Ill Ethanol Effects

One of the reasons that corn ethanol was pushed over the years was the presumed benefit for the environment. A new study from the University of Minnesota puts another nail in the coffin of such notions.

The Associated Press on February 3 reported:

A new University of Minnesota study has found that corn ethanol is no better than gasoline when it comes to fuel — and may be worse for air quality. The study estimated the economic costs to human health and well-being from gasoline, corn-based ethanol and plant-based ethanol…

“Our study shows that if we’re really going to make choices in the best interest of the public, we need to look not only at what’s cheapest to produce, but what are the costs to the public in terms of environmental and health effects,” said Jason Hill, research associate in applied economics and a resident fellow at the university’s Institute on the Environment.

The article also quoted Mark Hamerlinck, communications director for the Minnesota Corn Growers Association, pointing out that cellulosic ethanol cannot yet be made on a large scale.

Another news report on the study noted:

The study found that because of the excessive farm work needed to grow corn, including tilling, planting, spraying and harvesting, producing ethanol from corn actually requires more fuel than it creates.

So, the environmental benefits of corn-based ethanol continue to get called into question. The economics – including massive taxpayer subsidies and the impact on food prices – are among the economic questions swirling around ethanol.

In the end, the best answer remains letting the market work. That is, let competition and consumers decide what fuel sources make sense.

Raymond J. Keating
Chief Economist
Small Business & Entrepreneurship Council