[Pages S11891-S11892]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

THE MERITS OF ETHANOL

<bullet> Ms. MOSELEY-BRAUN. Mr. President, several months ago, during
the debate on the Balanced Budget Act of 1997, some of my colleagues
called upon Congress to end its commitment to ethanol.
Ethanol, as my colleagues are aware, is an alcohol-based motor fuel
manufactured from corn.
These lawmakers, predominately from oil States, drew their daggers in
professed horror, branding Federal support for ethanol as a ``deficit
buster,'' or a conspiracy of ``corporate welfare.''
While I know this mantra has become popular and convenient for many
in Congress in recent years, the truth is that, in this instance, it is
simply false. I would like to urge my colleagues to examine an
excellent essay recently printed in the Wall Street Journal which
illustrates the truth about ethanol, and which, I am hopeful, will
convince critics to reconsider their position.
The article, entitled ``Alcohol and Driving Can Mix,'' and authored
by former Central Intelligence Agency Director James Woolsey, outlines
the environmental and energy benefits of replacing gasoline with
alcohol fuels, like ethanol.
Mr. President, the concept of alcohol-based fuels is not new. Fifty
years ago, an Illinois lawmaker named Everett Dirksen encouraged
policymakers to consider ``processing our surplus farm crops into an
alcohol of 10 percent.'' In doing so, Dirksen believed, we would
``create a market in our own land for our own people.''
Half a century later, this idea has become reality. Today, demand for
ethanol is estimated at 1.5 billion gallons. There are approximately 50
commercial facilities producing fuel ethanol in more than 20 different
States across the country. By 2005, 640 million bushels of corn will be
used to produce 1.6 billion gallons of ethanol.
Ethanol has a wide range of benefits, such as its effects on the
environment. Ethanol burns more cleanly than gasoline, and, according
to the Environmental Protection Agency, diminishes dangerous fossil-
based fumes, like carbon monoxide and sulfur, that choke our congested
urban areas.
Oil tankers will not spill ethanol into our oceans, killing wildlife.
National parks and refuges will not be targets for exploratory
drilling. When ethanol supplies run low, you simply grow more corn.
Ethanol also strengthens national security. Ethanol flows not from
oil wells in the Middle East, but from grain elevators in the Middle
West, using American farmers, and creating American jobs. With each
acre of corn, 10 barrels of foreign oil are displaced--up to 70,000
barrels each day.
And for farmers, ethanol creates value-added markets, creating new
jobs and boosting rural economic development. According to a recent
study conducted by Northwestern University, the 1997 demand for ethanol
is expected to create 195,000 new jobs nationwide.
The bottom line is that ethanol is the fuel of the future--and the
future is here. Illinois drivers consume almost 5 billion gallons of
gasoline, one-third of which is blended with ethanol. Chicago
automotive plants are assembling a new Ford Taurus that runs on 85
percent ethanol. More and more gas stations are offering ethanol as a
choice at the pump.
Isn't it worth cultivating an industry that improves the environment
and promotes energy independence? Isn't it the responsibility of
Congress to foster an economic climate that creates jobs and
strengthens domestic industry? Don't we have a commitment to rural
America, and a responsibility for its economic future?
Mr. President, I think the answer to these questions is a resounding
yes, and that's why I will work to ensure that the Federal commitment
to ethanol is kept.
I ask that the text of this article be printed in the Record.
The article follows:

Alcohol and Driving Can Mix

(By R. James Woolsey)

President Clinton's global-warning proposal includes some
$5 billion in tax breaks to encourage the development of new
technologies to curb carbon dioxide emissions. But promising
technologies may already be in the offing. New microbes and
biocatalysts with names like zymomonas mobilis and KO-11 have
been genetically engineered to produce ethyl alcohol not just
from feed grains but also from other plants and common
organic wastes. The production of ethyl alcohol from biomass
may turn out to be as revolutionary as the production of
integrated circuits from silicon, vastly affecting the
world's distribution of wealth and the fundamentals of
international security.
Replacing gasoline with biomass-derived ethyl alcohol would
greatly reduce man-made greenhouse-gas emissions--estimates
put carbon dioxide emissions at 1/10th or less than those for
gasoline over the life cycle of fuel production and use.
Other changes in transportation would be far more costly:
Fuel-cell cars, for example, would require retooling
Detroit's factories; other efforts would need a vast new
infrastructure for fuel distribution; and a major shift
toward mass transit seems implausible in many of today's
fast-growing, sprawling cities.
In contrast, very little such new investment would be
necessary for ethyl alcohol to become a major share of
transportation fuel. Older cars' engines are able to burn
gasohol (10 percent ethyl alcohol); and a computer chip in
the fuel systems of this year's midsize Ford and Chrysler
minivans permits the use of up to 85 percent alcohol. Federal
fuel economy standards encourage these new ``flexible fuel
vehicles,'' and they have fortuitously arrived just as the
new technology is ready to reduce alcohol costs. Mixing these
fuels with gasoline is now done easily at filing stations
that sell gasohol. Environmental costs go down with alcohol:
its wide use would lead to a substantial improvement in air
quality. And an alcohol spill on an Alaskan shore would
produce nothing worse than dispersal, evaporation and
possibly some inebriated seals.

volatile costs

The one real barrier to ethyl alcohol's replacing a large
share of gasoline is production cost, which today is
comparatively high and volatile. Alcohol's current feedstock,
corn, is subject to the caroming behavior of feed markets. In
1995 its price, normally

[[Page S11892]]

around $100 a ton, nearly doubled, and the production of
alcohol for transportation consequently had to be cut by a
third. Ethyl alcohol feedstocks have been limited because the
yeast that has been used for millennia in fermentation can
only convert food crops. But advanced biocatalysts and
genetically engineered microbes now make possible the cost-
effective conversion of cellulosics: grass, trees and biomass
waste.
Even at today's fossil fuel prices, it is likely that as
ethyl alcohol's cost declines it will come to be used as the
emission-reducing oxygenate that is added to gasoline. But
the key issue is whether alcohol derived from biomass can
become cheap enough to begin to replace gasoline. Over the
past 15 years the cost of producing a gallon of alcohol
from corn has been cut in half, to about $1 a gallon. If
the new technology were to make it possible for costs to
fall another 30 to 40 cents, alcohol would become
competitive with gasoline when oil reaches around $25 a
barrel.
Is such a reduction in cost plausible? Consider switch
grass, common on the prairie. The U.S. Department of Energy
estimates twice as much alcohol could be produced per acre
from it than from corn. Since switch grass requires almost no
tilling, planting, fertilizing or other use of fuel or
chemicals, using it as a feedstock would yield several times
more energy than would be consumed during production--far
better than with either gasoline or corn-derived alcohol.
Switch grass and many biomass crops enrich the soil instead
of depleting it. Vastly more of the earth's surface is
available to grow such grasses, fast-growing trees and
aquatic vegetation than is available for feed grains. For
example, thinning forests by removing underbrush and small
trees reduces forest fires and preserves wildlife habitat--
and some cousin of zymomonas would doubtless love to dine on
such scrap brush.
Will oil prices hit $25 a barrel in a few years, making it
possible for even unsubsidized alcohol to replace a large
share of gasoline? The Energy Department forecasts a flat
market, but the oil bulls have a strong case because of
perennial instability in the Mideast and because demand will
burgeon as a growing share of the growing population in Asia
moves into cities. Fortune magazine noted two years ago that
once China's and India's energy consumption per capita reach
South Korea's current level, these two countries alone will
need almost 120 million barrels of oil a day--nearly double
what the world uses today. In spite of oil discoveries
elsewhere, it is likely that at least three-fourths of any
new demand will be filled from the huge reserves of the
Mideast, transferring more than $1 trillion over the next 15
years to the autocratic (and worse) states of the unstable
Persian Gulf alone, in addition to the annual $90 billion
they receive today.
Thus, if genetically engineered microbes and advanced
biocatalysts can start a transition from fossil fuels to
biofuels, a major Middle East war involving the U.S. would
become less likely. We would become freer to support
democracies and our friends--Israel, Turkey, Jordan--without
weighing whether we might offend an oil state. At the same
time, subsistence farmers in Africa and Latin America, paid
to grow transportation fuel, would begin to climb out of
poverty; Ukraine, rich in fertile land, would become more
independent of oil-rich Russia; China would feel less
pressure to befriend Iran and to build a big navy to dominate
the oil-rich South China Sea.

rural prosperity

What's more, new markets for biolfuel crops would help
rural America to prosper; substantial improvements in air
quality would let EPA Administrator Carol Browner stop
worrying about our power lawnmowers and let Detroit produce
four-wheel-drive sports vehicles to its heart's content; and
the U.S. trade deficit would shrink substantially, reducing
Wall Street's propensity to panic whenever the Japanese prime
minister gets grumpy about holding U.S. debt.
Who would lose? Chiefly oil-exporting states. But many
others would need an attitude check; oil companies, if they
resist diversifying; bureaucrats who don't like flexible-fuel
vehicles, because they aren't subsidized in their particular
fiefdom; environmentalists who don't like them either,
because they permit Detroit to build larger cars (the more
they burn alcohol, folks, the less you should care); Archer
Daniels Midland, which will have to get used to losing its
near-monopoly of the ethanol market; and of course Roger
Tamraz, because struggles over pipeline routes will become
boring.
What would we need to do before the December Kyoto summit?
Just announce that, in view of biofuels' advantages, we are
going to use government purchases and policies to help give
them a stable market until early in the next century while
production gears up, somewhat as we did with silicon chips.
We might even add that, except for continuing to do basic
research and development, we plan to phase out all energy
subsidies (including oil's remaining foreign tax credit)
toward the end of that period.
Then we could stand back, and let the new bugs and the
market do the rest.<bullet>

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