Month: January 2007

A major boost of ethanol proposed by Bush

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Your comments are welcome if you are for or even against the proposed Ethanol mandates made by President Bush.

During tonight’s state of the union address, President George W. Bush will make a proposal requiring automotive users to use 35 billion gallons of ethanol and other alternative fuels by 2017 in the State of the Union Address tonight, a major move that could shake up the entire U.S. agriculture and energy industry.

That is almost seven times the amount of ethanol made from corn in 2006. Most of the ethanol difference would have to come from sources of plant cellulose, inedible material, yearly grasses and wood chips.

The bid of 35 billion gallons is almost five times the amount of ethanol that refiners are required to use by 2012.

It is a "very ambitious goal, but we think it’s achievable," said Joel Kaplan, the White House’s chief of staff for policy.

He said that the White House would ask for more funding for research and development in 2008 and also expected the 2007 farm bill to provide additional funds needed to create a cellulosic ethanol industry.

"It is a big goal," said Jon Doggett, a lobbyist for the National Corn Growers Association, "but it also has some time for us to hit that."

He and a lobbyist for the Renewable Fuels Association were invited to the White House for a press briefing where officials spoke to the news media on the president’s speech.

The mandate would displace nearly 15 percent of projected yearly gasoline usage in 2017.

The government could waive the mandate if officials decide that it is necessary.

Other fuels also would also be eligible for the mandate. Fuels include methanol and butanol, other forms of alcohol based fuels, and also hydrogen and biodiesel.

Bush is also proposing to increase the standards for fuel economy to save 8.5 billion gallons of gas by 2017. That would displace about 5 percent in the projected gasoline usage.

E85 Legislation

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United States Senator Chuck Hagel, Republican from Nebraska, joined a bi-partisan group of Senators to re-introduce legislation that would grant the Secretary of Energy to use Corporate Average Fuel Economy (CAFE) penalties to provide grants to eligible entities who install alternative fuel pumps for fuel types such as E85 ethanol and natural gas. Senator Chuck Hagel was one of an original co-sponsor for the bill in the 109th Congress.

U.S. automakers are creating an increasing number of vehicles that operate on alternative fuels, such as E85 ethanol blended gasoline, but only one percent of the gas stations in the U.S. provide E85 fuel. This legislation will provide grant funds for the construction or expansion of infrastructure necessary to increase the availability of alternative fuels. CAFE standards are the weighted average fuel economy for a manufactures production list of automobiles. Penalties are assigned to manufactures who do not meet the CAFE standards.

"Our nation needs alternative fuels to play an increased role in creating a broader and more diverse energy portfolio. We must begin to expand the availability of alternative fuels, such as E85 ethanol, to American consumers. This is common sense legislation that will help reduce our nation’s dependence on foreign sources of energy while at the same time providing additional markets for Nebraska’s agriculture producers," Hagel proclaimed.

Ethanol causes farmers to plant more corn in 2007

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TOLEDO, Ohio – Inspired by growing demand for corn for the growing ethanol industry, farmers across the United States are growing corn this year instead of soybeans, wheat and cotton.

Some in the Midwest are ending their longtime practice of rotating plantings of soybeans one year and corn the next, choosing to grow corn in consecutive years. Livestock farmers are turning pastures into cornfields.

“We have farmers half-joking about planting corn in their front yards,” said Matt Roberts, an agricultural economist at Ohio State University. “A lot of farmers see this as an opportunity to have a very good year.”

Prices for corn are up to $3.40 a bushel and are projected to approach $4, reaching highs not seen in the last decade. At least 6 million to 8 million more acres (2.4 million to 3.2 million more hectares) of corn will be needed to supply ethanol plants, analysts say.

Ethanol production is expected to double as new plants are built to turn corn into the gasoline additive, from around 5 billion gallons now to 11 billion gallons, according to industry estimates.

Private investment in ethanol plants has soared as government leaders have called for more production of renewable fuels.

Farmers in the Midwest may be able to make $50 per acre by going with corn instead soybeans, Roberts said. “That’s a tremendous difference,” he said.

Some farmers are contemplating planting continuous years of corn, but that can lead to pest problems and increased costs for fertilizer and seed, said Bruce Erickson, a Purdue University agricultural economist.

And those fields tend to produce less each year. Most farmers rotate their crops to stop insects and weeds and maintain soil nutrients.

“Most scientific research shows a 10 percent drop in yield when you plant corn on corn,” Erickson said.

In Louisiana, the number of acres devoted to corn likely will double and possibly triple.

“Everybody wants to get into corn this year, some who have never planted it before,” he said.

Jim Harper, who grows rice, cotton and sugar cane in Louisiana, said he could make $150 more per acre by growing corn instead of cotton if he has a good crop.

That gives him the idea of not planning any cotton for the first time in 30 years. “It’s just a better income opportunity,” he said.