Has ethanol tanked?

by Barbara Murray, November 17th, 2008, 9:05 am

It seems so.  After a number of years of being praised as an alternative to gasoline for our trucks and cars, just about everyone has come to the conclusion that the corn-based fuel, ethanol, isn’t going to deliver us from further damaging the Earth’s atmosphere, help stop global warming, end our dependence on foreign oil, raise farmers’ incomes, and create new jobs.

The US is the world’s largest producer of corn-based ethanol. Corn ethanol, as it has been produced and added to our gasoline by government fiat, has instead led to ill-managed crop farming, rising food costs, food shortages, and the bankruptcy of at least one US ethanol manufacturer.

Who, exactly, is just about everyone? Let us consult an instructive but by no means complete list:

• US Farmers, who planted more acreage in corn at the expense of other food crops like soy and wheat. They sold much of the corn crop to ethanol producers at high prices and are now stymied by recent falling prices. As the demand for corn continues, they plant only corn, thus lowering yields because they no longer rotate crops.
• The nation’s food and beverage manufacturers, including Kraft Foods, Dean Foods, H. J. Heinz, Kellogg, Nestlé USA, PepsiCo, and Coca-Cola, who have seen the cost of their corn-based food ingredients skyrocket.
• US cattle ranchers and pork and chicken producers, who see the prices of animal feed continue to rise, a cost they pass on to the consumer.  In addition, due to higher feed costs, meat producers have had to reduce the size of their corn-fed herds and flocks, which means less meat, which means even higher meat prices.
• You and me at the supermarket, paying a whole lot more for our food.
• Hungry people in poor countries (and their governments) who purchase part of the heretofore abundant US grain crops to supplement their own food output. The US no longer has much extra corn to sell; nor oil, nor grain crops.
• Biofuel producers who, as a result of rising corn prices (their raw material), have been struggling to make a profit off of ethanol (like agricultural giant, Archer Daniels Midland, the country’s largest ethanol maker, which announced that for the quarter that ended September 30, operating profit at its corn-processing unit fell by more than half as a result of higher corn prices and energy costs).
• Dedicated ethanol companies forced to declare bankruptcy protection like Vera Sun, or shut down entirely, as Heartland Ethanol did in June of this year. (There go the new jobs.)

It seems the only folks who haven’t seen the mustard dripping on their shoes as a result of this ill-fated corndog of a “solution” to energy problems is the US government, which continues to be a loyal cheerleader for ethanol. In fact, it does more than cheerlead. It mandates. In 2007 Congress passed a law calling for a fivefold increase in the use of biofuel (which is blended into our gasoline) by 2020. And the EPA has so far refused to lower the Congressional mandates, despite the growing concerns about the ripple effects.

Our government seems never to have considered this fact, published by Time magazine in April of this year: A human being could be fed for one year on the corn needed to fill an ethanol-fueled SUV.