When Dario Franchitti steered his sleek, 670-horsepower, orange-and-black Indy car to victory at this year’s Indianapolis 500, the ebullient Scotsman chalked up an odd footnote in sports history. He became the first driver ever to win the iconic American auto race on pure ethanol—the gin-clear, high-octane corn hooch that supporters from midwestern farmers to high-ranking politicians hope will soon replace gasoline as America’s favorite motor fuel.
Indy’s switch back to the old bootlegger’s friend is just one indicator of the mad rush to biofuels, homegrown gasoline and diesel substitutes made from crops like corn, soybeans, and sugarcane. Proponents say such renewable fuels could light a fire under our moribund rural economy, help extract us from our sticky dependence on the Middle East, and—best of all—cut our ballooning emissions of carbon dioxide. Unlike the ancient carbon unlocked by the burning of fossil fuels, which is driving up Earth’s thermostat by the minute, the carbon in biofuels comes from the atmosphere, captured by plants during the growing season. In theory, burning a tank of ethanol could make driving even an Indy car carbon neutral.
The operative word is “could.” Biofuels as currently rendered in the U.S. are doing great things for some farmers and for agricultural giants like Archer Daniels Midland and Cargill, but little for the environment. Corn requires large doses of herbicide and nitrogen fertilizer and can cause more soil erosion than any other crop. And producing corn ethanol consumes just about as much fossil fuel as the ethanol itself replaces. Biodiesel from soybeans fares only slightly better. Environmentalists also fear that rising prices for both crops will push farmers to plow up some 35 million acres (14 million hectares) of marginal farmland now set aside for soil and wildlife conservation, potentially releasing even more carbon bound in the fallow fields.
The boom has already pushed corn prices to heights not seen in years, spurring U.S. growers to plant the largest crop since World War II. Around a fifth of the harvest will be brewed into ethanol—more than double the amount only five years ago. Yet such is the thirst for gasoline among SUV-loving Americans that even if we turned our entire corn and soybean crops into biofuels, they would replace just 12 percent of our gasoline and a paltry 6 percent of our diesel, while squeezing supplies of corn- and soy-fattened beef, pork, and poultry. Not to mention Corn Flakes.
Still, the prospect of amber waves of home-grown energy crops is too seductive to ignore, especially given the example of Brazil. Thirty years after launching a crash program to replace gasoline with ethanol from sugarcane, Brazil announced last year that thanks to ethanol and rising domestic oil production, it had weaned itself off imported oil. Investors, led by superstar CEOs Richard Branson of Virgin Atlantic and Vinod Khosla of Sun Microsystems fame, have bought into the vision, sinking more than 70 billion dollars into renewable energy companies. The U.S. government has ponied up hefty ethanol subsidies, and President Bush has proposed over 200 million dollars for research, with a goal of replacing 15 percent of our projected gasoline use with ethanol and other fuels by 2017.
“We can create ethanol in an incredibly dumb way,” says Nathanael Greene, a senior researcher with the Natural Resources Defense Council. “But there are many pathways that get us a future full of wildlife, soil carbon, and across-the-board benefits.” The key, Greene and others say, is to figure out how to make fuel from plant material other than food: cornstalks, prairie grasses, fast-growing trees, or even algae. That approach, combined with more efficient vehicles and communities, says Greene, “could eliminate our demand for gasoline by 2050.”
A century ago, Henry Ford’s first car ran on alcohol, while Rudolf Diesel fired his namesake engine with peanut oil. But both inventors soon discovered that “rock oil,” when slightly refined, held far more bang per gallon than plant fuel, and was cheap to boot. Oil soon left plant fuels in the dust. Only in periods of scarcity—like the OPEC oil embargo of 1973—did the U.S. and other countries turn back to ethanol, mixing it into gasoline to stretch supplies.
It wasn’t until 2000 that fuel alcohol staged a major comeback, largely as an additive in less polluting gasoline blends. For years, ethanol producers had enjoyed heavy subsidies and protective tariffs on imports, while Archer Daniels Midland, the largest U.S. ethanol producer, advocated mixing ethanol into motor fuel. But ethanol ran into stiff competition with the oil industry’s own additive, methyl tertiary-butyl ether (MTBE).
Then MTBE, a suspected cancer agent, began turning up in aquifers, prompting many states to ban the chemical and suddenly creating a two-billion-gallon market for ethanol. Recently, with the Middle East in turmoil and oil security once again a hot issue, Congress gave the ethanol industry another boost, extending the tax credits and tariffs while requiring that 7.5 billion gallons (28 billion liters) of the nation's fuel come from ethanol or biodiesel by 2012. (That figure could rise to 60 billion gallons, 227 billion liters, by 2030 if some senators have their way.) The biofuels boom was on.
Ethanol enthusiasts point out that the oil industry has also reaped huge subsidies for decades, including billions of dollars a year in tax breaks, as well as tens of billions of dollars annually to defend oil fields in the Middle East—even before the war in Iraq. Not to mention the untallied costs to health and the environment of pollution from cars, trucks, and the oil industry itself. And while oil subsidies flow into the hands of the wealthiest companies in the world, ethanol subsidies are fueling a renaissance in small heartland towns with names like Wahoo, Nebraska.
By this summer, with Nebraska’s 16 ethanol plants gearing up to consume a third of the state’s crop, corn prices had doubled, briefly topping four dollars a bushel, and growers were looking forward to the best profits in memory. “This is the first year I’ve planted all corn and no beans,” says Roger Harders as he finishes lunch at the Wigwam Café in Wahoo. He also has cattle that this year will eat a lot more grass than four-dollar corn. “You’re almost tempted to get out of the cattle business and sell your corn outright.”
Gary Rasmussen, co-owner of the local Case-IH implement dealership, sold ten new corn harvesters at upwards of $200,000 each from December through February, twice as many as usual, and his tractor sales are up as well.
A computer screen showing the latest corn prices is on prominent display on the sales floor. “Anytime you see a surge in commodity markets, you see a brighter future,” says Rasmussen. “Ethanol is going to be a real driver.” Despite the boom, it’s hard to fill up with ethanol in the U.S. It’s still mainly a gasoline additive. Only about 1,200 stations scattered mostly across the corn belt sell ethanol, in the form of E85 (85 percent ethanol, 15 percent gas), which can be burned only in specially designed engines. Ethanol delivers 30 percent fewer miles a gallon than gasoline, but at around $2.80 a gallon in the heartland, it is competitive with $3.20-a-gallon gas. Since the U.S. has no major pipelines for ethanol, transportation by truck, rail, or barge drives up the price elsewhere. But more ethanol plants are popping up all the time.
Christine Wietzki, a former farm kid from western Nebraska, is technical manager for one of the newest and most advanced ethanol plants in the country, the E3 BioFuels plant in tiny Mead, Nebraska, population 564. She’s spent much of her young career turning food into fuel and believes it’s a good deal all around. “If we don’t have to export corn and can use it to get off foreign oil, that’s fantastic,” she says. In a cold spring downpour, Wietzki shows off the plant, a cluster of new white buildings, tanks, and a grain bin rising from thick gray mud next to a pungent, 30,000-cow feedlot.
Much of what happens in its tanks and pipes is typical of any large distillery—after all, people have been turning grain into alcohol for eons. The corn is ground, mixed with water, and heated; added enzymes convert the starch into sugars. In a fermentation tank, yeast gradually turns the sugars into alcohol, which is separated from the water by distillation. The leftover, known as distillers’ grains, is fed to the cows, and some of the wastewater, high in nitrogen, is applied to fields as a fertilizer.
The process also gives off large amounts of carbon dioxide, and that’s where ethanol’s green label starts to brown. Most ethanol plants burn natural gas or, increasingly, coal to create the steam that drives the distillation, adding fossil-fuel emissions to the carbon dioxide emitted by the yeast. Growing the corn also requires nitrogen fertilizer, made with natural gas, and heavy use of diesel farm machinery. Some studies of the energy balance of corn ethanol—the amount of fossil energy needed to make ethanol versus the energy it produces—suggest that ethanol is a loser’s game, requiring more carbon-emitting fossil fuel than it displaces. Others give it a slight advantage. But however the accounting is done, corn ethanol is no greenhouse panacea.
“Biofuels are a total waste and misleading us from getting at what we really need to do: conservation,” says Cornell University's David Pimentel, who is one of ethanol’s harshest critics. “This is a threat, not a service. Many people are seeing this as a boondoggle.” But Wietzki and her colleagues in Mead think they can do better. They hope to improve the energy balance and greenhouse gas benefits of ethanol by creating a closed-loop system—which is where those cows come in. They plan to fire their boilers with methane from two giant four-million-gallon biodigesters fed with cattle manure from the feedlot next door—in effect using biogas to make biofuel. The increased efficiency, she says, isn’t only good for the environment, it’s also good business, especially if the price of corn keeps rising or oil drops below $45 a barrel or so, the lowest price at which ethanol backers say the fuel can compete with gasoline in the U.S. “The last people standing,” Wietzki says, “will be highly efficient producers like us.”
It’s easy to lose faith in biofuels if corn ethanol is all you know. A more encouraging picture unfolds some 5,500 miles southeast of Mead, where the millions of drivers of São Paulo, Brazil, spend hours a day jammed to a standstill in eight lanes of traffic, their engines, if not their tempers, idling happily on álcool from Brazil’s sprawling sugar belt. The country had been burning some ethanol in its vehicles since the 1920s, but by the 1970s it was importing 75 percent of its oil. When the OPEC oil embargo crippled the nation’s economy, Brazil’s dictator at the time—Gen. Ernesto Geisel—decided to kick the country’s oil habit. The general heavily subsidized and financed new ethanol plants, directed the state-owned oil company, Petrobras, to install ethanol tanks and pumps around the country, and offered tax incentives to Brazilian carmakers to crank out cars designed to burn straight ethanol. By the mid-1980s, nearly all the cars sold in Brazil ran exclusively on álcool.
Formula One-loving Brazilian drivers embraced the cars, especially since pure ethanol has an octane rating of around 113. It burns best at much higher compression than gasoline, allowing alcohol engines to crank out more power. Best of all, the government subsidies made it significantly cheaper. Not that ethanol didn’t hit a few bumps in the road. By the early 1990s, low oil prices led the government to phase out the subsidies, and high sugar prices left the sugar mills, or usinas, with no incentive to produce the fuel. Millions of alcohol car drivers like Roger Guilherme, now a supervising engineer at Volkswagen-Brazil, were left high and dry.
“Guys like me had to wait in long lines two hours or more to fuel up,” Guilherme says in his office at the massive Volkswagen plant in São Bernardo do Campo. “Consumers lost confidence in the alcohol program.” A decade later when oil prices started to rise, Brazilians wanted to burn alcohol again, but given their past experience, they didn’t want to be wedded to it. So Guilherme’s bosses gave him a challenge: Find an inexpensive way for one car to burn both fuels. Guilherme’s team worked with engineers at Magneti Marelli, which supplies fuel systems to Volkswagen, to write new software for the engine’s electronic control unit that could automatically adjust the air-fuel ratio and spark advance for any mixture of gasoline and alcohol. Volkswagen introduced Brazil’s first TotalFlex vehicle in 2003, modifying a small soccer ball of a commuter car called the Gol, which means—you guessed it—“goal!” It was an instant hit, and soon every other carmaker in Brazil followed suit.