E85 to the Rescue

What pillars of American culture are severely threatened? American automakers, and the American Family Farm, and American supremacy in world affairs.

Quite justifiably, you might ask how these disparate topics are related? One word: corn. Or better yet, E85. E85 is 85% ethanol and 15% gasoline. Go here for more information on the fuel, as this post will be long enough already without having to explain the background. http://www.e85fuel.com/index.php

If you want to read a one paragraph summation of this post, scroll to the end. If you are patient, and have an interst in energy, foreign policy, and agriculture, keep reading.

I am putting up this post for 3 reasons:

1. American farmers produce more corn than any other country in the world. In fact, genetic engineering enables farmers to produce more corn than ever before. 2004 was a record year. 2005 produced the second biggest corn crop ever. Neither year provided optimal growing conditions; even so, farmers harvested record amounts of corn. With such a supply glut, prices have been depressed. Additionally, so much corn was produced that millions of tons rotted on the ground while awaiting transport on America's vastly overburdened railways. Hurricane Katrina caused additional problems by wrecking the Port of New Orleans, the primary point for loading corn and other crops for shipment overseas. This caused a severe backlog of shipments and caused even more corn to rot while waiting for a barges to take it down the Mississippi to New Orleans.

2. For every unit of energy used to plant corn, harvest it, transport it and convert it into ethanol, it yields 1.64 units of energy in the form of ethanol. For every unit of energy used to convert oil into gasoline, 0.79 units of energy in the form of gasoline are produced. In other words, producing ethanol is twice as efficient as producing regular gasoline. In addition, America is the largest oil importer and consumer in the world. Most our oil comes from Venezuela and the East, and many of those countries really don't like America. Thus, wouldn't it be helpful if America imported less oil and produced more ethanol instead?

3. The American auto industry is in the doldrums, primarily because of an over-reliance on gas guzzling stables of SUVs, a failure to adequately provide for their pension programs, and other management shortcomings. However, one things Detroit automakers have done right is develop the technology to produce vehicles with the capacity to burn E85, something European and Asian automakers have neglected to do in large numbers.

I propose that the US make a sizable investment in E85 vehicles. Doing so will provide 3-fold benefits:

1. Will provide an ever-increasing market for the US corn crop, which will in turn raise prices. Each price increase will enable more family farmers to stay in business. Considering my background, I am quite biased in favor of the family farm. Even so, I think that small farms are relic, and are prime candidates for consolidation and amalgamation. In this respect, they are no different than any other small business that can't keep up with their larger competitors. However, this will enable them to stick around a little while longer, and that makes me happy.

2. American automakers have a headstart on their competitors around the world in production of E85 vehicles. If America wants to remain relevant in the future world economy and able to stand on equal footing with India and China, investment in E85 and other technology is the only way to do so. Thomas Friedman is right - India and China are making the required investment in science and technology. If the US doesn't make a comparable investment, we will eventually play the role Britain plays now in the world economy. A nice place to visit, and a former superpower, but no longer terribly relevant to world affairs. A nice lap dog, really.

3. Producing more of own fuel will further American foreign policy. As Friedman has written numerous times, fighting terrorism while minting money for hostile countries like Iran and Venezuela is self-defeating. As long as we insist on purchasing oil from these countries and keeping them afloat on a sea of dollars, they have absolutely no desire to listen to the current President, or any other American, for that matter. By increasing ethanol production, we will no longer be throwing huge bags of money at Venezuela, Iran and others. As a result, they will not be so quick to publicly wave their middle fingers at America while encouraging anti-American sentiments. Allowing the espousal of anti-American rhetoric in these countries leads directly to terrorism, which, I think we can all agree, is bad. As the rate of American money flowing into these dictators' coffers decreases because of decreasing Amerian oil imports, the persuasiveness of American influence will increase inversely.

So, to sum up my arguments in one paragraph.

American automakers and family farmers are in trouble. Corn will help. Farmers produce a huge amount of corn and more E85 vehicles will increase demand for corn. American companies make more E85 cars than any other companies. One unit of ethanol takes half as much energy to produce as one unit of gasoline. America also imports a lot of oil from unfriendly countries. E85 will help Amerian foreign policy by reducing reliance on oil imports. America reigns supreme for a little while longer. Hooray!