Corn Ethanol Bust Provides an Opening for 2nd Gen Biofuels
It’s a fact. Corn ethanol has lost its luster. Its intrigue has gone from, say, Sean Connery in Dr. No, to the “let’s-just-pretend-they-never-happened” Timothy Dalton years. Each day now brings news of another ethanol plant closure or project put on “hold.” In fact, the stream of bad news for corn ethanol has become so steady that it has largely faded into background noise — just another sign of a crashing economy.
In reality, however, corn ethanol was set up for a crash before the faltering world economy gave it the impetus to go over the edge. I’m not suggesting that corn ethanol is going extinct, just that, as some industry experts have put it, corn ethanol is going through a “major adjustment” where the outcome will be large swaths of consolidation and efficiency improvements within the industry.
In a way, corn ethanol is finally coming of age. To put it crudely, little Timmy has stopped having wet dreams and gone out and met some actual women.
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Just so we’re clear, I think corn ethanol still has a place in the US economy, but it finally seems to have taken on a value related to the true level of its usefulness. Regardless of the food versus fuel political boondoggle, there was never any way we could have grown enough corn at a cheap enough price for some future president to stand in front of a corn ethanol refinery with a banner proclaiming “mission accomplished.”
And I say good riddance to the hype. Corn ethanol was starting to become a distraction. A political toy to dangle in front of the right constituents. A complicated enough issue that you could pay the right person to come up with whatever answer you wanted to support your position.
In fact, I think the corn ethanol bubble bust is actually A Good Thing for the biofuels industry as whole. Corn ethanol was always just a way to get from here to there. Nobody with a good grasp of the big picture ever thought we’d be filling all the cars in the US with 85% corn ethanol fuel. In their quiet moments, when they were really being honest with themselves, even the staunchest corn ethanol supporters would agree.
And with corn ethanol’s downfall, I think the potential major winners are second generation biofuels — biofuels made from non-food crops grown in a sustainable manner, waste agricultural material, or garbage. Biofuels like cellulosic ethanol (can’t we just call it “Celluline”), algae diesel, and perhaps butanol.
Now that attention has shifted from “Woo-hoo corn ethanol!” to “what’s next?”, second generation biofuels might actually get some of the political and investment attention they so desperately need.
If there’s any real hope for us to span the gap from now to when we can all drive, say, hydrogen fuel cell cars, we need biofuels. There’s no way around that folks. It’s a progression that has to happen and biofuels are the only way — and the only truly good biofuels are the ones most folks have never heard about (or have mistakenly confused with corn ethanol). These second generation biofuels are full of promise that they can provide energy independence in a sustainable manner.
I just hope that the bad name of corn ethanol hasn’t harmed the good name of biofuels in general.
Image Credit: tauntingpanda’s Flickr photostream under a Creative Commons License.
Nick
Good post. I share you perspective on corn ethanol. With the EPA having just raised the renewable fuel requirement, http://tinyurl.com/5bzmro, and corn ethanol becoming less viable, the stage is set for second generation biofuels. Here’s hoping they can scale up in the near future.
waste to fuel seem a good market to go in to. Since garbage is cheap Ft process can be used to make green gasoline and desiel at go price. I think govement should encoruage any campany to do this. At least there should be more buzz about it.
Ding dong the witch is dead and now the flying monkeys can move onto bigger and better things. Here is to hoping someone can create a truly cost efficient algal bio-reactor!
This year, the cost of a bushel of corn doubled, rising along with numerous other commodities being bought and sold by speculators, including wheat, sugar and soybeans. Rice, which has no impact on ethanol production, TRIPLED in price. Some speculators withheld sizable blocks of commodities in order to create artificial shortages, and then they sold at a much higher price. Commodities traders were manipulating supply and driving prices, while critics erroneously blamed corn ethanol for escalating food prices.
When crude oil spiked, the cost of transportation fuels doubled. The cost to ship corn, and foods in general, was a much bigger factor in food prices than the 5 cents per pound that was added to the cost of the corn itself. Ship a ton of corn from Iowa to China and see what happens to the price. The claim that corn ethanol is the main cause for the high price of foods can NOT be substantiated.
Now the price of corn is back down to where it was a year ago, but are food prices dropping? No, because the raw materials in processed foods represent only a small fraction of the huge overhead cost of foods sold in supermarkets.
There is no shortage of corn and no shortage of land to grow it on. We’re using roughly the same amount of land to grow corn that we used 30 years ago, and since then, the yield per acre has almost tripled. After being flat for decades, exports of whole corn increased by 20% this year. Corn farmers would export more if the demand was there. Almost all the corn we export is Not for human consumption. It is Feed Corn. Shipped to foreign countries gaining affluence, like China and India, to produce meat, dairy, and animal products.
Ethanol refineries produce high protein distillers grains. This is animal feed that produces food. Ten to fifteen percent distillers grains added to the feed of dairy cows increases their milk production by 10 lbs per cow per week. It also puts 10% more meat on livestock and enhances the production of many other foods. This year, foreign demand and exports of distillers grains doubled, and its value increased dramatically. Corn ethanol is not just about fuel. It’s also a system for producing food. And when the energy balance is calculated, that must be taken into account.
Over 80% of the corn crop is Feed Corn. We grow all the corn suitable for human consumption that the world can stand, and we could produce much more. There’s plenty of corn and distillers grains available for sale, if you can afford the shipping cost. The cost of the grain itself is minimal.
The ethanol industry removes the starch from Feed Corn to make fuel. That’s no great loss in the realm of feeding livestock, because cows don’t digest the starch very well anyway. So the industry is taking low value corn starch and converting it into a high value fuel product. And what we have leftover is the more digestible portion of the corn kernel, as animal feed, in the form of high protein distillers grains. Corn oil is another byproduct of ethanol refineries.
Some corn ethanol critics make the false assumption that people are starving, because starch is being extracted to make ethanol from 1 out of 4 bushels of corn. When in reality, the corn ethanol industry makes a superior feed product that produces more meat, dairy, poultry, fish, and pork, in addition to corn oil, and a renewable domestic fuel.
Jeff,
I,m glad somebody knows the truth about corn ehtanol. Most people have bought into the media hype without doing any investigation on their own.
Jeff,
You are not actually addressing the true problems with ethanol. The problem is not the food vs. fuel that the media loves to harp on. It is the fact that ethanol is inefficient and just as harmful to the environment as petroleum. When you cradle to the grave ethanol it takes more energy to rpoduce than it provides.
Doug,
How many studies have to be published before people stop thinking corn ethanol takes more energy to create than it provides? You are confusing it with GASOLINE.
Cellulosic is more efficient yes, but alot of the energy in producing (even corn based) ethanol is free and clean, it’s called solar. Photosynthesis (sunlight and carbon dioxide) creates the corn starches.
We will move on to more efficient ethanol, but ethanol is in general an excellent fuel. It comes from plant material, burns very clean. Those who continue to advocate electric only mobility don’t understand that coal and nat. gas are still the primary generating sources, and they would have to burn a gazillion tons more of that stuff at night to keep the grid charged enough for a nation of overnight car chargers.
Biofuels and biofuel research and biofuel diversity is the best bet for now.
Steve-O,
As many studies as it takes to counter the one that say that it is far from carbon neutral. The fact that it is made from corn automatically makes it dependent on fertilizer and modern agriculture techniques. Ethanol is not as efficient as almost any other bio-fuel, that makes it a marginal tech to dump a ton of money into.
Although I agree that corn ethanol is not the best biofuel, most modern studies now find that there is approximately a 30-40% energy gain from ethanol production. When ethanol is used to replace gasoline, (remember it takes energy to make and distribute gasoline as well), it makes it approximately 50% gain (the energy that was not expended to make the gasoline that the ethanol replaced has to be added into the ethanol figures).
50% gain is getting into the respectable realm. No one would scoff at a 50% gain in automobile MPGs.
The additional positive of ethanol is that the energy that is used to make it comes ~80% from coal and natural gas (only 20% petroleum). In essence, ethanol production takes less favorable sources of energy (solid: coal, and gas: natural gas) and creates a useful liquid form of energy. Even if the the energy gain was zero, there is value in that for energy security reasons (we have lots of coal and natural gas here in the U.S.).
Tim,
What kind of monkey math is that. You must be one of the guys that does the polls for GM. Ethanol is not an efficient form of fuel, it burns cleaner, and is sustainable yes, but efficient no. It is time for all of the money that has been wasted so far on ethanol to be spent on more efficient bio-fuel research. The money needs to be spread evenly among the top three or four most efficient forms of bio-fuel.