Interesting timing, especially when some biomass companies are switching from wood chips to corn, because they couldn’t turn a profit on wood chips. Looks like all the wheels are coming off the bus now.
To Survive, Some Biofuels Companies Give Up on Biofuels – Technology Review
Gevo, a prominent advanced-biofuels company that has received millions in U.S. government funding to develop fuels made from cellulosic sources such as grass and wood chips, is finding that it can’t use these materials if it hopes to survive. Instead, it’s going to use corn, a common source for conventional biofuels. What’s more, most of the product from its first facility will be used for chemicals rather than fuel.
As the difficulty of producing cellulosic biofuels cheaply becomes apparent, a growing number of advanced-biofuels companies are finding it necessary to take creative approaches to their business, even though that means abandoning some of their green credentials, at least temporarily, and focusing on markets that won’t have a major impact on oil imports. This is hardly the outcome the government hoped for when it announced cellulosic-biofuels mandates, R&D funding, and other incentives in recent years.
Here’s the story on the subsidy ending from the Detroit News:
Congress adjourned for the year on Friday, failing to extend the tax break that’s drawn a wide variety of critics on Capitol Hill, including Sens. Tom Coburn, R-Okla., and Dianne Feinstein, D-Calif. Critics also have included environmentalists, frozen food producers, ranchers and others.
The policies have helped shift millions of tons of corn from feedlots, dinner tables and other products into gas tanks.
Environmental group Friends of the Earth praised the move.
“The end of this giant subsidy for dirty corn ethanol is a win for taxpayers, the environment and people struggling to put food on their tables,” biofuels policy campaigner Michal Rosenoer said Friday.
Dirty Corn Ethanol? I’m all for ending taxpayer siphoning, but dirty corn ethanol?
Full story h/t to Lawrence Depenbush
GregO says:
December 28, 2011 at 7:14 pm
A. Scott says:
December 28, 2011 at 6:30 pm
Thanks for your carefully considered answer. I have learned a lot today about a subject I was only marginally aware of. In the old days (ha ha) I would read all this in magazines or other print media – nowadays it’s all internet and digital media. I can assure you I tune out as much noise as I can.
A real problem seems to be distribution as you point out. This is interesting in that any alternative to the energy infrastructure we have will face this problem…even if a product is desired in a market, how to deliver the product to customers is an important element. Also product design of vehicles to work well with the new fuel has to be considered.
So for the sake of argument, (and I am no authority on this subject), let’s just say that the public investment has had a payoff in the development of corn ethanol as a viable fuel stock.
As a consumer interested in purchasing this product, and considering the distribution problem you have noted, what do you suggest be done at this time?
Follow the Brazil blueprint. They have given us a successful business plan and the road map.
As noted above create an intelligent plan to phase out the subsidy – based on defined production and distribution goals by area. When an area meets goals – where ethanol is at least generally available (as with Minnesota) the credits phase out.
Two other items with methanol, incomplete combustion produces formaldehyde in sufficient concentration to be a hazard, and methanol is highly toxic and is a skin absorbed poison as well as being absorbed at toxic levels through the lungs if vapor levels are high enough.
Larry
The Iranian navy is currently conducting exercises to practice closing the straits of Hormuz. Their leaders say that they will try to close it if sanctions are imposed to try to keep them from getting nuclear weapons. Doesn’t this remind anyone why we started down the biofuel path 30 years ago? But biofuels will never be the complete answer. We need to drill for gas and oil, conserve all we can, provide natural gas vehicles and infrastructure, and build the Keystone Pipeline.
And did it escape everyone’s notice that GEVO is doing exactly what ethanol detractors say they want? They will be producing butanol, a common chemical feedstock, less expensively than it can be produced from oil. It does not have a subsidy, is not supported by RFS2, is compatible with current infrastructure, more energy dense than ethanol, and it won’t damage engines, even outboard motors. Isn’t that something we can all celebrate and applaud? And unlike what the article implies, this has been the course for GEVO for the last four years, and not some sudden switch in strategy.
Catcracking @ur momisugly 8:17
Show me that the value of the asset being depleted is reflected on the income statement and balance sheet. Show me where the asset, the pool of oil, is recognized in the accounting. If there is any depletion of an asset that has not been previously shown on the balance sheet having arrived there as income, said depletion amounts to a subsidy.
If the value of the asset is recognized only as it is pulled from the ground, the entire value of the withdrawal should be taxed (less actual depreciation and production costs) anything less is a subsidy.
If the value of the asset, the pool of oil underground, has been recognized as income previously and taxed as such, deplete away up to the recognized value of the asset there is no subsidy.
If only there was a big, huge, ball of heat and light in the sky relatively near (like 93 million miles away) and you could harness some of the energy which that massive glowing orb gave off with panels of some kind and then all of the world’s energy problems would be solved. what a world that would be. . .
Trying to prevent the destruction of the human race is pointless
it simply the nature of humanity in bringing their own destruction.
However coming in parallel to humanities destruction comes that
of spiritual enlightenment // the two go together as CLEOPATRA
& ANTHONY ROMEO & JULIET REPUBLICANS & CORRUPTION.
Thus one should also see the funnier side unto humanity at times
and allow ones self a smile a laugh // at just how dumb humans are.
Spiritual enlightenment comes via meditation in turning the senses
inward where such spiritual experience meditation brings / answers
ones questions to life its purpose // leaving one with clearer clarity.
I should make the point (given time) / in allowing the planet an time
to renew as heal itself. Then human life will return as always having.
If at presently one not prepared for a growth in spiritual experience
as understanding // feeling at present there but no immediate need
then that is OK / not a problem. However if it be one is inclined they
should start the processs of Spiritual Enlightenment via meditation…
then on internet search put (words of peace) on site a large selection
of videos which Prem Rawat talks /explains meditation/ of one turning
the senses inward in bringing a unfolding of the spiritual self. Not of /
ideas. Not of beliefs or a heaven beyond the clouds / but having / via
meditation very practical spiritual experience / answering all questions.
I should point out that which one gaining in a life in spiritual experience
& understanding is never lost such experience understanding is added
to ones spiritual account. Each individual has a spiritual account that be
carrried life unto life ( such spiritual account can’t be lost /cant be stolen
but carried life unto life as unto life / on ones journey unto enlightenment.
I should also point out No Money) involved in learning / starting meditation
such totally free (note) humans do take to meditation as the duck to water.
An human forms designed for meditation / meditation iits ultimate purpose.
At first turning ones attention from the world // in turning the senses inward
be a bit unusual ( one having lost the practice ). However it mends itself as
ones focus on the inner experience continues to grow / unto enlightenment.
Physics Major wrote: “I’ll believe that corn ethanol is viable when farmers use nothing but ethanol in their machinery and ethanol stills use ethanol to fuel their entire plant.”
(1) Farm equipment mostly uses diesel and runs fine on biodiesel but (at least when I was in this business) they sell their biodiesel and buy agricultural (i.e. red dyed) diesel in order to capture the subsidies. In the long run, I don’t doubt that farmers would use their own ethanol. In fact, a lot of them drive their passenger cars on E85. (2) The primary power requirement for an ethanol still consists of heat so the financially most advantageous way of making that heat is with the cheapest fuel in terms of BTUs per dollar. So they use natural gas. Hey, do you think that the petroleum plants heat their distillation columns with gasoline? Does that fact make you doubt that gasoline is viable? Of course they don’t use ethanol when there are cheaper fuels available. (3) The third major energy component used in making ethanol is electricity (for pumps, mostly). And it’s a lot cheaper to buy electricity than to make electricity from any vehicle fuel. This should be familiar to you. Do you think that the electricity in a petroleum plant comes from burning gasoline? Of course it doesn’t.
You might as well argue that no farm is viable unless it makes its own barbed wire.
johanna wrote: “Finally, we should all remember that unless ethanol blends are cheaper in real terms (no subsidies or tax breaks) than 100% gasoline, it is making gas more expensive.”
While apparently very logical, this is not true. In fact, you know from experience that whenever fuels are removed from the market the price immediately escalates for other fuels. Remember what happened when gasoline production was reduced by Katrina? Yes, the price of gasoline immediately went up. But what you probably didn’t know is that the price of ethanol also went up. Why? Think about it, people who wanted to buy gasoline now had to buy ethanol because there wasn’t enough gasoline. So the ethanol price went up. Similarly, if the supply of ethanol decreases, the price of gasoline is forced to rise (all other things being equal).
That is exactly what happened until on farm fuel ethanol production was killed by prohibition.
As a result of prohibition local production and sale of fuel ethanol disappeared and the oil industry became a monopoly in motor fuel distribution. It now has a 90 year head start on modern fuel ethanol with a completely built out infrastructure and a captive market of vehicles that no longer (like the early auto mobiles) could run on more than one fuel.
Modern efforts to encourage fuel ethanol production, distribution and market (ie vehicles that can use either fuel) is simply a move to restore normal market competition that was artificially destroyed in the 1920’s.
Larry
cwj says:
December 28, 2011 at 9:36 pm
Catcracking @ur momisugly 8:17
Show me that the value of the asset being depleted is reflected on the income statement and balance sheet. Show me where the asset, the pool of oil, is recognized in the accounting. If there is any depletion of an asset that has not been previously shown on the balance sheet having arrived there as income, said depletion amounts to a subsidy.
If the value of the asset is recognized only as it is pulled from the ground, the entire value of the withdrawal should be taxed (less actual depreciation and production costs) anything less is a subsidy.
If the value of the asset, the pool of oil underground, has been recognized as income previously and taxed as such, deplete away up to the recognized value of the asset there is no subsidy.
————————————————————————
You clearly have no idea of the difference between assets and income. A mineral or oil deposit is an asset, which (a) has a finite quantity of economically viable extraction potential and (b) requires significant capital investment to produce income. Once extraction begins, the infrastructure and the resource diminish in value very day – hence they are able to be depreciated in the tax code. It is exactly the same principle as is used in any other business that has assets that depreciate in value during the course of business.
You will find that these assets do appear in the accounts of the businesses that own them, in the column marked ‘assets’. If the business is sold, that is a major component of what the buyer is paying for (along with forward sale contracts etc).
These companies, like everyone else, pay tax on their income. Taxable income comprises gross income minus deductions. Do you think that companies would spend billions up front finding and establishing large mining and energy extraction projects knowing that they would not be able to depreciate their assets like every other business?
carl brannen said:
johanna wrote: “Finally, we should all remember that unless ethanol blends are cheaper in real terms (no subsidies or tax breaks) than 100% gasoline, it is making gas more expensive.”
While apparently very logical, this is not true. In fact, you know from experience that whenever fuels are removed from the market the price immediately escalates for other fuels. Remember what happened when gasoline production was reduced by Katrina? Yes, the price of gasoline immediately went up. But what you probably didn’t know is that the price of ethanol also went up. Why? Think about it, people who wanted to buy gasoline now had to buy ethanol because there wasn’t enough gasoline. So the ethanol price went up. Similarly, if the supply of ethanol decreases, the price of gasoline is forced to rise (all other things being equal).
———————————————————————————–
What a bizarre line of thinking. It is like saying that we should water down everyone’s whisky because it makes it go further. Ethanol is not a substitute for 100% gasoline, it is an artifically imposed dilutant. People do not have the option of switching to 100% ethanol if the price of other fuels go up. Arguing that blended products also rise in price during fuel shortages is irrelevant. Indeed, you shot yourself in the foot because you demonstrated that diluting gas with ethanol did nothing to cushion consumers from fuel shortages, which is supposedly one of the rationales for forcing it on us.
hotrod (larry L) says:
December 28, 2011 at 8:37 pm
Carl Brannen says:
December 28, 2011 at 7:53 pm
…
And on the other hand, it’s sad that the government hasn’t allowed methanol as well as ethanol in fuels. As far as I know, there’s no significant difference in them in terms of their engine effects.
They tried that already. When high alcohol blends were first tested they tested both M-85 (85% methanol in gasoline) and E-85 (85% ethanol in gasoline).
To expound on Larrys comments about methanol – IndyCars ran on methanol for a number of years. They now run on ethanol.
Positives are both are water soluble – which means fire fighting can be done with regular water, an important consideration in an IndyCar incident. Both are less combustable. Both however do burn with a transparent clear flame and are usually denatured with something like gasoline and an odorant to create a visible flame.
Methanol is as noted highly corrosive – IndyCar engines had to be “pickled” – methanol drained and gasoline run thru them – when shut down to prevent corrosion. Ethanol is less corrosive.
Ethanol and methanol are much slower burning as well.
bishopandwarlord says:
December 28, 2011 at 10:06 pm
If only there was a big, huge, ball of heat and light in the sky relatively near (like 93 million miles away) and you could harness some of the energy which that massive glowing orb gave off with panels of some kind and then all of the world’s energy problems would be solved. what a world that would be. . .
Yep – wonderful idea – if only it were feasible. Despite covering vast areas with hugely ugly solar panels – with short life expectancy’s – and huge subsidies – solar has not made any appreciable dent in energy use. And as with wind solar requires on demand traditional back-up generation capacity for all those cloudy days – which basically means you pay twice to get one set of energy.
Whereas ethanol can be produced over and over from the same lands – is available largely regardless of weather – reduces emissions and GHG’s and can be readily stored for future uae.
Oh, and it is currently consistently replacing appx 10% of our overall domestic fuel consumption.
It CAN and is also being shipped – both by rail and pipelines – contrary to old, now false beliefs.
I think we should continue to work on what I call “personal” solar. Highly efficient, unobtrusive panels for homes, garages, car ports and commercial building roofs. I use nearly 100% solar water heating for example in Hawaii, and IF the cost was remotely reasonable AND there was a rational payback, would readily invest in solar.
I approve of what Congress did today. Regardless of the vigorous arguments both for and against ethanol, I do not believe the Federal government should be mandating its use nor should it be providing any kind of tax credits.
I’m quite aware of the propaganda of the ethanol lobby over the years. They have not needed a tax credit for the development of ethanol, nor do they need a mandate. The fact is that ethanol does not have the energy density of gasoline, so of course they have to trick it up (E10) by blending it in with gasoline so that cars do not cost a person too much mileage. Of course, corn production has shot up, and corn product prices (especially in Texas, where ranchers have bitterly complained here of high feed prices) continue to remain high. Sorry A. Scott, but many of your facts are simply either incorrect or irrelevant. It’s not wise to use your food as fuel in the long run. If the market place finds it worthwhile, ethanol will ultimately become useful. Right now, if it needs mandates and subsidies, that to me smacks of relative uselessness.
People, don’t force the love! It is never a good idea to force the love!
eyesonu says:
December 28, 2011 at 5:02 pm
Per the USDA site referenced regarding cotton:
US acreage harvested
year 2006 324K acres
year 2007 288k acres
year 2008 169k acres
year 2009 138k acres
year 2010 202k acres
year 2011 288k acres
Seems that much cotton cropland was converted to corn for ethanol beginning with the ethanol mandate. Shortage of cotton lead to increase prices. Writing on the wall regarding ethanol returning acreage back to cotton?
Regards to an earlier comment by A. Scott that no cropland was being diverted to grow corn was of course bogus.
Its always humorous watching people try to pontificate and pass judgement based on data they do not understand.
These are the correct numbers for total cotton acres harvested in the US:
2005 – 13,802,600 acres
2006 – 12,731,500 acres
2007 – 10,492,200 acres
2008 – 7,568,700 acres
2009 – 7,528,700 acres
2010 – 10,706,700 acres
2011 – 9,849,500 acres
Seems your numbers were a wee bit off eyesonu ….
Links:
http://usda01.library.cornell.edu/usda/nass/CropProdSu//2000s/2008/CropProdSu-01-11-2008.txt
http://usda01.library.cornell.edu/usda/nass/CropProdSu//2010s/2011/CropProdSu-01-12-2011_revision.txt
More useful comparative numbers are acres planted:
Corn acres planted:
2011 – 92,282,000
2010 – 88,192,000
2009 – 86,382,000
2008 – 85,982,000
2007 – 93,600,000
2006 – 78,327,000
2005 – 81,779,000
Vs Cotton acres planted:
2011 – 13,725,000
2010 – 10,973,200
2009 – 9,148,500
2008 – 9,471,000
2007 – 10,830,200
2006 – 15,274,000
2005 – 14,245,400
And total acres planted:
2011 319,147,000
2010 316,696,000
2009 319,250,000
2008 324,997,000
2007 319,990,000
2006 315,960,000
2005 317,754,000
Funny thing that eyesonu …. seems that while total acres planted is almost unchanged since 2007 that Corn acres planted – was down 1.4% from peak planted in 2007 while cotton planted is UP 27% from 2007
A few LESS acres of corn planted in 2011 vs 2007 while 27% more cotton was planted. Corn was 28.92% of total acres planted in 2011 vs 29.25% in 2007 – corns share of total crop acres planted virtually unchanged from 2007
So much for that claim of yours about corn displacing huge amounts of any crop let alone cotton …
(MODERATOR: I apologize for the blown BLOCKQUOTE tags in my previous comment!)
Right. Legislation that attempts to reach into every home, even the bedrooms, to dictate light bulb selection. I thought you leftist drones were against government in the bedrooms! Oh, right, only when it suits your agenda and coincides with your green religious beliefs.
You green nitwits just don’t get it (or perhaps you do ;-), attempting to redirect the $252 Billion of annual oil import dollars into the local economy means there will be no local economy. Never-mind the fact that your ilk first CAUSED the dependence on foreign oil in the first place by systematically attacking every facet of the energy supply chain, even locking down our own resources. Then you turn around and talk about dependence on foreign oil! This is like a murderer who kills the parents and criticizes the children for being orphans.
To the normal intelligent people engaging in these energy debates, you are going to have to come to terms with the fact that you are no longer in a academic Scientific or Ecological argument. The enemy is green socialism, period. They are simply modern retreads of past historical luddites and diggers. The new twist is the green eco-nazi component (pioneered by such nutjobs as Paul Ehrlich) in an unholy cabal with modern political socialism. This is what makes them very dangerous to free people anywhere in the world.
They are fully committed to their sick, pathetic religion. And they will never let up. Look at what the quoted commenter said (presumably with a straight face): redirect the $252 Billion of annual oil import dollars into the local economy. These people are fully prepared to destroy modern industrialized society and send us back into a fairy tale of neo-Agrarianism, and believe me, they are fully prepared to embrace the massive depopulation necessary to achieve this. It matters not that petroleum and its derivatives appear in every single thing we use in our modern, healthy, long lives. In fact, that is the actual point to their obsessive compulsive need to kill off petroleum.
Heritage Foundation or not (and they are usually pretty good to be sure), stupid is as stupid does. You actually said “If you have some time read the Energy Independence act of 2007. In many ways it is shockingly good legislation with respect to renewable fuels.” and wonder what this has to do with light bulbs? For real? Read through this comment concerning the absolutely idiotic ‘Energy Independence and Security Act of 2007’. Government in our bedrooms, and bathrooms, and everywhere else. Whether or not it addresses biofuels does not mitigate the shockingly bad idea of allowing big brother in the home. If you give a crap about your country and the government that you leave to your kids and grandkids, this should not need to be explained.
And no, I don’t take drugs. However, I do wonder about those people that try to paint a happy face on the nanny state.
Gail must be on hols – here’s a link she posted earlier on food speculation courtesy of Goldman Sachs:
http://www.foreignpolicy.com/articles/2011/04/27/how_goldman_sachs_created_the_food_crisis?page=0,1
Not only does eyesonu get the numbers grossly wrong he makes wild accusations unsupported as usual by any facts – that “…much cotton cropland was converted to corn for ethanol beginning with the ethanol mandate”
Yep ….that claim fails as well.
The Energy Policy Act of 2005 placed the first modest requirements on ethanol use – requiring a modest 4.0 billion gallons in 2006, 4.7 in 2007, 5.4 in 2008 gradually increasing to 7.5 in 2012.
The result – as the above corn planted numbers show acres planted dropped 4.2% in 2006 – the first year of the program.
In 2007 the program was modified to increase the mandated amounts effective 2008 – the response in 2008 to increased ethanol mandate? Yep 8.14% LESS corn acres planted.
Another epic fail for eyesonu … in both cases corn acres planted dropped substantially in the years the mandates went into effect – can’t very well take cotton land for ethanol when corn acreage planted decreased in the years of the mandates
At $1.50 a gallon, ethanol competes with gasoline without a subsidy when oil costs $70 a barrel or more..
http://www.energyfuturecoalition.org/biofuels/fact_ethanol.htm
When buying a fuel “blend” ask for a discount!
Kum Dollison says:
December 28, 2011 at 2:59 pm
Well, that’s just it, Mark. The Subsidy is going away in 3 days, now.
—
The subsidies are, but the mandates aren’t.
Regardless, if your claims regarding ethanol had any basis in reality, then ethanol should easily survive on it’s own, without subsidies or mandates. So why do you demand both?
The collision rate for NGV fleet vehicles was 31% lower than the rate for gasoline fleet vehicles
—
NG cars get into fewer accidents, so they are safer?
Geeze? Is that what passes for analysis these days?
The oil industry gets a depletion allowance that is available only to the extracting industries that exceeds their capital costs.
—
The depletion allowance is the equivalent to depreciation that all industries get.
The oil depletion allowance was terminated in the 70’s for major oil companies that drill and refine.
Drilling only companies still enjoy oil depletion allowance.
The claim that the big integrated companies enjoy oil depletion is a lie perpetuated by the Pelosi’s of the world since they know better!!
Which provides the greatest benefit, a) an unregulated market, or b) a regulated market?
Until our educational system improves to the point that the majority of high school seniors can confidently state that the answer in nearly all cases is “a,” and understand the reasons why, we will continue along our present path of reducing, sometimes severely, the free market’s amazing benefits to mankind.
Nearly every market is, of course, regulated in some manner today. In most cases, we would be better off if every single such regulation were tossed out and we were again forced to rely upon our common sense to make market choices. Couple that common sense with sensible tort law and environmental standards and then stand back and watch the country’s economy expand at a heretofore unbelievable rate.
If someone makes a product that causes injury, even death, let the legal system force change, not the regulators. If a company pollutes (per the environmental standards) then fine them accordingly, but don’t pass regulations dictating how to mitigate the pollution.
Unfortunately, this would leave politicians with precious little to do, so they will never take this direction. Instead they will continue to regulate, including regulating our schools, ensuring that our high school seniors continue to answer “b” to the question above, so that our politicians can continue on their present path, diminishing the economic status of their constituents, all while enriching themselves via their own regulatory processes.
a jones says:
December 28, 2011 at 8:20 pm
philincalifornia says:
December 28, 2011 at 7:07 pm
_____________________________
I disagree with you Sir.
The first patent I can find as to this is a British patent of 1895.
There was spate of patents, some British some American in the 1930′s. Presumably they came to nothing.
I rather miss the Womplex.
However all the current patents or applications I know of in this respect. US, EU and Japanese, are of dubious validity since they essentially try to rewrite prior knowledge to make it appear new. Which it is not.
It may be there are secret processes that can do this. I would not know. But if there are then none have become commercial to my knowledge. And if they were commercially viable we would know all about them.
Kindest Regards
======================================
To give a thorough response to this would, unfortunately, require more time than I have today. Just in general terms, and consistent with my comments above, I would refer you to this very recent press release from Mascoma and Valero as a) an example of where cellulosic scale-up is on the infrastructure development curve, and b) an example of a cellulosic technology that has undergone substantial due diligence in terms of commercial viability (this can be inferred from the money being spent and the fact that the oil company folks tend to be a conservative bunch):
http://www.masshightech.com/stories/2011/12/05/daily38-Mascoma-Valero-launch-joint-venture-for-biofuels-plant.html
There is probably similar information to be found on the Codexis Shell collaboration.
In terms of patents, you are correct in that depolymerization of cellulose is a pretty boring chemical process, so there is barely any scope for a huge technical breakthrough there. The novelty and inventive steps required for patenting lie in the process technology developments such as recycling of acid (as oppose to just tipping it in the local river 50 years ago), etc. HCl Cleantech has some applications here. Other “Assignee names” to search would be Codexis, Bluefire, Sweetwater, Renmatix (or look at their websites). I’m probably missing some big ones here.
Amazing, some of you stayed up all night to pimp the big corn position on ETOH production. The bottom line, regardless of all of the hand waving, is that ETOH production from corn is the most egregious waste of fossil fuels currently being practiced by man. It creates more pollution, it is absolutely unsustainable, and it has an extreme negative effect on food availability and cost.
From the perspective of thermodynamics, it should be obvious without presenting any science, that a unit of energy used directly to power a machine is more efficient than to use that unit of energy to convert another feedstock into a partial unit of energy to power the same machine. Of course, you can always present only the last step in the process to shore up a bogus position, however, If you want a complete overview of the thermodynamics of ETOH production, see: //www.oilcrisis.com/patzek/CRPS416-Patzek-Web.pdf.
Some website says “At $1.50 a gallon, ethanol competes with gasoline without a subsidy when oil costs $70 a barrel or more..”
Such statements are not very meaningful since high oil prices raise the cost of producing ethanol. If oil were, say, $500 a barrel, ethanol would cost (very optimistically) $10 per gallon (assuming 100k BTU’s of energy needed to produce a gallon of ethanol). Even at $100 a barrel, ethanol will cost $2 a gallon so it is not “competitive” with anything at that oil price and the stated ethanol price.