Monday, January 29, 2007

Thirst for biofuels drives Great Corn Rush

It was little wonder that Steve Ruh arrived back at his Illinois farm smiling on Friday evening.
The fields were barren and blanketed in snow and it is three months before this year's planting season even begins, but he had just struck a deal with his grain broker to deliver 15,000 bushels of maize at $4 (just over £2) each — for next December.
Last year he and his wife Elizabeth were selling maize at $2.20 a bushel, while in 2005 they were reliant on federal subsidies that kick in when the market price dips below $2.
advertisement
document.write('');
The dramatic price surge reflects the Great Corn Rush sweeping the fertile plains of America's Mid-West and transforming its farming heartlands.
The explanation is simple.
Maize is in high demand to make ethanol, a clear, almost odourless liquid that can be blended with petrol in a biofuel that America's leaders hope will reduce reliance on foreign oil, bring down prices at the pumps and, most controversially, help reduce the greenhouse gas emissions that may be contributing to global warming.
Last year the Ruhs grew 180,000 bushels of maize on their 2,200 acres and 90per cent of it was carried by barge to New Orleans for export abroad. This year they are hoping to harvest 200,000 bushels but only half of that will end up overseas.
They will drive the other 100,000 bushels from Ruh Farm, near the town of Big Rock in northern Illinois, to a state-of-the-art $140million ethanol plant that opened last month 30 miles to the west.
Encouraged by a government tax credit worth 51¢ per gallon of ethanol produced, Cargill, the agricultural corporation, expects to manufacture 100million gallons a year at the site.
The ethanol craze received a boost from President George W Bush in his State of the Union address last week. As part of his cherished but distant goal of energy independence, he increased the target for production of biofuels to 35billion gallons a year by 2017 — a six-fold rise on today.
Politicians who oppose ethanol subsidies do so at their peril in the Mid-West — Senator Hillary Clinton's low poll figures in Iowa partly reflect her stand against federal support. "Ethanol is revitalising rural America," said Mr Ruh, 37, who grew up on his family's farm nearby.
"Our fathers and grandfathers have experienced boom and bust, but we are cautiously optimistic about the future. We're not buying a new house yet but let's say we're thinking about it."
Holding their 11-month-old daughter Berlyn, Mrs Ruh, 30, added: "And maybe we'll be able to afford to expand our family earlier than we expected."
The federal push for ethanol has a diverse array of critics — free marketeers, global warming sceptics, oil companies, livestock farmers and, not least, environmental groups alarmed by the carbon emissions from the coal or gas required to heat the maize in the manufacturing process.
Brazil, by contrast, produces ethanol with much less environmental impact from sugar cane.
But Mr Ruh is convinced that technological advances will soon win round the doubters. "Ethanol is no gimmick," he said. "America needs alternative fuels to survive."

No comments: