Stop selling ethanol and see what happens

[daveman]

A study came along this past week from economists at Iowa State University and the University of Wisconsin that found that if ethanol production came to an immediate halt, the estimated gasoline price increase would be what the researcher described as “historic proportions,” ranging from 41 to 92 percent.

That’s roughly $5.50 to $7.50 of gasoline per gallon.

The same research team, in a study sponsored by the Renewable Fuels Association and released by the Center for Agricultural and Rural Development (CARD), found that the increased use of ethanol reduced wholesale gasoline prices by an average of $0.89 per gallon in 2010. The average effect increased to $0.89 per gallon, and the regional impact ranges from $0.58 per gallon on the East Coast to $1.37 per gallon in the Midwest, according to the study’s authors.

Ethanol In Pottersville

Thought this was interesting.

So you're perfectly willing to continue killing the Gulf of Mexico as long as you don't have to pay more for gas.

 

[daveman]

A study came along this past week from economists at Iowa State University and the University of Wisconsin that found that if ethanol production came to an immediate halt, the estimated gasoline price increase would be what the researcher described as “historic proportions,” ranging from 41 to 92 percent.

That’s roughly $5.50 to $7.50 of gasoline per gallon.

The same research team, in a study sponsored by the Renewable Fuels Association and released by the Center for Agricultural and Rural Development (CARD), found that the increased use of ethanol reduced wholesale gasoline prices by an average of $0.89 per gallon in 2010. The average effect increased to $0.89 per gallon, and the regional impact ranges from $0.58 per gallon on the East Coast to $1.37 per gallon in the Midwest, according to the study’s authors.

Ethanol In Pottersville

Thought this was interesting.

Sounds like something Obama Energy Secretary Steve "Somehow, we have to figure out how to boost the price of gasoline to levels in Europe" Chu would support in a heartbeat

I am a Democrat because I believe in the environment and conservation. For instance, we must raise the price of gasoline, like they do in Europe, to increase conservation. If we don't, there will soon be a big gas shortage, and this will mean higher gasoline prices for you and me.

 

[daveman]

1.5 gal fuel oil used for every 1 gal ethanol produced ,wheres the payoff??

That is a total lie. Ethanol EROEI is 3:1. It produces 3 units of energy for every 1 unit consumed. The same as oil sands. the US also makes/saves $3 on ethanol for every $1 it cost us.

Wrong.

Recently, Patzek published a fifty-page study on the subject in the journal Critical Reviews in Plant Science. This time, he factored in the myriad energy inputs required by industrial agriculture, from the amount of fuel used to produce fertilizers and corn seeds to the transportation and wastewater disposal costs. All told, he believes that the cumulative energy consumed in corn farming and ethanol production is six times greater than what the end product provides your car engine in terms of power.​

 

[Momanohedhunter]

1.5 gal fuel oil used for every 1 gal ethanol produced ,wheres the payoff??

That is a total lie. Ethanol EROEI is 3:1. It produces 3 units of energy for every 1 unit consumed. The same as oil sands. the US also makes/saves $3 on ethanol for every $1 it cost us.

No not really he isn't. They use fossil fuels and petroleum products to grow, produce, and ship the stuff. There is no way you can look at the cost of shipping alone and say mass produced ethanol saves money. It is logistically impossible even if they did blend the fuel there it still would not be cheaper. They still have to ship the ethanol to refineries all over the country by hundreds of thousands of diesel trucks that get shitty MPG and pay big dollars for fuel. Now, who eats that fuel bill?

 

[Quantum Windbag]

The problem with ethanol is that producers use corn when there are plenty of other sources that would not adversely effect the cost of foods!!!!!
Corn is used in almost every packaged good found in a grocery store and is a vital foodstuff for livestock. Make it less available and the price rises. Those prices are passed on to EVERY American consumer!
And, ethanol is a joke!!!
I drove a taxi powered by LPN for six years! It was a good as the highest grade gasoline, produced less than 10% of the emissions and is a hundred times more plentiful than petroleum products!!!

Yup. Anything high in cellulose will do. I know a guy who has a motorcycle that burns alcohol. He makes his fuel from day old bread and doughnuts. He also makes it from cat tails and is experimenting with lawn clippings. Engines run cooler on straight ethanol to.

The US farmer produces over 12 billion bushel of #2 yellow field corn every year. Humans eat sweet corn. Humans do not eat this field corn. It is fed to livestock. Extracting Ethanol from this corn only uses the starch of the corn. All the protein remains as Distiller Dried Grains (DDG) animal feed. Protein is what builds muscles in animals. Muscles = Meat, Steak, Hamburger, etc. Corn starch created methane gas in farm animals. This is smelly & is 15 times stronger of a greenhouse gas than (CO2) Carbon Dioxide ever was.

If you converted all the Corn grown in the USA into Ethanol it still leaves US & the World nearly all the animal feed value in the form of DDGs that we would have got from feeding corn directly to animals. We still export the DDG animal feed to China & the rest of the world the same way we did the corn. Sugar cane, switch grass & algae do not have a usable food co-product. They only create toxic waste. That means when you take away farm acreage to grow one of those, you truly decrease the worlds available food & drive up food prices. That does not happen with corn ethanol.

If you converted all the Corn grown in the USA into Ethanol it can replace 25% of the total US Gasoline demand 12% of the total US Crude Oil demand.

Mixing Ethanol into Gasoline prevents the need for refineries to add the ground water polluting MTBE into gasoline.

Ethanol production in the USA has created over 500,000 good paying jobs in the USA. Not part time minimum wage jobs.

You keep posting that thinking it actually proves something.

Are you aware that, if Obama's new mandates on ethanol remain in place, we will need to devote more and more crop to the feed corn every year? Eventually all the land currently used to produce both will be devoted to feed corn, and there will be no room to grow sweet corn.

There are lies, damn lies, and statistics. Your statistics make that statement true.

 

[Momanohedhunter]

Say KissMy, I returned that neg rep you sent with your resound about them using rail tankers. First retard that very statement points directly to your ignorance of how shipping and logistics. You see, there are few gas stations that have service by rail. And a tanker drop to a gas station uses the same amount of or more fuel as OTR due to inner city driving. Oh and here is your response.-

Stop selling ethanol... 05-17-2011 05:50 PM KissMy They use rail cars

Next time dont be such an ignorant pussy and post your neg rep out in the open like everyone else does. Then you will just be ignorant.

 

[KissMy]

Historically Gasoline has usually cost more than Diesel Fuel. These price charts prove Ethanol is lowering the cost of Gasoline at the pump.

The oil boys are all pissed about it & want to see your money support some foreign terrorist so their defense stocks will also make money. Lower Gasoline vs Diesel prices at the pump would not be possible if Ethanol actually had a negative EROEI or increased Gasoline consumption by lowering your mileage. Increased Ethanol demand is lowering Gasoline demand & blending Ethanol into Gasoline is increasing the Gasoline supply.

In the winter the demand for heating-oil/diesel-fuel is high & gasoline is low. That makes gasoline a bi-product from the barrels of crude oil they refine into heating oil. So the gas price dropped below & heating-oil/diesel-fuel would rise above gasoline every winter.

The exact opposite happened every summer.

In the summer the demand for gasoline is high & heating-oil/diesel-fuel is low. That makes heating-oil/diesel-fuel a bi-product from the barrels of crude oil they refine into gasoline. So the heating-oil/diesel-fuel price dropped below & gasoline would rise above heating-oil/diesel-fuel every winter.

Before the big rise in Ethanol production this translated into gasoline being at least 25% higher than diesel-fuel at the pump in the summer & diesel-fuel costing at least 25% more than gasoline in the winter.

Now in the past 3 years gasoline prices never even get as high as diesel-fuel even in the summer. At current prices that means Ethanol is holding Gasoline prices at the pump down by at least a $1 a gallon.

 

[Momanohedhunter]

Historically Gasoline has usually cost more than Diesel Fuel. These price charts prove Ethanol is lowering the cost of Gasoline at the pump.

The oil boys are all pissed about it & want to see your money support some foreign terrorist so their defense stocks will also make money. Lower Gasoline vs Diesel prices at the pump would not be possible if Ethanol actually had a negative EROEI or increased Gasoline consumption by lowering your mileage. Increased Ethanol demand is lowering Gasoline demand & blending Ethanol into Gasoline is increasing the Gasoline supply.

In the winter the demand for heating-oil/diesel-fuel is high & gasoline is low. That makes gasoline a bi-product from the barrels of crude oil they refine into heating oil. So the gas price dropped below & heating-oil/diesel-fuel would rise above gasoline every winter.

The exact opposite happened every summer.

In the summer the demand for gasoline is high & heating-oil/diesel-fuel is low. That makes heating-oil/diesel-fuel a bi-product from the barrels of crude oil they refine into gasoline. So the heating-oil/diesel-fuel price dropped below & gasoline would rise above heating-oil/diesel-fuel every winter.

Before the big rise in Ethanol production this translated into gasoline being at least 25% higher than diesel-fuel at the pump in the summer & diesel-fuel costing at least 25% more than gasoline in the winter.

Now in the past 3 years gasoline prices never even get as high as diesel-fuel even in the summer. At current prices that means Ethanol is holding Gasoline prices at the pump down by at least a $1 a gallon.

Are you so fucking retarded that that you dont think anyone will notice both your charts are from 2008 ? Have a clue about what you are posting asshole. Flaylo has it together better then you.

 

[chikenwing]

That is a total lie. Ethanol EROEI is 3:1. It produces 3 units of energy for every 1 unit consumed. The same as oil sands. the US also makes $3 on ethanol for every $1 it cost us.

Really??!!,funny thing this was told to me by a Citgo Engineer as I installed a blending system at one of their terminals,no incentive to lie,just part of a conversation we had about ethanol.

Kinda straight from the horses mouth so to speak.

Boy you are stupid. The Citgo man had every reason to lie to you. Ethanol is holding Gasoline prices down by over $1 a gallon. I proved that right here. Apparently you have a comprehension problem.

So how does your pretzel logic work here? Citgo lies too me because it takes more fuel oil to make less ethanol? if they were going to lie it would be the other way around,ya your right comprehension is a problem.

 

[Momanohedhunter]

Ethanol: How Many Senators Does It Take to Screw a Taxpayer?
Posted on January 16, 2011 by geobear7| 13 Comments

By The Burning Platform

“Today, the government decides and they misdirect the investment to their friends in the corn industry or the food industry. Think how many taxpayer dollars have been spent on corn [for ethanol], and there’s nobody now really defending that as an efficient way to create diesel fuel or ethanol. The money is spent for political reasons and not for economic reasons. It’s the worst way in the world to try to develop an alternative fuel.” - Ron Paul

When bipartisanship breaks out in Washington DC, check to make sure your wallet is still in your pocket. Every time you fill up your car this winter you are participating in the biggest taxpayer swindle in history. Forcing consumers to use domestically produced ethanol is one of the single biggest boondoggles ever committed by the corrupt brainless twits in Washington DC. Ethanol prices have soared 30% in the last year as the supplies of corn have plunged. Only a policy created in Washington DC could drive up the prices of gasoline and food, with the added benefits of costing the American taxpayer billions in tax subsidies and killing people in 3rd world countries.

The grand lame duck Congress tax compromise extended a 45-cent incentive to ethanol refiners for each gallon of the fuel blended with gasoline and renewed a 54-cent tariff on Brazilian imports. The extension of these subsidies, besides costing American taxpayers $6 billion per year, has the added benefit of driving up food costs across the globe, causing food riots in Tunisia, and resulting in the starving of poor peasants throughout the world. This taxpayer boondoggle is a real feather in the cap of that fiscally conservative curmudgeon Senator Charley Grassley. He was joined in this noble effort by another fiscal conservative, presidential hopeful John Thune. It seems these guys hate wasteful spending, except when it benefits their states. The bipartisanship in this effort was truly touching, as Democrats Kent Conrad and Tom Harkin also brought home the pork for their states.

A bipartisan group of 15 senators signed a letter in late November demanding an extension of U.S. ethanol subsidies. I wonder if the fact they have received hundreds of thousands of dollars in campaign contributions during the past six years from pro-ethanol companies and interest groups like ADM, Monsanto, the National Corn Growers Association, and the Iowa Renewable Fuels Association had anything to do with this demand. You can always count on a Senator to do what’s best for his re-election campaign rather than what is best for the country. These symbols of political integrity will always spout the standard talking points:

Promoting ethanol reduces our dependence on foreign oil
Ethanol is green renewable energy
Ethanol is cheaper than gasoline

As we all know when dealing with a politician, “half the truth, is often a great lie.”

Amaizing

Corn is the most widely produced feed grain in the United States, accounting for more than 90% of total U.S. feed grain production. 81.4 million acres of land are utilized to grow corn, with the majority of the crop grown in the Midwest. Although most of the crop is used to feed livestock, corn is also processed into food and industrial products including starch, sweeteners, corn oil, beverage and industrial alcohol, yogurt, latex paint, cosmetics, and last but not least, fuel Ethanol. Of the 10,000 items in your average grocery store, at least 2,500 items use corn in some form during the production or processing. The United States is the major player in the world corn market providing more than 50% of the world’s corn supply. In excess of 20% of our corn crop had been exported to other countries, but the government ethanol mandates have reduced the amount that is available to export.

This year, the US will harvest approximately 12.5 billion bushels of corn. More than 42% will be used to feed livestock in the US, another 40% will be used to produce government mandated ethanol fuel, 2% will be used for food products, and 16% is exported to other countries. Ending stocks are down 963 million bushels from last year. The stocks-to-use ratio is projected at 5.5%, the lowest since 1995/96 when it dropped to 5.0%. As you can see in the chart below, poor developing countries are most dependent on imports of corn from the US. Food as a percentage of income for peasants in developing countries in Africa and Southeast Asia exceeds 50%. When the price of corn rises 75% in one year, poor people starve.

The combination of an asinine ethanol policy and the loosest monetary policy in the history of mankind are combining to kill poor people across the globe. I wonder if Blankfein, Bernanke, and Grassley chuckle about this at their weekly cocktail parties while drinking Macallan scotch whiskey and snacking on mini beef wellington hors d’oeuvres. The Tunisians aren’t chuckling as food riots have brought down the government. This month, the U.N. Food and Agricultural Organization (FAO) reported that its food price index jumped 32% in the second half of 2010 — surpassing the previous record, set in the early summer of 2008, when deadly clashes over food broke out around the world, from Haiti to Somalia.

Let’s Starve a Tunisian

“What is my view on subsidizing ethanol and farmers? Under the constitution, there is no authority to take money from one group of people and give it to another group of people for so called economic benefits. So, no, I don’t think we should do that. Besides, bureaucrats and the politicians don’t know how to invest money.” - Ron Paul

The United States is the big daddy of the world food economy. It is far and away the world’s leading grain exporter, exporting more than Argentina, Australia, Canada, and Russia combined. In a globalized food economy, increased demand for corn, to fuel American vehicles, puts tremendous pressure on world food supplies. Continuing to divert more food to fuel, as is now mandated by the U.S. federal government in its Renewable Fuel Standard, will lead to higher food prices, rising hunger among the world’s poor and to social chaos across the globe. By subsidizing the production of ethanol, now to the tune of $6 billion each year, U.S. taxpayers are subsidizing skyrocketing food bills at home and around the world.

The energy bill signed by that free market capitalist George Bush in 2008 mandates that increasing amounts of corn based ethanol must be used in gasoline sold in the U.S. This energy legislation requires a five-fold increase in ethanol use by 2022. Some 15 billion gallons must come from traditional corn-blended ethanol. Nothing like combining PhD models and political corruption to cause worldwide chaos. Ben Bernanke and Charley Grassley have joined forces to bring down the President of 23 years in Tunisia. People tend to get angry when they are starving. Bringing home the bacon for your constituents has consequences. In the U.S. only about 10% of disposable income is spent on food. By contrast, in India, about 40% of personal disposable income is spent on food. In the Philippines, it’s about 47.5%. In some sub-Saharan Africa, consumers spend about 50% of the household budget on food. And according to the U.S.D.A., “In some of the poorest countries in the region such as Madagascar, Tanzania, Sierra Leone, and Zambia, this ratio is more than 60%.”

The 107 million tons of grain that went to U.S. ethanol distilleries in 2009 was enough to feed 330 million people for one year at average world consumption levels. More than a quarter of the total U.S. grain crop was turned into ethanol to fuel cars last year. With 200 ethanol distilleries in the country set up to transform food into fuel, the amount of grain processed has tripled since 2004. The government subsidies led to a boom in the building of ethanol plants across the heartland. As usual, when government interferes in the free market, the bust in 2009, when fuel prices collapsed, led to the bankruptcy of almost 20% of the ethanol plants in the U.S.

The amount of grain needed to fill the tank of an SUV with ethanol just once can feed one person for an entire year. The average income of the owners of the world’s 940 million automobiles is at least ten times larger than that of the world’s 2 billion hungriest people. In the competition between cars and hungry people for the world’s harvest, the car is destined to win. In March 2008, a report commissioned by the Coalition for Balanced Food and Fuel Policy estimated that the bio-fuels mandates passed by Congress cost the U.S. economy more than $100 billion from 2006 to 2009. The report declared that “The policy favoring ethanol and other bio-fuels over food uses of grains and other crops acts as a regressive tax on the poor.” A 2008 Organization for Economic Cooperation and Development (O.E.C.D.) issued its report on bio-fuels that concluded: “Further development and expansion of the bio-fuels sector will contribute to higher food prices over the medium term and to food insecurity for the most vulnerable population groups in developing countries.” These forecasts are coming to fruition today.

It Costs What?

The average American has no clue about the true cost of ethanol. They probably don’t even know there is ethanol mixed in their gasoline. The propaganda spread by the ethanol industry and their mouthpieces in Congress obscures the truth and proclaims the clean energy mistruths and the thousands of jobs created in America. The truth is that producing ethanol uses more energy than is created while driving costs higher. The jobs created in Iowa are offset by the jobs lost because users of energy incur higher costs and hire fewer workers as a result. It takes a lot of Saudi oil to make the fertilizers to grow the corn, to run the tractors, to build the silos, to get the corn to a processing plant, and to run the processing plant. Also, ethanol cannot be moved in pipelines, because it degrades. This means using thousands of big diesel sucking polluting trucks to move the ethanol – first as corn from the fields to the processing plants, and then from the processing plants to the coasts.

The current ethanol subsidy is a flat 45 cents per gallon of ethanol usually paid to the an oil company, that blends ethanol with gasoline. Some States add other incentives, all paid by the taxpayer. On top of this waste of taxpayer funds, the free trade capitalists in Congress slap a 54 cent tariff on all imported ethanol. Ronald R. Cooke, author of Oil, Jihad & Destiny, created the chart below to estimate the true cost for a gallon of corn ethanol. Cooke describes a true taxpayer boondoggle:

It costs money to store, transport and blend ethanol with gasoline. Since ethanol absorbs water, and water is corrosive to pipeline components, it must be transported by tanker to the distribution point where it is blended with gasoline for delivery to your gas station. That’s expensive transportation. It costs more to make a gasoline that can be blended with ethanol. Ethanol is lost through vaporization and contamination during this process. Gasoline/ethanol fuel blends that have been contaminated with water degrade the efficiency of combustion. E-85 ethanol is corrosive to the seals and fuel systems of most of our existing engines (including boats, generators, lawn mowers, hand power tools, etc.), and can not be dispensed through existing gas station pumps. And finally, ethanol has about 30 percent less energy per gallon than gasoline. That means the fuel economy of a vehicle running on E-85 will be about 25% less than a comparable vehicle running on gasoline.
Real Cost For A Gallon Of Corn Ethanol

Corn Ethanol Futures Market quote for January 2011 Delivery $2.46
Add cost of transporting, storing and blending corn ethanol $0.28
Added cost of making gasoline that can be blended with corn ethanol $0.09
Add cost of subsidies paid to blender $0.45
Total Direct Costs per Gallon $3.28

Added cost from waste $0.40
Added cost from damage to infrastructure and user’s engine $0.06
Total Indirect Costs per Gallon $0.46

Added cost of lost energy $1.27
Added cost of food (American family of four) $1.79
Total Social Costs $3.06

Total Cost of Corn Ethanol @ 85% Blend $6.80

Multiple studies by independent non-partisan organizations have concluded that mandating and subsidizing ethanol fuel production is a terrible policy for Americans:

In May 2007, the Center for Agricultural and Rural Development at Iowa State University released a report saying the ethanol mandates have increased the food bill for every American by about $47 per year due to grain price increases for corn, soybeans, wheat, and others. The Iowa State researchers concluded that American consumers face a “total cost of ethanol of about $14 billion.” And that figure does not include the cost of federal subsidies to corn growers or the $0.51 per gallon tax credit to ethanol producers.
In May 2008, the Congressional Research Service blamed recent increases in global food prices on two factors: increased grain demand for meat production, and the bio-fuels mandates. The agency said that the recent “rapid, ‘permanent’ increase in corn demand has directly sparked substantially higher corn prices to bid available supplies away from other uses – primarily livestock feed. Higher corn prices, in turn, have forced soybean, wheat, and other grain prices higher in a bidding war for available crop land.”
Mark W. Rosegrant of the International Food Policy Research Institute, testified before the U.S. Senate on bio-fuels and grain prices. Rosegrant said that the ethanol scam has caused the price of corn to increase by 29 percent, rice to increase by 21 percent and wheat by 22 percent. Rosegrant estimated that if the global bio-fuels mandates were eliminated altogether, corn prices would drop by 20 percent, while sugar and wheat prices would drop by 11 percent and 8 percent, respectively, by 2010. Rosegrant said that “If the current bio-fuel expansion continues, calorie availability in developing countries is expected to grow more slowly; and the number of malnourished children is projected to increase.” He continued, saying “It is therefore important to find ways to keep bio-fuels from worsening the food-price crisis. In the short run, removal of ethanol blending mandates and subsidies and ethanol import tariffs, in the United States—together with removal of policies in Europe promoting bio-fuels—would contribute to lower food prices.”

The true cost of the ethanol boondoggle is hidden from the public. The mandates, subsidies and tariffs take place out of plain view. The reason blenders (and gas stations) will pay the same for ethanol is because they can sell it at the same price as gasoline to consumers. A consumer will pay the same for ten gallons of E10 as for ten gallons of gasoline even though the E10 contains a gallon of ethanol. Consumers pay the same for the gallon of ethanol for three reasons. (1) They don’t know there’s ethanol in their gasoline. (2) There is often ethanol in all the gasoline because of state requirements, so they have no choice. (3) They never know the ethanol has only 67% the energy of gasoline and gets them only 67% as far. The result is that drivers always pay much more for ethanol energy than for gasoline energy, simply because they pay the same amount per gallon. When gasoline prices are $3.00 per gallon, Joe Six-pack pays $4.50 for the same amount of ethanol energy.

You know a politician, government bureaucrat or central banker is lying when they open their mouths. Whenever evaluating a policy or plan put forth by those in control, always seek out who will benefit and who will suffer. Who benefits from corn based ethanol mandates and subsidies? The beneficiaries are huge corporations like Archer Daniels Midland and Monsanto, along with corporate farming operations (80% of all US farm production), and Big Oil. The mandated ethanol levels are set in law. By providing tax subsidies we are bribing oil companies with taxpayer dollars to do something they are legally required to do, resulting in a $6 billion windfall profit to oil companies. The other beneficiaries are the Senators and Representatives from the farming states who are bankrolled by the corporate ethanol beneficiaries and their constituents who will re-elect them. The environment does not benefit, as many studies have concluded that it requires more fossil fuel energy (oil & coal) to produce a gallon of ethanol than the energy created. The jobs created in the farm belt at artificially profitable ethanol plants are more than offset by job losses due to the added costs in the rest of the economy. When subsidies are removed or oil prices drop, the ethanol plant jobs disappear, resulting in a massive capital mal-investment.

Our supposedly wise PhD and MBA leaders have created a perfect storm. The unintended consequences of government intervention in the markets are causing havoc, food riots, starvation and intense suffering for the poor and middle class. Brazil produces sugar cane ethanol in vast quantities and can export it to the U.S. much cheaper than we can produce corn ethanol. Fuel prices would be lower without tariffs on Brazilian ethanol imports.

The average cost of food as a percentage of disposable income for an American is 10%. Averages obscure the truth that the cost is probably .0001% for Lloyd Blankfein, Ben Bernanke and Chuck Grassley, while it is 30% for a poor family in Harlem. America’s horribly misguided ethanol policy combined with Ben Bernanke’s Wall Street banker subsidy program are resulting in soaring fuel and food prices across the globe. Poor people around the world suffer greatly from these policies. Below are two assessments of ethanol.

“Everything about ethanol is good, good, good.” – Senator Chuck Grassley, Iowa

“This is not just hype — it’s dangerous, delusional bullshit. Ethanol doesn’t burn cleaner than gasoline, nor is it cheaper. Our current ethanol production represents only 3.5 percent of our gasoline consumption — yet it consumes twenty percent of the entire U.S. corn crop, causing the price of corn to double in the last two years and raising the threat of hunger in the Third World.” – Jeff Goodell


Davis-Bacon for Ethanol Plants: New Ways to Waste Money
August 27, 2007
by: Terrence C. Watson

Wastewatcher, 7-Aug

The federal government’s subsidization of the ethanol industry needlessly depletes the U.S. Treasury. As if that alone were not enough to upset taxpayers, H.R. 2419, the Farm Bill Extension Act, will only make an already egregious waste of money worse by making it even more expensive to build new ethanol plants.

Made in the United States from corn, ethanol is a gasoline substitute; running cars on ethanol means using less oil. The federal government heavily subsidizes corn growers and ethanol producers. Rolling Stone reporter Jeff Goodell observed in the July 24th issue that ethanol receives more than 200 tax breaks and at least $5.5 billion in subsidies per year. According to Goodell, ethanol production represents only 3.5 percent of the nation’s gasoline consumption, but it consumes 20 percent of the entire U.S. corn crop. The Energy Information Administration reported that "Ethanol relies heavily on Federal and State subsidies to remain economically viable as a gasoline blending component."

It is fair to say that many of the 114 ethanol plants that exist across the country would never have been built if not for government subsidies. Foreign Affairs reports that within a few years these plants will consume half of the nation’s domestic corn supplies, drastically increasing the price of corn and many other foods. Subsidies for ethanol keep taxes high and have increased the price of corn to its highest level in 10 years. For the average American, this adds up to both a higher tax bill and a higher grocery bill.

This is all for a fuel that, according to experts like Dr. David Pimentel of Cornell University, just isn’t very good. Ethanol is less efficient and pollutes almost as much as the gasoline it is intended to replace.

Worse yet, H.R. 2419 extends the Davis-Bacon Act to ethanol plants constructed using federal loan guarantees. The Davis-Bacon Act is a 1931 labor law which mandates that contractors receiving federal subsidies pay their workers above-market wages. According to the Associated Builders and Contractors, an organization representing some 24,000 firms in the construction industry and related fields, Davis-Bacon already costs taxpayers approximately $1 billion annually, while making it harder for smaller firms to compete for government contracts.

If the Farm Bill Extension Act is approved, it will increase the cost of building ethanol plants and raise the price of ethanol. Congress egged on by clamorous corn lobbyists will be obliged to increase farm subsidies to keep ethanol competitive. The benefits will go to a few large companies that produce ethanol, increasing the misery of taxpayers.

Only members of Congress could find a way to make wasting money more expensive, but in H.R. 2419 that’s just what they have found. For the taxpayers’ sake, the Farm Bill Extension Act should be scrapped.

Davis-Bacon for Ethanol Plants: New Ways to Waste Money

 

[daveman]

The oil boys are all pissed about it & want to see your money support some foreign terrorist so their defense stocks will also make money.

The derp is strong with this one.

 

[Mr. H.]

The oil boys are all pissed about it & want to see your money support some foreign terrorist so their defense stocks will also make money.

Don't debase yourelf.

 

[KissMy]

Ethanol also pollutes groundwater. It's a containment issue. MTBE was railroaded out of the picture by the Ag lobby. They needed to do this to set the stage for ethanol blending.

The Ethanol Lobby did not even exist before the EPA decided to mandate Ethanol & Ban MTBE

Oh Yeah - The AG lobby really has sway with the EPA.

These 2 groups are always opposed to each other.

The EPA hates Farmers, Oil companies & any USA domestic industry. They would rather see it all go to foreign countries.

 

[editec]

How much would enanthol gas cost us if its producers were getting over a dollar a gallon from the Federal government?

Do you suppose it would be cheaper than non-enthanol gas?

 

[KissMy]

The oil boys are all pissed about it & want to see your money support some foreign terrorist so their defense stocks will also make money.

The derp is strong with this one.

So you are telling me that KBR is not a huge defense contractor & oil contractor.

 

[Momanohedhunter]

No, its a construction company.

 

[daveman]

The oil boys are all pissed about it & want to see your money support some foreign terrorist so their defense stocks will also make money.

The derp is strong with this one.

So you are telling me that KBR is not a huge defense contractor & oil contractor.

Correlation does not imply causation. Derp again.

 

[KissMy]

Net Energy: A Useless, Misleading And Dangerous Metric

The problem with net energy is that it makes an assumption that all sources of energy (oil, coal, gas etc) have equal value. "This assumption is completely wrong -- all energy sources are not equal -- one unit of energy from petrol is much more useful than the same amount of energy in coal...and that makes petrol much more valuable," says Dale.

For evidence, he points to the markets, where a unit of energy from gas, petrol and electricity are worth 3.5, 5 and 12 times as much as a unit of energy from coal, respectively.

"Clear thinking shows that we value the services that energy can perform, not the energy per se, so it would be better to compare fuels by the services that each provides...not on a straight energy basis...which is likely to be irrelevant and misleading," says Dale.

For example, biofuels could be rated on how much petroleum use they can displace or their greenhouse gas production compared with petroleum. His calculations indicate that every MJ of ethanol can displace 28 MJ of petroleum, in other words ethanol greatly extends our existing supplies of petroleum. Using corn ethanol provides an 18% reduction in greenhouse gasses compared with petrol, while fibre-produced ethanol gives a 88% reduction compared to petrol.

"As we embark on this brave new world of alternative fuels we need to develop metrics that provide proper and useful comparisons, rather than simply using analyses that are simple and intuitively appealing, but give either no meaningful information, or worse still, information that misleads us and misdirects our efforts to develop petroleum replacements,"

 

[JWBooth]

For starters, the parts on my power equipment will last longer, and my cost of repairs will go down.

 

[daveman]

Net Energy: A Useless, Misleading And Dangerous Metric

His calculations indicate that every MJ of ethanol can displace 28 MJ of petroleum, in other words ethanol greatly extends our existing supplies of petroleum. Using corn ethanol provides an 18% reduction in greenhouse gasses compared with petrol, while fibre-produced ethanol gives a 88% reduction compared to petrol.

That's impossible, considering it takes up to 6 units of petroleum to produce 1 unit of ethanol, as I've already shown.