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cartoon by Khalil Bendib |
The town of Columbus, Nebraska, bills itself as a "City of Power and
Progress." If Archer Daniels Midland gets its way, that power will be
partially generated by coal, one of the dirtiest forms of energy. When
burned, it emits carcinogenic pollutants and high levels of the greenhouse
gases linked to global warming.
Ironically this coal will be used to generate ethanol, a plant-based
petroleum substitute that has been hyped by both environmentalists and
President George Bush as the green fuel of the future. The agribusiness
giant Archer Daniels Midland (ADM) is the largest U.S. producer of ethanol,
which it makes by distilling corn. ADM also operates coal-fired plants at
its company base in Decatur, Illinois, and Cedar Rapids, Iowa, and is
currently adding another coal-powered facility at its Clinton, Iowa ethanol
plant.
That's not all. "[Ethanol] plants themselves � not even the part producing
the energy � produce a lot of air pollution," says Mike Ewall, director of
the Energy Justice Network. "The EPA (U.S. Environmental Protection Agency)
has cracked down in recent years on a lot of Midwestern ethanol plants for
excessive levels of carbon monoxide, methanol, toluene, and volatile organic
compounds, some of which are known to cause cancer."
A single ADM corn processing plant in Clinton, Iowa generated nearly 20,000
tons of pollutants including sulfur dioxide, nitrogen oxides, and volatile
organic compounds in 2004, according to federal records. The EPA considers
an ethanol plant as a "major source" of pollution if it produces more than
100 tons of any one pollutant per year, although it has recently proposed
increasing that cap to 250 tons.
Sulfur dioxide is classified by the EPA as a contributor to respiratory and
heart disease and the generation of acid rain. Nitrogen oxides produce ozone
and a wide variety of toxic chemicals as well as contributing to global
warming, according to the EPA, while many volatile organic compounds are
cancer-causing. Last year, Environmental Defense, a national environmental
group, ranked the Clinton plant as the 26th largest emitter of carcinogenic
compounds in the U.S.
For years, ADM promoted itself as the "supermarket to the world" on major
U.S. radio and television networks like NPR, CBS, NBC, and PBS where it
underwrites influential programs such as the NewsHour with Jim Lehrer. Now,
as it actively promotes its ethanol business, ADM has rolled out its new
eco-friendly slogan, "Resourceful by Nature" which "reinforces our role as
an essential link between farmers and consumers."
Fueling Exploitation:
ADM in Brazil and the Ivory Coast
Greenpeace International recently accused Archer Daniels Midland of
funding, along with two other agricultural commodities traders, much of
the razing of the Amazon rainforest for soy production. The group claims
that that ADM, along with Cargill and Bunge, are responsible for 60
percent of the financing of soy production in the vital rainforest
ecosystem. ADM lends money to farmers who plant in areas of the
rainforest that have been illegally cleared, alleges Greenpeace, and
then finances the shipping of soy out of the region. ADM has set up four
grain silos in the Amazon, for the export of soy from Brazil. The
primarily destination of the soy is Europe where it ends up as high
protein cattle feed.
ADM is also currently being sued by the International Labor Rights Fund
for alleged involvement in the trafficking, torture and forced labor of
children who cultivate and harvest cocoa beans in the Ivory Coast. The
suit, which is being filed on behalf of Malian children brought against
their will to the Ivory Coast, argues that the company, as well as
Nestle and Cargill, has knowingly turned a blind eye to the use of
forced child labor in the cocoa plantations where the agricultural
processor's chocolate originates.
"It is unconscionable that Nestle, ADM and Cargill have ignored repeated
and well-documented warnings over the past several years that the farms
they were using to grow cocoa employed child slave labor," says
International Labor Rights Fund attorney Natacha Thys. "They could have
put a stop to it years ago, but chose to look the other way. We had to
go to court as a last resort."
For more information:
Greenpeace's report "Eating Up the Amazon"
Human Rights Watchdog Sues Nestle, ADM, Cargill For Using Forced Child
Labor
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Despite the company's attempts at green packaging, ADM is ranked as the
tenth worst corporate air polluter, on the "Toxic 100" list of the Political
Economy Research Institute at the University of Massachusetts. The
Department of Justice and the Environmental Protection Agency has charged
the company with violations of the Clean Air Act in hundreds of processing
units, covering 52 plants in 16 states. In 2003 the two agencies reached a
$351 million settlement with the company. Three years earlier, ADM was fined
$1.5 million by the Department of Justice and $1.1 million by the State of
Illinois for pollution related to ethanol production and distribution.
Currently, the corporation is involved in approximately 25 administrative
and judicial proceedings connected to federal and state Superfund laws
regarding the environmental clean-up of sites contaminated by ADM
operations.
Friends in High Places
Environmentalists have cried foul, but they are up against the 56th largest
company in the United States, as ranked by revenue in Fortune Magazine. ADM
has more than 25,000 employees, net sales last year of $35.9 billion, with
$1 billion in profits, as well as a recent 29 percent profit increase in the
last quarter. The comany is a global force: ADM is one of the world's
biggest processors of soybeans, corn, wheat, and cocoa, which it buys from
growers in the U.S. and around the world. The company recently hired
Patricia A. Woertz, an executive vice president of Chevron Corporation, as
its chief executive officer.
ADM has another resource at its disposal, the considerable clout it has
built up over decades of courting and lobbying Washington's power brokers.
Days after the company's February expansion announcement of the coal-fired
Nebraska plant, U.S. Energy Secretary Samuel W. Bodman visited ADM's Decatur
headquarters to tout its part in President Bush's Biofuels Initiative. The
secretary posed for photos with then ADM Chair G. Allen Andreas and
announced that the Department of Energy would offer up to $160 million for
the construction of three biorefineries to expand U.S. ethanol production.
"Partnerships with industry like these will lead to new innovation and
discovery that will usher in an era of reduced dependence on foreign sources
of oil, while strengthening our economy at home," Secretary Bodman said from
ADM's trade floor. Like the ADM ethanol plant in Columbus, the three
biorefineries could well be partially coal-powered, given the absence of
conditions imposed by the Department of Energy.
"It's been some 30 years since we got a call from the White House asking for
the agricultural industry, ADM in particular, to take a serious look at the
possibilities of building facilities to produce alternative sources of
energy for our fuel supply in the United States," said Allen Andreas, who
was chair, chief executive and president of ADM at the time of Secretary
Bodman's visit. "We are delighted to participate in any way that we can in
the president's programs."
ADM and its signature project have never lacked friends in high places,
despite a history of price fixing scandals and monopolistic misdeeds. The
Andreas family, which has headed up the publicly-traded company for decades,
has cultivated bipartisan support through generous donations to both
Republicans and Democrats. Since the 2000 election cycle, ADM has given more
than $3 million in political contributions, according to the Center for
Responsive Politics: $1.2 million to Democrats and $1.85 million to
Republicans. These donations may have helped sustain a multitude of
government subsidies to ADM, including ethanol tax credits, tariffs against
foreign ethanol competitors, and federally mandated ethanol additive
standards.
Politicians from the Midwestern Corn Belt are some of the company's
staunchest allies. Senators Richard Durbin, Charles Grassley, and Tom
Harkin, and Representative Dick Gephardt have consistently supported lavish
federal tax subsidies to ethanol producers, for which ADM is the prime
beneficiary. All are recipients of political action committee donations from
the agribusiness behemoth. The Wall Street Journal has referred to the
former South Dakota senator and Senate minority leader as "Archer Daschle
Midland," because of his unswerving support for the interests of the
company.
ADM's political heft was behind the 54 cent per gallon tariff that the US
government has imposed on imports of sugar-cane based ethanol from Brazil,
which is cheaper than ADM's corn-based fuel. The tariff dates back to 1980
when the CEO of ADM convinced President Carter to adopt it, according to
former ADM lobbyist Joseph Karth. Iowa's Senator Grassley recently stated
his intention to block any attempt to remove the tariff on lower-cost
Brazilian fuel in the face of rising gas prices, stating that "lifting this
tariff would be counter-productive to the widely supported goal of promoting
home-grown renewable sources of energy."
Over many decades, the company has been the recipient of government largesse
in the form of federal and state corn and ethanol subsidies that have
totaled billions of dollars, prompting the libertarian Cato Institute to
declare ADM the biggest recipient of corporate welfare in the U.S. in 1995.
ADM has been a prime beneficiary of the federal tax credit on ethanol, which
the refiner can apply to the tax it pays on corporate income. First
implemented in 1978, the tax credit currently stands at 51 cents per gallon
of ethanol sold. The Government Accounting Office estimates the subsidies to
the ethanol industry from 1980-2000 at $11 billion. As the biggest ethanol
producer in the US, ADM has received the largest portion of the government's
generosity.
Recent legislation has further greased the tracks of the ethanol gravy
train. The Energy Policy Act of 2005's Renewable Fuel Standard stipulates
that gasoline sold in the US must include a certain percentage of ethanol or
biodiesel, starting at 4 billion gallons this year and rising to 7.5 billion
gallons by 2012. ADM got another boost when the federal government mandated
that oil companies replace MTBE, a cancer-causing gasoline additive, with
ethanol. 45 states have adopted policies to encourage the production and use
of the fuel. ADM has responded with plans to increase its output of ethanol
by 42 percent over the next three years.
When Corn is King
Subsidies and tax incentives might make public policy sense � even when
they flow into the coffers of a Fortune 500 company with mega-profits �
but only if corn ethanol delivers on the promise that its boosters claim: to
significantly cut greenhouse emissions, protect the environment, and slow
global warming.
Debate has raged for years over whether ethanol made from corn generates
more energy than the amount of fossil fuel that is used to produce it. UC
Berkeley's Alexander Farrell recently co-authored a comprehensive study,
published in Science, on the energy and greenhouse gas output of
various sources of ethanol. His group found that corn ethanol reduces
greenhouse gases by only 13 percent, which compares unfavorably with ethanol
made from vegetable cellulose such as switchgrass. "Our best guess," says
Farrell, "is that using corn ethanol today results in a modest decline of
greenhouse gas emissions."
Yet the enormous amounts of corn that ADM and other ethanol processors buy
from Midwestern farmers wreak damage on the environment in a multiplicity of
ways. Modern corn hybrids require more nitrogen fertilizer, herbicides, and
insecticides than any other crop, while causing the most extensive erosion
of top soil. Pesticide and fertilizer runoff from the vast expanses of corn
in the U.S. prairies bleed into groundwater and rivers as far as the Gulf of
Mexico. The nitrogen runoff flowing into the Mississippi River has fostered
a vast bloom of dead algae in the Gulf that starves fish and other aquatic
life of oxygen.
To understand the hidden costs of corn-based ethanol requires factoring in
"the huge, monstrous costs of cleaning up polluted water in the Mississippi
River drainage basin and also trying to remedy the negative effects of
poisoning the Gulf of Mexico," says Tad Patzek of the University of
California's Civil and Environmental Engineering department.
"These are not abstract environmental effects," Patzek asserts, "these are
effects that impact the drinking water all over the Corn Belt, that impact
also the poison that people ingest when they eat their food, from the
various pesticides and herbicides." Corn farming substantially tops all
crops in total application of pesticides, according to the US Department of
Agriculture, and is the crop most likely to leach pesticides into drinking
water.
While banned by the European Union, atrazine is the most heavily used
herbicide in the United States � primarily applied to cornfields � and
the EPA rates it as the second most common pesticide in drinking wells. The
EPA has set maximum safe levels of atrazine in drinking water at 3 parts per
billion, but scientists with the U.S. Geological Survey have found up to 224
parts per billion in Midwestern streams and 2,300 parts per billion in Corn
Belt irrigation reservoirs.
Then there is the question of how practical it is to replace petroleum with
corn-based ethanol. "There are conflicting figures on how much land would be
needed to meet all of our petroleum demand from ethanol," says Energy
Justice Network's Ewall, "and those range from some portion of what we
currently have as available crop land to as much as five times as the amount
of crop land in the US." The Department of Agriculture estimates that the
Corn Belt has lost 90 percent of its original wetlands, two thirds of which
has taken place since draining for agriculture began mid-century.
"No one who's looked at this issue [from an environmental perspective] talks
about using corn kernels as the only, or even major component, of the long
term solution," counters Nathanael Greene, senior policy analyst with the
Natural Resources Defense Council. "Everyone assumes we'll evolve the
industry from its current technology to the advanced technologies."
If that happens, it will be a marked reversal of many decades of government
policy in support of Archer Daniels Midland � and the company may well
wonder what it's getting for its unceasingly ample gifts to both political
parties. But with the "full-throated support of the Bush Administration", in
the words of the Renewable Fuels Association, a corn ethanol-dominated,
ADM-led trade group, that day doesn't seem to be approaching any time soon.
Sasha Lilley is a writer for CorpWatch and producer of the program Against
the Grain on Pacifica Radio.
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