Corn Ethanol: Something Is Fundamentally Flawed

While New York's Mayor Michael Bloomberg was busy unveiling a package of measures aimed at making NYC green (including reducing CO2 emissions by 30% by 2030), the state's Governor, Eliot Spitzer, was making his reservations about corn ethanol known, as reported in the Globe & Mail.

This adds yet one more (powerful) voice to the chorus of those skeptical about the viability of the corn ethanol industry.

The article also notes that Dr. Dan Kammen, an influential Berkeley academic and adviser on climate change to California Governor Arnold Schwarzenegger, is also among those who doubt that corn ethanol is the best route to follow to deal with climate change. This likely means that at least one of Arnie's advisers on the politically-sensitive issue of climate change is advising caution on corn ethanol.

Finally, the article recognizes that even powerful foes in high places might not be able to curtail the progression of the "ethanol juggernaut."

Corn ethanol is a classic case of an investment story where one could be labeled as preferring "to be right rather than rich." As far as I go, I see enough red flags to convince me that there is something fundamentally flawed here. But I would definitely be interested to hear more from the "other side." In the meantime, I prefer to put my limited supply of money behind things that look fundamentally stronger.

Comments

[Joe Rotger:]

Yesterday I heard from a friend, "When it doesn't make sense, there's probably something else underneath, tax related probably". How about: moving away into a new form of agricultural subsidy to curtail complaints from emerging countries (free markets is a one way street), or that it's politically correct to protect your farmer constituents, or that the big agros have good lobbying...

Joe

2007 May 01 09:42 AM

[banana638:]

As a substitute to corn based ethanol. I haven't read any article mentioning the possibility and the viability of cultivating a U.S. based sugar cane based ethanol akin to the one used in Brazil.

We have the acreage and the proper climate here in the U.S. to pursue this alternative energy source which I understand is more efficient than the corn based alternative.

[e-mail]

2007 May 01 09:06 PM