Days of Promise Fade for Ethanol

One of the greatest boons to the corn industry was government involvement with the usage of ethanol. In efforts to reduce the environmental impact of the usage of gasoline, it was thought that ethanol being mixed into the fuel would help. Regardless of whether or not the program helped the environment, it certainly helped farmers that grew corn, the source material of ethanol.

However, now the usage of ethanol has died down, as corn prices have gone up way too high due to drought in the country. In addition, there has been less gasoline produced, creating excess reserves of ethanol in addition to lower demand. Combined, these factors have sent ethanol prices plummeting, and the farmers who banked their business on ethanol are worried.

I never did understand the usage of ethanol in gasoline, in that it seems to make little sense. If cars run on fuel just fine, why add material that could make it less effecient? None the less, the government decided to step in, and now a mess has been created. Hopefully, the situation will defuse itself as travel picks up over the summer. If it does not, however, the government could have quite the situation on its hands in order to provide assitance to a collapsing market that it helped prop up.

Source:

http://www.nytimes.com/2013/03/17/us/17ethanol.html?ref=business&_r=0

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