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A Background Research Paper on Corn Ethanol and Unintended Consequences For California

Prepared by Juliette Anthony, M.A., M.S.
August 2007

Growth of the corn ethanol industry in California is fraught with unintended consequences, none of which are beneficial to the economy or the environment of the state. The consequences include major impacts on our overcommitted water resources, on the price of food, on our air quality and on the financial burden to citizens while private investors profit. Assembly Bill 118 in its present form (a reworking of the defeated Prop. 87), and other promised subsidies for the development and deployment of alternative fuels here in California, will develop a Food for Fuel program, affecting our food prices, our water use, and even aspects of our air quality.

WATER IMPACTS

“Food Grows Where Water Flows,” –The billboard message flashes by on Route 5 through California’s Central Valley. Water is a precious commodity in California. Our water delivery systems makes growing crops in California’s Central Valley possible. The large amounts of water required to produce ethanol competes with agricultural needs and has been overlooked or deliberately ignored by leading proponents of ethanol. Corn ethanol requires 3.7 to 5 gallons of water to produce 1 gallon of ethanol just in the manufacturing process which does not take into consideration the water needed to grow the corn.. (Full Fuel Cycle Assessment: Well to Tank Energy Inputs, Emissions, and Water Impacts, Prepared for the CEC, p. 6-17) According to BlueFire, a cellulosic ethanol producer, cellulosic ethanol requires 6 gallons of water to produce 1 gallon of ethanol during the manufacturing process, though the energy output is said to be at least 4-5 times greater than for corn ethanol per gallon [telephone conversation with BlueFire, June 2007]. And the future of cellulosic ethanol is an indeterminate number of years into the future—possibly five, six or more depending upon research and costs.

“The ethanol industry is mining our groundwater,” states the Minnesota Center for Environmental Advocacy. In several places ethanol plants have been shut down, and some granted only 3 year permits to operate because the groundwater supply has been so depleted. “’Mining water that is closer to the surface could result in dryer landscapes,” says Bob Libra, a geologist with Iowa’s Department of Natural Resources. ‘Some of that stuff has been in place for hundreds of thousands of years. If you take that out of the bank, you don’t know when you’re going to get it back.’”(Minnesota Environmental Partnership). Many places in California, especially in the San Joaquin Valley, have already sunk down many feet because of groundwater mining. In Iowa and Indiana, The Sierra Club has sued ethanol plants which have caused neighbors to become ill from toxics in the air and water. Surely, the air quality effects of an ethanol plant, if toxic for people, will be toxic for nearby cattle as well. Ethanol plants do not make good neighbors. (The Indiana Sierran-hppt:www.indiana.sierraclub.org/Sierran/03-1/EthanolPlants.asp)

AB118, now before the State Senate, will provide subsidies of 130 million dollars a year from the citizens of California through additional car and boat registration fees to research and develop infrastructure for “alternative fuels.” Although the AB118 does not specify corn ethanol, it is currently the only biofuel in the marketplace. Simply by default and timing, it will receive a lion’s share of funding. The Governor, while extolling the virtues of a water intensive ethanol industry, promotes new dams and a peripheral canal to deal with our shrinking water supply. The Governor giveth and taketh away.

Perhaps the two most popular myths about corn ethanol are that 1) it is a renewable energy source, and 2) its use as a motor fuel substantially reduces greenhouse gas emissions when compared to gasoline…If all the vehicles in California operated on E85 [the Governor and Legislature’s policy], the ethanol required would consume 70 percent of the entire U.S. corn crop, but only 13.6 percent of the energy in the fuel would be renewable…” (Contra Costa Times 8/05/07)

Daniel F. Anthrop, Professor Emeritus at San Jose State writes in Ethanol No Panacea For Rising Energy Demand”, “It is worth noting that approximately 14 percent of the U.S. corn crop is irrigated and that this irrigated acreage consumes almost 18 million acre-feet per year of water – much of which is overdrafted from the Ogallala aquifer in the Great Plains. To put this water requirement in some perspective, the average annual flow of the Colorado River at Lee’s Ferry is only about 14 million acre-feet per year. Moreover, much of this corn acreage in the Great Plains is easily erodable land, and a number of studies have conclusively demonstrated that row crops, such as corn, result in much higher erosion rates than cereal grains or forage crops.”

FOOD FOR FUEL POLICY

The potential consequences of growing “Food For Fuel” appear to be intentionally overlooked by the framers and supporters of AB118. Water flowing through the Central Valley enables California to produce ”more than half the nation’s fresh fruits, vegetables and nuts . . . Due to the vast size of the produce industry, minor problems with the distribution chain . . . can cause [consequences] throughout the nation’s food system.” as we saw with the e-coli episode in the Salinas Valley last year. (Life in the USA http://www.lifeintheusa.com/food/vegetables.htm)

Almost all of this agriculture is dependent on irrigation. Millions of gallons of water potentially diverted from California farms to ethanol could cause major disruptions in the food supply for the nation, and the move to growing corn, a very water intensive crop, will also add to the pesticide and fossil fuel fertilizer run-off polluting our waterways. Shifting our valuable farmland from vegetables to mono-cropping corn is already happening in Kern County, and could prove devastating to many low income families. This is a world-wide phenomenon which AB118 would only aggravate.

Gwynne Dyer, reporter for The New Zealand Herald, wrote the following on July 10, 2007:

“We are entering a period when three separate factors are converging to drive food prices up. The first is simply demand…the global population is continuing to grow – about an extra Turkey or Vietnam every year – but as Asian economies race ahead, more people in those populous countries are starting to eat meat. The animals will need a great deal of grain, and meeting that demand will require shifting huge amounts grain-growing land from human to animal consumption – so the price of grain and of meat will both go up. …If the price of grain goes up, some of them will starve…the mania for bio-fuels is shifting huge amounts land out of food production…This attraction of biofuels for politicians is obvious: they can claim that they are doing something useful to combat emissions and global warming – although the claims are deeply suspect… The amount of United States farmland devoted to biofuels grew by 48 percent in the past year alone and hardly any new land was brought under the plough to replace the lost food production.” (http:www.nzherald.july 10, 2007)

Because the cost of a bushel of corn has doubled since September of 2006, hog and cattle farmers are bringing their animals to market early in efforts to save money on feed. Even though last year’s harvest of corn was 10.6 billion bushels, the third largest crop ever, the corn is increasingly transformed into fuel for cars, leaving the farmers short and food prices rising in the supermarkets.

“If all the scores of factories under construction or planned go into operation, fuel will gobble up no less than half of the entire corn harvest by 2008.” And “Corn is . . . is a lousy raw material for fuel because producing 10 gallons of ethanol consumes the energy equivalent of about 7 gallons of gasoline, and greenhouse gas reductions are minuscule.” (businessweek.com/7/30/2007) This from a conservative business magazine, not an environmentally biased treatise on the definite downsides of corn ethanol.

The first step is to limit the extent of corn ethanol’s subsidies. Further planting of fossil fuel intensive fertilized corn fields should be discouraged. Let the Venture Capitalists who are seeking subsidies have the privilege of risking their own funds to research better non-food crop solutions and bring them to market when they are ready. Vinod Khosla claims that “only 49 million acres could (italics are the editor’s) supply 139 billion gallons of ethanol a year by 2030.” (Business Week, July 30, 2007).

If a reporter in The New Zealand Herald and a reporter at Business Week understand that there are real problems with biofuels in general and corn ethanol in particular, why has the California Press only written a few articles about AB118, and its stealth movement through the California Assembly and through two California Senate Committees? The Sierra Club, The Coalition for Clean Air, and The American Lung Association, are all aligned with Vinod Khosla and the oil companies in favor of AB118. This is reminiscent of what happened with MTBE in the late eighties and early nineties when major environmental groups backed the use of MTBE. They all, including Bluewater Network and its spin-off in D.C., the Renewable Energy Action Project (REAP), fought to preserve the oxygenate mandate so that ethanol could move in seamlessly to replace MTBE. MTBE was removed in January of 2007 and replaced by corn ethanol in all the areas of California mandated by the Clean Air Act to use an oxygenate. This includes the San Joaquin and SacramentoValleys, and the Los Angeles Basin down to the Mexican Border.

Only after many wells in California were contaminated, did NRDC and the Sierra Club realize that MTBE was a serious water quality problem and support its removal. We want to avoid a repeat of such an environmental error. Ethanol presents a considerably larger problem than MTBE. The demand for corn for ethanol production already has global effects on food supply. There were riots in June because people were not able to afford corn for tortillas, and the NPR morning news reported on August 9th that countries in Central America were speaking out against President Bush’s corn ethanol policy because it is playing havoc with their food supplies.

State Senator Tom McClintock (R) summed it up as follows: “The CARB regulations [to enforce the low carbon fuel standard] will undoubtedly hit Californians hard—but they will hit starving third world populations even harder. Basic foodstuffs are a small portion of the family incomes in affluent nations, but they consume more than half of family earnings in third world countries.” (Blog: Citizens for the California Republic, 06-18-07)

The details of the Food for Fuel policy are beautifully delineated in the publication “Rush to Ethanol” from Food and WaterWatch (foodandwaterwatch.org/food/pubs/reports/rush). Mono-cropping, fossil fuel fertilizers, air and water contamination, and the financial detriments to the economy are laid out in no nonsense language, supported by meticulous scientific research. The need to be careful with new cellulosic crops is clearly stated. If not farmed sustainably, cellulosic ethanol crops like switch grass can also wreak havoc with our soil and previously protected land reserves. “Loss of protected acres to energy crop production would be a major setback for water, soil, plant, and wildlife conservation efforts.” Cutting down of any forest anywhere in the Globe only increases global climate change, the very thing all these subsidies are supposed to curtail. Increasing sugar imports from Brazil means more rainforest degradation. Burning the forests outside Singapore to plant palm oil trees for biofuel destroyed air quality there for months.

And what of our air quality here in California? Biofuels are not quite as clean as they would have us believe.

NEGATIVE AIR QUALITY IMPACTS

The myth that ethanol is “clean” needs to be dispelled. While the Governor would like us to focus on a Low Carbon Fuel Standard, which makes the use of ethanol “look good” next to gasoline for reduction of the carbon greenhouse gasses in fuel, there are other negative air quality impacts with the use of ethanol—increased VOCs, Nox and ozone. “Overall, the results tend to support that the ozone impact of permeation VOC (volatile organic compounds) relative to CO is overwhelming and significant.” Ethanol molecules escape the gas tanks and hoses because they are microscopically small enough to permeate the walls of the tanks and the hoses. (Dongmin Luo, Research Division, CARB, January 2006:”Draft-The Ozone Impact of Permeation VOC relative to Carbon Monoxide).

Ethanol increased NOx by 5%, and for every 18 Degrees Fahrenheit increase in temperature, evaporative emissions doubled, according to a presentation at South Coast Air Quality Management District, Oxygenate Issues and Options on June 15, 2006. “As a matter of public health policy, we believe that ARB is obligated to address the full range of possible adverse ozone air quality effects…” said the SCAQMD to the California Air Resources Board in a letter dated June 13, 2007. “Ozone is the prime ingredient of smog in our cities and other areas of the country…When inhaled, even at very low levels, ozone can cause acute respiratory problems, aggravate asthma, . . . impair the body’s immune system defenses, making people more susceptible to respiratory illnesses, including bronchitis and pneumonia . . .Ground level ozone interferes with the ability of plants to produce and store food, so that growth, reproduction and overall plant health are compromised” states the Federal EPA on its Fact Sheet for Health and Environmental Effects of Ground level ozone. http://www/epa.gov/ttn/naaqsfin/o3health.html.

While the ARB is required by state law to ensure that control measures do not increase emissions (SB989), ethanol is being used throughout the state while plans for mitigation are underway, but not yet implemented. In truth it could be several more years before these mitigations have jumped through all the enforcement hoops and reach the California consumer. Meanwhile ethanol with its permeation problems is present in our gas tanks. The SCAQMD presentation concluded, “Low level blends of ethanol create excess emissions and air quality impacts.” Low level blends are all that is widely available currently and for the foreseeable future in California

FINANCIAL BENEFITS TO INVESTORS

AB118 is Proposition 87 repackaged. The alternative fuels plan in Prop 87 was to be paid for by taxes on profits from oil extracted in California. It was defeated on the November 2006 Ballot. Since the cost will now be paid for by extra fees on the registered owners of cars and boats, the citizens will not be happy when they discover that not only has the Legislature passed what they voted against, but is also making them pay for it. Back in October of 2003, Governor Schwarzenegger promised to repeal the car tax that he inherited from Governor Davis. “I campaigned that I will not raise taxes and I say this again: I will not raise taxes,” www.cnn.com/2003/ALLPOLITICS/10/09/recall.main/index/html Whether it is called a tax or a fee, the citizens of California will pay, and the low-income and disadvantaged will be the hardest hit.

The oil companies fought Proposition 87 vigorously, and with citizen participation successfully overcame the 146 million dollars that Vinod Kohsla, Steven Bing and other ethanol entrepreneurs had invested in this ballot measure. Now the oil companies have joined the ethanol Venture Capitalist group of Vinod Kholsa, Steven Bing and Pacific Ethanol’s Koehler Brothers, along with the Sierra Club, Coalition for Clean Air, Union of Concerned Scientists, and NRDC in supporting AB 118. Apparently what the oil companies didn’t like in Proposition 87 was that they were going to have to pay the bill. Now that the citizens will pay, the plan is fine. While the press heavily covered Prop 87, there has been almost no coverage of AB118. With Speaker Nunez sponsoring the bill and with all the big environmental groups supporting, legislators are expected to vote positively. The voters, however, may have reservations come election time when they assess the damage to their pocket books, and to their air and water supply.

Very much like the original backers of MTBE, who adamantly ignored the warnings regarding MTBE’s propensities to contaminate drinking water, these same people are avoiding the unintended consequences of changing California’s crop structure and diverting millions of gallons of water into ethanol plants. They also fail to mention that across the Midwest the Sierra Club and local communities have mounted lawsuits to oppose the building of ethanol processing plants. “Already there are 235 ethanol plants under construction or in planning stages across the county, in addition to 111 operating plants…The problem: There just isn’t enough corn to go around. “ (Los Angeles Business Journal, 7/09/2007)

The Federal Government is financially propping up this industry from beginning to end. The major agribusinesses, ADM and Cargill, are subsidized to grow corn, the entrepreneurs are given funds to build plants, and the refiners are given 51 cents a gallon for blending ethanol into our gasoline. Now they want California’s citizens to add their hard earned money to already well-subsidized private ventures, and then pay more at the pump and supermarket.

A gallon of ethanol is less expensive than gasoline, but we must pay exactly the same amount for it at the pump. The oil companies profit by selling us a gallon of less expensive fuel for the same amount per gallon that we are now paying for gasoline. In addition, we get less gas mileage from that gallon of ethanol, so we have to purchase more gasoline to drive the same number of miles. Everywhere the money is flowing out of our pockets into theirs. And those who will be harmed the most are those who are always harmed the most by corporate welfare, the poorest citizens.

News organizations all over the country are just beginning to put out wake-up calls in their headlines and articles. “Think you’re paying more for milk? Well, you are…When milk prices go up it’s devastating…People who supplement their grocery budgets with food stamps also are affected”, said Tom Shanahan, spokesman for the Idaho Department of Health and Welfare. Families receive a set amount of money in food stamps and do not receive more when milk or other food prices rise. (IdahoStatesman.com, July 15, 2007) Even Robert J. Samuelson, writing an article Prius Politics for the Washington Post, July 25, 2007, says, “Driven by demand for feed and fuel, corn prices have soared. With food costs increasing, inflation has worsened. The program is mostly an income transfer from consumers to producers and ethanol refiners.”

CONCLUSION

Professor Donald F. Anthrop cited above in the Contra Costa Times says it best. “Ethanol is not going to solve this problem, and it is time for the politicians and environmentalists to stop pretending it will… These people need a reality check.”

There are alternatives to biofuels if we understand that an alternative source of energy for transportation does not have to be a liquid fuel. Photon International Magazine in their April 2007 issue offered an interesting comparison between the renewable effectiveness and environmental impacts of plug-in hybrid vehicles powered by PV solar panels versus biofuels. Once a PV panel has been installed, it will supply energy for twenty-five or more years with very little maintenance. Any crop that is grown for ethanol requires energy annually, expensive processing and distribution. Why not put PV panels on carport structures on the top open air layer of public garages, with outlets for recharging. Use subsidies for this long lasting low environmental impact fuel rather than for corn ethanol. Specific subsidies for a single PV panel on private homes for hybrid vehicles could also be suggested.

It would be most helpful for as many people as possible to notify their respective Assembly person or State Senator that AB118 and SB210 are not acceptable in their current form, that developing ethanol plants and changing our vegetable and fruit crops into corn will raise prices to levels prohibitive for many people, and that restricting our water usage so that Venture Capitalists can use it for their benefit is not beneficial to the majority of Californians.

Juliette Anthony is an environmental research consultant, former twelve year Board Member of The Coalition for Clean Air, and research consultant on MTBE for Communities for a Better Environment.

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