rebl01

Are We at the Bottom of the Ethanol Barrel?

Few thoughts to ponder.

Less than 2 % of the US corn crop is used for human consumption as cereal grain. We use almost as much for pet food as we do for cereal consumption. About 6 to 7% of the corn crop is used to make fructose and sweetners. (It’s cheaper than sugar, and sugar is surplus)

The corn to ethanol industry only uses the starch portion of the kernel. All of the protein, oil, fibers, minerals, vitamins, and other components remain and are available for utilization as food for either human consumption, or for their traditional use as livestock feed. This remaining portion is commonly referred to as DDGS.

In the dry mill ethanol industry, less than 2/3rds of the energy in a bushel of corn ends up as a liquid fuel. The remaining Btu’s/calories are in the protein, fiber, oil, etc. (DDGS). When those products are priced by the marketplace, it pays four times as much for the liquid fuel as it does the food portion.

When you read or hear that it takes almost as much energy to produce ethanol as it yields, the 136,000 Btu’s per bushel remaining in the DDGS is conveniently or mistakenly overlooked.

The amount of water needed continues to decrease.

One needs to look back at the infancy of the oil industry. How efficient were they? As I recall gasoline was a byproduct no one knew what to do with. Do I think corn alone is the answer, no, but we are getting there. While not able to invest in them I look at Range Fuels technology being the great leap forward for this industry.