Forget the Ethanol Myth — Avoid Biofuel Bubble

An old Midwestern maxim deems a corn crop healthy if it’s “knee-high by the fourth of July.”

Yet when it comes to the expectations that corn-based ethanol will cure America’s dependence on foreign oil, the hype is way over everyone’s head.
Say you were able to cultivate every acre of Illinois for corn-based ethanol. This is purely hypothetical as it would involve bulldozing Chicago and other cities and towns in the Prairie State. As an Illinois resident surrounded by cornfields, fleeing demolition is not my relocation fantasy.

One of the potentially most productive corn-growing states on the planet would yield about 5.7 billion bushels of corn and 16 billion gallons of ethanol, according to Charles Washburn, professor emeritus at California State University in Flagstaff, Arizona. He has researched the subject over the past 45 years.

The Illinois mega-crop would provide only 0.8 percent of annual U.S. gasoline and diesel-fuel use, Washburn estimates, subtracting the energy it takes to create ethanol.

Of course, U.S. energy consumption isn’t a static beast. Washburn further projects that “a new corn field the size of Illinois would be required to meet our transportation energy growth every seven months.”

Even if every bushel of U.S. corn, wheat, rice and soybean were used to produce ethanol, it would only cover about 4 percent of U.S. energy needs on a net basis, Washburn estimates.

Bloomberg