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Tuesday, December 05, 2006

Free State Ethanol

The link is a week old, but I wanted to note this Sun article on a proposed ethanol plant to be built in either Baltimore or the Eastern Shore:
The surge of interest in the once-marginal fuel is driven by a desire for freedom from Middle Eastern oil and billions of dollars in federal subsidies. Increased demand for ethanol is boosting income for corn farmers and could reduce global warming pollution - but it might also translate into higher food prices for consumers, because more expensive corn means higher feeding costs for cows and pigs.

[snip]

Three gas stations in Maryland are among the few nationally that sell nearly pure ethanol - called E85, for 85 percent ethanol. But only 2.5 percent of the vehicles in the United States can run on this concentrated form without damaging their engines.

The rush to build corn ethanol plants in Maryland is a microcosm of the trend nationally, where about 50 ethanol plants are under construction and 107 more are operating. As a result, the price of corn futures - which reflects expectations of future markets - has soared 50 percent since September, from $2.40 per bushel to $3.60 this month, Silver said.

[snip]

Rice said producing ethanol becomes more profitable as oil prices rise. "A few months ago, it was a lot easier to get financing for ethanol plants because gasoline prices were higher and a lot of this market hinges on gasoline prices," said Rice. "If we all of a sudden get a plummeting of gas prices, you might see a lot of these financiers pulling the plug."
Of course, ethanol, like any fuel, is no silver bullet, but it does have the potential to boost the economy, especially in rural areas like the Eastern Shore. And it will take some time before an ethanol industry can function well without subsidies -- indeed, instead of Exxon and Shell, we may well have ADM and Cargill as our future energy giants, which is not an appealing prospect for those of us concerned about undue corporate influence on our government.

If you want to learn more about biofuels of all kinds, from ethanol to biodiesel, I highly recommend this series by the environmental magazine Grist, which provides, I think, a balanced look at the topic.

UPDATE: Speaking of corn, it appears climate change may well wreak havoc on any plan to farm our way out of the energy crisis.

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