From the department of “told you so” comes this about-face on what was supposed to be an environmental solution. It seems the cure is worse than the disease:
“CORYDON, Iowa — The hills of southern Iowa bear the scars of America’s push for green energy: The brown gashes where rain has washed away the soil. The polluted streams that dump fertilizer into the water supply.”
“Even the cemetery that disappeared like an apparition into a cornfield.
It wasn’t supposed to be this way.
With the Iowa political caucuses on the horizon in 2007, presidential candidate Barack Obama made homegrown corn a centerpiece of his plan to slow global warming. And when President George W. Bush signed a law that year requiring oil companies to add billions of gallons of ethanol to their gasoline each year, Bush predicted it would make the country “stronger, cleaner and more secure.”
But the ethanol era has proven far more damaging to the environment than politicians promised and much worse than the government admits today.
As farmers rushed to find new places to plant corn, they wiped out millions of acres of conservation land, destroyed habitat and polluted water supplies, an Associated Press investigation found.”
Dina Cappiello and Matt Apuzzo report for the Associated Press November 12, 2013.
h/t to reader Michael J. Bentley
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Here’s the surprising headline and money quote:
The consequences are so severe that environmentalists and many scientists have now rejected corn-based ethanol as bad environmental policy. But the Obama administration stands by it, highlighting its benefits to the farming industry rather than any negative impact.
Farmers planted 15 million more acres of corn last year than before the ethanol boom, and the effects are visible in places like south central Iowa.
The hilly, once-grassy landscape is made up of fragile soil that, unlike the earth in the rest of the state, is poorly suited for corn. Nevertheless, it has yielded to America’s demand for it.
“They’re raping the land,” said Bill Alley, a member of the board of supervisors in Wayne County, which now bears little resemblance to the rolling cow pastures shown in postcards sold at a Corydon pharmacy.
UPDATE: here is the video report from AP (h/t _Jim)
https://www.youtube.com/watch?v=tX2f4JnfS74
In related news:
EPA orders cut in ethanol in gasoline next year, citing risk of engine damage
November 15
By Sean Cockerham
WASHINGTON — The Obama administration Friday proposed the first-ever reduction in the amount of ethanol in the gasoline supply, signaling retreat from the Renewable Fuel Standard passed by Congress in 2007.
The Environmental Protection Agency wants 15.21 billion gallons of renewable fuels blended into gasoline and diesel next year, down from 16.55 billion gallons this year. Most of it is corn-based ethanol.
Read more here: http://www.kansascity.com/2013/11/15/4624584/epa-orders-cut-in-ethanol-in-gasoline.html#storylink=cpy
Related articles
- Making corn-based ethanol badly hurting environment: AP (cbsnews.com)
- Ethanol criticized as ‘ecological disaster’ (utsandiego.com)
- Obama’s Green Power … Raping The Land (cryandhowl.com)
- EPA orders cut in ethanol in gasoline next year, citing risk of engine damage (kansascity.com)
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Gary also makes the claim regarding the RFS ethanol mandate:
“Hard to prove, since we can’t perform a controlled experiment. All we do know is that the best choice–for the country as a whole–was “none of the above”
We have done a controlled experiment. And ethanol now supplies more than 10% of our motor fuel needs. Without subsidies from the government
We also have the successful use of ethanol in Brazil as a model. We are not exactly the same as they are – they use sugar cane which has different benefits and issues – however, the base actions necessary are essentially identical. Create a demand, create distribution to fulfill demand. .
Patrick said:
“So you are talking about highly controlled sporting environments (Nascar). Thanks! That’s my point. Everyday use, just does not work as well as you suggest. If that were the case, we’d all be running E85, or even 100% ethanoal, and we’re not! We’re being FORCED to run E85, and E85 (And other blends) needs significant subsidies to bring it to the pump! Lets not forget the machines harvesting and making E85, in most cases, don’t use E85.”
So many untruths …
NO ONE IS being “forced” to use E85. Period.
And neither E85 or any of the other ethanol blends are receiving subsidies today. There are some grants available for commercial scale CELLULOSIC ethanol plants – which do not use corn.
And as to your last point – many farms in the corn belt ARE using renewables – either ethanol or bio-diesel. Regardless, whether farm machines use ethanol or other fuel is completely immaterial. Ethanol replaces a set portion, over 10% now – of the US motor fuel energy use. It does not matter one bit what vehicles or sector that goes to.
You are simply wrong on each of your claims.
A.Scott says (November 20, 2013 at 12:45 pm): ‘Corn waste is not “corn”’
BWAHAHAHA! I knew you were going to come back with that! What’s next? Shall we debate what the meaning of “is” is? 🙂
Thought experiment: A. Scott & G. Hladik are in a field of corn. I point to a whole corn plant (corn roots, corn stalk, corn leaves, corn ear, corn tassels, corn silk, corn kernels, etc.) and say, “Corn!”. A. Scott points to the kernels (only) and says, “Corn!”. He then points to the rest of the plant and says, “Nroc!” I roll my eyes. 🙂
“Your claim that “corn” is subsidized…”
You really struggle with reading comprehension, don’t you? I wrote that “corn ethanol” is still subsidized, not “corn”. Show us all where I claimed otherwise.
“…because corn waste (stalks, cobs etc), which could be any of many other cellulosic feed stock…”
The Liberty “cellulosic ethanol” plant in the Forbes article uses corn as a feedstock. “Cellulosic” ethanol receives a subsidy.Therefore “cellulosic corn ethanol” receives a subsidy. QED. I’m actually amazed that you can’t (or won’t) see that.
“But the facts are there have NOT been a dozen recent bankruptcies. Essentially every recent (last 3-4 years) ethanol plant bankruptcy was set in action in 2008-2010 as the financial markets crashed.”
Buffalo Lake plant bankruptcy, August 2013. Plant was closed for 4 years, reopened last year, failed, is mothballed:
http://www.startribune.com/business/221251611.html
South Bend Indiana plant filed for bankruptcy November 2012, will probably be scrapped:
http://online.wsj.com/news/articles/SB10001424127887324743704578443071340623246
Incidentally, the WSJ article also says ethanol is in oversupply, mainly due to flat demand (which you verified). Dang, A. Scott, don’t you ever get tired of being wrong?
‘You claim re-opening some plants indicates “overcapacity”’.
No, no, NO! “Re-opening” plants indicates they were previously closed, and that indicates overcapacity. (How do I insert “roll eyes” emoticon?) With new plants supposedly coming on line next year (Forbes article), and old ones re-opening (farmdocdaily article), and flat consumption (A. Scott) the situation will only get worse.
“Unlike you – I provided a link directly to the EIA ethanol production and consumption data – going back to 2000 and earlier. You ignored them.”
On the contrary, you did. The numbers in your own reference show 2012 production declining from 2011, and the first 7 months of 2013 behind 2012. That’s a clear indication of overcapacity in the industry. But don’t feel bad that you’re not smarter than Forbes or the Wall Street Journal; they’re experts. 🙂
“I’ll repeat – consumption was essentially identical 2010-2012:”
Exactly. Thanks again for helping to prove my (OK, Forbes’ & WSJ’s) case.
A.Scott says (November 20, 2013 at 12:53 pm): “We have done a controlled experiment.”
Really? Please describe this “controlled experiment” in which:
(1) On one Earth, the US implements the historical RFS policy;
(2) On an identical Earth, the US goes with the corn price supports and so on that James D. Schielein criticized;
(3) On a third identical Earth, the US implements free market agricultural and energy policies.
Where is it published? References, please. 🙂
“And ethanol now supplies more than 10% of our motor fuel needs. Without subsidies from the government”
With continuing subsidies (even A. Scott admits this), grants (e.g. Liberty plant), and a mandated ethanol market (increasing). There, fixed that for you. You’re welcome. 🙂
“We also have the successful use of ethanol in Brazil as a model.”
Great! So let’s end our own ethanol grants, subsidies, and forced market, and let people buy as much of this Brazilian “wonder fuel” as they want. Easy-peasy.
Gary,
Enjoy………
Just love the guy………….but………..
To my knowledge, Friedman never detailed an answer on how to move agriculture to a truly free market. We have done very well (and what he wanted) as far as resisting imposing tariffs on Ag imports. In fact, it has been a cornerstone of Farm Bureau policy to promote free trade agreements, whether through piecemeal regional agreements (NAFTA), but preferably through the World Trade Organization.
The 1996 Freedom to Farm Act was supposed to be the phase out of farm subsidies. (and was the 2nd Farm Bill I worked on) I remember being very excited (youthful exuberance) of the progress we had made in dismantling nearly all of the production controls, farmer-owned reserve, strict subsidy levels and in their place a very modest (we thought at the time) price safety net that would kick in only during extraordinary price fluctuations.
Here’s what happened:
http://www.ncpa.org/sub/dpd/index.php?Article_ID=7317
Disappointment to say the least. Without going into great detail, the farm coalition we had put together fell apart and certain commodity groups and regions got Congress to pass Ad-hoc disaster assistance and once it was done for one year, it was easy to go back, and back, and back.
I found it interesting in the video above Milton’s reaction to the replacement of subsidies with insurance coverage, I wish that had been further explored. Because…..the last Farm Bill I worked with, the “2008 Food, Conservation and Energy Act” (Don’t you just love the names?), to a large measure did just that. We took dollars that were going towards the ad-hoc disaster assistance and put them towards enhancing crop insurance programs and also scaled back the counter-cyclical programs that were leftovers from ’96.
The point of all this for good or ill—is that I wished to expand the perspective and history of Ethanol and put into context why it is so vitally important to Ag.
You did not really answer the question “so what do we do now?” You cited Friedman and Smith which I will interpret as —-End Farm Bill program and subsidies now, return Ag to free market principles and let the chips fall where they may and we’ll all be better off in the end. Right?
In 2005, I had the opportunity to travel to New Zealand and study what happened to their Ag economy when the New Zealand government did just that. I can talk a bit about that—but it’ll have to be tomorrow—have a school board meeting to get to.
“If it really is such a great “green” way to save green, why does it need to be mandated?
(Dang! I just asked another question. Guess I still won’t get an answer.) ”
The fun part of debating with folks who debate by asking questions is that two can play that game.
What are the odds that Gunga Din has ever bothered to do any serious study to answer that queation?
Zero! The give away is the word “green”. This is a word for shallow thinkers. I have read many LCA showing that corn ethanol is a better environmental choice.
Many many, many better environmental choices are mandated. For example, low flow shower nozzles have been mandated by code since since 1986.
James D. Schielein says (November 20, 2013 at 3:33 pm): “Gary, Enjoy………”
Thanks. I do enjoy watching the guy.
“The 1996 Freedom to Farm Act was supposed to be the phase out of farm subsidies…and in their place a very modest (we thought at the time) price safety net that would kick in only during extraordinary price fluctuations.”
As soon as I saw “safety net” and “extraordinary”, I said to myself, “Uh-oh”. 🙂
This reminds me of so-called “Keynesian economics”, in which the national government runs a surplus in “good” times to help pay for deficit spending in “bad” times. In practice, of course, times are never quite “good” enough to run a surplus, especially when there are so many votes to buy. 🙂
“You did not really answer the question “so what do we do now?” You cited Friedman and Smith which I will interpret as —-End Farm Bill program and subsidies now, return Ag to free market principles and let the chips fall where they may and we’ll all be better off in the end. Right?”
As I suspected, I didn’t really have to spell it out. Rather than “now”, however, it should be done starting now and carry over a number of years, i.e. over several election cycles (oops!).
“In 2005, I had the opportunity to travel to New Zealand and study what happened to their Ag economy when the New Zealand government did just that.”
Whoa! I did not know about that! So has New Zealand made Adam Smith an honorary citizen? 🙂
http://www.newfarm.org/features/0303/newzealand_subsidies.shtml
Kit P says (November 20, 2013 at 4:46 pm): “Zero! The give away is the word “green”. This is a word for shallow thinkers.”
Couldn’t agree more. When I saw the word “Zero”, I immediately thought of this guy:
Don’t you get tired of being proven wrong Gary? Go ahead – make up whatever silly claims you want – it won’t change the facts.
No matter how you try and twist and torture it – grants for cellulosic ethanol plants have ZERO to do with subsidizing corn ethanol. None. They are grants for ethanol plants using more efficient cellulosic technology, regardless of the feedstock used.
Your continued assertion that because this particular plant happens to try to be more efficient by using waste from corn ethanol plants it is a “corn subsidy” – is simply ridiculous. The CORN is already gone, consumed – used to make corn ethanol. The waste is just that – waste – it is not corn.
By all means go ahead and keep trying to claim grants for cellulosic ethanol are somehow “corn ethanol” subsidies – we can use the entertainment.
You make equally silly claims regarding ethanol plant bankruptcies. I know Buffalo Lake well. I have friends in the co-op that supplied the plant (and lost money on their financing of it.)
The bankruptcy is directly related to problems with that particular plant from day one – they are the SAME problems that contributed to its closing the first time and have nothing to do with current market conditions. The FACT that someone bought and tried to re-open it – AND that there was a fight over ownership and the sale -shows they believed demand was there to do so. Once again you are clueless –here I have first hand knowledge of the details.
You are wrong about the Southbend plant as well … that’s what happens when people Google link bomb, posting old stories, without understanding what they are talking about.
The Southbend Indiana plant, first, was not a corn ethanol plant – it is a waste to energy plant – that generated $280 million in revenue in 2011, its last full year of operation.
Contrary to your claims, it is not being scrapped, but has been bought by Nobles America’s and is being re-opened as we speak. Now why would they spend big money to buy and re-open this plant if, as you claim, there is flat demand and oversupply in the market? These must be just plain stupid people right?
Then there is this real gem from Gary:
So which is it Gary? Do we have “flat demand” and overcapacity or not? If closed plants indicate there was “overcapacity” then what does RE-OPENING those closed plants mean? Why would anyone open or re-open a closed plant if it just creates additional overcapacity – and there was no demand – as you claim?
Laughable.
As is your next silly claim as well:
The ACTUAL production numbers:
2010 – 13,298 million gals
2011 – 13,929 million gals
2012 – 13,218 million gals
Demand numbers:
2010 – 12,858 million gals
2011 – 12,893 million gals
2012 – 12,882 million gals
2013 – 13,030 million gals*
*Projected; 2013 production based on actual YTD thru AUGUST, is 13,030 million gals.
2012 production was fractionally smaller than 2011 – a direct result of the drought, lower crop production and yields, and of the ethanol industry reducing production to absorb most of the impact of the lower corn stocks.
You can blather all you want – but you cannot change the facts. Using present ethanol plant available operating capacity, US Ethanol plants are operating at full realistic capacity:
2010 – 94%
2011 – 94.2%
2012 – 94.2%
2013 – 96.5%
US refineries only managed 87.2% utilization during this same period.
Demand has been maxed out based on production capacity since 2010, and demand has been increasing thru 2013.
Maxed out production. Increasing demand. Yet you continue to maintain demand is stagnant in the face of all the evidence otherwise. The facts – the data – show you are wrong.
And as usual, it is easy to prove it. Bloomberg agrees:
Bloomberg – Nov 18, 2013 – Ethanol Futures Advance as Consumption outpaces Supply
Each and every claim you try to make is easily proven wrong. By facts and data.
A.Scott says (November 21, 2013 at 6:12 pm): “…grants for cellulosic ethanol plants have ZERO to do with subsidizing corn ethanol. None.”
Only if they use no corn. Some do. So you’re wrong. Again.
“They are grants for ethanol plants using more efficient cellulosic technology, regardless of the feedstock used.”
Including corn, right? 🙂
“Your continued assertion that because this particular plant happens to try to be more efficient by using waste from corn ethanol plants it is a “corn subsidy” – is simply ridiculous.”
*sigh* Once again, I’m not claiming a “corn subsidy”. I’m pointing out a “corn ethanol subsidy”. And “corn waste” is corn. It was planted as corn, it grew as corn, and it was harvested as corn, not “nroc” or something else. 🙂
‘So which is it Gary? Do we have “flat demand” and overcapacity or not? If closed plants indicate there was “overcapacity” then what does RE-OPENING those closed plants mean?’
Your own numbers indicate flat demand. Production in 2011 exceeded production in 2012. Some plants were closed/mothballed/went bankrupt/operated at lower capacity, yet demand was met. Now apparently some of these unneeded plants are reopening in anticipation of higher demand. Great. But new plants are coming on line as well as old, and even your Bloomberg article indicates production hasn’t yet exceeded 2011 levels. So there’s still overcapacity in the industry.
“Why would anyone open or re-open a closed plant if it just creates additional overcapacity – and there was no demand – as you claim?”
Again, no. You claimed flat demand, I just went along. (Note: flat demand, not no demand.) You really don’t read what you write, do you?
BTW, in having periods of overcapacity (or undercapacity as in the specific subcategory of cellulosic ethanol at the moment) isn’t unique to the ethanol industry. All industries, including agribusiness, develop the same problem. Not sure why you’re getting steamed over it. It’s just business.
“The ACTUAL production numbers…demand numbers…[snip numbers]”
I’m curious. Your own numbers show “production” outstripping flat “demand”. What accounts for the discrepancy? Exports? Growing inventory? Something else?
“…and demand has been increasing thru 2013.”
Man, I hate to kick a man when he’s down, but your own numbers show flat demand for the last few years with a projected tiny increase in 2013. Read what you write, man!
“Bloomberg agrees:”
This is too easy. Bloomberg also disagrees: “The market is anticipating lower demand for the additive next year, if a Nov. 15 proposal by the Environmental Protection Agency to cut consumption targets is finalized, Babler said.” So even if the 2012-early 2013 overcapacity eases this year, it’s expected to return next year. READ your references, A. Scott.
“Each and every claim you try to make is easily proven wrong. By facts and data.”
Each of your claims is easily proven wrong by your own numbers and references. Between your abysmal reading comprehension and your continued insistence that “corn waste” somehow isn’t “corn” (I suppose “oral sex” isn’t “sex”?), you have zero credibility. Full marks for humor, though at this point I suspect only the two of us and the long-suffering mods are still reading. 🙂
I’m just gonna let your post stand … in all its glory.
“A.Scott says:
November 20, 2013 at 1:04 pm”
NASCAR not highly controlled? LOL…
And yet we have native peoples being forced off their lands in Africa to support this “corn for fuel” boondoggle! But you go on thinking corn based ethanol is the future fuel. I guess that’s why China is heavily investing in coal-to-liquid (CTL) plants. BTW, I know of no farmer in the UK, for instance, that uses anything other than “red” regular diesel.
Patrick says (November 22, 2013 at 4:09 am): “And yet we have native peoples being forced off their lands in Africa to support this “corn for fuel” boondoggle!”
I was “skeptical”–to coin a phrase–of that claim, so I did a quick Google search. I found this article (Caution! It’s full of CAGW & cars-are-evil nonsense!) which cites several nations with potentially counterproductive biofuel initiatives. Only one, South Africa, explicitly involves corn ethanol:
http://delusional-government.blogspot.com/2012/09/ethanol-drought-famine-and-africa.html
Several projects involve jatropha, used to make biodiesel, which has its own problems:
http://www.npr.org/blogs/thesalt/2012/08/22/159391553/how-a-biofuel-dream-called-jatropha-came-crashing-down
Ethiopia is using sugarcane to make ethanol (see top story here):
http://www.biofuelsdigest.com/bdigest/tag/ethiopia/
In South Africa, the initial government “incentives” in 2007 weren’t enough, so now they’re adding a mandated market:
http://www.ethanolproducer.com/articles/10329/south-africa-to-mandate-biofuel-blending-starting-in-2015
So, Patrick, I’d suggest you substitute “biofuel” for the phrase “corn for fuel”, unless you have references, which would be welcome.
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Yet still no answer.
(Did you notice I didn’t end this comment with a question?)
Gunga Din says (November 22, 2013 at 2:35 pm): “(Did you notice I didn’t end this comment with a question?)”
🙂