethanol is not a cost-of-living reducer, but an inflater, and will not help us to prevent recession.
Now, the ripple effects are also egregiously negative: we face the very real possibility that for the foreseeable future, wealthy economies transitioning to bio-ethanol as a fuel source, will be robbing the poorest in the human world of the capacity to sustain life with affordable foods. This will cause a number of damaging long-term consequences in the global economy:
- increased malnutrition, which is corrosive to political, geographical and economic stability;
- deepening endemic international wealth divide;
- closing of markets to foreign trade that appears linked to negative internal dynamics;
- mounting scarcity-based authoritarianism;
- slower move away from carbon-emitting fuels (bio-ethanol is a carbon-emitter).
If we take these risks seriously, and we should, we can see that corn-ethanol is a band-aid for a major trauma. The ecological and economic conditions we now face are not conducive to extracting from an ethanol-driven economy whatever benefits it could bring. We need, at the very least, to move away from crop-based ethanol toward waste-product cellolosic ethanol, where ethanol is attractive, to avoid the dangers of crop-ethanol’s negative scaleability: it increases overall cost-of-living the more we produce, instead of permitting economies of scale to reduce costs to consumers.
We also have a vested national interest in the diplomatic consequences of leaning heavily on the corn belt for fuel production: after years of an antagonistic foreign relations environment, we cannot afford to be classed by critics as a nation that puts its automotive convenience ahead of the right of the world’s poor to basic sustenance. Our own agricultural bounty has long been a source of our ability to provide massive amounts of food aid abroad, something that will be severely diminished if our solution to increased fuel costs is a product that inflates food prices even further.
It may be that our entire farm-subsidy system must be rethought, in order to provide for the economic elasticity we need in these pressing times. Farm subsidies in the US were designed to prevent over-production, which would drive prices down, creating an excess-production spiral, dust-bowl effect, and potential economic disaster. But we may now have more complex realities to face in connection with our domestic agricultural production, relative to a global market for both food and fuel.
When ethanol is made from corn 18% of the corn is consumed and 82% of the corn becomes what is called brewer’s mash. Brewer’s mash is a high protein feedstuff used to feed livestock, pigs, and other animals. A recent National Public Radio segment featured several cattlemen who stated that the recent increase in ethanol production had so increased the supply of feed mash that the cost of the feed was reduced and it now cost them $40 to $50 less per head.
Basically, the starch in the corn which has little or no food value is converted to ethanol, a high value product. At the same time, the protein in the corn is converted into another high value product, feed mash.
The belief that there is a large loss of food as a result of making ethanol from corn is NOT correct. The belief that ethanol production is the cause of the recent increases in food costs is also NOT correct. In fact, beef and pork prices are presently quite reasonable partially due to the fact that there is so much feed mash on the market.