Food-for-fuel controversy angers ethanol producer

It's Wrong to link sugar price to expensive fuel, Greenfield founder says: Ken Field says he's tired of the "campaign against corn ethanol" that has created a damaging public misperception of the renewable fuel. The founder and chairman of Toronto-based Greenfield Ethanol, the largest independent ethanol producer in Canada, is lashing out at reports last week that record-high sugar prices will lead to more expensive ethanol, and as a result push up prices at the gas pumps.

In Brazil, maybe – but not in North America, not in Canada. "This (rise in sugar) has absolutely nothing to do with ethanol, particularly in Ontario," said Field, lamenting the spread of information that most proponents of ethanol blame on the oil and food lobbies. Lack of monsoon rains in India had helped put a squeeze on global sugar production, pushing prices up more than 74 per cent this year. But sugar fell yesterday for a second day in London on speculation recent rain in India will improve prospects for the harvest in October. White, or refined, sugar for October delivery dropped $1.20 (U.S.), or 0.2 per cent, to $551.80 a tonne in London on the Liffe exchange. The contract has dropped 6.5 per cent from last week's $589.90, the highest price since at least 1983.

Most of the ethanol produced and used in North America comes from corn, not sugar, said Field, whose company buys about 60 million bushels of corn a year. "Fact is, there's lots of corn, so the price of ethanol is not going to go up. If anything, it's going to be lower." The U.S. Agriculture Department said last week the United States is expected to have its second-largest corn crop this year, with farmers harvesting 12.76 billion bushels. That's up 5 per cent compared with 2008. When last year's leftover stock is added, the total U.S. corn supply will swell to nearly 14.5 billion bushels – the highest level on record. Ethanol producers will use up about a third of that corn to meet a U.S. mandate this year that 10.5 billion gallons of ethanol be blended with vehicle fuel, a requirement that climbs to 12 billion gallons in 2010. (Across Canada the mandate is 5 per cent of all vehicle fuel) Even with a 15 per cent increase in the number of corn bushels used this year for U.S. ethanol production, a year-end surplus of 1.62 billion bushels is expected. "Where's the food-for-fuel debate?" said Field. "There's no shortage."

To counter concerns that producing ethanol from corn is too energy-intensive, doesn't do much to reduce greenhouse gases and leads to higher food prices by diverting land away from food crops – claims many call alarmist – the biofuel industry is developing a second-generation ethanol that's made from agricultural, forest and even municipal waste. So-called cellulosic ethanol requires far less energy to make and doesn't compete with food. The technology exists; the challenge for the industry is to drive down the cost. Greenfield, for example, is part of a joint venture in Edmonton that is turning plastics and paper fibres from municipal solid waste into ethanol. The company has also built a pilot plant in Chatham that can convert corncobs into ethanol.

"The results are phenomenal," Field said.

He estimates that using corncobs alone could increase the yield of one of his existing corn ethanol plants by up to 25 per cent.

Source: The Toronto Star.

It's about time to switch our think'n and sooner is better than later.

Wally.