US ethanol replaced about 2.6% of gasoline demand

US this year diverted 24.5% of its corn crop into ethanol production and replaced 2.65% of the total US demand for road transportation fuels — assuming that the 2007 figures for fuel use will be around the same as 2006, according to figures from the US Department of Energy which has issued preliminary ethanol production figures for 2007.  These show that in 2007 the US produced 6485 m gal ethanol — 49.6% of the world total –  and imported 361 m gal. Total consumption was 6846m gal. This displaced 4642 m gal of gasoline, based on preliminary data.

The US used 24.5% of the corn crop (3200m bushels) in the process.

According to the US department of Transportation, American road vehicles consumed 174 930m gal gasoline in 2006. Those numbers are likely to be updated in April 2009 for 2007.

All of this helps to put the current US pro-corn lobby lunacy into perspective. It also shows how little difference incremental planting and incremental improvements in crop yeild will make in the short- to medium-term. The last thing the world needs is the demand for grains to be getting close to the production levels of grains.

This also shows just how massive the demand for fuel is and how pathetically small attempts at growing our way out of oil dependency based on one type of technology are. If the entire corn crop were diverted to make ethanol, it would only replace 10% of demand.

 We all need to be a lot smarter about the kinds of things that we use for fuel, things like food waste and municple waste should be examined quickly and thoroughly. We should throw less away without getting the additoinal benefit from it. We should, through taxation if necessary, price gasoline at a level which reflects its true economic value and then we’d have an incentive to make all road vehicles much more efficient. That’s easy for me to say, I’m not standing for office. .  

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11 Responses to US ethanol replaced about 2.6% of gasoline demand

  1. John 1 September, 2008 at 7:48 am #

    Hi Simon

    Quite, but I read in a David Strahan article in the New Scientist that we would have to use a land area bigger than China to source enough biomass to replace all petroleum-based transportation fuels.

    Clearly, this is going to be impossible, but can second-generation technologies make enough of a difference quickly enough? The danger is that if they cannot we could suffer a series of recessions – amounting to a global depression – every time the oil price soars when demand recovers.

  2. larry hagedon 3 September, 2008 at 2:11 am #

    There is qite a lot of missinformation going around about bio-technology and alternative energies.

    It is deceptive to say we diverted 24 percent of our corn crop to Ethanol production. The truth is we only utilized 24 percent of our corn crop to best uses. These uses include several fuels, Ethanol, Methane, Bio-Butanol, hydrogen, diesel fuel, and what must be hundreds of corn co-products that are used in thousands of human food products, industrial chemicals, animal feeds and pharmaceutical applications.

    This is much better than the very wasteful and ancient farm practice of shoveling the corn straight to the livestock.

    We will be processing closer to 90 percent of our corn crop to best usages before long. The more corn we process for best uses the more foods, animal feeds, fuel, and all the other co-products we will have to market.

    The export market for the corn co-products is growing rapidly as we are producing way more corn based products than America can utilise today. The growing world is very hungry for our corn based people food, animal feed and industrial co-products.

    Next comes the conversion of billions of tons of the corn cobs and stalks and other farm, cannery, food processing, cheese processing and meat packinghouse bio-wastes to various bio-fuels and thousands of assorted other products.

    Forget those silly charts that say we will need so many billions of acres that bio-thechnology and alternative energies can never make a dent in our needs.

    We have vast resources yet untapped. Even if we can not replace all oil with alternatives, so what? All we need to do is fulfill the market demands as best we can. If we are short of replacing all oil, then we are short. So what? America will still be greatly enriched with 50 percent, or 75 percent of our fuel home grown.

    In fact we will soon convert all of our garbage, industrial wastes, hospital wastes, municipal sewage, farm manures, old computers, cell phones and printers, and much of our lawn clippings, construction and demolition debris into bio-fuels and various other products.

    We will even mine the old garbage dumps; and we are already starting to do so in fact.

    The so called dead zones in our oceans are extremely fertile and prolific growing grounds for various algaes for making a plethora of fuels, consumer products, human food ingredients, pharmaceuticals, industrial chemicals and high protein animal feeds.

    There are companies ramping up to use algae to clean up polluted sites, then harvesting the algae for fuel and other products. They will make a huge difference in our waterways and industrial and oil based pollution. Canada is using algae to clean up the massive pollution from their oil sands mining project.

    There are billions of dollars in new wealth being created in America as we build the infrastructure and employ the millions of people the bio-technology and alternative energy industries are already supporting.

    We will export billions of dollars of bio-technology produced products; and again we are already starting to do so. This will almost certainly give us positive trade balances for a change, probably even with China.

    larry hagedon
    http://groups.yahoo.com/group/AmericanFlexFuelExperience/

  3. Simon Robinson 3 September, 2008 at 12:15 pm #

    Hi Larry, I appreciate your passion and commitment to this area but the fact is that using corn to make ethanol diverts it from food.

    One bushel of corn (56lbs) produces about 17 lbs distillers grains (http://en.wikipedia.org/wiki/Distillers_grains and http://www.thehorse.com/ViewArticle.aspx?ID=12413). A bushel of corn also produces 18lbs (2.8gal (US)) of ethanol and just over 17 lbs of Carbon Dioxide.

    I’ve worked that out by adding up the molecular weight of ethanol C2H5OH = 46 and Carbon dioxide CO2=44 they are about the same so one pound weight ethanol produced has an equivalent amount of carbon dioxide associated with it). There is some weight left over in this calculation about 4lbs, so its not perfect. I think that it is pretty close though.

    Converting three pounds of corn to ethanol effectively reduces the mass of food available by two pounds compared with shoving that corn directly in to the food chain.

    It doesn’t matter that the individual products that can be made from food grains have higher energy content than corn. Their volume simply cannot make up for the volume that is burned or lost to the atmosphere as carbon dioxide during fermentation.

    I agree with you that we all need to be smarter about using the waste that is lying around from lawn clippings and land-fill. These should be explored more fully and hopefully commercialised. New technologies based around algae and cellulosic ethanol also need to be properly scrutinised and utilised.

    But using food to make fuel is like using antique furniture to heat your home. It might be OK if you’re desperate, but its very costly.

  4. Derek Masterson 3 September, 2008 at 8:19 pm #

    Simon,

    Are you really falling into the trap of thinking that using 24.5% of something to get 2.6% of something else is bad simply based on the raw percentages?

    If corn yields magically doubled and then we used 100% of that surplus for ethanol (making ethanol from about 62% of the corn grown) it seems you would convulse in horror. Not everyone would automatically double their food corn intake, you know. Isn’t it obvious that if we are meeting our corn food needs, then any increase in production could be put to other uses (ethanol being only one of many)? If production growth outstrips food need growth, then why not?

    If you want to debate the issue of subsidies or federal spending, then there’s at least a grain of reasoning and logic that could be applied against current policy. However, if you insist on scaring people into thinking that the farmer is starving the population by withholding all that field corn from the human food supply, that’s dishonest.

    Lastly, you rail against the futility of a solution by growing more crops, no matter how much it helps, simply because it’s not a single answer solution? And yet you think that other ways of lessening fuel demand in small increments (such as conservation) is a good thing? You can’t have it both ways.

    Next time I see those boneheads holding up tire pressure gauges at Barack Obama speeches, I’ll look for you.

  5. larry hagedon 3 September, 2008 at 10:22 pm #

    We have no shortage of corn based products, for any purpose including food.

    Most corn grown has been simply fed to animals, not used for human food. There are around 4,000 food products on most US supermarket shelves made with corn in them, but the shear volume of corn based ingredients in many of them is often minor. A big $4.00 box of corn flakes has only a few pennies worth of corn in it.

    Corn is not being grown at anywhere near the potential, either in the recovery of desirabble components or in total acreage.

    We are growing more corn today than America can consume, feed to our livestock or that the Ethanol plants need. We are keeping some in reserve and exporting the balance.

    The American problem has always been large agricultural surpluses, that is why our government pays farmers billions of dollars to not grow corn and other crops. Finding market has always been the problem. By processing corn to best uses we are greatly expanding our markets and are solving that problem.

    I see they might have found a new export market for some of our excesss corn, Vietnamese fish farms. They are working on their sales pitch for them right now.

    World human food markets are not so very interested in corn as most nations use rice or wheat as their staple food crop, yet we are selling as much as we can. Export sales of corn for animal feed has more potential. There is plenty of animal feed left to meet the market demand after we take the fuels and other co-products out.

    Three things are noteworthy:

    We can still expand our acreage of corn substantialy, and more and more fallow land is being returned to production. Last I checked, we were down from 44,000,000 idle acres to around 30,000,000 acres of federaly subsidized CRP land still lying fallow.

    We are using modern science to custom design corn for the end uses, significantly increasing yields. Research and breakthrus in technology are ongoing.

    The more corn we grow for ethanol, the more surplus food and animal feed we need to find a market for.

    One day we will reach our capacity to grow more corn perhaps, but we are not there yet, nor even very close, and we will keep on increasing our production of corn based fuels, human foods, animal feeds, pharmaceuticals and industrial chemicals as fast as we can develope markets for them.

    A massive game changer is likely coming. Green Algae pulp, left after the oil is removed. It is a high protein food that has been used for centuries for human food additives, animal feeds and pharmaceuticals. As we ramp up production of green algae crude oil, we will produce huge volumes of high value green algae protein to find new markets for. I rather expect feed costs for livestock will come way down in a few years, as we blend more and more abundant green algae protein in our feeds.

    larry

  6. Simon Robinson 4 September, 2008 at 10:52 am #

    Hi Derek, thanks for your analysis.

    No I’m trying to point out that corn is a very unsustainable fix. It will be possible to increase the area available for planting, it will be possible to apply more fertilisers (making the US more dependant on another set of imports) and it will be possible to develop more highly yielding varieties of corn. But that hasn’t been happening as fast as the growth in the volume of corn going into biofuels in the US over the past three years…

    If you turn more available crop land over to producing corn, then you reduce the proportion available to produce wheat, other grain crops that could substitute for corn. If demand for food remains the same then this process will raise the price of all grains, not just corn.

    The price of corn may be one thing that limits the amount of fuel ethanol made in the US. Removing subsidies would stop the process sooner. But there would have to be similar changes to subsidies for US farmers, wouldn’ t there?

    The US is not alone. It is part of a global market in grain. If the development of the US ethanol industry had taken place slowly over a decade or two then there is a chance that the world would have been able to absorb the changes. But it has been a sprint to ethanol which has destabilised the market and ramped up the price (check out the price of corn on CBOT over the past three years). I’m not against farmers making a living, my grandparents worked on the land.

    That applies to farmers the world over not just in the US and Europe. Excess grain from farmers in the US is used around the world it is either supplied as aid or dumped on the markets in countries where there is little protection for farmers. This dumping policy makes weak countries more reliant on cheap grain. Here’s a quote from Christian Aid on biofuels and grain policy. (http://www.christianaid.org.uk/issues/lifeonthemargins/stories/rising_food_prices.aspx)

    Christian Aid analysis shows that stable and secure markets are essential to increase staple food yields, and collective farmer organisations can help marginal producers get their goods to market.

    Subsidised food production by rich countries that were immune from pressure to liberalise has undercut producers in the developing world and left them reliant on imports – despite potentially lower costs of domestic production.

    The recent shift in subsidies to biofuel production has brought a sudden end to much of the related food dumping, at a time when domestic production in many countries is on its knees.

    Back to me
    That doesn’t matter if you’re paying $1.50 for box of cornflakes containing $0.06 of corn in the price (up from 3 cents last year). But if you have to buy a bag of grain and take it home to turn into food. Then that price has doubled. How would you feel about that?

    Simon

  7. Simon Robinson 4 September, 2008 at 11:00 am #

    Hi Larry,

    If you feed corn to chickens and then eat the chickens yourself… then it is used as human food… The US has been shielded from the effects of the rise in corn price because of the amount of processed food consumed. If Americans had to buy bags of grain, carry them home and make tortillas, for example, you’d notice the price change pretty well I guess. There are big problems in the world market for grains. Check out this piece from Christian Aid http://www.christianaid.org.uk/issues/lifeonthemargins/stories/rising_food_prices.aspx. US grain exports are often dumped in the developing world, this undercuts their farming and makes them more dependent on cheap imports of grain from overseas. Fortunately for you and me we live in bid trade blocs that can protect their farmers. This means we over produce and don’t go hungry. The problem is that the margin between supply and demand is shrinking as we divert more corn to ethanol.

    We do need game changing technologies and processes, you are absolutely right about that.

    Simon

  8. larry hagedon 4 September, 2008 at 3:18 pm #

    Hi Simon,

    You of course make a good point that feeding corn to chickens produces people food.

    The thing to remember is that we have a surplus of corn and all the co-products of corn; like food and animal feed. By making fuels, phamaceuticals and industrial chemicals from corn we can help market the product.

    We will continue to process increasing amounts of our corn and other grains like soybeans because it makes sense, incereases our markets and our returns on investment.

    As long as we can expand our markets for the products of grains, we will continue to produce more grains. Eventualy we will reach our production capacity but the crop experts at the USDA and many Ag colleges believe we can at least double our current corn production, while still meeting the market demand for all other grains and grains products.

    The problem with American Agriculture has always been a surplus the threatens to crash the markets and bankrupt the farmers. We do not have to make a trade off of food vs fuel. we have more than enough corn and wheat and a hundred other crops to make a surplus of all agricultural produce and products for some time to come.

    Prices go up due to shortages or to costs or both. There has not been a shortage of corn or any other commodity except foreign produced rice; which was as much a political as a volume shortage.

    Corn and all other commodities have gone up primarily because of the rapidly increased costs of production, which has been mainly due to the escalating price of oil.

    It would be nice if food prices would come down now, but we have had these price jumps many times in the past and history tells us they are here to stay.

    larry

  9. larry hagedon 5 September, 2008 at 2:21 am #

    Ethanol production is becoming irrelevant to Corn availabilty.

    two points:

    Corn processors will now need the income flow from the fuels, ethanol, bio-diesel, bio-butanol, methane, syngas, in order to eak out a profit in processing corn for the foods, animal feeds, and other products. The processing margins require utilizing the entire corn kernel for best uses or you can not compete. Ethanol is no longer a choice, it is becoming essential to making a profit processing corn.

    Ethanol producers can choose any carbonaceous bio-mass on the face of the earth to make their ethanol out of, including green algae, sewage and garbage. Many other feedstocks will make cheaper ethanol than corn will.

    Ethanol production from corn will be a minor factor, often sold at a production costs loss but essential to covering the price of the corn. Otherwise it will be important only to the corn processors as they compute profits and losses from their other corn co-products.

    By the by, selling at a loss is a fine old Ag commodities tradition. Hamburger often sells for less per pound than the price of butcher cattle on the hoof. The difference is in the higher priced steaks. Dont forget the hide. That can mean the difference between profit and loss for the whole steer.

    You can no longer make a profit making ethanol from corn, unless you can sell the other co-products at a good markup. Neither can you afford to not make the corn based ethanol and diesel fuels, You need them to help cover the cost of the corn.

    Making money in ag commodities is not for the faint of heart.

  10. Simon Robinson 5 September, 2008 at 12:01 pm #

    Yup, Once you’ve grown your corn, you want to use every last drop of its goodness.

  11. Ram 8 December, 2008 at 8:09 am #

    There is a considerable alternative feedstock other than corn/sugarcane to produce high quality ethanol.

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