Corn Ethanol Faces an Uncertain Future
Ethanol recently survived its most direct challenge yet when the EPA rejected Texas Gov. Rick Perry's request to halve this year's ethanol mandate, but that doesn't mean the biofuel's detractors are going away.
A quarter of this year's U.S. corn crop went toward producing ethanol that was blended into gasoline tanks across the country. Next year, fuel could eat up as much as a third of the crop. The price of a bushel of corn hit record highs this summer ($8 a bushel in June) before leveling off at around $6 a bushel. The high cost of corn has affected food prices across the board, but it hit especially hard among the grain-consuming livestock industries.
The ethanol industry still has a good number of defenders who blame other factors, such as rising demand in India and China, drought in Australia's growing regions and high oil prices, for driving corn through the roof.
Yet a recent study done by Purdue University found that ethanol was directly responsible for at least a dollar per barrel of the rising cost. Furthermore, given that even ethanol producers acknowledge that the nation's cars will never run solely off of corn, many scientists, politicians and average citizens have begun to question the wisdom of putting food into our fuel tanks.
Even though the federal subsidy for ethanol will decline from 51 cents per gallon to 45 cents this year, it's clear that E85 ethanol fuel cannot compete with regular unleaded gasoline without government support. It burns less efficiently than gasoline, so it ends up costing drivers the same or more. For instance, AAA's average cost for E85 today is $3.03, but its price adjusted for efficiency is $3.99 — more than 30 cents more than a gallon of regular gas.
Legislation has been floating around to reduce subsidies faster, but economists speculate that even if the government eliminated all support, corn prices would only fall 13% initially. It would take two years or more before consumers saw reduced food prices.
However, cellulosic ethanol and other biofuels made using wastewood or switchgrass haven’t gained prominence as fast as many thought they would. We’re still years away from either production method reaching the levels of corn ethanol.
Golden Image of Corn-Based Ethanol Shows Some Erosion (USA Today)
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I was down state this weekend and E-85 costs $3.09!!!
I know there's less energy in each gallon but that's a price I'm willingly to pay for those rock bottom prices.
While you save on a gallon of E-85 you are making up the difference in food costs and your taxes since the cost if E-85 if subsidized.
It's not cheaper, you just aren't paying for it at the pump.
corn ethanol did the job it was really intended for. it showed the nation that cars can run on other forms of energy. it never was intended to replace gasoline, but to get people to start thinking "green"
It is not making anyone thinking green.
a. It is less efficient than gasoline - significantly at that.
b. It makes perfectly no sense at all trying to replace oil consumption by raising food price for everyone including non-driving citizens just because we are trying to reduce oil consumption.
c. The price difference was offset by its efficiency deficit - remember, vehicles get worse mileage using E-85 than gasoline.
So, all it does was benefit the farmers who grow corns.
I am not saying that's a bad thing to benefit the farmers, but it is not doing the environment any good, meaning not "green".
It's an artificial profit increase for farmers in the form of an indirect subsidy. On top of that, farmers are directly subsidized by the gov't with billions of taxpayer dollars. I'm all for farmers getting rich, but without getting subsidized from two different angles.
ethanol is politics at its very worse. its causing riots in the third world because of huge cost increases, isnt efficient, and doesnt help "global warming" at all. The reason ethanol exists is because Iowa holds the first contest for the presiential race. Wonder why John Mccain barely bothered to campaign in Iowa? Because he opposed ethanol subsidys. SO no politican is going to come out against it because they want to get elected. Good for Rick Perry for calling ethanol for the crap and waste of time it is.
i would take the food prices if it were to give a hummer/tundra 50mpg or a cobalt/civic 90 mpg. and if corn ethanol is going to be around, they better get that sort of mpg and be cleaner. otherwise they won't be around.
Saying ethanol is crap is the only thing that empty suit has ever done right.
GM 's sudden stewardship of the environment is simply a way to continue to make gas guzzlers thanks to E85 an extremely inefficient fuel. The CAFE standards call for all car companies to achieve an average MPG for all vehicles. I believe the most recent number is 27 MPG. Well if you make the biggest money off of 10 miles per gallon SUV's you would hate to say good bye to them wouldn't you?
The CAFE standards has a loophole, that being that an E85 vehicle operating on E85 miles per gallon are ONLY figured against the actual amount of gasoline in the blend (15%) if you divide 100% fuel by 15% gasoline you get the multiplier to the mpg (666) therefore a gas guzzling 10 MPG SUV is given credit for 66.6 MPG. If you sell one SUV like this you can have 5 vehicles only achieving 20 MPG and this gas guzzling SUV and you average more than 27 MPG overall while not one of their vehicles really met the standard.
GM is not the only one taking advantage of this free ride Ford and Chrysler are too. The big three are heading down the toilet and this is just their hands clinging to the rim
Kudo's to McCain for opposing Ethanol as it's nothing more than a pandering political play. I hate the fact that Obama openly supports it and will probably play a my decision for me, a proud Democrat, to consider voting for McCain. I must admit the more I dig into Obama's positions the more I wished Hillary would have been the nomination.
Argh! you people drive me insane! Ethanol isn't made from food-grade corn, So where does your food for fuel arguement come from? Everyone that argues about Ethanol, doesn't know anything about it! only what they read. At 7.50 a bushel for wheat, only $0.12 worth goes to a loaf of bread, out of 60 loaves from a bushels worth! 12 cents!! for a $5 dollar loaf of bread! the cost comes from storage, refining, cooking, labor, shipping, packaging, and stocking! The same equation goes to corn products! And the corn you eat isn't used for food, so take your lame, un-backed arguement somewhere else! (perhaps you semi-educated can remember Taco Bell getting into some trouble for using genetically engineered field corn? same stuff they use for ethanol! ITS NOT FOOD GRADE!)
I agree with Jeremy. I'm an owner of a 100,000 head cattle feedlot in Parsons, Ks. The price of corn doesn't effect anything really, its the price of diesel to move the cattle! No feedlot uses anymore than 5% corn in their feed, it doesn't digest easily! From actually being in the business, and seeing these folks arguments, it makes me wonder how they can be so passionate about a topic they aren't familiar with!
John D.,
Isn't the argument that they're taking land that would be used for food corn or other crops and using it instead to grow what's needed for ethanol because of the new demand?
I thought it was the redistribution of the crops that was the problem and the fact that growing corn (I don't know if there's a difference in the variety) takes more out of the soil than other crops?
I admit I'm no agriculture expert but I thought that did play a part in the prices?
Gee, Jon D. responding to Jeremy and agreeing with him. Well, why not? They’re both the same. Look at the time it was posted and then look at their email addresses.
Dave T. you are correct. The high demand for corn will displace some crops, but those displaced crops will be in more demand and planted the next year. its a continuous cycle that's gone on for years. and its the bio-waste from the displaced crops on alternating years that keep the fields healthy for the corn. and yes different varieties use more nutrients, especially sweet corn and dent corn, the type we eat. but those nitrates are easily replace if field conservation is done correctly.
Ken L.
Well John D. agrees with me so that's all that counts;)
I'm not sure why the emails are the same, but their IP addresses are quite different, I checked.
John D. and Jeremy the same person? No...
Using the same computer, no. I only wanted
to respond to get a point acrossed. I do not
have an e-mail of my own so i used Jeremy's.
Sorry for any confusion.
(he gave me permission)
John knows alot about farming and feedlots being in the business for over 50yrs. We both agree that ethanol isn't the culprit, nor oil... its Foreign oil! I allowed him to use my e-mail just in case there was a direct question for him so i could relay it to him. (we know each other out of the blog here)
http://www.biofuelsdigest.com/MeatvsFuel.pdf
Read this article...gives some interesting insight into the fuel vs. food debate.
Ethanol has very little impact on food prices. Other economic factors have led to the price increases. The anti-ethanol folks have used this argument as propaganda and it simply doesn't fly. Every farmer that I know has said the same thing that JohnD has said. Conservatives mainly don't like the gov't subsidies being paid to farmers. But then they don't complain about gov't subsidies for oil companies (and they do get them) and other alternative fuel sources.
Corn-ethanol is still less efficient than electric cars anyway your slice it. Having the ability to control pollution at one source instead of millions of tailpipes is an added benefit.
Now read this again:
"For instance, AAA's average cost for E85 today is $3.03, but its price adjusted for efficiency is $3.99 — more than 30 cents more than a gallon of regular gas. "
Even when subsidized, its STILL 30 cents more expensive than regular gasoline. Crop-based fuel is bad idea. Look at the Brazilian economy which has really cheap gas price by making sugar-based ethanol but is tearing down rain forests in record numbers to create room to grow.