This immediate Chinese goal of obtaining 10% of that nation’s liquid fuels from methanol within five years, and more thereafter, far outpaces U.S. targets for producing ethanol from corn and other agricultural products. According to recent studies from numerous scholars, such as David Pimentel of Cornell University, the U.S. energy infrastructure may have problems ever getting much beyond 10% or so of its needs from synthetic fuels derived from agricultural products. In a recent discussion, professor Pimental noted his calculation that if the entire U.S. corn crop of 2005 were transformed into ethanol, and not a single ear of corn diverted to other uses, the resulting quantities of fuel would substitute for less than 15% of total U.S. liquid fuel demand.

In addition to what the scientific community is saying about the problems of using corn to manufacture ethanol on a vast scale in the U.S., no less an authority than the chief executive of Tyson Foods Inc. recently warned that ethanol-driven corn prices are already increasing the cost of beef and chicken, among other foodstuffs, for U.S. consumers. So the U.S. approach to substituting agricultural-based alternative fuels for imported oil is going to create direct competition in the corn pits between its food supply and its transportation fuel requirements. By default, the population of the U.S. will begin to find itself on the Mediterranean Diet.

Policy Drives Investment

By way of comparison, for the U.S. to have a program equivalent to what is already on track and official policy in China, U.S. production of synthetic fuels would have to exceed 2 mbd of oil equivalent within about five years. But even a casual glance at current trends in U.S. energy investment reveals that nothing comparable to the Chinese goal is going to happen in the world’s most prolific oil-burning nation.

There is, of course, much investment going on in the U.S. grain belt. According to a recent report in The Wall Street Journal, something over 125 ethanol facilities have been completed or are under construction in the U.S. And as no less a Peak Oil scholar than Rep. Roscoe Bartlett, member of Congress from Maryland, has noted, “We already pay farmers in this country not to grow food, so if we are going to have a lot of ethanol, we may as well put those farmers to work.” But, notes Rep. Bartlett, “It takes a lot of fossil fuel and energy just to grow the grain. Most fertilizer is derived from natural gas, and most agricultural chemicals come from oil. Add in the energy required for transport and processing, and ethanol is barely a break-even substance, from an energy standpoint. I worry about eventual depletion of soil fertility.”

Production of ethanol is soaring in China as well, partly driven by the high prices available for ethanol exports on the world market. So China both imports oil and exports ethanol. But Chinese critics of ethanol appear to be gaining an upper hand. There is a powerful strain of recognition within Chinese governing circles, based on that nation’s long history, that pays great respect to what the Chinese refer to as “food security” for the country. Many Chinese commentators argue that it is inappropriate to use corn and other agricultural products to convert to liquid fuel at a time when China is struggling to keep its precious agricultural land in production.
Continued 12/5/06