From the Spring 2007 issue of the Isa Informer

The truth about ethanol

The TCFA newsletter of January 5, 2007, says environmentalists now claim ethanol subsidies cost the equivalent of $500 per metric ton of CO2 removed. Cattle Fax writes that on a $90 fed market, $4 corn will make 550 lb. calves worth 20 cents less per pound than $3 corn.

Following is what the Wall Street Journal of May 10, 2006, reports (courtesy Dale Lasater):

“Unfortunately, congressional subsidies for biomass are driven by farm-state politics rather than by a technology-development effort that might offer a practical liquid fuel alternative to oil. Meanwhile, major oil and chemical companies are evaluating biomass and investors are chasing biomass investment opportunities. But how much of this is predictable?

Biomass can be divided into two classes: food-crop and cellulosic. Natural enzymes can easily break down food-crop biomass such as corn to simple sugars, and ferment these sugars to ethanol. Cellulosic biomass—which includes agricultural residues from food crops, wood and crops such as switch grass—cannot easily be “digested” by natural enzymes.

… In the U.S., cultivation of corn is highly energy-intensive and a significant amount of oil and natural gas is used in growing, fertilizing and harvesting it. Moreover, there is a substantial energy requirement—much of it supplied by diesel or natural gas—for the fermentation and distillation process that converts corn to ethanol. These petroleum inputs must be subtracted when calculating the net amount of oil that is displaced by the use of ethanol in gasohol. While there is some quarreling among experts, it is clear that it takes two-thirds of a gallon of oil to make a gallon equivalent of ethanol from corn. Thus one gallon of ethanol used in gasohol displaces perhaps one-third of a gallon of oil or less.

… A federal tax credit of 10 cents per gallon on gasohol, therefore, costs the taxpayer a hefty $120 per barrel of oil displaced cost. Surely it is worthwhile to look for cheaper ways to eliminate oil.

… Rising real prices of oil and natural gas reflect in part the progressive decline in low-cost reserves, and signal the wisdom of preparing now for a long transition from our petroleum-based economy. Almost certainly, future economies will exploit all possible technology options for replacing petroleum-based liquid fuels, especially technologies that do not produce net carbon dioxide, the major greenhouse gas. Biomass should, properly, be considered along with nuclear power and coal conversion with carbon capture and sequestration as important options, for future energy supply.”

Maybe the cattle industry should have been fighting ethanol rather than wasting our resources on a mandatory national ID program.

Get your complimentary subscription

Stay up-to-date and receive your free subscription to the Isa Informer newsletter. Click here to sign-up, and we will start your subscription right away.

Additional Isa Informer Articles