Video: Ethanol hype

By Anchor, 'On The Money'
CNBC
updated 5/23/2006 3:20:09 PM ET 2006-05-23T19:20:09

As the price of oil and gas has continued to spike, consumers have been left wondering — who’s coming to the rescue?

The PR campaign du jour would have Americans believe that ethanol is the Great Green Hope.

“We've got to go from a hydrocarbon economy to an economy that’s no longer dependent upon oil, and that’s where we're headed,” President Bush told NBC’s Brian Williams in a recent interview. “The ultimate solution is to promote ethanol"

As the president pushes ethanol as a solution to the energy shortage, corporate America is embracing ethanol to pitch its products.

But at the University of California at Berkeley, geoengineering professor Tad Patzek isn’t buying any of it. He thinks ethanol is a pretend solution that is, in fact, making our energy situation much worse.

“I think we've entered a period of collective madness,” he said. “And some way we need to get out of it.”

Patzek says the American public has been force-fed the ethanol myth.

“The first thing that is untrue about it is that people think it’s going to solve our energy problems,” he said. “It will not. The second thing that is untrue about it is that people say it’s sustainable — it absolutely is not.”

What do the numbers show?

Last year the U.S. produced just under 4 billion gallons of ethanol, serving just 1 percent of U.S. fuel needs. Academics say production can’t go much higher. 

“If we used all the corn produced in the United States to produce ethanol, it would provide only 7 percent of our total vehicle fuel use,” said Cornell agriculture professor David Pimental.

Here’s another sober way of looking at it: if every car in America was fully powered by ethanol, it would take 97 percent of U.S. soil to grow enough corn to support it.

And that's not all. It turns out that it takes more energy to make ethanol than it could ever generate.

“About 30 percent more fossil energy is required to produce a gallon of ethanol than you actually get out in ethanol,” said Pimental.

“All in all, it’s in fact a very inefficient system of converting one kind of fossil energy into another kind of fossil energy,” said Patzek.

That hasn't curbed the National Corngrowers Association's ambitions. It plans to increase ethanol output from 3.9 billion gallons last year to 16 billion gallons by 2016 — serving 10 percent of fuel demands.

Cornell professor Pimental has uncovered other dirty little secrets behind ethanol production.

“Corn causes more soil erosion in the United States than any other crop,” he said. “Corn uses more nitrogen fertilizer than any other single crop, and it’s the prime cause of the dead zone down in the Gulf of Mexico.”

Corn also uses more insecticides and herbicides than any other crop. And each acre drains 500,000 gallons of water over three months.

So why does ethanol grab all the headlines? Patzek and Pimental believe it's all about big-time lobbying.

“The companies that stand to make the vast majority of money are the big agribiz companies,” Patzek said. “Archer Daniels Midland is the first one, Cargill is the second one.”

Cargill acknowledges that ethanol isn’t the answer to our energy needs. Yet with corn prices soaring, they're doubling production.

“We are becoming more and more detached from ecology and biology and more and more focused on our end game which is fossil fuel,” said Patzek. “And what we forget is that the environment won’t be able to deliver.”

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