Most people who link ethanol to rising corn prices forget to look at the prices of other foods, like potatoes, carrots, lettuce, and anything else you can think of. When ethanol usage was going up, corn prices did go up too, but so did all those other foods which had absolutely nothing to do with ethanol, but they went up at about the same rate over the same time period. It was mostly because of rising oil prices, which in turn made things like fertilizer and diesel fuel more expensive. Then oil prices droped, and food (including corn) became cheaper again.
And as for the corn ethanol taking away from food, thats a load of BS. Its not the corn kernels that we eat that gets converted into ethanol fuel, its mostly corn byproducts that get used. So unless you're concerned about having less corn based cattle feed, its not much of a problem. Additionally, while I'm not sure if its still the case, there was a time that American farmers were being paid
not to grow corn, in order to
lower the supply and keep prices higher. Even then, it still upset the Mexican farmers who could import US corn cheaper than they could grow it themselves.
Quote:
Originally Posted by a_Username
So, just ignore the point of government subsidizing alternative fuels? Assuming the study is correct and ethanol should be costing $3.92, then you have:
Ethanol - $3.92
Gas - $2.46
Of course, all other things be constant for this to be true; you would have to take out government interference in the oil market to reveal its actual market price as well. (Let's just say that gas would be drastically lower than what it is now.)
Your last statement is true, but the question is rather or not it is economically viable.
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Depends on gas prices. $3/gal no. $5/gal yes. $7/gal absolutely.
Here is another point to consider with ethanol:
Whats the best way to avoid damage caused by a spike in gas prices (such as the one in 2008)? Diversify fuel sources. The most viable way to do that at the moment is with ethanol. But spikes like that rise faster than production capacity can be added, the price of fuel can double in a mater of months yet it would take years to build more ethanol plants and get the feed stock. So capacity needs to be there before hand so it can meet the demand with minimal lag.