If you travel through the American midwest, you cannot help but notice that corn-based ethanol is in the news. Over at the Oil Drum blog there is a good post on the merits of corn-derived ethanol (EtOH).  One of the important points that was made is that EtOH will be replacing MTBE as an oxygenating additive. This is an important point. For the near term, as MTBE is phased out EtOH is taking its place.  Therefore, the net effect on imported oil volumes may be nil. 

Then there is the matter of the energy balance for EtOH production.  There is no clear consensus on whether or not corn EtOH production is a net gain in BTU’s.  And then there is the matter of unintended consequences in shunting large mass flows of corn into energy production.

Modern agriculture has been characterized as the process of converting diesel fuel into food. High yield crop production also requires large machinery for efficient cultivation, soil amendments, advanced corn breeding, crop rotation, and specialized pesticides.  And this is just the farming part. Modern grain production requires substantial distribution infrastructure as well as financing for the upfront seed and fuel costs.

By unintended consequences the writer of the Oil Drum post means the possibility of ecological insult resulting from intensification of corn production.  Intensified corn production may result in reduced soybean production in the US, resulting in increased production in Brazil. US farmers may simply choose to grow fewer soybean acres. Increased soybean production in Brazil could result in accelerated deforestation to meet the demand uptick. 

What the writer did not mention is that reduced US soybean production could mean reduced crop rotation, placing increased demand on synthetic ammonia (NH3) production to make up the demand for fixed nitrogen.  Ammonia production uses natural gas (CH4) as the source of hydrogen, and the carbon is lost as CO2.  Increased nitrogen fertilizer use may result in greater run-off into the watershed, placing the aquatic ecosystem under increased stress and polluting drinking water supplies. 

Increased ammonia demand will stress the natural gas market to some extent and result in increased greenhouse gas emissions. 

In addition to ecological insult, there will be a shift of wealth associated with increased diversion of corn to fuels.  If corn yields and acreage cannot be increased to make up for increased fuels demand on corn supplies, the food product chain could be subject to greater scarcity with an increase cost to consumers for everything associated with corn- corn oil, high fructose corn syrup, starch, beer production (!!) with corn starch, cereal products, animal feeds and the associated price uptick that would cause for meat products. 

It is worth remembering that corn is one of the major inputs to our food manufacturing complex. It enters directly as whole corn or as separated corn germ and corn starch, and indirectly as food for hogs, cattle, and poultry.

Many of the choices we have in the supermarket are largely based on what you can do cheaply and on a continuous process basis with grain products.  Stress on this supply will be passed along to the consumer.

One fresh approach is from a start-up company called Zeachem who aims to produce cellulosic ethanol from biomass other than just the corn kernel.  In this process, all fermentable sugars as well as cellulosic hydrolyzates can be converted to acetic acid by fermentation and the lignin sidestream can be processed to yield hydrogen.  Esterification with process ethanol to afford ethyl acetate followed by hydrogenation yields EtOH.  This process is currently in scaleup and may prove to be a major improvement in the otherwise anemic economics of EtOH.