Extended Drought Pushes Corn Prices To Record Highs

As the US ethanol industry expanded, it quickly became clear that numerous limitations and complications came with using food crops – primarily corn in the US – to manufacture fuel. As is often the case in modern society, technology was seen as the solution.  Ethanol can also be made from non-food feedstock like switch grass, though the process is more technically challenging.

In order to speed cellulosic ethanol development, regulations mandated certain volumes would have to be blended into the fuel supply by certain dates. Unfortunately, technology has been unable to keep pace with the mandated blending schedule, causing some commercial players to favor alternate biofuel manufacturing approaches that use different feedstocks.

For example, refining giant Valero recently pulled out of a non-binding agreement to fund construction of a commercial-scale cellulosic ethanol plant. As reported by Fuel Fix, Valero spokesman Bill Day said:

“I can say in general that cellulosic ethanol hasn’t emerged as a mass-produced fuel as quickly as a lot of people expected.”