Corn Ethanol: The Rise and Fall of a Political Force

by Tristan R. Brown (The Conversation) The 2016 primary race is defying conventional wisdom, with erstwhile fringe candidates competitive in the polls despite their unorthodox policy positions. The Iowa Republican Caucus provided additional material for this storyline as Senator Ted Cruz defied projections and won the state.

His victory came despite his opposition to subsidies for one of the state’s biggest industries: the production of corn ethanol.

Ethanol production was so profitable that the country’s first ethanol mandate saw its target for 2012 reached four years early.

Around that time, there was growing concern that the fuel additive MTBE, which was designed to improve gasoline’s fuel performance but can cause health problems, was leaking from storage tanks and contaminating groundwater. That left corn ethanol, which also improves gasoline’s performance but does not persist in the environment as much as MTBE, as the only remaining fuel additive on the market.

The year 2007 witnessed three major events that drastically changed the nature of the new biofuel mandate.

Democrats took control of Congress in early 2007 after campaigning on a platform that included environmental security. Shortly afterward, an article argued that diverting corn’s calories from stomachs to cars would cause widespread hunger among the world’s poor.

That article’s publication coincided with a sharp increase in the prices of corn and other grains, which prompted one UN official to label biofuels “a crime against humanity.” Another analysis conducted during the year concluded that corn ethanol wouldn’t drive food prices permanently higher. However, it also calculated that emissions from biofuels were higher than thought because farmers in the Amazon responded to higher ethanol prices by converting rainforest to farmland.

As opposition to corn ethanol grew, Congressional Democrats put a cap on how much corn ethanol could be blended with gasoline, at roughly 10 percent of gasoline consumption under the expanded mandate.

To meet higher volumes of ethanol production, the revised rules called for production of biofuels from non-food sources, such as wood chips or corn stalks and husks. The mandate called for these advanced biofuels to fulfill higher production targets by 2022 despite the fact the industry was non-existent in 2007.

Then grain prices collapsed in 2008 and subsequent research has determined that Brazilian deforestation fell by 83 percent after 2004 even as corn ethanol production quadrupled, countering the argument that biofuels in the U.S. would lead to higher deforestation globally. The expanded mandate was already law when these findings became known, however.

Despite the political push-back the U.S. corn ethanol industry is in no danger of disappearing. Yet its future is still be limited by political and technology constraints.

The advanced biofuel from non-food biomass that was to surpass corn ethanol has mostly been a no-show, reaching just 4 percent of its original blending target in 2015 because of insufficient production. Efficiency gains mean that corn ethanol now achieves fewer greenhouse gas emissions than domestic gasoline.

Congressional opposition is too weak to exclude corn ethanol from the country’s biofuel mandate. On the other hand, it is strong enough to prevent corn ethanol’s mandate to expand to fill the place of the missing advanced biofuels. READ MORE