When the green flag drops for the 53rd Daytona 500 today, most eyes will be on the action on the track. Those paying close attention to the flag, though, will notice something new — a large “E” — representing American Ethanol, the industry group pushing for expanded use of the biofuel.
About 120,000 race fans will wave smaller versions of the same flag, handed out by NASCAR to promote its decision to switch fuels this year. Every car and truck in NASCAR’s top three series in 2011 will use Sunoco Green E15 — a blend of gasoline with 15 percent corn ethanol. NASCAR, the federal government and corn ethanol producers say the biofuel reduces emissions and decreases American reliance on foreign oil.
“This whole effort is really a centerpiece of what NASCAR’s ‘green’ initiative is all about,” said Mike Lynch, NASCAR’s managing director of green innovation. “We’re about conservation of the environment, job creation and strengthening of American energy independence.”
What those 120,000 fans excitedly waving those green flags probably don’t know, however, is they’ve been drafted into a fierce debate over U.S. energy policy and its impact on food prices. NASCAR’s role is a small speck in a global discussion.
Many environmental advocates are dubious about corn ethanol’s benefits, and some people think governmental support for ethanol is largely to blame for soaring food prices.
Lynch and ethanol advocates question the impact of expanded ethanol use on corn prices, though, and point out the federal government is solidly behind ethanol, dating back to the 1970s.
Federal support for domestic ethanol (most American ethanol comes from corn), through tax credits, tariffs and other programs totaled $7 billion in 2010, according to a Congressional Research Service report released Jan. 24.
The ethanol-friendly policies have, in turn, spurred expanded production. The U.S. churned out more than 13 billion gallons of ethanol in 2010, more than four times the amount produced in 2000. The percentage of U.S. corn crops used for ethanol has grown from about 5 percent in 2000 to 39 percent in 2010, and recent reports that America’s corn reserves are at an all-time low has food industry leaders concerned.
“The idea that you can take 40 percent of the corn crop and divert it from food to fuel and not expect it to impact food prices is kind of ridiculous,” said Geoff Moody, director of energy and environmental policy for the Grocery Manufacturers Association.
THE PRICE DEBATE
Corn is the most widely produced feed grain in the United States, with about 80 million acres in the American heartland devoted to growing the yellow and green stalks, according to the USDA. Corn is not just important as a side dish at summer picnics; it is the main ingredient in feed for most livestock, and it is processed into a bevy of products including starch, sweeteners, corn oil, beverage and industrial alcohol, and ethanol.
America produces about 20 percent of the world’s corn supply, so an uptick in corn prices here has a domino effect on prices for beef, milk, chicken, eggs and scores of other food items.
And those prices have been going up, everywhere. The World Bank’s food price index increased 15 percent from October 2010 to January 2011, and a recent report by the World Bank estimates the price jumps pushed about 44 million people into extreme poverty. The report lists “finding less food-intensive biofuel technologies” among several measures “necessary to mitigate the impact of food price volatility on the most vulnerable.”
Corn ethanol advocates, and people who work in the confusing world of commodities trading, question how big an impact the expanded use of corn ethanol in recent years really has on food prices, though.
“This food-versus-fuel-thing is much more complicated than that,” said Chris Thorne, director of public affairs for Growth Energy, an ethanol advocacy group. Corn ethanol is cheaper than gasoline, so expanded use of corn ethanol cuts into how much it costs to transport food items.
“Corn is a fraction of overall food costs at the grocery store. High oil prices are just as responsible,” Thorne said.
Nikoleta Panteva, an analyst who studies agricultural markets for IBISWorld, an industry research firm, called the impact of corn ethanol use on food prices “not significant” when compared to factors like weather.
A 2009 report by the Congressional Budget Office questioned the benefits of continued subsidies for corn ethanol, though. The report estimated that increased use of ethanol accounted for 10 to 15 percent of the rise in food prices in a year, which, in turn, cost the federal government another $600 to $900 million in SNAP, formerly the food stamp program.
That report was similarly skeptical of ethanol’s environmental benefits, noting that clearing large amounts of forests or grasslands to grow more corn could more than offset the biofuel’s reduction in greenhouse gas emissions, since forests and grasslands naturally absorb more carbon from the atmosphere than cropland absorbs.
GREEN RACING’S ROLE
To NASCAR fans, the effect of the fuel switch will barely be noticeable. When a few fans were asked about their thoughts at the Speedway on Saturday afternoon, their answers revealed the challenges Lynch faces in pushing his green initiatives on NASCAR’s fan base.
“Ninety-seven percent of these people won’t know the difference,” said John Garrett, 65, of Nashville.
“I think it’s silly. How much pollution are they causing overall?” asked Clay Johnson, 66, of Tampa, noting the gas used for all the big rigs bringing the cars to the track, and the fuel for the thousands of cars and recreational vehicles spectators drove to Daytona Beach for Speed Weeks.
Lynch recognizes the seeming contradiction of his job as czar of green innovation for a sport based on the internal combustion engine. But he hopes NASCAR’s popularity helps spread a message that wouldn’t get out if the sport didn’t exist.
“You could make the argument ‘Wouldn’t it be better for the environment if you just didn’t race cars in the first place?’ But if you didn’t race the cars, no one would be paying attention,” Lynch said. “People are going to drive cars. This gives us a chance to shine a spotlight on things that really work well.”
Whether corn ethanol really does work well when all impacts are considered is still a matter for debate, though. A better solution, Lynch admits, would be cellulosic ethanol — made from waste products like corn cobs — but the technology to make that biofuel isn’t commercially viable yet.
Even Sunoco, which is selling an estimated 70,000 gallons of E15 to NASCAR this year, acknowledges its fuel is not a cure-all. When asked about the issues surrounding corn ethanol, a Sunoco spokesman e-mailed The News-Journal a statement the company released in September 2010.
“We’re concerned about the sustainability of food-crop based fuels due to the possible detrimental impact they can have on food prices, land use, and carbon dioxide emissions,” the statement said. “Sunoco supports the development of sustainable biofuels as a way to increase fuel supply in our country. Corn-based ethanol will likely remain a part of the fuel mix, but isn’t a perfect long-term solution.”