The Ethanol Debacle

While on vacation I needed to make the usual stop to fill the car with gasoline. Without realizing it, I filled my tank with the lowest grade (87-octane rating) gasoline because it was cheapest. I had tried the more expensive grades (89- and 92-octane ratings) but found that the added improvement in gas mileage did not warrant the extra expense. Now, as I looked more closely, I realized the blend I had chosen contained 15% ethanol. Horrors! I should have gone across the highway to a gas bar that did not add ethanol. Why? Well, ethanol is about two-thirds as efficient as regular gasoline. I was paying the same price for gasoline that got about 10 percent less mileage per liter than that across the road.

In essence, I was voluntarily paying a 10% premium on gasoline I was purchasing, or about 10¢ per liter or $4.50 for a 45-liter tank of gas. I also realized that, while the 87 and 89 octane blends contained ethanol, the higher-quality blend did not. I was paying about $1.08 for a liter of 87-octane and would have gladly paid $1.19 per liter for the highest quality blend, and would have been better off. I would have been able to drive further on the tank of gas both because ethanol is less efficient by 10% compared to regular gasoline, but some 12%-14% less efficient compared to the ethanol-free, top premium blend. Further, given that ethanol is more corrosive (as it contain more water), a person would  likely be better off purchasing the top blend as long at the price difference was no more than 10¢ per liter.

Governments have pursued ethanol production to reduce carbon dioxide emissions. In some cases, the government has simply provided subsidies to ethanol producers so that they could sell ethanol at about the same price as gasoline. That appears to be the case in British Columbia, Canada, as I still have the option of purchasing gasoline without ethanol. In other jurisdictions, governments have not provided consumers with any option. The government mandates blending ethanol in gasoline, so that perhaps 15% of gasoline contains ethanol.

How effective is this strategy for reducing greenhouse gas emissions? It turns out to be a disaster. First, a recent paper in the prestigious journal Science has shown that government ethanol policies are a sop to agricultural producers. They raise food prices and, more importantly, result in the conversion of marginal pasture and forest lands into cropland, thereby releasing stored CO2 into the atmosphere.

Second, as the Dutch Nobel Prize winning chemist Paul Crutzen and his colleagues have demonstrated, the impact of ethanol policies on the overall reduction in greenhouse gases is tiny or even non-existent. The researchers focused only on the climate effects from nitrogen (N) fertilization associated with the production of energy crops for biofuels. They showed that, “depending on N content, the current use of several agricultural crops for energy production, at current total nitrogen use efficiencies, can lead to N2O emissions large enough to cause climate warming instead of cooling by ‘saved fossil CO2’.” Only if the nitrogen use efficiency could be increased from about 0.4 to 0.6 might maize-ethanol or canola-biodiesel be climate neutral or beneficial. The results are summarized in the following table.

Net Climate Warming Relative to Fossil Fuel CO2 Savings

    Nitrogen use efficiency 50% of N harvested for biofuels production replaces crops that need N fertilizer
Crop Biofuel

0.4

0.6

Rapeseed (canola) Bio-diesel 1.0 – 1.7 0.7 – 1.2

0.5 – 0.9

Maize (corn) Bio-ethanol 0.9 – 1.5 0.6 – 1.0

0.4 – 0.7

Sugar cane Bio-ethanol 0.5 – 0.9 0.4 – 0.6

0.3 – 0.4

  Notes: Climate warming occurs if values exceed 1.0. Current nitrogen use efficiency is around 0.4.

Finally, and not surprisingly, economic analysis indicates that the costs of reducing greenhouse gases in this fashion are exorbitant. Essentially, citizens are paying large amounts of money for no environmental or climate change benefits whatsoever. It is all a waste of money that could be used more effectively to deal with poverty, funding for health care and, yes, even global warming.

References

Crutzen, P.J., et al., 2008. N2O Release from Agro-biofuel Production Negates Global Warming Reduction by Replacing Fossil Fuels, Atmospheric Chemistry and Physics 8: 389-395.

Searchinger, T., et al., 2008. Use of U.S. Croplands for Biofuels Increases Greenhouse Gases through Emissions from Land-use Change, Science 319(29 February): 1238-1240.

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