Part I examined the true costs of ethanol and windpower to find that both were highly uneconomic compared to their alternatives. Both government-dependent fuels are also inferior products, making a straight comparative cost comparison misleading.
The environmental characteristics of both ethanol and windpower are also problematic compared to their more energy-dense, consumer-preferred alternatives.
Is Ethanol Green?
Given the high cost of the ethanol mandate, the putative benefits – energy independence, green jobs creation, environmental improvement – come at a steep price. But costs aside, there are other reasons to doubt whether these benefits are real. The gulf between hype and reality is perhaps greatest when it comes to environmental performance.
The negative environmental externalities associated with petroleum-derived fuels – particularly oil spills, air pollution, and greenhouse gas emissions – have long been a major focus of the environmental movement and federal regulators. Thus, many simply assumed that ethanol, by supplanting some of the gasoline supply, would be an improvement. Unfortunately, the mandate is teaching us, the hard way, that ethanol has plenty of its own environmental negatives.
Environmental organizations have raised concerns about the increased inputs of energy, pesticides, and fertilizer to grow the additional corn now needed to meet fuel as well as food demand. The same is true for the stress on water supplies, especially now that corn production has been expanded into locales where rainfall is insufficient and irrigation is needed. Land previously in its natural state has been converted to cropland. The facilities that distill the corn into ethanol also require significant energy and water inputs and produce industrial emissions.
The use of ethanol in motor fuel has had a mixed impact on air quality. It lowers some types of pollutants, such as carbon monoxide, but increases others, such as the evaporative emissions that contribute to smog. In fact, certain high-volatility components of gasoline must be removed before adding ethanol in order to prevent the overall blend from violating Clean Air Act requirements in high smog areas.
The biggest environmental disappointment with ethanol has been its impact on greenhouse gas emissions. Proponents of the mandate insisted that ethanol would be responsible for significantly lower carbon dioxide emissions than the gasoline displaced, but researchers have challenged this assertion and found the emissions reductions fairly modest. Other studies conclude that ethanol and other biofuels actually increase emissions, once the impacts of turning carbon-storing forests and grasslands into additional cropland are taken into account.
Even giving ethanol the benefit of the doubt regarding carbon dioxide emissions reductions, the Environmental Protection Agency draft regulatory impact analysis estimates the impact on future temperatures from the mandate at less than 0.01 degrees C by 2100, essentially meaningless. The Congressional Budget Office puts the cost to taxpayers of each ton of carbon dioxide reduced at $750 per ton, making it one of the most expensive ways of reducing emissions.
It is worth noting that many of the same reasons why ethanol is a bad deal for consumers – especially the corn and other resource inputs that make large-scale ethanol production uneconomic absent federal assistance – also undercut the supposed environmental benefits.
Is Wind Power Green?
Like ethanol, increased use of wind would also fall well short of the environmental hype, and for similar reasons.
An RES would require vast expanses of land to be dotted with wind turbines, and the environmental impacts (not to mention the effects on nearby residents) are far from trivial. The same is true of the many new transmission line routes that would be needed. Though most environmental organizations still support an RES in principle, several are already active trying to block many if not most proposed wind farms and new transmission lines, based on environmental concerns.
As with ethanol, the primary green selling point with wind has been the promise of greenhouse gas emissions reductions. And, as with ethanol, the reality should be a major letdown for anyone seriously worried about global warming.
The simplistic notion that the addition of wind means the subtraction of carbon dioxide-emitting coal and natural gas generation has failed to take into account wind’s limitations. As discussed above, in order to integrate wind the rest of the system must be operated in an inefficient – and thus higher-emitting – manner to compensate for the on-again off-again nature of wind. This is particularly problematic for coal-fired generation, which is ill-suited to be cycled, but also to an extent for natural gas.
Such system-wide accommodations for wind not only add to the cost of an RES, but also undercut or eliminate the promised carbon dioxide emissions reductions (as well as NOx and SOx emissions that contribute to air pollution). This is proving to be the case in pro-wind nations like Denmark, where increased emissions from coal negate any savings from wind. And in Colorado and Texas, state-mandated renewable standards more aggressive than in Denmark have led to an overall increase in carbon emissions as coal and natural gas plants are inefficiently cycled to accommodate wind. This suggests that emissions increases will only get worse with a national mandate.
Thus, as with ethanol, the very problems that make wind more expensive also make it less environmentally beneficial than proponents claimed. The fact that wind needs a mandate in the first place should be a sign of both economic and environmental disappointment should it be given one.
The only good news with the current ethanol policy is that it has proven to be so problematic that it has garnered a broad base of opposition. It is worth noting that the current debate over extending the ethanol tax credits – in past years a slam dunk given the power of the corn lobby and big ethanol producers like Archer Daniels Midland –has bogged down in Congress. Likewise, EPA’s proposal to allow up to 15 percent ethanol in fuel has also proven to be contentious.
Corn growers may love the current policy, but it has split the agricultural community – livestock and poultry producers who purchase corn as feed face higher prices thanks to the mandate. The food industry has gotten involved. Millions of boat and motorcycle owners and others worried about fuel quality issues have also become active. Many environmental activists, including some who once supported expanded ethanol use, have changed their position and are becoming vocal about it.
And the American public – who has gotten a bad deal at the pump, the supermarket, and as taxpayers – are no longer solidly behind Washington’s ethanol largesse. The ethanol lobby is still very powerful, but the battle has been joined.
The same should be true of wind. Perhaps this time the opposition can come together in time to prevent another regrettable mandate.
Ben Lieberman is an associate fellow in Environmental Policy with the Competitive Enterprise Institute, in Washington, DC.