The reverse of UN's disastrous "oil for food" program: Ethanol uses 40% of US Corn Crop

……..and aren’t they trying to raise it from 10% to 15% ethanol
When people start having problems with their older cars, any engine, they should sue.
Everyone raising corn is dancing to the bank, but then that was the whole idea in the first place………..

Food for klunkers.

In Germany the consumers just brought a halt to this insanity: http://www.spiegel.de/international/germany/0,1518,749199,00.html

There’s a big problem. Farmers and businesses invested heavily in plants, facilities and machinery for this business. You just can’t stop it and leave them hanging in the wind. Either the oil for food continues, or the government bails them out (too!).
This mess can be blamed on Bush, and all the environmentalists who originally backed the idea.

Klimawandler,
Consumers can decide what they want, but in the end the government thinks it can veto consumers’s decisions and decide for them. Expect the German government not to back down.

Curiousgeorge says that we are not converting people food corn to ethanol since it is a different kind of corn.
Unfortunately, curiousgeorge, it is not quite that simple.
It may not be the same corn that people consume, but that is not the problem. It diverts labor, capital, land, water, fertilizer, etc., etc. from growing people corn and other people foods to growing ethanol and car fuel.

Curiousgeorge talks about corn types grown to purpose and it is true there are ethanol specific ears of corn. But the land it grows on does not know nor care the pedigree of the tasseled stalks it is producing or if a flatulent ruminant or a flatulent Buick is going to consume that corn. Fields used to grow corn for ethanol could be growing food. They cannot do both at the same time.

Economically illiterate politicians who push this garbage apparently don’t read the peer-reviewed literature,
Ethanol Fuels: Energy Balance, Economics, and Environmental Impacts Are Negative
(Natural Resources Research, Volume 12, Number 2, pp. 127-134, June 2003)
– David Pimentel
“Several studies suggest that the $1.4 billion in government subsidies are encouraging the ethanol program without substantial benefits to the U.S. economy. Large ethanol industries and a few U.S. government agencies, such as the USDA, support the production of ethanol. Corn-farmers receive minimal profits. In the U.S. ethanol system, considerably more energy, including high-grade fossil fuel, is required to produce ethanol than is available in the energyethanol output. Specifically about 29% more energy is used to produce a gallon of ethanol than the energy in a gallon of ethanol. Fossil energy powers corn production and the fermentation/distillation processes. Increasing subsidized ethanol production will take more feed from livestock production, and is estimated to currently cost consumers an additional $1 billion per year. Ethanol production increases environmental degradation. Corn production causes more total soil erosion than any other crop. Also, corn production uses more insecticides, herbicides, and nitrogen fertilizers than any other crop. All these factors degrade the agricultural and natural environment and contribute to water pollution and air pollution. Increasing the cost of food and diverting human food resources to the costly inefficient production of ethanol fuel raise major ethical questions. These occur at a time when more than half of the world’s population is malnourished. The ethical priority for corn and other food crops should be for food and feed. Subsidized ethanol produced from U.S. corn is not a renewable energy source.
Food Versus Biofuels: Environmental and Economic Costs
(Human Ecology, Volume 37, Number 1, pp. 1-12, February 2009)
– David Pimentel et al.
“The rapidly growing world population and rising consumption of biofuels intensify demands for both food and biofuels. This exaggerates food and fuel shortages. The use of food crops such as corn grain to produce ethanol raises major nutritional and ethical concerns. Nearly 60% of humans in the world are currently malnourished, so the need for grains and other basic foods is critical. Growing crops for fuel squanders land, water and energy resources vital for the production of food for human consumption. Using corn for ethanol increases the price of US beef, chicken, pork, eggs, breads, cereals, and milk more than 10% to 30%. In addition, Jacques Diouf, Director General of the UN Food and Agriculture Organization, reports that using food grains to produce biofuels is already causing food shortages for the poor of the world. Growing crops for biofuel not only ignores the need to reduce fossil energy and land use, but exacerbates the problem of malnourishment worldwide. “

Wheat prices have not been flat.
http://www.indexmundi.com/commodities/?commodity=wheat&months=120
http://www.indexmundi.com/commodities/?commodity=corn&months=120

I see this as another attack on people of the world, destroy the food supply, create shortages based on flawed science, devalue the money supply to to further imbalance society, pit the have’s against the have not’s and blame it on nonsense. Will all these ongoing attacks on freedom, values, progress, resources for one reason to benefit the liars and the cheats. So I say “save the humans”.

@CuriousGeorge
I don’t get it. It’s reducing cropland that could be used for grain for livestock or people food. Obviously prices are going to go up if that cropland is removed. I don’t see the complexity here at all.

Curiousgeorge says:
March 5, 2011 at 3:38 pm
“If you wish to refine your claim that corn produced for ethanol uses up land that would otherwise grow corn for feed or people, then I’d be ok with that.”
That’s the point, Curiousgeorge. If government was not subsidizing ethanol, then farmers would be using their land to grow corn for feed or people, not ethanol. The type of corn is irrelevant. One does not have to have a degree in Economics to understand how government distorts a free market.

Alternatively created a genetically modified supercrop for Ethanol production that isn’t for any human or animal consumption and is separated from international food markets.

Curiousgeorge says:
March 5, 2011 at 3:38 pm

I’m not a fan of ethanol, but you should know that there are several varieties of corn specific to the end use…. But please realize the issue is far more complex than your headline would indicate.

Granted, not all of the 40% of the U.S.corn crop that is used for ethanol production is from cropland that is so diverted, but a lot of it is, and world corn-price trends have been impacted by ethanol demand.
For example, Mexicans on low incomes now can no longer afford tortilla’s, their main staple that they used to buy by the kg, but must now eat Ichi Ban noodles instead. I bet that the bakeries producing the tortillas feel the pinch as well.
The corn used to produce a tank-full of fuel could be used to feed a family of four for a whole year.

Looks like there are actually politicians out there (Germany) that have there heads and facts screwed on straight. Nice to read, thanks:
Klimawandler says:
March 5, 2011 at 3:46 pm
“In Germany the consumers just brought a halt to this insanity: http://www.spiegel.de/international/germany/0,1518,749199,00.html”
If only we could get some of those here in the USA…

Short corn.
The inevitable outcome of this is the collapse of corn prices and a whole lot of farms going on the foreclosure list.
Thanks, crony capitalists.

We need a website with impact of ” wattsupwiththat” to take the “fossil” out of fossil fuels, once and for all. The idea that carbon based fuels are finite and rapidly dwindling is ridiculous, untill we know where it comes from and how it formed. We don’t need to starve the world to make fuel, but we are.

This is easily the most idiotic thing I have ever heard of.
So when we get a major flood in the corn belt that some are predicting due to the snowy winter, we are going to be short on both food AND gasoline. BRILLIANT.
And today the administration announce it was going to appeal a court decision that forced them to get the permit process for drilling in the Caribbean. They are trying to shut down as many sources of energy as they can. They are strangling the country.

Perfect. But in respect to the general surge of food prices, the principal factor is inflation caused by the huge increase of money supplies. And who is printing all of this money?…
Peter Schiff explains that very well, just at the beginning of the program 20110216 at http://www.schiffradio.com/
To understand real economy, and to be vaccinated against the keynesian delirium:
http://LearnAustrianEconomics.com

Two factors seem to be missing from the analysis.
1) The US, UK and many other countries pay farmers to “set aside” acreage and not plant it. There are a lot of reasons for that linked to the “problem” that farmers can produce too much. The bottom line is we’re not even close to “maximum production”. People don’t starve in this world because we don’t/can’t produce enough food.
2) One of the biggest costs in food production is fuel. The rising price of oil and the increased push for more expensive “green energy” have dramatically increased production & shipping costs, which will eventually show up in food prices.

Corn farmers are starting to replace my house flippers which replaced my tech stock guys down here as regular customers. Before long I will only have bankers, lawyers and climate scientists.

There is no shortage of edible corn. No shortage. Climate “change” has not reduced farm productivity. Diverting corn to fuel has not reduced food corn availability.
Many people indeed go to bed hungry on this planet, but it is not due to farm productivity decline or diversion of food to fuel. Mainly it is due deliberate starvation policies on the part of totalitarian governments, and to transportation costs.
Compare the graph above to the spot price of gasoline from 1990-2011. There are many such graphs available. Here’s one:
http://tonto.eia.doe.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=EER_EPMRU_PF4_RGC_DPG&f=D
You people are smart. Place the graphs on top of each other. Notice the remarkable correlation.

The two largest uses of the US corn crop is now ethanol and beef (as if cows want corn…). You will also notice that beef prices are sky rocketing as well. That is not going to end until ethanol is dropped like the bad idea that it is.
Ethanol, decreases your fuel efficiency, increases ozone pollution and food prices. Only a half baked, stone stupid politician could come up with such a horrible idea. Oh wait, that is exactly what happened.
http://theinconvenientskeptic.com/2011/02/ethanol-vs-gasoline-mpg/
http://theinconvenientskeptic.com/2010/12/ethanol-ozone-and-the-epa/

The original post here would like to make you believe that the cost of corn is high.
In historical terms it is not even close to being at peak prices. In 1974 corn prices peaked at $15.67/bu in 2008 dollars, today corn is selling for about $7.28 in todays dollars or $7.12 in 2008 dollars.
That 1974 peak price was during the oil crisis of when oil prices went through the roof and fuel ethanol from corn was an insignificant fraction of fuel use, and an industry that had almost no economic clout.
You guys are confusing cause, correlation and effect. There is a correlation between food costs and corn prices, but the change in prices for both commodities is driven by oil prices and the cost of energy.
The reason Mexicans cannot afford to buy corn for their tortillias is because the Mexican government did not protect the small family farm from corn imports and broke the back of the small producers. Now instead of growing their “white corn” (note not the same as field corn for ethanol) in small family plots or local farms they shifted to large scale imports of their cultures staple food crop.
Don’t blame U.S. Farmers for stupid Mexican government decisions.
The U. S. exported 489,000 metric tons of white corn to Mexico in 2009/10.
We exported 880,000 metric tons of white corn all together that year.
http://www.ers.usda.gov/data/feedgrains/Table.asp?t=26
There is no corn shortage!! It just costs more to get it to the user due to high fuel costs.
It is only half as expensive as it was in 1974 in real dollars.
Larry

Hotrod (Larry)- Yes, corn is a useful crop with many markets, American as apple pie. So why can’t it compete on its own? Why are those of us who prefer pure gasoline forced to buy their product? Why can’t we buy our ethanol ( or sugar) onthe world market? What’s secure about an energy source that uses more oil than it replaces? The ethanol mandate is corrupt; it has turned honest farmers into corporate welfare queens.

Naturally the Islamists stepped in to take advantage. But they didn’t start it. Food riots were the initial cause of the riots.
None of the revolutions in North Africa have been driven by Islamists. They may take over later, but have not yet.
The revolutions are not driven by food rioting either. The initial cause was the success in Tunisia of politically based disgust at their rulers, initially fired by a self-immolation suicide. (Bahrein, for example, is hardly starving.)
People on this list are disgusted by the way the Greens don’t let economic realities influence their desire for corn ethanol. But just making up political facts to suit your own message is just as dangerous (I accept that the facts may have been made up for you by someone like Beck, determined that everything a Moslem does must be because he is a Moslem. Despite the fact that many of the people he thinks are Moslem aren’t (10% of Egypt, for a start).)

What? Corn prices are up because Chinese people and Indian people are eating more meat than ever and corn is the primary food source for cows and chickens. As people become more prosperous they eat more Western diets. I have no idea where you found the “research” you base this on.

Moderators, I tried twice to post a short comment on the Food-for-Oil program. What happened? Is it something I said?
[Found, Restored. Robt]

And I’m backing you. Long CVX, RDS, and BEXP (Austin in Bakken).
All are great hedges against rising gasoline prices.
we’re small working interest owners in infield plays here in TX. we (I say “we” but I have nothing to do with actually drilling the hole) just completed 5 horizontal wells to the Woodbine in S TX. #4 was 12,000 ft horizontal with 39 fracs! The next two are closer to Houston county, testing 4 probable zones vertically before going horizontal in whatever zone has the best production. Drill, baby, drill.
Yes, I’m one of those money-grubbin’ ahl profiteers. So far, oil has been a GREAT investment. My 401(k)? Eh…not so much.
Also noted when I filled the tank this afternoon the sign on the pump says “enhanced with ethanol.” Since ethanol has less energy per gallon than gasoline, shouldn’t the sign read “diluted with ethanol?”
My mileage certainly shows it.

Here’s another test. Go to the breakfast cereal aisle in your grocery store. Notice that all the packaged cereals cost the same, regardless of the type of grain they are made from. That’s because the actual farm product cost is pennies and minimal compared to the costs of processing, packaging, and transporting the stuff.
I hate ethanol. It wrecks engines. It is another stupid political imposition on consumers made by posturing dingbat politicians. But ethanol production has not reduced the production of edible corn.
The real price driver of corn and other food commodities is the cost of gasoline. Gas is now $3.30 and climbing. That’s not because demand has skyrocketed; it’s because of artificial manipulations of the petroleum supply and dingbat drilling and refining policies foisted upon us by corrupt dingbat politicians.

In the area I live they still disk down fields of sweet corn (for canning and freezing), peas, green beans, and even carrots. Why do they do this? — because the value of the crop will go down if the food producers end up canning or freezing too much of it. I used to run a company petroleum and feed dept who hauled fuel to the harvesters, sold fuel to the truckers, and to the farmer/landowners. A tremedous amount of fuel is used (far more than raising/harvesting dryland corn for feed or ethanol) to run these harvesting/ hauling operations. when energy costs go up- one of two things will happen: 1) even less acres will be planted unless supply of food in warehouses strongly call for more crop, OR 2) if energy prices sharply rise- even more of the acreage planted will be passed (disked under). Wisconsin averages # 5 in the USA for this vegetable production which also includes potato (main crop). This acreage has been pretty stable since it is irrigated. The amount of land to be the #5 vegetable producer in the US is small- the strip starts out only about 5 miles wide- swells to 25 miles wide, then back down to 5-10 miles of land on the north edge (with a lot of tree patch interspersed). Total length of this strip of production area is only about 50-55 miles. The rest of the state is pretty much trees, some scrub land from the old 1900 wheat boom left idle, or cropland for dairy or for feed. My point is here that it takes very little land to produce vegetable crop (ave potato yield here is 40,000 lbs/acre) and there is no danger of the USA ever being short of enough land to produce such vegetables such as sweet corn, beans, peas, potatos, lima beans, carrots, cabbage, cucumbers, etc- all of which are grown here. Most growers would be happy to raise a whole lot more but they have to make money doing it (and every year so the banks will loan the operating capital). When I was still in the business of serving that group it took over $2000/acre just to start a potato crop- I am sure it is far over 2x that today.
Someone mentioned corn is in many things today- yes- and not all of it particularly good for you. High fructose corn syrup goes into a wide variation of finished products such as ketchup, soft drinks, etc. As far as tortillas- the package on our counter is not made from field corn (YC) – it is made from white corn but perhaps some YC is used at times. In fact one could say that in the USA we are rarely ever carbohydrate deficient (the only portion of corn used for ethanol is starch- the rest goes to feed) and even if we were, swwet corn or potatos are a better choice than manufactured food.
Only two key areas really should be of concern regarding corn use;
1) enough be left over to provide the carbohydrate needs of dairy, swine, beef, and poultry- frankly pet food is a luxury. Understand also that when we choose to eat meat rather than grain we affect the grains market the most of all- because animals require far more grain to create a lb of meat. In most ruminants (cattle, sheep) grain is not required at all- their 4 stomachs are set up to eat cellulose- only in the last 100 years or so did we start feeding them grain to increase growth speed or production. In many cases we even went to far for a while with grain to ruminants. Dairymen here will substitute a fair amount of distillers grain (from ethanol production) for corn and soybean meal. A small amount of starch is still required for maximum rumen flora growth (thus some corn) but any dairyman will tell you too much will kill the rumen flora and milk production falls like a rock. The distillers helps to prevent starch overload but will also by-pass the rumen and provide a better protein / energy balance with out the overload. Poultry are most starch dependent and swine is somewhere in the the middle- but even in those diets distillers can be substituted in place of corn/soy at 10-20% as a rule depending on other dietary sources.
2) we need to recognize the poor of the world eat what we do not- some field (YC) is ground for their food. Not a very good diet considering that corn has some few of the most limiting items- protein is low- the amino acid varietal makeup is also poor. Our govt just plain got tired of keeping farmers overproducing everything so the world could buy cheap grain. I do not have the answer for this problem except to say that our overproductive agriculture and export $ hungry govt dumped so much cheap grain (and meat) on the world for so long- they lost/never developed out the supply chains, storage, knowledge, mills, roads. rail, banking, and most importantly farmers to grow their own climate appropiate foods. Some of this needs to happen- and happen now- but not the way the Saudi’s did. The Saudi’s just stopped their wheat program because they found they really did not have RAIN.
Sorry for the ramble here and rarely coming in to chat.

ruddyduck says:
March 5, 2011 at 5:35 pm
Hotrod (Larry)- Yes, corn is a useful crop with many markets, American as apple pie. So why can’t it compete on its own? Why are those of us who prefer pure gasoline forced to buy their product? Why can’t we buy our ethanol ( or sugar) onthe world market? What’s secure about an energy source that uses more oil than it replaces? The ethanol mandate is corrupt; it has turned honest farmers into corporate welfare queens.

Good questions, simple answer is politics, if the EPA would get out of the way, and allow blender pumps people could choose to use what ever blend of gasoline/ethanol they want. Where blender pumps are available the most popular fuel blend is 30% ethanol.
Why can’t we buy our ethanol and sugar on the international market? — we could but it would be stupid. One of the primary reasons for fuel ethanol is to provide a local fuel alternative so we are not strategically tied to some foreign supplier for all our energy needs. Buying fuel ethanol from Brazil just trades one sole source supplier of energy for another — seriously stupid move for something as critical as transportation energy. Sugar is essentially a surrogate for fuel, if we import sugar on the world market we break the back of our local sugar industry — Oh wait we already did that and wiped out the sugar beet industry years ago. There are 4 or 5 abandoned sugar beet plants within an hours drive of my home. They used to be the primary income provider for the small towns they were located in but cheap sugar from the Caribbean and south America killed the industry. Now the kids in those small towns move out when they get old enough because there is no local industry to give them work.
As far as subsidies, the blenders tax credit was supposed to expire this year, unfortunately it was renewed at the last minute. The current fuel ethanol industry can now be profitable without it if corn is priced at a fair value (above cost of production so the farmer can afford to grow it, and the oil industry did not try to strangle the fuel ethanol industry at every turn and turn them into a captive industry. The blenders tax credit actually goes to the oil companies not the ethanol industry with rare exceptions and never to the local farmer who grows the corn.
Personally I would like to see a rapid phase out of the blenders tax credit with a 50% to 20% reduction each year until it is gone. It has done its job, and created enough industry skill and infrastructure and investor trust in marketability of the product that it got the industry back on its feet after the government killed it during prohibition (with the encouragement of the oil industry). Fuel ethanol was the dominant fuel source for early automobiles until its production was outlawed by prohibition, and the oil industry flooded the market with cheap gasoline which at the time was a waste product that they burned off to get rid of.
larry

Jeremy says:
March 5, 2011 at 4:25 pm
LET THEM EAT BOURBON!
Now if she had said: “Let them eat Bourbons” that would have been funny.

We let China buy all those T-bonds. It’s unseemly to bellyache when they bid up the price of grains so their population can afford another bite of meat in their rice bowls. The 200 pounds of meat that the average American eats every year must strike the average Asian as a ridiculous luxury. The extra we may need to spend on food will be offset by the less that we spend on diets, diet food, and exercise equipment.

You know what is really nuts.
We’re arguing about corn for fuel.
Just fire up a few dozen nuke plants and this argument is moot. And at a lower price.

Eric (skeptic) says:
March 5, 2011 at 6:08 pm
Larry goes on and on, post after post, page after page, and never once addresses the fact that if it were not mandated, nobody would use that ethanol mixed crap.
Larry, let’s do a little test. Two gas pumps, same price. One has 10% ethanol, the other has no ethanol. Which will you choose?

The 10% ethanol blend, it burns cleaner ( I don’t give a crap about CO2 I mean it does not gunk up the fuel system and engine like straight gasoline does.)
It is a naturally dry fuel that will never let enough water collect in your tank that you will have fuel line freeze in subzero weather.
In controlled tests there is no statisically significant mileage difference between the fuels. In some cars the straight gasoline gets about 1.5% more miles per gallon in some other cars the 10% ethanol blend gets more fuel mileage (up to 3% improvement in one model).
The 10% ethanol blend will make slightly more power than the gasoline will and burns a bit cooler.
Given the choice, I would if given the option, buy E85 over straight pump premium if both sold for the same price. Straight gasoline is simply an inferior fuel in almost every regard to high ethanol gasoline blends.
Oh by the way — I have been using 10% ethanol blends for over 20 years, they do not cause problems with your car. They do fix a few problems that gasoline creates, like fuel residue build up in the fuel injectors that requires you to periodically purchase expensive fuel additives to clean up, where 10% ethanol naturally keeps that issue under control.
Larry

So many uniformed people reciting the same regularly and repeatedly dis-proven facts. Its really sad to see here at WUWT – where the discussions are usually so well thought, educated and informed …
Ethanol is NOT worse for the environment – it is significantly cleaner, reduces emissions and REDUCES greenhouse gases. There are several extremely small individual cases where ethanol has a negative impact – those are always used, as with the warmist’s, without context, to try and and prove a point – ignoring the comparatively massive positive benefits vs the comparatively minuscule negative ones.
Unless you’re an idiot Berkely professor named Pimental (or his sidekick Patzak), whose work has been repeatedly and throughly debunked, you would know and acknowledge that corn ethanol currently generates 1.3 to near 2 units of energy for every unit expended in production.
Food prices were NOT dramatically increased because of ethanol production. Corn prices spiked in 2007 – because of SPECULATORS, not ethanol – and just as quickly collapsed.
As noted by others, corn ethanol does NOT use food corn – it uses feed corn. And once ethanol is produced from this feed corn, one of the MANY beneficial byproducts is distillers dried grain solids – a high value animal feed that largely replaces the feed value of the corn to begin with.
For the last several year US corn production has not only been sufficient to supply 100% of our domestic needs – food and feed – and all of our ethanol needs, but also still have enough to meet the entire foreign export demand. AND STILL have corn left to add to US reserves. We had more supply than total US and worldwide demand. When demand exceeds supply (ie: when you have excess corn added to reserves) and prices still go up it is most certainly NOT ethanol (or any other single user) that is causing price changes. It is speculators, manipulating commodities for profit.
Additionally, as noted above, the production of ethanol creates a number of beneficial byproducts – including bio-fuel (in addition to the ethanol) and very high quality animal feed in distillers dried grains solids.
Ethanol DOES get lower mileage. Straight ethanol has appx 78,000 BTU’s per gal, gasoline appx 125,000 BTU per gal – approximately 37% less energy in a gal of ethanol vs gas. This however, is a perfect example of the disinformation that those with agendas use when trying to dishonestly promote their position.
We do NOT use straight ethanol nor straight gasoline in the US. We use E85 (85% ethanol) for ethanol and E10 (10% ethanol) for our regular gasoline. E10 is appx 120,000 BTU/gal and E85 is appx 85,000 btu/gal … or just 29% difference.
So it is TRUE you get lower MPG with ethanol. But the rest of the facts are that ethanol is SIGNIFICANTLY LESS EXPENSIVE as well.
I recently paid $2.47 for E85 locally vs. $3.22 for E10 gasoline – an appx 23% difference … so the reality is there is a very, very small difference in actual MILES PER FUEL DOLLAR SPENT. My 2003 Tahoe flex-fuel gets appx 14.7mpg normally on E10 gasoline, and 11.9mpg on E85 – a real world difference of just 19%. For me – in heavy stop and go city driving E85 is LESS EXPENSIVE – gets better mileage per dollar spent – than gasoline.
Most importantly ethanol is a RENEWABLE fuel. We can constantly make more. Every gallon of ethanol used is a gallon of fossil fuel not used.
We absolutely should be drilling and using our on reserves of fossil fuels. But it is inarguable that we need alternative energy sources as well.
No one believe corn ethanol is the solution. It will never be more than a small part of an overall solution.
It is highly likely corn use will decrease in near future as the much more efficient cellulosic ethanol plants come online. These plants use grasses, specially grown trees and similar sources – many which can be grown on marginal lands not suitable for crops – as the feedstock. These processes are generating as much as 8 units of energy for every unit expended in production. They, along with algae and other bio-fuel processes are the real future of renewable clean fuels technology
Corn ethanol serves an important purpose. It provides fuel TODAY that encourages vehicles to be produced and distribution systems as well. Both that will use the more efficient ethanol of the very near future. Without a demand and distribution there will be no investment in production – in ethanol plants etc.
And THAT is why ethanol makes sense and why the subsidies do as well. Ethanol subsidies totaled something like $6 billion last year. Oil received something just under $80 billion by comparison.
It should be clearly noted as well that CORN does not receive subsidies for ethanol. Farmers receive corn subsidies to grow corn – regardless of its use.
Every gallon of ethanol used, regardless of the source; reduces emissions, reduces green house gases, gives us cleaner air, and most importantly reduces our dependence of foreign oil. It is not a perfect solution, but it is ONE solution, more importantly a solution AVAILABLE TODAY.
If you are going to attack something, especially here at WUWT, at least make an effort to educate yourself and know the real facts.
hotrod (Larry) makes a number of important and valid points … that are accurate and readily supportable with facts. Not intended as an attack, but the majority of the negative comments towards ethanol are not supported by facts, and can not be … as they simply are not true or correct

In the southern US, cotton used to be the major cash crop. So much cotton production has been diverted to corn that cotton is commanding high prices not seen in many years. Has anyone seen the little article (probably in the back pages of your favorite birdcage liner) that clothing prices are rising apace?
Besides causing automobile fuel system and engine gook, corngas (even the 10% moonshine grade) is destructive of two-cycle gas-powered home implements such as blowers and weed-whackers. Dealers are advising complete purging of fuel from such tools after every use. Or, try to find some unadulterated gas. Ha!
When will the madness stop?

I would recommend to all WUWT readers a careful look at the wonderful piece by Dr. Robert P. Smith available at SPPI. Lest I forget, here is the link:
http://scienceandpublicpolicy.org/images/stories/papers/originals/toward_rational_energy_planning.pdf
No sane engineer, chemist, botanist or economist would ever recommend ethanol. Depending on whose work you read, you either expend more energy producing a gallon of ethanol than you get out of it, break even or (under the best conditions) get just slightly more energy out. It is a terrible motor fuel. It is hydroscopic. It is corrosive. It takes arable land out of food production. The government has pulled out the stops to feed this monstrous boondoggle. The taxpayers subsidize the ethanol producers and the “blenders” (i.e. “Big Oil”), they have mandated its use and have imposed tariffs to prevent foreign competition. This is a scam only a vote buying politician could love.
Who wins? The corn growers, the ethanol producers and “Big Oil”…and politicians. Who loses? The taxpayer…in the form of reduced mpg, greater wear and tear and engines, we pay for the subsidies in the form of higher taxes and ultimately we pay more for food because feedstock has been diverted into motor fuel. The deal actually sucks.
How about a 2 out of 3 compromise? End the subsidies to produce and blend ethanol and end the mandated use. Keep your anti-free-market tariff. Let’s see what happens to the ethanol industry once it’s stripped of all its “protection”. It should survive to some extent if it’s such an excellent oxygenator for gasoline. In truth the only advantage it has over MTBE is that it doesn’t stink.
The net effect of ethanol on our economy is negative. The net effect on energy utilization is negative. It is much like paying one group to dig ditches and another (much larger) group to follow behind and fill them in. Ethanol is a textbook example of crony capitalism and a how-to guide for buying off politicians.

Mark Wagner says:
March 5, 2011 at 6:01 pm
…
Almost certainly not if you factor in energy used in production and distribution. Can’t transport ethanol by pipeline; you have to use fuel-burning trucks.

Not true — you can transport fuel ethanol by pipeline, (you use those same evil fuel burning trucks to get your gasoline to the final destination too).
It has been done. It is not transported by pipeline because the owners of the oil pipelines refuse to share the lines and spend the money to clean all the crap out of the lines that petroleum products leave behind. The Ethanol would also clean out the gunk that is plugging the leaks in the pipelines and they would end up spending a boat load of money on maintenance because the lines were finally clean inside.
Several tests have been done to prove ethanol can be shipped in existing lines, and they had no problems except the ethanol picked up a lot of residue and was not longer clear and bright when it reached the delivery point making it unsuitable for sale without either re-processing it to remove the gasoline/oil residue or run enough ethanol through the pipe to clean it up, fix all the leaks then share the line.
They do ship fuel ethanol by pipeline in Brazil and there has been talk of building an ethanol only line here in the U.S. .
Right now the most cost effective way to move ethanol is by barge or by unit trains on the RR.
That will remain the case until the ethanol fuel lines are actually built, but that won’t happen until sufficient volume of ethanol transport occurs on a regular basis to justify the expense. (chicken and egg problem)
Larry

Dr. Dave says:
No sane engineer, chemist, botanist or economist would ever recommend ethanol. Depending on whose work you read, you either expend more energy producing a gallon of ethanol than you get out of it, break even or (under the best conditions) get just slightly more energy out
Sorry, but this is simply false. Pimental & Patzek, from Berkely, are virtually the only ones claiming negative energy balance .. and their work has been thoroughly and soundly refuted and debunked by many reputable scientists, government agencies and organizations.
THere are MANY peer reviewed works that clearly show the current yield for corn based ethanol averages appx 1.6 units of energy produced for every unit of energy expended in production. Some processes are getting well over 2 to 1 for corn.
Cellulosic biomass processes have matured and are starting to come online commercially – with Net energy yields as high as 7 to 8 units produced for each unit of energy expended. Cellulosic biomass can be grown on marginal land with little water or fertilization. In fact cellulosic biomass appears to be a very good rotation crop – helping rehabilitate soils used for row crop production.

hotrod ( Larry L ), I know you enjoy supporting government welfare for corn farmers but Dr. Pimentel’s studies have not been debunked. His studies have been supported by others,
Ethanol From Corn: Clean Renewable Fuel for the Future, or Drain on Our Resources and Pockets?
(Environment, Development and Sustainability, Volume 7, Number 3, pp. 319-336, September 2005)
– Tad W. Patzek et al.
“It is shown here that one burns 1 gallon of gasoline equivalent in fossil fuels to produce 1 gallon of gasoline equivalent as ethanol from corn. When this corn ethanol is burned as a gasoline additive or fuel, its use amounts to burning the same amount of fuel twice to drive a car once. Therefore, the fuel efficiency of those cars that burn corn ethanol is halved. The widespread use of corn ethanol will cause manifold damage to air, surface water, soil and aquifers. The overall energy balance of corn conversion to ethanol demonstrates that 65% of the input energy is lost during the conversion. Carbon dioxide sequestration by corn is nullified when corn ethanol is burned, and there will be additional carbon dioxide, nitrous oxides, and sulfur oxide emissions from the fossil fuels used to produce the ethanol. ”
Larry, “Fuel ethanol is the most cost effective octane enhancement for gasoline blending, it allows them to use less crude oil to make a gallon of fuel, therefore as the price of oil goes up, so does demand for fuel ethanol to allow the blenders to meet minimum octane requirements at the lowest possible cost.”
Really? So why does it have to be mandated and subsidized? If Ethanol was so great it could compete on it’s own. The fact is it cannot thus requires government welfare and mandates to punish consumers with higher gasoline prices.

Larry,
Thank you for calmly answering with real facts the knee-jerk reaction from people who know nothing about farming.
Farmers don’t live in a libertarian-designed spreadsheet. They live in the real world. For hundreds of miles, the only salable crops are field corn and soybeans. The machinery for that is what they have several times their annual income invested in. They aren’t going to grow something that they can’t plant, harvest and sell, even if hypothetically, people could eat it. The idea that farmland in Iowa or southern Minnesota is fungible with sweet corn or tomatoes or what have you is a very ignorant notion any high schooler in the midwest could explain to you. BTW, cellulosic ethanol production is happening right now in Iowa.
ShrNfr. You forget chlorophyll, and the sun. Funny thing about water: It isn’t destroyed: there is this thing called the water cycle. Read these pages and you will learn more about that bright light in the sky, and about the water cycle.

The correlation is mostly incidental.
With the increased use of corn for ethanol, the planted area increased massively as well.
What makes the corn price look being influenced by ethanol production, is the simple fact, that agricultural production (at least in the developed world) and the ethanol price both depend primarily on the oil price. The oil price caused both to soar, as it did in 2007 and in 1973 and in 1980.
High food prices are the single most important factor to guarantee more food production. Who would be served, if prices are kept artificially low by governments, but not enough food available. Look at North Korea or the former Soviet block for the answer.
Finally, in the past, hunger was caused by crop failures, as mankind never produced much more food beyond expected consumption.
With the ethanol corn and the ethanol sugar cane, there is now a new, giant food reserve created, what could be highly beneficial to mankind.
Whenever needed, this crop could be diverted temporarily back to food production by a political decision.

Don Shaw says:
Ethanol from cellulosic feed has failed miserably to provide the promised supply of ethanol as mandated from the EPA.
Cellulosic ethanol is in its very early stages … it was NEVER expected to provide a significant part of overall production in 2007 – or today …
The plants under construction are first version units, barely a step beyond prototype status … it will take number of years to refine and enhance the process and build an industry and a feedstock supply
It also MUST be noted – as your attached story shows – that this plant was being constructed in 2007 … we had that little old financial market meltdown followed by a collapse of the economy AND a collapse in gas prices – all of which made these early stage plants, along with many new corn plants – economically unfeasable – at least in the short term.
I;d like to be clear about a couple things as well … I am first a strong opponent of the AGW alarmism … it is undeniably clear we are due, overdue, for a glacial period … the historical records are about as clear as can be.
The historical record is I think also very clear that the temperatures of the last 10 years, 30 years, 100 years or even 400 years are well within the natural variation of the last 10,000 year historical record
I’m also not in any way related to or involved in the ethanol industry. At one point I was an ethanol skeptic. Until I did the research to try and support that position. And when you have the facts – all the facts – most of the claims against ethanol are simply not accurate. I encourage everyone to spend as much time fact checking and educating themselves about ethanol as they do about global warming issues.

So are the prices of corn/food rising all over the planet? Or just outside the U.S.? It seems that as a corn exporter it is the buyers that are the ones that are suffering. But didn’t the excess of corn grown in the U.S. contribute to putting farmers out of work in nations around the world in the first place? So now they decide to use the corn domestically to ease (although I’m sure only minimally) foreign oil consumption and everyone bitches that they are driving up food prices around the world. Well here in Canada I haven’t noticed any significant food increases.
MrC

Poptech says:
All the Ethanol shills who support government welfare for corn farmers and are anti-consumer choice for their vehicle fuels come out of the wood-work with these threads.
Sorry – but Pimental & Patzek (and Searchinger) HAVE been thoroughly refuted – by a myriad of sources – again simply type “Pimental debunked” in Google … anyone who relies on Pimental and Patzek today for any valid basis is not worth much response to.
I’ve also found people that refer to others as “shills” fit that same mold.
As to Searchingers “report” the Dept of Energy had this to say “The Searchinger study is plagued by incorrect or unrealistic assumptions, and obsolete data.”
Just one of many studies debunking Searchinger – who by the way shares many of the same issues as James Hansen when you check into his background ….
Researchers Michael Wang, at the Argonne National Laboratory, and Zia Haq, at the Department of Energy, recently offered a detailed response to the Science magazine article authored by a team led by Timothy Searchinger.
Wang’s analysis shows a reduction in greenhouse gas emissions from corn ethanol, compared to the Science magazine results. In the response, the authors indicate that Searchinger’s team made errors in updating the 1999 GREET model developed at Argonne by a team led by Wang. According to Wang and Haq, Searchinger modeled a case where corn ethanol production reached 30 billion gallons, compared to the 15 billion cap envisioned in the Energy Security and Independence Act; did not increase corn yields; underestimated the protein content of distiller’s grains by 23 percent, incorrectly assumed a 62 percent in corn exports for 2007, omitted a 400 percent increase in distiller’s grain exports, assumed constant deforestation rates in the Amazon and other areas despite downward trends, and did not account for an increase in corn ethanol production efficiency. Wang and Haq warned policymakers that indirect land-use modeling was in its infancy and not to be misguided by accepting results as definitive at this stage of model evolution.
Michael Grunwald of Time Magazine recently published a new, rather self-serving article in the Washington Monthly, filled with distorted logic and mangled facts.
His portrayal of Tim Searchinger as a humble lawyer who experienced an epiphany about biofuels is disingenuous at best. While now a visiting scholar at Princeton University, Tim Searchinger was formerly a lobbyist for the Environmental Defense Action Fund and was intimately involved in lobbying key Members of Congress during the drafting of the Energy Independence and Security Act of 2007.

I’d really be interested to see full disclosure statements from hotrod (Larry L) and 220mph. Do either of you two individuals have any financial interests (directly or indirectly) in the ethanol industry? Just curious. Reiterating Smokey’s comments (thanks, BTW), what would happen if all ethanol subsidies ended tomorrow? If the taxpayer were not forced by a coercive government to fund this folly, would it survive on its own merits? You two speak glowingly of all the advantages of ethanol. If true, it shouldn’t be necessary for the taxpayer to subsidize it, now would it? Subsidies are simply a political transfer of wealth. Has domestic ethanol production resulted in any meaningful decrease in the % of foreign oil we import? Or is this like “jobs saved or created”. We would have had to import even more except for… Yeah…right.
Ethanol, which by the way, I am a big fan of in beverage form, is no different from wind or solar power. It simply cannot exist as a viable entity in a free market economy without taxpayer subsidy. By definition this means it is a non-viable technology. Converting food into fuel is exactly what biological systems do…except we do it far more efficiently.
This is not your ordinary link to a “scientific source”. This is actually a link to an article in Car & Driver magazine which appeared several years ago. I don’t read C&D. I found the link in the comments section on another site several months ago. It is actually a very good article. It’s actually worth the time to read as the author obviously took the time to research it. It can be found here:
http://www.caranddriver.com/features/06q3/ethanol_promises-tech_stuff
I was writing an article about energy independence for submission to another site (or possibly this one). The next morning I awoke and scanned the news blogosphere (as is my wont). I discovered the fine article by Dr. Smith I previously linked to and decided not to bother. He is far more qualified and stated his (and my) case far better than I could. I encourage all readers to take at look at his piece.
http://scienceandpublicpolicy.org/images/stories/papers/originals/toward_rational_energy_planning.pdf

Smokey:@Mike says: “Wheat prices have not been flat.”
It’s the substitution effect. When one commodity becomes expensive, people purchase another commodity with essentially the same utility. This drives up the price of the substitute.
_________________________
AW said: “As shown above, food prices surged to record levels in February despite February wheat and rice prices being essentially flat. Yet, February corn prices are up …”
I was only responding this statement. Rice prices have been steady:
http://www.indexmundi.com/commodities/?commodity=rice&months=60
Why would the substitution effect only apply to wheat and not rice?
I don’t disagree that our ethanol policies make no sense and are one of many factors pushing up world food prices. The failure of the Russian wheat harvest is another. That was certainly weather and perhaps climate change related.

Poptech- I have a small fleet of FFV’s (mostly 3.5L Impalas) and I can assure you that they run on E85 90% of the time. The EPA mileage rating for E85 is a calculated range based on BTU content- not in real driving conditions. My fleet averages 80% of the range they would get on gas but the E85 is still lowest cost per mile most of the time. Maintenance also seems to be less. The govt ratings ignore that since E85 generates less heat- less gets wasted out the radiator for cooling (thus the lower loss of mpg than predicted per btu). It can be better than that- I would like to populate my fllet with the new Buick 2L turbo FFV which appears to be single digit % loss in mpg.
Miles per btu important- more so than energy density per gallon- otherwise we would all be running on diesel fuel or better yet- bunker oil.

Eric (skeptic) says:
March 5, 2011 at 7:16 pm
Larry said “Several tests have been done to prove ethanol can be shipped in existing lines, and they had no problems except the ethanol picked up a lot of residue and was not longer clear and bright when it reached the delivery point making it unsuitable for sale”
But great for burning in your engine eh? What is your answer to the boaters who are now forced to use ethanol mixtures? http://www.atlanticmaritimeacademy.com/images/TI-090311-ethanol-going-up.pdf
Besides MTBE, what are other alternatives besides ethanol?

You are correct the boaters got screwed because the manufactures were brain dead and used resins that were well known to be incompatible with ethanol added fuel years after ethanol was required by law to be added to gasoline in large parts of the country. Here in Colorado oxygenated fuel was required by law in 1988, any manufacturer of a device that used gasoline for sale in the United States should have dealt with this issue 20 years ago. The fact they did not is due to either incompetence or willingness to sell defective equipment to their customers.
There are no other cost effective oxygenates for adding to gasoline besides ethanol. Methanol (been there done that — major corrosion issues)
MTBE — major water table contamination issues.
Ethanol — high blending octane (118 octane when blended with gasoline up to about 60% — less effective at higher blends) Of course the octane test itself is not appropriate for high alcohol fuels, so talking about fuel octane with ethanol added gets complicated.
Its “road octane” in 85% blend is somewhere between 112 and 118 octane based on real world usage. Ethanol is much less corrosive than methanol and is easily passivated with corrosion inhibitors as are required in U.S. E85. It is biologically natural and benign easily decomposing if spilled. There is no other readily available chemical that can do what it does for the cost.
Larry

So I see my question was ill-posed, I gave a choice of plain gasoline and gasoline with ethanol as an oxygenator. Considering that oxygenation has some value for the environment I would propose a new question for Larry or any other ethanol proponent. It looks like the choices are methanol, ethanol, (or propanol or butanol with less oxygen). Water has the most oxygen but doesn’t burn. Methanol has the second most oxygen, so wouldn’t that give it an advantage over ethanol?
I don’t believe the scary stories about MTBE. First, if it got in the groundwater, the other fuel components were not far behind. Second, the toxicity of all solvents is probably similar.
Finally, the nutritional value of corn is negative in many cases due to poor digestion. Perhaps once the starches are turned into sugar and removed, there is a semi-edible waste product like tofu from soy oil processing. I am certain I would rather eat a cow that was fed grass than one that fed some leftover glop from corn processing.

To Phil says: Good post.
To everyone here the many comment demonstrate the many parts to the ethanol(I mistyped it ethanoil) debate. Just last spring corn was cheaper. close to $3.00 now you can sell it for around $6.85. Why? many factors 1.The cost of oil there is a good correlation between corn and oil prices.World wide demand for feed grains like wheat, grain sorgum, and corn..Maybe inflation gee you get agruments both ways on that one. Just a few of the demand factors driving corn prices
Perhaps govermets blend credit could be reduced some and both side would be happy.I like reducing this credit because it interfers with a true market Call it economic noise or rent seeking it distortes the markets.
As an aside the conversion of soybean oil to diesel took a hit in 2010. The blend credit for soydiesel expired and was not renewed till late in 2010. The result was a plant in wester Missouri set up to process soybeans went broke.The goverments bio diesel credit was essential to their business plan.
One other point land values have got through the roof with these higher grain prices. If we do change the blend credit for ethanol lest do it slowly so agriculture can unwind these artifically high land values in an orderly fashion. I have no desire to see another farm crisis like the one in 1981-85

A diesel engine has a theoretical efficiency of around 40% due to its compression ratios. But you can see on this chart: http://en.wikipedia.org/wiki/Gasoline_ga… that while diesel has about 129,500 BTU and more than gasoline’s 114,000BTU ethanol (E100) has only 76,100 BTU. So although the engine may be 25% more efficient the fuel contains about 33% less energy.

You are correct but E85 a mixture of 85% ethanol and 15% gasoline has more usable energy than gasoline at the fuel air mixtures actually used. In non-optimized engines it produces 5%-15 more power than gasoline and in optimized engines can approach 25% more power and above because of its high tolerance for compression and burning characteristics. It burns significantly faster at max power mixtures, higher evaporative cooling power than gasoline does so the engine does less negative work during the compression cycle. Net result is thermal efficiencies on high ethanol blends can get in the 40% range.
It is not important how much energy is contained in a gallon of fuel, it is how much useful energy that it contains can be extracted by a practical engine. This is why a fuel that has less energy per unit volume gets higher fuel mileage and power output than the BTU content alone would imply.
The assumption that fuel energy content per volume correlates with miles traveled per gallon is faulty. There is not a linear relationship between fuel energy per unit volume and work done per unit volume of fuel.
As far as fuel thermal efficiency this study is interesting reading.
http://delphi.com/pdf/techpapers/2010-01-0619.pdf
Larry

220mph, “Sorry – but Pimental & Patzek (and Searchinger) HAVE been thoroughly refuted – by a myriad of sources – again simply type “Pimental debunked” in Google … anyone who relies on Pimental and Patzek today for any valid basis is not worth much response to.”
No they haven’t. Show me the published rebuttal to their papers where Pimental or Patak did not reply or conceded.
I am sure you believe any result that shows up in Google, how sad. FYI your “search” comes up to Yahoo groups and nonsense. If I search with the correct spelling, I get more forums, blogs and other useless nonsense.

Why do I get the impression that this blog is about a bunch of Americans crabbing that their fast food might not be fast enough in the future. The old system was that a sizable portion of agricultural production went for horse feed to provide transportation. It seems fitting that we may once again look to agriculture for horsepower.
Food in the U.S. is too cheap for our own good. Lent begins next Wednesday.

Here is a 2000-2010 USDA Corn report:
Corn – Planted, harvested, yield, production, price, All States 2000-2010
http://quickstats.nass.usda.gov/results/E1AC0E4D-095D-3133-91B7-33FA1E08D3FA#9C148F0D-09A6-334B-AC23-390F77FDAD28

1outlaw, “Poptech- I have a small fleet of FFV’s (mostly 3.5L Impalas) and I can assure you that they run on E85 90% of the time. The EPA mileage rating for E85 is a calculated range based on BTU content- not in real driving conditions. My fleet averages 80% of the range they would get on gas but the E85 is still lowest cost per mile most of the time. …Miles per btu important- more so than energy density per gallon- otherwise we would all be running on diesel fuel or better yet- bunker oil.”
That is 80%, 20% less than gasoline. You are not be paying less per gallon for ethanol blends if you removed all the agricultural and blender subsidies and then adjusted the price for reduced MPG.
Yes we should be using much more diesel power vehicles like Europe does but are not thanks to environmentalists and the EPA. Diesel is much more fuel efficient,
99-MPG: Volkswagen Lupo TDi Diesel – A Thrifty Spin in a 99 M.P.G. Car (The New York Times)
65-MPG: Ford’s Fiesta ECOnetic – The 65 mpg Ford the U.S. Can’t Have (BusinessWeek)

Poptech says:
220mph, “Sorry – but Pimental & Patzek (and Searchinger) HAVE been thoroughly refuted – by a myriad of sources – again simply type “Pimental debunked” in Google … anyone who relies on Pimental and Patzek today for any valid basis is not worth much response to.”
No they haven’t. Show me the published rebuttal to their papers where Pimental or Patak did not reply or conceded.
I am sure you believe any result that shows up in Google, how sad. FYI your “search” comes up to Yahoo groups and nonsense. If I search with the correct spelling, I get more forums, blogs and other useless nonsense.
Research does require at least a very little amount of effort … I could have spent 5 minutes and come up with this independently but it was just as easy to click one of the “useless nonsense” links and get at least enough info (from a Wiki) to prove the point
If you really care – are actually interested in learning – I’d be happy to dig up a bunch of the actual studies for you:
Patzek and Pimentel
Since Pimentel seems to be about the only still pushing this concept of a negative energy balance with ethanol (with the assistance of Patzek) perhaps it would be in our best interests to have full disclosure here.
Patzek worked for Shell Oil Company as a researcher, consultant, and expert witness. He founded and directs the UC Oil Consortium, which is mainly funded by the oil industry at the rate of US$60,000-120,000 per company per year.
Pimentel has been basing his numerous studies on corn yeilds from 1980 with a refusal to admit yeilds have increased a great deal in the last 25 years. He also bases his studies on other figures from the late 80s and early 90s and even when pointed out he refused to update them and instead uses the same debunked figures in study after study.
Clearly this guy has a chip on his shoulder, and I suspect that chip is being funded by the oil companies.
Here is one interesting quote I found: “This [Pimentel’s] report was debunked by, among others, Michael Wang and Dan Santini of the Center for Transportation Research, Argonne National Laboratory, who conducted a series of detailed analyses on energy and emission impacts of corn ethanol from 1997 through 1999. […]Only Dr. Pimentel disagrees with this analysis. But his outdated work has been refuted by experts from entities as diverse as the USDA, DOE, Argonne National Laboratory, Michigan State University, and the Colorado School of Mines.”
If we are going to tell the whole story, there should be at least some reference to the perceived bias of Pimentel and Patzek especially when so many studies have refuted their claims. This isn’t as if the USDA study is the only one out there….and it should be disclosed.
20 December 2007 (UTC)

In addition to ethanol driving up food prices, the fertilizer runoff from all the Midwest acreage planted for ethanol creates a dead zone in the Gulf of Mexico each summer that covers thousands of square miles. We are mandated to subidize and use ethanol for a “cleaner” environment. In the process, we do as much harm to the Gulf as the BP oil spill. This doesn’t make sense.
No subsidies, no mandates. Make ethanol compete in the market place and see how much consumer demand it drives…

Good discussion – time to go hit the books and see what the latest research says. Thanks.

It would be interesting to see a graph of the number of people starving world-wide overlaid on top of the corn price graph.
The politicians that advocated for ethanol should be locked away. Consider all the negative consequences of the mandate. It’s downright criminal. To us, it means higher taxes, higher fuel costs, lower mpg, higher fertilizer prices/usage, more water use and water pollution, thousands of trucks of flammable liquids on the roads (you can’t transport it in pipelines), and fire like the one in Ohio recently when a trainload went up.
However, to poor nations that can’t afford as much food for their people, it means more people starve. It is especially critical this year because of crop failures in various places. There is apparently no surplus, so prices jump. It needs to stop now, even if it ends up costing some bucks. We already spend too much on this fiasco. Lets admit it’s stupid and stop it now.

Dr. Dave says:
March 5, 2011 at 8:02 pm
I’d really be interested to see full disclosure statements from hotrod (Larry L) and 220mph. Do either of you two individuals have any financial interests (directly or indirectly) in the ethanol industry? Just curious.

None at all, I work in the computer industry and use E85 blends in all 3 of my cars because it saves me money and the cars run better on it. My WRX is a full E85 conversion I paid for out of my own pocket, and it has paid for itself several times in fuel cost savings.

Reiterating Smokey’s comments (thanks, BTW), what would happen if all ethanol subsidies ended tomorrow? If the taxpayer were not forced by a coercive government to fund this folly, would it survive on its own merits? You two speak glowingly of all the advantages of ethanol. If true, it shouldn’t be necessary for the taxpayer to subsidize it, now would it?

If the ethanol subsidies ended tomorrow morning with no notice, the same thing would happen to the ethanol industry as happened to the oil industry when the Arab oil embargo doubled the price of their commodity overnight in the 1970’s.
In any industry the market is based on the existance a specific financial environment. If you yanked that rug out from under any industry you would crash it.
Now the second part of your question is the key issue, — yes ethanol can survive without the subsidy, now. The reason it needed the subsidy is two fold, one all the stupid crap info out there that is not only incorrect but in many cases exactly opposite of the facts, an the damage done by government intervention in the fuel market in the 1920’s that destroyed the fuel ethanol industry, so it was starting up at a severe handicap that would not have existed if the government had not been meddling in the first place.
Ethanol was the primary fuel for internal combustion engines for years before gasoline came along. The original Model T was designed to run on ethanol. At the time gasoline was dirt cheap, it was literally a waste product from the production of kerosene for illumination. The oil industry dumped this cheap waste stream on the fuel market when they figured out it could be used as a motor fuel and actively tried to shut down the ethanol industry and finally succeeded by helping push through prohibition in the 1920 which outlawed the thriving ethanol fuel industry over night.
The current subsidy is simply long overdue compensation for that government intervention in the markets and the 50 year head start the oil industry had with no viable competitors after the fuel ethanol industry was shut down by the government.
Fuel ethanol blended with gasoline would be the preferred fuel if the average person on the street was not up to his eyeballs in bad information about ethanol and really understood that when blended with gasoline, is a far superior fuel to gasoline alone.
The only reason gasoline was viable in the 1960’s in high compression engines was due to the use of TEL to boost octane. If fuel ethanol had been an operational industry and TEL had been outlawed after WWII we would all be driving high ethanol fuel blend cars and paying a lot less for gasoline since they would not have wasted a couple decades trying to figure out how to wring high octane gasoline out of crude oil without adding TEL. They would have just added ethanol and gone on about their business, because back then folks remembered ethanol used as a motor fuel, and knew it was a better fuel.
There was a reason the bootleggers were easily out running the cops, they were burning their own ethanol and making more power. That is also the reason serious racers have always gravitated toward alcohol based fuels and fuel blends which contained alcohol.
That is why today the high performance community is falling all over itself to do conversions to run E85 today, it out performs $6-$10 per gallon racing gasoline.
Larry

The issue is still not being communicated effectively regarding corn.
Corn is grown on N. America’s BEST cropland. This acreage (best cropland) does not change much from year to year. If 60% of this land is growing fuel crops, it is easy to see how food crops are squeezed into scarcity, hence higher prices.
If we are going to grow fuel crops (it does not matter which fuel crop), they must be grown on new marginal lands (not presently being used for pasture or animal feed). Otherwise, fuel crops will compete with food crops. Marginal lands are the ecosystem for much of our wildlife. They would be sorely missed.
Btw: Corn will not do well on marginal land, so another fuel crop MUST be selected anyway. GK

hotrod ( Larry L ) , “If the ethanol subsidies ended tomorrow morning with no notice, the same thing would happen to the ethanol industry as happened to the oil industry when the Arab oil embargo doubled the price of their commodity overnight in the 1970′s. In any industry the market is based on the existance a specific financial environment. If you yanked that rug out from under any industry you would crash it.”
Yes all subsidized industries crash when the subsidies are removed because they were never economically viable to begin with that is why they needed the subsidies.
“Now the second part of your question is the key issue, — yes ethanol can survive without the subsidy, now. The reason it needed the subsidy is two fold, one all the stupid crap info out there that is not only incorrect but in many cases exactly opposite of the facts, an the damage done by government intervention in the fuel market in the 1920′s that destroyed the fuel ethanol industry, so it was starting up at a severe handicap that would not have existed if the government had not been meddling in the first place.”
That is the biggest pile of BS I have ever read. Ethanol fuel was not banned in the 1920s, it could still be used in a denatured state. Even still so the U.S. Government destroyed the ethanol industry worldwide for over 75 years? Every country on the planet is just stupidly refusing to use Ethanol? How come the ban didn’t destroy the Alcohol industry? It recovered completely, yet the Ethanol industry just could not recover in over 75 years?
“The current subsidy is simply long overdue compensation for that government intervention in the markets and the 50 year head start the oil industry had with no viable competitors after the fuel ethanol industry was shut down by the government.”
How did the automotive industry beat out the horse and buggy industry in the U.S. with its over 100 year advantage?
“Fuel ethanol blended with gasoline would be the preferred fuel if the average person on the street was not up to his eyeballs in bad information about ethanol and really understood that when blended with gasoline, is a far superior fuel to gasoline alone.”
Oh really? So consumers are just idiots and are “imagining” reduced MPG and driving ranges?
“That is why today the high performance community is falling all over itself to do conversions to run E85 today, it out performs $6-$10 per gallon racing gasoline.”
Consumers don’t fill up on racing gasoline or methanol either because their sole reason for driving a car is not to win a race at over 200 MPH on a racing track.

“Boy this red herring nonsense gets old — the corn used for producing fuel ethanol (field corn) and is not “food for human consumption” it is an industrial crop like timber, alfalfa, cotton etc.”
When a person makes starts off with deceptive statements like that, you only expect it to go downhill from there. Ethanol corn often is the very same corn used for human consumption (as cereal, corn syrup, flour, starch, etc), and it is always the same land (and water and fertilizer) as used for food crops.
“The modern fuel ethanol industry grew up out of the oil shortages of the 1970′s because ethanol allowed them to stretch a limited supply of oil/gasoline.”
Nonsense. The modern fuel ethanol industry grew out of recent massive subsidy and mandates.
“Fuel ethanol is a direct replacement for imported oil, and its percent of use goes up as costs of oil increase. That is a classic increase of demand for a substitute product when the item it replaces becomes cost prohibitive.”
Nonsense. If that were the case, there would be no need for massive subsiby and mandated use.
“It is very simple economics, …”
It is very simple economics that if something is cost effective, it doesnt need to be subsidized. It is simple economics that if something is higher performing, it doesnt need to have its use mandated.
“Fuel ethanol is the most cost effective octane enhancement for gasoline blending, it allows them to use less crude oil to make a gallon of fuel, therefore as the price of oil goes up, so does demand for fuel ethanol to allow the blenders to meet minimum octane requirements at the lowest possible cost.”
If that were true, it wouldnt need massive subsidy and mandates.
“It is a safe bet that this years corn plantings will be going up substantially for the same reason, as increased fuel costs will improve profit margins on fuel ethanol.”
Profit margins artificially enhanced with massive subsidy and mandates.
You admit that if the massive subsidy and mandates were removed, the ethanol fuel industry would collapse. Industries producing a more cost effective and superior performing product don’t need taxpayer subsidy and government mandated use.
JJ

Kinda interesting logic isn’t it?
Prediction: global warming will cause crop failure, mass starvation, we must fight AGW.
Action: Convert food crops to fuel. Clearly, facing crop failure and mass starvation, the obvious strategy is to burn the food.
Observation: Food prices are going up. This is proof of global warming.
Question: I thought global warming was supposed to cause crop failure, mass starvation….and now prices are rising so that’s proof of global warming?
Discussion: Let’s skip the ethanol vs regular debate. I’d like to know how the ChickenWarmingLittles managed to go straight from “price” to warming. What about the intermmediate steps? Like showing the crop failures that were caused by warming, showing the reduced yields caused by warming, that then result in higher prices.
But no…all the headlines for some time now regarding crop failure have been from cold…frost…early snow… yet in those areas where temps have been normal or above normal…highest crops yields in history.
But I guess there’s no need for logic. Should have figured that out when John Q Public got duped into staving off food shortages by burning the food.

I would ask everybody to look at the numbers first, and then try to discuss them:
http://www.dailyfutures.com/one/grains.html
My take is, the increase in fuel conversion was more or less compensated by increased corn production.
If there is a shortage, it is probably not (yet) the availability of land, but (I speculate) more the availability of farmers. Many of them have given up during the 30 years of non increasing corn prices and their average age in the US is now 58 !

Here is an interesting article in the UK Telegraph relating the current increase in food prices world wide to among other things the increase in ethanol use
“Gloomy Malthus provides food for thought as world’s appetite builds”
http://www.telegraph.co.uk/finance/comment/liamhalligan/8363500/Gloomy-Malthus-provides-food-for-thought-as-worlds-appetite-builds.html
Excerpt “Accounting for 2.5pc of global energy use, biofuels are now serious business. Boosted by huge Western government subsidies, they’re set to meet more than 10pc of global energy needs by 2030. The trouble is that biofuels are shifting land use away from crops for food – which, in turn, is pushing food prices up. The extent of this land shift is uncertain. But a recent Friends of the Earth report said that in Africa, the European-led biofuels land-grab is “under-estimated and out-of-control . . . causing conflict and threatening food-security”. So even mainstream environmentalists now feel that biofuels, designed to lower our hydrocarbon addiction, are actually counter-productive given their impact on food. ”
The issue is receiving attention in serious mainstream papers here in UK. One wonders if politicians will see the light at well.

Poptech says:
March 5, 2011 at 8:58 pm
Larry, “It is biologically natural and benign easily decomposing if spilled. There is no other readily available chemical that can do what it does for the cost.”
It has it’s own problems if the spill catches on fire,
Ethanol has fueled Indycars for several years … there are occasional fires during wrecks and in pit incidents … like methanol, the prior fuel of choice, ethanol fires in Indycar are fought largely with water
And again I have to say comparing a tanker of ethanol on fire with a tanker of gasoline also seems silly to me … neither is a fire that can typically be “fought” – if fully involved the best a fire dept could do in either case is let it burn and try to minimize collateral damage

The green regime is full of well intentioned Pol Pots.
It seems the cruelty of do-gooders knows no bounds.

CharlieFFoxtrot says:
To us, it means higher taxes, higher fuel costs, lower mpg, higher fertilizer prices/usage, more water use and water pollution, thousands of trucks of flammable liquids on the roads (you can’t transport it in pipelines), and fire like the one in Ohio recently when a trainload went up.
However, to poor nations that can’t afford as much food for their people, it means more people starve. It is especially critical this year because of crop failures in various places. There is apparently no surplus, so prices jump. It needs to stop now, even if it ends up costing some bucks. We already spend too much on this fiasco. Lets admit it’s stupid and stop it now.
Again – factual claims NOT supported by data …
Higher fuel prices? …. nope
Ethanol, even E85, costs LESS – not more – than gasoline – per e85prices.com the national avg is $2.90 for e85 and $3.48 for gasoline (E10) – a 16.6% savings
In my area I pay $2.59 for e85 and $3.38 for gas (e10) – or 23% LESS for e85 … this trend largely holds for areas where e85 is prevalent
Lower MPG? …. nope – red herring
Direct MPG is lower with e85 – which makes sense since e85 has lower energy content. But energy content is not the only measure – vehicles designed for flex fuel take into acct the properties (higher octane etc) of e85 fuel and offer greater efficiency than conventional gas fueled engines.
Again – My 2003 Tahoe flex-fuel gets appx 14.7mpg City normally on E10 gasoline, and avg. 11.9mpg on E85 – a real world difference of just 19% …
E85 is 23% less than gas – yet my mileage is only 19% lower … I get a NET GAIN in actual fuel economy on a cost per mile basis with E85.
Higher fertilizer prices/usage? … outright false
First, FEED corn which is used for ethanol uses far less fertilizer (and water) than FOOD corn …. Second, again – the big complaint is that land is being used for growing corn for fuel instead of growing corn for food – the land has corn grown on it either way and fertilizer and water is used – again, FOOD corn has significantly HIGHER fertilizer (and irrigation) requirements than feed corn used for fuel
More water use and water pollution? …. and false again
Ethanol production does use water – but not dramatically more than other energy sources. And ethanol plants have dramatically reduced that water usage by using onsite treatment and reusing much of the water:
Interesting thing that water use – when you look at perspective:
WATER USE Ethanol vs Gas vs Electricity:
1 gal unleaded contains 119000 BTU
1 gal ethanol contains 76000 BTU
1 kwh elec contains 3413 BTU
1 gal ethanol takes 4.00 gals water
1 kwh elec takes 0.60 gals water
1 kwh elec takes 0.75 gals water (Nuclear)
1 gal gasoline takes 3.50 gals water
1 gal cellulosic takes 6.00 gals water (biochemical process)
1 gal cellulosic takes 1.90 gals water (thermochemical process)
Ethanol creates usable, high value byproducts which consume appx 35% of water used and as such a portion of water use should be allocated to production of these byproducts:
1 gal ethanol takes 2.60 gals water (less byproducts use)
1 gal cellulosic takes 3.90 gals water (less byproducts use) (biochemical)
1 gal cellulosic takes 1.24 gals water (less byproducts use) (thermochemical)
=BTU per gal water 19,000 ethanol
=BTU per gal water 5,688 electricity
=BTU per gal water 4,551 electricity (Nuclear)
=BTU per gal water 34,000 gasoline
=BTU per gal water 12,667 cellulosic ethanol (biochemical)
=BTU per gal water 40,000 cellulosic ethanol (thermochemical)
after byproduct water use credit:
=BTU per gal water 29,231 ethanol
=BTU per gal water 19,487 cellulosic ethanol (biochemical)
=BTU per gal water 61,538 cellulosic ethanol (thermochemical)
After properly crediting for byproduct value – even current ethanol production – which is pretty inefficient – is comparable to gas for water use – and future thermo technolodies make cellulosic biomass almost twice as efficent as gasoline for water usage
If we are basing viability of energy generation on water use we should abandon electrical power plants immediately as they are horrible water wasters – and nuclear plants are worse yet … but we do not – because there are offsetting factors
You can’t transport it in pipelines? …. simply false
You CAN transport ethanol thru pipelines – they are used in Brazil and several are proposed or in use in the US. In large part however pipelines are not necessary as the plants are located near the feedstock and the ethanol produced is consumed locally as well
Fire!? …. another red herring
A tanker of gas or a tanker of ethanol on fire – no effective difference – except that ethanol is less likely to explode than gasoline … neither can be “fought” effectively – they can only be contained and allowed to burn out
Poor nations that can’t afford as much food for their people? …. true – but completely unrelated to ethanol
US corn production meets ALL of the domestic food, feed and ethanol demands … PLUS ALL of the EXPORT demand – and there is still grain left over … these country’s could ask for more and we would have it to sell them – using corn for ethanol is NOT reducing availability of corn for food …

CNY Roger says:
Hotrod (Larry) can you explain this defense of ethanol in the link in your post March 5, 2011 at 5:00 pm :
Jere White, (Executive Director of the Kansas Corn Growers Association and Kansas Grain Sorghum Producers Association) claims that: “The fossil energy input per unit of ethanol is lower—0.74 million Btu fossil energy consumed for each 1 million Btu of ethanol delivered, compared to 1.23 million Btu of fossil energy consumed for each million Btu of gasoline delivered.”
no idea who this guy is or where you got this statement – but it is simply false
All you need do is search “ethanol net energy yield” on Google and you will find the current information … which will show the typical net energy yield for ethanol from corn is appx 1.5 to 2 units units of energy created for every one unit expended in production … these numbers continue to climb …
But the real improvement will be cellulosic ethanol processes – which are currently about double the corn yields and could see net energy yields as high as 8 to 1 in foreeeable future

Colin says:
What a load of utter rubbish from Hotrod and 220mph. They are trying to get around the fact that you cannot divert 40% of the corn crop from the largest producer of maize in the world and that it will not have a large effect on global food supply and price. Talk about ignoring the elephant in the room.
sorry – the “load of rubbish” as you put it, is from folks like you who make unsubstantiated claims with no documentation or support …
If you have factual support for your claim please provide it and we can discuss … others here have done that – your turn …

http://www.farmgateblog.com/article/1311/will-the-2011-corn-crop-be-large-enough-to-fill-the-demands
“…Our supply of corn at the end of the marketing year will be the equivalent of three weeks of use, but what happens if the 2011 crop also falls short of our needs?”

Hey … Obama is cornholing the future ….
It’s not about the corn it’s about using the famland for the thing that produces the highest government subsidy.
Did you know that you can make liquid transport fuels from coal at about $30 a barrel equivalent? Fischer-Tropsch is it’s name, invented in the 1920s. Used by Germany in WWII … and now being installed in China as state of the art refining plants.

hotrod ( Larry L ) says:
March 5, 2011 at 4:07 pm
The actual cost of the corn fraction of common food products is trivial, in a box of corn flakes the cost of the corn to make it is less than 10 cents, the real cost is in the packaging and shipping (oil) to get the product to the consumer.
A most critical point, and perhaps ultracritical when it comes to oil supply.
Global Traders seek to sell commodities as far afield as possible from point of origin to command the hightest prices. Where we left off just prior to the last oil price crash (which the Saudis fear) was Global Trade run amok that put unbearable pressure on the bunker oil supplies. The bunker oil for ships ran short, so diesel production was dipped into to add bulk to the bunker oil supplies.
This is where speculation does the greatest damage: At the Global Trade level. Speculating oil to skyrocket prices affects all trade, and thus the pressure is on all commodities, not just food. Unfortunately for people, they have to eat. Double unfortunately too many are out of work worldwide.
This is a speculative bubble we are witnessing. It will pop, but before it does so many nations/governments will sink into chaos.
Growing corn for fuel, at this point, is akin to rubbing salt in the wounds of speculative chaos.

“Ethanol production continues to increase in efficiency. The latest numbers from USDA’s 2008 Energy Balance for the Corn-Ethanol Industry report show for every British Thermal Unit (BTU) of energy used to make ethanol, 2.3 BTUs were produced. This is a marked improvement from the last report in 2004 when it took 1.76 units of energy to make 2.3 BTUs of energy. The report goes on to say efficiency will continue to improve as the ethanol process evolves requiring less corn per gallon of ethanol plus increasing corn yields will mean more ethanol per acre”
“A study by the University of California at Berkeley says that use of ethanol as a transportation fuel offers a positive life cycle energy balance, while producing slightly fewer greenhouse gas emissions than petroleum fuel use. Dan Kammen and Alex Farrell of the Energy and Resources Group (ERG) at the UC Berkeley published their research in the journal Science. While earlier studies suggested that the energy to produce ethanol was greater than the actual energy content of ethanol, this overview work argues that those assertions were incorrect. The ERG research report also noted that most ethanol today is produced through corn and, as such, the subsequent greenhouse gas emissions thought to cause global warming are only marginally cut. That will change, however, when such non sugar feedstock sources as switchgrass are put to use on a large scale, supplanting corn.
The UC Berkeley study examined several earlier assumptions and then corrected for errors and outdated information as it relates to how much energy it takes to grow corn and then make ethanol. The study says that ethanol produced from corn creates 10-15 percent fewer greenhouse gas emissions than burning gasoline. Similarly, a study from the International Energy Agency in Paris agrees, saying that while grain-based ethanol requires substantial amounts of fossil fuel inputs, that fuel additive is still responsible for creating 20 percent fewer greenhouse gas emissions than conventional fuels. “

Italy produced the first Methanol run car in 1936, there are about 500,000 methanol cars in Italy today.
I have a methanol plant in my basement which is supplied by household waste, and garbage, it heats the house,runs my wife’s car, those that are interested ‘google’
costs = wife’s car 7,000 km per year
= heating 260 M2 house 3/4 months
= cooling 260 M2 house 2/3 months
cost and installation of methane plant $6,800 (5 years ago)
maintenance $ 150.00 per year
Taxes $0.00
my savings over 5 years $20,000 – $25,000
Now if some one can tell me why you have not a plant in your basement ?

One nice thing about ethanol. We don’t have to send young men to the middle east to stabilize the politics and protect our fuel supply when we grow it here. When the disruptions in Libya spread to Saudi Arabia we’ll all be talking about how to grow corn in our gardens and build stills in our backyards.
On the subject of farm subsidies. The big farmer in my neighborhood who farms nearly 10,000 acres is waiting for the day subsidies go away because it means payment limitations go away. His speculation is that once payment limitations go he’ll be able to take over and drive the remaining small time guys out completely. It is true that farm subsidies hinder farm productivity. On the other hand do we want to deal with farms becoming too big to fail. It’s not inconceivable that a player like ADM could leverage its control of grain processing into control of the planting and harvesting of the crop. If this seems far fetched look at what has happened in the poultry business. It is vertically integrated and mostly in the hands of Perdue, Tyson Foods, and Pilgrim’s Pride. On balance it is probably a good thing because it helps us buy chicken so very cheaply that we can afford the luxury of jumping in a car and going down to get a KFC Double Down – all chicken – no bread sandwich.
The bottom line-
There is a price on a barrel of crude at which growing crops to be turned into fuel makes sense. That was how transportation worked when horse feed was grown to fuel our transportation in the horse and buggy days.

Layne Blanchard says:
But the EPA isn’t interested in factual data.
The number of gallons of bio-fuels that refiners must use each year was mandated in the 2007 EISA Act by Congress. The only thing EPA has power to do is determine the mix of source of bio-fuels.
Unfortunately, all the ‘happy talk’ about how much biofuel could come from cornstalks, grass clippings, wood chips and french fry grease was just ‘happy talk’ with no basis in reality.
The result is that for all intents in purposes all bio-fuels end up coming from the corn, which was not the original intent of the law.
There is no shortage of ‘happy talkers’ in the environmental movement who like to talk about ‘theoretical’ possibilities. It’s theoretically possible that I’m going to win the lottery but I’m holding off on spending my ‘winnings’ until I actually win. Unfortunately, in the biofuels game congress confused possible with actual.

220mph, “…ethanol fires in Indycar are fought largely with water”
So the NRT is lying?
NRT Quick Reference Guide: Fuel Grade Ethanol Spills (including E85) (PDF) (U.S. National Response Team)
“Fighting fires of fuel blends containing 10% or more ethanol by volume requires the use of an Alcohol Resistant-Aqueous Film Forming Foam (AR-AFFF).”
I don’t find fighting fires “silly”.

220mph, “Higher fuel prices? …. nope
Ethanol, even E85, costs LESS – not more – than gasoline – per e85prices.com the national avg is $2.90 for e85 and $3.48 for gasoline (E10) – a 16.6% savings
In my area I pay $2.59 for e85 and $3.38 for gas (e10) – or 23% LESS for e85 … this trend largely holds for areas where e85 is prevalent”
Sorry but the national average is 16% without adjusting for BTU or subsidies.
$3.503 – Regular Gasoline (AAA)
$2.929 – E85 (AAA)
Now lets get the actual price of E85,
$3.854 – E85 BTU Adjusted Price (AAA)
+0.450 – VEETC Subsidy (U.S. Department of Energy)
$4.304 – E85 BTU and Subsidy Adjusted Price
So much for that!

harrywr2
“There is no shortage of ‘happy talkers’ in the environmental movement who like to talk about ‘theoretical’ possibilities”
I tend to agree with this sentiment about happy talk. On the other hand some soul out there willing to risk capital (or his reputation if he works in a company) is likely to have the seeds of some future innovation happily brewing away in his mind. When I was 20 the idea of individuals being able to afford a personal computer was big time happy talk. Now even my computer has its own computer to handle the graphics part of its task. Happy talk is indeed “just talk,” but there are more innovations in our future waiting to be implemented by the right persons.

I think it might be useful to imagine a real life scenario.
Sometime in the near future China and India has a major crop failure, and these countries begin to starve. Here in N. America we stop exporting grains, to reserve, our supplies, to ensure, we do not run out.
As China starves, we continue driving around, blowing corn fumes out our tailpipes. How are we going to feel, at this time?
Now, put yourself, in the shoes of the poor, starving Chinese, who must endure hunger as they witness us drive around blowing corn fumes out our asses.
How long before they move on us? GK

This many comments and not one mention of the Iowa Caucus (apologies if I missed any).
For European readers, the Iowa Caucus is a key first post in the horse race to become president of the USA. Here is a link to a site that you can navigate to learn all about the Iowa Caucus – with what is hopefully a relevant starting point 🙂
http://www.iowacaucus.org/ethanol.html
You can find many links to the political importance of the Iowa Caucus and the ethanol connection. Here is just one example.
http://www.ft.com/cms/s/0/04f0a668-b71b-11dc-aa38-0000779fd2ac.html#axzz1FpsvWT43
A quote from this article is as follows:
“If you want to be president and you’re running in the Iowa caucuses, you have to support ethanol,” says Jerry Taylor of the Cato Institute, a free-market think-tank in Washington that opposes the industry.
That has forced some erstwhile doubters to reconsider their stance: Hillary Clinton, who opposed ethanol subsidies before she launched her bid for the Democratic nomination, has since come out forcefully in support of the industry.” end quote
The discussions above are very interesting, but honestly, the short answer is that were it not for the Iowa Caucus timing we would not be talking about ethanol, because there wouldn’t be any.

Biofuels really are not that big of a deal for the US itself. World-wide it has more negative effects in countries that can not produce as much food and give much more subsidies for them, but here its pointless to really guess what actual food production would be without ethanol.
Point in fact: Anything that is grown for food is price-controlled. The amount of foodstuffs grown is rather constant and the price only changes because of the price on fuel to ship the stuff. Corn for food will never go up in price because its controlled by the Government. I will not argue whether this is a good or bad thing, but this is just common sense. So in essence, food prices in the US are simply related to transportation costs and as such are related to the price of oil.
Food shortages are common in addition. Look through history and at either shipping costs or famines caused by bad weather. Both happen and regardless its the old story of anything that is sustainable can be taken away due to one storm. Sustainable is a myth, we as a society have never run out of anything that we can mine, but I can point to over 100’s of times in history where we ran out of food that is called sustainable by the same people. Pure and simple, its a myth. The oil in the ground is not going to disapear due to a heat or cold wave. But the biofuels could disappear because of those events.
Its a very large distinction, its almost like the entire sustainable argument took common sense on its head and turned it around.
In the end, that argument does not matter either though. The true cost of anything should be analyzed and then let the markets decide if we do indeed live in a free market. Subsidies just bias markets for a “preferred” product.
That being said, biofuels are harder on engines as a rule. You have to use more products to keep your engine running well with biofuels. You have to get your oil changed more often. You get slightly less MPG. But nothing there is really terrible and can’t be dealt with. You can also start designing engines for usage with biofuels which is what is starting today with some models running just as well with them. But when you engineer for a certain product, you still miss out, because the entire concept of increased BTU’s is paramount there with pure oil.
But if biofuels ARE cheaper, I see no issues with using them. This takes a very comprehensive cost/benefit analysis. First, remove the subisidies and remove all mandates for its usage. Then if it survives, great. If not, oh well.
That is what an open market is for. Let the market decide on green schemes that do nothing to help the environment and only make us more susceptible to mother nature. I would prefer the “sustainable” oil drilled from the US then biofuels, but shrug, its an open market for a reason, if it survives well that is the breaks.

#
#
Poptech says:
March 6, 2011 at 8:11 am
John Wright, “I had never heard about the effect of Prohibition on the elimination of alcohol from vehicle fuels (and thanks to Larry L for that titbit).”
Ethanol was never eliminated from vehicle fuels because of Prohibition. Ethanol could still be used in a denatured state, it just had to be mixed with a small amount of another chemical making it undrinkable. Thus if you are mixing it with gasoline it is “denatured”. Ethanol blends stopped being used because gasoline was cheaper no other reason.

The picture is a little more complicated that you want to present the Poptech. The volstad act (Prohibition) did not explicitly prohibit fuel ethanol, and denatured ethanol was still “legal”, it just became unavailable in the open market. By outlawing beverage alcohol they destroyed the industry that would create an adequate supply of fuel ethanol.
As prohibition was seen to be a soon to be imposed fact, the capital investment and plants of the large scale ethanol producers became nearly worthless, and were sold at fire sale prices many to the Rockefellers (oil industry), and all their skilled brewers and the chemists that supported them were diverted into either the oil industry or went underground into the boot leg industry.
Likewise the same prohibition on beverage alcohol made it illegal for small farmer still operations that could produce high proof alcohol on the farm. The farmers then could no longer provide their own fuel on the farm for their own farm equipment and transportation they were forced to buy from the only game in town the oil industry.
At that time the wide spread network of service stations to provide fuel for transportation did not exist, but folks in the rural areas could if they chose make their own fuel. By closing down the rural distributed fuel production economy and removing a secondary income stream from beverage alcohol it became to run most breweries.
Coors Brewing here in Colorado shut down their brewing operation and shifted into porcelain ware, which is now a second division of the company. That kept the company alive until prohibition ended. Not all brewers had the funding or smarts to make a similar move.
That concentrated the source of transportation fuel directly in the hands of a defacto monopoly in the oil companies and their suppliers. Even after prohibition was ended, that oil monopoly continued to squash small businesses that sold fuel ethanol. One of their tactics was to black ball fuel distributors that sold ethanol for “bad business ethics”, and refused to sell them kerosene or other petroleum products. In short the oil industry at that time ran a protection racket out in the open, and destroyed any business that sold fuel ethanol, by cutting them out of the supply chain for the other products they needed to run a successful business.
It was another example of unintended consequences, like the oil crisis in the 1970’s destroyed the majority of the independent gas station owners and left only the corporate chain stations. Many of the independents who went out of business in the 1970’s were selling gasohol and got cut off from fuel deliveries from the major oil chains. They always got their fuel deliveries late, or simply got driven out of business by corporate chain stations down the street selling gasoline at prices below their wholesale prices.
Larry

G. Karst,
“Now, put yourself, in the shoes of the poor, starving Chinese, who must endure hunger as they witness us drive around blowing corn fumes out our asses.
How long before they move on us? GK.”
The Chinese would then use some of the $2 trillion of US debt they are holding and purchase as much grain as they need. As they release these dollars onto the market, the dollar will decline rapidly in value and inflation will be imported into the US. As a consequence, interest rates will rise as investors attach a risk premium to hold US debt. I think it will be the US citizens who will be the most upset.

“I think it’s because the real factors in almost all commodity prices are market driven and energy costs drive much of that.”
Government mandates, subsidies and tariffs are not market forces. So I am well aware the price of ethanol has nothing to do with real factors.
“Also, it’s a bit dishonest to figure in ethanol subsidies while ignoring oil subsidies. It makes your comments less credible.”
Oh, please add them in. Make sure to divide by total domestic oil production!

hotrod ( Larry L ), “The picture is a little more complicated that you want to present the Poptech. The volstad act (Prohibition) did not explicitly prohibit fuel ethanol, and denatured ethanol was still “legal”, it just became unavailable in the open market. By outlawing beverage alcohol they destroyed the industry that would create an adequate supply of fuel ethanol.
As prohibition was seen to be a soon to be imposed fact, the capital investment and plants of the large scale ethanol producers became nearly worthless, and were sold at fire sale prices many to the Rockefellers (oil industry), and all their skilled brewers and the chemists that supported them were diverted into either the oil industry or went underground into the boot leg industry.”
What you are saying is illogical. If ethanol fuel/additive was economically viable they would have switched to making that. Gasoline put ethanol out of business because it was cheaper. It has nothing to do with Prohibition.
“At that time the wide spread network of service stations to provide fuel for transportation did not exist,”
They didn’t exist for the oil industry either when it was started.
“That concentrated the source of transportation fuel directly in the hands of a defacto monopoly in the oil companies and their suppliers. Even after prohibition was ended, that oil monopoly continued to squash small businesses that sold fuel ethanol.
One of their tactics was to black ball fuel distributors that sold ethanol for “bad business ethics”, and refused to sell them kerosene or other petroleum products. In short the oil industry at that time ran a protection racket out in the open, and destroyed any business that sold fuel ethanol, by cutting them out of the supply chain for the other products they needed to run a successful business.”
That is all conspiratorial nonsense and would not prevent a cheaper fuel from coming to market. Whatever kerosene or petroleum products they refused to sell, you could buy through a third party. Only the government can stop trade not any one company.
“It was another example of unintended consequences, like the oil crisis in the 1970′s destroyed the majority of the independent gas station owners and left only the corporate chain stations. Many of the independents who went out of business in the 1970′s were selling gasohol and got cut off from fuel deliveries from the major oil chains. They always got their fuel deliveries late, or simply got driven out of business by corporate chain stations down the street selling gasoline at prices below their wholesale prices.”
The oil crisis in the 70s was caused by government price controls on oil enacted under Nixon. Why would a company willfully help their competitor put them out of business? It is illogical and bad business. The fact remained ethanol was still not cheaper than gasoline, it was not used then and now for the same reason. All you have are silly conspiracy theories that have no basis in economics.

Richard M, “Well, I see the usual discussion of ethanol has taken place. It really is sad to see the normally skeptical WUWT readers being sucked in by the bad press on ethanol. You guys are smart enough to read past the lies on AGW, if you took a few minutes to apply the same critical thinking to the ethanol question you would be much better off.”
Yeah we are skeptical of a “fuel” that requires government mandates, subsidies and protection tariffs to even exist. We are reading past the lies promoting ethanol very well thank you,
Myth: Ethanol is Great (Video) (5min) (ABC News)