There seems to be a correlation between higher fuel prices and the discussion of ethanol. The higher the price, the more the talk. But talk seems to be a little one-sided. From the AP:
Even as ethanol devours corn and pushes prices higher, the president and Congress are calling for even greater ethanol use. Wall Street cannot seem to get enough of ethanol-related investments. Automakers are speeding ethanol-capable vehicles onto the road.
But is there a downside?
According to the Consumer Energy Council of America:
Depending on the ethanol/gasoline blend, ethanol may raise levels of nitrogen oxides produced as gasoline emissions. Because of its lower energy content relative to gasoline, ethanol also reduces mileage per gallon. Corn-based ethanol production is energy intensive, and in some instances uses nearly as much energy to produce (including the energy needed for farming and making fertilizers) than it supplies, although new technologies are improving the efficiency of production.
So for the present it looks like ethanol is a wash, energy-wise.
Even as ethanol production and integration continues to shape multiple industries, just remember that there are still issues to be resolved.
Ethanol may be a large part of our future, but for present it isn't netting us anything. Stay tuned.
i agree that Ethanol is not a story as big it is made ......but i think it plays a big role in the strategy that the govt has adopted.....it intends to reduce the demand for crude .....by part part substitution through Ethanol so that it can create pressure on oil prices ....this way it can save huge amount on crude bill even after subsidsing the Ethanol bill and after all ethanol subsidy is more of a agricultural subsidy and stays within the country........It is a good move to keep oil prices in check.....whatever is the motive looks like everybody connected to Ethanol will ...make hay ....
Posted by: Anonymous | July 18, 2006 10:07 PM | Permalink to Comment