Ethanol is Getting a Bum Rap

Kudos to Business Week reporter John Carey for daring to ask the question “Is Ethanol Getting a Bum Rap?”

Along with this clever illustration, Carey makes the point that corn ethanol “isn’t quite the villain critics make it out to be,” especially with regard to food prices.

“Biofuels are a very, very small factor” in rising food costs, says David Morris, vice-president of the Institute for Local Self-Reliance, a nonprofit group that tries to strengthen communities politically and economically around the world. Absent corn ethanol, food prices would still be up dramatically because of soaring global demand, fast-rising prices for oil and natural gas used to make fertilizer, and climatic factors such as Australia’s drought. It’s also worth noting that these high crop prices save taxpayers billions of dollars in reduced subsidies to farmers—far more than is spent to subsidize ethanol.

Certainly, a rapid rise in food prices brings misery to poor countries. But over the long haul, “it’s not obvious that high grain prices are inherently bad,” asserts Nathanael Greene, senior policy analyst at the Natural Resources Defense Council. Years of cheap, subsidized grain in the U.S. and Europe have left farmers in the developing world unable to compete. They can’t invest in better seed, machinery, or cultivation practices (page 26). As a result, global average yields for corn, wheat, and rice are less than half what the world’s top 10% of farmers achieve. While American corn farmers produce 150 bushels per acre, farms in the developing world often get only 30. “If there is a crime against humanity, it is these low yields,” not biofuels, says Richard Hamilton, CEO of Ceres Inc., a Thousand Oaks (Calif.) startup developing biofuel crops. Those low yields will improve if farmers make more money. In the long term, “high prices will lead these countries to produce more of their own food,” says Morris, easing the supply shortages.

Lots more in this balanced article – read it yourself here – and add your voice to the comments, many of which continue to be anti-corn ethanol.

South Dakota Launches Blender Pump Program

On Thursday, the South Dakota Corn Utilization Council (SDCUC) and the Ethanol Promotion and Information Council (EPIC) launched a blender pump program aimed at helping gas station retailers in the state obtain funding and the equipment needed to sell blends of ethanol ranging from 20 to 40 percent to be used in flex fuel vehicles.

EPIC Director of Operations Robert White said South Dakota is the perfect place to launch this new program. “South Dakota is where the blender pump movement started and we are happy to partner with the corn producers there to get this initiative off the ground,” said White.

SDCUC Executive Director Lisa Richardson says South Dakota’s ethanol industry is uniquely positioned to increase the use of higher ethanol blends to meet the Renewable Fuels Standard.

“The two largest ethanol companies are here, people in South Dakota are highly educated about ethanol and our goal is simply that we need to figure out we can use more product and we need to give consumers the choice and the blender pump does just that,” Richardson said.

There are currently about 20 blender pumps in the state and the goal is to install a minimum of 100 new blender pumps over the next year.

Read more here.

Little Bo Peep or the Ax Murderer?

Is ethanol Little Bo Peep or the Ax Murderer?

That’s the question National Corn Growers CEO Rick Tolman presented to the media during a press conference in Washington DC on Wednesday, pointing to the front page article on ethanol and corn prices in the Washington Post as being the latest example of making ethanol out to be the ax murderer. “There’s a lot of misinformation, slanted information that is just inaccurate,” Tolman said. “While we do have some role in higher food prices in the corn industry, we are certainly closer to Little Bo Peep than the ax murderer.”

Tolman pointed out the importance of the US corn industry, the dramatic increases in yields and production and the fact that prices for petroleum products have a much greater impact on food prices than corn does.

“What do corn prices have to do with food riots in China and Pakistan and India over rice?” Tolman asked. “Absolutely nothing. There is no connection to rice production around the world with biofuels production in the United States. Absolutely none.”

Tolman blamed the disinformation in the media on a very clever marketing campaign by those with deep pockets. “If you want to know who the real ax murderer is slashing our grocery food budget, look at $4 a gallon gasoline, look at $120 a barrel oil,” Tolman said.

Listen to Tolman’s comments here: