A US ethanol glut is causing some biofuels producers to go full circle by diverting their corn from fuel production towards food products such as energy bars and fish food, the Wall Street Journal reports.

Companies such as Green Plains Renewable Energy and Poet LLC are diversifying production by pulling some of their corn away from an ethanol market where, according to the Energy Information Administration, future demand will be little-changed from 2011.

Ethanol producers are getting pinched by a combination of factors, including the fact that the 30-year corn-ethanol government subsidy was terminated at the end of last year. Supply is high as producers have ramped up to meet requirements of a US government that's pushed for a higher ethanol percentage in the standard US fuel blend as a way to cut oil dependency. Meanwhile, automakers and other entities are saying that the 15-percent ethanol blend (aka E15) may damage engine parts because of its higher alcohol content. Most recently, earlier this month the AAA said that government should put the kibosh on E15 sales until more consumers are educated about the product.


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  • 24 Comments
      raktmn
      • 2 Years Ago
      The important thing to understand is that the fish food and protein bars are from the co-product of making ethanol. This is actually a very good example of ethanol manufacturers using the same corn for both ethanol AND food. It isn't an either-or proposal. When they take corn and make ethanol out of it, the corn doesn't disappear and all become liquid ethanol. The process creates valuable co-products that are high in protein, like Poet's Dakota Gold animal feed. This is just the ethanol companies using their co-product for higher value uses than animal feed, like fish food and human feed (protein bars). They still must distill the ethanol to get the co-product to make the protein bars and fish food.
      Marcopolo
      • 2 Years Ago
      It's sad to watch the US Ethanol Industry (and it's fans) franticly trying to justify an increasingly uneconomic and obsolete industry. The political clout of the US corn belt, has kept this heavily subsidised product in business long after it's used by date. Replacing the subsidy with a compulsory usage of the product is even worse. This method is just more politically cunning since the economic cost is hidden in the pump price of gasoline. Nor does Ethanol make America less oil dependant. The amount of energy used in growing the corn, and the blending process makes the whole ethanol process futile. US Ethanol will face competition from the natural gas industry in the form of CNG/LPG transport fuels, and low cost, low emission, NG generated electric power. NG is already proven to be economically viable and the technology has been in existence for more than 40 years. The ability of NG to generate low cost, low emission electric power, is compatible with the rise of EV technology. The US has vast reserves of NG, and already the economic benefits are starting to appear. High quality European Steel manufacturing plants are moving to the US, creating profitable US employment, due to the abundance of US NG. NG will bring back economic prosperity to the US by providing low cost energy to manufacture high tech solutions, and offset the low labour cost of competitors. In contrast, by mandating 10-15%, ethanol, the US is also ensuring 85% gasoline consumption ! It's time to abandon any government support for this obsolete fuel. Restore to the consumer the right to make their own choice about the fuel they want to use. ( they may even choose electric).
        raktmn
        • 2 Years Ago
        @Marcopolo
        You've made the classic mistake of believing that 100% of the energy that goes into making ethanol comes from crude oil. That simply is not true. You talk about NG a lot, but fail to understand that NG is the largest source of the energy consumed in the process of making ethanol (along with solar-powered photosynthesis). NG is what powers the natural gas distilleries used to make ethanol. NG is also used to produce electricity to distill ethanol. NG is what both the fertilizer and the pesticides are made out of. Ethanol is a way to take energy from the sun, mix it with NG (and some diesel fuel) and pour it into your gas tank. When you run on ethanol, you are effectively powering your car largely on NG and solar power. When you burn ethanol, you are effectively displacing crude oil with NG. I thought you were for that? I'm all for restoring to the consumer the right to make their own choice about the fuel they want to use. It is definitely time to mandate multi-fuel capability in every single car sold in the US. Right now 95% of car owners are forced by law to burn mostly gasoline. I agree that people should have the right to choose whatever ethanol mix they want. Or methanol if you are Carney. Why are you against making it free choice for people to choose to burn as much ethanol as they want?
          Rican_SoldierBoy
          • 2 Years Ago
          @raktmn
          EVnerd what you fail to understand is that it would mean change the whole refueling infrastructure to acomodate to NG. I truly believe NG is the future and the step inbetween gasoline long carbon chain and hydrogen no carbon chain. We just need short options in between to take advantage of infrastructure and current vehicles. Hopefully this is the year of production from non corn based ethanol.
          EVnerdGene
          • 2 Years Ago
          @raktmn
          "I'm all for restoring to the consumer the right to make their own choice about the fuel they want to use" So how about if I just use gasoline? So why don't you just use the friggin' NG instead of pushing it through some inefficient and polluting process, and needing to subsidize it with deficit spending?
        EZEE
        • 2 Years Ago
        @Marcopolo
        I have never had an emotional attachment to any technology (except my iPad...love this thing), so what about some of the alternatives to corn, like George Bush's 'switch grass?'
          Marco Polo
          • 2 Years Ago
          @EZEE
          @ EZEE Here's an unpopular truth. Nearly all bio-fuel projects are totally uneconomic and require heavy subsidies. Bio-fuels can reach a level of economic value, only in countries with surplus sugar cane or beet production. The search for a feed stock which is not subject to the vagaries of agriculture and can be economically grown on a large scale, has proven disappointingly elusive. The recently developed brilliant Virent Technology, languishes for a lack of feedstock. Despite all the fierce claims to the contrary, commercially viable bio-fuel on a large scale has proved only possible in very few nations, like Brazil, Poland and Mauritius. Even in these nations, the economic benefits are dubious. There is not yet a suitable feedstock available. .
      harlanx6
      • 2 Years Ago
      The market works if you can keep the godam government out of it!
        2 wheeled menace
        • 2 Years Ago
        @harlanx6
        No no! free markets are awful! look at how that's working for Hong Kong! just awful! :)
          carney373
          • 2 Years Ago
          @2 wheeled menace
          Just because a principle is true in general doesn't make it axiomatically true in every case. In this case, network effects, path dependence, and policy paralysis have continued a disastrously bad situation where the artificial monopoly enjoyed by oil continues despite what's needed to break it being relatively cheap and easy.
          raktmn
          • 2 Years Ago
          @2 wheeled menace
          If free markets are so great, why haven't Hong Kong's free market (or the United States' free market) solved the oil dependency problem already?
        raktmn
        • 2 Years Ago
        @harlanx6
        If the free markets are so awesome, why haven't they already solved our energy dependence problem already? Every president back to Nixon has talked about ending our foreign energy dependence. The free market has had more than 4 decades to solve the problem, and it failed. So your answer to 4 decades of free market failure, is more of the same from the free market?
        carney373
        • 2 Years Ago
        @harlanx6
        Except that the energy sector is not a free market. OPEC (a gang of governments) controls 78% of world oil reserves and artificially restricts supply via government fiat to create artificial scarcity and artificially high prices in a crushing "tax" on the rest of the world including us. No automaker includes flex fuel capability as a standard feature across the board of its entire product lineup despite the trivial cost, perhaps because the first automaker to do so would be the icebreaker bearing the costs while the rest could hold back until enough others make it a standard so that enough stations sell ethanol to make the feature a selling point. That's a market failure, with huge environmental, economic, and national security consequences.
      carney373
      • 2 Years Ago
      There'd be no "ethanol glut" if we passed the Open Fuel Standard Act to make full flex fuel capability a required standard feature (like seat belts) in gasoline cars. It would cost automakers only $130 per new car at the factory, at most. Of course, then we'd hear doom and gloom about "ethanol shortages".
      raktmn
      • 2 Years Ago
      Leave it to WSJ to re-hash a story from 8 months ago, and twist the story. Here is an example of many of the original reporting on this: http://www.omaha.com/article/20120427/MONEY/704279961/0#green-plains-looks-to-improve-earnings http://blogmidwestlabs.com/2012/04/27/ethanol-plants-moving-production-toward-more-co-products/
      M Power
      • 2 Years Ago
      Mmmm, nothing like a little more GMO corn and high fructose corn syrup to fatten the masses.
        carney373
        • 2 Years Ago
        @M Power
        HFCS is just sugar, no worse than cane sugar and no better. And GMO fear is irrational. ALL organisms are "genetically modified" from the original life that emerged on Earth, either via natural selection or artificial selection (agriculture). In fact GMO is safer than normal breeding because you pick only the traits you want without random other ones coming along for the ride.
          raktmn
          • 2 Years Ago
          @carney373
          Even "sugar" isn't "just sugar". What we call table sugar is actually a roughly 50-50 mix of fructose and glucose. Different sweeteners like HFCS have different levels of fructose and glucose. The body processes fructose and glucose differently. There were a bunch of stories about it yesterday in the press. That isn't to say that one sugar source is pure evil, and another is saintly. All have their disadvantages. HFCS is bound to get lots of attention just due to the pure volume of the stuff it is in.
          Levine Levine
          • 2 Years Ago
          @carney373
          Fear of GMO is well justified. Human Selection is vastly different than Natural Selection. Natural Selection process may take millions of year on one trait that is a slight modification of the original for the benefit of the specie, whereas Human Selection takes place in minutes on one or more traits that are substantial modification of the original for the benefit of corporation profit and consumer appeal. For example, the introduction of genes from bacteria into a plant to induce the plant to produce a specific anti-microbial compounds. Despite bold claims by certain bio-genetic firms, many of their genetic engineered products have failed to live-up to their expectation or calculation but they did confirm the haphazard nature of genetic modification. Finally, HFCS is not "just sugar." Sugar is a generic term for many kind of sugar, from complex to simple sugar like glucose. Cane sugar is different than beet sugar which is different than corn sugar from which HFCS is derived. Decades ago, synthetic sugar manufactures wanted to disguise their man-made sugar as good as 'regular sugar' in packing claiming there's little to no difference in their sugars from natural ones. However, Federal law prohibits manufacturers of man-made sugar such as Aspertane(sic), Sucra, etc from calling their concoctions, sugar. Claiming "GMO is safer than normal breeding because you pick only the traits you want without random other ones coming along for the ride," is erroneous and misleading -- a sure sign of ignorance of molecular biology. Genetic engineering has not advanced to that level, yet. Not only scientists know little about the interaction of certain genome but they possess the state-of-the-art skills that cannot specifically cut-and-paste only a particular segment of DNA with 100% success as the organic chemical reaction is still based on probability.
      budwsr25
      • 2 Years Ago
      Be careful with these ethenol gases. If you value your paint job and fill neck. If you over fill your tank or even drip gas it will rust out the filler on the tank quick.
        Rican_SoldierBoy
        • 2 Years Ago
        @budwsr25
        I thing you are going buy hearsay, have been using e85 on my turbo 2006 Scion tC for the past 3 years with not one problem. Two full years on a completely stock fuel system and one on a fuel return system. Paint around the filler call is as good as new along with the engine. Hate to see people spreading lies around without really even trying it.
      Levine Levine
      • 2 Years Ago
      Even without government ethanol subsidy there is still a glut of ethanol as fuel additive and the excessive corn inventory has been diverted to food production. This revelation means the allegation that the ethanol industry has caused a corn shortage leading to higher corn prices and food prices has no foundation. It has become apparent the petroleum industry had been issuing propaganda during the past two decades.
        Letstakeawalk
        • 2 Years Ago
        @Levine Levine
        Well, the petroleum industry, and former Vice-President and Nobel Prize winner Al Gore. "The size, the percentage of corn particularly, which is now being (used for) first generation ethanol definitely has an impact on food prices. "The competition with food prices is real." http://www.reuters.com/article/2010/11/22/ethanol-gore-idAFLDE6AL0YT20101122
          carney373
          • 2 Years Ago
          @Letstakeawalk
          Gore turned on ethanol because it doesn't fit is enforced-austerity agenda.
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