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Ethanol Drives Up Food Commodity Prices, Datagro Says

Marianne Stigset, Bloomberg
Global ethanol production is driving up prices for food commodities, from feed stocks such as sugar, to meat, said Datagro, Brazil’s biggest sugar-industry forecasting firm.

U.S. production, forecast to increase more than 70 percent by 2012, will use 37 percent of the country’s current corn supply to meet output needs, up 15 percent from 2006, Datagro said. Land for soy oilseeds is increasingly being diverted to grow corn, reducing soy supply and driving up animal feed prices, according to the company. In China, competing demand for corn from the food and ethanol industries may lead the country to reduce exports and become a corn importer, Datagro said.

“World sugar, meat, corn, soy and wheat are becoming more interdependent with ethanol,” Plinio Nastari, president of Datagro, said today at an International Sugar Organization seminar in London.

Demand for biofuels made from plants such as corn, palm oil and sugar is growing amid efforts by nations including the U.S. to reduce reliance on oil, gas and coal. Some governments are also trying to limit carbon emissions and assist farming.

In the U.S., ethanol production is forecast to increase to 34 billion liters by 2012, from an estimated 19.7 billion liters in 2006, according to Datagro.
(22 Nov 2006)

Grain-Derived Ethanol: The Emperor’s New Clothes

Robert Rapier, I-R Squared
Energy security. Homegrown fuels. Better markets for our farmers. And by gosh, it’s good for the environment. Sounds good, doesn’t it? Where do I sign up?

However, the truth behind grain-derived ethanol is masked behind half-truths and myths promoted by a very powerful lobby on behalf of agricultural and ethanol interests. This is one of the biggest scams in operation today, enabled by politicians who fear the political power of that powerful lobby. I will dissect some of the claims in this essay, and show why grain-based ethanol is a huge misallocation of resources.

First, what do I know about ethanol? I grew up on a farm, and my family still farms. I wanted to help farmers and the environment, so I went to a graduate school where I could be a part of a research project that was doing just that. My research group in graduate school was working on the conversion of biomass (aka cellulose) into ethanol. Biomass conversion via microorganisms was the topic of my thesis. After graduation, I worked several years for a chemical company in various roles (R&D, process, production) supporting propanol and butanol production. I currently work for a major oil company, and I try to stay current on developments in the alternative energy fields. In 2005, my company sent me to the state legislature to provide expert testimony regarding a proposed ethanol mandate for my state. My testimony generated a lot of discussion, and I was called back to the stand ten times to answer questions. Despite some very contentious questioning, nobody rebutted the arguments that I made, which is the gist of this essay.
(23 Mar 2006)
From Robert’s archives, an important article we’d neglected. -AF

Cellulosic Ethanol Reality Check

Robert Rapier, I-R Squared
I firmly believe we should be aggressively researching the potential of cellulosic ethanol. This was after all the topic of my graduate school work at Texas A&M. But I think the hype has gotten way out of touch with reality at this point in time. There is a reason that nobody today is making money with cellulosic ethanol. It is quite possible that they never will, and in this essay I will discuss the reasons for that.

I did an interview with a major publication last week on the topic of cellulosic ethanol. I won’t divulge any details, because I don’t want to leak out anything before it is published. But during the course of the interview, I made the point that one of the challenges is in securing a large and steady local supply of biomass to run through the plant. This was one of the points I made in my essay Cellulosic Ethanol vs. Biomass Gasification. Then I was asked about just how much biomass it would take to support a cellulosic ethanol plant. So I decided to do a little calculation.
(19 Nov 2006)