Category: Science and Medicine

The Clean Energy Scam: Ethanol

On April 16, 2008

As a full-time resident of the Midwest (Iowa-born, Illinois-resident), the section of the United States that stands to benefit most from the newfound emphasis on ethanol and the development of biofuels, the April issue of Time magazine, with an article (pp. 40-45) by Michael Grunwald entitled “The Clean Energy Scam” caught my attention. The subtitle read, “Hyped as an eco-friendly fuel, ethanol increases global warming, destroys forests and inflates food prices. So why are we subsidizing it?” Why, indeed?

Like all Midwesterners who hail from corn-growing states, it occurred to me that $4-a-gallon gas might prove to be a boon to mankind and that ethanol, made from corn, stood a good chance of being in the forefront of new efforts to tap into alternative energy sources. “Good for Iowa!” I initially thought. “You go, Hawkeyes!”

After all Iowa, my home state, according to this article, gains over 50,000 jobs (nothing to sneeze at in a state with only about 3 million residents and no really large cities) and $2 billion in income as it turns corn into fuel. Iowa produced nearly 2 billion gallons of ethanol last year, 30% of the entire United States total. Certainly the new initiatives will see even more emphasis on this alternative energy source. As the article put it (p. 44), “If biofuels are the new dot-coms, Iowa is Silicon Valley, with 53,000 jobs and $1.8 billion in income dependent on the industry.” The article even calls Iowa “America’s biofuel mecca.” (p. 44)and says that the industry has taken off with such gusto that Iowa is even importing corn for the initiative. It relates that John McCain’s absence from the landscape during the Iowa caucuses in 2000 was due to the fact that he had called ethanol “an outrageous agribusiness boondoggle” back then. By 2006, a more politically astute McCain was calling ethanol “a vital alternative energy source,” but he still did almost no campaigning in Iowa this season, which we can chalk up to his faltering campaign (see my article regarding McCain’s “Second Coming” on www.jollyjo.com).

In 2007, fewer than 2% of United States gas stations even offered ethanol as a fuel. The U.S. produced 7 billion gallons of biofuel in 2007, which cost taxpayers at least $8 billion in subsidies. (“The Clean Energy Scam,” p. 44). However, Iowa is not the world, and when one reads, in the same article, that regular gasoline isn’t even offered at a Brazilian “gas” station. Our country produces 5 billion gallons of sugarcane ethanol, which supplies 45% of its transportation needs. Here at home, the demand for ethanol is expected to increase five-fold in the next ten years. In 1995, ethanol was a $5 billion-dollar industry in the United States. By 2005, it is projected to be a $38 billion-dollar industry, worldwide, which will increase to $100 billion by the year 2010.

So, as the old Wendy’s ad used to put it, “Where’s the beef?” What’s wrong with using corn and sugar and soybeans to make biofuels to power our vehicles, rather than continuing to be at the mercy of the Mideastern oil-rich countries?

The April Time article from which these facts are taken posits the following reasons why ethanol (et. al.) is/are not the ideal alternative fuel source(s) of the future for the world.

Number One Argument Against Ethanol: “Corn ethanol, always environmentally suspect, turns out to be environmentally disastrous,” according to the Time piece. As writer Michael Grunwald eloquently phrased it (p. 42), “Several new studies show (that) the biofuel boom is doing exactly the opposite of what its proponents intended; it’s dramatically accelerating global warming, imperiling the planet in the name of saving it.”

Number Two Argument Against Ethanol: Biofuels are jacking up world food prices and endangering the hungry, world-wide. The author cites tortilla riots in Mexico over rising prices and destabilization of Pakistan caused by rising flour prices. Lester Brown of the Earth Policy Institute says that the emerging struggle pits 800 million people with cars against 800 million of the world’s hungry. In 2004, two University of Minnesota researchers predicted that the world’s hungry would drop to 625 million by the year 2025. Last year, however, after adjusting for the biofuel effect, they increased their original prediction to 1.2 billion hungry in that time period.

NumberThree Argument Against Ethanol and other Biofuels: The Amazon is doomed, unless steps are taken to prevent its brutal rush from forest to farmland. “Strange as it sounds, we’re better off growing food and drilling for oil.” (p. 44) Why? It seems that the scientists who originally put forth dreams of petroleum independence as a result of the increased growth of biofuels didn’t take into account that plants need land to grow. They don’t spring, fully-grown, from a parking lot in downtown Santa Monica. Land is needed to grow soybeans, sugar cane or corn. Why should this matter? It matters because many nations are industrially deforesting their countries so that they, too, can feed at the trough of biofuel largesse. Brazil is the best example. Besides the fact, as Grunewald puts it, that “every acre used to generate fuel is an acre that can’t be used to generate the food needed to feed us,” there is the problem of carbon storage. We need forests and foliage to take in carbon dioxide and, in turn, give off oxygen, but in countries like Brazil, forest land is burning that is roughly equivalent in size to the state of Rhode Island. The Amazon faces the very real prospect of turning into a desert unless something is done. Deforestation now accounts for 20% of all carbon emissions and Brazil vaulted into fourth place as a worldwide polluter, as a result of its slash-and-burn policies in converting jungle into farmland. As Grunewald put it (p. 42), “…unless the world can eliminate emissions from all other sources—cars, power plants, factories, even flatulent cows—it needs to reduce deforestation or risk an environmental catastrophe.”

Number Four Argument Against the Use of Bio-Fuels: the “experts” have changed their minds. One of the original leading proponents of the use of biofuels, rather than petroleum products, was University of California Berkeley professor Alexander Farrell. His 2006 Science article, which calculated the emissions reductions of various ethanols, used to be considered the Bible for promoting the initiative. Today, in 2008, he says, “The situation is a lot more challenging than a lot of us thought,” as the effects of deforestation are felt.

With all this in mind, the experts now are calling for better biofuels that don’t trigger massive carbon releases by displacing wildland (sugar, for example, is a better biofuel and burns cleaner than corn) and a mix of fuel sources. Leading supporters of the environment like Robert Kennedy, Jr., argue for a more widespread array of alternative fuels. Not just corn, soybeans, sugar or other foodstuffs, but wind and solar power, as well. The Natural Resources Defense Council’s Nathanael Greene says, in “Growing Energy,” (2004) “We’re all looking at the numbers in an entirely new way.”

But, as a Midwesterner, I predict that the powerful agriculture lobby will not agree with the conclusions of Michael Grunewald’s Time piece, and I’m not sure that I do, either. If subsidies are given to Iowa farmers to pay them not to grow certain crops, in order to keep the market from being glutted and the prices to drop, then the WTO (now meeting in Cancun, Mexico) might consider such subsidies to African countries to preserve the rainforest from unnecessary destruction. And if Americans would get on the hybrid car bandwagon (I’ve owned three) and/or the hydrogen or electric car, when it appear on the scene, that would help. And, just as the Midwest is a source of corn for biofuel, flat states like Kansas, Nebraska and North Dakota are veritable wind wizards. I hope to see the new-fangled windmills dotting the Midwestern landscape, and, while I’m not sure that nuclear power plants are terribly cost-effective, nor is there a good solution to the spent nuclear fuel rods in this country, in Europe, France has successfully harnessed the atom and even learned to recycle the spent nuclear material.

So the answer, as the song says, may be “blowin’ in the wind,” growing in the ground or a host of other places, none of which we should neglect to thoughtfully consider.

The Price You Pay Can Make A Difference in Pleasure

By Connie Wilson

On March 18, 2008

In Science and Medicine

Who knew that an area of our brain known as the medial orbifrontal cortex could affect whether we enjoy something purchased at bargain basement prices as much as an item or service for which we have paid Top Dollar? New research published in the Proceedings of the National Academy of Sciences, conducted by researchers at the California Institute of Technology and at Stanford demonstrates that the price people pay for something can change how much pleasure they derive from that item or service.

Neuro-economist Antonio Rangel of the California Institute of Technology and Baba Shiv, a Stanford University behavioral economist had subjects evaluate bottles of wine. One bottle of wine cost $10; one bottle cost $90. In reality, both bottles were filled with the same exact wine.

The researchers then conducted a brain-imaging study of the wine tasters and learned that the wine drinkers who thought they were drinking the more expensive vintage experienced a greater degree of activation in their media orbitofrontal cortex. These wine drinkers also reported that the expensive wine was better, even though, in reality, the wines were identical.

Many studies have shown that, because of a general assumption that something expensive should be better, consumers value everything from clothing to food more highly when the price is marked up. This effect, called the price-placebo effect, because it seems similar to the placebo effect in medicine, has been reported in a number of studies over the years. Researcher Baba Shiv said, “The price-placebo effect comes from the fact that you form this global belief that low price equals low quality.” My friends who believe that anything marked “Sony” must be better than a competing brand would fall into the majority of buyers.

In addition to the wine study, there was a corollary study involving solving word puzzles. Subjects were offered an “energy drink,” which they were told would boost their puzzle-solving performance. Some were asked to buy the drink at full price of $1.89. Others were offered the same drink, but told that, because of a bulk purchase, they could purchase the energy drink for only eighty-nine cents. Those who paid full price for the energy drink were able to solve nearly two times as many puzzles as those who received the discounted energy drink.

Some of the explanation for the improved puzzle-performance on the part of those who paid full price was attributed to persistence: “I paid full price and I’m going to hang in there and solve this (these) puzzles!” The studies bring up an interesting question: If I paid Top Dollar for something, and, as a result, derived more pleasure from it, was I ripped off, or did I actually get a better deal than the person who got a discount? If you found that comment confusing and contradictory, join the club; it becomes almost like as complicated as chess trying to decide if it is better to get a bargain or to pay full price.

The implications in these studies were very interesting, in light of the large number of consumers today who purchase many items in discount houses such as Sam’s Wholesale Club, Circuit City, Best Buy, and/or CostCo. When I recently purchased a Calvin Klein black pea coat from Sam’s for $25, I remember feeling that, although the coat looked good on me, fit well, and was a “name” brand with a much-higher price tag attached (from the original Calvin Klein stores), I found myself telling people that the coat had come from Sam’s Club and “only cost $25.” Rather than enjoying it less because of that fact, however, I actually think I enjoyed it more, feeling that I had gotten a bargain.

I wonder if the item makes a difference? A coat, after all, is more of a necessity than wine, puzzles or hookers…the third purchased “service” the article discusses at length.

The original article discussed former Governor Eliot Spitzer’s purchase of sexual services from a prostitute in The Emperors’ Club known as “Kristen” and debated, at length, whether Spitzer got 10 times the value for his $1000-an-hour tryst of someone who only paid a prostitute $100 an hour.

For me, the ultimate answer to that question is whether the price Spitzer paid— his future in politics, his family, his reputation and his aspirations for higher office—were worth the few hours of hedonistic pleasure he derived in hiring a high-priced call girl for sexual services. Logic would suggest that Spitzer not only crossed the line morally, but also paid far more than what “Kristen’s” services were worth.