yeah but now the price of popcorn is going to go up
Posted on 06/17/2006 2:40:10 PM PDT by Tolerance Sucks Rocks
Ethanol stirred Wall Street last week when the second-largest ethanol producer went public, a sign that the corn-based fuel has become hot as gas prices soar.
In its first day of trading, VeraSun Energy Corp.'s stock jumped 30% to $30 a share. Production capacity of ethanol in the U.S. has more than doubled since 1999, and the total number of ethanol plants has nearly doubled as well, to 97, with at least 30 more under construction.
In April, Bill Gates, chairman of Microsoft Corp., bought a large stake in Pacific Ethanol Inc., which produces ethanol. Wal-Mart Stores Inc. recently said it may start selling E85 -- fuel that is 85% ethanol -- at the stations it owns and operates. Also, auto manufacturers recently announced that they will ramp up production of ethanol-friendly cars.
A sign advertises the availability of E85 fuel. Could ethanol be the answer to the nation's energy problem? Here is a look at some of the issues:
Why is ethanol suddenly so popular? Investors and consumers have been seeking alternatives to oil as gas prices hover near $70 a barrel. President Bush, in his 2006 State of the Union address, called for more research into renewable energy, namely so-called cellulosic ethanol, the non-corn-based ethanol that is derived from natural products like switch grass, sweet potatoes, even pineapple tops. Today, nearly all ethanol on the market is corn-based, since there is a lack of technology to make cellulosic ethanol economically.
(Excerpt) Read more at online.wsj.com ...
Carl Bialik
June 9, 2006
President Bush announced in his State of the Union address in January that he backed funding for research into producing ethanol from corn and other farm products, with the goal of making a viable fuel alternative to gasoline for automobiles. Since then, Congress has wrangled over how to implement the idea.
Critics, meanwhile, have blasted the viability of ethanol. A central argument is that corn-based ethanol, the most-common form today, is literally a waste of energy. Detractors say that it takes more fuel to make ethanol -- growing the corn, bringing it to a processing plant and converting it to fuel -- than would be saved by using it.
That criticism has received attention in articles in the Washington Post, the Louisville Courier-Journal and Cox News Service (all of which also included the pro-ethanol side). In April, Larry Kudlow said on his CNBC show, "So many experts believe it costs more energy to turn corn into ethanol-related gasoline than [is] actually produced."
Two prominent researchers are chiefly responsible for the energy-efficiency claim: Cornell University's David Pimentel and Tad Patzek of the University of California, Berkeley. In a co-written paper published last year in Natural Resources Research, Profs. Pimentel and Patzek wrote, "Ethanol production using corn grain required 29% more fossil energy than the ethanol fuel produced." By comparison, production of gasoline or diesel uses about 20% more fossil energy than the fuels produce. (For automobiles, ethanol is generally blended with gasoline in either 90-10 or 85-15 proportions, but the studies focused on the energy content of the ethanol itself.)
An Energy Field of Dreams (Excerpt)
Wall Street Journal Editorial Board
June 17, 2006
"Be like Brazil" have never been words to live by except perhaps in soccer or samba. But suddenly Americans are being told we should imitate Brazil in its expensive devotion to driving cars that run on ethanol. VeraSun Energy, the second-largest U.S. ethanol producer, was the talk of Wall Street this week with its IPO. Wal-Mart wants to install pumps to cater to cars that run on a largely ethanol blend. Even Rudy Giuliani was plumping for the stuff this week, a sign that an Iowa campaign stop may be in his future.
We'd say the world had gone mad, except that this is a fairly typical case study in how political meddling distorts energy markets. Weary of high gas prices, drivers can be forgiven for desiring a "miracle" fuel that is allegedly cheap and clean. But the corn farmers, ethanol producers, politicians and environmentalists who have promoted the new ethanol mania have no excuse for peddling misinformation.
We have nothing against corn-based ethanol per se, assuming it competes in the market on the same basis as other fuels. Ethanol's problem is that it is expensive to make and provides far fewer miles per gallon than gasoline. So its supporters have worked the political system to subsidize ethanol, and more recently to force Americans to buy it.
U.S. taxpayers today pay twice for ethanol: once in crop subsidies to corn farmers and again in a 51-cent subsidy for every gallon of ethanol. Without such a subsidy, ethanol simply wouldn't be cost competitive with gasoline. Then last year, Congress went further and passed a new ethanol mandate, requiring drivers to use at least 7.5 billion gallons annually by 2012.
PING!
If so, we should open up ANWR to corn farming.
This is always good news. An additional item they need to develop is an ethanol converter that can be installed on older cars, rather inexpensively. That will only speed up the conversion. A nice tax break for the conversion should be afforded to anyone doing it also.
yeah but now the price of popcorn is going to go up
There doesn't seem to be a politician willing to say the Emporer has no clothes. It looks like this giant and useless subsidy is locked in. It's a good time to be a corn farmer on the government dole.
I thought that non-corn-based ethanol was a better deal, in terms of both cost to produce and energy output vs input.
Some have challenged that claim as bogus. What about Brazil? They have been doing this big time for a while. You're telling me that they (or someone else) have not analyzed their ethanol and gasoline consumption in this regards?
That's what I've been reading: there are far more efficient plants that grow in North America for making Ethanol. Corn fuel just enriches Archer-Daniels-Midland. . .
Not at $4.95 a gallon!
Something very shaky about this claim re: takes more energy to produce than is in what is produced. Well, who cares? If you can use solar power at the ethanol production plant, who cares if the joules consumed > joules produced?
FYI, this claim is probably bogus. The claim that is NOT bogus is the sheer acreage that would have to be switched to corn to equal the energy consumed by gasoline per year. That equation is legitimate, and as best I can tell it exceeds the acreage of land in the US, period, not just agriculture land. Total land.
But you CAN put a dent in the gasoline consumption and that by itself would cause oil prices to collapse.
Even though ethanol production is wasteful as compared gasoline the advantage is that all the components can be domestic.
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