NYT: Ethanol’s Boom Stalling as Glut Depresses Price

[Omaha Steve]

http://www.nytimes.com/2007/09/30/business/30ethanol.html?ex=1191816000&en=c2184a5480071ed2&ei=5043&partner=EXCITE

By CLIFFORD KRAUSS
Published: September 30, 2007

NEVADA, Iowa, Sept. 24 — 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.


Lincolnway Energy, a midsize distillery in Iowa, was once virtually alone in the region. Today, though, competing distilleries are operating and pouring even more ethanol onto the market.


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 have 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.

“The end of the ethanol boom is possibly in sight and may already be here,” said Neil E. Harl, an economics professor emeritus at Iowa State University who lectures on ethanol and is a consultant for producers. “This is a dangerous time for people who are making investments.”

While generous government support is expected to keep the output of ethanol fuel growing, the poorly planned overexpansion of the industry raises questions about its ability to fulfill the hopes of President Bush and other policy makers to serve as a serious antidote to the nation’s heavy reliance on foreign oil.

And if the bust becomes worse, candidates for president could be put on the spot to pledge even more federal support for the industry, particularly here in Iowa, whose caucus in January is the first contest in the presidential nominating process.


FULL story at link.

[Deja Q]

1. Surely there are better organic materials to convert to gasoline...

And as the ratio of oil to ethanol is just about the same, it seems a waste - a nice idea but the benefits just aren't really there.

Now if more people eat popcorn...

[kestrel91316]

3. Corn is heavily fertilized, usually to excess. The excess runs off

and winds up in the Mississippi River, and then ultimately in the Gulf, where it MAKES THE DEAD ZONE.

[ashely_kennedy6]

4. There are indeed better sources

Like Sugar Cane.

At Best Ethanol's energy gotten/used is 1.3:1 ... tho some say it's 1:1 or even 20% Below with all considerations

Sugar cane's Ratio is is 8:1 a huge difference and worth doing.

Far better to plant efficient Cane acreage in the US Southeast (Tx, Ms, Ala, Fla).
More sun in, more energy/sugar out.

This corn thing is wasting what is better grain and livestock land for inefficient ethanol.

Brazil has achieved independence with Cane. Soros is investing in Cane Farms in Brazil.

It would be even cheaper, in fact, to just import Cane ethanol from warmer Climes, but even if the countries are friendly this somwhat defeats the 'energy independence' part.

[razzleberry]

5. ratio of ethanol to oil (gain) is about ten to one

which is excellent

double benefit, the middle east,
plus,
oil companies are cut out of the deal

[pscot]

2. All those guys whoplanted more corn

must be kicking themselves now, with wheat at 10 bucks a bushel.