More Money, Fewer Grasslands: Corn Ethanol's Impact On Rural America

Jun 8, 2015

There are many factors behind the loss of grassland and native prairie in North Dakota, and the expansion of the Corn Belt is one of them. Here, a former grassland in Stutsman County, N.D., has been turned into cultivated fields. (Emily Guerin/Inside Energy)

Ethanol is one of the most important industries in the Midwest, and it’s an industry about to change. The U.S. EPA says that by June 1 it will propose new targets for the Renewable Fuel Standard, or RFS, which dictates the amount of ethanol the oil industry has to blend into our gasoline.

The RFS has three main goals: prop up rural economies, reduce dependence on foreign oil and reduce carbon dioxide emissions from the transportation sector.

It has arguably been most successful at meeting that first goal. Stutsman County, N.D., is a great place to understand why.

Central North Dakota didn’t really used to be corn country. It's too rocky, hilly and dry — although there are small ponds all around that are difficult to drive farm equipment around. Denny Ova lives here on a cattle ranch. He has farmed and ranched most of his life, but never really planted much corn until eight years ago.

Congress passed the RFS in 2007, creating an instant market for corn to be made into ethanol. Between 2007 and 2013, the price of corn almost doubled. During that time, the amount of corn planted in Stutsman County increased by over 50 percent. For people like Denny Ova and his neighbors, it was great news.

"[There's a] lot of buildings going up, a lot of new equipment sitting out there," he said. "People are happy."

Ova included. The walls of his garage are decorated with taxidermy deer and fish he's bagged on hunting expeditions and annual fishing trips to Mexico.

The ethanol industry estimates it contributes $640 million to North Dakota’s economy, and billions more across the Midwest. Tom Lilja, head of the North Dakota Corn Growers Association, says a lot of that is a direct benefit to farmers, who can receive more money for their corn when they sell it to ethanol plants.

"A farmer in the past would go to the elevator and take the price," he said. "Well now, he can look at an ethanol plant bid. And he can make these guys compete for their price."

Besides acting as a stimulus to rural America, the RFS was also meant to reduce U.S. dependence on foreign oil. Back when the RFS was crafted, in the mid-2000s, we were at war with Iraq and importing more oil than ever. Corn was cheap and plentiful, so why not refine some of that into ethanol right here in the United States? Ethanol did reduce our dependence on foreign oil, says Bruce Babcock of Iowa State University, but something else worked even more — fracking and horizontal drilling.

"It’s hard to separate the effects of RFS on reducing imports [from the shale oil boom]," he said. "High crude oil prices have dramatically incentivized domestic production."

Whether the RFS achieved its last goal, to be a less carbon-intensive fuel than gasoline, is even harder to parse out.

High corn prices meant many farmers took grassland out of federal conservation reserve programs, or CRP, which pay farmers not to plow, and did just that. Denny Ova wanted to keep his grass, but it didn’t make business sense.

"If you’re only getting $50 an acre out of CRR, but you could rent it to the neighbor for $80, you’re going to do that," Ova said.

Between 2008 and 2012, almost 6 million acres of grassland around the country were plowed under, according to a University of Wisconsin-Madison study. Plowing up grassland releases carbon dioxide from the soil. Accounting for that, some researchers say corn ethanol is not as “green” of a fuel as initially thought.

Losing grasslands is also bad for wildlife. The Chase Lake National Wildlife Refuge's 10,000 acres of prairie in Stutsman County are a haven for migrating birds looking for a place to rest, or nest, in the increasingly plowed-up landscape. Neil Shook, the refuge manager, says the area looks completely different than it did five years ago. Now, cultivated fields line the roads where before grasslands stretched for miles.

One Sunday morning a few years ago, Shook was out for a drive when a neighbor flagged him down. The neighbor, an older man named Roger, said he had been offered $90 an acre to turn some of his grassland into cropland. Shook begged him not to.

"I said, ‘How much do you want? I’ll buy it myself,’” Shook said. “I hadn’t even talked to my wife. And I’m like, ‘I just can’t take it anymore. What do you want? I’m going to buy it.’"

He took Roger out to the land in question to show him native flowers, grasses, and old tipi rings, evidence of earlier inhabitants. But then, later that summer, he saw smoke rising from the field.

"It got burned," Shook said quietly, visibly upset.

One way to make ethanol more environmentally friendly is to make it out of something besides corn. Indeed, corn ethanol was intended to be a bridge fuel to "cellulosic biofuels” made out of wood, grass, or other plant parts. But cellulosic ethanol, as it is called, has yet to fully take off. U.S. plants last year produced just one-fifth of the cellulosic ethanol called for in the RFS.