[Marxism] ECONOMIST: Castro was right - Ethanol

["Walter Lippmann" <walterlx@xxxxxxxxxxxxx>]

Castro was right - Ethanol
7 April 2007
The Economist
(c) The Economist Newspaper Limited, 
London 2007. All rights reserved

As a green fuel, ethanol is a good idea, 
but the sort that America produces is bad

IT IS not often that this newspaper finds itself in agreement with
Fidel Castro, Cuba's tottering Communist dictator. But when he roused
himself from his sickbed last week to write an article criticising
George Bush's unhealthy enthusiasm for ethanol, he had a point. 
Along with other critics of America's ethanol drive, Mr Castro warned
against the "sinister idea of converting food into fuel". America's
use of corn (maize) to make ethanol biofuel, which can then be
blended with petrol to reduce the country's dependence on foreign
oil, has already driven up the price of corn. As more land is used to
grow corn rather than other food crops, such as soy, their prices
also rise. And since corn is used as animal feed, the price of meat
goes up, too. The food supply, in other words, is being diverted to
feed America's hungry cars.

Ethanol is not much used in Europe, but it is a fuel additive in
America, and a growing number of cars can use either gasoline or
ethanol. It accounted for only around 3.5% of American fuel
consumption last year, but production is growing by 25% a year.
That's because the government both subsidises domestic production and
penalises imports. As a result, refineries are popping up like
mushrooms all over the midwest, which now sees itself as the Texas of
green fuel.

Why is the government so generous? Because ethanol is just about the
only alternative-energy initiative that has broad political support.
Farmers love it because it provides a new source of subsidy. Hawks
love it because it offers the possibility that America may wean
itself off Middle Eastern oil. The automotive industry loves it,
because it reckons that switching to a green fuel will take the
global-warming heat off cars. The oil industry loves it because the
use of ethanol as a fuel additive means it is business as usual, at
least for the time being. Politicians love it because by subsidising
it they can please all those constituencies. Taxpayers seem not to
have noticed that they are footing the bill.

Bad, good and best

But corn-based ethanol, the sort produced in America, is neither
cheap nor green. It requires almost as much energy to produce (more,
say some studies) as it releases when it is burned. And the subsidies
on it cost taxpayers, according to the International Institute for
Sustainable Development, somewhere between $5.5 billion and $7.3
billion a year.

Ethanol made from sugar cane, by contrast, is good. It produces far
more energy than is needed to grow it, and Brazil-the main producer
of sugar ethanol-has plenty of land available on which to grow sugar
without necessarily reducing food production or encroaching on
rainforests. Other developing countries with tropical climates, such
as India, the Philippines and even Cuba, could prosper by producing
sugar ethanol and selling it to rich Americans to fuel their cars.

There is a brighter prospect still out there: cellulosic ethanol. It
is made from feedstocks rich in cellulose, such as wood, various
grasses and shrubs, and agricultural wastes. Turning it into ethanol
requires expensive enzymes, but much research is under way to make
the process cheaper. Cellulosic ethanol would be even more
energy-efficient to produce than sugar ethanol and would not impinge
at all upon food production. Eventually, it might even allow
countries with lots of trees and relatively few people, such as
Sweden and New Zealand, to grow their own fuel rather than import
oil.

That is still some way off. In the meantime, America should bin its
silly policy. If it stopped taxing good ethanol and subsidising bad
ethanol, the former would flourish, the latter would wither, the
world would be greener and the American taxpayer would be richer.

Ethanol is not going to solve the world's energy problems on its own.
But its proponents do not claim that it will. Ethanol is just one of
a portfolio of new energy technologies that will be needed over the
coming years. Good ethanol, that is-not the bad stuff America is so
keen on.


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