August 23, 2010
Opinion: Ferris: Ethanol from corn is net gain on energy
Published in Lansing State Journal
The thoughtful letter "Analyze ethanol" from Tom Hill (Aug. 18) asked for a Viewpoint commentary from some agricultural economist. As one of those guys, it prompted me to answer. A quick response from Tom's major concern is that, yes, there is a major energy gain in producing corn-grain based ethanol, even though the energy content (BTUs) in pure ethanol (E-100) is only two-thirds that of gasoline.
Research for several years has supported this analysis and was amplified by a June 2010 report from the U.S. Department of Agriculture, which concluded that the ratio is about 2.3 BTUs of ethanol for 1 BTU of energy inputs. This includes an allocation to the important by-product of dry mill ethanol production called distillers' dried grain which is a substitute for corn grain and high protein meal in livestock rations.
This analysis, based on 2008 data, reflects major increases in the productivity in corn production and the conversion of corn grain into ethanol.
Still untapped from the corn plant are the cobs and the stalks. A company with an operation in Michigan (Poet) is developing a process in the Midwest with cobs as a feedstock and has prospects to expand using corn stover. This technology, known as cellulosic conversion, is more challenging than with corn grain. My analysis suggests that economic conversion of such feedstock is a long way off, even though championed by environmentalists. But, as a start, the use of corn cobs and stalks appears to be the most promising from this type of feedstock.
A second charge of Tom Hill was that the higher livestock feed prices raised the price of meat - another negative. He has a valid point.
In the fall of 2006, a frenetic effort to expand ethanol production encouraged by federal legislation plus strongly growing international demands for grain resulted in the farm price of corn increasing from about $2 per bushel in August 2006 by nearly a dollar per bushel in December and another 50 cents by June 2007. In combination with higher energy prices, the farm price averaged more than $4 per bushel in the 2008 crop year. However, as the saying goes, "The cure for high prices is high prices."
Farmers responded and have increased production by over 25 percent in 2010 since 2006. The problem was not the federal mandated expansion in biofuel production, but the rate at which the industry responded.
Both ethanol and biodiesel have positive effects on health and the environment. Difficult to measure, but the cost of our dependence on foreign oil and the support high petroleum prices provide for many nations not friendly to us are reasons to look domestically. National expenditures for assuring access to global petroleum...
