As California Pushes Increased Ethanol Use, Experts Sound the Alarm on Environmental Impacts

On Oct. 25, California Governor Gavin Newsom encouraged the California Air Resources Board (CARB) to accelerate its study of E15, a gasoline-ethanol blend, as a way to potentially lower the cost of gasoline in California and “save Californians as much as $2.7 billion every year —with little to no impact on the environment.”

The idea that E15 could lower gas prices in California is, itself, controversial. Even more controversial, though, is the notion that expanding the use of biofuels comes with few consequences.

Policy changes in California, especially when it comes to reducing greenhouse gas emissions or offsetting emissions through carbon credits, can have ripple effects throughout the U.S., and even around the globe; if California were a country, it would have the fifth-largest economy in the world. In the case of E15, California’s decision-making could impact land use in places like the Midwest, which produces most of the corn that goes into ethanol. 

Ethanol is a renewable fuel that can be made from a variety of products. According to Silvia Secchi, a professor of geological and sustainability science at the University of Iowa, ethanol was originally sold as a “bridge fuel” that could one day primarily be made from cellulosic materials like wood shavings and other waste products.

Overwhelmingly, this has not happened. Corn still dominates ethanol production.

According to the U.S. Department of Agriculture, 45 percent of all corn produced in the U.S. is used for ethanol production. The USDA admits that increases in corn acreage are “a result of expanding ethanol production” and notes that while the acreage of farms growing other feed grains, such as barley and sorghum, has declined, the number of acres of corn has risen. 

Increased intensity on the land in places like Iowa, which produces more corn than any other U.S. state and, as a result, uses a significant amount of fertilizer, has caused an environmental situation so dire that advocates are calling for federal intervention.

“I really wish that every time people put ethanol in their car, they would drink Iowa well water at home,” Secchi told Inside Climate News. “California is not going to be producing that ethanol. It’s going to be importing that ethanol from places like Iowa or Nebraska or Kansas or South Dakota, and the environmental impacts of that ethanol, in terms of land use change, in terms of water quality, all the degradation that ethanol brings with it, they’re going to stay with us.”

Nitrogen-based fertilizers, commonly applied to corn, can leak into aquifers and waterways in the U.S., causing nitrate contamination in drinking water that could take decades to reverse. The potential effects of nitrate-contaminated drinking water on people range from blue baby syndrome in infants to colon cancer in adults. In Des Moines, Iowa, the worlds’ largest nitrate-removal facility may need to get bigger to keep up with rising rates of contamination. 

For Danny Cullenward, senior fellow at the Kleinman Center for Energy Policy at the University of Pennsylvania, the impacts of biofuels on the land are difficult to overstate.

“Huge industrial use of nitrogen-based fertilizers, destroying water quality throughout most of the country, that’s not actually good. And those are the consequences that come from this myopic and very narrow look at this carbon accounting lens through these flawed methods,” he said. “All of that is necessary to underpin the notion of, maybe this will be good for consumers.”

Experts Inside Climate News spoke with are calling for more environmental impacts of E15—a blend of 85 percent gasoline and 15 percent ethanol—to be taken into consideration, not just the potential wins for consumers at the gas pump. 

A “Bridge Fuel”

Ethanol is a highly subsidized biofuel. Over the last 40 years, U.S. taxpayers have spent tens of billions of dollars supporting the ethanol industry through tax incentives, farm bill programs and the Renewable Fuel Standard, a 2005 program which mandated that U.S. transportation fuel contain a certain volume of renewable fuel. That same year, the U.S. became the world’s largest ethanol producer. In 2006, California’s Low Carbon Fuel Standard (LCFS) was first authorized as a way for the state, home to the most registered vehicles in the nation, to decrease its reliance on petroleum.

The program provides incentives for fuel producers to purchase “credits” from lower-carbon fuel sellers, or lower the carbon intensity of their fuel. Ethanol, a biofuel, became a way for producers to lower their carbon intensity. As Cullenward wrote in a recent paper, the LCFS “plays an important and increasingly controversial role in California’s strategy for reducing greenhouse gas emissions.”

In 2006, excitement was brewing that “innovation might be just around the corner,” Cullenward told ICN. Perhaps biofuels could be derived not from food products themselves—like corn and soybeans—but instead from waste products. Year after year, things did not change, and biofuels are still heavily subsidized. 

“I think most transportation policy experts would tell you that the primary way we’re going to reduce emissions from the transportation sector for light duty vehicles is by electrifying them,” Cullenward said. “This is a really important part of the story, because the federal government has so heavily subsidized the production of ethanol, and because the California government sort of doubled down on this. There’s still a lot of financial support through policy mechanisms for crop-based ethanol production.”

Increased biofuel production has also resulted in the creation of carbon capture and storage projects at ethanol plants—the likes of which are already showing signs of inadequacy. 

Soybeans, the second-most popular commodity crop in the U.S., are one of the main ingredients in biodiesel, which is used to fuel medium and heavy-duty vehicles like semi-trucks and buses. According to Cullenward, California accounts for almost all U.S. biodiesel consumption, most of which is shipped in from Singapore.

In 2023, the Science Advisory Board, a federal advisory committee to the U.S. Environmental Protection Agency, wrote to Administrator Michael Regan that “almost two decades after the Renewable Fuel Standard (RFS) program’s creation, the efficacy of the program in reducing greenhouse gas (GHG) emissions remains highly uncertain from a scientific perspective, and many other environmental concerns regarding the RFS have been raised.” 

The Renewable Fuels Association (RFA), an industry lobby group, responded to SAB’s letter by sending one of their own to Regan. “The overwhelming preponderance of scientific analyses and empirical data clearly show that corn starch ethanol significantly reduces GHG emissions relative to the gasoline it replaces,” they wrote.

RFA funded the study Newsom referenced in his press release, which concludes that gasoline prices will go down with the introduction and adoption of E15 gasoline in California.

“The Renewable Fuels Association is a lobbying group, so they’re going to be looking to push findings that potentially benefit them,” said Aaron Smith, professor of agricultural and resource economics at the University of California, Berkeley. 

Most gasoline consumers are pumping into their cars contains 10 percent ethanol. E15 would increase the ethanol composition to 15 percent. Smith says policymakers would need to “jump through a lot of hoops” to believe that adding five percent more ethanol to the gasoline blend would lead to a dramatic decrease in gasoline prices. Not to mention, he told ICN, that just because E15 is legal does not mean fuel suppliers will provide it. Incorporating more ethanol into gasoline blends can require suppliers to upgrade storage tanks and take on added costs. 

In response to Newsom’s announcement, the Renewable Fuels Association applauded the governor’s efforts.

“Not only does E15 reduce greenhouse gas emissions and harmful tailpipe pollution, but it also delivers significant savings at the pump. Allowing the sale of E15 would provide economic relief to California families, while at the same time providing important environmental benefits,” RFA President and CEO Geoff Cooper wrote in a press release.

“There’s no credible evidence that I’ve seen that this is really going to affect gas prices at all,” Smith countered.

A “Win-Win” for Californians

In the October press release, Newsom called introducing E15 a “win-win” for Californians. But even if, in a perfect world, E15 brought down gas prices in the state, increased ethanol production is not necessarily a “win-win” for the climate. 

The California Air Resources Board did not respond to requests for comment on the criticism before publication time.

“When you clear land to grow corn, what you’re doing is you’re losing a whole bunch of carbon that’s in the forest or the grass or whatever is on those fields before you clear it to make corn,” Smith said. 

For Secchi, California’s renewed interest in E15 is a “sign they’ve lost their way.”

“The scope of their policy is not including these effects beyond the state boundaries,” she said. “Maybe even more important, these policies that are just looking at carbon are often really stupid because they don’t consider other environmental effects. So, if we’re trading carbon for water or water for carbon, that’s not a good policy. That’s not a win-win.”

On Nov. 8, in the midst of national election coverage, the California Air Resources Board amended its Low Carbon Fuel Standard, which some experts, like Cullenward, warn might even increase gas prices, though there is truly no way to tell. The amendments included an increased obligation for fossil fuel sellers to cover their deficits by purchasing credits from low-carbon fuel sellers. But rising credit prices could lead to increased gas prices, with the added layer of benefitting biofuel companies, some of which are owned by oil companies. 

According to Cullenward, because of California’s convoluted carbon credit program, there is a world where E15 gasoline could be a little bit cheaper, if approved for sale in California.

“You could conceivably say, ‘I am exploring a direction that will lower costs for consumers, but it really is primarily about consuming more biofuel products,’ which is terrible for the climate, and to the extent it’s cheaper, it’s because you’re subsidizing it at the same time you’re mandating it, which is just a really weird, weird system,” Cullenward said.