Ethanol. Right. Now.

Response to The WSJ: Ethanol is not reducing the amount of corn for food

While I was amused that The Wall Street Journal would invoke “morality” in one of its editorials, I was stunned by the sheer number of half-truths, miscalculations, and misleading statements that could be wedged into one 600 word anti-ethanol editorial, “Amber Waves of Ethanol.”

The article primarily seeks to blame ethanol for higher food prices, and even the failure of two food companies, yet it includes no discussion about the morality of other Big Food companies who managed to thrive during the time period the others failed, by invoking the mythical “food vs. fuel” bogeyman as an excuse to raise their prices and reap record profits.  While the “food vs. fuel” PR campaign was wildly successful, it was not the truth, and it still isn’t.

In fact, the opposite is true.  More corn for all other uses is now available in the United States because of growing ethanol production (see chart). 

Chart shows the U.S. corn crop in billions of bushels, the portion used to make ethanol, and the portion remaining for food, feed, and export.

Sources: Corn production data: U.S. Department of Agriculture / Ethanol production data: U.S. Department of Energy's Energy Information Service

The WSJ article talks of “reduced corn food supply,” which is at best ignorant of reality.  The supply of corn for food in America and around the world is increasing, and in the United States that is due in part to the fact that ethanol has restored market pricing to corn – as opposed to artificially low prices with government payments designed to keep farmers growing cheap corn.  Because real grain markets are more attractive, farmers are growing more corn – more food – than ever before.  I am continually puzzled by those who think farmers will grow more corn if they are paid less for it.  Which economics textbook did I miss that contained that theory?

The article contained many other factual errors, such as ignoring consistently higher corn yields and record-setting corn production, no recognition that ethanol only uses starch and returns all of corn’s protein, fat and fiber to the food supply in the form of the animal feed distillers grain (a 33 percent error), and no recognition of the fact that China – yes, China – is currently accusing U.S. ethanol producers of producing too much of this low-cost feed.  I am led to the conclusion that if this is the quality of analysis being used to make decisions on Wall Street, we had better be prepared to bail them out again.

Posted by: Ron Lamberty, Vice President / Market Development, American Coalition for Ethanol

Winning the future, with the help of ethanol

The American ethanol industry, comprised of farmers and small businesses, is ready and willing to help the U.S. “win the future” for the sake of our economic security, national security, and environmental protection.

President Obama delivered the State of the Union address to a joint session of Congress last night, and we are grateful for his statement “clean-energy breakthroughs will only translate into clean-energy jobs if businesses know there will be a market for what they're selling.”

The American ethanol industry couldn’t agree more.  If Congress and the Administration take steps to remove Big Oil’s status-quo grip on the fuel market, corn ethanol and advanced biofuel will finally have the certainty to supply safer and more affordable fuel choices to consumers while creating jobs for the U.S.  That is why the E10 blend wall must be overcome with an approval for E15 in all cars and why policies that deploy more Flexible Fuel Vehicles (FFVs) and blender pumps should be implemented.

We are pleased that President Obama declared “we can break our dependence on oil with biofuels,” and note that American ethanol, the most widely available biofuel, is already displacing approximately 350 million barrels of foreign oil – essentially eliminating the need for the U.S. to purchase oil from Saudi Arabia.

The President rightly pointed out that Big Oil companies are profiting on their own, let alone the billions in taxpayer dollars they benefit from each year.  Redirecting oil company subsidies toward cleaner, safer, and better alternatives – such as American ethanol – is the kind of investment that will create the domestic jobs we need for the economy to recover and grow.

Finally, because there is no silver-bullet solution to reducing oil use, we appreciate the President’s goal to have 1 million electric vehicles on the road by 2015.  Nonetheless, there are already nearly 9 million FFVs on the road.  These FFVs can run on any blend of ethanol and gasoline, and should number nearly 20 million by 2015. 

Steps to ensure there are more FFVs and that the owners of these vehicles have the opportunity to use ethanol-blended fuel need attention this year .

Posted by: Brian Jennings, Executive Vice President, American Coalition for Ethanol