12-9 IAN Ethanol Corn or Not
A recent EPA proposal suggested reducing something called Ethanol Volume Obligations. What does that mean?
The EPA is proposing to reduce the RVO for conventional corn based ethanol by 1.39 billion gallons and I wondered what, if any, impact that would have on corn producers. The man who is always in the know when it comes to agri-economics is Paul Patterson at the University of Idaho. I've seen studies on both sides of the issue in terms of whether corn, grown to be used for fuel, whether or not it is a net positive or net negative and I think those battles will be fought for the foreseeable future. I think the most un-biased analysis that I have seen from the department of energy showed kind of a mixed bag. It was really close. There was a net energy production, maybe not a real big one compared to how many BTUs of energy go into the production of corn versus how many come back out. But then it’s all dependent upon where you start and stop that calculation. Some of the studies that I have seen have shown a negative impact particularly looking at corn being produced as a biofuel. One of the things they look at is the entire energy complex going clear back to the coal that gets mined that goes to help the steel that makes the tractor. When you start doing that type of calculation from an energy consumption standpoint, it makes it difficult to make anything look feasible. I am not in a position to judge the validity of a lot of those studies but I would say that overall it is a bit of a mixed bag in terms of the analysis that I have seen.
