Is there enough corn for Bush ethanol plan?

John W. Schoen Senior Producer • Profile • E-mail

Of all the proposals in President Bush’s State of the Union speech, the call for massive increases in subsidized ethanol production stands the best chance of winning Congressional support. With the campaign season getting under way, both parties are eager to boost federal funds to the Farm Belt. 

But even as the president hit the road Wednesday to highlight his plan at an ethanol plant in Delaware, some were already asking: Where is all the corn needed to make that ethanol going to come from?

The Great Corn Rush was already sweeping the Midwest before the White House set its ambitious new targets. The Energy Policy Act of 2005 provided generous subsidies for ethanol production along with increased mandates for its use to replace the fuel additive MTBE, which has been linked to cancer.

As a result, ethanol production has surged. Over 100 ethanol refineries nationwide now produce now than 5.4 billion gallons a year. The 2005 bill had set targets of 4 billion gallons for 2006 and 7.5 billion gallons by 2012. With dozens of additional ethanol plants coming on line in the nest few years, those targets now look comfortably attainable.

So the Bush administration has decided to more than double down its bet.  The new target of 35 billion gallons a year by 2017 represents a five-fold increase in ethanol production. That  would displace about 15 percent of U.S. gasoline demand.

But is there enough corn out there to meet that goal?

Ethanol producers say they’re confident they can meet the new targets. Higher yields from existing corn growers will support as much as 15 billion gallons a year, according to Don Endres, chief excecutive of ethanol producer VeraSun Energy, which is looking to more than double  production in the next 15 months.

“We think there is also another 20 to 30 million acres that could be put into production that would provide enough corn for another 15 billion gallons, so  we think we could get to 30 billion gallons on corn,” he said.

But critics of the Bush plan say the numbers just don’t add up.

“Producing 35 billion gallons of ethanol a year would require putting an additional 129,000 square miles of farmland — an area the size of Kansas and Iowa — into corn production, which is not very likely,” said Philip E. Clapp, president of the National Environmental Trust.

Increased demand for corn from ethanol is already straining supplies and pushing prices higher. Corn futures prices recently topped $4 a bushel, the highest price in a decade, raising production costs for livestock producers. The Department of Agriculture earlier this month forecast that by the time this year’s harvest is ready in August, corn in storage will have dwindled to a three-week supply — the lowest level in a decade.

Bush conceded Wednesday that the aggressive targets could put a strain on U.S. corn production.

“There is a constraint, and that is the ethanol use today comes from corn, and we've got hog growers and chicken growers that need corn to feed their animals," Bush said at a facility owned by Dupont Co. "Therefore it's going to be kind of a strain at some point and time on the capacity for us to have enough ethanol."

But the White House says that the plan to boost ethanol production includes "safety valves" that would let the government ease up on renewable requirements "to protect against unforeseen increases in the prices of alternative fuels or their feedstocks," according to briefing materials.

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