by Mona Gallagher

Created on: December 08, 2008

Ethanol is billed as the answer to a clean environment with fewer carbon emissions with burning fuel, but it's more expensive to manufacture and government subsidies are necessary to keep the industry afloat. Land, normally used for growing crops, is currentlu used for growing crops for ethanol production in a global meltdown economy where food shortages are predicted worldwide.

Ethanol is bleeding the struggling economy and the payback is questionable. It doesn't increase gas mileage and since there's not as much energy in ethanol, it actually deceases energy efficiency. Ethanol is more expensive to make and transport. It can't be piped because of contamination issues and must be transported by truck and rail in special tanks.

Standard mixture for cars is an E10 mix (10- 90 mix) and any car can use this ten percent fuel mix. E85 ethanol is an 85-15 mix but only specially designed flexible fuel vehicles can use this formula and it's not readily available at your local gas stations. Energy efficiency factors aside, future cars are making use of technology that is beyond the capabilities of ethanol.

That leads to the question of why some politicians are solidly behind ethanol production.

Food shortages and government subsidies are the two biggest ethanol drains on the economy. By using land to grow fuel crops instead of food crops, we're exacerbating the problem of a food shortage. By supplying government subsidies we place a further drain on our economy. It's not likely that the farmers will see the subsidies because they may end up going to the ethanol manufacturing plants.

A twist in the scenario has an ethanol plant ready to shut down in Iowa. They've run out of money and are still processing corn bought at $6 a bushel while prices have fallen to $3. "When the corn prices fell, "trouble started, and Pine Lake didn't contract enough ethanol at a high enough price to cover expenses." They had been producing 30 million gallons of ethanol per year.

Pine Lake is currently looking for financing to continue operating. They made twenty-four million dollars profit during the first two years of production. It's the second Iowa ethanol plant that has halted production since VeraSun filed for bankruptcy.

The recent request for funds from the big three auto makers caused a stir in Congress and a demand a change in the philosophy of the auto manufacturing is forthcoming. Their business models need to change if the U.S. is to find clean fuel alternatives and become independent

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