President Obama's visit to Fresno will hopefully bring some much-needed clarification as to how the federal government plans to help California battle the devastating drought in the near-term. Unfortunately, the administration's continued support of the Renewable Fuel Standard (RFS) works counter to any federal water assistance as it incentivizes the use of California's water toward the production of ethanol —a huge drain on state water resources for a fuel that has been discredited as environmentally harmful.
As conceived in 2005, the RFS was intended to lessen gasoline demand, decrease our reliance on foreign oil and reduce our environmental impact through the introduction of first-generation biofuels like corn-based ethanol followed by a swift transition to truly advanced biofuels. Unfortunately, that transition never occurred, as the industry has yet to commercially produce these fuels. Instead, 80% of the nation's biofuel blending requirements continue to be met with ethanol — to the detriment of our water supplies, environment and bottom line.
The refining of ethanol across California has come at a steep cost to water supplies. In California, more than 924 gallons of water may be required to produce a single liter of ethanol, according to researchers at UC Berkeley. A biorefinery that produces 100 million gallons of ethanol per year uses the equivalent of the water supply for a town of about 5,000 people — approximately the size of such Central Valley farming communities as Fowler, Gustine and San Joaquin. All in all, it takes 34 times the amount of water to produce one gallon of corn-based ethanol as regular gasoline. Ethanol's water utilization rate doesn't seem to fall in line with the idea of a "renewable fuel." All this water lost and for what gain? The answer is not much for our environment nor for California food producers. The Environmental Protection Agency's analysis has shown that lifecycle greenhouse gas emissions of corn ethanol were higher than those of gasoline in 2012 and will still be higher in 2017. Moreover, from 2008 to 2011, the mandate has contributed to plowing up more than 23 million acres of wetlands and grasslands — an area the size of Indiana — to grow crops, largely corn. This rapid conversion is driving up greenhouse gas emissions even higher by releasing carbon stored in the soil and by increasing use of fertilizers that swell emissions of nitrous oxide, a potent greenhouse gas.
What's more: As more and more corn is diverted to ethanol production to meet the RFS, less is available for livestock feed. High demand for corn on account of the RFS has caused extreme price volatility for this key commodity, forcing prices through the roof and at one point increasing prices up by more than 200% from pre-RFS years. Elevated corn costs drove prices for feed — the single largest input cost to food producers — up by 32% in 2012, increasing production costs for food producers across the state. This proved a deal breaker for many of them in the first year of California's drought, which saw countless farmers forced into foreclosure. Just look at the California dairy industry that has been forced to slash herd sizes and lost hundreds of farms since 2012.
The perfect storm of higher feed costs and dwindling water supplies puts California's food producers in jeopardy. They continue to lose farms and jobs to bankruptcies and foreclosures at a time when major commodity growers are making record profits. Without change, California's third year of drought will only bring greater financial struggle and economic downturn.
That's why if President Obama wants to help countless Central Valley farming families and their employees survive the drought, he can help advocate water conservation in one key area: corn ethanol refining and the federal policy that encourages it. The administration should follow several policymakers' charge in reforming the RFS in 2014 to ensure America is promoting truly renewable fuels that protect our environment, benefit the public and help American industries — not harm them.
Tom Tanton is the policy director for the California Coalition of Energy Users. He has 40 years' experience in energy technology and policy.