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As the amount of ethanol being produced in the US, and the rest of the world, continues to grow, many other industries are beginning to feel a pinch. This is because demand for corn is skyrocketing, and other industries that rely on corn are finding that the demand is growing faster than the supply can keep up.
This is simple supply and demand economics – the core of capitalism – and it is beginning to affect many things we take for granted:
* Tortilla prices are on the rise in Mexico (Note: I have read that tortillas use white corn whereas ethanol uses yellow corn and so this could possibly be inaccurate.)
So what’s the answer? I don’t think it is an easy one. Though we are feeling the pinch right now because of our growing use of corn, the amount of ethanol we are using right now is just a tiny fraction of the total amount of oil we are consuming. Think about it: our goal is to switch to 10% biofuels by 2010 – and billions of gallons of ethanol per year will be required to make that transition.
But if we don’t make the switch to ethanol, fossil fuel prices will continue to rise because there is a finite supply of them. So consumers will feel the pinch one way or another.
What do you think?
[quote][cite] cannonfoder:[/cite] as economic realities set in, other sources of feedstock will become more prevelant, and take the pressure off corn. corn is used because the grain, techonology, and infrastructure are available today, not 5-10 years from now. also checkout alge based biodiesel, and cellulostic ethanol.[/quote]
That certainly looks like the way ahead. The government has been handing out lots of grants for research into cellulosic ethanol technologies. Both that and algae are a few years away but certainly on the horizon.
* Iowa ethanol plant gets $80 million grant to produce ethanol from corn stalks
* New York gives $14.8 million grant for cellulosic ethanol demonstration facility
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