Ethanol from Corn: A Solution to Oil Dependence?

(Link to entire UN article above)

By Paritosh Kasotia

Many researchers and consumer advocates are skeptical about ethanol as an economically viable energy source. A study by the University of Minnesota, in the United States, finds that even if every acre of corn were used to produce fuel and not food, ethanol would still only supply about 12 per cent of America’s motoring fuel. Many researchers are also calling the corn-based ethanol the least sustainable biofuel. Additionally, there are unaccountable costs associated with ethanol production, such as long-term agricultural operations, infrastructure and investment, including water, land and energy. The Governments of developed countries spend hefty sums of money in subsidies to encourage ethanol production. In the United States, the Government has spent $51 billion between 1995 and 2005, which is twice as much as wheat subsidies and four times that of soybean subsidies. Despite all that, the ethanol industry has shown only mediocre results.

One of the biggest criticisms of ethanol comes from University of Minnesota economists C. Ford Runge and Benjamin Senauer, who claim that growing ethanol for fuel can disrupt the food production for human consumption, as it would take vast acres of land. They also claim that increase in food prices due to ethanol demand could cause as many as 600 million more people to go hungry worldwide.

An article in Rolling Stone, “The Ethanol Scam: One of America’s Biggest Political Boondoggles”, by Jeff Goodell mentions that the demand for corn used for ethanol production in the United States has disrupted the food economies of many countries. Since the United States supplies two thirds of all global corn exports, the effect of rising costs of corn is being felt by other countries in the world. For example, in Mexico, tortilla prices have jumped 60 per cent, resulting in food riots. Similarly, big importers of corn, such as Japan and Egypt, fear that a reduction in corn export could disrupt their livestock and poultry businesses.

The high demand for corn has increased its price, which, in turn, affects the price of wheat and rice. This phenomenon, according to the Earth Policy Institute, could result in food riots and political instability in lower-income countries that import grains, such as Indonesia, Mexico and Nigeria, among others.