Such is the expanding nature of the corn ethanol industry in the U.S., that the nation could switch from being the world's biggest exporter to corn to a net importer. In the meantime, however, U.S. farmers look set to make a killing on the world markets where corn has reached its highest price for a decade. If the U.S. did stop exporting corn, it would have a drastic impact on the global corn industry... and on world food supplies. This is a good example of how, in the global economy, no commodity can be considered in isolation. Why is there so much interest in corn-ethanol now, in a country which formerly could claim to be the world's greatest exporter of oil? The short answer is "foreign oil-imports". The U.S. is now absolutely dependent on imported oil, having passed its own national "Peak Oil" in the early 1970's. Conflict in the Middle East, and threats of further actions from either side mean that supplies of oil might become increasingly insecure. Additional pressure on what is often overlooked as a finite resource must increase from burgeoning demand from the Far East, and the West must come head-to-head in the near future with developing countries like China and India for this same resource. Indeed, it was announced this morning that the Anglo-Dutch company Corus (formerly British Steel) is accepting a £4.3 billion ($8.1 billion) takeover offer from its Indian rival Tata Steel. Hence, there is a growing desire to develop "home-based" energy sources, and corn-ethanol is popular in the U.S. as a potential "secure" fuel for the future, even though the Energy Returned on Energy Invested (EROEI) remains the subject of considerable controversy. As I have pointed out before in these articles, ultimately growing fuel must come into direct conflict with growing food, and having reached the half-way point of "world "Peak Oil", we could see "Peak Food" if conventional agriculture were to become compromised by the commandeering of corn crops for ethanol production. Not that the two matters are disconnected, since most of the corn is grown using oil-fuelled farming methods including the chemical fertilisers used to force-up yields of corn and all other crops in the first place. It is all very complicated and I question whether in reality corn-ethanol will solve the problem of fuel supply, ultimately.
Most analysts do not see an immediate dramatic switch from exporter to importer, but among his other "green" proposals, President Bush has called for the U.S. to be using 35 billion gallons of renewable fuels by 2017, and it is hard to see how such a massive target will be borne by the industry, without curtailing its exports. This amounts to a five-fold increase in ethanol use, and indeed even Bush admits that the constraint on the final production level is how much corn the American farmers can actually grow. Current law requires that 7.5 billion gallons of renewable fuels (mostly ethanol) be used by 2012 (the end of the Mayan Calender?), which is somewhat above the 2006 production figure of around 5 billion gallons.
Producing 35 billion gallons of ethanol from corn alone would absorb the entire present U.S. corn crop at current production yields - about 11 billion bushels - which would appear to put the kibosh on the whole scheme. If ethanol is burned in suitably adapted engines, a par weight for weight (roughly) with its equivalent of oil-based fuel can be drawn. Hence, 35 billion gallons is equal to around one billion barrels of oil. Now the U.S. gets through about one quarter of the world's produced oil (30 billion barrels), or 7.5 billion barrels annually. So, even if it did use its entire crop of corn to fuel cars, trucks and planes rather than people, it could still only meet around 13% of demand. I concede that this figure could be increased by suitable hybrid engines, based on fuel cells but these have yet to be developed, and the real existing oil reserve is already running down by the second. Thus current demand cannot be met according to any sensible analysis of the facts. Even using also not fully developed technology which employs enzymes to break down the (woody) cullulosic material in plants e.g. from switch grass and corn husks into ethanol, and diverting a realistically possible proportion 20% of the corn crop, the U.S. might meet a total 5% of its current fuel demand from corn. The loss of 20% of America's corn crop would definitely hit the capacity of the world market and probably countries such as Argentina and Brazil would meet some of that resulting shortfall.
The conclusions are clear enough, however, that along with all other Western countries, transportation must be cut in the U.S. to meet the needs of a more locally based economy, which reduces total fuel demand probably by around 90%. In this way, a mix of electricity (supplied from all sources including nuclear from thorium) could sustain tram-systems for moderately-sized urban conurbations and electrically-based (fully or hybrid) vehicles for essential use. An increased exploitation of coal could also place more fuels on the shores of the U.S. (and within all countries) made by liquefaction processes, but that would need to be done paying due regard to its environmental impact. Nor is it realistic that China and India can attain a Western standard of living that even the West can no longer bear. Every one of these analyses points away from globalisation and its associated extensive transportation, especially in moving goods around the world. Local production avoids this entirely. Localisation must happen either through default or design, and default is the hard option I would prefer to avoid.