The gigantic ecological tragedy of the deep-sea oil well blowout in the Gulf of Mexico grows worse and worse. So far, this disaster has caused some rethinking about how deep-sea drilling for petroleum can be better regulated as it goes ahead in the United States and Canada. It has also unleashed the lawyers to argue about which petroleum company or petroleum contractor is legally liable.
But the fact that has been almost ignored in the highly charged debate is this: anything you can make from petroleum (including fuel), you can make from alcohol. Had 80 million litres of alcohol been spilled into the Gulf it would have been harmless as it dissolved. Alright, if it had been ethanol (grain alcohol) a lot of fish might have hangovers. The point is there has never been an event like this one to emphatically point away from petroleum and toward bio-based energy.
Some opposition to ethanol is fierce. One of my distinguished colleagues in this section has told me repeatedly, "Ethanol is a scam." The argument is that the ethanol industry is "heavily subsidized" and that "ethanol increases greenhouse gas emissions." The big moral objection is the "Food for Fuel" issue - that using corn for ethanol drives up food prices for the world's poor. Well, if biofuels are that bad, then Drill Baby, Drill.
Subsidies for What
But let's look at the issues one by one beginning with "heavily subsidized" first. Every energy source has subsidies including, of course, the oil sands.
The federal and Alberta governments recently put up $1.5-billion for research and development on carbon capture. The petroleum industry also has depletion allowances, royalty tax credits, off-shore drilling credits and the ability to finance development with flow-through shares.
On the ethanol side, the federal government has a 10 cent per litre excise tax on gasoline and gave the ethanol industry an exemption on that tax. The Ontario government has a program that kicks in if corn prices are high and oil prices are low. In that event, the ethanol industry can draw up to 11 cents a litre. When oil was at $80 a barrel recently, the ethanol industry received nothing from the Ontario government.
Greenhouse Gas Emissions
The objection that "ethanol increases greenhouse gas emissions" should be off the table by now.
Last year, The Journal of Industrial Ecology at Yale University published a study titled Improvements in Life Cycle Energy Efficiency and Greenhouse Gas Emissions of Corn-Ethanol. This is an all-in accounting from farmer's field to gas tank. The conclusion: "Direct-effect GHG emissions were estimated to be equivalent to a 48 to 59 per cent reduction compared to gasoline, a twofold to threefold greater reduction than reported in previous studies." The report said that even more improvements are on the way. "These results suggest that corn-ethanol systems have substantially greater potential to mitigate GHG emissions and reduce dependence on imported petroleum for transportation fuels than reported previously."
In Canada, a little-noticed independent analysis of Canadian renewable fuel production reached an almost identical conclusion last November. The study used the Natural Resources Canada GHGenius lifecycle assessment model for transportation fuels and concluded, "On an energy basis, the results show that the reduction in fuel cycle GHG emissions from one megajoule (MJ) of ethanol (when used in an E10 fuel blend) is 62 per cent of the fuel cycle GHG emissions for one megajoule (MJ) of gasoline."
The report's author, chemical engineer Bill Palmer of Cheminfo Services Inc., told me, "This is big news. I'm surprised it didn't receive more coverage." In other words, definitive proof supported by proper research is out there to show ethanol is effective in reducing GHG.
Food for Fuel
Last year, there was a record corn crop in North America with 14 billion bushels grown. From that 47 billion litres of ethanol was produced, which is roughly the same quantity of gasoline used in Canada in a year. However, the corn crop also produced millions of tonnes of high fructose corn syrup - which goes into soft drinks and other obesity related goodies - plus it fed all the cattle and chickens and pigs, which would be better off eating grass.
After feeding all that there was still 1.9 billion bushels of corn exported, half of it as foreign aid. The United Nations has objected to our corn exports because farmers in Africa who are trying to grow corn to make a living are going broke because governments are giving away too much of the stuff. And after doing all of this, there's still two billion bushels of surplus corn in bins.
"What would you do with all this corn if you didn't make ethanol," asks Ken Field, founder and CEO of Canada's largest ethanol producer, Greenfield Ethanol. "You plant a seed in the spring and you can have gasoline in the fall that's local. That's a wonderful advantage to a local economy."
Bio-based versus Deep-water
Close to half the world's oil production and 25 per cent of U.S. production is expected to come from deep-water wells by the end of the decade. Regulation will become more stringent while insurance premiums for offshore drilling will rise steeply as costs mount for the damage caused by the almost unstoppable blowout.
"We should be making as much ethanol as we can and producing it from energy crops and from stover (leaves and stalks) and from wood waste and municipal waste - all this is coming," says Field. "This is where the world is going. It's a lot smarter than drilling two miles down in the Gulf of Mexico or off our own coasts."
To get to The Green Highway we need technology that is coming from the auto industry but also a greater reliance on renewable energy. This column will follow both.
Michael Vaughan is co-host with Jeremy Cato of Car/Business, which appears Fridays at 8 p.m. on Business News Network and Saturdays at 2 p.m. on CTV.