Lousy corn harvest, drought, makes ethanol blends a stickier wicket

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The terrible drought and corn harvest have some dire implications across a number of sectors, including gasoline production. Image from Wikimedia Commons.

Many years ago, the federal government ordered that gasoline be blended with corn ethanol, basically moonshine, tying our gas supply to our corn supply. This year, the corn harvest has been abysmal after the worst drought in living memory, meaning higher ethanol blends are a more daunting proposition.

EPA petitioned to postpone E15 after corn harvest

In case anyone missed it, a drought occurred this summer, the worst in living memory and, number-wise, in more than 50 years. The effects are harsh for producers of many crops but a bad harvest of one of the most vital crops, corn, is a bit more complex than people paying a dime or two more for a loaf of bread.

It has to do with gasoline, since all gasoline currently sold is a 90 percent gasoline, 10 percent corn-based ethanol blend or E10. Ethanol is an alcohol distilled from corn, or in other words, moonshine, panther’s breath, white lightning, hooch, rotgut, ruckus juice, sweet spirit of cats-a-fighting, etc.

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Currently, the Environmental Protection Agency is days from implementing a changed blend, E15, but, according to AutoBlog, a number of organizations are lobbying to delay it.

Days to decide

The EPA has been petitioned to grant a waiver, delaying the implementation of the E15 blend. About 200 Congresspeople, United Nations officials, farmers and scientists are hoping the agency will grant a waiver.

The effect of not granting a waiver would be that 15.2 billion gallons of ethanol would have to be distilled for blending purposes. In 2007, five years ago, it was 5 billion gallons, a three-fold increase since then.

In the meantime, this summer’s corn harvest was abysmal. According to an August press release by the  Energy Information Administration, the Department of Agriculture reported in May of this year that between 75 and 80 percent of corn harvests were “good or excellent,” less than 20 percent as “fair” and less than 5 percent were “poor or very poor.” The economic damage is much worse than just paying high interest on car loans credit.

August harvests were almost the exact opposite; 50 percent of harvests were poor, less than 25 percent were “good or excellent” and the number of “fair” harvests were about the same. The decline was almost linear, with every few weeks getting worse, but accelerating over July.

Widespread repercussions

The issue presented by the lousy corn harvest is that more ethanol is slated to be needed when there is less corn available. Edible corn, the kind at the supermarket, is one of the least common varieties; most corn ends up as ethanol or as feed grain.

As a result of the bad harvest, according to the Huffington Post, roughly 40 percent of the nation’s corn harvest will go to making fuel, which will drive prices up. This means that meat prices, such as chicken, pork and beef will go up, as well as prices for all dairy products. Corn prices have already gone up 400 percent in the past seven years, according to AutoBlog.

Ethanol producers are hurting, too. According to Minnesota Public Radio, ethanol producers in that state were shutting down production in the wake of the harvest. Plants in Kansas, Nebraska, Indiana and other states were idled as well. If there are fewer blenders, less corn to go around and so forth, this also means the price of gas can go up too.





Huffington Post: http://www.huffingtonpost.com/2012/08/17/ethanol-mandate_n_1799046.html

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