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Scientific Study from the year 2007 in the subject Politics - Region: USA, The University of Sydney (Faculty of International Relations), language: English, abstract: The US and its rising Ethanol Production Abstract: In the 2007 State of the Union address,1 US President Bush called on the country to produce 35 billion gallons of biofuel a year by 2017. President Bush’s proposal to increase biofuel production will dramatically increase the volume of corn required by the US ethanol industry and will translate into higher prices for both processed and stable foods around the world. Consequently, corn-based ethanol will continue to tie oil and food prices together in ways that will profoundly upset the relationship between food producers and consumers, with potentially devastating implications for global poverty. In addition, it will only replace a small percentage of US fuel consumption. ANALYSIS: 1. The US Ethanol Market 2. Impacts for the US and world Agriculture 3. Increased US corn (food) prices and its effects 4. US Ethanol production- dependence oil and environmental benefits 5. Conclusion
Colombia¿s sugarcane-based ethanol industry, after operating for only 3 years, is the second most developed in the Western Hemisphere. Most Colombian ethanol plants are energy self-sufficient and even generate surplus power that is sold to the national electric grid. Colombia¿s sugarcane-based ethanol production is increasing; proposed expansion projects have the potential to more than triple daily production from 277,000 gallons in 2007 to almost 1 million gallons in 2010. Most of the expansion is intended for exports, principally to the U.S. However, it is unlikely that Colombia could export ethanol anytime soon because domestic production is insufficient to meet nationwide requirements that gasoline contain a 10% ethanol blend. Maps.
The production and use of ethanol in the U.S. have been steadily increasing since 2001, boosted in part by production subsidies. That growth has exerted upward pressure on the price of corn and, ultimately, on the retail price of food, affecting both individual consumers and fed. expend. on nutritional support programs. It has also raised questions about the environmental consequences of replacing gasoline with ethanol. This analysis examines the relationship between increasing production of ethanol and rising prices for food. It estimated how much of the rise in food prices between 4/07 and 4/08 was due to an increase on the production of ethanol and how much that increase in prices might raise fed. expend. on food assistance programs. Tables and graphs.
A large expansion in ethanol production is underway in the United States. Cellulosic sources of feedstocks for ethanol production hold some promise for the future, but the primary feedstock in the United States currently is corn. Market adjustments to this increased demand extend well beyond the corn sector to supply and demand for othercrops, such as soybeans and cotton, as well as to the livestock industries. USDA¿s long-term projections, augmented by farmers¿ planting intentions for 2007, are used to illustrate anticipated changes in the agricultural sector. Graphs.
Achieving greater energy security by reducing dependence on foreign petroleum is a goal of U.S. energy policy. The Energy Independence and Security Act calls for a Renewable Fuel Standard (RFS-2), which mandates that the U.S. increase the volume of biofuel that is blended into transportation fuel from 9 to 36 billion gallons from 2008 to 2022. This report examines how meeting the RFS-2 would affect various components of the U.S. economy. If biofuel production advances with cost-reducing technology, and petroleum prices continue to rise as projected, the RFS-2 could provide economywide benefits. However, the actual level of benefits depends on future oil prices and whether tax credits are retained. Illus. A print on demand publication.
Presents information on the ethanol industry1s capability to expand its production capacity, the effects that expanded production could have on the agricultural sector and consumer food prices, and how the increased production could affect certain aspects of the federal budget. Charts and tables.
National interests in greater energy independence, concurrent with favorable market forces, have driven increased production of corn-based ethanol in the United States and research into the next generation of biofuels. The trend is changing the national agricultural landscape and has raised concerns about potential impacts on the nation's water resources. To help illuminate these issues, the National Research Council held a colloquium on July 12, 2007 in Washington, DC. Water Implications of Biofuels Production in the United States, based in part on discussions at the colloquium, concludes that if projected future increases in use of corn for ethanol production do occur, the increase in harm to water quality could be considerable from the increases in fertilizer use, pesticide use, and soil erosion associated with growing crops such as corn. Water supply problems could also develop, both from the water needed to grow biofuels crops and water used at ethanol processing plants, especially in regions where water supplies are already overdrawn. The production of "cellulosic ethanol," derived from fibrous material such as wheat straw, native grasses, and forest trimmings is expected to have less water quality impact but cannot yet be produced on a commerical scale. To move toward a goal of reducing water impacts of biofuels, a policy bridge will likely be needed to encourage growth of new technologies, best agricultural practies, and the development of traditional and cellulosic crops that require less water and fertilizer and are optimized for fuel production.
In the United States, we have come to depend on plentiful and inexpensive energy to support our economy and lifestyles. In recent years, many questions have been raised regarding the sustainability of our current pattern of high consumption of nonrenewable energy and its environmental consequences. Further, because the United States imports about 55 percent of the nation's consumption of crude oil, there are additional concerns about the security of supply. Hence, efforts are being made to find alternatives to our current pathway, including greater energy efficiency and use of energy sources that could lower greenhouse gas (GHG) emissions such as nuclear and renewable sources, including solar, wind, geothermal, and biofuels. The United States has a long history with biofuels and the nation is on a course charted to achieve a substantial increase in biofuels. Renewable Fuel Standard evaluates the economic and environmental consequences of increasing biofuels production as a result of Renewable Fuels Standard, as amended by EISA (RFS2). The report describes biofuels produced in 2010 and those projected to be produced and consumed by 2022, reviews model projections and other estimates of the relative impact on the prices of land, and discusses the potential environmental harm and benefits of biofuels production and the barriers to achieving the RFS2 consumption mandate. Policy makers, investors, leaders in the transportation sector, and others with concerns for the environment, economy, and energy security can rely on the recommendations provided in this report.
The production of corn-based ethanol in the U.S. has increased from 1,630 million gallons in 2000 to 4,855 million gallons in 2006, representing a 198% growth over the period considered. This growth is favored by the availability of more efficient technologies in the production process of ethanol and is sustained by the high prices of ethanol in the market. The industry is also supported by a favorable public policy, expressed in the form of laws, mandating an increase in the use of ethanol, and also in the form of tax incentives. The tremendous increase in the use of corn for the ethanol industry is made at the expense of the livestock industry that was the traditional destination for much of the U.S. corn grain. As the ethanol industry continues to expand, concerns are raised in regard to its impact as more and more corn is diverted from the livestock sector. This study investigates the economic impact of the ethanol industry on the U.S. livestock sector. Specifically, a shipping cost model is developed to simulate the impact of the ethanol industry on the shipping cost of corn at the national and individual state levels. The dynamics for major livestock producing states are also analyzed at the crop reporting district level. Different scenarios based on assumptions on the availability of corn and the production capacities of the ethanol industry are displayed. Results from the model indicate that nationwide there is a 5 to 22% increase in the shipping cost of corn for the livestock industry due to the ethanol industry, depending on the scenario involved. At the state level, there is an increase in the transportation cost for most of the states, with shipping cost doubling in some cases. Nevertheless, some states benefit from the dynamics created by the development of ethanol plants and are experiencing a reduction in their livestock industry corn transportation cost.