by Richard T. Stuebi
A good friend of mine sent me a provocative email the other day:
“Last year, your government spent more than $8 billion of your tax dollars to achieve the following results:
- Dramatically increase the emissions of carbon dioxide and other greenhouse gases into the atmosphere
- Accelerate the destruction of the Amazon rainforest
- Raise the price of milk, bread, beef and other grain-dependent products by more than 20%
- Increase world hunger
How did they do this? Two words: ethanol subsidies. Did I mention that the amount of corn it takes to produce enough ethanol to fill the tank of your typical SUV one time could feed the average person for one year (350 days)?”
This is one person’s “grabber” for an April 7 article by Michael Grunwald in Time magazine entitled “The Clean Energy Scam”. It presents yet another negative portrait of corn-based ethanol as a flawed technology — and flawed policies to support it.
However, to avoid throwing the baby out with the bathwater, it’s important to emphasize to the phrase “corn-based”. While it’s increasingly clear that corn-based ethanol is of dubious merit except to the major agri-businesses like ADM (NYSE: ADM) and Cargill that benefit from the government’s largesse, that’s not to say that the potential future emergence of cellulosic ethanol wouldn’t be a good thing all-around.
The only debate is whether the current push for corn-based ethanol is really a useful bridge to — or even a propelling force for — the advancement of cellulosic ethanol. Certainly, ethanol proponents like uber-VC Vinod Khosla (see some of his papers and presentations) think that corn-based ethanol is helping pave the way to a cellulosic future, by helping change the fueling infrastructure from gasoline to ethanol. Meanwhile, a growing chorus of contrary voices doesn’t see the cellulosic promise at all, and focus their angst on the real and present problems generated by corn-based ethanol.
If cellulosic ethanol never makes it out of the lab and into the market, then the rush for corn-based ethanol will indeed have been an expensive dead-end — and will provide more food for the fodder of those who claim that government policy involving preferential subsidies should not pick technology winners.