From the “damned if you do, damned if you don’t department”.
More Maize Ethanol May Boost Greenhouse Gas Emissions
From the American Institute of Biological Sciences
Read the full article (PDF)
In the March 2010 issue of BioScience, researchers present a sophisticated new analysis of the effects of boosting use of maize-derived ethanol on greenhouse gas emissions. The study, conducted by Thomas W. Hertel of Purdue University and five co-authors, focuses on how mandated increases in production of the biofuel in the United States will trigger land-use changes domestically and elsewhere. In response to the increased demand for maize, farmers convert additional land to crops, and this conversion can boost carbon dioxide emissions.
The analysis combines ecological data with a global economic commodity and trade model to project the effects of US maize ethanol production on carbon dioxide emissions resulting from land-use changes in 18 regions across the globe. The researchers’ main conclusion is stark: These indirect, market-mediated effects on greenhouse gas emissions “are enough to cancel out the benefits the corn ethanol has on global warming.”
The indirect effects of increasing production of maize ethanol were first addressed in 2008 by Timothy Searchinger and his coauthors, who presented a simpler calculation in Science. Searchinger concluded that burning maize ethanol led to greenhouse gas emissions twice as large as if gasoline had been burned instead. The question assumed global importance because the 2007 Energy Independence and Security Act mandates a steep increase in US production of biofuels over the next dozen years, and certifications about life-cycle greenhouse gas emissions are needed for some of this increase. In addition, the California Air Resources Board’s Low Carbon Fuel Standard requires including estimates of the effects of indirect land-use change on greenhouse gas emissions. The board’s approach is based on the work reported in BioScience.
Hertel and colleagues’ analysis incorporates some effects that could lessen the impact of land-use conversion, but their bottom line, though only one-quarter as large as the earlier estimate of Searchinger and his coauthors, still indicates that the maize ethanol now being produced in the United States will not significantly reduce total greenhouse gas emissions, compared with burning gasoline. The authors acknowledge that some game-changing technical or economic development could render their estimates moot, but sensitivity analyses undertaken in their study suggest that the findings are quite robust.
Effects of US Maize Ethanol on Global Land Use and Greenhouse Gas Emissions: Estimating Market-mediated Responses
Thomas W. Hertel, Alla A. Golub, Andrew D. Jones, Michael O’Hare, Richard J. Plevin, and Daniel M. Kammen
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Hotrod,
For information on the taxes paid by just one oil Company
http://www.usnews.com/articles/opinion/2009/02/11/exxon-big-oil-profits-evil-only-until-you-weigh-their-tax-bills.html
“According to the company’s income statement, the amount of taxes it paid in 2008 was 2.5 times as much as its net profit. The $45.2 billion profit figure makes a snappy headline, but the $116.2 billion in taxes that it paid is relegated to a footnote—if that. Exxon’s tax bill breaks down like this: income taxes, $36.5 billion; sales-based taxes, $34.5 billion; “all other” taxes, $45.2 billion. Although the company doesn’t mention royalty payments in its income statement, those payments are likely contained within the sales and “all other” categories.
In 2008, Exxon’s tax bill averaged about $318 million per day.”
Where is the subsidy and the tax breaks?
Any one have the numbers on the taxes aid by the Ethanol industry?
Henry- you’ll need that Racor Filtration no matter what- I also spent about 26 years in the fossil fuel business. As diesel sulfur contents dropped the microbial infections went from near 0 to quite common here in WI. I have seen diesel fuel black like used motor oil in the very worst cases. Anaerobic fungus and certain bacteria will take off and multiply in diesel fuel when the fuel is warm enough and condensation or other free water is present. And that was with 0 biodiesel content and certainly not in the warmest or most moist climate of the USA.
Another example of government subsidies to Oil Companies
“The American Petroleum Institute, the oil industry’s biggest trade group, said strong industry bidding in Wednesday’s latest Gulf of Mexico lease sale shows that the Obama administration should make more areas available for offshore oil-and-gas drilling.
The Interior Department attracted over $949 million in high bids in the sale, which covered tracts in a 2.4 million acre region of federal waters off the coasts of Louisiana, Mississippi and Alabama.”
Re: Phil (20:48:24)
#2 heating oil, as found in the US, is very similar to road diesel. #2 is dyed red, makes for a quick visual check that truckers are not using it to avoid paying road taxes. Diesel might have additives for better burning and to keep it from gelling up in cold weather. Now I see that the new low-sulfur diesel is dyed a fluorescent green, likely also for a visual check, while original was clear.
You can easily run off the same 275 gal tank of #2 for all the warm months here in PA, Spring to Fall, and that is with a domestic hot water coil in a hydronic-system furnace (heating tap water being the only reason to leave it on). Since it will just be “more of a good thing” it seems likely they may mandate low-sulfur #2 fuel oil. Will what you describe become a major problem for oil heat?
PS, I have no idea for low-sulfur #2 what color they will use. Should be interesting.
$949 million for offshore leases?
The oil business is subsidizing the Feds. That money is paid whether or not oil ever comes from the tract. I was in the MEPSI offices of Mobil when they bid offshore Biloxi. It was a large risk. It was a massive discovery but could have been a bust.
Now Russia is planning on drilling in the Gulf of Mexico. Obama is taking us back to the 70’s.
Back to ethanol. If the oil business is so nasty, why does agriculture spend so much money on fuel and lubes? Surely they could pack bearings with Crisco shortening. Peanut butter (non chunky) is great for low speed bearing applications like disk harrows.
Surely the ethanol plants could burn ethanol for heat to brew instead of natural gas.
I had a 3 burner stove and oven on a yacht in the 70’s that ran on alcohol. Baking bisquits while sailing offshore fired by an oven connected to a 3 gallon alcohol tank presurized with compressed air. I was ahead of the times.
When some uneducated farmer tells us that the depletion allowance is subsidizing oil, He is not educated in Generally Accepted Accounting
Practices. The depletion allowance is no different than depreciation on that John Deere. It is just as ignorant as Obama tellling us that gross farm revenues and income are the same. In other words, Obama says if a farm’s sales are 500,000 the man made half a million.
http://www.afdc.energy.gov/afdc/pdfs/exisetax.pdf
http://www.ethanolrfa.org/view/?id=125
Larryl
Depletion allowance,
The straw man argument by the greenie weenies that claim it is a Federal subsidy.
A tax deduction authorized by federal law for the exhaustion of oil and gas wells, mines, timber, mineral deposits or reserves, and other natural deposits.
Law books like Callahagans, West Law, Matt Bender, Prentice Hall and others are in the library of your CPA.
If i invest $1,000,000 in a timber stand, gravel pit, oil field copper mine, I can write off the resource over time as the resource generating revenue is depleted.
You can write off Those 8 huge tires on your Stieger because they will be depleted in rubber after a certain amount of wear. That is not a Federal welfare check.
You may even try to take those tires as a deduction on December 31 if you buy them on that day but we all know they will wear out but wear out over how many years?
My CPA friends charge farmers extra to do their books because the time you argue with the CPA is billable hours. Even their coffee break is billed to clients.
http://www.ethanolrfa.org/view/?id=125
No econ classes Larry?
hotrod ( Larry L ) (08:01:26) :
The question was now much tax paid by the ethanol Industry.
Prepared by:
Michael K. Evans
Professor of Economics
Kellogg School of Management
The study is 1997. Toss it in the trash. First you are wasting time on old studies. He is also wrong. No wonder he is at a school. The driver of a vehicle pays highway taxes. They are not paid by the moonshine still. The increase in taxes is what we look for. Lower fuel mileage causes the total dollars paid in taxes by the consumer to go up. The poor proff doesn’t understand business. If I spend a dollar at Sears, my wife may spend 1 less dollar at Walmart. If I print a new dollar, then I ad gross revenue to the economy. If I double my chicken consumption, he is immature enough to assume I do not decrease beef in my diet. Hotrod. Buy an old econ book at a garage sale. Samuelson will do.
He also assumes that farmers raising corn for ethanol didn’t own a truck or combine and bought both because they now are growing the economy.
Northwestern University
It seems an earlier Boilermaker said Ac Economics guys add little value. This guy is a poster child for what Macro Econ students see as flawed conclusions.
I ask the question again. How much tax paid by the ETHANOL industry? If they are getting tax incentives, TIF’s or abatements, I am sure you will show those also.
If Evans wanted to be a little less shallow, he would express consideration for exchange rates and inflation.
If we want to clean this up, we will report grants and subsidies. If we take 8 billion in Fedral subsidies away from ethanol moonshine still industry and place it in the pinto bean industry. We would also have more Taco Bells, add 192,000 jobs, create demand for frijoles combines and grain carts.
The simple point is a shift in production and consumption is not a measure of growth of GDP!!!
Don’t you all like how they burn the sugarcane fields before harvesting cane? Of course cane is far superior to corn. The cane is sugar and doesn’t need to be converted to sugars. That is a CO2 rich step. All ethanol exhaust is CO2 and H2O. Of course some ethanol websites say not so for their gullible readers. To lure investors, ethanol is sold as creating jobs and saving on pollution.
It is my understanding there is an ethanol plant in Kansas that offered several truckloads of CO2 for a test to do CO2 injection enhanced oil recovery. I also hear there is some plant considering sequestering the CO2 they produce in brewing.
For those that still think CO2 is pollution, ethanol is pollution in a lot of ways.
Even Gurnsey burps after the DDG diet is pollution.
Henry- my point with the AG Econ dept at Purdue was that one of the Ag Econ professors was the co-author of the study this thread was supposedly about- and I was not impressed with Purdue’s Ag Econ Dept nor his participation in this study fuunded in part by BP whereas I had no issue with the regular economics staff over in the Krannert School. did BP’s participation in this study have an impact in it’s results- we will never know. But although it is a short walk from this ag econ professor’s office to the Horticulture, AGEN building, Biology dept, and the Agronomy dept – he does not seem to take input from them. I emailed him months ago when he was apparently doing this work- he was not interested in gathering data.
Quote from;
“kadaka (23:03:51) :
Re: Phil (20:48:24)
#2 heating oil, as found in the US, is very similar to road diesel. #2 is dyed red, makes for a quick visual check that truckers are not using it to avoid paying road taxes. Diesel might have additives for better burning and to keep it from gelling up in cold weather. Now I see that the new low-sulfur diesel is dyed a fluorescent green, likely also for a visual check, while original was clear.
You can easily run off the same 275 gal tank of #2 for all the warm months here in PA, Spring to Fall, and that is with a domestic hot water coil in a hydronic-system furnace (heating tap water being the only reason to leave it on). Since it will just be “more of a good thing” it seems likely they may mandate low-sulfur #2 fuel oil. Will what you describe become a major problem for oil heat?
PS, I have no idea for low-sulfur #2 what color they will use”
The old #2 years ago was straw colored (most say the yellow tint was sulfur related- but it may also have to do with the refinery process and crude at the time.
Then back in the 90’s sulfur contents were reduced and the first 6 months here were the colors;
Clear- actual greenish tint- without the dyes this was “tax paid” diesel for on road use
Blue- dyed blue to mean off-road tax not paid and high sulfur for off road use
Red- dyed red to mean low sulfur but tax not paid for off-road
The blue went away after enough screamed that this was the color reserved for for jet fuel and a plane might be lost. EPA backed down and then went with the IRS red.
Since this time the sulfur levels have still been coming down per EPA rules.
If your tank is in the basement you will likely never have an issue since the air temp is more constant. Outdoor tanks should be painted white or silver if codes allow to prevent the sun from heating the tank because during the night cool moist air air is drawn in as the airspace grows larger. This then results in condensation which the fuel cannot entrain- this is exactly the “free water” the microbes need. All fill caps and vents should be secure. Biocide is likely available from your supplier should an infection begin — you will be changing filters far to often if this occurs.
The problem is greatest in boat tanks or vehicle/power unit tanks where usage is seasonal and hot fuel is returned to the tank. (Diesel engines return excess fuel back to the tank from the fuel pump.) Hope that helps.
Re: Phil (15:07:52)
For winter I’d think black would be a good color. Despite the “unprecedented warmth” #2 gelling up in winter is still a problem. Common mix for outdoor tanks is half-and-half, #2 and #1 (kerosene).
BTW, back when my tenants bought their own oil (only have one set), they ran out one winter and a helpful neighbor fetched them 50 gal of kerosene. Loosened up all the old sludge from the #2, I had to run new fuel lines. And I have yet to figure out how to get fittings not to leak using single flares on soft copper, had to break out the double-flare tool I use for brake lines. Fun.
Acording to the renewable Fuels association: over 100,000 jobs will be eliminated if the subsidy discontinues and 38% of the ethanol production.
http://renewablefuelsassociation.cmail1.com/T/ViewEmail/y/7DC56BD0CF8C2BD2
so much for claims that this is a viable industry