Pawlenty's ethanol 'success story' a fairy tale

Governor Tim Pawlenty’s one-year term as chairman of the National Governors Association (NGA) officially ended yesterday when Pennsylvania Gov. Ed Rendell took the helm. During his term, Pawlenty made clean energy his signature issue by launching an initiative called “Securing a Clean Energy Future,” which sought ways to increase production of cleaner domestic fuels, promote advanced electricity generation, improve energy efficiency, and accelerate research and development of clean energy technologies.

“America is at a tipping point,” Pawlenty said nearly one year ago. “Our country is too dependent on imported sources of energy and greenhouse gas emissions continue to grow too quickly. Governors have a tremendous opportunity to lead the country toward a cleaner, more independent, more secure energy future.”

If America was at a tipping point last year, when gasoline prices had just dipped below $3 per gallon and oil was trading at $75 per barrel, the nation’s current situation may be dire.

Many of the attendees at this year’s NGA meeting, Pawlenty among them, are looking to cellulosic ethanol, which is made by breaking down the cellulose in plant fibers, as part of the solution. During a discussion on clean energy over the weekend, Pawlenty stated, “Corn-based and commodities-based ethanol for states like Minnesota has been a success story, but we recognize that this has to now move to Phase 2.”

While cellulosic ethanol may be a promising fuel derived from a variety of plant sources, corn-based ethanol has been anything but a success story. The firestorm of bad publicity it’s received in recent months may prevent consumers from buying into Phase 2.

To date, the real successes of corn-based ethanol lie in creating a supply and distribution chain. There are 303 gas stations in Minnesota carrying E85. In 2006, 550 million gallons of ethanol was produced, doubling the state’s production since 2001. Unfortunately, during that same five-year period, state-wide consumption remained steady at 260 million gallons while the cost of E85 has risen. In July 2005, E85 could be purchased for $1.69 a gallon in Minnesota. At the start of Pawlenty’s term as chair of the NGA, the cost was $2.30. Today it costs about $3 per gallon. But while it’s still cheaper than gasoline, the savings are offset by a loss in fuel economy. Flex-fuel vehicles operating on E85 usually experience a 20 to 30 percent drop in miles per gallon due to ethanol’s lower energy content while regular vehicles running on gasoline with 10 percent ethanol experience a 1.5 percent drop in fuel-efficiency.

The failures of corn-based ethanol do not end with the distinct lack of demand. Corn prices have skyrocketed to more than $7 per bushel. That’s great for corn farmers, but livestock and poultry farmers are being pinched, forcing them to pass the cost onto consumers. The result has been consumers cutting back on meat purchases. (Cargill Meats, for one, has responded by rebranding some of its lesser cuts to appeal to the 30 percent of consumers who have cut back on beef purchases. Flap meat is now called Cordelico™ Sirloin and an eye of round is now known as a Rigosa™ Roast.)

Environmentalists have also found corn-based ethanol to be a failure on many fronts:

* Vast amounts of fertilizer and pesticides are used in crop production which increase runoff pollution * High-crop prices have resulted in less farmland being set aside for conservation * Ethanol distillation requires large quantities of energy and fresh water * And neighbors have complained that ethanol plants release noxious odors.

Cellulosic ethanol may eliminate many of the problems that plague corn-based ethanol. Byproducts like corn husks and wood pulp can be utilized for ethanol production as can non-commodity crops like switch grass, fast-growing poplar trees and even native prairie grasses. Grasses are of particular interest because they also sequester carbon in their root systems, unlike corn which releases carbon during the ethanol production process.

Corn-based ethanol was the solution that offered windfall profits to agribusiness and a “green” image for politicians. Cellulosic ethanol provides the same benefits to politicians and extends the offer to the timber industry and even more farmers. But there’s still the matter of convincing consumers, which may prove an even more difficult challenge now. Especially if the ones promoting it are the same individuals who sold consumers a commodity-based solution in the first place.