Biofuels Mandate: Greenhouse Gas Abatement Costs $750 per Ton

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Drink, don't burn, ethanol

Last year, the 11 billion gallons of biofuels (10.8 billion from corn) produced and sold in the U.S. received $6 billion in tax credits. The Congressional Budget Office released last week a new report, Using Biofuels Tax Credits to Achieve Energy and Environmental Policy Goals [pdf], which made the following devastating findings about U.S. biofuels policy:

The costs to taxpayers of using a biofuel to reduce gasoline consumption by one gallon are $1.78 for ethanol made from corn and $3.00 for cellulosic ethanol. The cost of reducing an equivalent amount of diesel fuel (that is, a quantity having the same amount of energy as a gallon of gasoline) using biodiesel is $2.55, based on the tax policy in place through last year.

Similarly, the costs to taxpayers of reducing greenhouse gas emissions through the biofuel tax credits vary by fuel: about $750 per metric ton of CO2e (that is, per metric ton of greenhouse gases measured in terms of an equivalent amount of carbon dioxide) for ethanol, about $275 per metric ton of CO2e for cellulosic ethanol, and about $300 per metric ton of CO2e for biodiesel. Those estimates do not reflect any emissions of carbon dioxide that occur when the production of biofuels causes forests or grasslands to be converted to farmland for growing the fuels' feedstocks. If those emissions were taken into account, such changes in land use would raise the cost of reducing emissions and change the relative costs of reducing emissions through the use of different biofuels—in some cases, by a substantial amount.

Translation: The biofuel mandate is a stupid, very expensive, and largely ineffective way to try to reduce greenhouse gas emissions.

Reason told you so here, here, and here.

In April, Big Ethanol rolled out a TV ad campaign defending its subsidiies. I now reprise my more accurate alternative to that campaign below:

Opposition to further federal subsidies to encourage the turning of food into fuel is growing. Now the corn ethanol industry and farmers lobby are fighting to keep every penny they drain from the taxpayers' pockets. The ethanol lobbying group, Growth Energy, is rolling out a 12-week $2.5 million national TV ad campaign that aims to persuade policymakers and the public to continue lavishing subsidies on the industry. Some pro-ethanol ad tag lines read:

 -"No beaches have been closed due to ethanol spills. America's clean fuel."

-"Ethanol has not shipped a single job overseas. America's economic fuel."

-"No soldiers have been deployed to defend our ethanol reserves. America's independent fuel."

-"No wars have ever been fought over ethanol. America's peace fuel."

-"We won't have to wait millions of years to replenish our ethanol reserves. America's renewable fuel."

-"Ethanol has contributed $0 to the governments of Iran, Saudi Arabia and Venezuela. America's sensible fuel."

May I suggest some alternative tag lines which might read:

-"No carbon dioxide emissions have been cut due to ethanol subsidies. America's greenhouse fuel."

-"Ethanol tax subsidies increase unemployment by reducing consumers' incomes. America's job killing fuel."

-"Police have been deployed to put down ethanol caused food riots. America's starvation fuel."

-"Food trade wars have broken out over ethanol caused food price spikes. America's protectionist fuel."

-"We have to wait more than 100 years to pay off ethanol's carbon debt. America's global warming fuel."

-"Ethanol has contributed $0 in taxes to the federal government. America's tax subsidized fuel."

NEXT: Internet Addiction

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  1. “Translation: The biofuel mandate is a stupid, very expensive, and largely ineffective way to try to reduce greenhouse gas emissions.”

    A much, much more efficient way to reduce greenhouse gas emissions is to pay Fresno Dan to watch porn.
    Now, the cynical will say that is something Fresno Dan will do without being subsidized, but I will do even more (let’s not get into whether it is humanly possible to watch porn more than 24 hours in a day), and time spent watching porn is time spent NOT DRIVING. and I’ll do it for a mere 500$ a ton of porn.

    1. That is fucking awesome

    2. Per ton of what?

      1. Ejaculate. Get to work, Dan!

      2. emissions

  2. > -“No beaches have been closed due to ethanol spills.

    hell yeah, I enjoy ethanol spills, but ethanol doesn’t go well with swimming, so I organize my spills elsewhere.

    sorry for off-topic, but the current spill is well underway. 😛

  3. Translation: The biofuel mandate is a stupid, very expensive, and largely ineffective way to try to reduce greenhouse gas emissions.

    SUCCESS!

  4. Ronald, why do you hate Doctor Emmett Brown?

  5. Reason told you so here

    Nice try Ron. Trying not to be a know-it-all by avoiding saying “I told you so”. Too bad all of the Reason articles were penned by yourself.

    1. MP: Obviously, Reason’s editors had the good sense to publish my columns on the topic. 🙂

      1. Who actually receives the subsidies? Does BP get any?

  6. Those estimates do not reflect any emissions of carbon dioxide that occur when the production of biofuels causes forests or grasslands to be converted to farmland for growing the fuels’ feedstocks. If those emissions were taken into account, such changes in land use would raise the cost of reducing emissions and change the relative costs of reducing emissions through the use of different biofuels?in some cases, by a substantial amount.

    Cue the progressives/liberals/statists/pie in the sky dreamers to claim that the next time the feds address energy policy and greenhouse gas emissions they’ll get it right.

    1. They can make no mistakes!

    2. Big Oil secretly added all of these extra costs.

    3. But think bad it would be if they had not acted when/how they did.

  7. -“Ethanol has contributed $0 in taxes to the federal government. America’s tax subsidized fuel.”

    Come on, Ron: adding ethanol reduces effective fuel mileage, so drivers fill up more frequently, paying additional per-gallon taxes at the pump.

    1. It also increases engine wear, leading to a fabulous broken windows effect.

    2. I have hundreds of small engines in my rental fleet. Here’s my take on ethanol as a fuel in terms of performance.

      IT SUCKS

      It absorbs water, including humidity. It’s corrosive to metal, including aluminum. It fouls carburetors. It eats a lot of plastics found in older engines. It shortens the usable lifetime of stored gasoline to barely a month.

      I add Star-Tron to all of my gasoline fuel just to compensate for the problems ethanol creates (it does work). Thus, increasing the cost even more for fuel that I already contribute tax dollars to.

      In case I didn’t mention it before.

      IT SUCKS

      1. (index fingers lodged in ear canals) la, la, la, la, la, la, la, la, etc.

  8. Given that reducing greenhouse gasses is a stupid goal, the fact ethanol is a stupid way to achieve that stupid goal isn’t a very good argument against it.

    OTOH, the only halfway good argument I’ve heard for ethanol subsidies is that it could provide a buffer against catastrophic food shortages.

    Now, if they would lift the stupid tariffs, we might be able to import sugar cane ethanol from Brazil at something like a reasonable cost.

    1. What? Big Sugar is already hurting as $1.8B state of Florida’s Everglades buyback becomes a $600M deal. Now you want them to compete with furriners? Do you keep your monocle in a case lined with baby skin, too?

      1. Yes, but I only use Caucasion baby skin. I’m not a racist.

        1. I only use Caucasion baby skin…

          …cause you’re a Racist!!!

    2. But we’re subsidizing the production of the food that is making us obese – and then offering it as food aid to starving people and destroying their local economy.

      http://www.independent.co.uk/n…..61903.html

      Corn products are just a short term solution that will cause greater, more expensive, more devastating problems in the future.

      1. The answer is to stop giving it away, not to stop growing it.

        1. No, high fructose corn syrup and other corn products are largely responsible for the quantity of obese people in the US and a variety of other health issues.

          Then, we try to give to starving countries – effectively exporting our health problems.

          If we stop giving it away, we’d be selling it to people who have no money in the first place. African villagers aren’t buying corn, charities are. Also, there is a large fee to ship the corn to Africa making the corn very expensive to buy.

          We grow so much corn because the industry is propped up by subsidies – it’s just another bubble created by government intervention.

          Don’t stop growing it entirely, but the bubble needs to burst in order for the supply to meet the demand.

          1. What?! Have high fructose corn syrup and other corn products suddenly started jumping in the mouths of all the obese people? I need to know because our family lives close to a cornfield. The last thing I need for that sneaky stuff to get into our house at night while we’re sleeping…and well, I don’t even want to think about it now.

            Oh, wait. You’re saying that people were tricked into their breakfast of three Mountain Dews and their Nutty-Bar-lunch.

            You know what? I really don’t know what you’re saying, expect that it seems like people only have a small responsibility in their own obesity. Thank God it’s those dastardly marketing geniuses making me fat, and not me.

            Now,where are those Nutty Bars?

            1. I agree 100% that people are responsible for what they consume. Don’t get me wrong – but when the FDA endorses a particular diet, which they shouldn’t be, some sheeple are going to follow it.

              And also, Americans have a choice of what to eat – when we start shipping the stuff to starving people, they kind of have to eat it.

          2. “…high fructose corn syrup and other corn products are largely responsible for the quantity of obese people in the US and a variety of other health issues.”
            Bullshit, those problems are caused by people who are either unwilling to moderate their consumption or unwilling to exercise to a degree sufficient to burn off the amount they are consuming. I certainly agree about the need to end agricultural subsidies, but make no mistake, corn farmers are not forcing anyone to eat too much.

            1. Partially true. Obesity is caused by people with lots of money (in historically relative terms) and lots of technology consuming more calories and living a sedentary lifestyle.

              The fact that the bulk of our calories come from HFCS is just a side note. We’d be doing it on Cane Sugar or honey if HFCS weren’t around.

          3. Table sugar = 50% fructose
            HFCS 55 (type used in most food applications) = 55% fructose.

            It’s not eating the high fructose corn syrup that is causing obesity, it is just people eating too much of the wrong foods (but, by personal choice).

            Lay off the HFCS.

  9. The costs to taxpayers of using a biofuel to reduce gasoline consumption by one gallon are $1.78 for ethanol made from corn and $3.00 for cellulosic ethanol.

    From what I gather, that’s on TOP of the cost to buy a gallon of ethanol.

    -“No beaches have been closed due to ethanol spills. America’s clean fuel.”

    No beaches have been closed due to mocha frappuccino spills either. That’s because neither have happened, yet.

    Idiocy.

    1. OMG!?! Closing a beach? The chaos that would ensue would be utterly tragic!

    2. OM, it is obvious you didn’t read the report.

      Why doesn’t this surprise me?

      Come on, tell me how they calculated that 1.78 figure! Prove to me that you have the attention span of at least a five year old.

  10. “We’re farmers; we don’t have to make sense.”

  11. And yet thousands of young people suffer ethanol poisoning every year. I think we must ban ethanol for teh chirrens!

  12. Translation: The biofuel mandate is a stupid, very expensive, and largely ineffective way to try to reduce greenhouse gas emissions.

    But . . . but . . . but . . .

    Energy independence!
    Green jobs!
    Feels good!
    Doen’t fund Ayr-Ab “terrorist” nations!
    Makes people believe they are saving Gaia!
    It’s like throwing virgins to the Volcano God! Makes god happy! We saved!

  13. The worst part of the whole ethanol subsidy boondoggle is that as long as Iowa remains one of the early major presidential primaries, there will never be an honest discussion about farming subsidies. Candidates simply cannot afford to walk in to Iowa saying “we need to cease subsidizing the ethanol industry” and expect to get any votes. It’s like having a presidential candidate go to the New Hampshire primary and say we need to stop living so freely. It’s a death sentence.

    Until Iowa is removed from the early primary schedule this isn’t going to change.

    1. Until Iowa is removed from the early primary schedule hell freezes over this isn’t going to change.

      FIFY

    2. It’s like having a presidential candidate go to the New Hampshire primary and say we need to stop living so freely. It’s a death sentence.

      I seem to recall more than one major party candidate who went to New Hampshire with that message and went on to win the Presidency. It hardly seems a death sentence.

      1. Here’s Obama’s New Hampshire Primary Speech. I’m assuming you’re referring to the Hope’N’Changester.

        Now, you and I both know (and knew) that he was saying that, but the speech didn’t spell it out and no one in the press would call him out about “spreading the wealth” or any of that other crap. I don’t think this is a valid example.

        I’m saying that in context of the Iowa primaries and ethanol subsidies, it’s next to impossible to come out of that primary without pandering to the locals. Thus, the subsidies aren’t going anywhere for a long, long time.

  14. So you hate Doc Brown, too, Old Mexican?

    This is so sad – I thought “Back to the Future” was our future…BIONUKES!!

    *sulks and walks away, thinking of the unfairness of it all*

  15. And … you ca-ca-ca-can’t drink gasoline! I mean, m-m-much gasoline.

    1. Hey Foster, Ron White has stolen your act.

      1. Except that with Foster, it was just an act.

  16. I’d like to be the first to congratulate Ron on a pretty darn good alt text. May it be the first of many!

  17. Has anyone else noticed how racist these alternative fuel campaign commercials are? Have you guys seen the one where they show all of these scary looking Arabs (in full Arabian garb of course) talking on cell phones while the narrator talks about how all of the money we spend on oil goes into the hands of our enemies.

    How is it that the very same people who claim to be so concerned about why they hate us think it is just fine to run such a racist ad. I don’t know about you, but I don’t think that the mere fact that the money we spend on oil happens to go to some Muslims is that big of a deal.

    1. This is on a billboard in my neighborhood. Fucking stupid.

      1. Yeah it is on buses all over DC. But the very same people would have kittens if Obama ever wanted to actually do anything about Iran. It is the height of cynicism.

        1. Not to mention WE DON’T GET ANY FUCKING OIL FROM IRAN.

          1. Yeah, but Iran is run by a scary looking swarthy guy.

          2. The billboard doesn’t claim that. It just claims Ahmadinejad is making money off our dependence on foreign oil. Maybe he’s just really good at the futures market.

            1. What’s ridiculously stupid about the claim that the 15% of the oil we get from the middle east means we support terrorist regimes is that if we stopped buying that 15% from the middle east it’s not as if no one else would. It’s a claim that is easily refuted factually.

          3. We get only a relatively small percentage of our oil from the entire Middle East. Somewhere between 15-20%. Certainly not enough on its own to justify our meddling there. We do that primarily for political and global economic reasons, not so much for “oil.”

      2. Got a link that isn’t blocked? r absent that, a description?

        1. If it’s the same billboard I’m thinking of, it basically says that Iran is making money off of American’s using oil. And we should immediately pass this special legislation to prevent it.

          1. It is the same billboard.

    2. The ethanol industry is concerned about why Arabs hate us?

      All of the people who you disagree with don’t necessarily agree on everything.

  18. The food riots were not caused by US ethanol subsidies as much as they suck.

    It was caused by speculation in commodities markets by you know who, Goldman Sachs, JP Morgan, etc.

    The way they went about it, food prices skyrocketed even though actual food reserves were quite high (record production for some commodities).

  19. But think of the technologicial innovation that subsidies for “green industries” provide! In Europe they have managed the scientific feat of producing solar energy at night.

    http://www.businessweek.com/ne…..ation.html

  20. I can’t believe nobody has commented on this. Bailey made a comical alt-text, and it was half-decent! I thought I’d never see the day.

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