Environmental group raises concerns about corn for fuel

by Ron Sterk
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KANSAS CITY — Environmental group Earth Policy Institute (E.P.I.) has raised concerns about whether there will be sufficient corn for food based on a study that says corn use for ethanol fuel may be greater than current industry projections.

In its own study released Jan. 4, the E.P.I. said the ethanol industry has under counted the number of ethanol plants under construction by more than 25% and the U.S. Department of Agriculture has underestimated the amount of corn needed to produce the fuel.

The E.P.I. said 116 plants were producing ethanol at the end of 2006, with 79 under construction and 11 expanding. In its year-end review, the Renewable Fuels Association (R.F.A.) count was 110 plants producing, 63 under construction and eight expanding. Another 200 ethanol plants were in the planning stage as of Dec. 31, the E.P.I. said.

In addition to the R.F.A., which represents the U.S. ethanol industry, the E.P.I. used estimates from the American Coalition for Ethanol (ACE), publisher of Ethanol Today, BBI International, publisher of Ethanol Producer Magazine, and Europe-based F.O. Licht, publisher of World Ethanol and Biofuels Report. The E.P.I. said lists from the R.F.A., BBI and ACE were incomplete, but it drew on comparisons, along with F.O. Licht reports, to determine its final count.

Based on its higher plant numbers, the E.P.I. said production of ethanol could approach 15 billion gallons in 2008 and require about half of the projected U.S. corn crop that year.

U.S. ethanol production was an estimated 5 billion gallons in 2006.

"Because of inadequate data collection on the number of new plants under construction, the quantity of grain that will be needed for fuel ethanol distilleries has been vastly underestimated," the E.P.I. study said.

The current U.S.D.A. projection for the amount of corn needed for fuel is 60 million tonnes (2.4 billion bus) from the 2008 harvest, vastly below the E.P.I.’s projection of 139 million tonnes (5.5 billion bus) needed by that time if the number of plants in operation, under construction, expanding and in planning come on line. It should be noted that the U.S.D.A. projection was made early in 2006, prior to the surge in ethanol plant plans. The U.S.D.A. will revise its number at its annual Outlook Conference in early March.

"This unprecedented diversion of the world’s leading grain crop to the production of fuel will affect food prices everywhere," the E.P.I. said. "As the world corn price rises, so do those of wheat and rice, both because of consumer substitution among grains and because the crops compete for land."

The group also projected the prices of products that use corn, such as milk, eggs, beef and others, also would rise.

Instead of allowing ethanol production to grow unabated, the E.P.I. proposed that U.S. fuel efficiency standards be raised 20%, a shift to more gas-electric hybrid cars, increased use of wind energy, and a moratorium on licensing new ethanol plants. The group suggested a goal of "just enough fuel ethanol to support corn prices and farm incomes but not so much that it disrupts the world food economy." It also supported increased effort to make cellulosic ethanol from non-food feedstock.

"The grain it takes to fill a 25-gallon tank with ethanol just once will feed one person for a whole year," the E.P.I. said.

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