Of Bushels, Booze, and Bullocks: Currrent Event Briefing June 18,2008 Introduction to Environmental Policy Marci E. Fiedler, Colin FitzGerald, Jessica McHugh, Alejandro Gomez Palma, Carlos Rymer Corn to Ethanol Subsidies in the United States
The Energy Independence and Security Act mandates the use of 36 billion gallons of biofuels, largely ethanol, by the year 2022.
Federal and state tax credits subsidize ethanol production to the tune of $0.57 per gallon
Introduction “ [T]he demands of America's ethanol programme alone account for over half the world's unmet need for cereals. Without that programme, food prices would not be rising anything like as quickly as they have been. ” The Economist Dec 6th 2007
Of Bushels: Corn Production , Ethanol and Price Impacts Corn Production 2007 (USDA): 13.1 Billion Bushels Up 24% from 2007. 93.6 million acres Highest level since 1944. $ 52,090,108,000 USD $ 4.00 usd/bushel 3.3 Billion Bushels ( 25 %)
Of Bushels: Corn Production, Ethanol and Price Impacts Gallons of ethanol 2006: 5 Billion Gallons 2006 Gasoline Consumption USA: 138 Billion Gallons Ethanol – Gasoline Equivalence: 4% of gasoline supply Wheat stocks are at their lowest level since 1980.
Of Bushels: Corn Production, Ethanol and Price Impacts “ The impact is around 3%...I invite you to do the homework… ” ''While we do have some role in higher corn prices, we're closer to a Little Bo Peep than an ax murderer…'' Vice President of USA Automotive Company President of the National Corn Growers Association “ The growing interest in ethanol fuel has other notable motives[…]: the need to diversify energy sources, the desire of many countries to meet their greenhouse gas abatement targets under the Kyoto Protocol, and the need to stabilize commodity prices and cut down on agricultural subsidies in line with WTO provisions.” Food Outlook , FAO (2006)
An increasing amount of domestic corn is being diverted to ethanol production as the industry grows quickly
Even with the fast pace of growth, ethanol from corn will not be able to satisfy domestic transport fuel demands
Ethanol production in the U.S. is having significant global impacts in food prices and greenhouse gas emissions
The energy balance of ethanol derived from corn continues to be a controversial issue
Politically, ethanol production is favored even if it costs the economy due to pressure from strong farm states
References Martinelli, Jose Maria. 2002. Políticas públicas en el nuevo sexenio . Plaza y Valdés editores, México. Dale, E. Bruce and Kim, Seungdo. 2002. Allocation Procedure in Ethanol Production System from Corn Grain. International Journal of Life-Cycle Analysis. De Gorter, Harry and Just, David. 2008. Why new U.S. biofuel legislation is on track to waste billions of tax dollars, while subsidizing oil consumption . Cornell Chronicle: http://www.news.cornell.edu/stories/May08/Perspective.deGorter.html Iowa Corn Association. “Frequently Asked Questions about Corn in Iowa “. Accessed June 17, 2008. http://www.iowacorn.org/cornuse/cornuse_20.html#harvest Pimentel, David and Patzek, Tad W. 2005. Ethanol Production Using Corn, Switchgrass, and Wood; Biodiesel Production Using Soybean and Sunflower. Natural Resources Research, Vol. 14, No. 1: 65-76. Shapouri, Hosein et. al. 2002. The Energy Balance of Corn Ethanol: An Update . USDA. U.S. Department of Agriculture. National Agricultural Statistics Service (NASS). WASHINGTON, Jan. 11, 2008 http://www.nass.usda.gov/Newsroom/2008/01_11_2008.asp 1. Cover Slide: Generic photo of corn to be used for ethanol production 2. Cover Slide: 200-proof ethanol produced in a plant in Illinois, USA. https://www.eere-pmc.energy.gov/PMC_News/EERE_Program_News_3-08.aspx