Letter To The Editor: Response to "The Ethanol Scam"

Rolling Stone received the following letter from Bob Dinneen of the Renewable Fuels Association, a corn lobby, in response to "The Ethanol Scam" [RS 1032].

Click to the jump to read Jeff Goodell's point-by-point response, and read the original piece here

An Urban Chic Straw Man

It doesn't come as a big surprise that a magazine best known for pop-rock reviews and social commentary fails to understand the complexities of world energy markets and the need for ethanol and other renewable fuels ("Ethanol Scam: Ethanol Hurts the Environment And Is One of America's Biggest Political Boondoggles," by Jeff Goodell). What is less surprising, but more disturbing, is the failure of the "journalist" to interview anyone with a working knowledge of the U.S. ethanol industry. Rather, he relies on oil industry reps and ethanol critics pushing personal agendas.

Nevertheless, since Rolling Stone felt the need to opine on America's ethanol industry, it is incumbent upon me to set the record straight.

First, let's address the classic straw man of the food versus fuel argument. Mr. Goodell, channeling the leading progressive minds of our time, Fidel Castro and Hugo Chavez, claims that a rush to ethanol production will starve poor, hungry populations around the world. What he fails to mention is that American farmers are on pace to produce more corn than any time in history. While it may be urban chic to chastise farmers for making a decent living, it doesn't detract from the fact that once again they have answered the call and will continue to feed the world and begin to help fuel a nation.

Stronger prices for commodities around the world encourage more agricultural production in developing nations, providing those farmers more income and an opportunity to improve their quality of life. And a better quality of life leads to less volatility and less likelihood these nations will foster the kind of authoritarians that pose a very real threat world peace. Yes, people like Mr. Goodell's Hugo Chavez.

It is also disingenuous for Mr. Goodell to buy the spin of the nation's largest meat packers and food processors that corn prices alone are what is driving up the price of food. A study done by John Urbanchuk, an independent economist, found that oil and gasoline prices have twice the impact on consumer food prices that corn prices have. Given the current and recent prices of both petroleum products, it becomes pretty clear what the real factor behind rising food prices is. And conveniently left out of this argument is that corn prices are down over $1 since the beginning of the year. One should expect food prices to follow suit, if corn is indeed the culprit for higher prices.

Another popular argument from the status quo crowd is that ethanol makes no economic sense and is dependent upon government handouts to survive. While it is true that the incentives the federal government has put into place have fostered the development of a robust renewable fuels industry in this country, it is not as though that money disappears. In 2006 alone, the production and use of nearly 5 billion gallons of ethanol generated more than $2.7 billion in new tax revenue for the federal treasury, more than $2.3 billion for state and local government coffers, and reduced those pesky farm program payments publications like Rolling Stone loathe by more than $6 billion. All told, the $2.5 billion investment the federal government made in ethanol tax incentives was returned to taxpayers fourfold.

Again, Mr. Goodell omits an important fact in this debate as well. There is no such thing as a free market when it comes to energy. For a century, America's petrochemical complex has been the beneficiary of generous subsidies and preferential tax treatment that have allowed them to become the massive, multinational corporations they are today. I am not arguing for or against these incentives, but merely noting that if we want to move away from fossil fuels, we must understand that it is not a level playing field.

Yet another common misconception offered by ethanol novices is that ethanol is at best energy neutral, meaning it takes as much energy to produce as it yields. As is to be expected, Mr. Goodell relied on the figures of an energy blogger for his facts. Inconveniently for his arguments, the federal government has different figures. According to the Argonne National Laboratories, ethanol yields nearly 70% more energy that it took to produce. Conversely, refined gasoline contains 20% LESS energy that it took to produce. Moreover, ethanol comes from a renewable resource while gasoline relies upon a finite feedstock whose availability continues to tighten.

And finally, only because my fingers are getting tired, Mr. Goodell dismisses out of hand the environmental benefits of ethanol production and use. According to Argonne National Laboratories, ethanol production and use today reduce greenhouse gas emissions by up to 29%. Future ethanol production from cellulosic feedstocks holds the potential to reduce greenhouse gas emissions by up to 90% compared to gasoline. While addressing greenhouse gas emissions and global climate change, ethanol use reduces tailpipe emissions that cause air pollution and has prompted the American Lung Association of Metropolitan Chicago to credit ethanol-blended gasoline with reducing smog formation by 25%.

It is entirely appropriate to have a debate about our energy policy in this country. But it is irresponsible to present one side of the argument without fully understanding the role renewable fuels like ethanol must play in our nation's energy future. Mr. Goodell and Rolling Stone would be doing right by their faithful readers if they would at least consider all the facts.

Bob Dinneen, President
Renewable Fuels Association
Washington, DC
202.289.3835
www.EthanolRFA.org