Ethanol has had its highs and lows. Which way is it headed now?

Fermentation. What would we do without it? It’s a little trick that microbes figured out billions of years ago as a way of getting energy from carbohydrates. Then way back in prehistoric times, we humans figured out how to hijack that microbial process for our own purposes — and for millennia that purpose was making alcohol from sugar for libation (and I imagine since then there’s been a whole lot of libation).

But eventually we came upon a more sober application of alcohol: fuel. First used in 1826 to power internal combustion engines, ethyl alcohol, as it was then called, gained a foothold in Europe in the early 20th century. But this alcohol-based fuel struggled to find a toehold in America’s fossil-fuel dominated energy budget. Not until 1978, in the wake of the 1970s energy crisis, did Congress provide a tax exemption for ethanol-blended gasoline. This exemption and the subsidies that followed, however, couldn’t reverse our growing dependence on foreign oil. But because virtually all ethanol generated for America’s automobiles is corn-based — that is, produced by fermenting the sugars contained in corn kernels — the subsidies have been a boon to the corn industry [pdf].

In 2005, spurred by rising oil prices and perceptions that corn ethanol was a renewable, carbon-neutral fuel, America’s love affair with corn ethanol grew. The Energy Policy Act mandated that by 2012, 7.5 billion gallons of renewable fuels be blended annually into gasoline. The 2007 Energy Independence and Security Act set a new bar of 9 billion gallons for 2008 to be increased annually toward a 36 billion gallon goal by 2022 with up to 15 billion gallons coming from corn ethanol.

The Corn Ethanol Bloom Is off the Rose (Mostly)

But in recent years, its economic benefits have been questioned (see here, here, here and here). Its use of corn for fuel instead of food has fed other concerns, such as possible food shortages and volatility, price shocks and political instability. Some studies (here and here) suggest that biofuel production leads to forest-clearing to grow more crops and thus increased greenhouse gas emissions. 

Even so, removing federal support of corn ethanol has proved difficult. The corn lobby’s got lots of clout, and it can’t hurt that the path to the presidency begins in Iowa (rumor has it that Republican hopeful Jon Huntsman will bypass the caucuses because of his support to end ethanol subsidies).

Nevertheless, the tide may be turning. The Senate voted to cut off the industry’s $6 billion annual subsidy; and three Congressmen have reportedly reached a compromise with the industry that would eliminate the subsidy but divert $668 million of it to biofuels research and the installation of ethanol-friendly pumps at gas stations (and use $1.33 billion of the savings for federal deficit reductions). If passed, the victory would likely be Pyrrhic: with the renewable fuels standard regulations intact and corn ethanol being the only game in town, it’s unlikely that corn-ethanol producers will suffer very much.

Cellulosic Ethanol in the Wings

Most biofuel supporters admit the corn ethanol solution is far from ideal. Many supporters and detractors alike claim it’s just a stopgap for cellulosic ethanol, the ultimate biofuel — fuel generated from a plant’s non-edible parts. For corn, that would be stover (e.g., the leaves, husks, stalk, and cobs) rather than kernels. There’s generally a whole lot more cellulose in plants than sugars — compare a corn cob to its kernels. And so there’s a lot more feedstock for making cellulosic ethanol than for making traditional, grain-based forms of ethanol.

Economically, cellulosic ethanol is not yet ready for prime time — it’s too expensive — but industry is pushing ahead and in many cases with government support. Last week the Energy Department announced a $105 million loan guarantee to a company proposing to make ethanol from corn cobs.

America and Corn Cob Ethanol: The Beginning of a New Love Affair?

On the surface, it looks like all systems are go. Cellulosic biofuel has more biomass to work with, and, because it comes from inedible stuff, it shouldn’t impact food supplies, right? I mean, who eats corn cobs?

Well, it turns out that livestock sometimes do, and interest in stover as an affordable alternative food source has risen with corn prices. (See here, here, and here.) Making biofuels from corn cobs slated for livestock feed will affect food supplies as well as land use and greenhouse gas emissions. Ultimately, because biofuels and food both require land to grow, decoupling the two is difficult. Commodity farming follows the price. If growing biofuel has more earning power, land meant for growing food will likely be diverted for biofuels.

So, before jumping on the corn cob bandwagon, perhaps we should think more carefully. Something to chew on.