Figuring Out Our Stance On Ethanol
Promoting different ethanol agendas probably won't help us in the near term.
Published on: July 27, 2010
Most experts predict the ethanol industry will hit the blend wall within the next year or so. At this point, ethanol plant capacity will exceed the amount needed to blend 10% ethanol into all of our nation's fuel.
To continue an upward trend in corn demand for the industry, groups are pushing legislators to mandate additional ethanol production. Until recently, all of these groups were pushing for an increase in the minimum ethanol blend from 10% to 15%.
Growth Energy bucked the trend on July 15 when they introduced "The Fueling Freedom Plan." Their new plan seeks to funnel the blender's tax credit toward the construction of 200,000 blender pumps across the U.S. Plus, the plan calls for every U.S.-built automobile to be a flex fuel vehicle.
This is a significant departure from the E-15 initiative, which is supported by the Renewable Fuels Association, American Coalition for Ethanol, and the National Corn Growers Association.
According to Growth Energy, their plan seeks to eventually remove government subsidies by providing consumers with an easy choice at the pump.
I'm all for getting ethanol to stand on its own two feet. However, it's going to be tough to get anything done when you're proposing two wildly different agendas for a fuel that the current administration hasn't exactly favored. Not to mention, mid-term elections are not far off.
I've got to say, this is a tough little riddle. That ethanol demand base is vitally important, especially when examined under the lens of increasing input costs. At the same time, I'd like to see the consumer start footing the ethanol bill and ease the burden off the U.S. tax payer.
A recent article in Popular Mechanics detailed the huge hurdles that still stand in the way of going to all electric vehicles. Even if the battery technology was here, the distribution system is not. If the distribution system was, electricity could very well become just as expensive as fossil fuels.
This makes me think that ethanol isn't going anywhere anytime soon. We've got to figure out how to move forward with this fuel. And, above all, we've got to do it together. We've got too many detractors out there to put up a divided front.
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