Spartan cars could ease ethanol's corn price boost
NEW YORK (Reuters) - Next-generation hybrid cars could one day help ease corn prices that have doubled as greater supplies of the grain are distilled into ethanol fuel, and could also head off potential meat and dairy price boosts, a U.S. environmentalist said on Wednesday.
Plug-in hybrids, like regular hybrids, run on both electricity and gasoline. But they also have a plug that can draw power from the cleaner-burning electric grid. The cars currently are auto showroom curios, but pressure is growing on automakers to make them commercially available.
Some of that pressure is coming from the organization Plug-In Partners, which has spearheaded a national campaign with more than 500 partners, including electric utilities and the cities of Los Angeles, Dallas, Chicago, and Boston. Some members have pledged to buy the cars once they are available.
"There is a real effort afoot to ensure a market for plug-ins," Lester Brown, president of the Earth Policy Institute in Washington, told reporters on a conference call. He also said the United States should boost fuel economy standards for cars to make ethanol supplies go further.
The U.S. Department of Energy has allocated millions of dollars a year into research on hybrids, including plug-ins, but says perfection of batteries remains a major hurdle.
FOOD COSTS
Brown predicted early last year that corn prices would rise as the United States uses more of the grain for ethanol production.
The Bush administration has offered ethanol producers millions of dollars of incentives to reduce oil imports and boost supplies of lower-carbon fuels.
Nearly 80 U.S. ethanol refineries are springing up, mainly in the Midwest. As they consume more corn, prices have doubled to well over $4 a bushel, the highest level in a decade.
The rising price of the grain most commonly fed to livestock in the United States has also cut beef and chicken output, according to the Department of Agriculture. Rising food prices boosted U.S. consumer prices more than expected last month, a Labor Department report showed last week.
The United States is the largest exporter of corn and the price rise could also boost food prices in developing countries. "The world's breadbasket is becoming the U.S. fuel tank," Brown said. "Exactly how the world will react to that is not clear."
Brown, a former farmer, said past price spikes in corn caused by bad weather have been temporary, but ethanol demand could keep prices high for a long time.
"There is no reason now to think prices will be going back to normal any time soon." he said.
Some environmentalists worry plug-ins could increase pollution by boosting the use of coal, a cheap but dirty fuel used by electric power plants. But Brown said wind power, which is growing quickly in states like Texas and California, could add growing amounts of power capacity.
"One of the things holding back power from wind is that it's hard to store," he said. "Basically plug-in batteries could become storage for wind power."
