Stick Ethanol in the Museum of Unintended Consequences

HUMAN EVENTS ^ | 02/02/2007 | Deroy Murdock

[neverdem]

Many Democrats and some Republicans applauded President Bush's State-of-the-Union proposal for a 20% reduction in gasoline use over the next 10 years, largely through greater reliance on ethanol.

Bush's idea, however, is adding corn-based fuel to protests in Mexico City. Existing federal laws that mandate ethanol in U.S. gasoline have diverted trainloads of corn from America's food supply-chain to ethanol factories. This boosted U.S. corn prices nearly 80% in 2006.

That's bad enough if you buy corn on the cob for a weekend barbecue. But it's much worse if you are a poor Mexican surviving on corn tortillas. A kilo (2.2 pounds) of tortillas recently has shot up 55 percent, from 5.5 to 8.5 pesos. Poor Mexicans are not taking this sitting down.

In fact, some 75,000 of them stood up Wednesday in Mexico City's giant Zocalo plaza. More than 200 unions and social-action groups organized protests to denounce the rising price of this basic Mexican staple.

"[Felipe] Calderon stole the elections, and now he's stealing the tortillas!" screamed one banner, chiding Mexico's narrowly elected, new president. According to the Associated Press, the normally free-market Calderon has been trying to get manufacturers to follow a gentlemen's agreement to keep tortilla prices flat.

How has American energy policy inspired political instability in Mexico? This is a pristine example of The Law of Unintended Consequences. When big government does big things, all sorts of wacky stuff happens, and rarely for the good.

Uncle Sam gives ethanol manufacturers a 51-cent-per-gallon subsidy. Anyone who wants to import ethanol is welcome to, provided he pays the 54-cent-per-gallon tariff slapped on ethanol imports. This is one reason for another unintended consequence: gasoline prices shot up last summer since ethanol, largely produced in the Midwest, had to be shipped south and to both coasts to be blended, by law, with gasoline. Importing Brazilian ethanol into Atlantic and Pacific ports would have made sense, but then-House Speaker Dennis Hastert hated the idea, since that would put competitive pressure on his corn-farming Illinois constituents.

"I don't see an economic plus in it right now," Hastert sniffed.

What other unintended consequences could the federal government's ethanol-mania propel?

First, poor Mexicans will feel even poorer as tortilla prices stay high or climb even higher. At the margin, watch for more of them to throw up their hands and head north, to a neighborhood near you.

Second, as fuel companies buy more and more corn, prices will rise for corn flakes, corn bread, popcorn, corn syrup, and other food items. Grocery bills should grow, at least marginally.

Third, humans eat corn, but so do cows, pigs, and chickens. Meat prices will rise, hurting U.S. consumers and making American meat exports less competitive on world markets.

Fourth, if they have not already, members of the Federal Reserve Open Market Committee will notice these increases in consumer and producer prices. Fearing inflation, they could start increasing interest rates. That would slow the economy and push into foreclosure more Americans with variable home mortgages.

This economic damage will accelerate if President Bush promotes, or if the federal government mandates, a one-fifth drop in gasoline use by 2017. According to estimates by Cato Institute scholars Jerry Taylor and Peter Van Doren, writing in the Winter 2007 issue of The Milken Institute Review, "If all the corn produced in America in 2005 were dedicated to ethanol production…it would have reduced U.S. demand for gasoline by, at most, 12 percent." So, to reach Bush's 20 percent goal, corn production must grow to 167 percent of its 2005 levels, and every kernel must go into ethanol. Kiss your corn pudding goodbye.

Cultivating that much corn will require even more farmland. Securing it likely will require chopping down the same trees that inhale the carbon dioxide that humans and cars exhale. If Al Gore is telling the truth, this will increase global warming. So, one of the environmentalists' favorite tools for fighting global warming actually could exacerbate it. Meanwhile, as the Wall Street Journal editorialized on January 27, "ethanol increases the level of nitrous oxides in the atmosphere and thus causes smog."

How lucky we are to have a government big enough to tie its own shoelaces together.

Mr. Murdock, a New York-based commentator to HUMAN EVENTS, is a columnist with the Scripps Howard News Service and a media fellow with the Hoover Institution on War, Revolution and Peace at Stanford University.

[taxesareforever]

There goes the pie in the sky dream of low priced fuel.

[1COUNTER-MORTER-68]

It's Shocking !!! Shameful Waste !!! Awful Thing To Do !!

Shame On George Bush !!! All That CORN !!! Po'Mexicans !!!

Make Whiskey With All That Corn !!!...;0)

[OwenKellogg]

Kinda like my reply on this thread: http://www.freerepublic.com/focus/f-news/1773981/posts


... when someone asked "Now what exactly are we supposed to be saving by using corn ethanol?" ...

I replied:

"By using corn ethanol for fuel, we increase the price of food products, thereby increasing the price. It will eventually bankrupt us to continue to feed the world. While this ethanol thing gets legs, the environmentalists will attempt to shutter the oil business once and for all through a variety of legislation to make it too restrictive and taxed too heavily. Once we are bankrupt and the oil business has been successfully shut down by the leftist environmentalists, it's back to the stone age for us, which has been the leftist's plan all along. See?"

The law of unintended consequences applies here, but you've really got to wonder if it is really unintended.

[sphinx]

But it's much worse if you are a poor Mexican surviving on corn tortillas.

But it's much better if you're a Mexican peasant farmer trying to make living while the U.S. dumps subsidized corn on international markets. "Feeding the world's poor" is a nice warm fuzzy slogan that often masks the sabotage of Third World agriculture.

Not that this is a problem for liberal elites -- Third World farmers who can't make a living back home can always sneak into the U.S. to do jobs Americans don't want to do.

[Poincare]

Uncle Sam gives ethanol manufacturers a 51-cent-per-gallon subsidy.

The total subsidy works out to quite abit more when you figure in the subsidies for the corn itself, for transportation, and the tax abatements at the pump. Lots more.

[ChiMark]

The law of supply and demand interupts shangri-la. The farm lobby has been
pushing ethanol for over a decade but they can't deliver the
needed supply. Never could.

It's all about basic economics 101. The yield of ethanol per acre of corn is small. The scope of the ethanol craze would require most of the U.S. to be under tillage for corn.

Let's go to some other moronic bio-fuel solution like using
used toilet paper or shoe string.
I resent having to pay more for whiskey.
This could be a boon for those bootleggers.

Hey, Otis! where'd ya get the hooch?

[colorado tanker]

Well, lessee. Taxpayers have to subsidize ethanol over 50 cents a barrel and we have to keep out cheaper imports with a big tariff. Then, it still isn't enough so's we'll have to "bail out" the coming overproduction capacity. Now we find out all this government intervention is causing instability in Mexico much the way the war on drugs is in South America, turning whole countries over to the communists.

Yep, we always ought to trust the government over the market to give us just what we deserve.

[spokeshave]

Antway...imminent global warming and changing weather patterns (drought - heatwaves etc) will soon trash the corn crop, .... note to self ....buy stock in wooden bicycle manufacturers.

[colorado tanker]

You're quite right, silly me. According to the Group of Scientists in France, we're doomed, no matter what we do because we are evil, polluting, CO2 emitting devils.

We might as well hop in our SUV's and go have a last fling in Vegas to enjoy ourselves. I plan to drink and eat so much that I'll personally emit even more hydrocarbons.

[greasepaint]

whoever wrote this, is mentally ill.

a kilo of corn sells for less than two pesos

[muffaletaman]

Taxpayers have to subsidize ethanol over 50 cents a barrel...

The article says 51 cents a Gallon. There are 42 gallons in a barrel of petroleum products.

This is a subsidy of $21 a barrel for ethanol producers. Pretty large largess...

[colorado tanker]

Thanks. Never underestimate the amount of a politicians' subsidy.

[Ninian Dryhope]

"55 percent, from 5.5 to 8.5 pesos."

Yes, from $0.35/pound to $0.45/pound. BFD. So a frigging pound of corn tortillas cost a whopping $.45 for a pound.

[Ninian Dryhope]

Corn based ethanol for fuel is stupid.

[Fierce Allegiance]

ping

[Fierce Allegiance]

Are you any relation to the cereal making Kelloggs?

[G-Man 1]

Raping the farm land to plant one type of crop. No crop rotation destroys the land. I'm reporting you to the FFA and the 4H. Beware.

[chinche]

To low-income Mexican families the price increases are far from trivial. The posted article is simply retelling what in the Spanish language press is a commonly noted problem: world corn prices rise as the demand for corn in the United States increases due to dubious ethanol subsidies. See, for example,

http://www.elpais.com/articulo/internacional/mexicanos/pobres/quedan/tortillas/elpepuint/20070117elpepiint_15/Tes

Los mexicanos más pobres se quedan sin tortillas: El aumento de precio del maíz importado de EE UU, que se ha disparado un 150%, amenaza con provocar un estallido social

Los mexicanos más pobres no dan crédito a lo que ven. Apenas un mes y medio después de la toma de posesión de Felipe Calderón, el presidente que prometió en su primer discurso emplearse a fondo en la lucha contra la pobreza, se ha disparado el precio de las tortillas de maíz, elemento básico de la dieta popular. Las protestas se han hecho sentir en diversos puntos del país, el tema acapara la atención de los medios informativos y está en boca de todos. El kilo de tortillas, cuyo precio habitual no supera los 7 pesos (0,50 euros), ha llegado a 18 pesos en el Estado de Baja California.

Los dueños de las tortillerías (hay unas 70.000 en todo el país) y de los molinos de nixtamal, donde se muele el maíz para convertirlo en masa con la cual se elaboran las tortillas, juran que no tienen la culpa del aumento de precios. Son los intermediarios, acusan. El año pasado les vendían la tonelada de maíz a 1.400 pesos, y hace unas semanas a 2.200. Hoy no baja de 3.500 pesos la tonelada, es decir, un aumento del 150%.

[Smokin' Joe]

Never happy, are they? He leaves the border wide open and all they do is gripe. A-maize-ing. And still "Bush's Fault"

[Elsie]

Uncle Sam gives ethanol manufacturers a 51-cent-per-gallon subsidy.

The total subsidy works out to quite abit more when you figure in the subsidies for the corn itself, for transportation, and the tax abatements at the pump. Lots more.

 

 

 

Let me fix this...

 

 

Uncle Sam gives ethanol manufacturers a 51-cent-per-gallon OF OUR TAXES.

The total AMOUNT OF TAX MONEY works out to quite abit more when you figure in  YOUR TAXES. for the corn itself, for transportation, and the tax abatements at the pump. Lots more.

 

 

Me MUST remove the word "subsidy" from our vocabulary and replace it with OF OUR TAXES, or MY taxes, or Your tax money or something similar.

 

GRANT is ANOTHER weasel word that hides the taking of your money by force to give to others for 'Good Intentions"!!

[corbie]

lest we forget: ethanol also trashes engines, unless they're specially adapted to it.

we've watched the sad demise of a lawn mower and snow blower, the rehabilitation of a generator, and car-gasket deterioration.

not to mention the sheer obscenity of feeding people/animal food to motors.

gentlemen, start your engines (with salt and butter additives).

[Dutch Boy]

This is the 3rd country in recent months that report ethanol has had an affect on their food supply. This goes directly against want all the experts and bandwagon riders claimed.

[Bon mots]

The EU has passed legislation forbidding the use of food crops for fuel production, so palm oil and other oils like this are out. Jatropha and things that grow in deserts, are in!

Why don't we let people grow Jatropha in the desert?

Another good bet would be the farming of algae!

[Overseez]

I always thought that biodiesel was more interesting than ethanol... it's more efficient too. The best choice would be to make it from algae... just look at this chart:

---

Yields of common crops

Crop	kg oil/ha	litres oil/ha	lbs oil/acre	US gal/acre
corn (maize)	145	172	129	18
cashew nut	148	176	132	19
oats	183	217	163	23
lupine	195	232	175	25
kenaf	230	273	205	29
calendula	256	305	229	33
cotton	273	325	244	35
hemp	305	363	272	39
soybean	375	446	335	48
coffee	386	459	345	49
linseed (flax)	402	478	359	51
hazelnuts	405	482	362	51
euphorbia	440	524	393	56
pumpkin seed	449	534	401	57
coriander	450	536	402	57
mustard seed	481	572	430	61
camelina	490	583	438	62
sesame	585	696	522	74
safflower	655	779	585	83
rice	696	828	622	88
tung oil tree	790	940	705	100
sunflowers	800	952	714	102
cocoa (cacao)	863	1026	771	110
peanuts	890	1059	795	113
opium poppy	978	1163	873	124
rapeseed	1000	1190	893	127
olives	1019	1212	910	129
castor beans	1188	1413	1061	151
pecan nuts	1505	1791	1344	191
jojoba	1528	1818	1365	194
jatropha	1590	1892	1420	202
macadamia nuts	1887	2246	1685	240
Brazil nuts	2010	2392	1795	255
avocado	2217	2638	1980	282
coconut	2260	2689	2018	287
oil palm	5000	5950	4465	635
Chinese tallow	5500	6545	4912	699
Algae	79832	95,000		10,000

- Note: Chinese tallow (Triadica Sebifera, or Sapium sebiferum) is also known as the "Popcorn Tree" or Florida Aspen.
Source: Chinese tallow data, Mississippi State University
Source: Used with permission from the The Global Petroleum Club

Typical oil extraction from 100 kg. of oil seeds

Crop	Oil/100kg.
Castor Seed	50 kg
Copra	62 kg
Cotton Seed	13 kg
Groundnut Kernel	42 kg
Mustard	35 kg
Palm Kernel	36 kg
Palm Fruit	20 kg
Rapeseed	37 kg
Sesame	50 kg
Soybean	14 kg
Sunflower	32 kg

Source: Petroleum Club (with permission)
The energy content of biodiesel is about 90 percent that of petroleum diesel.

[weezel]

want cheap fuel?
http://www.truehealth.org/methane2.html

[litehaus]

subsidy?..................Didja mean Perfidy?...LOL

[neverdem]

I always thought that biodiesel was more interesting than ethanol... it's more efficient too. The best choice would be to make it from algae... just look at this chart:

Environmental, economic, and energetic costs and benefits of biodiesel and ethanol biofuels

Negative environmental consequences of fossil fuels and concerns about petroleum supplies have spurred the search for renewable transportation biofuels. To be a viable alternative, a biofuel should provide a net energy gain, have environmental benefits, be economically competitive, and be producible in large quantities without reducing food supplies. We use these criteria to evaluate, through life-cycle accounting, ethanol from corn grain and biodiesel from soybeans. Ethanol yields 25% more energy than the energy invested in its production, whereas biodiesel yields 93% more. Compared with ethanol, biodiesel releases just 1.0%, 8.3%, and 13% of the agricultural nitrogen, phosphorus, and pesticide pollutants, respectively, per net energy gain. Relative to the fossil fuels they displace, greenhouse gas emissions are reduced 12% by the production and combustion of ethanol and 41% by biodiesel. Biodiesel also releases less air pollutants per net energy gain than ethanol. These advantages of biodiesel over ethanol come from lower agricultural inputs and more efficient conversion of feedstocks to fuel. Neither biofuel can replace much petroleum without impacting food supplies. Even dedicating all U.S. corn and soybean production to biofuels would meet only 12% of gasoline demand and 6% of diesel demand. Until recent increases in petroleum prices, high production costs made biofuels unprofitable without subsidies. Biodiesel provides sufficient environmental advantages to merit subsidy. Transportation biofuels such as synfuel hydrocarbons or cellulosic ethanol, if produced from low-input biomass grown on agriculturally marginal land or from waste biomass, could provide much greater supplies and environmental benefits than food-based biofuels.

Thanks for the table. PBS had a show on growing and harvesting algae.

[taxesareforever]

Looks like that was taken off the "Red Green" show. :)

[curiosity]

I see you pinged our resident corn lobby shill. Interesting that he hasn't replied.

[Fierce Allegiance]

:)

Give it time. Maybe a full growing season.

[Keith in Iowa]

I'm ignoring ignorants.

[palmer]

the environmentalists will attempt to shutter the oil business once and for all through a variety of legislation to make it too restrictive and taxed too heavily

I was just at a global warmatology website where one stooge revealed that he is in the process of writing a multi-hundred page report about the oil industry for 5 NE states. Sounded to me like they are going to do lawsuits like they did to tobacco and would like to do to gun makers.

[OwenKellogg]

I think that the entire Industrial Revolution will be under serious attack over the next few years. The 2008 election is more critical than any other in history for this reason. Conservatives must stop dividing over every tiny difference and recognize that our entire way of life will be under attack. These leftists really do intend to subjugate the producers (to use an Atlas Shrugged term). The outcome of this battle, led by the Nobel and Grammy nominee, Al Gore, is a clear and present danger to our way of life.

Many Republicans are going over to the "looters" side on global warming, income disparities, and industrial progress. When we start compromising issues, the battle is lost. It's just a matter of time until the train wreck.

[palmer]

These leftists really do intend to subjugate the producers (to use an Atlas Shrugged term)

It seems like it might really be worse than the usual wealth redistribution. It appears that they want to destroy productive capacity (that which uses energy), not just loot it and give it to the poor minus their cut.

[Tolerance Sucks Rocks]

Amen. Things will be much better when the country is producing butanol from cellulose and garbage. Then we can flush the ethanol habit down the toilet, or at least apply it to devices other than automobiles.

[Tolerance Sucks Rocks]

Don't forget, we're forced to buy a 10 percent mix of this crap at the pump.

[OwenKellogg]

Agreed.

[LZ_Bayonet]

"At the margin, watch for more of them to throw up their hands and head north, to a neighborhood near you."

How about to a bumper-to-bumper freeway near me? I could shut my engine, put it in neutral, and pay a couple of illegals $10 to keep pushing my small car along with traffic for the half-hour it takes for traffic to start moving; while I sleep. And there's the gas I'll save. Hmmmmm, forget the illegals, have you ever seen those weight loss ads where they state that the companies fee is only $1 for every pound the obese person loses? I could probably get some obese Americans to do this, lose weight, AND PAY ME.