Corn-based ethanol -- not a cure-all
February 20th 2007 23:58
Over the last year or two, there has been a lot of "buzz" about corn-based ethanol. At times, it has been viewed as a panacea that would help cure our country's addiction to foreign oil. While it could help with our country's energy needs, focusing on corn-based ethanol could also cause a whole new set of problems.
Using a higher percentage of corn for fuel could impact the meat industry, since animals often feed on corn. If more corn is being used on fuel, less would be available to use as feed:
Likewise, a shortage of corn for use in food could cause problems for poorer countries as prices increase:
Usage of ethanol for fuel would also have impacts and pressures on other industries:
So as ethanol (and particularly corn-based ethanol) is increasingly used for fuel, leaders in a number of industries and even in the government will have to monitor the broader impacts of this shift in fuel sources. I do believe that ethanol will play a vital role in meeting the world's future energy needs, but its use must not be pursued and exercised in a total vacuum. Otherwise, we could create even more problems than we currently face.
Using a higher percentage of corn for fuel could impact the meat industry, since animals often feed on corn. If more corn is being used on fuel, less would be available to use as feed:
"There is a constraint, and that is, the ethanol use today comes from corn, and we've got hog growers and chicken growers that need corn to feed their animals," the president said. "And therefore, it's going to be kind of a strain, at some point in time, on the capacity for us to have enough ethanol to be able to make us less dependent on oil."
Likewise, a shortage of corn for use in food could cause problems for poorer countries as prices increase:
Yost said he was confident that the global market would answer the growing demand but acknowledged that food aid for the needy could become more expensive in the future. He said donor governments would always make funds available to buy food for those who need it.
Usage of ethanol for fuel would also have impacts and pressures on other industries:
• Soft drink bottlers, who use millions of gallons of corn-derived fructose sweetener, are likely to increase prices this year by about 4 percent, independent industry analysts say.
• In Mexico, President Felipe Calderon was forced to abandon his free-trade principles and pressure producers of corn products to accept a price ceiling in order to hold down the soaring cost of tortillas, the staple food of his country's poorest people.
• Bourbon drinkers may contribute to the country's fuel savings by making fewer trips to the liquor store. Jim Beam Brands in 2004 spent $10.3 million to purchase 3.4 million bushels of corn. This year, that corn will cost the bourbon producer nearly $14 million.
• In Mexico, President Felipe Calderon was forced to abandon his free-trade principles and pressure producers of corn products to accept a price ceiling in order to hold down the soaring cost of tortillas, the staple food of his country's poorest people.
• Bourbon drinkers may contribute to the country's fuel savings by making fewer trips to the liquor store. Jim Beam Brands in 2004 spent $10.3 million to purchase 3.4 million bushels of corn. This year, that corn will cost the bourbon producer nearly $14 million.
So as ethanol (and particularly corn-based ethanol) is increasingly used for fuel, leaders in a number of industries and even in the government will have to monitor the broader impacts of this shift in fuel sources. I do believe that ethanol will play a vital role in meeting the world's future energy needs, but its use must not be pursued and exercised in a total vacuum. Otherwise, we could create even more problems than we currently face.
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