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MN2020 - Environmental Op-Ed Series: Beyond Corn Ethanol
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Environmental Op-Ed Series: Beyond Corn Ethanol

April 28, 2010 By Natalie Camplair, Hindsight Community Fellow
Ron Fagen knows about efficiency in the renewable energy industry. His specialty? Since 1988 it's been corn ethanol--a renewable automotive fuel made from corn sugar that many hoped would replace gasoline. His Granite Falls, Minnesota-based company, Fagen Inc., built more than half of the ethanol plants in the United States. Mr. Fagen says  it was his company's dedication to technologically advanced and efficient designs that helped reduce the price per gallon of ethanol from $3.60 in the 1980s to just $1 in 2005.

But the ethanol boom is over now. In an interview at the 2010 National Ethanol Convention on February 16 in Orlando, Florida, Mr. Fagen announced that, in 2010 and beyond, he plans to "put ethanol [projects] on hold" and instead to invest in biomass and wind energy projects.

The fact that the nation's largest ethanol plant builder is actively investing in other renewable fuels should send a message to policy makers and other businesses. The future of renewable electricity and fuel lies in diversification, increased efficiency and the promotion of rural communities that foster the development of new technologies. Farm towns in Minnesota and around the country can become self-sufficient, productive hubs of green energy development by not specializing in monocrops.

A month after Fagen declared his change of focus, President Obama called for a tripling of biofuel production to 36 billion gallons by 2022 from last year's 11.1 billion. President Obama and other officials claim that this legislation will bring prosperity back to rural America. Interestingly, this is not what corn ethanol producers, who have relied on government subsidies, want to hear.

Ethanol is not the primary renewable fuel encouraged by Obama's mandate. The call to triple biofuel production is part of a series of government projects and programs that promote "second-generation" fuels, like those derived from prairie grasses, leftovers from lumber production, and manure. Nathanael Greene of the Natural Resources Defense Council said that "this [mandate] proves how important it is to put policies in place to make sure public dollars go to support real renewable energy."

Today, about one third of all corn produced in the U.S. becomes ethanol, which is then mixed with regular gasoline or piped into specially designed vehicles like Ron Fagen's Chevy Tahoe that takes a mixture of 85 percent ethanol and 15 percent gasoline. In recent years, the ethanol industry has been slumping as subsidy-inflated production capacity exceeds the actual consumer demand. That aside, state and federal governments have continued to funnel tax dollars into the industry through legislation like the 2008 Farm Bill.

This gap between supply and demand has led to pleas from ethanol producers for higher percentages of ethanol permitted in gasoline to drive up demand. Both the Environmental Protection Agency and President Obama have withheld making a decision on whether to increase the amount of ethanol allowed in gasoline--announcements that have ethanol proponents tapping their feet. The negative environmental impacts of corn ethanol production, like the pollution of water and soil resources and high greenhouse gas emissions, also cause legitimate hesitation.

The question remains if the entire biofuel industry, ethanol included, has the infrastructure to meet President Obama's demand for a tripling of production.  A lack of capacity to meet this mandate creates a niche for pioneering companies like Fagen's to expand efficient and renewable biofuel and energy production.

Business and government actors need to stop looking to the corn ethanol industry for a solution to the national energy crisis and rural unemployment. Instead, we should invest in an entire, diverse green energy sector that includes wind, biomass and increased efficiency. This would open up a variety of jobs in rural communities, from research engineer to farm mechanic. The same agriculturalists who have asked for an extension of government support to cultivate mono-crops could reap huge long-term benefits from the diversification of the biofuels industry.

None of this change can happen unless citizens demand that their representatives in Congress support comprehensive renewable energy legislation. This means an end to the doling out of corn subsidies. In Minnesota, steps are already being taken to increase rural energy efficiency and promote wind energy, but we are still on schedule to increase the percent of ethanol in gasoline from 10 to 20 percent in 2013. There is still a long way to go before we move beyond corn ethanol.

With the media and political focus on health care coming to a close, the time is now to turn to the impending energy debate. Policies to further expand the corn ethanol industry should not be supported if there is consensus that ethanol is an unwise investment or that better alternatives are available. If state governments and private enterprises choose to follow Ron Fagen's example, the reward will be a healthy, diverse fuel economy and the preservation of the Midwestern environment.

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