Improving Sustainability of the Corn-Ethanol Industry

Paul W. Gallagher and Hosein Shapouri

ISU General Staff Papers from Iowa State University, Department of Economics

Abstract: Two criteria based on characteristics of plant growth establish when bio-fuels can provide sustainable energy for society. The first criteria: enough solar energy stored during plant growth becomes available for man's use. Pimentel's early evaluation of the US ethanol industry calculated the ratio of BTUs in ethanol: BTUs from fossil energy of com and ethanol production at less than one. He concluded that ethanol is not sustainable energy, and questioned the industry's existence. Recent energy balance ratios that include adjustments for co-product feed and higher energy efficiency in corn/ethanol production suggest a moderate contribution from captured solar energy. The ratio is around I .3 (Shapouri et al., 2002). Dale questions the relevance of the net energy criteria, noting that economic value creation is consistent with energy ratios less than or near one. Dale (2007) proposes a second criteria for a sustainable fuel: enough C02 in the atmosphere is converted to carbon in the plant and 02 in the atmosphere through photosynthesis and plant growth to improve global-warming. Comparing greenhouse gas emissions from a refinery and an ethanol plant, some have calculated that emissions could be about 20 % lower with today's com-ethanol instead of the corresponding output of petroleum-based gasoline (Wang et al., 1999). Thus, recent calculations of energy ratios and C02 emission comparisons both suggest that the com-ethanol industry is sustainable. Further, public policies to ensure the com-ethanol industry 's exislence find moderale justification from both suslainability measures.

Date: 2009-01-01
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