West Wing's Ethanol Problem
In a recent episode of The West Wing, dark horse Democratic presidential candidate Matt Santos (played by Jimmy Smits) condemned ethanol on the grounds that, "Storage is a nightmare."
The West Wing is a smart television program, written by smart people with access to an enormous amount of expertise. Part of the show's appeal is its willingness to present both sides, even with highly controversial issues like the morality and efficacy of the death penalty or political assassinations. When it comes to ethanol, however, The West Wing's writers apparently believe there is only one side and it is exceedingly negative.
This was demonstrated a number of times in the show's early years, when Aaron Sorkin was in charge. In the first season, Vice President John Hoynes (Tim Matheson) was asked to break a tie vote in the Senate in favor of extending the ethanol tax incentive. He balked, since he had vigorously opposed that incentive when he was in the Senate. At the show's conclusion, President Bartlet (Martin Sheen) gives Hoynes permission to kill the incentive, and confesses, "You and I agree on ethanol, but you were the only one to say it."
The Jan. 26 episode, "King Corn" raised ethanol trashing to an entirely new level. In this episode, one of the presidential candidates, liberals as well as conservatives, and Democrats as well as Republicans, strongly object to ethanol, although in the end all but one ends up "pandering" to Iowa's caucus voters by endorsing the fuel.
A Short History of Ethanol
Ethanol is liquor. It begins with the fermentation of sugars into a weak alcohol, a process carried out by anyone who makes wine or beer. Distillation then eliminates the water. The result is 100 percent (200 proof) alcohol. Some call it White Lightning. You could drink it, although it'd knock you on your behind.
That is why Matt Santos' comment about ethanol being a storage "nightmare" was so wacky. Gasoline is a chemical stew of over 150 highly toxic chemicals. Gasoline storage systems have to protect us from gasoline. We don't need to be protected from vodka.
Ironically, the benign nature of ethanol has stunted its industrial and fuel use for almost 150 years. In 1860, ethanol was one of the nation's best-selling chemicals, used as an illuminant and solvent. When the Civil War broke out, President Abraham Lincoln imposed a $2.08 per gallon Spirits Tax to finance the war effort. Ethanol was subject to the tax. Kerosene, the first commercial petroleum product and far inferior to ethanol as an illuminant, was poisonous and thus subject to a tax of only 10 cents a gallon.
Industrial and fuel ethanol disappeared for 45 years.
In 1906, Teddy Roosevelt, seeking a competitor to Big Oil, convinced Congress to lift the Spirits Tax. The ethanol industry was back in business. By the end of World War I it was producing some 50 million gallons a year. Then the ax of Prohibition fell. Prohibition didn't actually ban industrial alcohol, but gaining a production permit was difficult because the feds feared the output would be diverted to the far more profitable illegal liquor market.
Although Prohibition ended in 1933, a legacy of that era remains. Today, just as in 1925, ethanol must be doctored with a small quantity of gasoline before leaving the biorefinery to prevent its being diverted to the liquor market. Which is why you shouldn't drink the ethanol that goes into your car.
In "King Corn," Matt Santos' liberal wife expresses her outrage at ethanol. "A billion dollars a year to make a gasoline additive," she grumbles. "A billion that could be spent on providing prenatal care, head start education, child health care."
Any politician's wife knows that federal incentives are not fungible. Eliminating an incentive for nuclear power doesn't mean that money suddenly becomes available for child care. More importantly – and here again we have an instance of The West Wing's tone deaf script – Matt Santos hails from Texas, as does former VP John Hoynes, his opponent in the primary.
As you might have guessed, the level of incentives for ethanol, an infant industry with enormous growth opportunities, doesn't come close to those paid to oil, a mature industry whose fuel source is running out. An analysis done for the Institute for Local Self-Reliance found that the oil industry receives as much as $11 billion a year just in tax incentives. We should add to this the costs of protecting our access to foreign oil, an expense the Pentagon itself estimated to be about $50 billion a year (the estimate was done before the current Iraq war). Then add the environmental and public health costs, which by all accounts are even higher than the military costs.
One wouldn't expect an actual politician from Texas to make these points. But we should expect The West Wing's writers to allow its viewers to hear them.
Several episodes have offered the unrebutted proposition that it takes more oil to make ethanol than is displaced by ethanol. The show's writers could easily have learned that there have been about 20 peer-reviewed studies of that issue. All of them agree that in 1980 the proposition was true. And all agree that since then both the ethanol refinery and the farmer have become much more energy efficient. Some 90 percent of all current studies conclude that ethanol is currently a net energy producer. And as corn stalks begin to displace natural gas as the refinery's primary energy source, the net energy ratio will become exceedingly attractive.
Underdog Makes Good
Ethanol has the sort of underdog-makes-good story that should appeal to scriptwriters in Hollywood and New York.
Consider that in 1978, even with its tax incentive safely in hand, ethanol faced daunting challenges. To be successful, producers had to convince a bitterly opposed oil industry to sell ethanol at its gas stations. It had to convince a reluctant auto industry to allow ethanol in its gas tanks.
Until the late 1980s, most ethanol was sold in gas stations owned by farmer cooperatives, not by oil companies. And people, especially in the upper Midwest, willingly used ethanol blends even when their car manuals strongly discouraged their use.
Critics point to the significant presence of agribusiness giant Archer Daniel Midland (ADM) in the ethanol industry. There is no question that without the political clout of ADM the ethanol industry would not exist. But ADM no longer controls the industry. In 1990, ADM produced 75 percent of the nation's ethanol. Today, that proportion has fallen to about 35 percent. The fastest growing segment of the industry consists of farmer- and locally-owned ethanol facilities. Farmer-owned biorefineries, collectively, now produce more than ADM does.
Oil incentives are usually permanent. Ethanol's incentives are temporary. Which has led the industry to have to fight every few years for its survival. The last time was in 1997 when conservative Republican William Archer of Texas, chairman of the powerful House Ways and Means Committee, vowed to kill the incentive. It was an epic battle, lasting over two years. Finally, in 1998, the ethanol incentive was extended until 2007.
Archer used many of the arguments raised on The West Wing. But his primary goal wasn't to reduce government waste. In his tenure no oil or gas incentive was reduced. He was trying to protect his state's 14 MTBE refineries. MTBE is a gasoline additive made from natural gas and an oil refinery byproduct. In the oxygenate and octane-enhancing market, it was ethanol's competitor.
MTBE received no tax incentives. It was the gasoline additive of choice by much of the country outside the upper Midwest. But it did indeed have a public cost; it pollutes groundwater and lakes. That discovery led some 15 states to phase out MTBE, but the damage has been done. Clean-up costs may run to $30 billion, a sum four times greater than all the incentives spent on ethanol from 1980 to 2004.
On West Wing Alan Alda plays Sen. Arnold Vinick, a Republican from California who will undoubtedly become his party's presidential nominee. Sen. Vinick was the only ethanol opponent in the show to tell the Iowans what he believed.
No Fuel Is Perfect
Is ethanol a perfect fuel? Of course not. There are no perfect fuels. Do agricultural states strongly support incentives for biofuels? You bet they do, in the same way that California lobbies for aerospace spending and Connecticut for shipbuilding.
A more interesting question is, do farmers benefit from biofuels incentives? Only marginally. Of the 52 cents per gallon incentive for ethanol, the corn farmer receives about a nickel. But if farmers own the ethanol plants; that is, if they own a share of the manufacturing facility that converts their raw material into a finished product, they can receive dividends of 20-30 cents per gallon.
Biorefineries can be much smaller and far safer than oil refineries. They can rely on a wide variety of feedstocks available in virtually all parts of the nation. This allows us to envision a different future for agriculture, one in which farmers here and abroad do not compete with other farmers but with the fossil fuel industry. It's a future in which farmers are no longer condemned to sell their raw material at an ever-decreasing price, but can earn their income from multiple sources.
Clearly, there is another side to the ethanol story. Perhaps it will get equal time on future episodes of The West Wing.