Ethanol

It sounds too good to be true: A residential system that allows people to make fuel from old beer, leftover wine and other waste products and use it to run their vehicles. That's what inventors of the E-Fuel MicroFueler claim, and there's support for the idea in government, industry and pop culture. MicroFueler buyers are eligible for a $5,000 tax credit. Former L.A. Laker Shaquille O'Neal is an investor in the system's distributor. The $10,000 E-Fuel MicroFueler consists of a 250-gallon tank for organic feedstock, such as waste wine and beer, and a still that converts it to pure ethanol, or E-Fuel.

The increased use of ethanol could cost the government up to $900 million for food stamps and child nutrition programs, a congressional report says. Higher use of the corn-based fuel additive accounted for about 10% to 15% of the rise in food prices from April 2007 to April 2008, according to the nonpartisan Congressional Budget Office. That translates into higher costs for food programs for the needy.

Corn is a key element of the U.S. food supply. It is what dairy cows eat to make milk and hens consume to lay eggs. It fattens cattle, hogs and chickens before slaughter. It makes soda sweet. As the building block of ethanol, it is now also a major component of auto fuel. And that may signal trouble ahead.

Something was wrong with Sally Ann. ? For months, she sputtered and choked, and Barry Treahy's remedies weren't working. He kept changing her fuel filters. Then he rebuilt her carburetor. Finally, he cut into her gas tank, cleaned out the mysterious caramel-colored gunk and patched her up -- twice.? Disaster struck on a summer day in San Diego, when Treahy's beloved 20-foot fishing boat was parked street side with the outer hull plug open to drain any residual water.

With high food prices prompting grocery-store apologies to customers and raising fears of starvation in impoverished countries, Congress suddenly faces renewed pressure to cut subsidies to the wealthiest farmers and incentives for ethanol production. The American farmer, long an untouchable political icon, has even become something of a political embarrassment on Capitol Hill, with President Bush earlier this week demanding an end to crop subsidies for "multimillionaire farmers."

For as far as the eye can see, stalks of sugar cane march across the hillsides here like giant praying mantises. This is ground zero for ethanol production in Brazil -- "the Saudi Arabia of biofuels," as some have already labeled this vast South American country.

Curtis Raines describes himself as "just a dumb old farmer" who's not afraid to ask an obvious question: Why grow corn for fuel when it could be used to feed hungry people? "That just doesn't make a lot of sense to me," Raines said. The 64-year-old Oklahoma Panhandle farmer is growing a 1,000-acre plot of switchgrass, billed as the world's largest of its type, to test whether the native plant can replace corn in making ethanol.

Fuel maker Tesoro Corp. on Tuesday sued California air regulators to block a new regulation that is expected to sharply boost ethanol use in the state's gasoline starting in 2010. The San Antonio-based company, which operates refineries in Los Angeles and the Bay Area city of Martinez, said the new fuel specifications could conflict with the state's push to cut greenhouse gas emissions and could have ramifications for the environment and U.S. food prices.

The air smells clean and sweet off the sprawling corn and spearmint fields, but for this unincorporated town of 156, it is the smell of failure: the failure to reap the rewards of the ethanol boom. Construction crews were scheduled to start digging up the sandy soil next spring to make way for an ethanol distillery plant in San Pierre.

Gov. Arnold Schwarzenegger's senior staff declared there "are no winners and losers" in California's ambitious low-carbon fuel initiative unveiled in Sacramento on Tuesday. But some parts of the energy industry may have more to gain than others. Former California secretary of state Bill Jones, co-founder and chairman of Fresno-based Pacific Ethanol Inc.