Ethanol Industry: Jobs Are Better Than Food?

The ethanol industry seems to be on the warpath against bad press (maybe that’s just my impression), which it’s been continuously mired in over increasing food prices, changing land-use patterns, and the questionable environmental benefits of grain-based fuel. As I mentioned last week (Ethanol Industry Pays Off Subsidies, Boosts U.S. Economy), business is booming, and this has potentially emboldened or intensified the pro-ethanol lobby.

Bob Dinneen, head of the Renewable Fuels Association, had this to say at this year’s National Ethanol Conference (via Autopia):

He calls the food-vs-fuel debate a “fallacy” that assumes “farmers are incapable of supplying the growing needs for food, fiber and fuel.” Besides, he said, biorefiners only need the starch in feedstocks; the protein provided 14 million metric tons of livestock feed last year.

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Dinneen says a study by Informa Economics found ethanol production caused less than 5 percent of the increase in food prices last year. (The study was funded by the Renewable Fuels Foundation, which is linked to the Renewable Fuels Association.)

I wouldn’t go so far as to call it a fallacy since, as Autopia highlights, US grain subsidies are still implicated in world-wide food price increases.

A report this morning from NPR also weighed in on the value of protein byproducts and local economic stimulus produced by the ethanol industry (Listen Here: Ethanol Demand, Prices Boost Farm Communities). In Northwestern Iowa, local farmer Brian Friedrichsen describes:

“We are able to utilize the co-products from the ethanol plant, and so we’ve expanded our cattle operation a little bit every year for the last four years,” Friedrichsen says.

He says the feed from the ethanol plant cuts his costs by $40 to $50 per steer each year, saving him at least $200,000 annually. Friedrichsen estimates that the number of cattle being raised in the area has tripled as a direct result of the ethanol facility.

Farmland is also shooting up in value. A nearby farm sold last year for almost $7,000 an acre. Before the ethanol boom, an acre of farmland here would often go for less than $2,000.

There’s no question that ethanol is here to stay, but with major increases in food-based ethanol are we putting short-term economic gain at the expense of everything else?

Related Posts:
Popular Mechanics: Ethanol Bill Bad News
ADM to Pump Ethanol Plant’s CO2 Under Illinois
The Growing Need for Fuel Substitution, Efficiency, and Conservation

NPR (Mar. 4, 08), Morning Edition: Ethanol Demand, Prices Boost Farm Communities, by Jason Beaubien

Autopia (Feb. 27, 08): Ethanol Industry, Bigger Than Ever, Says Its Critics Are Wrong

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