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Congress and the president have spoken: ethanol is America’s new renewable fuel.

Yesterday, President Bush signed into law energy bill H.R.6, which establishes a new renewable fuel standard in the United States (see Max’s earlier post). But not everyone is applauding Capitol Hill. James B. Meigs, editor-in-chief of Popular Mechanics, has railed against ethanol in an op-ed to be published in the magazine’s February 2008 issue. As Meigs points out, Washington is looking for quick fixes, not long-term solutions:

It’s great that our politicians have discovered the need for new energy technologies. But it appears that Washington is determined to put its money—our money—on the wrong horse. Right now, researchers are studying a host of energy solutions, including hydrogen, high-mileage diesel, plug-in hybrids, radical reductions in vehicle weight and cellulosic ethanol (made from cornstalks, switchgrass or other nonfood crops). It is far too soon to say which of these holds the most promise. But, instead of promoting experimentation and competition to find the best solutions, politicians seem ready to declare ethanol the winner. As a result, our nation could wind up with the worst of both worlds: an “alternative” energy that is enormously expensive yet barely saves a gallon of oil.

James makes an excellent point: Washington should not be mandating specific renewable technologies but offering incentives that promote intelligent and innovative research. The new renewable energy standard is actually the most extensive ethanol mandate to date, requiring 15 billion gallons of ethanol be produced per year by 2015—three times todays output.

That’s a lot of corn, which isn’t exactly Mother Nature’s most resource efficient crop. Corn returns about 1.25 units of energy for every 1 unit of input. Imagine putting $1 on the roulette table and getting back $1.25. Worth the risk? Not really. And since these energy inputs usually take the form of diesel fuel and petroleum-based fertilizers, producing corn-ethanol is hardly kicking the oil habit.

So why does Washington still support corn-based ethanol? James has one answer:

There’s a simple reason that ethanol is popular with politicians: money. Substituting corn ethanol for a large fraction of the gasoline we burn will mean sluicing gushers of cash from more populated states to politically powerful farm states. And a lot of that cash will wind up in the pockets of the big agribusinesses, like Archer Daniels Midland, that dominate ethanol processing—and whose fat checkbooks wield enormous influence in Washington.

On the flip side, the new standards require that by 2022 an additional 21 billion gallons of renewable fuel be produced from conventional and advanced biofuels, including biodiesel, cellulosic ethanol, butanol, and biogas. They also raise CAFE standards to an average of 35 mpg by 2020.

These are important steps, but James’ argument still holds water. The U.S. doesn’t need massive increases in corn-based ethanol production. What it needs is intelligent, incentive-based development of renewable energy sources. Let’s do it right the first time.

Popular Mechanics (Feb. 2008): The Ethanol Fallacy: Op-Ed
GreenCarCongress (Dec. 18 2008): House Sends Energy Bill to President Bush; New Renewable Fuel Standard

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