Posted on 08/28/2002 11:56:37 AM PDT by alloysteel
Prosecutors snagged their first guilty plea in the Enron energy scandal last week. Former executive Michael Kopper admitted conspiracy to commit wire fraud and money laundering. He has promised to forfeit $12 million in illegal profits, which will be distributed to Enron victims.
Now, if only taxpayers could get some of their money back from a far bigger corporate energy fraud that continues unabated in Washington: Ethanol.
The corn-based fuel is backed by both Democrats and Republicans, who are hungry for contributions from agricultural conglomerate Archer Daniels Midland (which owns 41% of U.S. ethanol production capacity) and desperate for votes from the farm belt (where 98 percent of the nation's ethanol plants are located). According to the Washington Post, Senate Majority Leader Tom Daschle (D-S.D.) supervised the writing of a section in the Senate-passed energy bill requiring gasoline refiners to nearly triple the use of ethanol by 2012.
After 2012, this anti-free market maneuver would guarantee ethanol a growing fixed share of the country's fuel consumption every year, no matter what consumers actually demand or what better methods of reformulating gasoline come along.
House Speaker Dennis Hastert (R-Ill.) and Minority Leader Richard Gephardt (D-Mo.), both from corn-fed states, support Daschle's corporate welfare mandate, as does President Bush. "Ethanol is good for our economy, it's good for our air," President Bush asserted earlier this week during a swing through Iowa and South Dakota urging passage of the energy bill.
That's not what a recent internal administration document showed. A little-noticed memo from the Office of Management and Budget reported in June that both Bush's own Council of Economic Advisers and the Federal Trade Commission believe the ethanol mandate "is costly to both consumers and the government and will provide little environmental benefit."
The panels concluded that a jump in ethanol consumption would increase gasoline costs and might create fuel supply shortages on the East and West coasts. Retrofitting refineries to produce an ethanol blend could add at least 3 to 5 cents to a gallon of gas. In California, the mandate could raise fuel costs by nearly a dime per gallon; in New York, it could mean a de facto gas take hike of more than 7 cents per gallon. The ignored advice from Bush's experts is consistent with reams of past findings on both the economic and scientific fraud that is ethanol.
Cornell University agricultural researcher David Pimentel, who chaired a Department of Energy panel that investigated ethanol production several years ago, published an analysis last year showing that about 70 percent more energy is required to produce ethanol than the energy that actually is in ethanol. "Abusing our precious croplands to grow corn for an energy-inefficient process that yields low-grade automobile fuel amounts to unsustainable, subsidized food burning," Pimentel concluded.
As for the environmental "benefits," the National Academy of Sciences concluded that ethanol had little impact in improving ozone air quality. While ethanol can reduce carbon monoxide emissions, it also increases emissions of volatile organic compounds and nitrous dioxide, the most common precursors of smog.
When you add up all the targeted government subsidies for ethanol, including federal price supports, a generous federal excise tax exemption worth more than 5 cents a gallon at the pump, various tax credits, and subsidized grain exports, the taxpayer tab amounts to more than $7 billion over the last 16 years. (And ethanol still costs more than regular gasoline.) These government giveaways are on top of the abominable $200 billion farm bill signed into law by President Bush, which will pay farmers some $4 billion a year to grow more corn for subsidized ethanol production.
It's not the small family farmers that reap the rewards. It's the suits at ADM, whose every $1 of profits earned by ethanol operation is estimated to cost taxpayers $30.
This corporate bilking of the public, and the Beltway collusion that enables it, ought to be criminal. But instead of leading the ethanol crooks away in handcuffs, Tom Daschle and President Bush kneel at their feet - waiting for the donations and votes to roll in while the corn goes up in smoke.
This is a disengenuous comment. The fact is Californians pay extra to place MTB into the gasoline right now. Ethanol would add nothing more to the cost of gasoline in the long run, since MTB is being phased out, replaced by ethanol.
Also, doesn't ethanol burn cleaner than gasoline? That's been my understanding.
Now, I have a hard time thinking it's a great idea to support Sheiks from the middle-east by buying more oil, when we can divert dollars to the American farmer or American based companies instead.
In the car, yes, alcohol burns cleaner. The problem is, ethanol has half the btu's of gasoline, and it takes more energy (steam and electricity) to manufacture than gasoline.
ADM's ethanol refinery is powered by their own power plant which burns high sulfer coal, which creates a lot of pollution, one way or another. Even if the fluidized bed boiler and the scrubbers are working properly, the nasty stuff has to go somewhere.
So, if you look at the "big picture" burning ethanol, manufactured by ADM, in your car actually pollutes more (per BTU (or horsepower)) than burning gasoline.
It's my understanding the refineries themselves have long been capable of producing cleaner burning fuel, without the use of additives; and that the only reason we have additives at all is "financially influenced" governmental intervention.
Thank you, steel man. I didn't know what the catalyst for ethanol was. I was in on the conversion of an ethanol unit to make MEK, about ten years ago, and I remember all the vessles we had to reconstitute were copper, and the guard shack where the "revenooers" stayed was still there.
Also, doesn't ethanol burn cleaner than gasoline? That's been my understanding.
The pollution in the fluidized bed boiler is bound up in the limestone if it is working right, but they haul the limestone / ash mixture off & dump it. If the dump is in the wrong place, (and half of them are) the rainwater leaches the "bad" chemicals out of the mixture & it goes into the watershed. There can be a lot of heavy metals, etc in the residue.
The only safe dumping spot is in abandoned deep shaft coal mines, filling the tunnels in so they wont collapse.
The insurance companies didn't go for it they think if you get in a wreck you will go boom worse than with gasoline.
Excactly
Most of the pollution emitted by automobiles is emitted by a small percentage of the cars on the road. Locally a recent study showed that 13% of the vehicles caused 80% of the emissions. The typical government response is to require new cars to meet even higher standards. In Texas, some have proposed imposing Califorina emission standards on all new cars. The problem is these higher standards for new car auto emissions significantly increase the cost of new cars. So what do people do? They hold on to their older cars longer. I personally would prefer to pay a milage based fee for the emissions my car makes. An environmental fee would apply to all cars that are driven, not just to new cars. This would change the incentives for maintaining and driving older vehicles.
When ADM first put their new boiler in they had a lot of trouble getting rid of the flyash - trouble with permits, etc. They tried to use it to build a "Ski Resort Mountain" in the middle of 600+ acres of watershed that runs right into the sangamon river, which feeds lake decatur, which is where Decatur gets it's drinking water. After a lot of protest & legal stuff they finally gave up. I was told that Indiana's EPA had also denied them a permit to dump it in strip mines south of Terre Haute. I think it is being mixed in with concrete now, but I'm not sure.
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