Ethanol has been viewed as the motor fuel of the future for more than a century—Henry Ford, anticipating eventual petroleum shortages, designed the Model T to run also on it—but it has many disadvantages, both economically and environmentally, and it is not the energy panacea it is often presented to be.
U.S. ethanol production is still minuscule, relatively speaking. In 2006, it amounted to less than 5.5 billion gallons. Because alcohol, when burned, yields only about two-thirds as much energy as gasoline—a fact that explains why your car gets better mileage on pure gasoline than it does on any ethanol blend—those 5.5 billion gallons provided the energy equivalent of 3.5 billion gallons of regular unleaded, or about enough to keep all of America’s gasoline-powered engines running for something like two weeks.
Yet producing even that modest amount required 20 percent of the U.S. corn crop that year, along with billions of dollars’ worth of ill-considered federal subsidies and import restrictions, and contributed to higher prices at American gas stations and grocery stores. It also boosted consumption of natural gas—corn cultivation depends heavily on nitrogen fertilizers, which are manufactured primarily from natural gas, at the rate of approximately 33,000 cubic feet of gas per ton of fertilizer, accounting for approximately 5 percent of the world’s annual gas production—and exacerbated food shortages all over the world. Global food prices rose 83 percent between 2005 and 2008, mainly because of increases in direct energy and fertilizer costs but also partly because of the diversion of foodstuffs, in the United States and elsewhere, into the production of biofuels. (The price of corn alone rose 124 percent between early 2006 and early 2008, from $250 a metric ton to $560.)
The impact has been especially high in the Third World, where even small increases in the price of food can be devastating to entire populations. In 2008, a survey by the World Bank found that many countries had acted to prevent exports of indigenous foodstuffs, in the hope of maintaining local supplies and holding down local prices—the food version of the isolationist national energy policy promoted by many U.S. politicians. These efforts, the Wall Street Journal reported, actually had the opposite effect, by distorting world food markets and driving prices higher. (The article was accompanied by a photograph of a food riot in Haiti.)
Limiting exports—global “locavorism”—necessarily creates shortages in importing countries, as well as inviting trade retaliation. Susan Schwab, who was the U.S. Trade Representative between 2006 and 2009, has said, “If every country in the world decided it wanted to produce its own food for consumption, there would be less food in the world, and more people would be hungry.”
In the United States, agriculture is one of the few reliable export industries. Restricting American-grown foodstuffs to consumption by Americans would drive up food prices at home, exacerbate food shortages abroad, and eliminate one of the few available tools for reducing the staggering U.S. trade deficit.
