Ethanol's Growing List of Enemies

Paul Hitch has spent his entire life raising cattle and hogs on a stretch of the Oklahoma panhandle he says is "flat as a billiard table." His great-grandfather started the ranch in 1884, before Oklahoma was a state, and now Hitch, 63, is preparing to pass the family business on to his two sons.

But he worries that they'll face mounting pressures in the industry, particularly because of the soaring price for corn, which the business depends on to feed the livestock. In the past year, corn prices have doubled as demand from ethanol producers has surged.

"This ethanol binge is insane," says Hitch, who's president-elect of the National Cattlemen's Beef Assn. (NCBA). "This talk about energy independence and wrapping yourself in the flag and singing God Bless America—all that's going to come at a severe cost to another part of the economy."

The ethanol movement is sprouting a vocal crop of critics. While politicians including President George W. Bush and farmers across the Midwest hope that the U.S. can win its energy independence by turning corn into fuel, Hitch and an unlikely assortment of allies are raising their voices in opposition. The effort is uniting ranchers and environmentalists, hog farmers and hippies, solar-power idealists and free-market pragmatists (see BW Online, 02/2/07, " Ethanol: Too Much Hype—and Corn").

They have different reasons for opposing ethanol. But their common contentions are that the focus on corn-based ethanol has been too hasty, and the government's active involvement—through subsidies for ethanol refiners and high tariffs to keep out alternatives like ethanol made from sugar—is likely to lead to chaos in other sectors of the economy.

Now you are changing the subject once again tariffs on ethanol. Leisler, I'm not much for arguing for the sake of arguing. I'll tell you what I know and what I think, but that's going to be about it. I don't have time to play games.

I'm not disputing that there is a $.54 per gallon tariff on ethanol imported from most countries (countries in North America and I think Central America have a different deal because of trade agreements and I don't know that there is any tariff or at least it is lower for them). I'm not a big fan of the tariff. It should at least be lowered some if not phased out entirely.

Just so we understand each other, I do not think ethanol is ever going to replace gasoline. It won't even come anywhere close unless we figure out a way to produce a whole lot more per acre of land than we (or any other country) can with corn, cane, or any other existing sugary or starchy feedstock currently used for commercial ethanol production. An average acre of Brazilian sugarcane is not going to be enough feedstock to supply enough fuel for one average American driver to drive for a year. An acre of Brazilian cane is not even twice as productive for ethanol production as an acre corn grown in this country. We already produce more ethanol with corn than Brazil does with cane, so even if we did away with all the tariffs and imported every bit they could sell us, or even took every bit they make and left them none, it would only amount to a tiny portion of the fuel we need to run our cars and light trucks. Brazil is a massive country with millions and millions of acres of prime sugar cane growing lands. No other country in this hemisphere or maybe even in the entire world could even come close to producing as much sugarcane as they can, so I doubt we'd replace gasoline even if all nations that can grow sugarcane jumped on the ethanol bandwagon and we imported their excess. For ethanol, or any other biofuel concoction to replace all the liquid petroleum fuels we use in our vehicles, or even a major portion of this fuel, we're going to have a new feedstock from which we can produce enough fuel for several drivers per acre. Otherwise there will just never be enough farmland to supply world fuel needs. Maybe something like cellulosic ethanol or biodiesel from algae will fit the bill someday, but as of yet those technologies are nowhere near ready for use in large scale commercial fuel production.

Should we be working on alternative fuels? I think so. Our fuel supply is a matter of national security. It's a bad idea to have all of our eggs in one basket with oil. Should the government spend any money on developing fuels? Again, in my opinion our fuel supply is a matter of national security, so I am not opposed to some of my tax money going to developing alternative fuels, just as I am not opposed to our government spending money on defense technology. Should we be subsidizing the heck out of these industries and causing them to grow into massive government funded industries that could not survive without government money, far bigger than they are now? Hell no. In my opinion we're going way overboard with all the subsidies and mandates and impossible goals for the future. Does all if this scare the heck out of me? Not really, because it's not really going anywhere. Not even President Bush can set mandates that extend decades past his tenure as president. I hear all the hype, but reality has a way of creeping in and spoiling all the fun. People are obviously already starting to complain about high corn prices. We'll grow more corn and that will probably bring prices back down for a while, but sooner or later prices will climb and ethanol and everything else will get too expensive and it will no longer make political sense to push for more ethanol mandates and subsidies. There will be a pullback on these things and growth in the ethanol industry will stop. It will fall back into being a small niche industry people don't think about much anymore. Some good will come out of all this though. Americans farmers will make some money for a while and all the money that's pouring into alternative fuels will likely lead to some important technological advances. The general public will become more aware of energy issues and perhaps be less opposed to things like nuclear energy, coal liquefaction, drilling for more of our own oil reserves in what are now protected areas, etc. It's not all bad.

Re read what I wrote and re read what you wrote and you just proved what I said except for the part about 10 pounds vs 14 lbs of sugar to make a gallon, we agree on most everything else. I used world sugar price because why would you pay the US sugar price? Then you say I would have to pay the tariff! Bingo! There your conspiracy! Why are we protecting our farmers when we could buy all they have and the world sugar to make ethanol no matter what the ratio is. That's the point! In Brazil, they use cane and can make it for half the price of gas right now, today! We fight over a gas pump that sell 3 cents cheaper than the next.

......."Chuckles, no offense intended here, but do you really believe there is some grand conspiracy on the part of corn growers and ethanol producers to use nothing but corn for ethanol production? That's just silly conspiracy theory nonsense. Now, no doubt American farmers, corn producers and sugar crop producers alike, do try like crazy to protect themselves from foreign competition."........

I don't understand why you can't re read your own statement and see the contradiction in your own sentence. I've studied ethanol production since the first embargo in the '70's and I've built the engines to run on it and have made the ethanol myself for under 25 cents a gallon. Prices have gone up, but are still less than gasoline. I realize you don't have to refine sugar to make it and said so in what I wrote. The point was that you could use sugar to do it and still be cheaper than gas. Even using your formula of 14 lbs of sugar to a gallon, it's still cheaper than gas. The problem is tariff's. Remember the economics 101 saying "if you want less of something tax it". Why don't we want more ethanol? If people knew how cheaply they could make it themselves, they would have stills in their garages and they might take a swig without paying the tax. Why do we have E85 in the first place? You don't need it mixed with gasoline unless you want to poison it. It also makes it more expensive because you have to have 200 proof ethanol to mix with gas. 190 proof works just fine if you use it straight. You can even burn 180 proof in a pinch. That's 10% water! If you mix it with gas the water separates in the tank and you are screwed.

All this makes ethanol fuel more expensive and is just to make it nicer for the people doing the conspiring. There was a story just recently of an old man arrested in Iowa or someplace that made biofuel from French Fry grease for his VW Golf. Seems he didn't pay any road tax on the fuel he made. They really don't want fuel independence is the point.

People argue on these ethanol threads like they do on the evo threads. This is easily provable and isn't rocket science. There are still people here that says it takes more energy to produce corn than you get from the ethanol. They haven't read anything or even bothered to look at it in 20 years.

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