In a speech on March 4, 2008 at the International Conference on Renewable Energy Sources, Samuel Bodman, United States secretary of energy, emphasized that American investment in biofuel energy had already exceeded $1 billion. Among key projects, he singled out $400 million in investments in three bioresource research centers, intended for five years. Moreover, Secretary Bodman mentioned a new joint project between the Department of Energy and the Department of Agriculture to carry out more than 20 studies in this industry at a total cost of $18 million. The main goal being pursued by the US in developing biofuel resources is to reduce the country’s gasoline consumption by 20% over 10 years, but making biofuel price-competitive with gasoline by 2012 is also important. All of this, the US administration feels, should substantially reduce harmful atmospheric emissions. Acknowledging that “a great deal remains to be done and this will not be easy,” Samuel Bodman expressed optimism about the prospects of this new direction in energy, stating that “the world is on the road to cleaner, more available, and safer energy, and biofuel will play the main role here.”
Along with starry-eyed optimism in forecasts about biofuel’s prospects in the world media, analytical articles began to appear in which the authors expressed very sober opinions about this issue, emphasizing that massive use of biofuel presented substantial global risks in very different areas and spheres.
A rapid and poorly thought-out transition to biofuel by the leading world powers could have negative consequences for the environment and well-being of the inhabitants of developing countries. A report to the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) published in March 2008 noted that many countries were, that same year, expecting food products to jump in price partly due to the increased use of grain and sugar cane for production of biofuel. “The rapid increase in the prices of food products will be the main problem this year,”13 said Shuvojit Banerjee, a representative of this commission. “And since it will apparently be impossible to stop the movement toward increasing biofuel production, the region will have to prepare for a long period of inflation due to higher prices for food products.”14 The commission called on the governments of Asian and Pacific countries to undertake additional measures to protect the poor from economic shock. Along these same lines, P. Chidambaram, India’s finance minister, declared that the use of agricultural products for producing biofuel was a blow to the poor, and called this “a sign of perverted priorities in some countries.... This is disgraceful and deserves condemnation.”15
Recently, the US national program to produce bioethanol from corn has been drawing more and more severe criticism in the press. Experts have calculated that grain ethanol requires a massive amount of agricultural land: replacing just 10% of American motor fuel with alternative biofuel would require a third of all cultivated land to be devoted to grain production. In 2006, 60 million of the 295 million tons of grain harvested were used for bioethanol production. This created obvious imbalances in agricultural production, and grain prices increased 50% over the preceding period. An increasing number of American farmers are taking advantage of government subsidies and planting industrial corn, and this in turn creates a shortage of animal fodder, which inexorably drives up the prices of meat products.
At the same time, whereas in 2005 the average price of a gallon of ethanol decreased from $2.00 to $1.55, the cost of corn, the basic raw material for its production, increased from $1.60 to $3.27 per bushel. Thus, biofuel producers ended up squeezed between decreasing revenue and growing expenses, despite generous federal subsidies on the order of 51 cents per gallon.
At first glance it would seem that massive use of biofuel, if we are to believe the claims of its proponents, should substantially reduce dependence on crude hydrocarbons, and consequently, demand for oil should sharply decrease. However, simple calculations show a different picture. Using current technology to process vegetable and grain crops into biofuel, the amount of energy spent on its production is only slightly less than the amount obtained from its energy content. This is readily apparent from analyzing the value of the EROEI (Energy Return on Energy Invested) coefficient, which reflects the ratio of the energy obtained from a resource to the energy expended for its derivation. (This only applies to industrial energy expenditures; sunlight and photosynthesis do not count.) If the EROEI is less than 1, then energy expenditures are higher than the energy extracted from the resource. Experts estimate that the EROEI for various agricultural crops processed into biofuel ranges from 0.7 to 3.2. Given such EROEI values, it turns out that the more biofuel is produced, the more conventional fuel is needed for its production. It is well known that biofuel production involves the combustion of coal or residual oil (to generate electricity), the use of gasoline and diesel fuel (for trucks and tractors to transport raw materials and finished products), and finally the combustion of natural gas (for heating and hot water supply).
The leading American analyst Jim Puplava claims that producing industrial alcohol from corn is completely inefficient under current conditions: “If we calculate the expense of the natural gas consumed in producing fertilizers, the amounts of fuels and lubricants required to treat crops and gather the harvest, and consider that automobile gas mileage per unit of fuel is reduced by approximately a quarter after switching from gasoline to ethanol, the resulting energy balance is negative.”16
Neither should the adverse environmental impact be disregarded. According to the authoritative journal Science, producing bioethanol releases 179–212 pounds of CO2 per megajoule into the atmosphere, that is, almost as much as when gasoline is burned (207 pounds of CO2), which is not at all surprising given the EROEI of bioethanol. Producing bioethanol from vegetable materials also involves the use of sulfuric acid, and so far no one has found a use for the sulfonated lignin byproduct.
To expand their so-called “energy-intensive” plants, American farmers who sell their cereal crops for biofuel production must chop down forests, which decreases biodiversity, impoverishes ecosystems, and results in deforestation, salinization, and subsequent soil erosion.
Other countries attempting to follow the route of accelerated biofuel production have encountered problems similar to those in the US. Along these lines, one widely publicized project that Japan never succeeded in realizing is rather revealing. In the summer of 2008, on the eve of the G8 summit in the vicinity of Lake Toya on Hokkaido, the Japanese government decided to demonstrate to the world its desire to develop alternative forms of fuel in the war on global warming. It was expected that the small island of Miyakojima would become a prototype of the “Japan of the future,” where gasoline containing ethanol would be sold. There are 19 filling stations on Miyakojima, and the 35,000 automobiles owned by local inhabitants annually consume 27,550 tons of gasoline. At the same time, the island produces a lot of sugar, and the raw material for its production is very well-suited for producing ethanol. However, preliminary calculations by specialists at major Japanese oil companies, including Nippon Oil Corp., showed that this project would not bring anything but serious losses, and in so doing could seriously damage the reputation of national industry. Thus, the idea of turning the island into a zone completely free of conventional gasoline remained an impossible dream.