Rising price of growing oil alternatives raises demand for oil
Oh, man, I wish I could preserve this article in amber: "Cost of raising corn grows."
Troubling news from the folks who bring you grain-based ethanol:
In February, the USDA forecast that U.S. farmers would spend 12.5 percent more on fuels and oils this year compared with last, with the highest prices this year occurring in the first six months. Fertilizer costs in 2006 are expected to be 6.5 percent higher.
While those percentage increases are smaller than they were in 2005, crop farmers’ costs have risen sharply in the past several years, agribusiness leaders said.
That’s right: The oil-based products and services used to raise everyone’s favorite "alternative fuel" are getting more expensive.
How does Big Ag want to respond to this crisis?
Earlier this month, Iowa agribusiness leaders called on the U.S. Congress to loosen restrictions on oil and natural gas exploration in the Gulf of Mexico. U.S. law prohibits exploration of fields within 200 miles of the Gulf Coast. The newly formed Iowa Consumer Alliance for Energy Security wants Congress to change that.
"High energy costs are a hardship on all of us," Heartland Cooperative’s Coppess said during a May 9 press conference at the Iowa Capitol in Des Moines. The group is part of a national coalition pushing for increased domestic production of energy sources. Iowans involved in the effort are calling for passage of a bill pending in the U.S. Senate that would allow production inside the 200-mile barrier.
delicious bitter irony! The feedstock for everyone’s favorite alternative fuel can’t be grown without oil and natural gas. So rising demand for that liquid-fuel alternative is raising demand for … the very liquid fuels it’s an alternative too.
But surely corn can be raised without all these fossil fuels? Uh:
For grain handlers, farm equipment manufacturers and other agribusinesses, energy costs have become the difference between red ink and black.
"Our business does very little without a lot of transportation fuel expense," said Magnuson, manager of the cooperative in Sully. "It’s running the trucks. It’s delivering feed. It’s floaters in the field, and it’s high-clearance sprayers. It’s all of our equipment. So that increase is a very substantial part of the impact on our bottom line."
The absurdity of turning to our petro-soaked agricultural sector to free us from oil will, I expect, only grow more obvious and glaring in coming years.