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Pumping Corn Into Wisconsin: Consideration for Ethanol Legislation

Pumping Corn Into Wisconsin: Consideration for Ethanol Legislation






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    Pumping Corn Into Wisconsin: Consideration for Ethanol Legislation Pumping Corn Into Wisconsin: Consideration for Ethanol Legislation Document Transcript

    • Pumping Corn into Wisconsin:Consideration for Ethanol Legislation By Justin Dohms
    • The Growth in Ethanol The price of gasoline has risen to record highs with no end in the near future.Consumers are spending well over 2 dollars for a gallon across the country, and the peaksummer demand will stall any ideas of price decreases. The United States hasn’tprovided the majority of oil it consumes since the early 1970’s, and the current priceshave illustrated our dependence on foreign sources once again. To combat the problem,the U.S. government has urged those foreign sources to increase production and hasproposed drilling in environmentally sensitive areas to increase future domesticproduction. Citizens are doing there part by beginning to re-evaluate their driving needsand switching to more efficient vehicles. Regional interest into the production of bio-fuels has also exploded, with ethanol at the forefront, to reduce the dependency onforeign oil. State legislators from both sides of the aisle are seeking to expand and secure theethanol market with the introduction of legislation that would mandate a 10%/90% (E10)ethanol to gasoline mixture in all regular-grade automotive gasoline across Wisconsin.State Senator Jon Erpenbach (D-Middleton) and State Representative Davis (R-Oregon)launched the bi-partisan effort with introduction of SB15 and AB15. The bill wouldmake Wisconsin the third state, after Minnesota and Hawaii, to mandate the widespreadautomotive use of the gasohol, or E10. Ethanol, or ethyl alcohol, is 100% grain alcohol that was used in the first vehiclesdesigned by Henry Ford. It is produced from the distillation of biomass materials,including wheat, potato wastes, sawdust, rice straw, paper mill wastes, yard clippings,molasses, sugarcane, brewery waste or anything containing sugar, starch or cellulose.1The overwhelming majority of ethanol is produced from corn, however, and thediscussion in Wisconsin has centered around corn-derived ethanol fuel. While Ford’sModel T accepted the straight grain alcohol, today ethanol is commonly mixed withgasoline to form E10, or gasohol, a 90%gasoline and 10% ethanol mixture. This blend,with ethanol’s octane-boosting qualities, is soldstatewide by participating stations andaccounted for 9% of total motor fuel sold in2003.2 Its use is most concentrated insoutheastern Wisconsin, where it is acomponent of the reformulated gasoline (RFG)mandated by the Clean Air Act Amendments of1990. The Amendment focused on the worst airquality areas in the country, called non-attainment zones, and required vehicles to useRFG in an attempt to lessen the amount of smogand ozone-contributing emissions. Since 2003,1 EPA 420-F-00—035 March 2002, www.epa.gov2 WI Dept. of Revenue “Motor Vehicle and General Aviation Fuel Tax Statistical Report” (1985-2003)
    • ethanol has been the oxygenate of choice for Wisconsin.3 This is largely due to thephase-out of MTBE, or methyl tertiary butyl ether, which has been found to contaminatedrinking water sources. Ethanol has a higher octane but a lower energy value than gasoline. The formerquality led the federal government in 1995 to mandate its use, as an oxygenate inreformulated gasoline (RFG), in six southeastern Wisconsin counties to improve airquality. This 10% ethanol gasohol produces more complete combustion of gasoline, andtherefore is suppose to emit fewer particulates into the atmosphere. Ethanol’s latter quality is of some concern for Wisconsin consumers. One gallonof corn-based ethanol contains roughly 2/3 the energy value of a gallon of gasoline. Inother words, a car that could drive 30 miles on a gallon of gasoline would go 20 mileswith a gallon of ethanol. The proposed legislation would mandate up to a 10% ethanol to90% gasoline, and many consumers might not notice a large difference in fuel costs, butthe aggregate effect would equal a greater quantity of fuel purchased. Furthermore, thecost of a gallon of the E10 blend might be more expensive. When asked in an interviewwith WI Public Radio if the blend would be cheaper, Bill Bruins, president of WI FarmBureau Federation, responded: “Cheaper isn’t really what’s going to happen.”4 Ethanol remains attractive, though, because of its promise to reduce thedependency on foreign oil, provide an environmentally safe fuel source and inject ruralWisconsin with an economic stimulus. Rising prices in oil, however, have made ethanolmore competitive and propelled it into the national energy agenda, with many in the CornBelt ready to harvest profits. Experts are not in total agreement on corn-derived ethanolas a renewable resource and its effect on the environment, though, and studies performed-to-date do not conclusively support its use. Ethanol Net Energy Value (NET) Determining the net energy value, or NET, of corn-derived ethanol iscontroversial. NET is formulated by calculating the energy content of ethanol minus thefossil energy used to produce the ethanol.5 Conclusions from studies over the years varydue to variations in scope regarding energy inputs and outputs. An overly simplisticstudy might conclude that only energy from the sun is needed to grow corn, and thusconclude that ethanol is renewable. Ethanol production is much more complex, and eachstep from ethanol’s lifecycle requires more energy inputs, as the illustration below shows. The illustration below was provided by the Argonne National Laboratory, theU.S. Dept. of Energy’s Research Lab, in 2004, which concluded a positive net energyvalue for corn ethanol.3 WI Department of Administration. http://www.doa.state.wi.us/docs_view2.asp?docid=7704 Interview w/ Joy Cardin, WI Public Radio, March 7, 2005.5 Shapouri, Hosein. James Duffield, Michael Wang. “The Energy Balance of Corn Ethanol: An Update.”U.S. Department of Agriculture. Office of the Chief Economist, Office of Energy Policy and New Uses.Agricultural Economic Report No. 813, July 2002.
    • Source: Office of Energy Efficiency and Renewable Energy, U.S. Department of Energy, “Argonne National Laboratory Ethanol Study: Key points.” http://www.drivingethanol.org/ArgonneNatlLabEthanolStudy.pdf Studies often cited in support of corn-based ethanol include one in 1997 by theArgonne National Laboratory6 and the USDA’s 2002 and 2004 reports7. The 2004USDA study is referred to in the 2005 RFA (Renewable Fuels Assoc.) Outlook Report,finding that “ethanol produces 167% of the fossil energy that is used to grow, harvest,transport and refine grain into ethanol.”8 However, the RFA is guilty of pluckingnumbers to support their industry. Immediately preceding the USDA 2004 finding, theyexplain that solar energy is all that is needed to produce corn. Conversely, studies that find a negative net value have been criticized for notincluding solar energy at all. They have also been criticized for not including credits forthe energy contained within byproducts of corn-ethanol production, such as distillersgrains. Studies that have found a negative energy value include those from CornellProfessor David Pimental published in 1991, 2001, and 2003. He claims “ethanolproduction is a waste of energy, consuming 70 percent more energy to produce than itgenerates when used as a fuel.”9 Compiled below is a selection of studies illustrating the variations in measuringcorn-ethanol’s net energy value. This lack of consistency explains the preparedness ofproponents and critics alike to provide numbers supporting their view.6 Wang, M., C. Saricks, and M. Wu: 1997, “Fuel-cycle fossil energy use and greenhouse gas emissions offuel ethanol produced from U.S. Midwest corn”. Argonne National Laboratory, Center for TransportationResearch, Argonne, IL 60439.7 Shapouri, H., J.A. Duffield, and M. Wang: 2002, “The Energy Balance of Corn Ethanol: An Update”.Agricultural Economic Report No. 814, U.S. Dept. of Agriculture, Economic Research Service, Office ofthe Chief Economist, Office of Energy Policy and New Uses, Washington, D.C.8 RFA. “Homegrown for the Homeland Ethanol Industry outlook 2005” Feb. 2005 p.8.9 Schoen, John W. “ Ethanol: Boon or boondoggle?” CNBC Business. 2004 MSNBC Interactive.
    • Environmental Impacts The national lobbying group Renewable Fuels Association is quick to promotecorn-based ethanol as environmentally benign. They’ll argue that because ethanol, whichis 35% oxygen, aids in more complete combustion of gasoline, air pollution is reduced.10Also, they will tout ethanol as water soluble, non-toxic and biodegradable. The sun does aid in the growth of corn, but in order to grow, produce, anddistribute corn-ethanol other input variables need to be considered. In addition to thesun’s energy, today’s corn hybrids require more nitrogen fertilizer and pesticide than anyother food crop.11 Also, corn production in the U.S. erodes soil about 18 times faster thanit can be reformed.12 Therefore, to really understand the amount of energy needed toproduce one gallon of ethanol a broader lifecycle scope is needed. Wisconsinites are familiar with the effects of agricultural run-off. This year,headlines revealed that manure fertilizer caused numerous fish-kills around the state. InMadison, algae-bloom outbreaks that require the closing of beaches and that suffocatefish are very visible results from run-off, both agricultural and urban. The results fromcurrent corn production call into question corn-derived ethanol’s renewable status. In2003, U.S. farmers produced 9 billion bushels of corn. This corn required 9 billionpounds of nitrogen fertilizer, 3 billion pounds of phosphate fertilizer, and 4 billion poundof potash.1310 RFA “2005 outlook” p.1211 Pollan, M.: 2002, “Industrial Corn- Destroying Our Health & Environment”. New York Times, July 18th,Op Ed.12 Pimentel, D.: 1996, Food, Energy, and Society. Niwot, CO: University Press of Colorado.13 USDA: 2003. U.S. Department of Agriculture: http://www.nass.usda.gov:81/ipedb/.
    • Increasing the use of ethanol causes concern for the health of ground and drinkingwater. Ethanol is bio-degradable but can be highly corrosive. The combination ofethanol and gasoline may actually cause more soil pollution than gasoline alone.14 In theevent of a tank leak, soil would first concentrate on biodegrading the ethanolcomponents, allowing the gasoline components, such as benzene, to slip deeper into thesoil before the soil concentrated on its breakdown.15 From 1990 to 2003, the EPAreceived reports of 400,000 leaks in gasoline storage tanks.16 The process of growing corn, harvesting it, fermenting it, transporting it andultimately burning it in the form of an automotive gasoline mixture presents an array ofpossible air pollution sources. To safely evaluate and predict the air emissions effectsfrom an increase in corn-derived ethanol, one needs to consider ethanol’s entire lifecyclein order to ensure that emissions reduction from one source does not divert our attentionfrom an increase from other sources. In their 2005 Ethanol Outlook Report, the Renewable Fuels Association, a pro-ethanol lobbying firm, insists that a 10% ethanol blended fuel would: • Reduce tailpipe fine particulate matter (PM) emissions by 50%. • Reduce secondary PM formation by diluting aromatic content in gasoline. • Reduce carbon monoxide (CO) emissions by up to 30% - even in new cars. • Reduce toxics content by 13% (mass). • Reduce toxics content by 21% (potency)17 Ethanol also has a positive benefit in greenhouse gas (GHG) emissions reduction,according to the Argonne study. Wang found that, on a per gallon basis, corn ethanolreduces GHG emissions by 18-29%, National Corn Growers Association says.18 Most studies seem to agree that ethanol reduces emissions from carbon monoxide.However, it has been found to increase emissions from nitrogen oxides (NOx),acetaldehyde, and peroxy-acetyl-nitrate (PAN)19 In Minnesota, ethanol has beenapplauded for helping the Twin Cities area to meet their nonattainment EPA airstandards, particularly for a reduction in CO emissions. Dan Gunderson, spokespersonfor the Coalition Against Government Gasoline Mandates, argues that Minneapolis was14 Rice, D.W. et al.:1999 “Health and Environmental Assessment of the Use of Ethanol as a FuelOxygenate- Report to the California Environmental Policy Council in Response to Executive Order D-599”. UCRL-AR-135949, Air Resources Board, Lawrence Livermore National Laboratory, CA.15 Powers, S.E., C.S. Hunt, S.E. Hermann, H.X. Corseuil, D.W. Rice, and P.J.J.Alvarez: 2001, “TheTransport and Fate of Ethanol and BTEX in Groundwater Contaminated by Gasohol”. Critical Reviews inEnv.Sci. and Techn. 31, 79-123.16 U.S. E.P.A., Corrective Action Measures Archive, Data on number of active and closed tanks, releasesreported, cleanups initiated and completed, and emergency responses,http://www.epa.gov/oust/cat/camarchv.htm.17 Renewable Fuels Assoc., “Homegrown for the Homeland: Ethanol Industry Outlook 2005” February2005, p.12. http//www.ethanolrfa.org/outlook2005.html.18 Agriculture Online. “New study confronts old thinking on ethanol’s net energy value.” March 28, 2005.www.agriculture.com.19 Rice, D.W. et al.:1999 “Health and Environmental Assessment of the Use of Ethanol as a FuelOxygenate- Report to the California Environmental Policy Council in Response to Executive Order D-599”. UCRL-AR-135949, Air Resources Board, Lawrence Livermore National Laboratory, CA.
    • successful in lowering its CO emissions, but that the Milwaukee nonattainment zonedoesn’t have a CO problem, but a volatile organic compound problem, which producessummertime smog.20 A recent study by the Southeast Michigan Council of Governments (SEMCOG),has found that a 10% ethanol/gasoline mixture would produce more emissions of volatileorganic compounds (VOCs) and oxides of nitrogen (NOx).21 These chief ingredients ofozone are precisely what the nonattainment areas of southeastern Wisconsin are trying tocontrol.22 In a statement before the Assembly Agricultural Committee, ThomasDarlington drew parallels between the Michigan study and proposed bills in Wisconsin.“The key findings and observations on VOC emissions relative to the current discussionon AB15 is that increasing the ethanol market shore to 100% (100% E10 option) wouldresult in significant VOC emission increases due to increased permeation.”23 The study has been referred to by the WI Manufactures & Commerce, which isconcerned that the bill would make meeting ozone standards in southeastern WI moredifficult.24 An E10 ethanol blend is already mandated in southeastern WI, but someworry that an increase in use by surrounding counties and cars entering the area mightpush the level of VOCs and NOx’s unacceptable levels. Ethanol Plants The number of ethanol plants isincreasing rapidly to meet the growingdemand for ethanol. These plants will notonly bring much-needed jobs to ruralWisconsin, but more coal and natural gasemissions as well. These fueling options arethe cheapest and are in stable domesticsupply—attractive qualities for plantoperators. Granted that newer coal-burningtechnology emits less than there ancestors,building and operating new ethanol plantswill increase the amount of coal-derived airemissions. Ethanol plants have been given muchattention lately for their potential to injectrural towns with economic stimulation. TheWI Department of Administration estimatesthat a “40-million gallon ethanol plantwould create 41 full time jobs, increase20 Interview w/ Joy Cardin, WI Public Radio, March 7, 2005.21 Darlington, Thomas. “Statement before Assembly Agriculture Committee,” February 3, 2005, p.1.22 Ibid.23 Darlington, p.5.24 Pommer, Matt. “Ethanol For All Gas Revs Feud: Proposed Mandate Pits Ag vs. Industry,” The CapitalTimes, Feb. 4, 2005, p.2.
    • household income in the community by $19.6 million a year, and boost state and local taxreceipts by an average of $1.2 million.”25 As of January 2005, Wisconsin is home to three operating plants with two underconstruction, and all are around the 40 million gallons per year output range. In 2004,Wisconsin plants produced 210 million gallons of ethanol. In comparison, Iowaproduced 1.2 billion gallons and Minnesota 524 million gallons in the same year.26 There are two types of ethanol plants: dry-mill andwet-mill. At dry-mill plants, corn is ground and cooked to convert the starch into sugars,which are then fermented. Ethanol, distiller’s grains and carbon dioxide are the primaryproducts from this technique. Since the production of ethanol only requires the corn starch, the remaining nutrients and protein are sold as Wisconsin Ethanol Plant Locations dried distillers grains and locally as wet distiller’s grains to feed dairy and beef cattle. The grains are 1. ACE Ethanol, Stanley, lucrative, as a dry plant may be able to produce 2.7 operating at 40 MGY gallons of ethanol, 18 pounds of dried distillers grains (Million Gallons/Year), started operations July 2002. with solubles (DDGS) and 18 pounds of CO2 from 2. Badger State Ethanol, one bushel of corn.27 Dry-mill plants produced Monroe, 40 MGY, started seventy-five percent of U.S. total ethanol production operations in September in 2004.28 Wet-mills are more expensive to build and 2002. 3. Utica Energy (Olsons Mill), seem to be less profitable. Oshkosh, 40 MGY, started Communities’ reception to ethanol plants is operations April 2003. mixed. While residents of the smaller farming towns 4. United Wisconsin Grain Producers (Under want to support their communities, many consider the Construction), Friesland, 40 plants as heavy industrial—increasing the risk of MGY, target completion spills, large truck traffic, air pollution, and water April 2005. 5. Western Wisconsin concerns. Regarding water needs for an ethanol Renewable Energy Co-op plant, estimates of a half million gallons of water is (Under Construction), needed per day to operate a plant.29 Wheeler, 40 MGY, target completion Spring 2006. In addition to this NIMBY (not-in-my- backyard) effect, residents have environmental www.doa.state.wi.us complaints, such as a strong yeast odor that may permeate through neighborhoods. Furthermore, in Minnesota “plants have released pollutants into wetlands in violations of their permits or without obtaining the proper permit.”3025 “Erpenbach and Davis Co-Sponsor Renewable Fuel Blend Legislation,” January 20, 2005.www.legis.state.wi.us/senate/sen27/news/PR2005/pr2005_003.htm.26 Renewable Fuels Assoc., “Homegrown for the Homeland: Ethanol Industry Outlook 2005” February2005, p. 3.www.ethanolrfa.org/outlook2005.html.27 Kaiser, Robert. “Utilizing the Growing Local Supply of Distillers Grains.” Univ. of WI-Extension, DairyAgent. http://www.wisc.edu/dysci/uwex/nutritn/pubs/KaiserDistillersGrains.pdf28 Ibid29 Interview w/ Joy Cardin, WI Public Radio, March 7, 2005.30 Meersman, Tom. “Ethanol plants pose pollution challenge,” Star Tribune July 8, 2001.
    • Conclusion Ethanol seems very popular around the state due to its economic promises.Farmers want to increase their incomes, cities and towns want to increase their revenues,investors their capital investments. Critics argue that the state should not be in thebusiness of mandating fuel markets, and also that farmers receive enough subsidiesalready. Also, mandating a demand for ethanol does not guarantee a constant supply.In Wisconsin, most ethanol is derived from corn, which is sometimes victim to bad cropyields. This volatility causes concern for future fuel and food costs. Ethanol may be produced from many different sources and depends on the regionit is produced within. Also, corn-derived ethanol is not the most efficient to produce andproduces fewer environmental advantages than other sources such as switch-grass, whichgrows well in Wisconsin climates. However, there is a lot of momentum to convert thestate’s corn stockpiles into profitable products like fuel and cattle feed. In regards to air emissions and the net energy value of corn-derived ethanol, Iwould like to see more consistent studies performed. There isn’t a standard by which tomeasure the complete environmental effects of the ethanol lifecycle. The “scope” ofstudies regarding ethanol needs to be honest and complete, because study results at thistime may be plucked and used to either side’s advantage. This results in a blurring of thereal effects of ethanol production and combustion. While reducing our dependence on foreign oil and reducing air emissions shouldbe the goal of any renewable energy policy, there is reason to question ethanol“renewability,” and I’m not sure that we need to rush into mandating the ethanol market.If consumers supported ethanol and what it provides, ethanol would not need statelegislation limiting their fuel station options. Furthermore, the total costs--prices at thepump, federal/state corn and ethanol production subsidies and tax relief—should beincluded in the discussion and warrants study.