Introduction

Rising oil prices, energy security, and global warming concerns have all contributed to the current hype over biofuels. With both prices and demand for oil likely to continue to increase, biofuels are being presented as the way to curb greenhouse gas emissions and to develop homegrown energy that reduces our dependence on foreign oil.

In this context, corn-based ethanol has emerged as a leading contender to reduce dependence on fossil fuel–based gasoline. At first glance, corn-based ethanol seems simple, even patriotic: take the sugar from corn that U.S. farmers grow and ferment it with yeast to distill basically the same stuff found in alcoholic beverages. Byproducts, such as distiller’s grain and corn gluten, serve as livestock feed and help offset refining costs. The industry claims that ethanol blends will lower tailpipe emissions, promote energy independence, and revitalize rural America.

Farmers and investors envision a new gold rush. Ethanol production is registering record growth rates, and reached nearly five billion gallons in 2006. Dozens of new ethanol refineries are being constructed, with production capacity forecast to double as early as 2008. President Bush intensified this momentum in his 2007 State of the Union address with a call to produce 35 billion gallons of alternative fuels by 2017—a fivefold increase from the currently established goals.