Ethanol Gold Rush Carries Costs

The rush to mandate and subsidize ethanol may turn out to be fools gold, from NCPA:

  • Last year, about 4.9 billion gallons of ethanol were produced.
  • Within a couple of years, that number is projected to rise to about 12 billion gallons, thanks to a building boom in ethanol plants.
  • A proposal in Congress would mandate an increase in ethanol production to 36 billion gallons within 15 years.
  • That amount of ethanol, using current technologies, would consume virtually America’s entire corn crop.
  • Even assuming breakthroughs in so-called cellulosic ethanol — which is made from grasses, wood chips and such, and now costs much more than corn-derived ethanol — world food supplies would be stressed.

The benefit from all of this is far less clear than ethanol’s newly enriched boosters would have you believe, says USA Today. In its first major report on bioenergy, the United Nations concluded that while ethanol and other biofuels can help reduce global warming and create jobs for the rural poor, the benefits may be offset by other environmental problems and higher food prices.