The Ethanol Backlash

A substitute for gasoline, this grain-derived fuel has generated enthusiasm and resistance in equal amounts.
By Daniel Gross Newsweek Web Exclusive
Jul 20, 2007

Ethanol, the substitute for gasoline that in the United States is largely derived from corn, is hot. Statistics from the Renewable Fuels Association show that production doubled between 2002 and 2006, from 2.1 billion to 4.9 billion gallons, allowing the United States to surpass Brazil as the Saudi Arabia of ethanol. When the 86 plants under construction today are completed, American production capacity will top 13 billion gallons per year. In his most recent State of the Union address, President Bush called for the United States to produce 35 billion gallons of renewable fuels in 2017.

Any rapidly growing, paradigm-shifting industry is bound to engender both enthusiasm and resistance in roughly equal amounts. And the prospect of using grains, which have generally been cheap in this country, as a replacement for fossil fuels, was bound to excite hope and ruffle feathers. After all, while farmers and ethanol-plant investors will profit, companies and industries that rely on cheap grains, or that produce and distribute fossil fuels, face serious disruption. And so, before it has even emerged as anything more than a marginal contributor to supply—ethanol accounted for about 1.25 percent of gasoline use last year—a full-fledged ethanol backlash is underway. The squawks of protest arise not just from oil companies. They're coming from economists, environmentalists, poverty fighters, and science nerds. Meet the ethanol-skeptics.

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