Ethanol Industry Could Use Some Stimulation These Days or, One Good Effect of the Economic Downturn


Hit & Run regular and serial novelist Alan Vanneman points to this New York Times sob story about the ethanol industry, which has been hit hard by low oil prices, low demand for gas, and our national malaise:

As recently as last summer, plants that make ethanol from corn were sprouting across the Midwest. But now, with motorists driving less in the economic downturn, the industry is burdened with excess capacity, and plants are shutting down virtually every week….

"The ethanol industry is on its back despite the billions of dollars they have gotten in taxpayer assistance, and a guaranteed market," said Amy Myers Jaffe, an energy analyst at Rice University….

In an effort to reduce the country's dependence on foreign oil and to lower the greenhouse gas emissions that contribute to global warming, Congress mandated a doubling of corn ethanol use, to 15 billion gallons a year by 2015. Congress also mandated, by 2022, the use of an additional 21 billion gallons of ethanol and other biofuels produced from materials collectively known as biomass. The potential materials include corn stubble, wood chips and straw.

More here.

Development of large-scale new-generation ethanol is not working and mandated corn ethanol use is a really terrible idea that helped spike food prices worldwide last year. Even environmentalists who once pushed for corn-based ethanol have rethought their position. Watch Reason.tv's "Silly Senator, Corn Is For Food" for a comprehensive catalogue of the problems with corn-based ethanol: