Biofuel Blues

The boom in corn ethanol production may be coming to an end. As a start, the industry is due to lose some of its government support – more than 30 years after Jimmy Carter first began subsidising corn ethanol to encourage the development of a homegrown plant-based fuel but energy policies brought in by George W Bush which set production quota to encourage the use of biofuels allowed the industry to take off. Congress is expected to end $6bn in subsidies during the debt deal negotiations.

"Ten years ago this was the greatest thing since apple pie – ethanol. A lot of farmers invested in this, and a lot of farmers invested in ethanol plants. Everybody wanted it." said Arlyn Schipper, with 1,619 hectares (4,000 acres) in Iowa planted almost entirely with corn, 70% of the crop to produce ethanol. There are five ethanol plants within a 50-mile radius of his home. America is projected to produce 14bn US gallons (53bn litres) of corn ethanol this year at 200 refineries across the midwest. Iowa, which leads the country in corn production, will use 58% of its crop for ethanol this year.

"The research is very clear by now. Turning corn into ethanol is not environmentally sound," said Bill Freese of the Centre for Food Safety. "It's really an environmental disaster." Environmental groups had argued that its use offered no meaningful reduction in greenhouse gas emissions – in part because of the vast use of energy and water in the ethanol conversion process. Campaigners argue that the entrenched government supports for corn ethanol have blocked the development of next generations of greener biofuels made from wood or the non-edible parts of plants, known as cellulosic biofuels. "Corn ethanol continues to eat up the market and even eat up grant money that could be used to spur the development of cellulosic and advanced biofuels," said Sheila Karpf, an analyst at the Environmental Working Group.

The US is the world's largest producer and exporter of corn, giving it the power to dictate global market responses. Domestic consumption of corn, as ethanol, has driven up the price of corn worldwide, according to studies from the World Bank and other institutions. The high prices for corn – while driving hunger in Africa – have encouraged other farmers to turn over land from wheat, soybeans, or even pasture to corn production. US farmers planted 92m acres of corn this year, up from 4m acres last year, according to the US department of agriculture.

"Farmers are tearing up any little bit of land they had and going to corn," saidMarie Brill, an analyst at ActionAid. As a food crop, corn is also far more damaging to the environment than other crops, such as soybeans, because it uses more pesticides and fertiliser.

However, the ethanol industry still has a mighty hold on America's corn belt. "Ethanol is still a great thing," Schipper said. "It's been good for us."