Ethanol May be the Presidents Next Disaster
All the signs are now pointing to the fact that ethanol may not be the answer for $100 barrel oil prices. Ethanol prices have tumbled over 50% while some are also blaming ethanol for record crop prices. As one Washington insider who wished to remain anonymous said, “Solving one problem to create a new problem is not a good solution. In the case of ethanol, I’m not sure what problem it’s actually solving. It’s not our answer for to combat our dependency on oil.”
Some energy industry experts are starting to agree with that assessment. Scientists at Cornell University have recently concluded making the fuel uses more energy than it creates. David Pimentel of Cornell University who has studied the production of ethanol for 2 decades has concluded processing ethanol requires 29 percent more energy than it produces. In addition, researchers at Stanford University have added that the use of ethanol provides little or no benefit to the environment as compared to fossil fuels.
The Bush Energy Plan has resulted in 20 separate laws and incentives to encourage ethanol use. However, this hasn’t discouraged Georgia and Florida from restricting ethanol use during the summer when officials are concerned that evaporation can create smog problems.
Ethanol prices should begin to level off as the market finally absorbs the overcapacity. One industry expert said that ethanol production results in a 33% gain in combustible energy because fertilizer and pesticide costs to grow corn should not be included in the price to produce ethanol.
Fuzzy math?
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