There has long been a debate over whether ethanol is an environmentally sound alternative to gasoline. Critics contend that due to the amount of fossil fuel used to harvest and create ethanol it actually releases more greenhouse emissions than fossil fuels. But this study adds health costs to the mix, especially when ethanol is made at coal-fired production facilities.

The study, published in the Proceedings of the National Academy of Sciences, found that for every billion gallons of fuel produced and combusted in the U.S., the combined climate-change and health costs are $469 million for gasoline and $472–$952 million for corn ethanol, with the higher totals coming from coal-fired production.

Health and environmental costs plunged dramatically for cellulosic ethanol, which is derived from prairie grass, corn stalks, switch grass and other sources besides corn, costing only $123–208 million. Cellulosic ethanol, however, is not yet a commercially viable alternative.

Researchers, which included Minnesota, Stanford University and the U.S. Energy Department, said the debate over whether substituting biofuels for fossil fuels benefits or harms the environment needs to be expanded beyond greenhouse gas emissions in order to get an accurate picture of costs.

The American Coalition for Ethanol (ACE), the industry’s trade association, condemned the study, saying it bases its findings on erroneous assumptions about corn-based ethanol.

“I’m disappointed with what appears to be another politically motivated study with an ax to grind against corn ethanol,” said Brian Jennings, executive vice president of ACE, in a statement “The steps our nation must take regarding climate change and energy policy must be founded on the most thorough and defensible science, but this paper does not represent a meaningful contribution to the discussion surrounding these critical issues.”

The group said the primary assumptions the study relies on disregard technology innovations that help farmers produce additional corn and companies produce ethanol more efficiently.

The Minnesota study also contradicts another study released in January by the University of Nebraska that found corn-based ethanol directly emits an average of 51 percent less greenhouse gas than gasoline, as much as three times the reduction reported in earlier research, thanks to recent improvements in efficiency throughout the production process.

According to the Iowa Renewable Fuels Association, the state has 38 operational ethanol refineries with a combined annual capacity of over 3 billion gallons. There are also five ethanol refineries under construction that will add nearly 700 million gallons of capacity.

Braley worked with Rep. Tammy Baldwin (D-Wisconsin) to pass an amendment that would make biofuel projects eligible for the “Temporary Program for the Rapid Deployment of Renewable Energy and Electric Transmission Projects,” which was already written into the proposed stimulus package.

The U.S. House Energy and Commerce Committee, of which Braley is now a member, took up the proposed amendment and passed it on a voice vote Thursday afternoon, making the amendment a part of the bill that will be debated by the full U.S. House.

“The purpose of the economic stimulus package is to create jobs and boost our economy,” Braley said. “My amendment will help biofuel makers invest in the latest technologies and create jobs in Iowa. Investing in renewable energy will help grow our economy out of this crisis and reduce our dependence on foreign oil.”

The temporary program that would now include a stipulation for biofuels was modeled after the U.S. Dept. of Energy’s Loan Guarantee Program. It is designed to speed commercial adoption and use of advanced renewable energy technologies by providing low-interest, government-backed loans to companies investing in the implementation of technologies.

Prior to the Braley-Baldwin amendment, the list of technologies eligible for loan guarantees under the stimulus package did not include biofuels. As now written government officials would determine if the technologies applying for the monies would likely become commercial and produce transportation fuels “that substantially reduce lifecycle greenhouse gas emissions compared to other transportation fuels.”

The stimulus also offers good news for wind energy. As it is currently written, the stimulus would extend the Renewable Energy Production Tax Credit, which includes a wind energy tax credit, for three additional years beyond the current Jan. 1, 2010 expiration date. Braley has also introduced legislation that would further extend this tax credit for seven years.

In addition, the stimulus would also create a temporary 30 percent investment tax credit in wind energy, which companies could take in lieu of the production tax credit.

Unfortunately, hopes for renewable energy incentives within the debated stimulus package was not enough to save roughly 100 jobs at Clipper Windpower, which began production in Cedar Rapids in 2005. The plant has been used as a backdrop for many politicians, local and national, as they have discussed renewable energy and the promise of “green” jobs.

Renewable energy incentives, including Braley’s newly passed amendment, comprise roughly $6 billion in tax relief, or less than 1 percent of the estimated $865 billion economic stimulus plan. In addition to extending and expanding existing tax credits for renewable energy, the stimulus package also proposes $1.6 billion of new clean renewable energy bonds and $2.4 billion of qualified energy conservation bonds.

Sale of energy bonds would finance facilities that generate electricity from wind, closed-loop biomass, open-loop biomass, geothermal, small irrigation, hydropower, landfill gas, marine renewable and trans combustion systems. A third of the bonds would be available to government projects, a third to public power providers and a third to electric cooperatives.

The conservation energy bonds would be used to finance government programs and incentives to reduce greenhouse gas emission.

Outside of tax incentives, the stimulus package also includes $51.85 billion (or roughly 6 percent of the total estimated $865 billion) that would be earmarked to create “green” jobs while reducing the nation’s dependency on foreign oil. Such jobs would be in a wide variety of industries, but all would be created as government and the private sector seek and implement new ways to be more energy efficient.

Tom Vilsack interviewed outside Mineos pizza in Pittsburgh (Photo: Vilsack for President/Flickr)

On matters of agriculture, Vilsack was a pragmatic centrist, content with incremental changes and reluctant to take steps to significantly disrupt the status quo. When he successfully ran for his first term as governor in 1998, the generally pro-Republican Farm Bureau decided not to oppose him, choosing instead to endorse both him and his opponent. That was an impressive feat for an underdog Democrat running for governor — especially for a trial lawyer who had never farmed a day in his life.

He has clearly thought about what he would do in his new position. In an interview with a Minnesota college newspaper just before Election Day, Vilsack said Agriculture is “a department that impacts every American.”

In the interview, he cited the international food crisis as an opportunity to use America’s “soft power.” He suggested promoting renewable energy was part of the job. “How do you accelerate the research and development that gets you to second-generation bio-fuels?” he asked.

He also mentioned the school nutrition program, saying “you have to be focused on whether we are doing right by our children in schools across America in terms of nutritious food that we subsidize and we provide in school lunch programs.”

He even spoke of controlling forest fires which, it turns out the Agriculture Secretary has a role in.

While he was governor, Vilsack remained largely above the fray of ongoing feuds over the placement of confined animal feeding operations (CAFOs) near rural communities. Groups on the left who would like to give local communities stricter control over where the CAFOs are allowed felt betrayed by their governor’s unwillingness to help, but his stance kept agribusiness interests relatively quiet.

Vilsack’s most noticeable impact on rural Iowa did not involve changes to agricultural policy or stricter environmental regulations, but rather tax credits and business incentives. His economic development efforts — most notably the Iowa Values Fund, which was designed to create grants, loans, and tax incentives for businesses who choose to locate in the state — have been credited for short-term successes in many corners of the state, but critics in his own party argued that they amounted to corporate welfare.  In any event, the long-term benefits remain difficult to measure.

Vilsack was a pragmatist by necessity. For all eight of his years at Iowa’s helm, he faced a Republican-controlled legislature.  His allies on the left say his record might have looked different if Democrats won control of the statehouse a few years earlier.  He chose not to run for a third term in 2006 despite his relative popularity, opting instead to explore a presidential bid that quickly flopped.

As a presidential candidate in a crowded Democratic primary, Vilsack, who served as chair of the centrist Democratic Leadership Council until only months earlier, seemed to move farther to the left on environmental issues, embracing an ambitious but seemingly arbitrary requirement that, by 2020, all new power plants constructed must be carbon-free. His campaign even bought carbon credits to offset its campaign activities.

Vilsack also subtly tempered his enthusiasm for corn-based ethanol over the course of his candidacy, shifting to a more tenable position in favor of all forms of cellulosic ethanol and other biofuels, using corn ethanol merely as a “transitional fuel.”

From the few glimpses we have gotten of Vilsack’s federal agricultural policy positions, it is clear that he supports stricter limits on farm subsidies than Congress was able to pass in the 2008 Farm Bill. That puts him in line with the President-elect and Iowa Sen. Tom Harkin, Chairman of the Senate Agriculture Committee. Perhaps unfortunately for Vilsack, it will likely be another four or five years before Congress passes the next farm bill, and that is longer than a typical cabinet secretary has to wait.

In the interim, Vilsack will be tasked with many administrative and regulatory responsibilities, and he seems intent on pushing other policy goals in line with the Democrats’ agenda.

Expect the incoming Secretary of Agriculture to achieve tangible results that are easy to explain, because that is Vilsack’s style. He will immerse himself in a few specific issues, come up with a few policy ideas, and set to work building a political consensus, diluting the original ideas when necessary.

Don’t expect Vilsack, a consummate pragmatist, to turn America’s food system upside down anytime soon.

U.S. Sen. Ben Nelson, D-Neb., was at the Iowa State Fair on Friday speaking in support of Democratic presidential candidate Barack Obama.

Voters concerned about federal agriculture policies will gravitate toward Barack Obama, said Nebraska senator Ben Nelson at the Iowa State Fair Thursday.

In an interview with the Iowa Independent Thursday afternoon, Nelson said that there are many important differences in the two major presidential candidates on farm policy.

The key difference, said Nelson, is on biofuels.

“Senator Obama supports corn-based ethanol and moving to other bio-based ethanol products as well,” Nelson said. Senator John McCain, R-Ariz., “has fought against, and does not support corn-based ethanol and has resisted it and voted against it.”

The Nebraska Democrat, who serves on the Senate Committee on Agriculture, Nutrition and Forestry, played an important role in crafting the new farm bill that was passed into law earlier this year. He worked alongside Iowa’s senators, Democrat Tom Harkin and Republican Chuck Grassley, to bring the bill out of committee and ultimately to passage through an override of a veto by President Bush.

“Senator Obama comes from a state that’s rich in agriculture — Illinois,” said Nelson. “He understands agriculture and is willing to work with farmers and ranchers to find better ways. And he supported the farm bill.”

McCain, said Nelson, voted against the farm bill and is “still opposed to the farm bill and to any kind of government support for ethanol.”

He said voters in Iowa and in Nebraska who are concerned about agriculture will have a clear decision. “It’s a matter of what people decide to support, and what their agenda is, that will cause voters to decide who to vote for. Either in favor of the farm bill, in favor of supporting agriculture — or in favor of the positions of Senator Obama’s opponent, which in my opinion certainly should not be attractive to Nebraskans or Iowans or anybody in agriculture.”

Nelson went on to speak in support of Obama at the Des Moines Register building, where he discussed how he believes Obama’s health care proposals will benefit rural areas.

The report, titled Biofuels and Sustainable Development: An Executive Session on the Grand Challenges of a Sustainability Transition, was the result of a series of workshops and studies held in May at Venice International University in Italy. Experts from around the developed world in the fields of public policy, business and science gathered for the event and shared their views on sustainable biofuels production.

The group’s findings were summarized by noting that “liquid biofuels can provide a much needed substitute for fossil fuels used in the transport sector. They can contribute to climate and other environmental goals, energy security, economic development and offer opportunities for private companies to profit.”

The report goes on to warn that biofuels must be implemented with care, otherwise environmental problems can be “exacerbated.”

The group suggests that governments should guide the development of biofuels to “realize its multiple potential benefits.”

There was agreement among the participants that radical changes in current policies would not be beneficial. “Any single rule — such as production subsidies, a simple ban on biofuel production, or the immediate revocation of existing mandates for biofuel use — is too blunt an instrument and will almost certainly do more harm than good.”

“Now we hear a lot of talk, I think it’s misguided, about some of the food going for ethanol that’s causing a lot of problems,” said Harkin. “That’s not it at all. That’s not it at all.” He was on the Senate floor Thursday talking about the new farm bill, stressing the importance of some of the energy provisions included in the bill. The Bush administration has called for putting off further negotiations on the farm bill for one year or more, seeking a one-year extension of the current farm program. Harkin said it would be a mistake to wait a full year or more to enact some of the new energy incentives.

“A lot of people have this mistaken idea that the corn that’s being made into ethanol is the corn that people eat,” said Harkin. “That’s not so. People don’t eat that, it’s not the kind of corn you buy and you eat on your plate at night. This is the corn that’s fed to chickens and hogs and cattle. And most of the hungry people in the world today, they aren’t hungry because they aren’t getting meat. They’re hungry because of subsistence diets. So the ethanol thing is just a kind of a bugaboo. That’s just a phony issue out there.”

Harkin highlighted the fact that current energy policies will put the focus on the next generation of biofuels, actually limiting the use of corn for ethanol. “We recognize the limits (of corn ethanol). And we’ve recognized that in the energy bill we passed,” he said. In the renewable fuels standard that was passed into law last year by Congress, no more than 15 billion gallons of ethanol can be made from present sources like corn.

He said that passing the new farm bill will be critical in spurring these new technologies. “We want to move aggressively into cellulose ethanol — using wood products and waste products and things like that for making ethanol. And this (new farm bill) pushes us in that direction. Moves us aggressively in that direction. Well, if we have a one-year extension, we’ll lose yet another year or two on that.”

In a conference call with agriculture reporters Tuesday, Grassley was asked by Gary DiGiuseppe of the Arkansas Radio Network if he thought the federal government should roll back some of its policies that promote renewable fuels. “Well, I hope not,” Grassley replied.

Grassley said he was familiar with the reports of food riots in certain areas of the world, but he said that had little to do with corn. He said there were some reports of concerns in Mexico over corn, but “we don’t make ethanol out of rice and out of wheat. So I’m not sure that I understand, except ignorance on the part of people, about the connection between making ethanol and food,” he said. “I’m not very sympathetic to it at this point. When they start getting a connection between corn and food, then I’ll be glad to listen.

“If part of our problem is that the Chinese are going to eat meat — and you’ve got to have corn and soybeans to feed the Chinese their meat — then why isn’t it just as legitimate for the Chinese to go back and eat rice as it is for us to change our policy on corn to ethanol?”

Grassley was later asked to clarify his comment by Philip Brasher of the Des Moines Register.

“Let me repeat it in the rhetorical form that I asked it,” Grassley responded. “People are pointing to the United States, right? That we ought to not use corn for ethanol. That’s after 25 years of people all over the world saying we ought to move from fossil fuels to renewable fuels. So we do what the world asked us to do. Now the world is concerned about us doing that, it might raise the price of food. Well, one of the factors that raises the price of food is the fact that the middle class of China is eating meat instead of rice. So as a matter of public policy, isn’t it just as right for Chuck Grassley to say to the Chinese, ‘You’re contributing to the shortage of food because you’re running your food through animals now so you can eat like we do in the United States.’ Why isn’t it just as reasonable for me to say ‘Why don’t you go back and eat rice instead of asking us to change what we’ve been asked to do for 25 years?’ I’m not saying that they ought to, I’m saying it’s legitimate for me to raise that as a question, just as it is legitimate for them to raise the question of us of corn to ethanol.”

To listen to Grassley’s comments, check the Iowa Independent video below.

Higher commodity prices have been a boon to Iowa grain farmers, raising farm income and raising the hopes of a new generation of farmers. But just as these farmers begin to enjoy a rare profitable period in agriculture, it's beginning to rain on their parade.

Mainstream news media outlets have begun trumpeting the view that the use of corn to make ethanol is somehow causing food shortages around the globe. Higher prices for everything at the grocery store have caused a lot of folks to look for a scapegoat, and biofuels are an easy target.

The argument certainly makes sense on the surface: Doritos must be expensive because the market price of corn is high. But it's just not that simple.

While the new demand created by ethanol plants has caused a tightening of corn supplies, there are many, many other worldwide factors at play that have caused inflation of food prices.

The largest factor causing such inflation may be the hungry masses in rapidly developing nations in Asia who have found themselves for the first time with a little extra spending money. The newly moneyed Chinese are gobbling up food at a pace unheard of just a few years ago. Now that these folks are enjoying a higher standard of living, their diets are expanding accordingly. It's putting pressure on agriculture all around the world to step up the pace of production.

A major drought and crop failure in Australia last year is another factor that caused global wheat supplies to tighten significantly. Wheat prices skyrocketed as a result, and it will take a big wheat crop this year to make up the difference.

Global market prices for corn, soy oil, wheat and rice are all much higher than they were just one year ago. But these commodities are not alone. Crude oil prices are near record highs, as well. Really, everything is more expensive, from food to fiber to fuel.

Patrick Packnett, assistant deputy administrator of global analysis for the U.S. Department of Agriculture, said just this week that ethanol is not a major factor causing food price inflation. In an article published Wednesday on DTN Ag News, Packnett is quoted saying: "Someone needs to set the record straight. People are looking for an easy target when they blame ethanol for raising food prices, but there are many other factors at play, and ethanol isn't even the major issue."

Packnett notes that global prices for rice are at the highest levels since 1980. Rice is grown only in particular climates on specific types of land. Rice and corn do not compete for the same acres, and nobody's making ethanol out of rice.

A weak U.S. dollar may also have a lot to do with inflation of food prices. The economic policies of the Bush administration have been great for U.S. exporters, but maybe not so great for everybody else.

It's important to remember that commodity grain prices make up only a fraction of the final price of a food product. A recent American Farm Bureau Federation study showed that the value of corn that is used to make a box of corn flakes is less than a nickel. Maybe with inflation since that time, that value has risen to 10 cents or so. That's something to consider when you look at the price tag on these products at the grocery store. Grain prices make a difference in consumer food prices, but according to that study, only a very slight difference.

The solution to food shortages lies in expanding production to meet the new demand. This is an achievable goal, which can be met by embracing more efficient and environmentally-friendly methods in agriculture, and also by investing into the research and development of technologies that will increase yields.

World hunger is a complicated issue, and there are many culprits. But let's not all jump on the bandwagon to blame the relatively small biofuels industry for a global problem that is really caused by many other factors.

TEMPLETON – The Templeton Area Development Corp. has inked a deal for an option on 114 acres outside of the community that it hopes to market for value-added, industrial or other business use.

The land, which the Carroll Area Development Corp., and Western Iowa Advantage will help promote, is one-half mile west of U.S. 71 on the Templeton blacktop with access to the Burlington Northern Railroad line that runs between Coon Rapids and Manning.

Templeton is a town of about 350 people in southern Carroll County.

The TADC and Harriet Miller family signed an exclusive option agreement for the land. The paperwork on the arrangement was filed Wednesday with the Carroll County Recorder’s Office.

Any development likely would involve another 6 acres of railroad right of way.

“This site will allow us to be more competitive when looking for locations this large,” said Jim Gossett, executive director of the Carroll Area Development Corp.

Larry “Doc” Sporrer, treasurer of the TADC, said the land likely will be marketed at $10,000 an acre to potential developers.
Sporrer said Templeton hopes to lure a “value-added” company, possibly in the biofuels industry, but that the door is open to any number of possibilities.

He said the TADC doesn’t have any desire to subdivide the land.

For his part, Gossett (pictured at right) said the CADC has had four requests in the last 18 months for availability of sites at more than 100 acres.

The option deal will allow Carroll County development officials to show businesses that the area is ready for new sitings with much of the location and legal work already complete.

“You can’t just point to a farm field and say I know a guy who knows a guy who might sell you that land,” Gossett said.
Specifically, Gossett said the Templeton site would be marketed at www.carrollareadev.com, and www.westerniowaadvantage.com.

Gossett said he regularly receives requests for available sites from the business development arms of utilities, the Iowa Department of Economic Development and individual companies.

The CADC’s industrial site locations committee is now eyeing other potential spots in the area for similar option deals with the intent of marketing them to business and industry as well.

Meanwhile, Sporrer said, the TADC is planning another 10-acre expansion to the business park on the eastern side of Templeton, where Templeton Rye Spirits is located.

(Editor’s Note: The photo is of Jim Gossett.)