Tangled Up In Green: Sobering Effects of Corn Prices
As I start to stockpile bourbon (it’s made from at least 50% corn) as an investment strategy, I wonder why we are doing this to ourselves.
You practically can’t read a newspaper or news magazine without someone condemning the use of corn as an alternative fuel source these days. And who wouldn’t. The ethanol boom has driven the price of corn up, which in turn makes everything that uses corn go up in price. Corn is in a lot of products.
Why are we investing so much in corn-based fuel?
I think the answer is fear. Fear of rising oil prices. Fear of global warming. Fear of our dependency on foreign oil.
Fear is driving energy companies to move ahead on any number of crude oil alternatives in hopes that we can find a sustainable balance. I don’t think anyone is looking for a quick money making solution. It wouldn’t make sense to invest so much into the infrastructure of an alternative fuel source if those behind it didn’t believe that is was a sustainable business model. In today’s eco-savvy public opinion, a new business can’t survive if it isn’t sustainable.
Part of the problem we are in today is that we put all of our transportation energy eggs into the crude oil basket. Now that that basket seems to be killing us, we are scrambling to put our eggs into other baskets. Some of those baskets (like hydrogen fuel cells) are still being woven together.
The good news is that it seems as if we are diversifying our energy portfolio through research into a number of alternative fuel technologies, and some in conjunction with each other like the bio-fuel, plug-in, hybrid.
To me anything that can move us away from crude oil is a step in the right direction. But we don’t know how trying to grow our fuel might affect agriculture and commodities prices.
Maybe it’s fear of that unknown that keeps us from embracing ethanol.
There isn’t going to be a clean, neat little answer wrapped in a pretty bow to solve our transportation energy problems. As research and development progresses, there are going to be set backs. Whether they are spurred from changes in economic models, changes in government regulations and subsidy structures, or changes in the public’s energy usage, setbacks will happen. Those all seem like problems that can be tackled — unlike our current dependency on crude oil without investing in alternative fuels.
So I will gladly pay a higher premium at the liquor store pump for my bourbon if it means a cleaner more sustainable future. I just might savor it a little more.
Corn photo courtesy of just_a_name_thingie via flickr
Car photo courtesy of usaautoparts.net
