Recently, when the cost of oil was ~$100/barrel the US made a significant invest

Question

Recently, when the cost of oil was ~$100/barrel the US made a significant investment in the form of tax breaks and subsidies to producers of ethanol to assist in the development of production of ethanol from biomass, including corn. Discuss the sustainability of ethanol production from corn, by considering the total energy input in the production of ethanol and in the generation of greenhouse gases. Be sure to provide references for any information you use in your discussion, including those form the textbook.

Explanation / Answer

There are a lot of issues with respect to the production of corn ethanol.

Issue 1: Rising food prices.

Opponents of corn ethanol argue that use of corn in the production of ethanol leads to higher prices of corn, making the consumer worse off. Corn is subsidized in the US for ethanol production. But ethanol production shall take place even if no subsidization occurs. That is, even at unsubsidized corn prices, the corn ethanol is competitive with gasoline.

Issue 2: Expensive production process

Some argue that a lot of fossil fuel energy is wasted in the production of ethanol, which is why the net energy derived from ethanol, considering energy lost in ethanol production, is a negative value. But the sustainability of corn ethanol can be compared with that of gasoline only when the same net energy value for gasoline is also calculated and taken into accout. Until more reseach is done in this idea, not much can be said about the sustainability of corn ethanol using this idea.

Issue 3: Subsidized ethanol distorts market

It is argued that subsidized ethanol is making ethanol seem more competitive than it actually is in comparison to gasoline. But this argument is also ill founded, as gasoline is also subsidized by th US government, directly by the tax policy and indirectly by billions of dollars spent on military every year to protect the supply of oil from the Middle-east to the US.

Issue 4: Environmental concerns

There is no cnsensus as yet on whether the production of corn ethanol is sustainable from an environmental point of view. One cost of ethanol is that it causes smog in enviornment. A benefit from ethanol use is that it lead to reduction in greenhouse gases, with estimates of greenhouse gas reduction resulting from ethanol varying from 5% to 18%.

Conclusion:

The scientific world is divided on the question of sustainability of corn ethanol.

References:

http://www.businessweek.com/debateroom/archives/2007/02/ethanol_too_much_hypeand_corn.html

http://www.americasquarterly.org/node/248

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