Corn Ethanol goes boom, then bust (and is evil)

Turns out that even the small increase in ethanol production (it is small if you compare it to the actual amount of gasoline used) cannot be handled by this country’s fuel infrastructure.

Sudden Surplus Arises as Threat to Ethanol Boom – New York Times

The ethanol boom of recent years — which spurred a frenzy of distillery construction, record corn prices, rising food prices and hopes of a new future for rural America — may be fading. Only last year, farmers here spoke of a biofuel gold rush, and they rejoiced as prices for ethanol and the corn used to produce it set records.

But companies and farm cooperatives have built so many distilleries so quickly that the ethanol market is suddenly plagued by a glut, in part because the means to distribute it has not kept pace. The average national ethanol price on the spot market has plunged 30 percent since May, with the decline escalating sharply in the last few weeks.

How many cars can run on E85 ethanol, which is an 85% ethanol, 15% gasoline blend? This pdf file courtesy of the National Ethanol Vehicle Coalition lists about 50 vehicles. Note one common thread, most of them are overized, overpowered trucks and SUVs. Worse, only about 10 of them are < 3.0 liter engine vehicles. So why are these the only vehicles setup for ethanol? The hybridcars website explains:

Automakers’ tendency to make their largest vehicles E85 compatible is rooted in America’s fuel economy rules. Since 1988, automakers have been allowed to assign flexible-fuel vehicles higher fuel economy ratings under the government’s CAFE fuel economy regulations. This means that a vehicle like the Durango, which averages 13 mpg would be rated at roughly 23 mpg for CAFE purposes, even if its owner never fueled it with E85.

Hah, one more boondoggle. Corn ethanol is subsidized to the tune of $1.45 per gallon, corn growers get billions in subsidies, car manufacturers get to claim laughably high fuel economy standards, and politicians get to proclaim their fealty to the Midwest by kissing babies in Iowa and bowing to the corn god.

Meanwhile, everyone else loses, and the prospect that prices would fall 30% gets a concerned article out of the New York Times.

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