Improving Sustainability of the Corn-Ethanol Industry

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Gallagher, Paul
Shapouri, Hosein
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Gallagher, Paul
Associate Professor Emeritus
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The Department of Economic Science was founded in 1898 to teach economic theory as a truth of industrial life, and was very much concerned with applying economics to business and industry, particularly agriculture. Between 1910 and 1967 it showed the growing influence of other social studies, such as sociology, history, and political science. Today it encompasses the majors of Agricultural Business (preparing for agricultural finance and management), Business Economics, and Economics (for advanced studies in business or economics or for careers in financing, management, insurance, etc).

The Department of Economic Science was founded in 1898 under the Division of Industrial Science (later College of Liberal Arts and Sciences); it became co-directed by the Division of Agriculture in 1919. In 1910 it became the Department of Economics and Political Science. In 1913 it became the Department of Applied Economics and Social Science; in 1924 it became the Department of Economics, History, and Sociology; in 1931 it became the Department of Economics and Sociology. In 1967 it became the Department of Economics, and in 2007 it became co-directed by the Colleges of Agriculture and Life Sciences, Liberal Arts and Sciences, and Business.

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  • Department of Economic Science (1898–1910)
  • Department of Economics and Political Science (1910-1913)
  • Department of Applied Economics and Social Science (1913–1924)
  • Department of Economics, History and Sociology (1924–1931)
  • Department of Economics and Sociology (1931–1967)

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Two criteria based on characteristics of plant growth establish when bio-fuels can provide sustainable energy for society. The first criteria: enough solar energy stored during plant growth becomes available for man's use. Pimentel's early evaluation of the US ethanol industry calculated the ratio of BTUs in ethanol: BTUs from fossil energy of com and ethanol production at less than one. He concluded that ethanol is not sustainable energy, and questioned the industry's existence. Recent energy balance ratios that include adjustments for co-product feed and higher energy efficiency in corn/ethanol production suggest a moderate contribution from captured solar energy. The ratio is around I .3 (Shapouri et al., 2002). Dale questions the relevance of the net energy criteria, noting that economic value creation is consistent with energy ratios less than or near one. Dale (2007) proposes a second criteria for a sustainable fuel: enough C02 in the atmosphere is converted to carbon in the plant and 02 in the atmosphere through photosynthesis and plant growth to improve global-warming. Comparing greenhouse gas emissions from a refinery and an ethanol plant, some have calculated that emissions could be about 20 % lower with today's com-ethanol instead of the corresponding output of petroleum-based gasoline (Wang et al., 1999). Thus, recent calculations of energy ratios and C02 emission comparisons both suggest that the com-ethanol industry is sustainable. Further, public policies to ensure the com-ethanol industry 's exislence find moderale justification from both suslainability measures.


This is a chapter from Biofuels (2009): 223, doi: 10.1002/9780470754108.ch12.