Big year for ethanol?

This month, Darrel Good of the University of Illinois’ Department of Agricultural and Consumer Economics reported record estimates for U.S. ethanol production: more than 14 billion gallons (more than 1.3 billion gallons more than last year). The reason for this huge spike is something we’ve been hearing a lot about lately: the long, hot U.S. summer, and the record corn crop that came with it.

Ethanol is a renewable fuel that is produced through grain fermentation; we produce a lot of ethanol in Ontario with mainly corn and some wheat. Canada also produces a large amount of biodiesel, which is similar but mostly made from used cooking oil and animal fats (some also comes from soy and canola oil).

While some vehicles can run on 100% ethanol, it is most commonly found as an additive in gasoline, making up as much as 10% of gasoline blends in Ontario. A car using ethanol-blended gasoline instead of unblended fuel emits lower amounts of greenhouse gases, carbon monoxide, particulate matter, and other toxic substances. A 2011 report produced by Grain Farmers of Ontario estimated that substituting 10% ethanol into gasoline in Ontario meant a 62% reduction in net greenhouse gas emissions on a per litre basis.

The Ontario corn crop won’t reach the record size that this summer’s U.S. crop has, but we will likely see some of its effects. While Canada produces a lot of ethanol and biodiesel, we are still one of the world’s largest importers of U.S. ethanol. It’s unlikely that you’ll see a dip in the prices at the pump because of this, but the huge supply of U.S. corn and U.S. corn ethanol will obviously continue to influence the price of corn and corn products for some time to come.

More reading:

Good, D. “Big Year for Ethanol.” farmdoc daily (4):192, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, October 6, 2014.

“What are the Effects of Biofuels and Biproducts on the Environment, Crop and Food Prices and World Hunger?” (GFO).