AP Investigation: The secret, dirty cost of Obama’s green push
Published 11:01 am Tuesday, November 12, 2013
Ethanol causing problems across the Midwest
Editor’s note: This is the original report from the Associated Press’ investigation into ethanol’s impact on the Midwest. Find all the stories in the series here.
By Dina Cappiello and Matt Apuzzo
CORYDON, Iowa — The hills of southern Iowa bear the scars of America’s push for green energy: The brown gashes where rain has washed away the soil. The polluted streams that dump fertilizer into the water supply.
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Even the cemetery that disappeared like an apparition into a cornfield.
It wasn’t supposed to be this way.
With the Iowa political caucuses on the horizon in 2007, presidential candidate Barack Obama made homegrown corn a centerpiece of his plan to slow global warming. And when President George W. Bush signed a law that year requiring oil companies to add billions of gallons of ethanol to their gasoline each year, Bush predicted it would make the country “stronger, cleaner and more secure.”
But the ethanol era has proven far more damaging to the environment than politicians promised and much worse than the government admits today.
As farmers rushed to find new places to plant corn, they wiped out millions of acres of conservation land, destroyed habitat and polluted water supplies, an Associated Press investigation found.
Five million acres of land set aside for conservation — more than Yellowstone, Everglades and Yosemite National Parks combined — have vanished on Obama’s watch.
Landowners filled in wetlands. They plowed into pristine prairies, releasing carbon dioxide that had been locked in the soil.
Sprayers pumped out billions of pounds of fertilizer, some of which seeped into drinking water, contaminated rivers and worsened the huge dead zone in the Gulf of Mexico where marine life can’t survive.
The consequences are so severe that environmentalists and many scientists have now rejected corn-based ethanol as bad environmental policy. But the Obama administration stands by it, highlighting its benefits to the farming industry rather than any negative impact.
Farmers planted 15 million more acres of corn last year than before the ethanol boom, and the effects are visible in places like south central Iowa.
The hilly, once-grassy landscape is made up of fragile soil that, unlike the earth in the rest of the state, is poorly suited for corn. Nevertheless, it has yielded to America’s demand for it.
“They’re raping the land,” said Bill Alley, a member of the board of supervisors in Wayne County, which now bears little resemblance to the rolling cow pastures shown in postcards sold at a Corydon pharmacy.
All energy comes at a cost. The environmental consequences of drilling for oil and natural gas are well documented and severe. But in the president’s push to reduce greenhouse gases and curtail global warming, his administration has allowed so-called green energy to do not-so-green things.
In some cases, such as its decision to allow wind farms to kill eagles, the administration accepts environmental costs because they pale in comparison to the havoc it believes global warming could ultimately cause.
Ethanol is different.
The government’s predictions of the benefits have proven so inaccurate that independent scientists question whether it will ever achieve its central environmental goal: reducing greenhouse gases. That makes the hidden costs even more significant.
“This is an ecological disaster,” said Craig Cox with the Environmental Working Group, a natural ally of the president that, like others, now finds itself at odds with the White House.
But it’s a cost the administration is willing to accept. It believes supporting corn ethanol is the best way to encourage the development of biofuels that will someday be cleaner and greener than today’s. Pulling the plug on corn ethanol, officials fear, might mean killing any hope of these next-generation fuels.
“That is what you give up if you don’t recognize that renewable fuels have some place here,” EPA administrator Gina McCarthy said in a recent interview with AP. “All renewable fuels are not corn ethanol.”
Still, corn supplies the overwhelming majority of ethanol in the United States, and the administration is loath to discuss the environmental consequences.
“It just caught us completely off guard,” said Doug Davenport, a Department of Agriculture official who encourages southern Iowa farmers to use conservation practices on their land. Despite those efforts, Davenport said he was surprised at how much fragile, erodible land was turned into corn fields.
Shortly after Davenport spoke to The Associated Press, he got an email ordering him to stop talking.
“We just want to have a consistent message on the topic,” an Agriculture Department spokesman in Iowa said.
That consistent message was laid out by Agriculture Secretary Tom Vilsack, who spoke to ethanol lobbyists on Capitol Hill recently and said ethanol was good for business.
“We are committed to this industry because we understand its benefits,” he said. “We understand it’s about farm income. It’s about stabilizing and maintaining farm income which is at record levels.”
The numbers behind the ethanol mandate have become so unworkable that, for the first time, the EPA is soon expected to reduce the amount of ethanol required to be added to the gasoline supply. An unusual coalition of big oil companies, environmental groups and food companies is pushing the government to go even further and reconsider the entire ethanol program.
The ethanol industry is fighting hard against that effort. Industry spokesman Brooke Coleman dismissed this story as “propaganda on a page.” An industry blog in Minnesota said the AP had succumbed “to Big Oil’s deep pockets and powerful influence.”
To understand how America got to an environmental policy with such harmful environmental consequences, it’s helpful to start in a field in Iowa.
Leroy Perkins, a white-haired, 66-year-old farmer in denim overalls, stands surrounded by waist-high grass and clover. He owns 91 acres like this, all hilly and erodible, that he set aside for conservation years ago.
“I’d like to keep it in,” he said. “This is what southern Iowa’s for: raising grass.”
For decades, the government’s Conservation Reserve Program has paid farmers to stop farming environmentally sensitive land. Grassy fields naturally convert carbon dioxide into oxygen, which helps combat global warming. Plus, their deep root systems prevent topsoil from washing away.
For Perkins and his farmer neighbors in Wayne County, keeping farmland in conservation wasn’t just good stewardship. It made financial sense.
A decade ago, Washington paid them about $70 an acre each year to leave their farmland idle. With corn selling for about $2 per bushel (56 pounds) back then, farming the hilly, inferior soil was bad business.
Many opted into the conservation program. Others kept their grasslands for cow pastures.
Lately, though, the math has changed.
“I’m coming to the point where financially, it’s not feasible,” Perkins said.
The change began in 2007, when Congress passed a law requiring oil companies to blend billions of gallons of ethanol into gasoline.
Oil prices were high. Oil imports were rising quickly. The legislation had the strong backing of the presidential candidate who was the junior senator from neighboring Illinois, the nation’s second-largest corn producer.
“If we’re going to get serious about investing in our energy future, we must give our family farmers and local ethanol producers a fair shot at success,” Obama said then.
The Democratic primary field was crowded, and if he didn’t win the Iowa caucuses the road to the nomination would be difficult. His strong support for ethanol set him apart.
“Any time we could talk about support for ethanol, we did,” said Mitch Stewart, the battleground states director for Obama’s 2008 campaign. “It’s how we would lead a lot of discussions.”
President Bush signed the bill that December.
It would fall on the next president to figure out how to make it work.
President Obama’s team at the EPA was sour on the ethanol mandate from the start.
As a way to reduce global warming, they knew corn ethanol was a dubious proposition. Corn demands fertilizer, which is made using natural gas. What’s worse, ethanol factories typically burn coal or gas, both of which release carbon dioxide.
Then there was the land conversion, the most controversial and difficult-to-predict outcome.
Digging up grassland releases greenhouse gases, so environmentalists are skeptical of any program that encourages planting more corn.
“I don’t remember anybody having great passion for this,” said Bob Sussman, who served on Obama’s transition team and recently retired as EPA’s senior policy counsel. “I don’t have a lot of personal enthusiasm for the program.”
At the White House and the Department of Agriculture, though, there was plenty of enthusiasm.
One of Obama’s senior advisers, Pete Rouse, had worked on ethanol issues as chief of staff to Sen. Tom Daschle of South Dakota, a major ethanol booster and now chair of the DuPont Advisory Committee on Agriculture Innovation and Productivity.
Another Obama adviser at the time, Heather Zichal, grew up in northeast Iowa — as a child, she was crowned “sweet corn princess” — and was one of the Obama campaign’s leading voices on ethanol in her home state.
The administration had no greater corn ethanol advocate than Vilsack, the former Iowa governor.
“Tom understands that the solution to our energy crisis will be found not in oil fields abroad but in our farm fields here at home,” Obama said in 2008. “That is the kind of leader I want in my Cabinet.”
Writing the regulations to implement the ethanol mandate was among the administration’s first major environmental undertakings. Industry and environmental groups watched closely.
The EPA’s experts determined that the mandate would increase demand for corn and encourage farmers to plow more land. Considering those factors, they said, corn ethanol was only slightly better than gasoline when it came to carbon dioxide emissions.
Sixteen percent better, to be exact. And not in the short term. Only by 2022.
By law, though, biofuels were supposed to be at least 20 percent greener than gasoline.
From a legal standpoint, the results didn’t matter. Congress exempted existing coal- and gas-burning ethanol plants from meeting this standard.
But as a policy and public relations issue, it was a real problem. The biofuel-friendly Obama administration was undermining the industry’s major selling point: that it was much greener than gasoline.
So the ethanol industry was livid. Lobbyists flooded the EPA with criticism, challenging the government’s methods and conclusions.
The EPA’s conclusion was based on a model. Plug in some assumed figures — the price of corn, the number of acres planted, how much corn would grow per acre — and the model would spit out a number.
To get past 20 percent, the EPA needed to change its assumptions.
The most important of those assumptions was called the yield, a measure of how much corn could be produced on an acre of land. The higher the yield, the easier it would be for farmers to meet the growing demand without plowing new farmland, which counted against ethanol in the greenhouse gas equation.
Corn yields have inched steadily upward over the years as farms have become more efficient. The government’s first ethanol model assumed that trend would continue, rising from 150 bushels per acre to about 180 by the year 2022.
Agriculture companies like Monsanto Co. and DuPont Pioneer, which stood to make millions off an ethanol boom, told the government those numbers were too low.
They predicted that genetically modified seeds — which they produce — would send yields skyrocketing. With higher yields, farmers could produce more corn on less land, reducing the environmental effects.
Documents show the White House budget office also suggested the EPA raise its yield assumptions.
When the final rule came out, the EPA and Agriculture officials added a new “high yield case scenario” that assumed 230 bushels per acre.
The flaw in those assumptions, independent scientists knew, was that a big increase in corn prices would encourage people to farm in less hospitable areas like Wayne County, which could never produce such large yields.
But the EPA’s model assumed only a tiny increase in corn prices.
“You adjust a few numbers to get it where you want it, and then you call it good,” said Adam Liska, assistant professor of biological systems engineering at the University of Nebraska. He supports ethanol, even with its environmental trade-offs.
When the Obama administration finalized its first major green-energy policy, corn ethanol barely crossed the key threshold. The final score: 21 percent.
“If you corrected any of a number of things, it would be on the other side of 20 percent,” said Richard Plevin of the Transportation Sustainability Research Center at the University of California, Berkeley. “Is it a coincidence this is what happened? It certainly makes me wonder.”
It didn’t take long for reality to prove the Obama administration’s predictions wrong.
The regulations took effect in July 2010. The following month, corn prices already had surpassed the EPA’s long-term estimate of $3.22 a bushel. That September, corn passed $4, on its way to about $7, where it has been most of this year.
Yields, meanwhile, have held fairly steady.
But the ethanol boom was underway.
It’s impossible to precisely calculate how much ethanol is responsible for the spike in corn prices and how much those prices led to the land changes in the Midwest.
Supporters of corn ethanol say extreme weather — dry one year, very wet the next — hurt farmers and raised prices.
But diminishing supply wasn’t the only factor. More corn than ever was being distilled into ethanol.
Historically, the overwhelmingly majority of corn in the United States has been turned into livestock feed. But in 2010, for the first time, fuel was the No. 1 use for corn in America. That was true in 2011 and 2012. Newly released Department of Agriculture data show that, this year, 43 percent of corn went to fuel and 45 percent went to livestock feed.
The more corn that goes to ethanol, the more that needs to be planted to meet other demands.
Scientists predicted that a major ethanol push would raise prices and, in turn, encourage farmers like Leroy Perkins to plow into conservation land. But the government insisted otherwise.
In 2008, the journal Science published a study with a dire conclusion: Plowing over conservation land releases so much greenhouse gas that it takes 48 years before new plants can break even and start reducing carbon dioxide.
For an ethanol policy to work, the study said, farmers could not plow into conservation land.
The EPA, in a report to Congress on the environmental effects of ethanol, said it was “uncertain” whether farmers would plant on farmland that had been set aside for conservation.
The Department of Energy was more certain. Most conservation land, the government said in its response to the study, “is unsuitable for use for annual row crop production.”
America could meet its ethanol demand without losing a single acre of conservation land, Energy officials said.
They would soon be proven wrong.
Before the government ethanol mandate, the Conservation Reserve Program grew every year for nearly a decade. Almost overnight, farmers began leaving the program, which simultaneously fell victim to budget cuts that reduced the amount of farmland that could be set aside for conservation.
In the first year after the ethanol mandate, more than 2 million acres disappeared.
Since Obama took office, 5 million more acres have vanished.
Agriculture officials acknowledge that conservation land has been lost, but they say the trend is reversing. When the 2013 data comes out, they say it will show that as corn prices stabilized, farmers once again began setting aside land for conservation.
Losing conservation land was bad. But something even worse was happening.
Farmers broke ground on virgin land, the untouched terrain that represents, from an environmental standpoint, the country’s most important asset.
The farm industry assured the government that wouldn’t happen. And it would have been an easy thing for Washington to check.
But rather than insisting that farmers report whenever they plow into virgin land, the government decided on a much murkier oversight method: Washington instead monitors the total number of acres of cropland nationwide. Local trends wash away when viewed at such a distance.
“They could not have designed a better approach to not detect land conversion,” said Ben Larson, an agricultural expert for the National Wildlife Federation.
Look closely at the corn boom in the northern Great Plains, however, and it’s clear. Farmers are converting untouched prairie into farmland.
The Department of Agriculture began keeping figures on virgin land only in 2012 and determined that about 38,000 acres vanished that year.
But using government satellite data — the best tool available — the AP identified a conservative estimate of 1.2 million acres of virgin land in Nebraska and the Dakotas alone that have been converted to fields of corn and soybeans since 2006, the last year before the ethanol mandate was passed.
“The last five years, we’ve become financially solvent,” said Robert Malsam, a farmer in Edmunds County, S.D., who like others in the central and eastern Dakotas has plowed into wild grassland to expand his corn crop.
The price of corn is reshaping the land across the Midwest. In Wayne County, Iowa, for example, only the dead can stop the corn.
A gravel road once cut through a grassy field leading to a hilltop cemetery. But about two years ago, the landowners plowed over the road. Now, visiting gravesites means walking a narrow path through the corn.
People have complained. It’s too narrow for a hearse, too rutted for a wheelchair, too steep for the elderly. But it’s legal, said Bill Alley from the board of supervisors.
“This is what the price of corn does,” he said. “This is what happens, right here.”
When Congress passed the ethanol mandate, it required the EPA to thoroughly study the effects on water and air pollution. In his recent speech to ethanol lobbyists, Vilsack was unequivocal about those effects:
“There is no question air quality, water quality is benefiting from this industry,” he said.
But the administration never actually conducted the required air and water studies to determine whether that’s true.
In an interview with the AP after his speech, Vilsack said he didn’t mean that ethanol production was good for the air and water. He simply meant that gasoline mixed with ethanol is cleaner than gasoline alone.
In the Midwest, meanwhile, scientists and conservationists are sounding alarms.
Nitrogen fertilizer, when it seeps into the water, is toxic. Children are especially susceptible to nitrate poisoning, which causes “blue baby” syndrome and can be deadly.
Between 2005 and 2010, corn farmers increased their use of nitrogen fertilizer by more than one billion pounds. More recent data isn’t available from the Agriculture Department, but because of the huge increase in corn planting, even conservative projections by the AP suggest another billion-pound fertilizer increase on corn farms since then.
Department of Agriculture officials note that the amount of fertilizer used for all crops has remained steady for a decade, suggesting the ethanol mandate hasn’t caused a fertilizer boom across the board.
But in the Midwest, corn is the dominant crop, and officials say the increase in fertilizer use — driven by the increase in corn planting — is having an effect.
The Des Moines Water Works, for instance, has faced high nitrate levels for many years in the Des Moines and Raccoon Rivers, which supply drinking water to 500,000 people. Typically, when pollution is too high in one river, workers draw from the other.
“This year, unfortunately the nitrate levels in both rivers were so high that it created an impossibility for us,” said Bill Stowe, the water service’s general manager.
For three months this summer, workers kept huge machines running around the clock to clean the water. Officials asked customers to use less water so the utility had a chance to keep up.
Part of the problem was that last year’s dry weather meant fertilizer sat atop the soil. This spring’s rains flushed that nitrogen into the water along with the remnants of the fertilizer from the most recent crop.
At the same time the ethanol mandate has encouraged farmers to plant more corn, Stowe said, the government hasn’t done enough to limit fertilizer use or regulate the industrial drainage systems that flush nitrates and water into rivers and streams.
With the Water Works on the brink of capacity, Stowe said he’s considering suing the government to demand a solution.
In neighboring Minnesota, a government report this year found that significantly reducing the high levels of nitrates from the state’s water would require huge changes in farming practices at a cost of roughly $1 billion a year.
“We’re doing more to address water quality, but we are being overwhelmed by the increase in production pressure to plant more crops,” said Steve Morse, executive director of the Minnesota Environmental Partnership.
The nitrates travel down rivers and into the Gulf of Mexico, where they boost the growth of enormous algae fields. When the algae die, the decomposition consumes oxygen, leaving behind a zone where aquatic life cannot survive.
This year, the dead zone covered 5,800 square miles of sea floor, about the size of Connecticut.
Larry McKinney, the executive director of the Harte Institute at Texas A&M University-Corpus Christi, says the ethanol mandate worsened the dead zone.
“On the one hand, the government is mandating ethanol use,” he said, “and it is unfortunately coming at the expense of the Gulf of Mexico.”
The dead zone is one example among many of a peculiar ethanol side effect: As one government program encourages farmers to plant more corn, other programs pay millions to clean up the mess.
Obama administration officials know the ethanol mandate hasn’t lived up to its billing.
The next-generation biofuels that were supposed to wean the country off corn haven’t yet materialized. Every year, the EPA predicts millions of gallons of clean fuel will be made from agricultural waste. Every year, the government is wrong.
Every day without those cleaner-burning fuels, the ethanol industry stays reliant on corn and the environmental effects mount.
The EPA could revisit its model and see whether ethanol is actually as good for the environment as officials predicted. But the agency says it doesn’t have the money or the manpower.
Even under the government’s optimistic projections, the ethanol mandate wasn’t going to reduce greenhouse gas right away. And with the model so far off from reality, independent scientists say it’s hard to make an argument for ethanol as a global warming policy.
“I’d have to think really hard to come up with a scenario where it’s a net positive,” said Silvia Secchi, a Southern Illinois University agriculture economist.
She paused a few moments, then added, “I’m stumped.”
In June, when Obama gave a major policy speech on reducing greenhouse gas, he didn’t mention ethanol. Biofuels in general received a brief, passing reference.
What was once billed as an environmental boon has morphed into a government program to help rural America survive.
“I don’t know whether I can make the environmental argument, or the economic argument,” Vilsack said in an interview with the AP. “To me, it’s an opportunity argument.”
Congress and the administration could change the ethanol mandate, tweak its goals or demand more safeguards. Going to Congress and rewriting the law would mean picking a fight with agricultural lobbyists, a fight that would put the administration on the side of big oil companies, which despise the ethanol requirement.
So the ethanol policy cruises on autopilot.
Bob Dinneen, president of the Renewable Fuels Association, the ethanol lobbying group, said there’s no reason to change the standards. Ethanol still looks good compared to the oil industry, which increasingly relies on environmentally risky tactics like hydraulic fracturing or pulls from carbon-heavy tar sands.
Leroy Perkins, the farmer agonizing about what to do with his 91 acres, says he likes ethanol as a product and an industry. But he knows it fuels the corn prices that are transforming his county.
“If they do change the fuel standard, you’ll see the price of corn come down overnight,” he said. “I like to see a good price for corn. But when it’s too high, it hurts everybody.”
Investors from as far away as Maryland and Pennsylvania have bought thousands of acres in Wayne County, sending prices skyrocketing from $350 per acre a decade ago to $5,000 today.
One in every four acres of in the county is now owned by an out-of-towner.
Those who still own land often rent it to farming companies offering $300 or more per acre. Perkins could make perhaps $27,000 a year if he let somebody plant corn on his land. That’s nothing to dismiss in a county where typical household income is $36,000.
But he knows what that means. He sees the black streaks in his neighbor’s cornfields, knowing the topsoil washes away with every rain. He doesn’t want that for his family’s land.
“You have to decide, do you want to be the one to…”
He doesn’t finish his sentence.
“We all have to look at our pocketbooks.”