Ethanol: Not Economically Viable
Ethanol plants are facing bankruptcy due to rising corn prices and too-low ethanol prices.
Agriculture Commissioner Roger Johnson says plummeting ethanol prices and rising corn prices are causing problems in the ethanol industry.
There are reports that some U.S. ethanol companies that are on the brink of bankruptcy.
You know why this is happening? Because nobody wants ethanol. Most of these plants were planned and built during a time when the sale of ethanol was heavily subsidized. That subsidy created artificial demand for the product, which in turn ramped up demand for corn (thus driving the price of that crop higher). Now that subsidy has been dropped and a simple truth as emerged: Ethanol isn’t as good as gasoline.
Even when ethanol is $0.10 - $0.60/gallon cheaper than regular gasoline it still doesn’t get a lot of buyers because it makes engines less efficient. That loss of gas mileage means the fuel ends up being more expensive than gasoline in terms of real cost even given ethanol’s often cheaper price.
I suspect politicians will likely try to solve this by just mandating the sale of ethanol at our pumps.
