Gasohol: would it take food from the poor?

Most of official Washington is eager to prime the pumps to speed the flow of gasohol from the nation's farmlands and forests. But questions loom over the long-term consequences of diverting grain, the world's basic food, into fuel for automobiles and shadow the short-term, on-the-farm use of gasohol.

The Carter administration's goal is for industry to be producing up to 500 million gallons of alcohol fuel in 1981. Existing distilleries currently can yield about 80 million gallons.

Even though the increasing price of gasoline makes gasohol (10 to 20 percent ethyl alcohol, or ethanol, mixed with gasoline) attractive to businessmen and farmers, US Department of Agriculture (USDA) officials say greater incentives are needed to bring about the ambitious six-fold increase in production.

But in the rush to gasohol production a larger and more troubling problem is its impact on the world food supply. A report just released by the Worldwatch Institute, a nonprofit research organization, paints a bleak picture of a struggle in the 1980s and '90s between an affluent minority, who own the world's automobiles, and the poor, who would experience higher grain prices and a tighter supply.

"Using food crops to produce alcohol will underline the global disparities in income as perhaps nothing else has," says Lester Brown, Worldwatch president and author of the study.

With Brazil in the midst of an ambitious alcohol-fuel program and grain-producing nations such as the United States, Australia, New Zealand, and South Africa launching or seriously considering similar programs, the current surpluses of grain and other food-grade vegetable matter would vanish, Mr. Brown says.

"For food-importing countries, such a shift could be disastrous," he says, even if the high-protein by-product of ethanol is used as a food supplement.

But if an alcohol fuel program is designed carefully to use agricultural wastes, food industry by-products, and cellulosic materials, such as corn stalks or waste wood, and if farmers are given first priority in the use of ethanol for their tractors, trucks, and irrigation pumps, then world agriculture actually could be strengthened, Mr. Brown says.

The USDA favors such an orientation toward the use of waste material, Mr. Williams says. But in the near future, agricultural commodities will be used more heavily than waste products because this technology exists and offers the fastest hope of expansion.

"Over time, however, we expect residues and new energy crops to be the major feedstock for alcohol fuel production," Mr. Williams maintains.

"The most important action necessary at this time to achieve the President's alcohol fuels production goals," Deputy Secretary of Agriculture Jim Williams testified this week before a congressional committee, "is passage of the excise tax exemption and income tax credits in the oil windfall profits tax bill currently pending in Congress."

(The bill is facing its final legislative hurdle at this writing, with the Senate due to consider it this week.)

Sen. George McGovern (D) of South Dakota, however, accuses government agencies of dragging their feet. The Department of Energy, he says, is "virtually ignoring" small- scale production of ethanol in farm areas and, instead, is encouraging the construction of large, expensive ethanol refineries. Meanwhile, the USDA is sitting on $100 million in loan guarantees and $10 million in direct loans that already are available for stimulating production of renewable-resource fuel.

But Mr. Williams contends that a more favorable climate for firms and investors needs to be created by extending tax breaks for the fledgling industry until 1992. With these incentives, and with corn at $2.50 a bushel, a 40 million-gallon ethanol distillery might bring a 20 to 25 percent return on equity, he predicts.

With minor carburetion adjustments, farm automobiles, trucks, and gasoline-engine tractors can burn straight ethanol, thus giving a farmer who installs a distillery a degree of energy self-sufficiency.

But one as-yet-unsolved problem, says Mr. Williams, is that most heavy farm equipment uses diesel fuel. A farmer producing his own ethanol would need to mix each gallon of it with six gallons of diesel fuel and one gallon of water. This is such a slight use of ethanol that the farmer probably would be left with a surplus and still be dependent on outside fuel sources.

Some of the surplus might be used for farmstead energy needs, such as grain drying and heating of livestock sheds, says Mr. Williams. Other energy specialists believe heavy tractors might be built with fueling mechanisms that could use either diesel or ethanol. "But it is imperative that the farmer can use it, or sell it to a neighbor, or convert it" to other uses, Mr. Williams says.