July 27, 2007, 6:00 am

Ethanol? You Must be Kidding Me!

by: The Financial Blogger    Category: Investment, Market and Risk
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While several countries are seeking for more uranium in order to produce a more “green energy”, some other, not to mention the USA, are looking at corn to fuel their Hummers. I am going off topic for a second, but I just can’t wait to have GM producing Hybrid Hummers so I can buy one and not feel guilty about the environment! In fact, ethanol is another big buzzword in today’s energy industry. Is it really that good? Why there is so much advertisements (or should I say pressure?) from many companies?

Is it that effective?

When a topic is highly debated, scientists are found in the middle of the battlefield. Some of them are claiming that ethanol is the energy of the future. However, some others considered the opportunity cost related to the resources required to produce this resource. According to some studies, it requires so much energy to produce ethanol that it is not as “energy efficient” as it seems. Not only that, but it would require several acreage of corn to produce enough ethanol to compensate for our oil needs.

The price of corn is therefore increasing and several committees are worried about third world countries that count on corn to feed their starving population. Industrial countries might sacrifice acreages of land in the honour of God Money. Our new martyrs will be left without anything to eat so we can ride our cars.

Other studies mention also that ethanol might not be much more efficient compares to the new generation of low consumption motors. Several car companies injected millions to create vehicles that will not require as much gas as before. You also have hybrid model that works partially with electricity. These new technologies might comprise ethanol’s future.

Why is there so much pressure around ethanol then?

First, USA does not like the idea of depending of Arab countries for their energy supply. At any time, they can be taken as hostages and another oil price crisis may arise. As they do not have much oil on their land, they need to find alternatives. Ethanol is one of them. In addition to that, this resource is much greener than oil and other derived products.

Second, the massive production of corn will incur another effect; it will drain out good soil from everything. We already know that monocultures require additional chemical products or manure to equilibrate the soil’s composition. To keep the soil high on minerals, pharmaceutical companies are promoting their products. They designed chemicals for this purpose. Therefore, we are now looking at the biggest industry teamed up with cars and pharmaceuticals giants that want us to ride on ethanol. Do you think it might happen?

Even if ethanol is not the right substitute to oil, we must find an alternative. Beside hybrid technologies (electric power combined to gas), I do not know many other solutions. Does anyone is aware of other technologies that might reduce our oil fixation?

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