Jason Barton

Professional Information and Energy News

Biofuels Are Not Limited to Corn Ethanol

without comments

It’s true that if we attempt to meet George Bush’s Renewable Fuel Standards (RFS) (36 Bgals of renewable fuels by 2022) only with corn ethanol, food prices will rise as a result. But, as has been written before on this site, the rise in food prices in 2008 had more to do with petroleum prices than with ethanol.

So, if we fail to diversify our energy matrix, food prices and much of the economy as a whole will be subject to the high volatility in petroleum prices. Developing other ways of fueling our transportation fleets, and reducing the amount we transport ourselves and our goods, will go much further in terms of protecting ourselves from this volatility than will eliminating our biofuels efforts.

I’m not a proponent of corn ethanol, but I am a big proponent of objective, accurate information. So it’s also important to note that the RFS caps corn ethanol at 15B gals in 2015 (we’re now producing about 12B gals/yr). That’s still a lot, and I’m not convinced it’s a great idea, but, ceteris paribus (it means, all things being equal–Latin is fun), food prices will not likely rise much more due to corn ethanol. The rest of the biofuels we produce to meet those federal standards are supposed to come from grasses, trees, and agriculture residues. There’s still plenty that can go wrong with that, but other issues aren’t addressed in the article below, so I’ll end here.

Thanks for reading.

ps, I both dig and am disturbed by getting information from a source that provides news only if I can profit from it.

January 28, 2011

By Kerri Shannon, Associate Editor, Money Morning

U.S. Clean Energy Investment Puts Upward Pressure on Rising Food Prices

In U.S. President Barack Obama’s State of the Union address Tuesday, he highlighted clean energy investment as a key component of America’s future, one that will be reflected in his budget proposal for fiscal 2012.

“With more research and incentives, we can break our dependence on oil with biofuels, and become the first country to have a million electric vehicles on the road by 2015,” the president said in his speech to members of Congress. “[I]nstead of subsidizing yesterday’s energy, let’s invest in tomorrow’s.”

This commitment to clean energy investment increases the importance of biofuels like ethanol, made from corn and other agricultural products. About 40% of U.S. corn is used to make ethanol, and increased ethanol production leads to higher corn and food prices.

Read the entire article here.

Written by Jason

January 31st, 2011 at 7:31 pm