Ethanol: Still The Fuel Of The Future?

Ethanol was one of the big stories this year as pressure to find alternative sources of fuel mounted and companies began the process of “going green.” But can the corn fuel craze continue in ’07? John Kilduff of Fimat USA was on “Squawk on the Street” to discuss the future of ethanol.

Kilduff sees an even bigger year ahead for ethanol – and other alternative fuel sources, especially biodiesel. And although corn-based ethanol is far from the most efficient way to produce the fuel, Kilduff says it will probably remain the most popular – at least until an easy alternative is readily available.

2006 was a volatile year for the ethanol market – with prices going as high as $4 and as low as $1.50. Overall, ethanol prices dropped this year as corn futures skyrocketed. This is cause for concern, says Kilduff. As the call for corn is straining the supply, consumers are going to feel it not only at the gas pump but also at the supermarket. And livestock owners are also likely to feel the pinch. But Kilduff has high hopes for an “ethanol-blended gas future” into 2007 and beyond.