Mother Nature Ethanol’s Friend and Nemesis

The uncertainties of ethanol are mostly weather related. While this won’t come as any great revelation, it has certainly come home to roost in the past couple of years. The importance of the ethanol industry to the energy security and price of gasoline in America is not even a question any longer. The question is what’s the weather forecast?

As any farmer will tell you, depending on the weather is a helluva way to run a business. Unfortunately, the weather not only affects the production cost of ethanol, but more importantly it negatively affects public opinion and political support. The oil industry clearly has its obstacles to overcome as well, such as drilling costs, reserve limitations, etc. Most of those numbers are kept close to the vest, however, and since no one really knows the actual reserve limitations, we pretty much have to take them at their word.  On the other hand, the weather that affects corn production is public knowledge and speculation can run rampant as to what effects it will have, often sending shockwaves of hesitation through Congress.

It seems to me that much of the consternation over corn-to-ethanol, including the current debate on the renewable fuel standard (RFS) is rooted in America’s ability to produce sufficient corn to meet the needs of food and fuel. This, of course, is largely dependent on Mother Nature. As long as we depend on corn as the primary feedstock for ethanol production, I see no way to avoid this continuing cycle of uncertainty.

Make no mistake, I fully support the use of corn as a feedstock for ethanol, even though it will go through its ups and downs riding on the weather. It has never been a food vs. fuel issue. As anyone with half a brain will tell you, we produce more than enough corn to supply not only our global commitments but also enough to produce 10 percent or more of America’s fuel supply. We simply cannot trash an entire industry that has added so much to our economy, our energy security and to our environment because we have a bad weather year. Nor can we ignore the fact that we will have another bad weather year at some point and corn production could again be limited. 

Rather than throw the ethanol industry under the bus because of a bad weather year, we should be creating a feedstock reserve during the high production years. We have already capped the amount of ethanol from corn at 15 billion gallons per year in the RFS, so we know what we will need year in and year out. Now we should begin building a corn reserve specifically for ethanol production during those years of bumper crops. I wouldn’t begin to detail the logistics of how, but I know that there are many in the USDA who would be willing and able to configure such a strategy.     

But first, Congress needs to put aside the weather issue and the oil industry propaganda about food vs. fuel and land use and the other nail strips that have been tossed in front of the tires of ethanol and ask a simple question: Does ethanol have a place in America’s energy future? If the answer is no, then whether it be corn or cellulose as the feedstock there is no point in continuing, because there will always be weather issues and fabricated nail strips no matter what feedstock is used. If the answer is yes, then the question is what do we need to do to preserve ethanol’s future? Congress should work together with the appropriate government agencies to help build a sustainable pathway that ensures the future of this important energy source rather than succumb to the propaganda of those who are bent on destroying it.

That’s the way I see it!

Author: Mike Bryan
Chairman, BBI International
[email protected]