February 23, 2007

 

Bush: Cellulosic ethanol key to cut farmers' corn price pinch

 

 

A breakthrough in cellulosic ethanol production technology is key to keeping US cattle and hog farmers from feeling the pinch from rising feed-corn prices, President George Bush said Thursday (Feb 22).

 

Critics of the President's energy policy say that one of the key tenants of the strategy--offsetting 35 billion gallons of gasoline use a year by 2017 with alternative fuels such as ethanol--is unrealistic and could make feed corn prices, and subsequently food prices, significantly more expensive.

 

Speaking at an energy panel in North Carolina intended to highlight ongoing work to develop cellulosic ethanol production, President Bush said he was confident in his goal, but it would require continued government funding. Cellulosic ethanol "is coming to fruition, and the role of the government is to stimulate thought and investment".

 

"I wouldn't have (set the goal) if I didn't think it was achievable," the president said, after touring a North Carolina facility developing cellulosic ethanol technology.

 

The Administration has asked Congress for up to US$4 billion in loans guarantees for biofuel projects, which would include plans to build bio-refineries and cellulosic ethanol plants. Cellulosic ethanol is a motor fuel that can be produced from biomass such as wood chips, switchgrass and corn stover.

 

The President says his 35 billion gallon goal is supposed to help cut US dependence on foreign crude supplies and address climate change through cleaner-fuel. The Administration is aiming that 20 billion gallons will come from cellulosic ethanol, with only around 15 billion gallons likely to be supplied through corn-based ethanol due to market constraints. Presently, however, it's technically unfeasible to produce cellulosic ethanol commercially because of the high cost of enzymes that break down the corn starch into sugar for fermentation, and some energy analysts wonder if a breakthrough is possible within the timeline set by Bush.

 

Bush acknowledged the increasing cost pressure that livestock farmers were feeling with the rising price of corn, a basic feed, because demand was now also driven for corn as an energy source. Analysts say corn prices affect the cost of a whole range of food products besides meat, milk and eggs, and drinks made with corn syrup.

 

"The problem is, we've got a lot of hog growers...who are beginning to feel the pinch as a result of high corn prices, and a lot of cattle people in the US..(are) worried about high corn prices affecting their making a livelihood," he said.

 

The price of corn has doubled to nearly US$4 a bushel over the past six months.

 

"The question is, how do you achieve your goal of less dependence on oil, without breaking your farmers?" he asked.

 

"I know it sounds like a pipe dream to some...(but) we're on the verge of some breakthroughs that will enable a pile of woodchips to become the raw materials for fuels that will be able to run your car" he added.