SOUTH SAN FRANCISCO— As corn ethanol’s Public Enemy Number One — did my plaque get lost in the mail? — I’m thrilled the Senate voted to kill the industry’s fiscally and ecologically ludicrous tax credit. But it was galling — if not too surprising — to hear Agriculture Secretary Tom Vilsack, complain that the “ill-advised” vote would “pull the rug out from under industry.” That’s the whole point! This particular industry is accelerating the global food crisis and global warming. Its rug should have been pulled out long ago.
Vilsack also said killing this agribusiness boondoggle would kill jobs, but it should help create jobs in the fledgling advanced biofuels industry. In fact, while the Senate was voting, I happened to be visiting the kind of next-generation biofuels firm that will thrive long after corn ethanol disappears.
The company is called Solazyme, and it re-engineers algae to turn just about any kind of feedstock — sugar cane, switchgrass, crop wastes, whatever — into jet fuels, diesel fuels, and just about any kind of oil. It’s leveraging the power of evolution—algae naturally produce oil — to create renewable low-carbon alternatives to petroleum that won’t divert so much farmland from food into energy. These aren’t pie-in-the-sky ideas that might work someday; Solazyme is already starting to sell fuel to the Navy. It’s also making oils for nutritional supplements, skin creams, chemicals and other products. Today I got to eat chocolate ice cream made out of algae, with one third the fat and one tenth the cholesterol of regular chocolate ice cream. It tasted like chocolate ice cream.
And did I mention that Solazyme just went public?
There are a lot of interesting companies in the advanced biofuels space, but for years they’ve struggled to raise capital while the smart money has poured into corn ethanol plants, because federal policies virtually assured their success. (Until those federal policies drove the price of corn so high that the plants got into trouble, which is a separate story.) Even if the ethanol tax credits and a companion tariff on foreign ethanol disappear — which would require the cooperation of the House and President Obama — corn ethanol still gets plenty of government help. Congress loves shoveling money to farmers, but in this case, we’d be better off paying them not to grow fuel.
As a Corn Belt senator, Obama was a huge corn ethanol booster. His administration — including Vilsack — has promoted research and development for advanced biofuels as well. His stimulus bill—yes, that again —included $800 million for biomass projects, including $22 million that will help finance Solazyme’s first commercial plant in Peoria. And some high-ranking administration officials — I’m thinking of a certain Nobel laureate —are well aware that corn ethanol is a dud, even worse for the planet than gasoline.
But ethanol subsidies are not dead yet. “We need reforms and a smarter biofuels program, but simply cutting off support for the industry isn’t the right approach,” Vilsack said. Oh, it’s exactly the right approach. If you want a smarter biofuels program, getting rid of the dumbest giveaway is the obvious way to start.