Ethanol Reshapes American Heartland
By Yaser Anwar, CSC of Equity Investment Ideas
Business 2.0 magazine reports, there is a major question surrounding exactly how the valuable substance will be extracted. "If you're making an investment for the long term, you have to ask yourself whether the future's dominant fuel is going to come from corn, sugar, rape seed or switchgrass - or if it's going to be synthesized from scratch," the magazine says.
"The winner is going to be whoever can make ethanol in mass quantities for as little money per gallon as possible - a tall order, no matter how you go about it."
Of course, in the U.S., almost all of the ethanol produced here is derived from corn - the result of pressure from the farm lobby, in addition to other factors. In fact, "it has the most government subsidies, and is the form of the fuel that Richard Branson says he will invest in, and market, to the tune of $400 million," according to Business 2.0.
And news like this is changing the economic landscape of America in a big way.
A new article from The New York Times describes the overwhelming effects ethanol is having on the U.S. heartland in the face of concerns that a huge redirection of agricultural resources to make the fuel could have massive repercussions.
For instance, it could lead to more expensive food for both humans and livestock, and the costly creation of new farmland to make the ethanol. There is major concern about keeping the cost of corn low enough to make ethanol production feasible.
But "the modern-day gold rush is driven by ... surging demand for ethanol as a gasoline supplement, a potent blend of farm-state politics and the prospect of generating more than a 100% profit in less than two years," according to the Times.
The article cites the small town of Hereford, Texas, which in the past has primarily been a perennial player in the cattle industry.
"... In the middle of the Texas Panhandle's cattle country and hundreds of miles from the agricultural heartland [in Hereford], two companies are rushing to build plants to turn corn into fuel ... As a result, Hereford has become a flashpoint in the ethanol boom that is helping to reshape part of rural America's economic base," the paper says.
The NYT goes on to mention that at least 39 new ethanol plants are planned for completion within a year, at which point the U.S. is projected to surpass Brazil as the largest ethanol producer in the world.
http://www.equityinvestmentideas.blogspot.com/
Business 2.0 magazine reports, there is a major question surrounding exactly how the valuable substance will be extracted. "If you're making an investment for the long term, you have to ask yourself whether the future's dominant fuel is going to come from corn, sugar, rape seed or switchgrass - or if it's going to be synthesized from scratch," the magazine says.
"The winner is going to be whoever can make ethanol in mass quantities for as little money per gallon as possible - a tall order, no matter how you go about it."
Of course, in the U.S., almost all of the ethanol produced here is derived from corn - the result of pressure from the farm lobby, in addition to other factors. In fact, "it has the most government subsidies, and is the form of the fuel that Richard Branson says he will invest in, and market, to the tune of $400 million," according to Business 2.0.
And news like this is changing the economic landscape of America in a big way.
A new article from The New York Times describes the overwhelming effects ethanol is having on the U.S. heartland in the face of concerns that a huge redirection of agricultural resources to make the fuel could have massive repercussions.
For instance, it could lead to more expensive food for both humans and livestock, and the costly creation of new farmland to make the ethanol. There is major concern about keeping the cost of corn low enough to make ethanol production feasible.
But "the modern-day gold rush is driven by ... surging demand for ethanol as a gasoline supplement, a potent blend of farm-state politics and the prospect of generating more than a 100% profit in less than two years," according to the Times.
The article cites the small town of Hereford, Texas, which in the past has primarily been a perennial player in the cattle industry.
"... In the middle of the Texas Panhandle's cattle country and hundreds of miles from the agricultural heartland [in Hereford], two companies are rushing to build plants to turn corn into fuel ... As a result, Hereford has become a flashpoint in the ethanol boom that is helping to reshape part of rural America's economic base," the paper says.
The NYT goes on to mention that at least 39 new ethanol plants are planned for completion within a year, at which point the U.S. is projected to surpass Brazil as the largest ethanol producer in the world.
http://www.equityinvestmentideas.blogspot.com/
posted by douglas mcintyre at 5:06 AM
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