Posted on 11/26/2008 6:37:38 AM PST by IbJensen
The use of ethanol and other renewable fuels supposedly helps gasoline burn cleaner creating less pollution. It also reduces America's reliance upon foreign oil.
Last Monday the Environmental Protection Agency increased the amount of renewable automobile fuels required to be sold in the United States next year from 7.8 percent to 10.2 percent of the 138.5 billion gallons of gasoline projected to be consumed. This mandate mainly directs that higher levels of ethanol be mixed with gasoline.
The higher standard is required by the Energy Independence and Security Act of 2007, a law that requires the increased use of renewable fuels each year in order to reach an annual use of 36 billion gallons by 2022. While burning cleaner gas is an admirable goal, the federal government's ethanol mandate has ensured that the American corn industry has consumers and businesses in a stranglehold without producing quantifiable benefits. In fact, some scientists now argue that there are few, if any, environmental benefits to using ethanol.
According to an April Hudson Institute report, "The Case for Ending Ethanol Subsidies," by Diana Furchtgott-Roth, "converting undeveloped land to cropland - in order to grow more corn and facilitate bio-fuel production - releases a massive amount of carbon dioxide. Only if bio-fuels are made from waste products or grown on abandoned agricultural lands does the production process actually reduce greenhouse gas emissions."
In addition, since ethanol separates from gasoline in the presence of water, the blends of ethanol and gasoline that we put in our cars cannot be transported through traditional petroleum pipelines. Instead, ethanol is shipped by rail, at greater cost than gasoline and mixed with gasoline near the point of distribution. That is why the 10 percent ethanol-gasoline blends are not available all over the country, only in major metropolitan areas.
Meanwhile American taxpayers subsidize the ethanol industry with $3 billion every year. These subsidies are given to corn farmers and ethanol producers no matter what the price of corn is on the market. These are extremely high because of the EPA requirement for biofuel usage. So many corn farmers have become wealthy from this two-tier system of subsidies and federal environmental mandates which inflate the price of corn on the open market.
Food prices around the world have risen dramatically in the last few years because of this system. Corn, beef, milk, butter, tortillas, gasoline and many other basic food commodities have become more expensive than ever because of the artificial government intervention in the market. This increase in food prices has hurt the world's poor more than anyone else but even middle-income American consumers have felt the pinch at the pump and the grocery store.
And then there is the question of energy independence, which is both an economic and a national security issue. Relying upon bio-fuels, predominantly ethanol, to make ourselves independent of foreign oil is a false hope. It has far less energy density than traditional gasoline, meaning nearly twice as much ethanol is required to equal the energy output of gasoline. We simply cannot convert enough of the land required to make ethanol into cornfields. There isn't enough land in America to do so.
Instead of releasing new federal mandates for ethanol consumption, Congress and EPA ought to overturn our artificial dependence on bio-fuels and begin building clean nuclear-energy power and coal plants, drilling for oil and natural gas in Alaska and off our coasts, and building more traditional petroleum refineries. Then we seriously could discuss the possibility of energy independence while working to clean up air pollution.
This is strangling every American household through the higher prices paid at the market. Food is being expensively processed in order to be pumped into the car's fuel tank.
This makes about as much sense as anything else these liberal pansies have ordered us to do.
Air bags, seat belts, extra stop light in the rear, etc. etc.
ping
Ethanol shares sell at bargain prices
Poet LLC says future bright, offers to buy out other producers.
DIRK LAMMERS Associated Press Writer
SIOUX FALLS, S.D. — Poet LLC, the nation’s top ethanol producer, is in buyout talks with a number of ethanol companies, the company’s founder told The Associated Press on Monday.
“We just feel there is a lot of promise in the future of the ethanol industry,” said Jeff Broin, chief executive of privately held Poet.
He offered no specific timetable and mentioned no company names.
VeraSun Energy Corp., the second largest U.S. ethanol producer, sought bankruptcy protection Oct. 31 after it suffered significant losses in the third quarter due to a dramatic spike in the cost of corn it turns into fuel.
Shares of smaller ethanol players such as Pacific Ethanol Inc., Aventine Renewable Energy Holdings Inc., and Biofuel Energy Corp. are trading at a fraction of what they once were, creating an environment in which it may be cheaper to buy an ethanol company than to build new plants.
Broin said Sioux Falls, S.D.-based Poet is looking to add plants that are in the right location with the right amenities.
“I think, quite honestly, some of the plants out there may be stranded capital. They were built in the wrong locations,” Broin said. “But there are some that we have significant interest in.”
Broin said he is examining “entire company opportunities.”
Many Wall Street analysts remain bearish on biofuels.
JPMorgan analyst Terry Bivens said consolidation could benefit the industry.
He said he expects depressed gasoline prices to lower demand for corn-based ethanol, but the long-term outlook is more favorable.
According to auto club AAA, the national average price for regular fell to about $1.91 a gallon overnight, less than half the cost when fuel hit record highs in July.
“We expect gas prices to eventually rebound and ethanol production capacity to consolidate,” Bivens wrote in JPMorgan’s 2009 alternative energy outlook.
With slim profit margins already weighing on the biofuels industry, VeraSun, which also is based in Sioux Falls, found itself in a liquidity crisis after locking in at higher-than-market corn prices.
Farmers have objected to VeraSun’s ability to reject corn contracts it signed before seeking bankruptcy protection and challenged its ability to do so Friday with the Delaware bankruptcy court.
Broin said Poet’s hedging actually boosted the company’s financial standing, and allowed it to pursue acquisitions in a rough year for the industry.
Poet, which has been making ethanol from corn for more than 20 years, operates 26 plants that collectively can pump out about 1.54 billion gallons of the alternative fuel each year. Broin said the company has brought three plants online in the past 70 days.
Poet has plans to start building at least two new plants in the spring, but an acquisition could trump that timetable if the company’s design and construction division is tied up retrofitting newly added facilities.
Ethanol FUD ping!
It is said that ethanol causes auto engines to wear prematurely. Don’t know how true that is but I have seen it written several times.
Gasoline is food? Whoda thunk it!
Food grains are not used in ethanol production, only seed quality grains. Ethanol production has not affected food prices but the high costs associated with $120.00+ oil for fuel, taxes on transport and sales taxed sure have had their effect. No, I am not pro ethanol as I know it makes a piss poor motor fuel and is very hard on engines.
Down here in Brazil, almost everyone runs 100% ethanol and haven’t anyone complaining. Seems peppy, they all drive like F1.
You know, I have supported the ethanol industry since the early 1970’s after the 1st OPEC oil embargo. But we were given the choice about to use or not to use.
BAck in the 70’s there was a lot of alternative energy talk.
Oil prices went down. We found more foreign supplies to offset the new, hard line EPA restrictions.
Of all those technologys introduced during that period, only ethanol kept in production.
Wind the clock forward to 2004 when oil prices began spiking (and imports were over 60% compared to 30% in the 70’s) and the talk came back about all those wonderful technologies that will deliver the energy we need to our doorstep.
The difference between then and now is that now the government is forcing consumers to make choices on alternate energy, instead of the free market making those choices. We have plenty of domestic oil in North America.
But since government requires, and issues the permission slip to develop those oil fields they have taken away our choices. Free enterprise no longer dominates the energy market (or any other market for that matter).
All energy alternatives require government sponsorship to succeed. Since government lacks success as a viable, fiscal, business operation, how can we depend on their leadership when there is no accountability of the leaders?
Ethanol is good for many people. Not good for many. Let them make that choice. Government is inept at making logical choices for the people.
This article really has nothing to do with the efficacy of ethanol, rather whether agriculture or petroleum has more influence in Washington.
“Food grains are not used in ethanol production, only seed quality grains. Ethanol production has not affected food prices ...”
BS! What do you think beef, chickens, turkeys, etc eat?
Where the hell does corn grow? On rocky outcrops on the side of a mountain, or is it the same farmland used to grow other food crops?
I lose about 5-6 mpg in my hybrid every time I am forced to buy the ethanol blend. With gas prices back down, it doesn’t seem so offensive, but when the price was over $4 a gallon, looking at that mpg gauge brought to mind every stupid decision the Bush administration made in the past eight years.
I hate the myth that ethanol raises food costs. The surplus corn used for ethanol wasn’t going to anyones table anyhow. And the distillers grains are fed to livestock anyhow so very little food value is lost.
For all the reasons to badmouth ethnol, the food to fuel arguement is the lamest. Blame the high cost of diesel fuel instead. Blame congress. Don’t blame the farmers. They are just trying to survive within the means government regulations allow them.
This fits in perfectly with the liberal doctrine, in creating artificial scarcities that result in a huge profit to a few, who may be strictly regulated by the dominant political power, while providing no net benefit to the rest of the population.
Now, part of the planned transition to “new sources” of energy would include natural gas, which we have in plentiful supply here in the US, and there are alternative sources to vastly expand the recovery and use of natural gas, which is primarily methane.
Compressed natural gas, CNG, has a rather low energy density per weight unit, as compared to a commonly used motor fuel, gasoline, and Diesel fuel has an even higher energy density per weight unit. Ethanol, however, is far lower energy density than either gasoline or Diesel fuel. For that reason alone, ethanol as a motor fuel is a failure.
The petrochemical technicians are rather clever lads, and over the years, they have developed several processes to convert very thick, heavy crude oil fractions into much lighter gasoline and Diesel fuel. By a reverse of this same procedure, compounds like methane may be converted to higher energy density hydrocarbons, producing a much cleaner-burning fuel than that produced from petroleum alone.
There shall be no severing ourselves from carbon based fuels, ever. Not even from the form of “fossil” fuel with the highest energy density of all, coal, or its derivative, coke, which is just about pure carbon. Back in the early 20th Century, German scientists had perfected a number of processes to convert coal directly to a liquid fuel, using steam injection into a bed of coke that had been heated to incandescence, resulting in conversion to carbon monoxide and free diatomic hydrogen, both potent and high-energy fuels when burned in the presence of oxygen. Or the free agent hydrogen and carbon monoxide could be forced through a catalyst layer, and reformulated into various hydrocarbons, creating a synthetic fuel mixture that is both more pure and more consistent than that extracted from distillation of petroleum.
But the liberal mindset has expressly prohibited this route to energy independence for this country.
Your comments are excellent!
The nanny-ninny liberal pansies know best for us.
Weyrich must work for the oil cartels.
I'll tell you what is true. Ethanol attracts and holds water. This can cause steel fuel lines and gas tanks to rust. Ethanol is a solvent and will go to work on built up varnish in gas tanks and fuel lines, causing it to break down, release and wind up in the fuel filter and/or in the carby or injector jets. Ethanol is also hard on certain seals in carburettors, dissolving them over time, particularly marine and aviation related engines. Some light aircraft use auto fuel. Auto fuel with ethanol is a no-no in aircraft because of the water attraction. If ethanol in fuel is holding water and the airplane flys at an altitude that is below freezing, hello frozen fuel lines, engine failure and a forced landing.
These are all in addition to lower gas mileage, higher food costs, etc. Ethanol is bad Ju-Ju no matter how you look at it. That's why CONgress mandated it's use.....
There is plenty of evidence to suggest that ethanol production impacts food prices. It is not a myth. Both sides of this issue have made arguments for their side. I am persuaded that ethanol production can have a substantial impact on food prices depending on the economic situation. I agree that there are other reasons to oppose the biofuel subsidies and mandates that are at least as compelling.
Farm states (including farmers) have pushed very hard for ethanol mandates and subsidies. Iowa voted for Obama largely on his support of ethanol mandates and subsidies. The corn farming states obtained enormous leverage when Republicans had control of the Senate. Republican control of the Senate was conditioned on placating the farm states with bloated farm bills. Farm bill subsidies increased substantially starting in 2002. It has been downhill since them with enormous ethanol and biofuel subsidies. Support for these subsidies and mandates was one of the biggest mistakes of Bush's presidency.
I agree that the entire farm subsidy program is badly broken. I only expect the subsidy program to become even worse with the rats in power. Republicans need to attack these subsidies and mandates. It is a good opportunity to turn the table on the farm state lobbying and bad energy and food policy.
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