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# The Politics of Ethanol and the Future of Next Generation Biofuels

Module by: Nicole Hemsoth. E-mail the author

Summary: There is tremendous potential for the United States to forge new political alliances at home and abroad in the production of ethanol. At the same time, decreasing dependence upon petroleum will also have consequences. The relative benefits and disadvantages—political, social, economic, and environmental—must be weighed carefully by those who are in the position of crafting and implementing national policy.

## The Politics of Ethanol and the Future of Next Generation Biofuels

Anyone with even a casual interest in keeping up with mainstream media will confirm that “green” issues have been a popular subject in the print and electronic news in recent months. According to Jamison (2001), the term “greening” refers to a set of practices intended to promote sustainable living and development. One of those practices is the use of ethanol, which is “the most widely touted clean fuel” (Greve, Smith, & Wilson, 1992, p. 22). Ethanol is not only a hot-button environmental issue, however. Ethanol is also increasingly becoming a political issue (Doyle, 2000). As the war in Iraq rages on with no apparent end in sight, as gas prices surge, and as Americans’ dependence on non-renewable petroleum-based fuels becomes increasingly and painfully evident, ethanol is viewed as not just a viable alternative to petroleum fuels, but a necessary one that is being embraced by politicians on both sides of the aisle (Murray, 2007). The use of ethanol is even becoming an important issue on the platform of the candidates for the 2008 presidential election (Murray, 2007). As Murray (2007) reported, presidential aspirant Senator Hillary Rodham Clinton “ is promoting a $50 billion strategic energy fund, laden with more ethanol perks [than she previously voted against]” (para. 1). Barack Obama, a Democrat, and Senator John McCain, a Republican, also support expanding and improving the existing infrastructure for massive ethanol and biodiesel use in the United States (Murray, 2007). Even President Bush, who consistently receives abysmal approval ratings from environmentalists, has increasingly become involved in actively promoting a political culture that is more ethanol and alternative fuel-friendly. In his 2007 State of the Union address, for instance, President Bush called for an increase of 15% dependence upon alternative fuels by 2017 (The White House, 2007). This increase represents a production of 35 billion gallons of alternative fuel (The White House, 2007). Although this number really represents only a small percentage of fuel consumption, it is, perhaps, an important political nod to the increasing role that biofuels are expected to play in the coming years. As this initiative demonstrates, ethanol and biofuel promotion is no longer just an environmental concern for people who want to reduce their carbon footprints. Rather, ethanol and biofuel production is being viewed by Democrats and Republicans alike as an increasingly important political strategy that will serve both domestic and foreign ends. In the 2007 State of the Union address, for instance, the President indicated that a shift to alternative fuel dependence will reduce political vulnerability and dependence upon other countries’ petroleum reserves, a critical issue which will be discussed at greater length later in this paper. Murray (2007) explains that ethanol and biodiesel have actually been political issues since at least the 1970s, “when the Arab oil embargo raised voter concerns about U.S. dependence on foreign oil, and it got its first federal assistance in a 1978 energy tax bill” (para. 7). Despite these hauntingly familiar political events of the 1970s, which seem to have an echo in the War on Iraq, ethanol never really took root and spread in the United States in a meaningful way. Politicians’ interest in the use of ethanol remained minimal until recently, when concerns about the rapid warming of the planet and all of the attendant consequences prompted a re-examination of the possibilities that ethanol represents for oil-dependent Americans (Intergovernmental Panel on Climate Change, 2007). The war also played a significant role in renewing the interest in ethanol. There are many reasons for the political resistance that has characterized the widespread implementation and availability of ethanol as a fuel source in the United States. First of all, there is a powerful lobby comprised of automobile manufacturers and oil companies that has resisted the shift to ethanol; after all, their industries seem to rely upon continued petroleum dependence (Ball, 2006). This lobby has successfully convinced politicians to maintain the petroleum-based status quo, arguing that doing so maintains economic stability. A shift to an ethanol-oriented fuel system, they argue, would require substantial changes not only in infrastructure and industry, but in legislation as well. This issue of the auto-makers’ and oil producers’ lobby and its incredible power was underscored in a recent television report and follow-up online interview by PBS reported David Brancaccio (2007). In his in-depth report on the North American automobile industry and its resistance to developing fuel-efficient vehicles, Brancaccio (2007) explained that there is a curious dynamic between consumers and producers that is largely preventing the development and widespread implementation of alternative fuel sources, as well as cars with improved miles-per-gallon ratios. Although the technology for alternative fuels and improved MPG ratios already exists, Brancaccio (2007) indicated that there is a strong consumer demand for vehicles with high gas-consumption ratios. Sports utility vehicles are particularly good sellers, and auto makers support their claims against alternative fuels such as ethanol by pointing to robust consumer data that seem to support the notion that gas-guzzling vehicles are here to stay (Brancaccio, 2007). For politicians then, voting against alternative fuels is a nod of support not only to the historically powerful auto and oil industries and their respective lobbies, but also to consumers, who are, after all, voters. Second, and related to the first issue, is the fact that while federal politicians have made occasional efforts to expand ethanol and biofuel usage, these efforts have largely been gestures, rather than concentrated and committed initiatives. Although a 1998 study conducted by the U.S. Department of Energy and the US Department of Agriculture determined that ethanol and other alternative fuels have the potential to reduce carbon dioxide emissions as much as 78% when compared to petroleum diesel, the United States government does not have an impressive history of applying such data through concrete, tangible initiatives. The United States has largely failed in tentative efforts to provide consumers with incentives, economic or otherwise, for using ethanol or any of the other alternative fuels that are available. In addition, the government has not supported efforts to expand or improve the infrastructures of production, delivery, and distribution of ethanol. While ethanol has been used widely in other countries for 20 years, it was not until the early 1990s that the federal government approved the Energy Policy Act, which permitted consumers to purchase ethanol and other biofuels for the first time. The Energy Policy Act remained relatively obscure, however. Its passage was not accompanied by public fanfare, nor was it accompanied by any visible change in the availability of ethanol. Even today, more than 15 years later, many Americans are probably unaware whether ethanol or the other biofuels are available for purchase in their community. The purpose of the Energy Policy Act was to reduce the United States’ reliance on foreign oil, especially considering the volatility of the foreign petroleum markets. On an operational level, though, the Energy Policy Act resulted in few changes. Congress did require some governmental departments to convert their fleets to run on alternative fuels, including ethanol. However, for the American public, the Energy Policy Act was passed into legislation seemingly without any personal relevance or significance. It required no consumer-level changes, and it did little to support any, either. Despite its intentions, the Energy Policy Act has clearly not reduced this country’s dependence on foreign oil. Another important political issue related to the production and use of ethanol is that there is a certain ingrained, widespread, and persistent social resistance to developing ethanol and the other available renewable biofuels. As Ball (2006) explains, the technology of petroleum and petroleum-using vehicles has had a century to perfect itself. While Americans may say that they want to shift to renewable fuel sources, especially if they are more affordable and also demonstrate appreciable positive environmental effects, the reality, in terms of actual behavior, is that “gasoline is convenient reliable, and even at current prices, relatively affordable” (para. 4). This last statement may seem somewhat preposterous, given that the average price for a gallon of gas in the United States this week exceeds$3.20 per gallon (Gasbuddy, 2007); however, ethanol and the other biofuels are likely to be as expensive as petroleum-based gasoline, if not more so (Yacobucci & Schenpf, 2007). This is likely to be the case until there is a widespread, developed, and connected infrastructure for the production, delivery, and distribution of ethanol (Yacobucci & Schenpf, 2007). The coordination of production, delivery, and distribution will require political involvement and coordination on the local, state, and federal levels.

Furthermore, even when gasoline prices at the pump are high, as they are at present, consumers seem willing to spend their disposable income on this particular expense (Brancaccio, 2007). As gas prices have risen, there has not been a concomitant drop in consumption or a shift to alternative means of transportation, such as bicycling, walking, or using public transportation systems. Americans are a car-oriented culture, and shifting attitudes away from car-dependence has been a task that is fraught with political difficulty and is considered by some scholars to be akin to political suicide. In his history of the American car and the culture it has spawned, Berger (2001) contends that Americans associate the automobile with indispensable personal freedoms. The automobile, writes Berger (2001), has been a significant way for Americans to attain the freedom of mobility and personal decision-making, and it has also been an important variable around which people construct particular aspects of their identity. As such, any changes in the way that mobility is conceptualized and experienced are considered threatening by the public, which cherishes the car in a way that many other countries and cultures do not (Berger, 2001).

Finally, there are political issues related to the widespread use of ethanol that would affect relationships with foreign countries significantly. In fact, the mere idea that an increase in ethanol production is pending caused immediate ripple effects in the political, social, and economic sectors in Mexico in mid-2006 and into this year, causing a shortage of corn tortillas, a staple of the Mexican diet (Webb, 2006). It is likely that such shortages, both domestic and foreign, will continue to occur until both producers and consumers adjust production and demand levels. As Webb (2006) noted, corn produced for ethanol only increased by one-sixth in Minnesota, a corn-producing state, between 2004 and 2005; however, the “discovery” of corn as veritable “liquid gold” (para. 9) has spurred intensified demand for corn crops. As of June, 2006, Webb (2006) reported that ethanol is currently responsible for 50 to 60% of the Minnesota corn crop usage, and in Iowa the scenario is even more dramatic, where almost all of the corn crops are being earmarked for ethanol. It is difficult, perhaps, to understand how these production and usage patterns, which seem to fall squarely in the agricultural realm, affect politics and foreign relationships, but the example of Mexico is but one of many actual consequences, also predicting future outcomes. While ethanol does present significant positive environmental advantages, the replacement of petroleum-based gasoline products for ethanol-based products must be studied carefully for its political consequences, which are, perhaps, harder to identify, predict, and understand.

The United States could learn, though, from other countries where ethanol has been used more than it has here. Although the idea of using ethanol to power vehicles is a relatively new idea for most Americans, ethanol and the other biodiesels have been used in Canada, Europe, and Latin America for at least 20 years (Gentry, 1998). Brazil, in fact, is one of the biggest producers of ethanol and biofuel in the world, and it is intensely interested in developing a political, commercial, and economic relationship with the United States for the promotion of ethanol use (Wilson Center, 2007). Specifically, Brazil would like to partner with the United States to “establish international standards, coordinate joint investments, and devise a common strategy” that will permit these two partners to bring other “producer and consumer” countries into the ethanol-using fold (Wilson Center, 2007, para. 6). The Wilson Center (2007) suggests that positive political relationships can be forged by increasing international partnerships that could facilitate the production, delivery, and distribution of ethanol and the other biofuels. In fact, the Center (2007) alludes that the United States could improve its tarnished reputation, especially in regions where it has historically had positive and productive relationships, including Latin America, by investing politically and financially in joint political initiatives related to the use and international standardization of ethanol.

There is another critical political issue related to the increased use of ethanol, the significance of which cannot be underestimated. The transition from a petroleum-dependent fuel economy to an ethanol and biofuel-dependent economy would shift the locus and nature of political relationships and pursuits abroad from a situation in which the United States is largely dependent upon foreign countries for petroleum supplies to a situation in which the United States is dependent upon the domestic production of corn and other ethanol sources to fulfill its gas needs. At present, the United States cannot meet its own petroleum needs. Even if the United States drilled in the Arctic National Wildlife Refuge area (ANWR), a politically divisive issue in and of itself (Herndon, 2002), the reserves that are located in this vast Alaskan territory are not sufficient to meet the United States’ fuel needs over the long-term (National Resources Defense Council, 2005). According to the National Resources Defense Council (2005), if ANWR were opened for drilling, it would only yield enough oil to keep the United States fueled for one year, hardly justifying the political decision to open this territory, which is currently protected by the federal government, despite President Bush’s repeatedly articulated interest in opening ANWR (National Resources Defense Council, 2005).

The transition to ethanol from petroleum, then, represents an important political paradigm shift. Rather than depend upon oil-rich foreign countries, such as Venezuela, Saudi Arabia, Iraq, and other Middle Eastern nations to provide open up their oil reserves to the United States, leaving the U.S. incredibly vulnerable to shifting political alliances and needs, the development of ethanol shifts dependence onto domestic producers, thereby reducing both political and economic vulnerability. This shift is increasingly important, considering the fact that the United States does not have particularly stable relationships with oil-rich countries interested in selling their reserves. The United States’ political relationships are particularly weak in the Middle East at this moment, and its relationship with Venezuela is under increasing strain because of political differences between President Bush and Venezuelan President Hugo Chavez. Also, both the Middle East and Venezuela are recognizing that the United States is not the only big consumer of petroleum anymore. As China’s industrial boom and modernization movement expands and accelerates, it becomes increasingly demanding of foreign oil supplies, and has developed strong political and commercial ties with Venezuela, in particular. The relationship between China and Venezuela may serve to destabilize foreign relations between China and the United States, particularly as China becomes more competitive with the United States in world markets. The numerous ways in which a shift to ethanol will affect political alliances and decisions, whether domestic or foreign, remain to be seen, though they are already being observed and anticipated.

As ethanol production continues to expand and as the use of ethanol becomes more popular, it is entirely possible that new and powerful lobbies will emerge, and that these groups will begin to challenge the historical power that has been enjoyed by the automobile and oil-manufacturing industries, thereby changing the landscape of politics that involve fuel-related issues. In particular, it is likely that the agricultural industry will experience a profound resurgence and will expand its sphere of influence over political decision-making at the local, state, and federal levels. Because corn is, at present, the most widely used source product for the production of ethanol, corn farmers will probably exert the greatest influence over politicians and alternative fuel-related decision-making processes and policies. There are a number of other agricultural crops that can serve as the core ingredient for ethanol. These crops include sorghum, wheat, and sugar (Pahl, 2005). Farmers are obviously key stakeholders in all matters related to ethanol production and use in the United States, and their opinions and needs will gain greater political weight in matters ranging from trade agreements and tariff structures to import and export arrangements and pricing.

It is also probable that the local and state governments that have pioneered efforts in the development and use of ethanol and the other alternative fuel products will play a significant role in influencing the federal government’s political policies and practices with respect to ethanol usage. In particular, West Coast cities such as Seattle, Washington and Portland, Oregon have been actively engaged in ethanol and biodiesel development strategies for at least two decades. These local governments can offer valuable advice to the federal government with respect to strategies for developing cooperative relationships between government agencies and private and industrial partners. Such partnerships are absolutely necessary if widespread ethanol usage is to at least decrease our dependence on petroleum-based fuels to an appreciable degree. Local jurisdictions such as Seattle and Portland can also identify potential pitfalls related to ethanol implementation, and can suggest realistic and effective strategies for either avoiding or surmounting such obstacles and challenges. The demonstrated efficacy of the pilot programs in West Coast cities can also provide tangible evidence to substantiate the claim that supporting ethanol and alternative fuel development is not political suicide. In fact, citizens from these jurisdictions can show how ethanol and alternative fuel support can actually enhance one’s political attractiveness, particularly in our increasingly “green-conscious” climate. At long last, the promotion of ethanol as an alternative—and perhaps, even primary—fuel source need not be considered as a political liability, but instead, may be viewed as a support-increasing strategy. It will be interesting to watch the presidential campaign over the next year to determine the influence that ethanol and alternative fuel movements will have on the election.

The shift to a political, social, and economic culture that privileges ethanol and other alternative fuels over the increasingly scarce and non-renewable petroleum fuels certainly holds a great deal of promise for politicians. However, as is the case with any changes in policy and practice, a shift to ethanol and alternative fuels will also be likely to destabilize some political relationships and dynamics while improving and stabilizing others, both domestically and internationally. As the United States devotes more attention to ethanol and alternative fuels, it must consider all of the political issues that have been identified here. The failure to do so could be politically devastating. No country enacts policies in a vacuum, especially when those policies are intimately connected to the international economic market, an issue which will be addressed later in this team paper. There is tremendous potential for the United States to forge new political alliances at home and abroad in the production of ethanol. At the same time, decreasing dependence upon petroleum will also have consequences. The relative benefits and disadvantages—political, social, economic, and environmental—must be weighed carefully by those who are in the position of crafting and implementing national policy.

References

Ball, J. (2006, August 2). How California failed in efforts to curb oil addiction. The Wall Street Journal.Retrieved on May 24, 2007 from http://www.post-gazette.com/pg/06214/710490-185.stm.

Berger, M.L. (2001). The automobile in American history and culture: A reference guide. Westport, CT: Greenwood Press.

Brancaccio, D. (2007, May 18). Interview: Csaba Csere on the U.S. car market. NOW. Retrieved on May 24, 2007 from http://www.pbs.org/now/shows/320/auto-market.html.

Doyle, J. (2000). Taken for a ride: Detroit’s big three and the politics of pollution. New York: Four Walls Eight Windows.

Gasbuddy. (2007, May 24). Regular gasoline average prices. Retrieved on May 24, 2007 from

http://www.gasbuddy.com/.

Gentry, B.S. (1998). Biodiesel. The Columbia encyclopedia. New York: Columbia University Press.

Greve, M.S., Smith, F.L., & Wilson, J.Q. (1992). Environmental politics: Public costs, private rewards.New York: Praeger.

Herndon, M. (2002). The last frontier: The last true wilderness is increasingly at risk in the current political climate with calls for less dependency on foreign oil focusing attention on the Alaskan preserves. Forum for Applied Research and Public Policy, 16(4), 72.

Intergovernmental Panel on Climate Change. (2007). Climate change 2007: Mitigation of climate change.Retrieved on May 24, 2007 from http://www.ipcc.ch/SPM040507.pdf

Jamison, A. (2001). The making of green knowledge: Environmental politics and cultural transformation. Cambridge: Cambridge University Press.

Murray, S. (2007, March 13). Ethanol undergoes evolution as a political issue. The Washington Post. A06.

National Resources Defense Council. (2005). Arctic National Wildlife Refuge: Why trash an American treasure for a tiny percentage of our oil needs? Retrieved on May 24, 2007 from http://www.nrdc.org/land/wilderness/arctic.asp.

Pahl, G. (2005). Biodiesel: Growing a new energy economy. White River Junction, VT:

Chelsea Green Publishing Company.

Webb, T. (2006, June 26). Ethanol plans threaten corn shortage. The Minneapolis St. Paul Pioneer Press.Retrieved on May 24, 2007 from http://www.topix.net/content/kri/ 0605477030039508027915220497072325841118?threadid=QLI57SMRRL8FOKM7

The White House. (2007). Twenty in ten: Strengthening America’s energy security. Retrieved on May 24, 2007 from http://www.whitehouse.gov/stateoftheunion/2007/initiatives/energy.html

Wilson Center. (2007, February 20). The global dynamics of biofuels: Potential supply and demand for ethanol and biodiesel in the coming decade. Retrieved on May 24, 2007 from

Yacobucci, B.D., & Schenpf, R. (2007). Ethanol and biofuels: Agriculture, infrastructure, and

market constraints related to expanded production. Retrieved on May 24, 2007 from

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