Ethanol's Growing List of Enemies

Business Week ^ | March 19, 2007 | Moira Herbst

[thackney]

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.

[thackney]

the liquid-fuel energy gain is more that TEN-TO-ONE

From your same source, they claim it takes 0.74 BTU to produce 1 BTU of ethanol fuel.

They also admit that energy balance claims for ethanol widely vary, some claim negative balance.

[thackney]

anything is better than sending money to ragheads

What about producing our own petroleum that generates royalty payments instead of requiring subsidies from the taxpayers?

[TKDietz]

"Don't we pay farmers NOT to grow things? Why not try to get them to plant more."

For the most part we do actually pay them to grow more. Most crop subsidies these days are paid on each bushel a farmer produces. They government will set a target price they think farmers need to make per bushel to stay in business, and then pay subsidies to make up the difference between the actual market price and the price they set. The higher the market price for a crop like corn goes, the lower the government's per bushel subsidies go. A lot of people believe these subsidies encourage overproduction and are self perpetuating because farmers keep producing more to make more money and as they do that they drive prices down which means the government will have to pay more in subsidies for each bushel produced. There isn't really a penalty for producing way more of a particular crop than we need. If the market price gets driven down the government will make up the difference. As a result corn prices have stayed really low for a long time until just last year when drought and demand for ethanol started making prices climb again.

There is still a limited soil conservation program where they pay some farmers with erosion prone soil not to grow crops. They only pay a little better than forty dollars per acre on average though so not many farmers participate in this program, especially if their farmland is productive. It wouldn't make economic sense for the farmers. What the soil conservation program ends up being then is welfare for a few farmers with bad farmland that shouldn't be farmed anyway. Most of this land wouldn't be farmed even if the program did not exist.

[greasepaint]

F you.

one tenth of the energy, needs to come
from filthy ragheads.

the rest is home grown

[chuckles]

The prez just left the Brazilians mad because they wanted the 54 cent a gallon tax lowered. They have the ethanol, we don't want it. The corn producers are the problem. If ethanol can be produced below $1 a gallon, why is it over $2 on the futures price(2.32 as I write)? We use corn at $4 a bushel and they use cane at a dirt cheap price is why.

It's all to protect a few votes in the midwest. If we are going to do this, you have to jump in with both feet. Right now, this morning, refined sugar is about 10 cents a pound. At 10 pounds per gallon of ethanol, thats $1 a gallon with a refined product. You don't need to refine it before fermentation, but that just shows how cheap it can be if we weren't propping up the corn farmers. In Brazil, ethanol is 1/2 the price of gasoline and they export a surplus.

[thackney]

They have the ethanol, we don't want it.

Nearly a Billion gallons a year shows this statement false.

We need energy independence, not a new supplier waiting to get rich off of us.

[hedgetrimmer]

President Bush's brother Jeb has a money making interest in ethanol, he's created the Interamerican Ethanol Commission with South American partners. So you are going to see ethanol subsidized and pushed on America by the government, then they will pull the carpet out from under American producers, so that Brazil can have the ethanol production as part of a falsely named "free trade" agreement. It will further disrupt and depress the US economy, which is a goal of these types of groups.

Farm and Food: Some more free-trade, grain-alcohol Kool-Aid

[chuckles]

....."perhaps farmers will make enough money actually growing crops and we can get rid of all those subsidies."....

I agree with the first part of your post, but you are dreaming here. It would be like telling the "Grey Panthers" they have to take a $5 cut in SS to save the country. You would be sent home next election cycle. I love farmers and God bless em, but they have their own "union" knuckle dragger's that roam the halls of congress breaking knee caps. The sugar subsidy comes to mind down south. Can't get rid of it no matter what the price of sugar is.

[hedgetrimmer]

The Bush brothers have a vested interest in forcing America to produce ethanol right now, just like Al Gore has a vested interest in a carbon tax from global warming.

[greasepaint]

do you know how to read?

--> LIQUID <-- energy gain is more than

TEN to ONE.

the rest is coal-etc, that cost pennies.

[chuckles]

...."This is a problem?".....

No, its not a problem, but they don't need subsidies and sweetheart deals to do it. All, I'm saying is the demand is so high, we could take ethanol or feed stocks from several places and the price would still be sky high for farmers, but we would have tons more ethanol at a cheaper price.

[hedgetrimmer]

We are getting ethanol only because politicians in the highest offices are corrupting the market for their personal gain.
****

Florida, Brazil, and IDB Launch Interamerican Ethanol Commission

The Honorable Jeb Bush, Governor of the State of Florida, His Excellency Roberto Rodrigues, President of the Superior Council of Agribusiness of FIESP and His Excellency Luis Alberto Moreno, President of the IDB, Launch Commission to Promote Usage of Ethanol in Gasoline Pools of the Western Hemisphere
MIAMI, FL -- (MARKET WIRE) -- December 18, 2006 -- At a press conference today at the Biltmore Hotel, the Honorable Jeb Bush, Governor of the State of Florida; His Excellency Roberto Rodrigues, President of the Superior Council of Agribusiness of FIESP and Former Minister of Agriculture of Brazil; and His Excellency Luis Alberto Moreno, President of the Inter-American Development Bank (IDB), announced the initiation of the Interamerican Ethanol Commission. Bush, Rodrigues and Moreno will serve as co-chairs of the commission which has as its mission to promote the usage of ethanol in the gasoline pools of the Americas.

Rodrigues was joined by a distinguished Brazilian delegation that included Linneu Carlos da Costa Lima, Deputy Minister of Production and Agroenergy; Silvio Crestana, President of EMBRAPA; Eduardo de Carvalho, President of UNICA; Luis Custódio Cotta Martins, President of SINDAÇÚCAR - Minas Gerais; and Silas Oliva, Director of Petrobras. Governor Bush was accompanied by several key board members and staff of Florida FTAA, including Ambassador Charles E. Cobb, Chairman of Florida FTAA; Brian C. Dean, Executive Director of Florida FTAA and the co-chairs of the Florida FTAA Ethanol Advocacy Committee: Jorge L. Arrizurieta, Chair, International Policy Group, Akerman Senterfitt; Dominique Virchaux, Managing Partner, Virchaux & Partners; and Mario Fernandez, President, COFE Properties, LLC. President Moreno was joined by several key officials from the IDB, including senior staff of the bank's section for Alternative Sources of Energy. Additional attendees included corporate leaders, scientific experts, and other local government leaders.

In addition, the launch featured championship IndyCar driver Vitor Meira, senior IndyCar executives, including Vice President for League Development John Lewis, and the Indy Ethanol Show Car. IndyCar is leading motor-sports into a new era by adopting 100% ethanol as its fuel of choice for the 2007 racing season, which begins at Homestead-Miami Speedway on Saturday March 24. Both IndyCar and its racing partner the Ethanol Promotion and Information Council (EPIC) were honored at the launch with the 2007 Akerman Senterfitt Ethanol Innovator in Sports Award. According to IndyCar executives, "ethanol is less costly, better for the environment, and is a superior octane burner, actually increasing the speed and power the sport demands." Tom Slunecka, Executive Director of EPIC, commented that "the IndyCar Series choice of 100 percent fuel-grade ethanol...sends a message to consumers that performance and environmental responsibility go hand in hand when choosing ethanol-enriched fuel at the pump."

Bush, Rodrigues, and Moreno discussed the main objectives of the commission, which include: promoting increased ethanol blended fuel use throughout the region; promoting the integration of technical and scientific research efforts across the hemisphere related to the production and distribution of ethanol; determining investment needs in both agriculture and infrastructure to enable a hemispheric wide market for ethanol blended fuel; determining the economic and environmental implications of carbon credits produced by the project; encouraging the development of environmentally sound ethanol operations; and recommending a set of actions in order to create an international market for ethanol.

The commission will educate governments and legislatures throughout the hemisphere on ethanol through a series of "road shows." In addition to disseminating information, generating media coverage, and promoting public discussion of the benefits of ethanol, these road shows will secure partnerships from local officials and interested groups in order to expand ethanol usage and production for export.

Former Minister Rodrigues spoke of Brazil's role as a global leader in ethanol technology, production and distribution, pointing out that the country produces approximately 4 billion gallons of ethanol annually. He stated that "Brazil's ethanol capacities and technology position the nation to provide leadership throughout the hemisphere," and emphasized that "now, with the partnership of the State of Florida and the establishment of a formal forum of cooperation through the commission, countries throughout the Americas will benefit from the expansion of ethanol usage and production." Brazil is Florida's top trading partner, with two-way trade totaling 10.9 billon U.S. dollars in 2005.

Governor Bush emphasized the potential role the committee can play in contributing to decreasing U.S. dependence on imported oil by means of diversifying the United States' fuel economy. He stated, "Through this commission, Florida has a great opportunity to be on the forefront of promoting an energy policy that strengthens our national security, stimulates economic development, increases protection for our environment and promotes free trade within the hemisphere."

President Moreno's participation in and support for the Interamerican Ethanol Commission reflects his perspective that the commission will serve to spur economic development and to alleviate poverty in the Latin American and Caribbean region.

The three leaders agreed that cooperation on renewable energy has the potential to serve as a uniting force in the Americas, contributing toward economic growth and a cleaner environment. All three alluded to the significant opportunities expanded ethanol production holds for sustainable development and job creation throughout the Western Hemisphere.

The idea to form this commission grew out of a policy proposal Governor Bush submitted to Washington in April. His "Hemispheric Wide Approach to Ethanol," holds that the United States should adopt a bold initiative to pump 15 billion gallons of ethanol annually into the marketplace by 2015 ("15 by '15") -- nearly 10 percent of current national demand for gasoline and double the amount required by the Energy Policy Act of 2005.

The Interamerican Ethanol Commission promotes the usage of ethanol in the gasoline pools of the Western Hemisphere and is co-chaired by Governor Jeb Bush, State of Florida; Roberto Rodrigues, President of the Superior Council of Agribusiness of FIESP; and Ambassador Luis Alberto Moreno, President of the Inter-American Development Bank. The commission will serve to foster awareness of the benefits of renewable fuels in economies throughout the Americas and contribute toward a framework for a rationalized and viable regional marketplace in ethanol, promoting the policy guidance necessary to spur both foreign and domestic investment in renewable fuel production and infrastructure.



http://www.marketwire.com/mw/release_html_b1?release_id=195102

[montag813]

Ethanol in your tank is a violation of Sharia Law.

[hedgetrimmer]

Look who's poised to make fortunes off of ethanol:

The commission will serve to foster awareness of the benefits of renewable fuels to economies throughout the Americas. The commission will also contribute toward a framework for a rationalized and viable regional marketplace in ethanol, promoting the policy guidance necessary to spur both foreign and domestic investment in environmentally sound renewable fuel production and infrastructure.



Leadership



The commission is co-chaired by:

Governor Jeb Bush, State of Florida

Roberto Rodrigues, President of the Superior Council of Agribusiness of Brazil &

Former Brazilian Minister of Agriculture

Ambassador Luis Moreno, President of the Inter-American Development Bank

The launch ceremony is co-chaired by:

Glenda Hood, former Florida Secretary of State

Donna Hrinak, Director of Corporate & Government Affairs, KRAFT Latin America and former U.S. Ambassador to Brazil (invited)

Current Stakeholders include:

Florida FTAA, Inc. – Ambassador Chuck Cobb, Chairman; J. Antonio Villamil,
Vice Chair; Brian C. Dean, Executive Director; Jorge L. Arrizurieta, Dominique Virchaux, and Mario Fernandez, Co-chairs, Ethanol Committee

Empresa Brasileira de Pesquisa Agrícola (EMBRAPA)

Federation of Industries of the State of São Paulo (FIESP)

Pólo Nacional de Biocombustíveis / São Paulo University (USP)

[Leisler]

ADM, every mewing hick farmer that can't make an honest living, most of the Republican/Democrat farm state political hacks.

The tax and regulatory suppression of oil, nuclear, coal in this country, coupled with the delusionist notions of greenies and the greed of farmers are the motivations of this. It's politics and money, not physics and economy.

The economic distortions of the market make eth and other expensive fuels seem possible. Actually it makes them possible.

Anyways these farm greed heads, ADM and government gave us the toxic boondoggle of MTBE additives in our fuels. It's so screwed up it's hard to figure where the clear baseline is.

I'd love for half the country to go eth. Eth gas prices would soar to, say, $7/gallon. I'd stick with gas which would drop to $1. Fine with me. Of course then the eth heads would flee eth. Duh. Free, private markets. It used to have some hold in Republican circles.

[Leisler]

It's amazing what money you can make when the government forces people to buy your product that they wouldn't buy otherwise.

[dalereed]

Used a lot of it racing in the 50s, it's alright if you don't care about massive consumptionm.

For general transportation it's absolute garbage.

[chuckles]

Yes, I understand engine building. I've built several. I could take the 350ci chevy out of my truck and put a v6 or even a 4cly 2 liter in and get the same HP as the V8 but also get more torque and better economy than the gas V8. If you have a 4 cly that produces 400 hp when you need 400hp, but runs on 4 cly when you are coasting, you would get better economy. Higher compression, turbo's with 30-lbs of boost, advanced timing, high lift longer duration cams all add to the efficiency of the engine. It's true the jets would be larger for ethanol, but you are using it more efficiently than gas.

Think of the rice burners of today that use nitrous injection. For the few moments they get nitrous, they produce 500 hp, then when the nitrous is cut, they are back to 150 hp. Another advantage would be air cooled engines with high compression and high power, less weight combo's. Having 115 octane fuel opens up several possibilities.

[dalereed]

Back then it was methanol, the poison one, ethanol was illegal because you could drink it.

[TKDietz]

"I can't figure out why corn is the only crop those ethanol plants use, when corn isn't even the best crop TO use for maximum ethanol production."

Right now corn is the best crop grown in this country to use for ethanol production. If our farmers could find a better one, they'd jump right on it. They're in this to make money. If there was a feedstock they could grow as cheaply as they grow corn and it would give higher per acre ethanol yields, they'd start growing it and would bring in more money for it per acre than they can get now for corn. Ethanol producers aren't any different, they're also in this to make money. They want the cheapest, highest yielding feedstock they can get. It's not hard for them to switch to another grain or another feedstock, although it may be difficult for some of these plants to make the big jump to cellulosic ethanol production if that technology ever pans out. A few plants already use other feedstocks besides corn, especially sorghum. They mostly all use nothing but corn though because corn is the cheapest feedstock they can get and they're able to get pretty high yields from it. There have been studies done on using sugar cane, sugar beets, and all sorts of other feedstocks, and none of the other feedstocks were as cost effective as corn for use as an ethanol feedstock in this country. Corn is abundant and relatively cheap, and it's about 70% starch, which can all easily be converted into fermentable sugars. They get about 2.8 gallons of ethanol per bushel now, and farmers are able to get well over 150 bushels per acre on average. Bushels per acre yields for corn keep improving as time goes on. Sugar cane would be better in terms of gallons of ethanol per acre yields, but there are very few places where it will grow in this country and what little we are able to grow ends up going for a high price for sugar production. The same applies to sugar beets, which on a per acre basis will produce more ethanol than corn, but they only grow well in limited parts of this country, they're expensive to grow and harvest and destructive to the soil (after a sugar beet crop farmers wait several years before planting them in the same field), and what little we are able to produce already command a high price in our lucrative sugar industry.

There is no great conspiracy to use nothing but corn for ethanol production in this country. The reason corn is the ethanol feedstock of choice in this country is because it's relatively cheap and high yielding as an ethanol feedstock. It's the best one we have, for the time being. When something better comes along, farmers and ethanol producers will quickly adapt and start growing it and using it to produce fuel.