Is This the End of U.S. Biofuels? || Aug 10, 2026
The U.S. ethanol mandate in the early aughts reshaped American agriculture by tying corn production to fuel production; this saw corn demand double, with roughly half the corn crop now tied to biofuels. So, the case for diverting large amounts of U.S. corn into fuel production is now becoming less clear.
U.S. energy has become independent following the shale revolution. The environmental benefit has been refuted and moving forward, food security will be far more important than biofuels. Allocating large amounts of U.S. corn for fuel production becomes economically and politically difficult when it's needed (and more profitable) to use for human consumption.
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Comments (38)
So overdue to see this.
May 😅
Zeihan's grasp exceeds his reach, as ever. He gets quite a bit factually wrong here or misrepresents the complexities with over simplification, at best.
Ethanol is an energy play. A different energy play is emerging in the Midwest—wind power. Drive I-80 through Iowa, and the number of windmills is staggering. It's a much more consistent income source for landowners than farming. Out West (where Peter and I live), it's a bit different, with solar arrays popping up on parched farmland.
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Should we be buying EVs?
Yay!
Hopefully EV’s will also play a part in the deconstruction of US agriculture being used for fuel vs food! It is a disgusting abuse of land and precious water resources!
This is a bit too oversimplified for ethanol in the United States in my opinion. Part of the reason that ethanol has not worked out as planned is ethanol was supposed to be a release valve on the over supply, so in the event the grain started piling up you would just simply turn more of it into ethanol stabilizing the price. However, much like Keynesian taxation… Nobody wants to raise taxes during the good times to offset the deficit spending you did to end the bad times.
Never saw the point of wasting all that good booze. Also, it messes up gasolne engines. "Gas" mileage goes down. Regardless, it's not supportable any more. Let it go.
Peter, any comments on the merging of US/Israeli militaries?
We have the refineries. In fact we refine millions of barrels of foreign crude for reexport—a very profitable business. And we are producing/pumping more petroleum than we consume, which we also export. Our exports are currently larger than Saudi Arabia’s
I had long thought—from the time that the ethanol substitution began—that this was a bad idea after one factored in nitrogen fertilizer. Subsequent problems with nitrogen runoff polluting all the way to the Gulf. Even so, i thought perhaps 10 percent of the crop was converted. 50 percent is a political and economic nightmare to shift.
Ethanol was never "fine". It was always stupid.
Come on Peter, you're from Iowa and you love digging in the weeds. Ethanol is 100% a starch utilization play. Field corn (the kind they make ethanol out of) is ~75% starch. That's way too high for mass human and animal consumption. Ethanol production ferments 100% of the starch out of the corn kernel and returns 100% of the protein, fiber, and oil/fat to the feed market. The ethanol industry's ability to remove ~35% of the US's annual corn starch production has allowed the US farmer to increase yield 30% over the past 25 years and still have a market. Ethanol just as much about adding concentrated plant based proteins to the feed market as it is about expanding the gasoline supply pool.
Ethanol - powering your vehicles with solar power but with extra steps! Lol
Greenie here who did the math 20 years ago, yes ethanol is stupid and destructive but even if we could efficiently use sticks, twigs and yard clippings there is not enough FRESH WATER. You can have bio-fuel or drinking water but not both. Do the numbers people.
Sorry, ethanol is neither stupid nor destructive. (I have no idea where you guys come up with that crap) and you must live in CA where water is an issue. Most biofuel production is done in the Midwest where water is not a consideration.
Silly question, perhaps. Am I correct in remembering that the corn used for biofuel is "not commonly used" for human food? And that it would take several years to build up enough "food grade" corn seed to make a significant food impact? Or can the post-fermentation residue be used for human food stock?
Feed corn, the kind used for ethanol, is ~15% moisture. You will break your teeth trying to eat it. The post fermentation feed is typically fed to livestock which turn it into human food stock. You could eat the fermentation residue, it just doesn't taste very good
Corn Ethanol = 1.3 units of energy out for every 1 unit of energy put in to produce it. Sugar Beet Ethanol = 9 units of energy out for every 1 unit of energy put in to produce it. Sugar Cane Ethanol = 15 units of energy out for every 1 unit of energy put in to produce it. If you’re going to produce plant ethanol in the US, use Sugar Beets in everywhere except Louisiana & Hawaii where you use Sugar Cane. Using corn is unproductive.
I'm finding a little bit of a difference in data. Corn a little higher over 2 and sugarcane a little lower 9-11. Still a heck of a lot higher than corn. I do think Biodiesel from canola etc can work some but Ethanol should probably be phased out.
Even Obama eventually realized we went too far with ethanol. Adding ethanol is harder on engines and gets you less MPG's. What we need are more refineries. Stop shipping out crude and ship out more refined product instead. Lower our internal prices and make more on exports.
I think Peter has a brain freeze. So without globalization, who is going to buy new food farmers produce, and how will we ship it? Does he see the US companies building food processing plants for world market? Without ethanol lots of acres go unplanted and all grain prices collapse. Electric vehicles are the enemy of ethanol in the next 50 years.
Peter, if you want to speak about this topic accurately you will need to do several or a series. This was a gross misrepresentation of what actually happened in the late ‘90s/early 2000s, and agricultural production in general. 1. Corn/Soy are not directly food for human consumption. They are major/minor components for thousands of food products after considerable processing. 2. Food costs soared at the end user (and that was mainly at the low end of the processing chain) for multiple reasons of which the increase in corn/soy prices was only a fractional component, larger drivers being energy/transportation costs. 3. US corn/soy production annual increase far outstrips the nominal export/domestic demand. If adjusted for inflation, corn/soy prices at the farm gate have fallen dramatically since 1980. Without the RFS and biofuels, there would have been a collapse in the farm sector far bigger than the exodus seen in the late 80’s. 4. Current prices continue to dance around cost of production, driving consolidation of farms. Farm bankruptcies are again rising because of multiple factors. Land costs being just one of the major drivers. I could go on and on, but you get the point. And yes, I am a farmer for over 50 years and am retiring in 2. None of my children are returning to the farm and my operation will eventually be integrated into a larger producer. I was heavily involved in the creation of the WTO, MFN status for China, the RFS, and multiple Farm Bill iterations, so Farm policy is in my blood.
So in this case then (separately from this video), what would you recommend for policy for ethanol in gasoline (or similar fuels) and row corn production? I also think it’s a problem that these farms are being consolidated. What should be done or could be done?
Bad idea from the start - started in the Carter administration I thought, post embargo...
So true! Relax the mandates and let the market determine the use of the corn. Ethanol as fuel no longer makes sense!
I think the environmentalists went away because it's becoming obvious that the war against carbon pollution is lost and we're just going to have to take what's coming on the chin.
Don’t “take it on the chin” use all the money used for non-fossil subsidies and spend it on preparing for a warmer world.
Please make ethanol subsidies die. It’s a waste of $ (all around)
You are confusing subsidies vs mandates. There are no subsidies for ethanol.
Interesting. Thanks for the video.
2:57 ... and if We are not "Lucky" ... how many do We lose ... what is the ceiling ... 2.5 - 3 Billion? ... 🤔 If that were 2🐝 the Top-Cap ... ... ... 🤨 👁️ actually think that is an acceptable loss. Greta Thunberg will be pleased ... 👁️'m sure. DO IT FOR GRETA! ... 🥳 ... ✊
Are you on yet another Extreme-Freakness-Grand-Hiking-Event-Kinda-Thing ... Uhgen ...???... 😧
What's up with this video? The voice of Peter says shot in "May," snowy Colorado, but the visual says August 10th? I believe the snowy background, but am open to explanation.
It was uploaded to Patreon on Aug 10th. But it was recorded in May. Happened a few times before.
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