Archive for the ‘Ethanol’ Category

A Sideways Glance at the Ethanol Boom

Photo by roger4336. Some rights reserved.

Photo by roger4336. Some rights reserved.

“Ethanol is ethanol is ethanol.” A biology professor in college used this maxim to dispel the popular myth that drinking different kinds of alcohol has a different effect on one’s mental state. But what else is ethanol? Well, of course, it’s a fuel additive, and one that’s become drastically more popular in the last ten years, so much so that it’s led to an “ethanol boom.”

The New York Times reports this week that land prices in the American heartland are hitting thirty-year highs, as crop prices (corn and soy, in particular) keep ticking up, due largely to an increasing demand for ethanol, both domestically and abroad. As such, farmers across America’s fertile plains are putting their land up for sale, both to other farmers looking to expand or to outside investors interested in a taste, unable to resist the unreal prices.

But what happens when the ethanol boom ends? Reports from the end of last year seemed to suggest that the high international demand for ethanol is a fleeting concept, and is forecasted to begin steadily dropping off, as the amount used as a fuel additive in gasoline (one of its most popular uses here in the U.S.) is already reaching federal limits, and gasoline consumption wanes overall. The high farmland prices that we’re seeing now hold dangerous consequences for those over-zealous folks who rushed to buy more land may be hit with a sudden decrease in land prices and leave their creditors with heavy debts.

Meanwhile, ThinkProgress takes a look at the issue from another angle, in how the steep corn prices are strangling the already stuggling biofuel industry and what it means for sustainable energy.

Not with a Bang But a Whimper (This is the Way the Ethanol Subsidies End)

Photo by William Bartlett. Some rights reserved.

While most of us were raising toasts as fireworks rang in the new year, a quiet but substantial change in renewable energy regulation came to pass. After 30 years of tax credits introduced by the U.S. Energy Tax Act of 1978, the ethanol industry watched these subsidies expire on New Year’s Eve.

Previously set to expire in December of 2010, the subsidies had been extended at the last minute to December 31, 2011. And while many expected that the extension might be the subsidies’ last, it didn’t stop U.S. Senators from passing an amendment to S. 782, the Economic Development Revitalization Act of 2011, in June of this year that would have proactively eliminated the subsidies.

S. 782 stalled, but the subsidies expired anyway. For better or for worse, ethanol will no longer receive the benefits of the 45-cents-per-gallon Volumetric Ethanol Excise Tax Credit or the 54-cents-per-gallon import tariff on foreign fuel ethanol. Yet the response to the subsidies’ end seems almost indifferent; the New York Times quotes a spokesperson from a trade group for ethanol producers: “The marketplace has evolved. The tax incentive is less necessary now than it was just two years ago.” A former president of the Iowa Corn Growers Association added, “It won’t be fatal as long as the demand for ethanol and gasoline remains strong.”

Perhaps it’s not an ending after all.

Sun Setting on Ethanol’s Glory Days?

After basking briefly in the glow of the EPA’s decision allowing fuel containing up to 15 percent ethanol to be sold, the ethanol industry is now pouting after the release of a draft report from the EPA conceding that water, soil, and air quality all stand to be impacted by increased cultivation of feedstocks for biofuel.

Photo by Kate Jewell. Some rights reserved.

While the EPA performed “extensive” testing on so-called E15 to determine its impact on engine durability and emissions, it wasn’t until last week’s report that they publicly considered the broader “environmental and resource conservation impacts of increased biofuel production and use.” Whether you’re looking at “pollutants in the wastewater discharged from biofuel production facilities” or “emissions from combustion equipment used for energy production at biofuel production facilities,” the draft report did not paint a particularly rosy environmental picture of the effects of increased ethanol manufacturing.

Ethanol industry group Renewable Fuels Association posted an extensive blog post in response to the report. The written comeback questions the EPA’s sources and criticizes the report’s method and focus, concluding: “EPA’s draft report needs substantial improvement before it can be submitted to Congress.”

Well publicized by The Hill’s E2-Wire, you may have already perused the text of the report itself, but in the off chance you haven’t, it can be viewed in full here: Biofuels and the Environment:  First Triennial Report to Congress

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