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Is Ethanol the Answer?

Marianne Lavelle and Bret Schulte, US News & World Report
Politically it’s a winner. But experts aren’t sure ethanol can deliver on its promise
Heartwarming stories like Galva’s-in a state that hosts the first presidential contest-help explain why Washington is so fired up over ethanol. In 2006, production skyrocketed, and Washington is poised to push it still higher. What’s not to like? Every gallon theoretically means more money for the iconic American farmer and less cash lining the pockets of foreign sheiks. “There’s almost a sense,” says Iowa State University political scientist Steffen Schmidt, “that ethanol is morally better than oil.”

Washington loves a “win-win,” but there are plenty of doubts as to whether the love affair with ethanol qualifies. Even though the ethanol industry profited handsomely last year, it continued to benefit from billions of dollars in taxpayer subsidies. And as ethanol becomes a larger part of the energy mix, it is not clear that Washington is prepared for the fallout. Ethanol already consumes so much corn that signs of strain on the food supply and prices are rippling across the marketplace. Environmental impacts will multiply as more land and water are devoted to the prized yellow grain. And, even if these problems were overcome, ethanol’s potential growth could be stunted by an energy system currently tailored to gasoline.

Ethanol undoubtedly plays a role in the quest for energy independence and the desire to curb global warming. But some observers worry that ethanol development may take the place of more effective initiatives: forcing automakers to increase gas mileage, for instance, or mandating cuts in carbon dioxide emissions. “Some members of Congress are looking for quick fixes,” says one economist who has studied the issue. “It’s an easy bandwagon to jump on. But there’s a lot of exaggeration about what ethanol is capable of doing.”
(4 Feb 2007)
The article is applauded by Heading Out at The Oil Drum: “…there has been a growing realism appearing in the writings of the Main Stream Media.”
and by David Roberts at Gristmill: “Well tickle my toes and call me Elmo! If it isn’t a big story — a cover story, no less — in a major American newsweekly that resists the siren song of ethanol.”

Indonesia: Massive biofuel program to go ahead despite int’l concerns

Ika Krismantari, The Jakarta Post
International criticism of Indonesia’s massive biofuel development program will not affect the project, which is expected to turn the country into one of the biggest biofuel producers in the world, says an official.

The director of the Energy and Mineral Resources Ministry’s research and development unit, Nenny Sri Utami, said in Jakarta on Monday that the plan to turn more than five million hectares over to growing the feedstock for the biofuel plants would go ahead as planned.
(7 Feb 2007)

NYT: The Price of Corn

Editorial, NY Times
…Gratifying our two major appetites – cheap food and cheap gas – used to seem easy because both corn and oil were abundant. Cheap oil helped keep corn prices low because it cost farmers less to run their tractors and combines.

But we are entering a new dynamic now. While there has been talk recently about refining ethanol from sources other than corn, that could take a while. So at the moment what we are trying to do is gratify those appetites from the same resource: agricultural land. No matter how high prices go, what will need to change isn’t the amount of corn acreage available or even the size of the enormous harvests we are already getting. What will need to change is the size of our appetites.
(6 Feb 2007)

Kudzu Considered for Potential As Fuel Source
Corn can be made into ethanol, so why not kudzu, the non-native weed that grows at will throughout much of the southern U.S.?

Tyler Rowland, a high-school senior in Tallahassee, Fla., tells Scott Simon about his bid to turn kudzu into fuel.
(3 Feb 2007)

Food industry calls for a more balanced biofuel policy

Ahmed ElAmin, Food Production Daily
With the increasing use of some of their raw materials for the production of biofuels, the food industry is starting to call on the European Commission to take measures to ensure they do not face further price hikes for their supplies.

The European Commission has proposed the bloc produces enough biofuels to reach a target of 10 per cent of all vehicle fuel by 2020. Biofuels are produced from sugars, edible oils and grains such as corn. Use of biofuels instead of oil is seen as a way of reducing greenhouse gas emissions and the subsequent impact on climate change.

Recently the Association of Chocolate, Biscuits and Confectionery industries of the European Union (Caobisco) and the International Margarine Association of the Countries of Europe (Imace) spoke out against the setting of a mandatory target, saying it will damage the food industry by leading to a “serious” shortage of raw materials and price hikes.

“Biodiesel is grabbing an increasing share of our vegetable oil supply. The competition will be seriously distorted if mandatory obligations are included for the mineral oil companies” said Inneke Herreman, Secretary General of IMACE.
(5 Feb 2007)

Food vs. Fuel

John Carey and Adrienne Carter, Business Week
As energy demands devour crops once meant for sustenance, the economics of agriculture are being rewritten
Greg Boerboom raises 37,000 pigs a year on his farm in Marshall, Minn. Those hogs eat a lot of corn—10 bushels each from weaning to sale. In past years he has bought feed for about $2 a bushel. But since late summer, average corn prices have leapt to nearly $4 a bushel. To reduce feed costs, he sells his pigs before they reach the normal 275 pounds, and keeps them warmer so they don’t devour more food fighting off the cold. Still, Boerboom hopes just to break even. “It’s been a pretty tight squeeze on pork producers,” he says. “The next eight months will be really tough.”

The spike in the price of corn that’s hurting Boerboom and other pork producers isn’t caused by any big dip in the overall supply. In the U.S., last year’s harvest was 10.5 billion bushels, the third-largest crop ever. But instead of going into the maws of pigs or cattle or people, an increasing slice of that supply is being transformed into fuel for cars. The roughly 5 billion gallons of ethanol made in 2006 by 112 U.S. plants consumed nearly one-fifth of the corn crop. If all the scores of factories under construction or planned go into operation, fuel will gobble up no less than half of the entire corn harvest by 2008.

Corn is caught in a tug-of-war between ethanol plants and food, one of the first signs of a coming agricultural transformation and a global economic shift.
(5 Feb 2007)
I don’t know if we need another article on this, but this one is notable because it appears in Business Week. Seems to cover the pro/con arguments pretty well. -AF