GoodFuels

Impact of ethanol on farmers

Via Daily Finance:

In an interview with farmer Brent Porteus, past president of the Ohio Corn Growers Association, Daily Finance discusses the corn market and “prospects for the future”.

When asked how ethanol impacted his farming operation in the past year, Porteus has this to say:

“The impact of ethanol is not as great as many people believe. It’s still only a part of the market — last year, three billion bushels. Sixty percent of our corn production is used to feed livestock, while over two billion bushes went to export last year, up 6 percent. Last summer, China was buying commodities, since they were a bargain due to the weak dollar. The spike in grain prices occurred when oil prices went up and the stock market declined, and money looking for a safe haven flowed into commodities. This ‘perfect storm’ was what drove prices up steeply for a couple of months. It wasn’t a corn problem; it was an energy problem.”

As for the food vs fuel debate, he believes that this country’s farmers will be able to renewable fuel and feed the country at the same time:

Porteus points to the dramatic increase in our nation’s yield per acre over the past 30 years. In 1978, the U.S. corn harvest was about 6.3 billion bushels; in 2008, 12.1 billion. He believes that, with new planting technology and improvements in the corn stock, farmers will be able to increase their yields to serve the ethanol industry without driving up food prices. Also, as the USDA points out, only 19 percent of our food cost comes from the cost of grains and seed oils.

Interesting interview. Read the whole thing here.

Photo courtesy of rsgreen89.

What Chu Said in Iowa

Energy Secretary Steven Chu was in Des Moines Monday to announce more than $16 million in American Recovery and Reinvestment Act funding for energy efficiency and renewable energy projects in Iowa during a news conference with Governor Chet Culver. But his announcement took a back seat to some of the comments about ethanol he made during Q and A with reporters.

First, Chu indicated that he supports approval of the waiver that would allow up to 15 percent ethanol blends for standard vehicles currently being considered by the federal government. “I don’t want to prejudge what they’re going to find, but if the existing automobile fleet can handle 15 percent, I would say let’s make that a target and go to 15 percent,” Chu said. “This is very important for decreasing our oil independence.”

Chu also suggested that car manufacturers ought to make all new automobiles flex-fuel capable. “I’ve been told it costs about $100 in gaskets and fuel lines to turn a car so that it can go all the way to E85,” Chu said. “But a new car , it would only cost $100 out of $15,000. Wouldn’t it be nice to put in those fuel lines and gaskets so that we can use any ratio we wanted?” He said that while mandating that companies make all vehicles flex-fuel is “beginning to be discussed” by the administration, they first want to “see about whether the current fleet can take 15 percent or 13 percent ethanol.”

When it came to the issue of indirect land use change and how corn ethanol can measure up using the calculations proposed by EPA under the Renewable Fuels Standard for lifecycle greenhouse gas emissions, Chu had to do some dancing. “The Obama administration has made it very clear that they would rather get to where we need to get to in terms of decreasing our carbon footprint by legislation not by regulatory things,” Chu said when questioned about the matter. He then launched into a discussion about the potential cellulosic sources for biofuels hold for farmers.

Asked more specifically about the EPA proposal, Chu said, “It’s out for peer review and we’ll see how it plays out.” That comment prompted Rep. Leonard Boswell (D-IA), a member of the House Agriculture Committee who was also at the press conference, to say to the secretary, “I hear what you’re saying, I’ve heard it loud and clear, and we’re very concerned about it and there’s a fairly large group that’s making this come to the table for discussion.”

Here is an audio file with Chu’s answers to some of the questions posed. The audio from the reporters was not audible, but you can pretty much figure out what they were asking.