[Congressional Record Volume 143, Number 154 (Thursday, November 6, 1997)]
[Senate]
[Pages S11891-S11892]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                         THE MERITS OF ETHANOL

 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.

                          ____________________