Record Drought May Be a Good Time to Stop Using Corn for Fuel

Newsflash: The United Nations and The Wall Street Journal just agreed on something. Earlier this month the United Nations Food and Agriculture Organization issued a statement urging "an immediate, temporary suspension" of America's use of corn to produce ethanol, in order to "allow more of the crop to be channelled toward food and feed uses."

Within 24 hours, the Journal responded: "Natural disasters can't be controlled. Ethanol is a man-made disaster that could be stopped."

What size "disaster" does it take to align the Journal with the United Nations? Simply this: Over the course of a scorching summer, the U.S. is smoldering its way into our worst drought in 50 years.

Shucking Dollars Down the Drain

The Department of Agriculture says we're likely to reap only 10.8 billion bushels of corn in 2012. That sounds like a lot, but it's actually 13% less than we grew in 2011, and the smallest harvest since 2006 -- despite American farmers planting the most acres ever planted in the past 75 years. Today, fewer than one acre in four in America has a "good" crop or better. The rest of the crop is "poor" ... or worse.

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And yet, with so little corn to go around, U.S. law still mandates that we take 40% of the harvest and turn it into ethanol -- not useful things like corn chips (yum!) or cattle feed, but a fuel blamed for everything from wasting water to corroding engines to simply not being all that good a fuel source. (A liter of ethanol, when burned, generates a third less energy than a liter of oil.)

Topping it all off, the making of ethanol may actually consume more energy than the burning of the finished product produces. Depending on how you run the numbers, it may take as much as 29% more energy to plant, fertilize, harvest, transport, and distill a gallon of ethanol than you get out of that gallon once ignited in your car engine. (Oh, and taxpayers subsidize the stuff, too.)

Motley Fool contributor Rich Smith holds no position in any company mentioned.