Canadian business group finds ethanol doesn’t hinder food, reduces emissions

Source: Tiffany Stecker • E & E  • Posted: Tuesday, November 8, 2011

A Canadian economic think tank has released a positive review on the potential of ethanol as an alternative to petroleum fuel, asserting that corn- and wheat-based fuel creates no pressure on food resources and reduces greenhouse gas emissions in a life-cycle analysis.

In an ethanol industry-backed report, the Conference Board of Canada –an economic research organization based in Ottawa — found that emissions from using, transporting and producing 100 percent ethanol fuel were up to 62 percent lower than emissions from gasoline. A 10 percent ethanol blend with gasoline could drop emissions by 4 to 6 percent.

It also found no conflicts with growing food crops, thanks to the yield boost that technology has provided.

“Corn yields have continually improved,” said Len Coad, a co-author of the report and director of energy, environmental and transportation policy at the Conference Board, addressing a common complaint about the rapid rise in global biofuel production.

When the 2008 food price spike coincided with a global ramp-up of biofuel demand, crop-based fuels were pointed to as a cause of global hunger, an inefficient resource allocation and a destroyer of unequipped engines. Indirect land-use change — the ecological consequences in the global market when land is converted to biofuel production — has become a more recent concern of ethanol’s opponents.

“Perhaps the most significant potential environmental pressures from ethanol production have been identified through potential land-use changes,” states the study. “However, based on Canadian and U.S. harvest data, ethanol feedstock demand has not significantly increased the land allocated to corn production.”

Oil prices blamed for food cost rise

The study asserts, like many pro-ethanol organizations in the United States and abroad, that the high petroleum prices pumped up food costs, not land-use conversions.

“The studies that have examined both biofuels targets and crude oil prices, for example, show that oil prices are a much more important determinant of crop prices than biofuels production,” it states. “Without the price linkage clearly established, land reallocation and related environmental impacts are difficult to establish.”

Canada’s federal government passed a renewable fuel standard in September 2010 for ethanol to make up 5 percent of gasoline at the pump. Provincial governments carry their own standards, ranging up to 8.5 percent blends in Manitoba. This equates to more than 2 billion liters of ethanol per year, said Bliss Baker, spokesman for the Global Renewable Fuels Alliance.

The Canadian federal government has offered a grant of 10 Canadian cents per liter to biofuels producers between 2008 and 2010, with the subsidy declining by 1 Canadian cent per year thereafter, as well as a C$200 million loan program for facility construction. Provincial governments have also launched incentive programs.

Eastern Canada saw a rapid conversion to corn ethanol production after 2000. The acreage of wheat in western Canada has been in constant decline, although this is unrelated to ethanol demand, said Coad.

Limited research scope?

Jesse Row, director of the Sustainable Communities Group at the Pembina Institute, an environmental think tank in Canada, called the Conference Board’s conclusions “a bit off.” Even though land use wasn’t affected inside the country, it is impossible to avoid indirect effects given the global dependence of agricultural goods, he said.

The [indirect land-use changes] have been pointing to developing countries,” said Row. “The scope was rather limited in that aspect.”

Even though ethanol is primarily a domestic market in Canada, with few exports, the diversion of land to ethanol could reduce the amount of food grain that once went to an existing international market, added Row.

“Certainly, there’s evidence out there that they are other [viewpoints] that other prominent organizations are saying,” he said.

Row does agree on the potential greenhouse gas benefits of ethanol, but the cost of producing ethanol is more than alternative measures like energy efficiency.

“I’m not saying that ethanol doesn’t have a greenhouse gas benefit, but we need to look at all our perspectives,” he said.

Coad said the financial backing from the Canadian Renewable Fuels Association has little bearing on the outcome of the report. The researchers referenced 120 studies on both sides of the issue and included independent analysis from two experts to smooth any gaps in the review.

“We [often] do work that is funded by the client,” he said. “We try to find the best-quality analysis. You’ll find studies that find that ethanol is energy-negative and some that will talk about how it’s energy-positive,” as compared to the energy output of fossil fuels.