Summary: Corn ethanol is a mixed bag, and the contentious debate about its virtues and disadvantages has only obscured the reality. It could promote rural economic growth, and likely provides some energy and greenhouse gas benefits, even when produced with the usual mix of fossil fuels. On the other hand, it may be disadvantageous from the point of view of other environmental considerations. In theory, corn ethanol could very substantially reduce our dependence on foreign oil supplies-but only if it offsets a large portion of our gasoline consumption, which it appears unlikely to do. Cellulosic ethanol is an entirely different story, but appears not to be close to large-scale commercial production. Corn ethanol may be useful in providing a transition to cellulosic ethanol, but until cellulosic ethanol is widely available other strategies for achieving some of the same goals-such as increasing vehicle fuel efficiency and promoting hybrid technology and public transportation-are likely to deliver bigger benefits.

In the eyes of their proponents, fuels made from biomass like corn, soybeans, and switchgrass-known as "biofuels"-are a big part of the solution to climate change, air pollution, and our dependence on unstable foreign oil supplies. But the detractors claim that it takes more energy to make biofuels than they supply, and that they are otherwise a bad bargain for the environment. Our aim is to get as close to the truth about biofuels as the current state of knowledge allows.

The core debate around ethanol has centered on whether more energy goes into its production than it actually supplies, with the highly publicized work of two scientists concluding that the energy balance is substantially negative (which is almost certainly incorrect). Unfortunately, the extreme position of the energy balance contrarians, juxtaposed with the enthusiasm of the corn lobby, has obscured a much more nuanced story: corn ethanol can provide both a small to moderate energy and greenhouse gas benefit depending on the conditions of its production (e.g., whether the land on which the corn is grown is already farmed, how much fossil fuel is used to make it). Corn ethanol may be good news for the economy of rural America, although this will depend in part on the sustainability of ethanol-related land use practices. Moreover, although in theory corn ethanol could substantially reduce our dependence on foreign oil supplies, it is unlikely to be produced in sufficient quantities to do so. In fact, converting the country's entire corn crop to ethanol-a clearly untenable idea-would supply only 12 percent of U.S. demand for gasoline.

But if corn ethanol presents an ambiguous picture, cellulosic ethanol does not-except that it is nowhere in the world produced commercially, and probably will not be, at least in substantial quantities, for many years. Cellulosic ethanol is ethanol made from nonfood feedstocks like corn stalks, rice husks, switchgrass, woody plants, and prairie grasses. It may well be the transportation fuel of the future. In the meantime, we should keep in mind that increasing the fuel efficiency of vehicles, promoting hybrid technology, and supporting public transportation will be important companion strategies to the development of biofuels.

We confine our discussion to the use of biofuels for transportation purposes. Although biomass can be burned or gasified to generate electricity and can also be used to make chemicals, it is promoted mainly as a substitute for gasoline and, to a lesser extent, as an alternative to diesel fuel. Our further focus is mainly on one type of biofuel-ethanol made from corn-which currently accounts for almost all of the country's biofuel production. Finally, we focus on E85 (fuel with 85 percent ethanol and 15 percent gasoline) rather than E5 or E10, which are used as oxygenates to help areas meet air quality standards.

This article addresses the following questions:

• Does it take more fossil fuel energy to make corn ethanol than the ethanol provides as a fuel?
• Why should we care about the energy balance for corn ethanol?
• Can corn ethanol help us reduce our reliance on petroleum products?
• How does corn ethanol compare to gasoline in terms of greenhouse gas emissions?
• Is corn ethanol better than gasoline in terms of other environmental impacts?
• Is corn ethanol more expensive than gasoline?
• How much of our gasoline use can corn ethanol replace?
• How does biodiesel do as compared to diesel fuel?
• What is cellulosic ethanol and how does it fit into this picture?

Does It Take more Fossil Fuel Energy To Make Corn Ethanol than the Ethanol Provides as a Fuel?

Answer: No.

The public debate around corn ethanol has focused almost to the exclusion of other issues, on whether it takes more fossil fuel energy to make than it actually provides as a fuel. One way to think about the net energy balance for corn ethanol-which is almost certainly positive-is to think about the fossil fuel inputs as liberators of the corn's solar and chemical energy.

In order to calculate the net energy value of corn ethanol, researchers measure the energy value of the outputs-the ethanol and its coproducts-as compared to the energy of all of the fossil fuel energy inputs. On the inputs side of the equation, corn uses large amounts of synthetic fertilizer (made mostly from natural gas) and pesticides (made primarily from petroleum). Plowing, planting, spraying, and harvesting use diesel fuel; drying the corn after it is harvested requires natural gas. And all of that comes before the corn is distilled into ethanol, an energy-intensive process that also requires fossil fuel. However, on the outputs side there are coproducts like "distillers' dry grain with solubles" (an animal feed), corn gluten feed, and corn oil, in addition to the ethanol itself.

There are many studies of the energy balance for corn ethanol. They reach widely varying conclusions, and are difficult to compare because of differences in the range of assumptions-both about energy inputs and about allocation of energy inputs to coproduct outputs. However, a few recent studies have either evaluated the earlier studies or done their own analysis, and notwithstanding the use of different methodologies they reach similar conclusions: that corn ethanol appears to have a small to moderate net energy benefit.

Here are the remarkably consistent energy balance conclusions of several recent studies of corn ethanol, all of which appear to use reasonable assumptions on farm energy use, corn yields, fertilizer application rates, and the like:

• A report published in the July 25, 2006 Proceedings of the National Academy of Sciences entitled "Environmental, Economic, and Energetic Costs and Benefits of Biodiesel and Ethanol Biofuels" (Hill, J., et al.) concludes that the net energy benefit for corn ethanol is about 25 percent, but that most of that is attributable to its co-products.
• A February 2006 publication of the Natural Resources Defense Council and Climate Solutions, "Ethanol: Energy Well Spent; A Survey of Studies Published since 1990," reports that five out of the six corn ethanol studies reviewed show "renewable returns on nonrenewable energy investment" ranging from 1.29 to 1.65 (a 29 to 65 percent gain). The study characterizes these figures as "a solid renewable energy return on [the]...fossil energy investment."
• An article in the January 27, 2006 issue of Science, "Ethanol Can Contribute to Energy and Environmental Goals" (Farrell, A., et al.) reports that the studies that correctly accounted for coproduct allocation reported that corn ethanol and coproducts "yielded a positive net energy of about 4 MJ/l [megajoules per liter] to 9 MJ/l [i.e., a net energy benefit of between about 18 and 40 percent]. The study that ignored coproducts but used recent data found a slightly positive net energy for corn ethanol."
• A 2002 publication of the U.S. Department of Agriculture, "The Energy Balance of Corn Ethanol: An Update" (Shapouri, H., et al.) finds "an energy ratio of 1.34; that is, for every Btu dedicated to producing ethanol there is a 34 percent energy gain."

The highly publicized work of only two scientists, David Pimentel and Tad Patzek, take the view that the energy balance for corn ethanol is substantially negative. All of the studies cited above conclude that the work of Pimentel and Patzek is fundamentally flawed. Among other things, it fails to assign energy inputs to coproduct outputs correctly; uses unrepresentative and poorly documented data (e.g., energy values for farm machinery that are more than an order of magnitude greater than values reported elsewhere); and includes energy inputs that other studies do not include, such as the energy costs of manufacturing farm equipment.

Why Should We Care about the Energy Balance for Corn Ethanol?

Answer: We shouldn't, unless we think of it as a surrogate for other considerations.

Notwithstanding all of the above, we think the energy balance debate is something of a red herring. Although much of the argument about ethanol has centered on this question, it is hard to figure out, once one really drills into it, why it matters-unless energy balance is really a surrogate for other considerations, like climate impact, air pollution, cost, and dependence for oil on unstable and unsavory regimes. If it took a huge amount of wind power (for which we did not have other uses) to make a small amount of ethanol, wouldn't we say this was a problem mostly because of the cost? And if it took lots of coal to make a little ethanol, wouldn't we balk at the climate and other environmental impacts? Considered in this light, the energy balance, in and of itself, does not appear to be the proper focus of concern.

Can Corn Ethanol Help Us Reduce our Reliance on Petroleum Products?

Answer: Yes.

Gasoline is refined from crude oil, or petroleum, about 60 percent of which comes from foreign sources, while corn and other ethanol feedstocks are home grown commodities. Moreover, many people believe that the world is soon to run low on oil (see July/August 2004 issue of Environmental Energy Insights). Although it takes energy to make ethanol, most of that energy typically comes from coal and natural gas, of which there are abundant domestic supplies.

A 2002 U.S. Department of Agriculture study evaluates the net energy gain for corn ethanol from the perspective of petroleum product (i.e., gasoline, diesel, and fuel oil) use, which gives an estimate of the petroleum displacement value of ethanol. According to the study, only a small amount-about 17 percent-of the energy used to make corn ethanol comes from petroleum products, with the rest primarily from coal and natural gas. The researchers conclude that one British thermal unit (Btu) of liquid fuel, used with other forms of energy (e.g., coal, natural gas), will produce 6.34 Btu of corn ethanol. In other words, to the extent that we substitute corn ethanol for gasoline, we greatly decrease our reliance on petroleum products.

How Does Corn Ethanol Compare to Gasoline in Terms of Greenhouse Gas Emissions?

Answer: Corn ethanol is slightly better, assuming favorable production methods.

If making corn ethanol simply involved burning the same carbon that a plant just recently removed from the air, then corn ethanol would have a big greenhouse gas advantage over gasoline. But this is overly simplistic for a number of reasons. For one, agricultural practices like tilling (in the growing and harvesting of corn) result in greenhouse gas emissions. For another, as we have already discussed, fossil fuels are implicated in making corn ethanol-for example, in manufacturing fertilizer, plowing fields, and distilling corn into ethanol. Additionally, carbon dioxide is not the only greenhouse gas in this picture because nitrogen fertilization can cause the release of nitrous oxide, a powerful greenhouse gas.

That said, the article published in the Proceedings of the National Academy of Sciences (referenced above) concludes that production and use of corn ethanol provides a 12 percent net reduction in greenhouse gases as compared to an energetically equivalent amount of gasoline. However, the authors caution that this estimate assumes that the corn is grown on land already in production, and that converting intact ecosystems to production would reduce or even reverse the greenhouse gas benefit.

The authors of the January 2006 Science article reach a conclusion that is surprisingly similar in light of the differences in methodologies between the two studies. They conclude:

The impact of a switch from gasoline to ethanol has an ambiguous effect on GHG emissions, with the reported values ranging from a 20% increase to a decrease of 32%...Our best point estimate for average performance today is that corn ethanol...reduces GHG emissions only moderately, by about 13%.

A 2005 study out of the Argonne National Laboratory, "Well-to-Wheels Analysis of Advanced Fuel/Vehicle Systems: A North American Study of Energy Use, Greenhouse Gas Emissions, and Criteria Pollutant Emissions" (Brinkman, N., et al.), reaches a consistent conclusion: E85 has a total greenhouse gas emissions benefit of 18 percent.

These studies assume the current fuel mix or something close to it for the production of corn ethanol; a significant shift in that mix would obviously change the greenhouse gas emissions profile for ethanol. Currently, natural gas plays a significant role in ethanol production. However, coal has much more carbon per unit of energy than does natural gas, and many of the new ethanol plants on the drawing board will use coal rather than natural gas because of the price differential between the two. If this trend holds, it will reduce-or even reverse-the small greenhouse gas benefit of corn ethanol relative to gasoline.

Is Corn Ethanol Better than Gasoline in Terms of other Environmental Impacts?

Answer: Doubtful.

There is remarkably little information available on the other environmental impacts of corn ethanol from a life-cycle perspective. However, agrichemicals, especially nitrogen and phosphorus, and pesticides have significant environmental impacts, including the eutrophication of coastal waters, loss of biodiversity, and contamination of drinking water.

One study, the "Well-to-Wheels Analysis" referenced above, does quantify the life-cycle air pollution impacts of corn-based E85 as compared to gasoline, showing a small total increase in emissions of volatile organic compounds and carbon monoxide, and a sizable increase in emissions of total nitrogen oxides, particulate and sulfur oxides on a Btu or grams per mile basis.

However, when urban areas are considered separately as a subset of total emissions, the study shows quite different impacts, with reductions in all of the pollutants just enumerated. This is because ethanol is produced mostly in non-urban areas, which experience the air pollution impacts of the agricultural activities and ethanol manufacture. However, the main effect of ethanol in urban areas comes from its displacement of gasoline. Given the paucity of information on the air pollution impacts of corn ethanol, particularly as a result of tailpipe emissions, this issue needs further study.

Is Corn Ethanol more Expensive than Gasoline?

Answer: Yes.

E85 has 72 percent of the energy of gasoline. To be truly cost-competitive, the price at the pump must reflect that differential; for example, when regular gasoline is priced at $3.00 per gallon, E85 should cost $2.13 per gallon for the prices to be the same on an energy equivalent basis. Although the prices of both gasoline and ethanol vary over time and from region to region, ethanol has generally been more expensive than gasoline.

Subsidies for corn ethanol and gasoline are difficult to sort out, and that enterprise is beyond the scope of this article. Suffice it to say that both are heavily subsidized in a variety of ways, including federal crop subsidies for corn and indirect subsidies for gasoline that should include at least some portion of the country's defense budget.

How Much of our Gasoline Use Can Corn Ethanol Replace?

Answer: Currently, we're at about two percent. Going a lot higher would require the production of large amounts of cellulosic ethanol.

At the moment, there is a large gap between facts and aspirations.

The Ethanol Promotion and Information Council, the Department of Energy, and the Natural Resources Defense Council (organizations that do not always find themselves on the same page) have high hopes for the future of ethanol, but those hopes appear to reside mainly with cellulosic rather than corn ethanol. Here is what they say:

• According to the Ethanol Promotion and Information Council, ethanol can displace one-third of the unleaded gasoline used in the U.S. by 2025.
• The Department of Energy has adopted a strikingly similar goal, with the aim of replacing 30 percent of the gasoline and diesel fuel used for transportation with biofuels by 2025.
• NRDC sees biofuels replacing gasoline by 2050 if cars are also made more fuel-efficient and a program of "smart growth" is put in place.
• All of these projections assume the availability of cellulosic ethanol.

Now, the current reality:

• About 95 percent of all ethanol in the U.S. is made from corn.
• In 2005, about 14 percent of the country's corn harvest was processed to make an amount of ethanol energetically equivalent to slightly less than two percent of U.S. gasoline usage.
• Devoting the entire U.S. corn harvest to ethanol in 2005 would have offset 12 percent of U.S. gasoline demand.
• There is currently no commercial production of cellulosic ethanol (see below).
• Only 600 of the country's 180,000 gas stations are currently equipped to dispense E85 ethanol.

So, optimistic estimates of ethanol production assume the availability of cellulosic ethanol, which is not commercially available and is unlikely to be for some time. Also, although it is perhaps the least of our problems, the country has virtually no infrastructure for dispensing ethanol.

How Does Soybean Biodiesel Do as Compared to Diesel Fuel?

Answer: Much better in most respects.

The study reported in the Proceedings of the National Academy of Sciences addresses biodiesel made from soybeans in addition to ethanol made from corn. Although the article is not clear about the diesel blend that is being evaluated (B20, or 20 percent biodiesel/80 percent diesel is typical), its conclusions on energy balance, greenhouse gas emissions, and air pollution are more optimistic for biodiesel than for corn ethanol. However, this optimism should be offset by the assessment of supply: devoting the entire 2005 U.S. soybean crop to biodiesel would have offset only six percent of diesel fuel demand.

According to the study:

• In 2005, biodiesel from soybeans made from 1.5 percent of the U.S. soybean harvest supplied 0.09 percent of the country's diesel fuel.
• Soybean biodiesel provides about 93 percent more energy than its production requires.
• Soybean production requires a small fraction of the nitrogen, phosphorus and pesticides that it takes to grow corn.
• Biodiesel blends reduce carbon monoxide, particulate matter, and sulfur oxide emissions relative to diesel fuel (which is not the case for E85 relative to gasoline). Some studies show a small increase in emissions of nitrogen oxides.
• Greenhouse gas emissions of soybean biodiesel are 59 percent of diesel fuel greenhouse gas emissions-again, better than for corn ethanol (assuming land already in production).
• In 2005, estimated soybean diesel production cost was $0.55 per energy equivalent liter, as compared to the average diesel wholesale price of $0.46 per liter.

What Is Cellulosic Ethanol and How Does It Fit into this Picture?

Answer: Cellulosic ethanol scores high on all the measures we have discussed. The problem is that it is not produced commercially and is likely a long way from large-scale commercial production.

Cellulosic ethanol is ethanol made from nonfood feedstocks like corn stalks, rice husks, switchgrass, woody plants, and prairie grasses, most of which are available on a large scale. The feedstocks come from activities unrelated to making ethanol (including from waste agricultural products), and also from crops grown for the primary purpose of energy production. Dedicated energy crops like switchgrass can be produced on agriculturally marginal lands with little or no fertilizer and pesticides. Perennial grasses actually reduce erosion, may increase soil fertility, and improve water quality and wildlife habitat.

Whereas the energy balance studies cited above for corn ethanol all show energy ratios well under 2.00, credible studies find an energy return on investment for cellulosic ethanol in the range of 4.40 to 6.61 (i.e., a 440 to 661 percent return on energy investment). One of the biggest reasons for the difference is that the manufacturing process consumes the entire plant, including lignin. Lignin is the nonfermentable component of the plant; it can be burned to fuel the ethanol production facility. In fact, many models assume that the heat from the lignin combustion will actually exceed the heat required to make ethanol and will be available to generate surplus electricity. Partly as a result of this difference in the production process, greenhouse gas emissions are much lower than for corn ethanol, and lower still than the emissions attributable to the use of gasoline.

But here's the rub: there is no commercial production of cellulosic ethanol anywhere in the world. Cellulosic ethanol is a significant source of hope for the future, but the operative word here is "future." Iogen Corporation, an Ottowa-based biotech company, has a pilot demonstration plant up and running, and other companies boast that they will have commercial plants in operation before Iogen does, but many scientists believe that large-scale commercial production of cellulosic ethanol is not around the corner.

Cellulose and hemicellulose-a substantial portion of the cellulosic biomass-are insoluble. The production process for cellulosic ethanol will likely involve pretreatment to make the biomass accessible to cellulose enzymes, followed by enzymatic hydrolysis to break down the cellulose fibers and then by an improved fermentation process. The Natural Resources Defense Council is a big proponent of cellulosic ethanol. But in its February 2006 study cited above ("Ethanol: Energy Well Spent; A Survey of Studies Published since 1990") it reports that "the technology to produce this type of ethanol is still being developed and is far from mature."

The topic of ethanol has become badly garbled by a loud debate between those who argue that it takes more energy to make the fuel than it is worth, and those who tout it as the hope of rural America and the solution to dependence for oil on unsavory regimes (and on Prudhoe Bay...). Neither view is accurate. If sustainably produced, its overall benefits probably outweigh its disadvantages by a small margin.

An additional benefit of corn ethanol is its potential to provide a transition to the use of cellulosic ethanol. For example, only 600 of the country's 180,000 gas stations are equipped to dispense ethanol. Corn and cellulosic ethanol are chemically identical, and the same infrastructure could support both.

We are years away from widespread commercial availability of cellulosic ethanol, although this is a worthy goal. It is important not to confuse the small benefits of corn ethanol with the very substantial advantages of cellulosic ethanol.

Like cars that run on hydrogen, vehicles that run on biofuels are likely in our future. In the meantime, there are many strategies that can deliver substantial benefits now, like increasing the fuel efficiency of vehicles, promoting hybrid technology, and supporting public transportation. Futuristic scenarios should not be allowed to undermine strategies that can usefully be deployed in the present.