Corn more vulnerable than oil to climate changes
The record storms and floods that swept through the Midwest last month struck at the heart of America’s corn region, drowning fields and dashing hopes of a bumper crop.The story does mention the disruption caused to the fuel supply by Katrina, but that was something that could be fixed in a short time rather than waiting for next years crop. We would be much better off if we were producing oil and gas from Alaska and the offshore areas the Democrats are blocking. The ethanol is more expensive and less efficient as a fuel.
They also brought into sharp relief a new economic hazard. As America grows more reliant on corn for its fuel supply, it is becoming vulnerable to the many hazards that can damage crops, ranging from droughts to plagues to storms.
The floods have helped send the price of ethanol up 19 percent in a month. They appear to have had little effect on the price of gasoline at the pump, as ethanol represents only about 6 percent of the nation’s transport fuel today.
But that share is expected to rise to at least 20 percent in coming decades. Experts fear that a future crop failure could take so much fuel out of the market that it would send prices soaring at the pump. Eventually, the cost of filling Americans’ gas tanks could be influenced as much by hail in Iowa as by the bombing of an oil pipeline in Nigeria.
“We are holding ourselves hostage to the weather,” said John M. Reilly, a senior lecturer at the Massachusetts Institute of Technology and an ethanol expert. “Agricultural markets are subject to wide variability and big price spikes, just like oil markets.”