James Griffin
Posted on 03/20/2012 12:46:17 PM PDT by Constitutionalist Conservative
The Energy Independence and Security Act of 2007 (EISA), which mandated a steep rise in domestic ethanol production, is causing unforeseen negative consequences for food prices while failing to live up to the desired gasoline results and other expectations, concludes a Texas A&M University research team headed by an economics professor who studies energy issues.
James Griffin
James M. Griffin, director of the Mosbacher Institute for Trade, Economics & Public Policy, which is part of Texas A&M’s Bush School of Government and Public Service, and Mauricio Cifuentes Soto, a graduate student assisting him, say in their report that the goal of EISA was to cut greenhouse gas emissions and to ease dependency on imported oil. Policymakers also thought the new blend of ethanol and conventional gasoline would cost motorists less, they note.
“EISA mandated ethanol production to grow from 4.9 billion gallons in 2006, to 36 billion by 2022,” says Griffin, author of A Smart Energy Policy: An Economist’s Rx for Balancing Cheap, Clean, and Secure Energy. “Today, at 14 billion gallons, we’re not even halfway there and the unintended consequences of the policy, especially those influencing world food prices, are negative and far outweigh the positives.”
With the best of intentions, he observes, lawmakers believed the policy would have a positive effect by lowering prices at the pump. Moreover, since corn plants absorb CO2 from the atmosphere, greenhouse gas emissions would fall significantly, and the U.S. would build energy security as domestic ethanol replaced oil imports from the Middle East.
Lawmakers had great hope for ethanol fuels.
On the positive side, the researchers point out that after adjusting for ethanol BTU efficiency losses of 40 percent less compared to conventional gasoline, refining costs, taxes and subsidies, the net benefit of the ethanol policy is just about 2.2 cents per gallon or $24 per year for a typical household consuming 1100 gallons per year.
Additionally, using CO2 life-cycle estimates by the Argonne National Laboratory, the authors assert that, ethanol reduced U.S. and world greenhouse gas emission — 0.42 percent of U.S. and 0.08 percent of world emissions.
Nevertheless, these benefits are minuscule when put in perspective. “Corn-based ethanol has done little to reduce the nation’s carbon footprint,” Griffin adds. “In contrast, the policy’s unintended consequences for food prices raise grave economic and ethical issues.”
The Texas A&M researchers also traced an increase in corn and grain prices to ethanol production. They refer to the United Nations’ FAO Food Price Index which shows that between Jan. 2007 and Sept. 2011, after adjusting for inflation, corn prices increased by 68 percent, cereals by 69 percent and dairy products by 46 percent.
One study (Hayes et al, 2009) the researchers cite quantifies how a $1 per bushel increase in corn prices impacts a wide variety of food products. The study shows, for example, that between 2005 and 2011 corn prices rose by $5 per bushel, beef rose 18.5 percent, pork 16 percent, poultry 17.5 percent, eggs 27.5 percent, milk 10.5 percent, cheese 9 percent, sugar and sweets 3.5 percent.
The researchers claim that not all these price increases are due to U.S. ethanol policies. However, even “if only one-fourth of this additional expenditure is attributable to ethanol, this would imply a loss to American consumers of $40 billion over the last 4 years.”
Even though these increased food prices might not look so significant, the world’s poor disproportionately share the burden of these policies because a large portion of their income is devoted to food alone, they add. According to the U.N., rising food prices plunged nearly 70 million people into extreme poverty in 2010-2011.
An increase in corn and grain prices has been traced to ethanol production.
Finally, in regards to energy security, the authors claim that the benefits of ethanol policy are largely elusory. The fact that in 2011 ethanol displaced 5.6 percent of imported petroleum is irrelevant because the world oil market and its effects are global. Even though the U.S. imports no oil from Iran, for example, a disruption of Iranian supplies would trigger world-wide increases in all oil prices — even domestically.
Griffin and Cifuentes conclude that, instead of marching blindly ahead to EISA’s 2022 mandated production target of 36 billion gallons, the ethanol policy should be reassessed.
“To be sure, we should continue to support R&D for advanced biofuels such as cellulosic ethanol,” Griffin says. “In the interim, we should dismantle the ethanol mandates and trust markets to sort out the proper mix of ethanol in gasoline.”
For more on the study, go here.
OTOH, knowing there was a pretty stable market, farmers have put more land into corn and soy beans, which are complementary crops. You can rotate between them, although it's a good idea to put in some alfalfa type crop into the rotation as well, along with some fallow time. My wife's grandfather did that, the sharecropper who farms the place now does it too. He's a very good steward of the land. He knows "Walt" would come back and haunt him if he wasn't. :)
Still, the government should have been subsidizing the alcohol by tax policy as they have.
Try that with a boat.
Mine was on the hard or tied to the dock most of the past two seasons because of ethanol damage. It cost the marina and the economy generally thousands of dollars for time I didn’t spend on the water, using gas, incurring scheduled maintenance fees, eating in their restaurant, shopping at West Marine, bait and tackle shops, etc.
I still haven’t got it resolved. Additives don’t do squat for ethanol problems. It corrodes the fuel system and in some cases can make the fuel tank fail. I pay special attention to opening up the lowest reaches of the bilges and getting in there physically to sniff them because of the concern for a fuel leak. I don’t want to be the last American in orbit.
ADM and the other multi-billion dollar agro-giants have corrupted and coopted the political process in the ‘red’ states to bend the process to their benefit. Republicans as much or more than Democrats are to blame. “It’s for the farmers!” is every bit as phony as “It’s for the chillrun!”. When people hear ‘farmer’ they think of American Gothic, when they should be visualizing Gordon Geccko.
Except for silk stocking yuppie law students. They are entitled to free food, fuel and birth control. It’s in the Constitution.
There was nothing elusive about the technology or the economics. They were told many times and in no uncertain terms that processing corn into ethanol would consume nearly as much fuel as it produces and that it would raise food prices. The proponents painted an ILLUSION and sold it anyway.
pure-gas.org
click on TX
less mileage, costs more... what's not to love??? and with the added bonus of increased food prices it's a twofer
The same advice from the shop where I bought a small outboard motor.
The same advice from the shop where I bought a small gasoline generator.
No way to prove it, but I feel like my fuel related repair bills have gone down, way down using 100% gasoline.
Premium gasoline (91 octane) with out any ethanol was running about 25 cents per gallon higher than Regular gasoline (87 octane) with 10% ethanol.
About a year ago the price differential jumped to 40 cents per gallon higher. I think sales were booming so stations tried the higher price for the summer months. Six months later (last fall) the difference fell back to 25 cents and has stayed there.
When I pull up to a dispenser at a gas station I pump 3 gallons of premium in my pick up tank before filling my 2 and 5 gallon gas cans. I have to assume that the hose and piping inside the dispenser were full of gasoline with 10% ethanol in it. Then I fill my gas cans.
After about a year of doing that I decided to use Premium in my pick to see how it did. The miles per gallon for the pick up went up 11%. Right now the cost difference is 7%. A savings of 4% isn't much, but it has to be better for the motor in the pick up as well.
Some people test to make sure the gas they are buying contains no ethanol. A retired man here on FR said his test kit cost just under $30. He said it was slow, but he was retired and had the time to make sure.
A year or two ago someone here on FR told this story:
A friend of his owned a Chrysler dealership. Some of the new cars he had sold kept having problems with the way they ran. His service department could not find the reason for the problem. Finally the dealer bought an expensive ethanol test kit and found that gasoline that was supposed to have 10% ethanol had up to 21% ethanol in it. The service department drained the gas tanks and filled the tanks with E-10, problem solved.
Not all Premium gasoline is free of ethanol. Most clerks in C Stores have no clue about what they are selling. I just go by the sign on the pumps. Yet at $85 an hour for repairs to an outboard a test kit might not be a bad idea.
Pure-Gas.org/ lists locations that sell ethanol free gas. You might find something in your area. The list is by no means complete, but it a place to start.
BTW I still add Seafoam or Stabil to gas that might be stored for awhile either in cans or gas tanks.
See Replies #26 and #28
You cant get 100% gasoline.
That’s the trouble.
Hmmm... I may have to take a trip to lake Fork/Yantis
I bet its a marine pump I cant get the car to.
Still, Its a good idea for the mowers and such and it’s a fishing trip.
Thanks.
I agree with every word of that. Of course, the fair market value of corn was seriously distorted because of the government's ignorant meddling in the market. The corn-based ethanol program has been very damaging to the economy and hasn't saved us any energy.
Wait a minute. Are you asserting that government action distorts the market?
cash fer clunkers was a small part of the plan to rid us of evil old-school gas engines......
ethanol is destroying a LOT of engines/fuel systems, especially small 2 strokes and seasonal usage/lawn garden equipment...
and the irony of increasing the ethanol content, while it decreases MPG, is that the EPA gets a twofer on their ever increasing CAFE mandates...
i shrugged off the fact that i cant get pure gas locally, but i cant afford to replace power tools every couple yrs, so i may have to find an aviation fuel supplier at least for those small engines...but hey, if *sales* of new cars and power equipment looks good on paper for the economists, i guess its ok...NOT...!!!
death by a thousand cuts is currently at about 933 on gilbos scale, and counting...
Gilbo’s scale is accurate....
Ethanol based gas has probably been the greatest boon to small engine manufacturers there has ever been.
I had about 3/4 quart of gas left in my tiller from last year, and it was running, but very rough.
Dumped it out and let the gas sit, totally blew the tank dry and filled it with new gas, ran like a champ!
Gas that was dumped out soon settled and was literally about 1/7 water. (plus the rust the water caused).
Ethanol gas is crap, plain and simple.
Ethanol draws water to itself.
Yup.
Hydrophilic.
Yet another “Failed Green” technology.
I encourage others to check out the keyword “FAILEDGREEN” for other industries, technologies, and companies that have failed to accomplish the hope and change that their proponents claimed would result. Also feel free to add that keyword to appropriate articles.
Burning food for fuel is stupid.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.