The Ethanol/Oil Question
The Ethanol/Oil Question. I’m Greg Martin with today’s Line On Agriculture.
Like most of you I am shocked with $4 a gallon gasoline. My question is, why? The answer I get back usually is confusing and just adds more questions. Then we hear that ethanol and biofuels are keeping gas prices from being twice as much.
VILSACK: On average across the nation consumers would be paying 89 cents a gallon more for their gasoline were it not for ethanol and biofuel. And if for whatever reason ethanol production were to halt immediately we could see potentially a doubling of gas prices.
That was Ag Secretary Tom Vilsack talking to reporters. One question I get a lot of is why don’t we just use the resources we have available to us. Estimates are that off shore oil reserves and oil shale deposits would keep us in gasoline for quite a few years. My question there is, then what? Do we hope that by that time we will have developed a pill we drop in the gas tank? Electric vehicles are in their infancy but not all oil is used for automobiles. Will a nation of electric cars drive down the need for oil AND ethanol? We still have to generate that electricity some how. Then the question always crops up and food versus fuel. Corn is for eating. No corn is for making fuel. No...it is making food cost more. No that is the cost of fuel to deliver the crops and food. And then we are back at the beginning again. Now the Department of Agriculture is looking at going beyond corn to make alternative fuels. The Undersecretary for Rural Development, Dallas Tonsager, is promoting the use of other crops and materials for ethanol production. He says the Department can help operations get started with grants, loans and loan guarantees.
TONSAGER: These second and third generation biofuels, if we can help finance those - they’re generally very, very expensive projects so we’re interested in working with anybody who’s interested in developing those kinds of ventures and we are interested in getting into almost any kind of material that might be used for biofuel.
It seems everyone has an opinion on the issue from leaning to the left or right or even straddling the center line. Politicians have taken sides and haggle over which direction to head. Washington Congressman Doc Hastings suggests that biofuels would fit into his “All the Above” approach.
HASTINGS: This would fall broadly into my support of an “All of the Above” energy plan. Clearly that would fall into that category.
I’d love to hear your thoughts on the issue. That’s today’s Line On Agriculture. I’m Greg Martin on the Ag Information Network.
