A requiem for ethanol?

Representatives attending the recent American Banker's Association's Agricultural Bankers Conference predict over 40 ethanol companies will fail by 2009. On the heels of bankruptcy by industry giant Vera Sun and 24 of its subsidiaries, Mark Lakers of the Agribusiness and Food Association predicts industry consolidation.

The specter of consolidation sounds just like (guess who?) banking and automobile manufacturing -- except ethanol producers, farmers and their corpulent intermediary Archer Daniels Midland don't have to beg for help because they are celebrating their 30 year anniversary of government largesse.

I'm not convinced this is a requiem for ethanol, a fuel born as a commodity for drunks (it was a prohibited grain alcohol before it became a fuel) that has enjoyed a long history of tax subsidies, tariffs, loans and other love, starting with President Carter in the 1970s.

Even if we devoted our entire corn crop to ethanol, it would still only replace 15%
of our annual fuel demand.

Corn-based ethanol, made from corn starch as opposed to the plant's fiber or perennial grasses such as switch grass, carries a doozie of an environmental punch:

  • Pollutes surface and groundwater with pesticides and fertilizers.
  • Exacerbates the Gulf of Mexico Dead zone.
  • The most energy-intensive crop grown. Period.
  • Rapidly depletes topsoil and promotes topsoil erosion.

And while it's not completely responsible, ethanol is part of the fuel vs. food quandary that's doubled prices on wheat, soybean and corn in the last year, leading to food riots in Mexico, Pakistan, Italy, and Indonesia. In China, a marked increase in cooking oil prices led to a store riot killing three.

The ethanol industry is already drunk with excessive taxpayer-supported subsidies and bi-partisan support in Congress but now it's facing opposition from a fascinating consortium of revolters ranging from The National Turkey Federation, National Cattleman's Beef Association and (the very conservative) Grocery Manufacturer's Association to the Environmental Working Group, Food for All and Earth Policy Institute.

In a mano-o-mano wrestling match, we can pair up Emeril and Rachael Ray against Dick Durbin, with an apartment sized E-85 vehicle and a Le Creuset French Oven as door prizes. For a light touch, check out the film King Corn and yet another fun
You Tube explanation of the dangerous delusion called ethanol.

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