Tuesday, November 23, 2010

Corn a Good Business to Be In

While following coverage of green regulatory decisions, two stood out:

1. Obama administration decision to put off E15 decision about adding 2001 to 2006 model year vehicles until later. E10 has been the standard across the country for years, and now that's moved up to 15% ethanol - E15 - on model year 2007 and newer vehicles. At first, the administration rejected anything older than 2007, but has recanted that move and is taking more time to decide. More vehicle tests need to be done, the EPA says.

2. California Air Resources Board (CARB) approved a resolution saying recent research had spurred a downward revision in estimated greenhouse gas emissions caused by changing land uses to plant more corn. With new rules for transportation fuel emissions scheduled to come into effect in less than two months, California regulators moved to revise their treatment of corn ethanol from being worse than gasoline to better, according to Greenwire.

If you're growing, processing, transporting, and selling corn, you're in a really good business these days. Every time someone pumps gas into the car, more corn is sold and that volume will probably be increasing. And if CARB says that corn ethanol has its benefits, that will open more doors.

Corn ethanol is transitional - corn and sugar cane ethanol are widely used in the US and Brazil, but they have their downsides for impact on the environment and raising animosity with industry groups that believe ethanol is creating unstable market prices that raise hackles for shoppers, sometimes causing riots around the world. The evidence of corn ethanol wreaking havoc on stores and prices is iffy, but its negative impact on the environment is more accurate. Yet until really good stuff comes on the market in advanced biofuels, we're stuck with corn ethanol.


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