Shift To Corn-Based Ethanol Under Attack
The rush toward ethanol as part of the solution to the energy supply challenge continues to come under attack even as the US Congress takes steps to stimulate production.
The International Monetary Fund notes that higher biofuel demand in the US and the European Union has not only led to higher corn and soybean prices, but has also resulted in price increases on substitution crops and increased the cost of livestock feed by providing incentives to switch away from other crops.
Until new technologies are developed, using food to produce biofuels might further strain already tight supplies of arable land and water all over the world, thereby pushing food prices up even further.
The IMF adds that Brazilian ethanol derived from sugarcane is less costly to produce than corn-based ethanol in the US, and also yields greater environmental benefits. However, generous tax credits for blenders, tariffs on imported biofuels, and agricultural support for grain farmers in the US and the EU make it difficult for low-cost foreign biofuel producers to compete in these markets.
A Wall Street Journal editorial comment lashed out at Congress for its proposed renewable fuels mandate designed to produce a five-fold increase in ethanol production.
Heavily subsidized and absurdly inefficient, corn-based ethanol has already driven up food prices. But the Senate’s plan to increase production to 36 billion gallons by 2022, from less than seven billion today, will place even greater pressure on farm-belt aquifers.
Citing an OECD report featured a month ago on Research Recap, the WSJ also notes the relative inefficiency of ethanol production and its negative environmental impact.
The New York Times reports that US sugar producers are jumping on the ethanol bandwagon, hoping that ethanol-related provisions in the new Farm Bill will help offset the impact of increased sugar imports from Mexico.
A little-noticed provision in the new farm bill working its way through Congress would oblige the Agriculture Department to buy surplus domestic sugar caused by the expected influx of Mexican sugar next year. Then the government would sell it, most likely at a steep discount, to ethanol producers to add to their fermentation tanks.
The future, according to The Washington Post, may lie in cellulosic ethanol made from switchgrass, woodchips and other plant fibers. Cellulosic ethanol produces four to six times the energy it consumes, compared with about one-and-a-half times for corn-based ethanol.
There is no commercial production of cellulosic ethanol in the US, but companies such as SunEthanol, Synthetic Genomics and Genencor are actively pursuing this path. Massachussetts-based SunEthanol has attracted an equity investment from VeraSun Energy, a large corn ethanol producer.
You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
January 14th, 2008 at 2:32 pm
[...] earlier reports from the International Monetary Fund and the OECD, the Society says biofuels are not the silver bullet for meeting the rising demand for [...]
April 22nd, 2008 at 3:07 pm
[...] UN’s Food and Agriculture Organisation and others have linked biofuels production – alongside factors such as crop failures and the falling dollar [...]