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For years, governments have promoted ethanol-blended petrol as a cleaner alternative to conventional fuel. But long before biofuels became a global policy priority, billionaire Warren Buffett’s close aide\u00a0legendary investor Charlie Munger dismissed the idea in unusually blunt terms, arguing that producing ethanol consumed more fossil fuel than the energy it delivered.<\/p>
Speaking at the 2006 Berkshire Hathaway Annual Shareholders Meeting, he argued that producing ethanol consumed more fossil fuel than the energy the biofuel\u00a0ultimately delivered.\u00a0<\/p>
“I have just enough glimmers of thermodynamics left in me to suspect that it takes more fossil fuel energy to create ethanol than you can get out of the ethanol you’ve created. If so, that’s a very stupid way to try and solve an energy problem.”\u00a0<\/p>
Munger’s criticism was directed primarily at\u00a0first-generation corn ethanol, which was rapidly expanding in the United States at the time through government mandates and subsidies. He\u00a0maintained\u00a0this view for years, later describing corn ethanol as “monstrously stupid” and “one of the dumbest ideas in the history of the world,” arguing that it wasted food crops and distorted agricultural markets.\u00a0<\/p>
DON’T MISS | Centre debunks E20 myths & concerns, cites tests on engine safety and water use<\/strong><\/p> Nearly two decades later, his criticism continues to fuel debate \u2014 not just over the science of ethanol’s energy balance, but also over its economic viability, food security implications and role in the transition to cleaner energy.<\/p> What was Munger referring to?\u00a0<\/strong><\/p> At the heart of the debate is\u00a0Net Energy Balance (NEB), also known as\u00a0Energy Returned on Energy Invested (EROEI or EROI).\u00a0<\/p> The concept asks a simple question:\u00a0How much usable energy do you get from a fuel compared with the energy\u00a0required\u00a0to produce it?\u00a0<\/p> If producing one unit of fuel requires more than one unit of fossil energy, the fuel offers little or no energy advantage.\u00a0<\/p> SEE WHY |\u00a0Hidden challenge of E20 petrol: Why storing it is far more complicated than ordinary fuel<\/strong><\/p> Why critics argued ethanol was inefficient\u00a0<\/strong><\/p> When Munger made his remarks in 2006, several studies suggested that corn ethanol had a poor\u2014or even negative \u2014 energy balance.\u00a0<\/p> Major energy inputs included:\u00a0<\/p> Some early analyses concluded that producing corn ethanol required\u00a0more fossil energy than the ethanol itself\u00a0contained, supporting Munger’s criticism.\u00a0<\/p> What does more recent research say?\u00a0<\/strong><\/p> The picture has changed over the past two decades.\u00a0<\/p> DO CHECKOUT | Centre denies reports claiming E20 programme was termed an \u2018experiment\u2019 before Supreme Court<\/strong><\/p> Improved crop yields, more efficient fertiliser use, advances in ethanol plants, and greater reliance on natural gas and renewable electricity have significantly improved the industry’s energy performance.\u00a0<\/p> Recent lifecycle assessments \u2014 including studies by the\u00a0US\u00a0Department of Agriculture (USDA)\u2014generally conclude\u00a0that modern corn ethanol now produces\u00a0roughly\u00a01.5\u00a0to 2.3 units of energy for every unit of fossil energy invested,\u00a0indicating\u00a0a\u00a0positive net energy balance.\u00a0<\/p> That means Munger’s statement is\u00a0less\u00a0accurate\u00a0for today’s US\u00a0corn ethanol industry than it was when first-generation production was\u00a0relatively inefficient.\u00a0<\/p> However, researchers continue to debate the exact figures because results depend on assumptions about farming practices, land-use\u00a0changes\u00a0and processing methods.\u00a0<\/p> DON’T MISS THIS |\u00a0Can flex fuel cut your petrol bill? What the Brazil model shows us<\/strong><\/p> Why the criticism\u00a0hasn’t\u00a0disappeared\u00a0<\/strong><\/p> Even if ethanol now delivers a positive energy return, critics argue several structural problems remain.\u00a0<\/p> Corn ethanol vs second-generation biofuels <\/strong><\/p> Not all ethanol is the same.\u00a0First-generation ethanol\u00a0is produced from food crops such as corn or sugarcane.\u00a0Second-generation (cellulosic) ethanol\u00a0is made from agricultural waste, crop residues, grasses or wood biomass.\u00a0<\/p> MUST READ\u00a0|\u00a0Govt waives excise duty on petrol with higher levels of ethanol<\/strong><\/p> Cellulosic ethanol has the potential for a much higher energy return while avoiding direct competition with food production. However, technological complexity and high production costs have prevented it from achieving widespread commercial adoption.\u00a0<\/p> How does this relate to India?\u00a0<\/strong><\/p> India’s ethanol programme differs significantly from the US\u00a0model that Munger criticised.\u00a0<\/p> Rather than relying primarily on corn, India sources ethanol\u00a0largely from\u00a0sugarcane molasses, sugarcane juice and, increasingly, damaged food grains and surplus rice. The government promotes ethanol blending to reduce crude oil imports, support\u00a0farmers\u00a0and lower vehicle emissions.\u00a0<\/p> FIND OUT |\u00a0Petrol, EV or Flex-Fuel? Here’s which car makes most sense for your road trips in 2026<\/strong><\/p> Supporters argue these\u00a0objectives\u00a0extend beyond energy efficiency alone. Critics, however, continue to raise concerns about water-intensive sugarcane cultivation, land use, food\u00a0security\u00a0and the long-term sustainability of expanding ethanol production.<\/p> <\/div> Charlie Munger, Warren Buffett, Berkshire Hathaway, ethanol blending, ethanol in petrol, biofuels, corn ethanol, energy return on investment, EROI, net energy balance, fossil fuels, renewable energy, fuel additives, ethanol debate, energy efficiency, food vs fuel, government subsidies, biofuel policy, clean energy, sustainable fuels, petrol blending#039monstrously #stupid039 #mainstream #fuel #ethanol #proved #legendary #Charlie #Munger #wrong1783265135<\/p> ","protected":false},"excerpt":{"rendered":" For years, governments have promoted ethanol-blended petrol as a cleaner alternative to conventional fuel. But long before biofuels became a global policy priority, billionaire Warren Buffett’s close aide\u00a0legendary investor Charlie Munger dismissed the idea in unusually blunt terms, arguing that producing ethanol consumed more fossil fuel than the energy it delivered. Speaking at the 2006 […]<\/p>\n","protected":false},"author":1,"featured_media":11005,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[37],"tags":[43939,35489,38863,40056,43942,43927,4557,43929,37489,43930,43931,20228,34543,43934,43928,43935,43933,3146,36510,43936,43941,43506,43943,43932,43938,12594,35364,43940,43937,22018,4346],"class_list":["post-11004","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-content-marketing","tag-039monstrously","tag-berkshire-hathaway","tag-biofuel-policy","tag-biofuels","tag-charlie","tag-charlie-munger","tag-clean-energy","tag-corn-ethanol","tag-energy-efficiency","tag-energy-return-on-investment","tag-eroi","tag-ethanol","tag-ethanol-blending","tag-ethanol-debate","tag-ethanol-in-petrol","tag-food-vs-fuel","tag-fossil-fuels","tag-fuel","tag-fuel-additives","tag-government-subsidies","tag-legendary","tag-mainstream","tag-munger","tag-net-energy-balance","tag-petrol-blending","tag-proved","tag-renewable-energy","tag-stupid039","tag-sustainable-fuels","tag-warren-buffett","tag-wrong"],"acf":[],"_links":{"self":[{"href":"http:\/\/longzhuplatform.com\/index.php?rest_route=\/wp\/v2\/posts\/11004","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/longzhuplatform.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/longzhuplatform.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/longzhuplatform.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/longzhuplatform.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=11004"}],"version-history":[{"count":0,"href":"http:\/\/longzhuplatform.com\/index.php?rest_route=\/wp\/v2\/posts\/11004\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/longzhuplatform.com\/index.php?rest_route=\/wp\/v2\/media\/11005"}],"wp:attachment":[{"href":"http:\/\/longzhuplatform.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=11004"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/longzhuplatform.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=11004"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/longzhuplatform.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=11004"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}