TERRE HAUTE — Every time I pull my Saturn up to the pumps and see higher fuel prices, it stinks.
But I’d willingly absorb an increase if it meant our country could keep more of its talented young people and valuable resources here in the U.S. of A.
Yes, barely a month after President Bush pitched a long overdue acceleration toward an American economy based on homegrown fuels instead of Middle Eastern oil, the primary ingredient in that idea — ethanol — is taking a beating for all of its shortcomings. When it comes to that product made from plants, such as corn, ethanol’s pile of pitfalls will be knee-high by this Fourth of July. Take your pick …
-- It generates only 70 percent of the energy available in gasoline.
-- The 51-cents-per-gallon federal subsidy given to refineries and wholesalers costs taxpayers $6 billion a year.
-- Burning ethanol releases smog-causing nitrogen oxide into the air.
-- It’s hard to find stations offering E85 (a blend of 85-percent ethanol and 15 percent gasoline).
-- It only works in properly equipped flex-fuel vehicles.
-- It’s currently expensive to produce.
Maybe so, maybe not. There are valid economic and scientific counterpoints to each of those complaints. Several studies, for example, refute ecological arguments against ethanol and prove that its use helps reduce greenhouse emissions. Regardless of all of the debate over its perceived negatives, ethanol still doesn’t come with nearly as much international baggage as oil. If self-serving interests in farm states such as Iowa, Nebraska and Indiana drive up the price of corn and, thus, ethanol, we’re not likely to end up in an armed conflict.
No amount of economic inefficiency offsets that price.
Besides, some of the smartest scientists on the planet are right here in Indiana, specifically at Purdue University, working on solutions. I trust them.
With all of ethanol’s flaws, if Bush’s proposal to reduce America’s current gasoline consumption by 20 percent in the next 10 years comes true, the result could be higher prices at the pump. Sticking with gas would be cheaper, right?
Maybe not. Anyone who’s ever rented a car knows what “hidden costs” are. Sure, a two-door Ford might carry an advertised $29-a-day rental price, but when you add the taxes, insurance and refueling fees, the actual bottom line might be three times greater.
Americans pay beyond the pump price for gasoline. Those added costs include the human and financial toll from military conflicts, as well as the expense of having to guard international shipping routes, not to mention directly and indirectly subsidizing unsavory governments controlling oil-producing countries.
“I do believe there’s a national security cost to getting 60 percent of our oil from less-than-reliable, less-than-friendly sources,” said Wally Tyner, an ag-economist and energy expert at Purdue, in a telephone interview last month.
Professor Tyner thinks the steps proposed by Bush represent a good idea, while also acknowledging that others — such as Sen. Richard Lugar — have wanted America to move even more aggressively away from foreign-oil reliance long before the president got interested in the concept.
“Both pieces of the energy plan represent a new direction for the administration,” Tyner said.
Bush’s plan for a 20-percent cut in foreign oil consumption involves replacing 15 percent of that supply with alternative fuels. The other five percent would come through conservation. If it happens, American motorists will be using 35 billion gallons of ethanol and alternative fuels a year by 2017. That’s almost seven times the amount of corn-based ethanol produced in the U.S. in 2006.
“In order to get [to 35 billion gallons a year], we would have to make ethanol out of cellulose,” Tyner explained.
Indiana and other farm states are working on that idea right now, although that progress could have been greater if there were more action from the White House in recent years. (Lugar, for example, has a plan for America to be using 60 billion gallons of ethanol a year by 2030.) Cellulosic ethanol is derived from trees and grasses.
Plenty of skeptics say the nation’s economy simply cannot make 60 billion gallons of ethanol, or even 35 billion gallons in a year.
Andy Miller, the Indiana director of agriculture, insists Bush’s proposal is attainable and that the Hoosier state, which currently has only one operating ethanol plant, will be a major contributor to that objective.
“Indiana’s ideally poised to be a leader in achieving the 35-billion-gallon goal, and the implementation of that goal will have a significant impact on the state,” Miller said by telephone last month.
Twelve ethanol plants, including Putnam Ethanol in Cloverdale, four biodiesel plants are under various stages of construction now, according to the Indiana Department of Agriculture. Together, they will eventually produce more than 1 billion gallons of fuel annually, Miller said.
Some suggest states such as Indiana are merely selling the rest of the country on a gold-rush boom that may benefit those states temporarily but will divert the nation’s resources from more realistic options. Besides, haven’t presidents — from Bush back to Jimmy Carter — been talking about shaking our “addiction to oil” with only meager results since the 1970s? Why should it become a reality now?
“We are in a very different world,” Miller said.
And our economy should adapt because of that different world, even if those changes seem difficult, cumbersome and maybe illogical along the way.
It may all boil down to this question, posed by Professor Tyner: “Are you willing to pay 10 or 15 cents more per gallon for stronger national security?”
I responded by asking him how he thought American consumers would answer that question.
“I don’t know what they’ll say,” Tyner answered.
Undoubtedly, there are a lot of dictators in those oil-rich countries are counting on most of us saying, “No.”
Mark Bennett can be reached at mark.bennett@tribstar.com or (812) 231-4377.
Mark Bennett Opinion
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