Ethanol 'Too Important' For Economy

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With production at record levels and exports the ethanol sector once again is perceived as a bright spot in an economy continuing to struggle out of recession.

Now, industry leaders and researchers are seeking gains in plant efficiency, climate-friendly technologies, and new ethanol “co-products” that could help assure expanded market share for corn-based ethanol as an “advanced biofuel.”

At the same time, they warn elimination of the federal ethanol blenders credit, regulations discouraging investment in greener production technologies, and a continuing “international land use wall” for corn ethanol plants will stunt ethanol’s economic and environmental potential. Currently, corn ethanol is limited to 15 billion gallons out of 36 billion gallons of required nationwide biofuels use under the federal renewable fuels standard.

In a speech addressing the Gulf Oil spill last Tuesday, President Obama emphasized “the time to embrace a clean energy future is now.” At last week’s annual Fuel Ethanol Workshop last week in St. Louis, National Renewable Fuels Association Bob Dineen argued weak policies threaten the future of ethanol,and a growing segment of the economy.

“The industry continues to evolve; it continues to get more efficient,” he told FarmWeek. “Profitability’s returning as corn prices moderate some and oil prices increase a bit with the summer driving season. Things are generally looking up. I’m optimistic we’re going to see extension of the tax incentives and the other policies that have built this industry.

“We’re just too darned important at this point. Ethanol now represents 10 percent of the U.S. motor fuel market. Without ethanol, what are you going to do? You just going to import more oil? You going to look at (petroleum deposits in) tar sands? You going to find someplace deeper in the Gulf that’s not leaking to get your oil? I don’t think so.”

Agriculture shares inextricably in the economic fortunes of ethanol, according to Iowa State University ag/biosystems engineering specialist Charles Hurburgh Jr. Hurburgh warns that at an anticipated 4-6 percent annual ramp-up in corn yields in coming decades,adding a possible 300-500 million of bushels to yearly U.S. production, capping corn-based ethanol production would result in “a growing surplus of corn we’re going to have to do something with.”

While increased exportation of U.S. ethanol benefits the nation’s balance of trade, it also signals “we are not maximizing the use of ethanol in this country as we should,” Dineen said.

Watch FarmWeeknow.com for further developments and views from the Fuel Ethanol Workshop, and listen above as Bob Dineen outlines industry concerns.

Source: Illinois Farm Bureau



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