Ethanol, More of a Problem Than a Cure
Paul Krugman points us to this Bloomberg article that makes the case against the Bush administrations ethanol mandate fairly well. Some highlights:
- About 33 percent of U.S. corn will be used for fuel during the next decade, up from 11 percent in 2002
- Farmers will have to increase planting of corn for ethanol by 43 percent to 30 million acres by 2015 to meet the government’s requirements
- Corn [prices] doubled in the past two years, touching a record $5.29 a bushel today in Chicago.
- Increased demand for the grain helped boost food prices food prices by 4.9 percent last year, the most since 1990, and will reduce global inventories of corn to the lowest in 24 years
- The price of young cattle sold to feedlots gained 8.7 percent in the past year
- Researchers led by Timothy Searchinger at Princeton University said their study showed greenhouse-gas emissions will rise with ethanol demand
A spot-on quote in the article came from Cal Dooley, a former U.S. congressman from California, president of the Grocery Manufacturers Association, who said: “We are mandating and subsidizing something that is distorting the marketplace. There are no excess commodities, and prices are rising.”
Shocker.
This has been a well-publicized problem in Mexico for over a year now and the corn price increase there and elsewhere is only going to get worse as more U.S. production is turned into fuel.
The sad fact is that ethanol is significantly less efficient than petroleum products. While ethanol provides a short-term buffer against higher oil prices, the Bush administration is forcing America to rely on product whose production cannot be sustained long-term.
The next administration would be wise to slow investment in this technology in favor of nuclear and hydrogen power sources as these should provide more benefits in the long-term.
You misspelled ethanol in the title.
And, with that spelling (ethanal), it certainly is more of a problem than anything else. Hmm, maybe Marc intentionally misspelled it.
very good post, marc.
And sorry for the other guys picking on spelling
With farming prices soaring in Mexico and the US and NAFTA the illegal immigrants leave Mexico because their isn’t any work on the farms. With ethanol causing greater demands and prices on corn tortillas are cheaper in the US.
Isn’t that awful? Farmers making real money for a change! Don’t those serfs know that they’re supposed to work for as little income as possible?
Interesting how everyone overlooks the fact that ethanol and biodiesel have been lucrative products in Germany and much of Europe for the last decade. Clearly this proves how inefficient the process is.
Is ethanol good for the family farm or ArcherDanielsMidland? More farmers in Mexico and the US are more sharecropper than farm owner.
Both the US and the EU should become independent from fossil oil immediately. That would enable them to stop kissing up to countries such as Saudi Arabia. It definitely is a matter of sovereignty.
I am glad to hear someone else see’s the false propaganda of Corn Based Ethanol fuels. Ethanol is far worse for vehicles engines, it gets terrible mileage by at least a 2:1 ratio, and is more destructive to the atmosphere then regular gasoline. Why are more people not aware of this or complaining or refusing to buy this garbage? Not too mention, the micro and macro economic ripple effect ethanol has on every U.S. citizen. Corn goes into everything we buy as consumers from obvious groceries like chicken, beef, eggs, soda, cereal, baking goods, everything in your shopping cart including diapers! You monthly grocery bill has already gone up, and will triple getting far less food for your money, this will make gas prices not seem like a big deal. Forget dining out with your family, going to a simple restaurant chain will compare with prices for a local professional sporting event !!$$$$ !!Farmers will be less financially incentivised to keep (CRP) Conservation Resources Crops for wildlife habitat such as pheasants, quail, turkey, deer among many other species will suffer and no longer exist , as farmers plow fields from fence pole to fence pole.
Farmers will not wait patiently for corn corps to grow, they’ll hit’em hard with heavy duty chemicals so they can get bushels to market, never mind the chemical run offs into our streams and lakes and drinking systems.