Lobby groups blast corn ethanol

Environmental concerns mean the future of biofuels cannot be in corn, said two advocacy groups today, accompanied by the Vermont Law School Institute for Energy and the Environment.

The Food & Water Watch, the Network for New Energy Choices, and the Vermont Law School held a press conference today to highlight what they called risks in the forthcoming U.S. Farm Bill.

The corn ethanol refinery industry, the beneficiary of new renewable fuel targets in proposed energy legislation, and proposed loan guarantees in the 2007 U.S. Farm Bill, will not significantly offset American fossil fuel consumption without unacceptable environmental and economic consequences, the groups said.

"Rural communities won't benefit from the Farm Bill becoming a fuel bill. In the long run, family farmers and the environment will be losers, while agribusiness—whose political contributions are fueling the ethanol frenzy—will become the winners," said Food & Water Watch Executive Director Wenonah Hauter.

Hauter said corn ethanol is encouraging the development of Texas-style livestock farms, which will require more water, create more ground pollution, add vast amounts of waste to leaky open air lagoons and put millions of acres of conservation lands at risk of development.

"This will not benefit independent farmers, but the consolidated livestock industry," she said.

"All biofuels are not equal," said Scott Cullen, Senior Policy Advisor for the Network for New Energy Choices.

"Expansion of the corn ethanol industry will lead to more water and air pollution and soil erosion of America's farm belt, while failing to significantly offset fossil fuel use or combat global warming."

"As long as we spend more on subsidizing energy suppliers than we do on investments in energy efficiency, we are on a path to pain. We are already subsidizing corn-ethanol with more money than we spend on high-mileage cars or on quality mass-transit. That's good for some companies and some politicians, but it's bad for our nation and our world," said Michael Dworkin, of the Vermont Law School Institute for Energy and the Environment.

Both the farm and energy legislation being debated in the U.S. Congress contain provisions that stand to set American biofuel policy for years to come.

While politicians promise that America will be driving on switchgrass-based ethanol instead of gasoline in the next decade, the majority of the subsidies on the table today will go to corn-based ethanol refiners in the near term, speakers asserted.

"The reality is that only corn based ethanol is commercially viable right now. Any incentives are likely to benefit corn based ethanol, not the more attractive cellulosic ethanol," said Hauter, who also warned that investing heavily in ethanol now would "lock the industry in" to the fuel over other more efficient, practical ones.

Shares of leading U.S. corn ethanol producers Archer Daniels Midland (NYSE: ADM) and VeraSun (NYSE: VSE) were off only slightly at press time, down .36 percent (down $.13 to trade at $35.93) and 2.5 percent ($.32, trading at $13.74) respectively.

The Food & Water Watch, the Network for New Energy Choices and the Vermont Law School have published a report detailing their concerns, titled The Rush to Ethanol: Not all BioFuels are Equal.