In the five minutes it takes you to read this column, the United States will consume 70,000 barrels of oil. According to the Energy Information Administration, we burn 6.2 billion gallons of oil in a single day. Our insatiable appetite for petroleum, which is both expensive and finite, has economists and scientists worried.
Where will we turn when the oil wells run dry? When will the price of crude oil finally prove too expensive to run our cars, produce our plastics and manufacture our chemicals? In the debate over energy and carbon emissions, an unlikely hero has emerged in corn-based ethanol.
The hoopla surrounding ethanol has been hard to ignore. Farmers, venture capitalists, politicians and even energy companies have pointed to ethanol as the fuel of the future. The prospects of ethanol are indeed alluring. The clean-burning, home-grown gasoline substitute has the potential to reduce our dependence on foreign oil, decrease the amount of dangerous carbons entering our atmosphere, jumpstart struggling economies in rural America and begin the next revolution in technology and industry: The biofuel age.
The ethanol explosion certainly has affected the Kansas economy. There are eight ethanol plants in the state, with construction price tags ranging from $60 million to $200 million. The Kansas Energy Information Network reported that four more plants are under construction, and another 22 are being proposed. From Finney County in the southwest to Atchison County in the northeast, ethanol plants are spending millions of dollars buying fuel, feed, water and labor from rural Kansas communities – an economic stimulus for areas with falling populations and fewer employment opportunities.
More ethanol plants mean more demand for corn, the grain whose starches are converted into sugars and fermented into ethyl alcohol, or ethanol.
Fred Cholick, dean of the College of Agriculture, said higher demand for grain, coupled with a worldwide food shortage, has led to higher corn prices. Though the jump in prices has profited the Kansas corn producer, Cholick said not everyone is singing ethanol’s praises.
“Higher prices of commodities – corn and sorghum in this case – all have very positive influences for the local farmer,” Cholick said. “The other side of it is, the users of those products domestically – here in Kansas it’s the beef industry, the feedlots and the swine industry – are paying more to feed their animals corn. They are in a squeeze.”
Corn futures traded at more than $5.50 per bushel at the Chicago Board of Trade last week, up from an average of $2 per bushel in the early 2000s. More corn is being sold for ethanol production than exported to underdeveloped nations which have less-disposable income and a greater need for our surplus grain. Less wheat is planted when corn is more profitable; Cholick said the average Kansas wheat base has dropped from 14 million acres to just less than 10 million acres last year.
There are signs that the ethanol bubble is fragile. The ethanol industry’s aggressive expansion into Midwestern states in the last five years, where labor is cheap and corn is plentiful, is showing signs of slowing down. According to a Feb. 26 article in USA Today, Cargill recently scrapped plans for a $200 million ethanol plant outside Topeka. Cargill cited poor economic conditions and, ironically, the rising cost of corn.
Before Kansas and the rest of the country completely embrace ethanol as the answer to our oil addiction, we must build a smarter strategy to expand the industry. The current high corn prices and ethanol euphoria might be the boom-and-bust years of biofuels. The industry has yet to prove itself both as an efficient alternative to oil and as a stable industry for the economies of Kansas and the nation.
Does ethanol deserve all the attention? To completely answer such a question is beyond the scope of one column. In the coming weeks, I will address the environmental effects of ethanol, and the research being done to improve its efficiency and production.
The future of ethanol is bright, but like any infant industry, there is room for improvement. The initial excitement has given way to growing pains, but Cholick said ethanol has the potential to not only revolutionize agriculture, but shape the 21st century.
“For the local community, in terms of jobs and construction, ethanol has a very positive impact,” Cholick said. “As we go through this adjustment period, parts of a community’s economy will be adversely impacted. The long-term forecast is positive. Over the short term, we’ll have bumps in the road.”
Joe Vossen is a senior in political science. Please send comments to firstname.lastname@example.org.