Ethanol Surges Despite Doubts

Washington DC May 7, 2007; The AIADA newsletter reported that Ethanol is in the midst of a booming renaissance, despite a host of questions.

President Bush says the fuel additive distilled from mashed and fermented grain is a cheap-and-easy alternative to high-priced foreign oil. Yet, USA Today reports that skeptics worry about ethanol's fuel efficiency — lower than traditional gasoline — and its effects on both the environment and food prices as corn chews up more farmland.

David Sykuta, executive director of the Illinois Petroleum Council trade group, said, "The thing that should make people cautious is the irrational exuberance, that somehow ethanol is going to be the silver bullet that gets us out of our energy woes.

That's just not true." Still, ethanol remains a darling of Capitol Hill lawmakers. "As long as they're committed, it'll be more than just a flash in the pan," said Darrel Good, a University of Illinois crop marketing specialist. "It's basically growing because of fairly large subsidies and mandates; right out of the chute, that philosophically doesn't sit well with some folks."

Billions of dollars in government support are going to developers of ethanol plants, as well as tax credits of 51 cents refiners get for every gallon of ethanol they put in blended gasoline.