Rapid expansion in the US
bioethanol
industry will slow – at least in the short-term – partly because of
high world commodity prices, according to Robert Wisner from
Iowa State University.
The other important factor was the lack of sufficient
infrastructure, he told delegates at the
British Crop Production Council’s
International Plant Protection Congress.
He calculated that if the 329 planned ethanol plants were to
come to fruition, the US would need 159% of the total 2006 corn
(maize) crop to supply them.
“Cost of feedstock and price of crude oil are key factors in the
growth of the industry and corn prices are 80% higher than 18
months ago. Not all planned ethanol plants will be built, but it
shows the pressure that is there.”
High corn prices were a knock-on effect of buoyant wheat markets
– largely due to poor weather in key production areas such as
Australia - and he did not think it would be a long-term feature of
markets. “This is not the time to be heavily investing in ethanol
plants, but I think the situation will change significantly over
the next year.”
While US bioethanol production had grown rapidly, the
infrastructure – such as blending facilities and rail transport and
handling systems – still had to catch up, which could limit further
rapid production expansion, Prof Wisner added.
“There’s still a 50-60% price differential between ethanol and
gasoline, so there is strong incentive to invest in
infrastructure.”
He also highlighted the pressure biofuel demand was putting on
land across the US. There were seven million acres of conservation
land in the heart of the Corn Belt and 50-60% of that could be
brought back into production, he suggested.
“This raises a lot of environmental issues, such as the effect
on wildlife, groundwater supplies, water quality and the impact of
monoculture corn."
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