Global Dashboard – Blog covering International affairs and global risks

Hurrah for ethanol (not)

January 2, 2008 | More on Climate and resource scarcity, North America | No comments

Hal Weitzman is with Barack Obama in Iowa.  Barack Obama loves ethanol.

When the last presidential caucus was held in 2004, Iowa produced 860m gallons of ethanol. A year later, after Washington introduced a renewable fuel standard mandating the yearly production of 7.5bn gallons by 2012, the industry enjoyed a growth spurt. Today, Iowa’s 28 plants are responsible for 2bn gallons of the US’s annual production of 7bn gallons, with 18 new plants expected to add 1.6bn gallons next year. As a result ethanol is one of the few issues on which there is near-consensus among the leading presidential hopefuls on both sides.

Go figure.  As Weitzman continues,

Nationally, there is a growing chorus of disapproval against the ethanol industry. Foodmakers and retailers blame ethanol for higher corn prices. Livestock producers resent the effect of the corn boom on feed costs. Some environmentalists question ethanol’s green credentials and say there should be more support for wind and solar power. Free-market groups oppose a 51 cent-a-gallon government subsidy for refiners who blend ethanol into traditional petrol.

Regardless of this opposition, ethanol is likely to become a permanent fixture of the US’s energy supply, boosted by growing interest in renewable fuels and a widespread sentiment that the country needs to wean itself off its dependency on oil imports. Polls show most Americans support the industry. This month Congress passed an energy bill that mandates an increased annual production of 36bn gallons of ethanol by 2022.  “It’s pretty easy to take a shot at ethanol, but the reality is that it’ll be a part of any ‘final package’ on energy,” says Wallace Tyner, professor of agricultural economics at Purdue University in West Lafayette, Indiana.

Grrr.

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