Ethanol Stance Taints Barack Obama's Green Credentials

Barack Obama has enjoyed near-universal backing from American environmentalists, with the Sierra Club, the country's largest grass-roots environmental group, and Friends of the Earth US both endorsing the Democratic nominee for president.

But there is one policy area in which Obama and the environmental lobby have increasingly grown apart: ethanol. As senator for the corn-growing state of Illinois, Obama has been a firm advocate of corn-based ethanol, 34 billion litres of which is now added to US petrol every year to reduce imports of foreign oil.

Ethanol has been booming in the past two years across the corn heartlands of the US. But environmentalists are critical of the rush towards the fuel. They say its value as an alternative energy is debatable: one unit of energy expended in producing it gives less than two units of energy in the form of ethanol. Add to that the pressure on land use to grow more corn, and some analysts say its impact in terms of global warming emissions is actually negative.

On top of that, ethanol has been blamed for contributing to the devastating global rise in food prices. The huge demand for corn to feed the 178 US distilleries that now pockmark the mid-west has diverted the supply from food markets and distorted international trade. About a third of American corn is now gobbled up by the industry, and the price of corn more than doubled to a peak of $5 (PS3.15) a bushel earlier this year.

Yet Obama has continued to back the $33bn spent by the federal government every year to subsidise ethanol at the pump. The Republican presidential candidate, John McCain, by contrast, has said such subsidies should be removed; unlike Obama he also calls for a lifting of trade tariffs imposed on the importation of more efficient Brazilian ethanol drawn from sugar cane.

The effect of the ethanol craze is visible on a drive across the Great Plains ending in the small town of Brownsville, Nebraska. The road passes through mile upon mile of flat land covered in nothing but rotting corn stalks after the harvest.

Corky Jones is a fourth-generation Nebraskan farmer who grows corn and soya beans on a 970 hectare (2,400 acre) farm worked with his three sons. The ethanol bonanza has increased his yearly income by more than $500,000 just through the rise in corn prices. A long-term Democrat, his support for Obama has been strengthened by the senator's position on ethanol.

"Alternative energy is the cry of the land," he says.

He also rejects criticism of the fuel as propoganda put about by the oil companies. "The oil giants don't want to give up a drop of their oil to anybody else."

The idea that the oil lobby is behind criticism of ethanol is shared by Roger Hill, who manages an ethanol plant in Craig, Missouri, about an hour's drive away. Here the corn is mashed, cooked and fermented, and then distilled into the alcohol that is ethanol.

Hill is a life-time Republican. Though he agrees with Obama's position on ethanol, he says he still will not vote for the Democrat because he does not trust him to follow through on his promises. His distrust is intensified by his mistaken belief that Obama is a Muslim.

Obama has softened his stance on ethanol slightly in recent weeks after his controversial support for it came under media scrutiny. He says he may now rethink the policy, although he has not yet withdrawn his backing.

That puts environmentalists in a quandary in terms of their overall affinity for the Democratic candidate. Carl Pope, the national director of the Sierra Club, told the Guardian: "I don't agree with his position on ethanol. But I think that once elected president he will do the learning that is required. He has some catching up to do."

Obama may be spared an awkward confrontation over ethanol in any case. Federal requirements for the quantity of ethanol produced in 2008 have already been met, leading to a decline in demand.

Rapidly falling oil prices in the wake of the Wall Street crash have further damaged demand for alternative fuels. Ethanol plants are struggling under reduced orders, and some have closed; with it the price of corn has also begun to decline. The ethanol bubble may be about to burst.