Some people say that Americans need to look for "alternatives" to oil as prices generally increase and pollution concerns are trumpeted by environmentalists. The current hot topic is ethanol, a corn-based fuel that is already being used in automobiles on a small scale.The new demand for corn is fantastic for farmers, who are seeing rising prices paid for their corn. It's not so good for consumers -- it's causing food prices to rise as the availability of corn is going down.
Looking for fuel alternatives is a good idea, but it has to be done strategically and smartly. Consumer needs for food should come before fuel. That's just common sense.
A bill passed the House of Representatives on Friday, mandating more widespread use of "biofuels," which are derived from plants. We currently consume about 6 billion gallons of ethanol and other biofuels, and this bill would force consumers to increase that to 36 billion gallons per year by 2022.
Tree-huggers love it. They say biofuels create fewer greenhouse gases and can be continuously generated by growing plants. It may reduce the need for oil imports.
Farmers love it. Instant market for their goods.
Realists hate it. Ethanol has a long way to go in terms of a desirable fuel for automobiles, with efficiency and portability as major concerns. And the price of corn, a food staple, will undoubtedly go up and increase food prices across the board. And it won't just increase the price of food that uses a corn base. All sorts of animals are fed corn, so products like chicken and pork will be more expensive too.
Attempting to mandate widespread use of ethanol seems too risky at this time. Lawmakers would be better off letting consumers decide which fuel they want to use. Those who think corn-based fuel is a good idea can voluntarily use it. Others who recognize the inherent problems with ethanol can pass on it for now.
Forensic accountant Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations through her company, Sequence Inc. Forensic Accounting. The Association of Certified Fraud Examiners honored Tracy as the 2007 winner of the prestigious Hubbard Award and her first book, Essentials of Corporate Fraud, will be on bookshelves in March 2008.
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Reader Comments (Page 1 of 1)
12-10-2007 @ 5:50PM
william lindblad said...
One thing Congress missed is that it takes 2 gallons of water to produce one gallon of ethanol. It appears that the august body has a short memory. They passed "low flow" regulations on the plumbing industry 30 years ago when they realized that the country had an impending water shortage. The water shortage is still with us and getting more severe each year. Seems like a contradiction to me, but I guess we can expect beer and wine to made from re-claimed water sometime soon if you are willing to believe that cars will come first. I want to see them try to legislate waste treat tap water!
12-11-2007 @ 1:24AM
BoboTheClown said...
Corn-based ethanol is a bad idea for all the reasons cited above plus
1) there is a real question regarding the energy balance (energy output minus energy required to grow corn and distill and transport ethanol) of corn-based ethanol.
2) the effect on food prices extends beyond just corn and livestock; due to crop substitution, corn's effect on fertilzer prices, etc prices of wheat, soybeans, etc have skyrocketed this year.
3) ethanol cannot be transported via pipelines.
If we really want more ethanol, why not just lower the tariffs on Brazillian (sugar-cane-based) ethanol? Maybe because the Dems are looking for red-state votes??
Plug-in hybrids would be a much more cost-effective short-term solution. Longer term, electric and/or hydrogen power will be preferable to ethanol.
12-11-2007 @ 8:55AM
BoboTheClown said...
Corn-based ethanol is a bad idea for all the reasons cited above plus
1) there is a real question regarding the energy balance (energy output minus energy required to grow corn and distill and transport ethanol) of corn-based ethanol.
2) the effect on food prices extends beyond just corn and livestock; due to crop substitution, corn's effect on fertilzer prices, etc prices of wheat, soybeans, etc have skyrocketed this year.
3) ethanol cannot be transported via pipelines.
If we really want more ethanol, why not just lower the tariffs on Brazillian (sugar-cane-based) ethanol? Maybe because the Dems are looking for red-state votes??
Plug-in hybrids would be a much more cost-effective short-term solution. Longer term, electric and/or hydrogen power will be preferable to ethanol.