‘Green’ energy still struggling
It’s been a rough year for ethanol, the alternative fuel that was once touted as having great promise in soothing America’s demand for foreign oil.
But like many other “green” fuels that have been touted, ethanol has had trouble with sustainability. Indeed, it has had trouble with market liftoff.
If the federal government did not mandate that retail gasoline sold at the pumps contain ethanol, one wonders how much ethanol would be produced in the United States.
What is known is that many attempts to expand production of ethanol are failing. Earlier this year, Range Fuels sold for $5.1 million a plant that federal and Georgia taxpayers had pumped $70 million into. The plan, unveiled in 2007, was to turn some of Georgia’s wood into ethanol.
Range went bankrupt in 2011. About $64 million of federal funds went up in smoke, so to speak.
More recently, in late October, BP Oil pulled the plug on a $300 million ethanol plant in Florida. The plant — announced in 2008 — was to produce 36 million gallons of ethanol per year, according to the News Service of Florida. The research part of the plant will remain open but that is small comfort to a Florida county that has 9.2 percent unemployment and was hoping for 200 jobs to run the plant and grow the crops.
Ethanol will still be used in gasoline, of course. The mandated use has been a huge subsidy for farmers, who like how the increased demand for corn drives up prices. But not everyone is happy about the effect that has on food and feed prices.
In 2008, during several commodity bubbles, prices for corn and oil soared at the same time. It soon became expensive for consumers from Mexico to Kansas to Canada to buy food. The U.S. policy of plowing many of our food-farming acres into fuel-farming acres causes higher prices for a variety of food, from corn to meat.
In 2011, according to the Renewable Fuels Association, the U.S. set a record in production for ethanol, with an estimated 13.9 billion gallons of ethanol made by 209 ethanol biorefineries located in 29 states. As in 2008, higher costs have again arrived for corn-related products.
Yet even with the federal requirement to mix ethanol into gasoline, it has become clear that the U.S. market itself doesn’t think too highly of ethanol and sees better, easier opportunities in fuels such as natural gas.
It should be noted that even with huge federal subsidies, many “green” energy companies have failed even to stay open. So it’s time for federal policymakers, including President Barack Obama, to get the message: Stop the subsidies to green energy. Let the market work things out.
At the very least, cutting back on ethanol subsidies may lead to cheaper food for consumers, in the United States and worldwide.
The Jacksonville Daily News