The Demand for Ethanol

By Deane Barker on January 23, 2007

Distillery Demand for Grain to Fuel Cars Vastly Understated: Interesting article (not neutral, however, as this is a lobbying group’s site). Ethanol is in so much demand that it’s pushing grain prices higher and higher. In fact, according to the quote below, Iowa — the nation’s largest corn producer — will soon be able to allocate more than its total corn crop to fuel plants alone.

Robert Wisner, Iowa State University economist, reports that Iowa’s demand for corn from processing plants that were on line, expanding, under construction, or being planned as of late 2006 totaled 2.7 billion bushels. Yet even in a good year the state harvests only 2.2 billion bushels. As distilleries compete with feeders for grain, Iowa could become a corn importer.

And the U.S. corn production has global ramifications:

The U.S. corn crop, accounting for 40 percent of the global harvest and supplying 70 percent of the world’s corn exports, looms large in the world food economy. Annual U.S. corn exports of some 55 million tons account for nearly one fourth of world grain exports.

It’s kind of depressing, really. Along comes this great breakthrough which seemingly solves problems…and it just creates more.

What this proves to me is that there’s really only one solution to the energy and pollution problems of this nation and the world in general: use less gas.

I’m not a tree-hugger by any stretch, but I have a policy that I won’t buy a daily-driving vehicle that gets less than 20 m.p.g. I imagine that threshold will rise to 25 m.p.g. in the coming years.

Gadgetopia

Comments

  1. I’m pretty sure things like NAFTA and CAFTA go both ways. It would surprise me if we actually started importing “low-grade” corn for ethanol production. That is until refineries start popping up in our N/CAFTA allies nations, then we’re just importing fuel…again.

  2. I appreciate your common sense on the subject. But while I’m not against ethanol – the way I am against continuing to fund the nutty Middle East or clinically insane Venezuela – it doesn’t seem to be much of step up. For the 3% efficiency we gain we get a 5% bump in production cost.

    We have several companies here developing switchgrass – and it really does sound like a solution. Here’s a weed that grows everywhere and anywhere (think dandelions!) and has an inate sugar content that is 17 times that of the sweetest corn.

    But my dream is still to rid us of the “refinery”. Energy Independence is always best at the personal level, not just at the national level.

  3. There’s a missing component to the discussion. Federal subsidies pay farmers to not grow crops. If demand turns out to be as strong as predicted, it may be more profitable to use those fallow acres for a cash crop.

  4. sounds like a loop; middle east raises oil prices making larger demand for corn, which raises corn prices, which mean higher food prices in the middle east, which mean higher oil prices ….

  5. Check out the Minuscar Project blog http://www.minuscar.com started by a guy in Sioux Falls who rides his bike more than drive his car. 2006 Mileage 1,917 – The Car 3,258 – The Bike(s) Less consumption by a guy who lives in frigid Sioux Falls, SD and even has a wife and two children. Come on, it he can do it so can the rest of us.

  6. I used to go to the offices of a software company in Sioux Falls a lot — they were out by the airport at the time.

    It was in the middle of winter, and every time I left, there was this bike inside the front door. It was sitting on cardboard so the snow could melt, and it was all decked out with all the gear necessary to ride all winter.

    Looking at this guy’s profile (he’s a software developer), I’m not unconvinced this is the owner of that bike.

    Good for him.

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