More on the coming American ethanol glut
As we wrote recently, America is about to be flooded with ethanol. This "flood" certainly won't be enough to supplant all of our oil imports, but it will be large enough to make ethanol plants less profitable and therefore changing the equation for a lot of producers and buyers.
The LA Times recently spoke with Gordon Ommen, co-founder of US BioEnergy Corp. (AutoblogGreen's interview with US BioEnergy reps is in the video above) and others in the ethanol industry about the biofuels future in America. The viewpoint that profits will plateau once we get to making nine or ten billion gallons a year is
starting to sound like a refrain, but these ethanol producers are still bullish on what they're doing (or, at least, they're confident to the media).
There is, of course, a lot more to the story. I'm talking about the increasing number of E85-capable cars, more ethanol pumps on the horizon, and continued government pressure to get ethanol into every possible area. Still, industry insiders know all about these things, too, and if they're saying the glory days will soon come to an end, then I think we need to get ready for them.
[Source: LA Times]
Reader Comments (Page 1 of 1)
Rob O. 9:21PM (6/17/2007)
Makes me wonder if - as we begin to exchange our usage of fossil fuels (a.k.a. the liquified form of ancient plants) for that of fresh, live, plants - anyone is truly considering the consequences. What happens when our demand for corn as fuel outstrips it availability as a food source?
Sure, there's a difference in the types of corn harvested for each purpose, but how long will it be before higher profits drive the fuel crop to supplant the food crop in the farmers' fields?
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Tony Belding 12:07AM (6/18/2007)
Corn is an incredible political and economic mess. You have people saying ethanol will drive up food prices. However, others are saying that America's obesity epidemic is due to cheap corn syrup which is used in sodas, candy, all kinds of processed foods. But why is corn syrup cheap? It's because corn is heavily subsidized, while cane sugar imports (mostly from Brazil) are blocked by tariffs, to the immense and long-standing frustration of the candy industry.
Will somebody now step forward and say we need to tax corn syrup to combat obesity? Maybe we should subsidize it *and* tax it! I'm sure the Congress would love that.
It's easy to crunch the numbers and show that corn-based ethanol can never be more than a drop in the bucket of our transportation fuel needs. At the same time we have people saying there will be over-production. . . It's enough to make my head spin.
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Tim 10:57AM (6/18/2007)
If we set strict limits of oil imports from hostile nations including Saudi Arabia and the Sudan, the price (value) of ethanol will stabilize or increase and we could end tax subsides. Simply don't let our enemy’s dump their oil in the US market in an attempt to destroy competition from homegrown renewable fuels. This would be is a simple policy issue for citizen legislators. Unfortunately, most members of congress are career politicians elected by the ignorant so courage has been replaced by fear, greed and jealousy. Land of the brave and home of the free? Yea, right.
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