Its Ethanol Schizophrenia. . . thats what I call the current mad rush to corn-based fuel. The way politicians have wrapped their arms around it youd think it was the one great solution to the nations energy problems. But logic says otherwise.
The large ethanol subsidies (51-cent-per-gallon federal) doled out by Congress are a boom for the farmers. The price per bushel of corn is giving marijuana a run for the top cash crop title! Last year, nearly 5 billion gallons of ethanol were produced. Its supposed to quickly increase to 12 billion gallons due to the current building boom in ethanol plants. There will soon be 200 of them. This triggers marine industry fears that the gas/ethanol ratio could be pushed up to 80/20 or higher from the current 90/10 ration and that would create major problems for us.
However, a look at some basic facts indicates its more likely that we will not see an increase above the current 90/10 ratio. A battle is shaping up over the amount of ethanol in this country and it will revolve around corn. Here are a couple of examples:
As the need for corn for ethanol rises, so will the price of corn. As such, there will be less available for feed and food needs and the prices will rise more. Will consumers quietly pay more and more at the dinner table? Not likely.
In addition, President Bush has called for increasing ethanol to 35 billion gallons annually over the next 10 years. But to do that, some estimates say wed have to use virtually all the corn grown in the nation. No more feed or food at all? Again, not likely. Now, add in the fact that ethanol, feed and food arent the only demands for corn. Theres competition. How about plastics? For example, today literally billions of petroleum-based plastic water bottles are pouring into our landfills. Theyll never degrade.
Relief, however, is in sight. Cargill has developed a bio-degradable polymer. The packaging industry has jumped on it. Only one problem its a corn-based plastic! More competition for the corn!
The bottom line of these, and more, demands for corn is that we will not likely have enough corn to see ethanol rise to a higher ratio than the current 90/10. If America is going to lower its dependency on foreign oil, were going to have to look to more than corn and the marine industry can breath a little easier about the subject.
Thats how I see it, how about you?