A White Paper - November 23th 2010
Corn Based Ethanol—the Rest of the Story
Bill Holmberg, Chairman, Biomass Coordinating Council, American Council On Renewable Energy -- an Early
(1974) Ethanol Pioneer
There are two well advertized stories being positioned to determine the energy future of liquid
transportation fuels in the United States. In this struggle for market share (fossil versus renewables) there are
five additional chapters to the story not being adequately considered by the public and governmental
decision makers in determining the best transportation fuel options for the U.S.
Two Competing Industrial Teams Struggling for Public Attention and Favorable Support:
A) Big Oil and Refiners; Grocers Manufacturing Association; major food processors; associations of
animal feeding industries; and, well-intentioned environmentalists relying on old data, or having
been duped by powerful political and financial propaganda machines determined to control the
transportation fuels market and influence the downward price of corn to increase profits to the
disadvantage of farmers and tax payers.
B) The starch-based (corn) ethanol industry and the corn growers who have improved their
efficiency and their corn production markedly over the past quarter century, but who have been
slow in adequately responding to legitimate concerns of the environmental and wildlife
communities, and in articulating their worries about the corn-ethanol impact on the food versus
fuel, land use, and water issues.
Chapter One: Energy and National Security. The U.S. continues to import over 62% of its oil and 30% of
its petroleum products and gasoline at a cost to the nation of about $400 billion a year -- a good portion
of which goes to nations unfriendly to our best interests. Additionally, there are high U.S. military
expenditures committed to protecting the sea lanes used in transporting oil and gas. Also the
vulnerability of the concentrated transportation fuel networks must also be considered in light of
current national security challenges and possible attacks by terrorists. Dispersed, domestic
transportation fuel production and availability are becoming important factors.
Chapter Two: Cost to Human Health. Reported estimates of the medical costs associated with burning
gasoline are underestimated because they do not include the costs associated with birth defects caused
by fossil fuel combustion products or Polycyclic Aromatic Hydrocarbons (PAH). In a recent Washington
Times article, Boyden Gray and James Woolsey used EPA’s own cost estimates for airborne aromatics to
conclude that those costs are over One Hundred Billion annually. Gasoline emissions are the major
source of toxics our children and their parents are exposed to daily. Yet, the EPA does not recognize
gasoline’s mutagenic properties and associated birth defects in any assessment of the medical costs
associated with gasoline emissions. The EPA concludes enforcing the clean air act’s restrictions on
aromatics would cost too much. But short chain hydrocarbons like ethanol simply do not contain or
produce aromatics on combustion, and provide the needed octane in gasoline at no added costs to the
consumer.
Gasoline’s PAHs are identical to the PAHs, the primary toxics found in cigarette smoke. The mutagenic
properties of these PAHs are known, and numerous studies readily recognize the birth defects
associated with second hand smoke. Recent UCLA research, “Air Pollution’s Impacts on Infants and
Children,” addresses birth defects associated with even low density traffic. The study concludes traffic
pollution leads to up to a 30% increase in preterm births and a similar increase with infant mortality and,
"Certain vulnerable population segments -- the poorest and most exposed -- may experience much
higher risks."
The most logical and cost effective way to reduce the medical costs associated with gasoline emissions is
for the EPA to withdraw its exemption for mobile source fossil fuel aromatic emissions (benzene,
toluene, xylene), making way for cleaner-burning additives and fuels.
Chapter Three: Science and Technology delays and advances. In 1939, the U.S. established a USDA
laboratory in Peoria, IL dedicated, in part, to the production of ethanol from cellulosic biomass. Seventy
years later, commercialization is still elusive. A recent study from the Department of Agriculture raised
concerns about the economics of biofuels from plant cellulose and suggested that federal funds be
poured into algae and oil crops. "After two decades of research without a sustainable technical
breakthrough to make cellulosic ethanol competitive, it appears that it is time to re-evaluate the
research," the report noted.
In the world of biomass, the easiest way of converting sunlight into usable energy is: first through
sugars, then starches, starch/proteins, hemicellulose/cellulose, and then lignin. The starch/protein team
(corn and milo), could reach 15 billion gallons by 2013, providing hundreds of thousands of jobs and
generating tens of billions of dollars in taxes, savings and business operations per year to the benefit
the public. On Election Day 2012, we will likely still be importing over 60% of our transportation fuels
while the hemicellulose/cellulose/algae industries will hopefully be on their way producing about 1/2
billion gallons of fuel (about 3% of the corn-based capacity) with comparatively limited job
opportunities. It will be some time in the future before these promising industries overtake the
sugar/starch/protein team as this team continues to increase efficiency and expand their feedstock base
to include sugar cane, sweet potatoes, sunspuds, sweet sorghum, small grains like barley, and sugar
bearing grasses. Perhaps 2020 would be a possibility. In the meantime, the sugar/starch/protein team
will do the heavy lifting for America – and this includes turning concerns about the buildup of
greenhouse gases into profitable businesses by recognizing that biomass, soils and the oceans (also
involving biomass) are the biggest carbon sinks in the world.
Chapter Four: Advances in Technology. Advances in science and technologies are providing lighter,
more efficient and powerful engines benefiting from the clean burning, high octane, and the single
molecule characteristic of ethanol. These benefits are not found in gasoline or in some of the advanced
“drop in” fuels.
Continuing advances in science and technologies used to produce sugar/starch/starch protein and
vegetable oils into ethanol and biodiesel, also lend themselves to profitable smaller-scale biorefineries
suitable for “family farmers” and rural communities. Properly managed, with nationbuilding/community-building incentives, these enterprises will bring families and younger life back to
farming and forestry businesses to the betterment of the people, the environment and the planet. They
will also add, through dispersed systems, more to our energy and national security while creating
meaningful jobs.
With advanced science and technologies in satellites, GPS systems, and computers; and scientists
trained in soils, water, wildlife, microbes, statistics and modeling, it will soon be possible to remotely
determine, reinforced by on-site measurements, natural conditions on a pixel bases (30 meters by 30
meters square). This capability will provide the potential of ensuring that each pixel of land is
maintained at its optimum, sustainable productivity level to include: biomass growth, water
conservation, soil vitality, productive fish and wildlife habitat (cover, water, food), and positive
greenhouse gas measures (reductions in CO2, methane and N2O). This capability, already commercially
operational on a limited bases, will continue to evolve over time as the technology and resources
become available. This will not only ensure broad-based optimum productivity and sustainability on
farms and forests/woodlots, but will also create thousands of quality jobs for people as caretakers of our
lands while producing sustainable biomass feedstocks for food, feed, fiber, fuel, fertilizers and chemical
feedstocks. Greatly underestimated, chemical feedstocks from biomass are producing a widening range
of products -- anything not made from minerals or metals can be made from biomass; from solvents and
pharmaceuticals to auto parts.
In short, the food versus fuel and indirect land use concerns will be well managed to the benefit of
humans, animals and natural systems.
Using these scientific and technological advances, and the creativity and determination of the American
people, biomass will continue to play a major role in meeting national needs in the food, feed, fiber,
fuel, fertilizers and chemical feedstocks fields while ensuring sustainability; and lead to enhancements in
farm and forest lands, watersheds, wetlands, riparian buffers, wildlife habitat, vitalized soils, water
supplies, and profit-making greenhouse gas reductions.
Importantly, this will contribute to the reindustrialization of America and the creation of “Sustainable
New Wealth” industries with major economic multipliers, generate millions of jobs, help revitalize our
economy, and, pay down our national and international debts. [NOTE: Chapter Five: The Summation,
follows the Options section.]
OPTIONS IN MOVING FORWARD:
First Option: The two Teams can compete in the transportation sector, “no holds barred,” by organizing
their political and financial prowess to gain sought-after advantages over competitors. These are
expensive, disruptive and distracting activities at a critical time in American history. We cannot afford
this fight.
Second Option: Or, we can do the right thing by the American people and the planet by bringing
honesty and integrity to a competitive marketplace where externalities outlined above are included in
the calculus and used in determining incentives and other benefits. While this transition is occurring,
both sides can make money with the following plan.
Considerations worthy of immediate actions include:

Encourage public support for the wise and environmentally sound exploration and use of
cleaner burning domestic fossil fuels to reduce imports and “energize” our economy
(quantifying the externalities). The fossil transportation system already has in place the
distribution and fuel utilization technologies that have favored gasoline and diesel for almost a
century. While corn-based ethanol initiated and advanced the development of the biofuels
distribution infrastructure; the overall transportation fuels distribution systems remain fossil
fuel oriented. Better collaboration will be of real service to the nation.

Call for the accelerated production of more efficient flexible fuel vehicles with engine
characteristics that take advantage of a variety of fuels, including biofuels.

EPA authorizing more extensive use of higher blends levels of ethanol in gasoline to expand the
market for ethanol and reduce imports of oil and gasoline. EPA, reducing aromatics in gasoline
by authorizing higher ethanol blend levels, not only effectively addresses the air toxics issue,
but also leads to the production of more gasoline per barrel

Greatly increase the availability of alternative fuel/charging stations to accommodate gasoline,
diesel, biofuels, natural gas/biogas, electricity and hydrogen

The VEETC Plan:
o
Reduce the VEETC and maintain a reduced import tariff for one year.
o
Adjust the VEETC for additional 4 years to:



o
Convert the blender credit to a reduced producer credit,
Provide funding for infrastructure development, and
Provide incentives for increased efficiencies in feedstock production conversion
efficiencies.
PAYGO: Reallocate funds dedicated to the SPR expansion to pay for this biofuel capacity
increase as a “virtual” transportation fuel reserve.
The Last Chapter - Chapter Five: New Wealth Industries. The information and proposals outlined above
will help ensure the advance of the U.S. economy through reindustralization, generation of “New
Wealth,” major job creation, and the ability to pay down our national and international debts. Generally,
“New Wealth” is only created when nature is debited for providing natural resources, but does not
demand payment. The resulting monetary value creates “New Wealth,” with major economic
multipliers. This New Wealth is provided by the extractive industries –coal, oil, gas, minerals, metals, etc.
New Wealth is also provided by the sustainable industries – agriculture, forestry, hunting, fishing, all the
renewable energy technologies (solar, wind, biomass, hydro, water power, geothermal and renewable
hydrogen), energy efficiency, recycle, reuse, and Human Creativity (critically important and depends on
quality education).
Advanced science and technology, team work, and a commitment to sustainable future will not only
restore economic and environmental health to America, but also ensure our leadership in a future that
must be sustainable – a world where the best in science and technology, human creativity, integrity,
hard work, and compassion, are combined with the lasting power and creativity of natural systems –
advancing together in common cause.
The days of exploiting natural systems without lasting care are coming to an end. The five chapters
outlined above offer additional pathways to a sustainable future, while all sides make a good return on
their investments. This is sustainability with prosperity.