Ethanol no image

Published on October 28th, 2008 | by Adam Shake

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Is the Ethanol Industy Failing or Flourishing?


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Over the last few month’s we’ve seen a tide of News about the ethanol industry and it’s staggering growth, but in just the last few days, it seems as if the tides have turned. A confluence of events ranging from  rising corn prices and falling gas prices to increased rains and late corn harvests that some say are due to global warming, have resulted in a number of ethanol plants either shutting down or not being built.

Just this morning, theKansas.com posted this article:

“A deadline quietly came and went this week — and the end result is the Emerald City Ethanol plant, which was to be built northeast of the Harvey County Transfer Station, will not become part of the landscape.”

“According to an update given by Mickey Fornaro-Dean during Wednesday’s meeting of the Harvey County Economic Development Council board, the company pulled the project Oct. 3 and did not renew an Oct. 20 option on land near the now-closed county landfill.”

“‘There are just an awful lot of factors at play here,’ Dean told the board. ‘There is still some interest there, but for now, they have walked away.’”

Similar stories such as these, are dominating the Biofuel headlines;

Aberdeen News

“A Mina ethanol plant will temporarily shut down because of limited corn in the area caused by wet weather, the plant’s parent company said Thursday.”

Bizjournals;

“The struggling economy forced Chesterfield, Mo.-based Abengoa Bioenergy New Technologies to temporarily shut down its Portales, N.M., plant, according to a newspaper there.”

New Haven Register;

A series of 11th-hour maneuvers leading up to the auction Thursday of a Cheshire biofuels plant, which was supposed to produce a new owner, instead resulted in the process being extended another three weeks.

KX News;

RAPID CITY, S.D. (AP) Officials in Belle Fourche say plans to build a $200 million ethanol plant have fizzled.

Montgomery county paper;

More signs of tough economic times may have hit Montgomery County as the VeraSun Energy ethanol plant has ceased operations – at least temporarily.

Biofuels Digest;

Alabama Corn harvest yields down 30% from 10-year average, climate change blamed.

I recently wrote an article entitled “Oh No! Gas Prices are Falling!” In it, I said “Every time the price of oil drops, the demand for that same product increases and the  demand for alternate fuels, decreases.”  Needless to say, the comments were not in in support of raising gas prices.  But I think that we need to question a few very important issues.

  • How big a factor is climate change having on an industry that many think that we need to rely on? Do we want to put next years fuel crop at the mercy of the weather?
  • It seems to me that our society does not care as much about the environmental impacts of a product as it does the cost of the product. With that being said, who would have controlling interest in the corn fuel markets? There would be quite a few fingers in this mathematical model, but a few of them would be the companies who own the patented seed, fertilizers and pesticides. Theoretically speaking, companies like Monsanto could be the next Exxon.
  • If the prices of corn can be artificially manipulated for profit, then does not adding a second price trigger such as climate change, make crop grown ethanol a bad idea?

What are you’re thoughts?

Photo courtesy of tlindenbaum via Creative Commons license


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About the Author

Adam Shake works in Washington D.C. and spends most of his recreational time hiking and kayaking in Virginia and West Virginia with his wife Laura and their 6 year old Rhodesian Ridgeback, Katahdin. Adam is dedicated to the Environment and maintains a website at www.twilightearth.com



  • Steve-O

    You may be right. I continue to use ethanol no matter how low gas goes, and always will because I believe in its superiority. I may be in the minority. Or, is it just becvause driving is down in general that this is occuring?

  • Steve-O

    You may be right. I continue to use ethanol no matter how low gas goes, and always will because I believe in its superiority. I may be in the minority. Or, is it just becvause driving is down in general that this is occuring?

  • Bill

    Anything that requires subsidies, mandates and protective tariffs is, by definition, a bad idea. Good, innovative products like the iphone require none of these government intrusions. Furthermore, it’s obvious that processing food staples into fuel will cause increases in food prices. Throw in the uncertainties of weather and the picture is even worse. But there is more! The energy return on energy invested for corn to methanol is, at best, very little. Food to fuel has failed and will always fail; but so far it hasn’t cost us very much (relative to government projects). The real danger is that it has the potential to smear the entire bio-fuels market. It seems progress is being made on algal bio-diesel and bio-mass/waste conversion to fuel. Neither of these compete with food crops. The food to fuel programs should be stopped immediately.

  • Bill

    Anything that requires subsidies, mandates and protective tariffs is, by definition, a bad idea. Good, innovative products like the iphone require none of these government intrusions. Furthermore, it’s obvious that processing food staples into fuel will cause increases in food prices. Throw in the uncertainties of weather and the picture is even worse. But there is more! The energy return on energy invested for corn to methanol is, at best, very little. Food to fuel has failed and will always fail; but so far it hasn’t cost us very much (relative to government projects). The real danger is that it has the potential to smear the entire bio-fuels market. It seems progress is being made on algal bio-diesel and bio-mass/waste conversion to fuel. Neither of these compete with food crops. The food to fuel programs should be stopped immediately.

  • Carbon Buildup

    Give me a break! This article isn’t about the state of the ethanol industry, it’s about the state of the corn-based ethanol industry! All this underscores the ridiculousness of using corn as an ethanol feedstock. It’s too expensive, it’s unreliable as a source, and its price isn’t reliable because it’s traded as a commodity, subject to speculation. Why not point out that the scenarios described in this article are not at all surprising when the feedstock’s price is subject to speculation and weather conditions?

  • Carbon Buildup

    Give me a break! This article isn’t about the state of the ethanol industry, it’s about the state of the corn-based ethanol industry! All this underscores the ridiculousness of using corn as an ethanol feedstock. It’s too expensive, it’s unreliable as a source, and its price isn’t reliable because it’s traded as a commodity, subject to speculation. Why not point out that the scenarios described in this article are not at all surprising when the feedstock’s price is subject to speculation and weather conditions?

  • Steve-O

    Yeah, Everyone in the biofuels circles understands corn sucks when many other low maintenance crops will yield great cellulosic ethanol. I think since most “gasoline” contains 10% ethanol, that lower demand for ethanol would surface as it now has. And doesn’t more ethanol go to e10 in the USA than goes to E85? I think people are simply driving less. E85 made from cellulosic will take off as more vehicles become compatible with the stuff and the processes for making it are refined.

  • Steve-O

    Yeah, Everyone in the biofuels circles understands corn sucks when many other low maintenance crops will yield great cellulosic ethanol. I think since most “gasoline” contains 10% ethanol, that lower demand for ethanol would surface as it now has. And doesn’t more ethanol go to e10 in the USA than goes to E85? I think people are simply driving less. E85 made from cellulosic will take off as more vehicles become compatible with the stuff and the processes for making it are refined.

  • dave

    Time to give Bluefire Ethanol in Irvine, CA a review…they plan to use municipal waste as their feedstock…

  • dave

    Time to give Bluefire Ethanol in Irvine, CA a review…they plan to use municipal waste as their feedstock…

  • Jim

    Ethanol is the answer because

    1- Non food crops on 5% of unusable farmland could supply all our transport needs.

    2- Time. A ethanol crop can be ready in 6 months. Energy,solar, nuclear, drilling not even close.

    3- The infrasture is there already. A $300-$500 part converts a car. The farms are ready. All we need are the ethanol plants.

    4-500bil spent on Iraq would have given us ethanol plants in every county in the USA at 50c a gallon wholesale.

    More here http://peswiki.com/index.php/Review:Alcohol_Can_be_Gas

  • Jim

    Ethanol is the answer because

    1- Non food crops on 5% of unusable farmland could supply all our transport needs.

    2- Time. A ethanol crop can be ready in 6 months. Energy,solar, nuclear, drilling not even close.

    3- The infrasture is there already. A $300-$500 part converts a car. The farms are ready. All we need are the ethanol plants.

    4-500bil spent on Iraq would have given us ethanol plants in every county in the USA at 50c a gallon wholesale.

    More here http://peswiki.com/index.php/Review:Alcohol_Can_be_Gas

  • Ted

    Ethanol from cellulosic is no bargin. Yields are lower than corn; The plants are much more expensive; Land requirements to grow it (i.e., switchgrass, etc.) is enormous. Unless there is some major technical breakthru, cellulosic will no happen.

    By the way, the ethanol demand is down because: 1) We use ~ 160 billion gallons of gas for our cars; 2) Current ethanol production is ~15+ billion gallons which is enough for the E10; 3) There is no infrastructure for E85 yet. My state only has 7 stations and only one of them is public. Unless it is more widely avaialbe and cheaper than alternatives, E85 won’t happen.

  • Ted

    Ethanol from cellulosic is no bargin. Yields are lower than corn; The plants are much more expensive; Land requirements to grow it (i.e., switchgrass, etc.) is enormous. Unless there is some major technical breakthru, cellulosic will no happen.

    By the way, the ethanol demand is down because: 1) We use ~ 160 billion gallons of gas for our cars; 2) Current ethanol production is ~15+ billion gallons which is enough for the E10; 3) There is no infrastructure for E85 yet. My state only has 7 stations and only one of them is public. Unless it is more widely avaialbe and cheaper than alternatives, E85 won’t happen.

  • Ted

    Ethanol from cellulosic is no bargin. Yields are lower than corn; The plants are much more expensive; Land requirements to grow it (i.e., switchgrass, etc.) is enormous. Unless there is some major technical breakthru, cellulosic will no happen.

    By the way, the ethanol demand is down because: 1) We use ~ 160 billion gallons of gas for our cars; 2) Current ethanol production is ~15+ billion gallons which is enough for the E10; 3) There is no infrastructure for E85 yet. My state only has 7 stations and only one of them is public. Unless it is more widely avaialbe and cheaper than alternatives, E85 won’t happen.

  • Steve-O

    Ted is right about universal availability of E85, but E85 is flat out everywhere in my state. 7 stations within 10 miles and 4 within 5 miles of my house. Today it dropped from 1.99 per gallon to 1.89. I may be fortunate, seems my city has the best darn price on E85 to be had anywhere. And it is starange, but in Wisconsin the price of unleaded e10 is higher than the nat. average.

  • Steve-O

    Ted is right about universal availability of E85, but E85 is flat out everywhere in my state. 7 stations within 10 miles and 4 within 5 miles of my house. Today it dropped from 1.99 per gallon to 1.89. I may be fortunate, seems my city has the best darn price on E85 to be had anywhere. And it is starange, but in Wisconsin the price of unleaded e10 is higher than the nat. average.

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