All the money rolling into the ethanol/corn industries may come to a screeching halt in a year or two, say researchers at Iowa State University. Inside Green Tech spoke to Bruce Babcock, economist and director of the Center for Agricultural and Rural Development at ISU, who say that, "We think the expected returns to an ethanol plant are zero or negative in 2008."

That's a dire prediction for an industry that's been building ethanol plant's like there's a greener tomorrow in each one. And it's certainly different than what people in the industry are telling AutoblogGreen.
Babcock has his reasons, though: rising prices for corn feedstock, more ethanol on the market which leads to falling prices. This year there will be about six billion gallons of ethanol made in the U.S. "As we move beyond six, seven, eight billion gallons, we think the price will drop," Babcock said.

Of course, if E85-capable vehicles start to become more popular, then Americans will be able to use a bit more than six billion gallons a year. Of course, if cellulosic ethanol plants start to make the biofuel cheaply, then the profits for corn ethanol drop. So many possibilities (stay tuned for Sam's post in a little bit on how GM sees the ethanol future).

[Source: Inside Green Tech]

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