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Big oil & big lies spell big trouble for ethanol
There was a time in the not too distant past, when the ethanol industry would have jumped for joy to get attention from the mainstream media. Today, however, the kind of attention ethanol is getting is unwanted and undeserved. With gasoline prices skyrocketing toward $3 a gallon, everyone is looking for someone to blame, and ethanol has become a convenient target.

East Coast newspapers and big TV networks have been taking potshots at the renewable fuel made from midwestern corn. These stories fall into three main groups: higher prices for ethanol have caused high price of gasoline, replacing MTBE with ethanol as an additive has caused a shortage of gasoline, and using corn for fuel will lead to food shortages. All of these charges are false and not supported by the facts, but when has that stopped the media from running with a good story?

Big oil companies, looking for a place to hide as the price of crude soars over $70 a barrel, are quick to stoke the fires of misinformation. They are moaning and groaning about how hard the switch from the proven carcinogen MTBE is. The fact that the industry has known about this mandated transition for years always gets left out of the story. The fact that 60 percent of the price of a gallon of gasoline is determined by the price of the oil that goes into it also gets left out of the discussion. A study by the U.S. Department of Energy shows ethanol only contributes pennies to the cost of a gallon of gasoline.

During a recent press briefing by a coalition of farm and energy groups held to counter the aforementioned bad publicity, Bob Dineen, president of the Renewable Fuels Association, stated that 85 percent of all ethanol is sold on a long-term contract. This means the ethanol that refiners are using to blend with gasoline today was purchased six months ago when prices were lower.

As for the “Chicken Littles” of the world who are running around squeaking, “If we use our food for fuel, we will all starve,” ignore them. American farmers have turned out back-to-back 11 billion bushel corn crops, one with less than ideal weather. Besides, after you use corn for ethanol, the protein is still left. High-protein livestock feed is one of the byproducts of the ethanol process. So, duh, we can have our food and fuel, too.

This battle of ethanol is really just a skirmish. The real battle will come with the move to E-85. This is where big oil will dig in its heels and fight like an angry goose. Blending ethanol at 10 percent means the fuel is still 90 percent petroleum. E-85 on the other hand is 85 percent ethanol and only 15 percent petroleum.

Currently E-85 is not a threat; there are only a handful of stations selling the fuel and only a few million cars in the whole country capable of using the stuff. If E-85 catches on and begins to take a bite out of oil company profits, just watch how things change.

Remember big oil owns or controls most of the retail fuel stations, and they will be slow to install E-85 pumps.

It will likely take government mandates to move E-85 from the fringe to the mainstream. Since big oil lobbyists control Capitol Hill, this government action will have to come on the state level. Mandates or incentives can be quite effective in driving consumer acceptance of this new fuel option.

Hopefully, the mainstream media will not succeed in turning consumers against ethanol. It is the only short-term alternative to petroleum we have. It is safe, clean, economical, and comes from a reliable renewable source. Compare that to oil, which is dirty, dangerous, expensive and finite. Which do you think is the best choice for America?

This farm news was published in the April 26, 2006 issue of Farm World.