I often get asked my stance on ethanol while I am speaking to various groups with Farming Today. It is either during my Q&A session or afterwards, a member of the audience will come speak to me individually about it.
Most have very strong feelings about why they are against it; this is often why they talk to me about it after I’m done speaking. They don’t want to bring it up during the Q&A sessions because of their stance.
They tend to tell me the same two reasons every time – it costs more in oil than it takes to make it, often citing research that is 5-10 years old OR they tell me that corn prices have driven up the cost of food since so many farmers are now planting corn.
First of all, let me say this.
I support ethanol. We sell a lot of our corn to a local ethanol plant, Guardian Energy.
I’m going to try to clear up a few things concerning what I hear surrounding ethanol.
1. Ethanol isn’t always made from corn.
For some reason, there is a belief that ethanol can only be made from corn. Yes, it is made primarily from corn in the United States. It is made from corn because corn grows here, and it grows well here. It is a crop that works with our climate and soil in the United States. Ethanol can be made from sugarcane, wheat, barley and potatoes for example.
Many other countries produce ethanol based fuels. In fact, until the U.S. really started capitalizing on ethanol based fuel, Brazil was the number one bio-based fuel producer!
2. Yes, ethanol contains some gasoline, but probably not for the reasons you think.
Ethanol is essentially a grain alcohol. I’ve often heard: “Well, you can’t run a car on pure ethanol it has to have gasoline in it, so what is the difference?” Actually you can run a car on pure ethanol. However, in the U.S. it is illegal run a car on pure ethanol. All ethanol produced must have some gasoline added to it. Mostly, because they don’t want people drinking the ethanol used to fuel vehicles. Now that would make for a really awkward hangover story!
3. Ethanol is now the number one product produced by corn. This is driving up our food prices because it isn’t being used for food.
Here’s what a lot of those studies don’t factor in when they’ve come out and said ethanol is now the number one product being produced: co-products! Producing ethanol creates much more than just ethanol.
Do you know what that means? It means good old animal feed is still the number one product of corn. So corn is still producing food, in a supply chain sort of way! Distiller’s grain is a co-product of ethanol production. Ethanol uses the starch portion of a corn kernel, so the vitamins, minerals, fat, etc. are made into distiller’s grain and used in livestock feed. In fact, a bushel of corn usually produces 2.8 gallons of ethanol as well as 17 pounds of distiller’s grain!
Guess what else is a co-product of ethanol? Carbon Dioxide. Why does that matter? Ethanol plants are capturing the CO2, cleaning it, compressing it and selling it to other industries to use in beverages, dry ice production, and flash freeze meat or even in paper production!
Really, the biggest factor affecting food prices is oil. Food has to be transported somehow and companies have to account for the cost to fuel their semis and airplanes. As the price of fuel increases, transportation costs increase, which in turn, make the prices of our food increase.
4. The price of corn fell because farmers planted too much.
Here’s the deal. Ethanol has a set limit by our government on how much can be produced. The government doesn’t always paint an accurate picture. They tell farmers to go ahead and plant their crops the best way they know how but then set a limit on how much ethanol can be produced. Not many industries have a set limit on how much product they are allowed to produce. Yes, you normally produce to meet demand, but if your demand increases you produce more. So as more and more vehicles are able to take an ethanol blend (vehicles have been able to take at least a 10% blend if manufactured in 1980 and after) the demand should be increasing. Farmers were trying to meet the demand that the government set forth for ethanol. When all of a sudden the EPA decides to drop it (after harvest is complete) a farmer can’t do much about that or the fact that they have corn in their bins. So as we produce more corn (that can be used for a variety of things: food, cardboard, plastic cups, blankets, etc. not just fuel) but the cap on ethanol continues, the price will drop. This is problematic for farmers and for the free market enterprise system that our country is based on. Basically, my thoughts are that the government might need to back off where ethanol is concerned both on a vehicle front (mandating that all vehicles have to double mileage by 2025-is that even a realistic expectation for Trucks and SUVs?) and putting a cap on ethanol production.
Corn prices have varied every single year. As one of my fellow farming friends pointed out, when he started farming full-time in 2009, he has sold corn everywhere from $3.00 to $9.00. He also said to remember that 2013 has been a good crop year so there is a larger supply and the global market needs to be factored in too.
5. Ethanol doesn’t make sense. It uses more energy than it produces.
I’ve heard this one plenty of times. This may have been true, years ago. New studies are arriving from universities, government agencies, regulatory agencies and independent organizations about how now ethanol returns about 2.34 BTUs for every 1BTU of fossil energy input. There are other factors that go into the overall cost too. Most studies don’t factor in the co-products and their monetary gain. Most also don’t factor the reduced carbon footprint with ethanol versus gasoline into monetary terms. Ethanol burns cleaner; It is a cleaner way of transportation. I guess it can be hard to put a price tag on cleaner air.
As modern facilities have been built and new information found out concerning ethanol, many ethanol facilities are now recycling all the water they use in production so they can use it again. Facilities are being updated to produce ethanol without the use of heat. Ethanol is changing, becoming more efficient, effective and cheaper. That is what happens when a technology and product is invested in. Ethanol is not a stagnant technology; it is constantly changing and evolving.
In fact, Syngenta has developed a seed corn with the Enogen Trait Technology which actually helps reduce the inputs needed at the producing facility, and allows a facility to produce more fuel from that type of corn.
Ethanol reduced our dependence on foreign oil. It is a domestic product, creating jobs and renewing rural communities, right here on our own soil.
There are now new factors in the big picture of fuel production that when it comes to price and energy return of ethanol, that were not in early studies or the information just wasn’t available at the time.
6. Can the U.S. really rely on ethanol and still make it profitable?
Yes, but there is still a lot of work to do. Here’s what I think: I think that if we significantly change the kind of vehicles we are driving on the roads, which we have started to do (Cash for Clunkers anyone?), and these flex fuel vehicles that take a blend of E85, will greatly impact the need for ethanol and our environmental impact. Heck, there are now even Flex Fuel lawn mowers being produced! Now, I know there are larger environmental concerns when it comes to farming, and farmers are working to address that with a variety of methods from technology, crop rotations, hybrid seeds, biotech, and much more. The fact of the matter still stands, that petroleum is a non-renewable resource. When it runs out do we want to be sitting with no alternative? Or do we want to have a locally produced, renewable product available?
More fuel stations need to offer E85.That might be the biggest problem of all concerning ethanol. How do we get it to the fuel stations where people need it to be? There is currently just a little over 2,000 gas stations offering E85 and the majority of these are in the Midwest. So maybe the problem isn’t that people don’t want to use it, it is literally that they can’t because it isn’t available. H
ow do we address that moving forward?
When factoring in the “profit” of ethanol, we really have to account for a variety of things- it has renewed rural communities by creating other jobs that aren’t actually in the ethanol plant as people begin to move back to these towns. Ethanol plants have invested funds into their communities as well, supporting schools, organizations and community events. For me, if we are only talking about “profit” in the hard terms of the price of ethanol, we are missing out on so many other factors.
Mind you that this is my opinion on ethanol, but I’m backing it up with facts. I’ve listed below resources where I’ve retrieved information from so feel free to check them out yourselves.
Is ethanol the answer for our fuel issues? No. However, it is a key player in our fuel needs. It is renewable, burns cleaner and is domestic. It needs to be supported.
Here are additional links (where a lot of my information is from) that you can check out for more information on ethanol and other bio-based fuels: