Cellulosic Ethanol an Environmental Disaster?


I subscribe to Forbes Magazine, and read every issue cover to cover. Just about every investment adviser in the U.S. does as well. On environmentalism, however, the magazine usually lacks serious input beyond spouting their usual anti-environmental stance. Peter Huber's column "The Forest Killers" puts me over the edge.

Cellulosic ethanol refers the distillation of agricultural waste, including "switch grass and wood chips" (a phrase made popular in the president's State of the Union), into ethanol. Huber paints a dire picture of what would take place if the process became widely avaiable. He envisions peasant farmers in India raping the landscape the clear it of lumber, prairie grass, cow dung, and god knows what else in order to get the feedstock for making a gallon of gasoline. It would be as if a barren field were suddenly strewn with diamonds, with the result being leveled forests and drained wetlands.

Maybe Huber is trying to invent the next Y2K/Doomsday/Peak Oil/Nuclear Holocaust scenario. Unfortunately, it shows little understanding of the process. Although the process is similar in theory to how a Kentucky Moonshiner makes grain alcohol out of corn, the scale required to produce enough barrels to make the enterprise worthwhile would make it out of reach to the small farmer. First of all, even at $3 per gallon, the profits derived from gasoline do not begin to approach that of moonshine. Farmers are likely to take that into account before they engage in a dangerous, explosive process. Secondly, the equipment required to distill ethanol, while not on the scale of an oil refinery, still requires economies beyond even the village level. Third, the sheer amount of feedstock required to make one gallon of ethanol is so immense that it could only be done on an industrial level. Fourth, given the effort required to gather such an enormous amount of feedstock, one would presume that the landowners -- even the land dwellers -- would make the calculation that other uses are more profitable. Lumber, soil for growing, grassland for grazing, wetlands for fishing will likely remain more profitable uses.

This is not to say that small farmers can not benefit from ethanol production. Quite the contrary. But, it requires a little more organization than the marauding bands of pillagers that Huber envisions.