Friday, August 22, 2008
If America is addicted to oil then we’re addicted to corn. And as with oil, those with the lowest incomes are hit the hardest when prices of gasoline and food go up.
As college students, a lot of us are in that low-income bracket.
Don’t worry though, the government has your back. Washington has responded to the problem with another solution in the form of stimulus checks. Wait, you already spent yours?
To make matters worse, while people are increasingly experiencing “sticker shock” at the grocery store, the government continues to encourage the use of ethanol through subsidies and mixing requirements. Along with the increase in the price of oil, America’s increasing reliance on corn ethanol has significantly increased the cost of food.
Ignoring that it’s less fuel efficient than gasoline, requires more energy to produce than is gained and that it won’t support the amount of fuel necessary to fuel the economy, at best the use of corn-based ethanol has saved no money. Any money claimed to be saved at the pump has been lost at the grocery store.
Poultry, beef, pork, cereal, soft drinks and many juices also rely heavily on corn products in their production. Corn for fuel is increasingly competing with corn for food.
In 2006, a bushel of corn was $2, but this June it reached more than $7 a bushel. However, instead of rolling back the ethanol subsidies, which would lower the price of food, the government has gone in the opposite direction.
In December, Congress increased the amount of ethanol that states are required to mix in gasoline. The new bill mandates that 36 billion gallons of ethanol be mixed with gasoline by 2020. That’s 27 billion gallons more than the 2009 requirement.
So not only are taxpayers paying to pay more at the grocery store, but are headed to pay even more for higher prices as the corn supply is further strained. Last year, The Boston Globe reported that food prices were increasing at the fastest rate since 1990.
Texas Gov. Rick Perry spent the last few months unsuccessfully lobbying the Environmental Protection Agency to cut the ethanol requirement for Texas in half, but his request was rejected. Citing skyrocketing corn feed prices, Perry argued the ethanol mandate was bankrupting cattle producers in his state.
Though the corn ethanol industry is not going to disappear overnight, eliminating the subsidies for it and mixing requirements are the first two steps in encouraging alternatives. According to Slate magazine, subsidies paid for ethanol were $37 billion from 1995 to 2003.
However, since its unlikely ethanol use is going to go away entirely, it would at least make more since if the United States abandoned corn-based ethanol and started using other crops, such as sugar cane or beets. Both crops are about twice as energy efficient as corn and beets don’t have the problem like corn and sugar do with competing with the food supply.
Other countries have started using both for energy. Brazil has taken the lead on sugar cane ethanol, and France produces beet-based ethanol.
Investment in alternative energy sources is a good thing, but only provided that those alternatives are better than what we have now.
Mangiaracina is a Lenexa senior in journalism.
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Comments
Grocery store prices show problems with ethanol
The use of corn for ethanol is not driving the high prices you're finding in the grocery store. The cost of the foreign oil that's necessary for growing, harvesting, and transporting those crops to the grocery store is. If anything, the blending of ethanol into gas is keeping the cost of gas from being even higher.
Grocery store prices show problems with ethanol
Yes it is. It is directly related.
I don't know if you've ever done anything along the lines of - basic economics - but a stable and healthy industry does not need the government to provide most of the money and MANDATE that it is sold.
As a chemical engineer and someone who has studied energy quite a bit, I can assure you that in no way, shape, or form- ethanol is bad for the US, our energy situation, and the consumer.
Grocery store prices show problems with ethanol
Er. In EVERY way, shape, and form. Typo. Forgive me, commenting isn't my strong point.
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