Even sugarcane—the most energy-efficient crop for ethanol because of its rapid growth rate and the fact it produces sugar that is ready to be fermented by yeast, unlike starch from corn that requires an additional step—needs some two meters of rainfall a year, which precludes growing it on much of the world's existing arable land. And to replace all of today's gasoline demand with ethanol made from sugarcane would require planting more than 320 million hectares across the tropics—more than half all the land devoted to agriculture presently and multiples of the roughly 20 million hectares of sugarcane planted today. Plus, it takes at least 5.7 liters of water to ferment 3.8 liters of ethanol—even more when the water used to grow corn is counted—an equation that may not work as water becomes a scarce resource. In fact, a 2007 study funded by the Swiss government found that all of today's most significant biofuels—ethanol from corn or sugarcane and biodiesel from soy or palm oil—do more environmental damage overall than do fossil fuels.
Food versus fuel
Perhaps the largest concern about ethanol is illustrated by an oil company's efforts in the U.K.: BP will turn British wheat into ethanol at several facilities in a bid to improve the country's energy security. Of course, wheat is a staple food crop, and using it to make fuel has an impact in global crop markets that results in increasing food prices.
Take corn. The U.S. produces 60 percent of the world's supply of exported corn, and uses that which it keeps for everything from feed for livestock to the sweetener in your beverage of choice. Turning corn into ethanol raises the price of corn, which in turn raises the price of foods such as steak or eggs. Corn now costs more than $7 per bushel, up from $2 per bushel at the turn of the 21st century.
The CBO estimated that ethanol contributes as much as 15 percent to the recent rises in food costs. And that's not just the case in the U.S. The U.N. Food and Agriculture Organization noted in a 2008 report during the last food crisis that the increase in demand for sugar and corn for biofuels was "one of the leading factors behind the increase in their prices in world markets which, in turn, has led to higher food prices." In fact, the International Food Policy Research Institute has called biofuel subsidies in rich countries the equivalent of a tax on food.
Of course, using homegrown crops—whatever the impact—does reduce the need for the roughly 11 million barrels of foreign oil (and the military entanglements required to secure that foreign oil) the U.S. imports every day; it also improves the livelihoods of rural communities. "We have only just begun to realize the benefits of home-grown fuels," U.S. Secretary of Energy Steven Chu said in a February address to the National Ethanol Conference in Phoenix, although he has also expressed skepticism about whether corn is the right crop for fuel.
For the moment, ethanol remains the biofuels king, whether fermented from corn or sugarcane. Oil companies like Shell are investing heavily in sugarcane biofuels, forming a joint venture with Brazilian ethanol company Cosan—dubbed Raizen—to produce 2.2 billion liters of sugarcane ethanol a year. "Of all the alternatives to road-transportation fuels, certainly over the next 20 years, biofuels are the answer," says Shears of Shell, which predicts biofuels will make up some 9 percent of the global transportation fuel market by 2030. "Of all the biofuels options at the moment, Brazilian sugarcane does produce less CO2."