Touted as renewable and secure, ethanol comes under renewed scrutiny as an energy source
When we hear the term ?renewable energy source? we typically think about energy sources like solar and wind power. But what about ethanol? Is it renewable? Politicians certainly seem to think so, otherwise why would the Renewable Fuels Act funnel so much money toward the ethanol industry in form of subsidies? The other major argument in favor of ethanol is that it can provide the United States with a secure source of energy. Both of these claims are false, says James Eaves, writing for the Cato Institute.
First of all, ethanol is not currently produced in a "renewable" manner?the production process is almost completely dependant on fossil fuels such as coal, natural gas and diesel. Furthermore, a recent study published in the Proceedings of the National Academy of Sciences shows that even the nonrenewable production of ethanol could displace at most 14 percent of U.S. gasoline consumption?if all of the corn grown by American farmers were devoted to ethanol production.
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Another ethanol shortcoming is that it is not very secure. While it is true that U.S. corn yields have increased substantially over the past few decades, researchers have observed that the year-to-year percentage gain has steadily declined. The rate peaked around 4 percent in the early 1960s and was less than 1.5 percent in 2001. That growth rate is not expected to keep up with food demand.
Moreover, variability in U.S. corn yields appears to be increasing, a point that is underscored by this summer's drought. Researchers predict that, even under the best-case global warming scenario, corn yields are likely to decline by 22 percent in the short-run.
Another point that Eaves makes is that ethanol supply and demand are both susceptible to changes in weather. For example, a heat wave could reduce supplies but at the same time increase demand since people may travel farther to beat the heat.
What, in Eaves's view, should we do?
Perhaps, instead of using coal and natural gas to create ethanol, it may be more efficient to use natural gas or liquefied coal to power cars directly. Or, maybe, if we want a renewable solution, we could use solar panels to generate electricity for electric cars (solar panels capture far more solar energy than corn). These may or may not be good alternatives, but the point is that there are alternatives to ethanol that consumers should explore. Because the technologies and energy markets are incredibly complex, we shouldn't have great confidence that politicians, using billions of dollars in subsidies, will pick the best one. Legislators could better serve the public by mandating the use of alternative fuels or a cap on particular emissions and then allowing the market to reveal the best options for accomplishing those goals.
If markets are generally better than politicians at choosing technological winners and losers, why should we make an exception when it comes to fuel sources?
by Bates Rambow on October 5, 2007
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