I’ve written about the challenges of the ethanol/biofuels industry many times. And the bad news just keeps coming, Without Warning. Each piece of news is challenging the future viability of the industry. For instance, in recent weeks several reports have surfaced.
From AgriNews, April 24, 2009 (AP Story): “Antibiotics pose concern for ethanol corn producers.” The primary byproduct of corn ethanol is a feed ingredient called Distillers Dried Grains, or DDGS. The story states, Ethananol production relies on enzymes, yeast and sugar to convert corn into fuel. And just as the wrong bacteria in thebody can sicken people, it also can cause a variety of ailments in a batch of ethanol… the main enemy is a bacterial bug that makes lactic acid… if enough of the bacteria is present, fermentation can be ruined… If that happens, there’s no ethanol and no profit… what these people operating these plants are trying to do is to keep these lactic acid bacteria in check. And one way of doing that is with the help of antibiotics… penicillin and virgniamycin… The U.S. Food and Drug Administration has taken a mostly hands off approach to the use of antibiotics in the ethanol industry. But amid increasing concerns over food safety in recent years, the agency is taking a closer look… Charlie Staff, executive director of the Distillers Grains Technology Council, said that distillers grain is one of the few dependable money makers for the ethanol industry. If they didn’t have distillers grains as a revenue, many more of the them (ethanol plants) would be able to operate.
From AgriMarketing, April, 29, 2009: “Iowa State Professor Issues New Report: Status update on the Ethanol Industry.” It states: According to Ethanol Producer Magazine, the current count is that 37 ethanol distilleries are out of business — with 23 of them built since 2005. The cumulative production capacity of these plants is 2.2 billion gallons annually. Given that there are presently 193 ethanol distilleries in the U.S. (according to the Renewable Fuels Association) 37 idled plants represents 19.2 percent of all distilleries, and 17.8 percent of production capacity. That’s right on pace with our prediction that a substantial percentage of plants will be out of business within the next five years.
Why? It’s basic economics. Even with the vast amount of taxpayer subsidization of the industry, ethanol remains more expensive than gasoline on an energy basis — per British Thermal Unit (Btu). Ethanol simply contains less heat energy that the same amount of gasoline does. So, its real cost to buyers is more than gasoline. Sure, it costs less at the pumps in most locations across the country, but the discount is not enough to offset ethanol’s lower energy content which results in less fuel economy. Not even the taxpayer largesse that continues to be poured into the industry can stop the problems.
From “The Economist,” April 11, 2009, “Biofools, Farming biofuels produces nitrous oxide.” This is bad for the environment. Theory, though, does not always translate into practice, and just as governments have committed to the greater use of biofuels, questions are being raised about how greeen this form of energy really is. The latest come from a report produced by a team of scientists working on behalf of the International Council for Science (ICSU), a Paris based federation of scientific associations from around the world. The ICSU report concludes that so far the productions of biofuelds has aggravated rather than ameliorated global warming.
Add these additional challenges to the mix:
1. Carbon Footprint:California is in the midst of creating legislation that could eliminate the use ofethanol derived from corn due to its “Carbon Footprint.” Here is the link to a short article that discusses the controversial nature of this legislation. Is ethanol’s carbon footprint bad? It depends
2. Water Usage: Concerns are being raised about the amount of water it takes to produce a gallon of corn based ethanol, especially if the corn was raised utilizing irrigation. Here is an excellent article over at MIT Technology Review: Measuring Corn Ethanol’s Thirst for Water.
Add these pieces together and what do you get. You get a Silent Problem that is being avoided, neglected and silenced on many fronts. No matter what the pro-biofuel folks are stating to the contrary, the biofuels industry is in trouble. And its viability is growing more tenuous by the day. It could easily be another “Without Warning Event.”
