Ethanol: Fuel Of The Future?

November 15^th, 2007

If you are like most Americans, you're nothing like Don Brown. Brown, a retired truck driver, not only knows that E85 is a blend of 85 percent ethanol and 15 percent gasoline, he loves it.

"I'm the E85 man," he said when a KARE11 crew approached him and asked why his car - and clothes - were covered in stickers and patches promoting the much-hyped fuel.

We asked him why he believes so strongly in E85. Because this is the United States of America, (and) we got to take care of our country first," Brown said. But most Americans are not putting ethanol in their tanks.

Ethanol, which simply is grain alcohol you could drink - if it weren't mixed with other chemicals - accounts for just 3.5 percent of all the fuel we use, according to the U.S. Department of Agriculture.

Outside of Minnesota, which is home to one-fourth of all E85 pumps in the entire country, E85 is extremely difficult to find.

Bev Meier, the manager of an Exxon station in Lake Dalton, Wis., said, "I don't have a car that uses (E85), and even though I manage a convenience store with gasoline, I don't know anything about it."

At the other end of town, Matt Steigerwald, manager of a Shell station, said none of his customers are asking for ethanol.

"Not here, no," he said. "As far as I know, there's only one gas station in (Lake Dalton) that even has E85 around here. So we don't get it at all. We don't get questions about it whatsoever."

However, the demand for the fuel, which car commercials tout as "a fuel that lowers greenhouse gas and can reduce our dependence on oil," is coming from somewhere.

This year's corn crop covered almost 93 million acres of farmland. That's 19 percent more than last year, an increase widely attributed to the ethanol boom.

Dan Erickson, a farmer near Albert Lea and member of the Minnesota Corn Growers Association, said he will take 40 percent of his corn crop this year to the ethanol plant. "It's always a good time to be a farmer," he said. "But yeah, now it's really good."

In Minnesota alone, this year, those plants will produce 620 million gallons of ethanol. The prediction for next year is one billion gallons.

But if most car drivers aren't asking for ethanol, if most cars are not engineered to run on ethanol, if top foreign car makers Toyota and Honda don't currently sell any cars in the U.S. designed to handle high blends of ethanol, why producers producing so much ethanol? Because the government is pushing ethanol.

Politicians in both parties promote ethanol when they say we need to lessen our dependence on foreign oil.

"It is not good for our country, as a matter of national security, to have that much of our country's future hooked to people who don't like us or want to do us harm," Gov. Pawlenty told a cheering crowd at an ethanol conference this summer.

KARE11 looked into that claim and found the suggestion that we're relying too heavily on enemies is at least a little misleading. Quick research tells you the United States' top two sources of foreign oil are Canada and Mexico, countries that generally are considered friends.

Among the top five countries supplying oil to the U.S., Saudi Arabia is the only one in the Perisan Gulf region. Venezuela, which is ranked number four, has a blustery president but it is not generally considered a threat.

That said, few people would argue it is a bad goal to find a clean, renewable source of fuel. It's just that people who have studied ethanol say corn is not the answer.

"We're not going to ethanol our way out of reliance on foreign oil," said C. Ford Runge, a distinguished McKnight Professor of applied economics at the University of Minnesota. His colleague, David Tilman, another Knight Professor and ecologist, said ethanol would only make a dent in our usage of gasoline, even if every kernel of American corn were used for fuel. "If we took all the corn we grew in 2005, in the whole United States, and used that to make ethanol, it would only get rid of 12 percent or our gasoline," Tilman said.

Yet government is spending taxpayer money as if corn were the solution. In Minnesota, the government has paid nearly $376 million in ethanol subsidies since the 1980s.

At the federal level, the government is budgeting $14 billion in tax credits over the next four years. On top of that, a tax on foreign ethanol - a 54-cent tariff on every gallon of imported ethanol - is a roadblock to competition.

"The American ethanol industry subsidies are a reflection of its relative inefficiency, compared to lower cost ethanol sources, such as sugar cane based ethanol from Brazil," Runge said. Runge said, if you take away the subsidies, there would be no market for ethanol made from corn. "The ethanol industry is the creation of government subsidies," he said.

Runge has many concerns about ethanol. In an article he co-authored in the journal Foreign Affairs, he notes corn prices have surged because of ethanol. In March, corn futures hit their highest level in 10 years. "Really, what is happening is, we are filling the tanks of our vehicles with ethanol fuels that are bidding corn away from food uses," Runge said.

There also are environmental concerns. A study by the Institute for Agriculture and Trade Policy found it takes, on average, more than four gallons of water to produce just one gallon of ethanol.

David Tilman, who has studied ethanol extensively, found the amount of energy that goes into making ethanol is almost as large as the amount of energy ethanol produces. "Twenty percent of the energy in a gallon of ethanol is new energy," he said. "Eighty percent is all the energy it took to grow the corn and convert the corn to ethanol. And that energy it took was fossil energy."

It also takes fertilizers to grow corn, fertilizers that have run off fields and into the Gulf of Mexico, creating a dead zone" the size of New Jersey, according to NASA, that can't support aquatic life. "In the long term, corn's not going to do it for us," Tilman said. Tilman is testing native prairie grasses, which he said can be converted to ethanol without the consequences of corn.

But prairie grasses don't currently have the same political allies as corn.

"The problem really is that corn and soybean growers didn't spend 30 years paying the campaign bills of members of Congress to maintain these subsidies to just give the game away to grass," he said.

The corn lobby does have deep roots, and over the years, just a handful of big companies have benefited the most from the ethanol boom. Today, four companies produce more than 40 percent of the ethanol made in the U.S.

Ethanol's biggest supporters have begun to acknowledge corn is at best, part, of the answer.

"We'll look back 25 or 30 years from now, and what we have now will be viewed as the Model T of renewable energy," Gov. Pawlenty said.

General Motors, which builds more than one-third of all flex-luel cars on the road today, also is adding hybrids to its fleet and working on a fuel cell car, which could be available to the public in 2010.

GM's director of communications for biofuels, Alan Adler, said ethanol isn't going to replace gasoline, but GM believes using it now is better than the "status quo."

In the meantime, more efficient ethanol plants are being built. But is E85 a practical fuel - from a performance standpoint - for anyone who drives a car, pays too much for gas and is concerned about the environment?

KARE 11 tested E85 on a road trip. We'll tell you if it performed like real alternative to gas in Part Two of our story.

- By Scott Goldberg, KARE 11 News

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