TUPPER: Time to face ethanol’s future
It was with mixed emotions that we published The Associated Press’ investigative story on ethanol Tuesday.
We recognize the story as an exemplary piece of journalism that exposes the negative side effects of the ethanol boom in an exceptionally comprehensive way. We also recognize that ethanol — a gasoline additive made mostly from corn — has been a primary driver in the modern Golden Age of agriculture in South Dakota and throughout the Corn Belt.
So it was painful to play the story across our front page. Corn-growing affects most everyone here in the Corn Palace City and its surrounding communities, where agriculture is the basis of our economy. The story undoubtedly angered some of our readers.
But we cannot deny the truths contained in a story that, rather than telling us much of anything new, actually just pulled together and quantified a lot of things we already knew or suspected from prior reports and anecdotal observations. High corn prices, driven partly by a government mandate to mix more ethanol into gasoline, have caused farmers to plant more acres. Along the way, a lot of grassland has been plowed under. We all know that. Until now we’ve focused mainly on the drastic impact to South Dakota’s pheasants, which have lost habitat to the corn bonanza. The Associated Press furthered our understanding of ethanol’s environmental impact by explaining impacts from corn fertilizers in the water supply, carbon dioxide released from plowed-up prairie sod, and more.
I cannot help but think we’re witnessing the beginning of the end of ethanol’s heyday. Environmentalists now oppose ethanol because it’s increasingly viewed as not truly “green,” conservationists oppose it because of its effect on native prairies, oil companies oppose it because they resent having to mix so much of it into their gasoline, and hunters oppose it because of the wildlife habitat it’s chewed up. With so many organized and well-financed interests now aligned against ethanol, it’s difficult to see a future for the industry as rosy as the recent past.
The one savior could be the long-sought use of grasses, cornstalks and other natural materials and byproducts in the production of ethanol. But, as The Associated Press report noted, talk of such advancements has been ongoing for years with seemingly few lasting results. The “Saudi Arabia of Grasses” that Sen. John Thune, R-S.D., once predicted South Dakota could become still seems far off. If the ethanol industry and the farmers who support it hope to keep producing as much or more ethanol as they do now, the rapid deployment of next-generation “cellulosic” ethanol might be their only chance.
And yet, even if cellulosic ethanol never fulfills its promise and the ethanol industry falls apart, we’re not sure it will spell complete doom for farmers. The most fascinating development in production agriculture these past few years has not been ethanol, but rather the rehabilitation of railroads and the construction of massive, rail-connected grain terminals to collect commodities for shipment to the West Coast and ultimately China. That’s another factor driving corn production.
We witnessed this development at close range with the recent construction of the Gavilon Liberty Grain facility between Kimball and White Lake, which cost about $30 million and required an additional $16 million rail-improvement grant from the federal government. We’ve been told numerous times that Liberty Grain was built to take advantage of rail routes to Seattle where grain is loaded on ships and sent to feed the expanding economy and population of China.
Certainly, ethanol is the current king of the corn business. By some accounts, up to 40 percent of the nation’s corn crop is used to produce the fuel. That’s an enormous chunk, and if it vanished overnight, the economic effects on rural America would be disastrous. But if advances can be made in cellulosic ethanol, or if agribusinesses can continue to capitalize on growing demand from China, or both, perhaps the hole from corn ethanol’s potential demise can be filled in time.
No business enjoys good times forever, and the unprecedented run of high corn prices, soaring profits and inflated land values that farmers have reaped from ethanol cannot continue unabated. Of all people, farmers, who each year face the prospect of floods, droughts, hailstones, windstorms and other unpredictable weather events, should know that storm clouds are never far away.
A massive thunderhead is now growing on ethanol’s horizon, and people in agriculture should prepare and adapt rather than waste too much time spitting into the wind.