« Global Warming And Greenhouse Effect | Home | Ethanol Research Expands Beyond Corn »
Ethanol Is Booming, But Is It Too Good To Be True?
By Mr Ethanol | May 7, 2007
The Buffalo News:
Corn-and-soybean farmer John Adams considered the pitch too good to pass up.
The 58-year-old Adams, who works 950 acres in central Illinois, didn’t immediately join the farmer cooperatives pooling together to build a 100-million-gallon-a-year ethanol plant. But when he dropped by an informational meeting a few months ago, he had to have a piece.
“I was impressed,” he recalled. “I had to do a lot of thinking about where the ethanol market was and where I think it’s going.”
Ethanol, for decades largely an afterthought in the global fuels market, is in the midst of a booming renaissance, despite a host of questions.
It is a hot topic from agribusiness boardrooms to Midwestern diners to world capitals including Washington. President Bush says the fuel additive distilled from mashed and fermented grain is a cheap-and-easy alternative to highpriced foreign oil, and some day it’s already been an economic boon for moribund rural stretches.
Yet skeptics wonder if the rush to ethanol makes sense given the murky outlook for demand. They worry, too, about ethanol’s fuel efficiency — lower than traditional gasoline — and its effects on both the environment and food prices as corn chews up more farmland.
How big is the boom? Americans last year harvested 10.5 billion bushels of corn — the third-largest crop ever — after planting 78.3 million acres. The Agriculture Department predicts U.S. farmers this year will plant 90.5 million acres of corn, the most since 1944, and harvest a record 12.2 billion bushels.
Of that, an estimated 3.2 billion bushels will go into ethanol — a whopping 49 percent increase from last year.
It’s an attractive investment: Billions of dollars in government support are going to developers of ethanol plants, as well as subsidies — tax credits — of 51 cents refiners get for every gallon of ethanol they put in blended gasoline.
The corn-for-ethanol boom, however, could eat into the food industry’s share of the crop, raising prices for everything from breakfast cereal to beef and beer. As farmers plant more corn, U.S. soybean acreage is expected to slide 11 percent and cotton production 20 percent this year alone, the Agriculture Department said.
Yet ethanol is more pricey than gasoline and has about two-thirds the energy value of conventional gas, meaning lesser fuel economy. Only a sliver of the nation’s gas stations offer E85 — mostly in the Midwest — though the number has more than doubled from about 600 in January 2006 to 1,170 now.
Topics: BizOp, Ethanol, Ethanol Prices, Negatives, News, Positives |
Related Posts
- Ethanol Surges In Spite Of Questions About Demand, Environment, Food
- Where’s Ethanol Money?
- Verasun To Become Largest Ethanol Producer
- About
- Is Ethanol’s Carbon Footprint Bad? It Depends
- Ethanol Good For America
- True Cost Of Ethanol Is Not Worth It
- Good Sugarcane Harvest Means Ethanol Will Continue To Be Cheap In Brazil
- Mandated Ethanol Usage: A Good Idea?
- Iemma Orders Ethanol For Public Cars
New Way Of Making Easy Money Online