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D.C. Chuckle
I got a laugh reading this one from the CBO (Link).
The cost of the review of ethanol is a measly $1m. Why has it taken so many years to have this study? More importantly, what happens if this study shows that ethanol is proven to be a dud? Answer:
No later than 30 days after the assessment is completed, EPA would be required to submit a report to the Congress, indicating whether the agency agrees with the study’s findings. The NAS and EPA would have 18 months from the time of enactment to complete the study. Mid-level ethanol blends could not be sold until after EPA issues its assessment report.
A few data points on ethanol:
- 10% of all gasoline sold contains ethanol. That comes to 13 billion gallons of alcohol, $25-30b of cash flow a year.
- The energy content of ethanol is 33% less efficient than gasoline by volume.
- Using E10 (10% ethanol) reduces mileage by 3.3%.
Americans drive 3 Trillion miles a year (incredible). If all of the drivers used blended gas containing 10% ethanol it would mean that the reduced efficiency would cost drivers 100b miles a year, or $350B. The actual losses to drivers is less than that calculation as not all gas consumed has ethanol, but the number that consumers pay as a result of ethanol is well in excess of $50b - serious money.
The politics of ethanol is interesting. The House Bill that would force the review of ethanol comes from Congressman Lamar Smith (R-TX). Lamar is the head of the Committee on Science, Space and Technology (CSST). Smith also represents Texas. Does Congressman Smith have an axe to grind in this story? Sure he does - Texas is oil and refining. Those who produce oil and the refiners who convert it into gasoline have a lot at stake. If ethanol is scrapped, then big oil and big refiners will win big. One can be pretty sure that the 'results' of the proposed study are already known. H.R. 875 would not have gotten as far as it has unless guys like Lamar Smith already know the answers on ethanol.
Ethanol is a renewable energy source - so that makes it Green. The Administration, and a fair number of Democratic Senators have IOUs to the Greens. The folks who want ethanol have a very big support base. That support base includes environmentalists, corn growers and ethanol producers - but it doesn't include consumers.
There are some market related consequences to H.R. 875. Should it pass, it will knock the ethanol producers for a loop, the refiners will see a benefit, and I wouldn't want to be long corn if this Bill comes into being.
I'm not worried too much about the companies who make ethanol, nor do I think that corn is headed for a tumble. H.R. 875 will never see the light of day. And that is the joke in this story. For a lousy million bucks the answers to this could be available for the public to consider. But the public will never have a chance to see those results. We will continue to burn our food and use inefficient energy supplies for years more to come. Welcome to America and its stupid politics.
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The thing is, of the "green" people I know, not one of them thinks that ethanol is a good idea or a truly green alternative. If it's EROEI-negative then it's not green, period.
Ethanol from corn is the most stupid of all.
I know a couple of guys who worked at JBEI, you didn't dare mention EROEI while there, but when out and over a drink, they'll admit that ethanol has been a white elephant to date. They're optimistic for the future, that institutions like JBEI will come up with "bug-based" biofuel. Personally, I think we don't get there before other problems start to dominate.
I think if I were a long term planner, I would gin up the production of any food product in the US including what used to be cheaper than dirt corn. I understand that the corn now grown is a sugar producer for gas and Twinkies and not the nutritional corn of 50 or 100 years ago. However the process of getting it planted and harvested and the equipment to do so is greatly improved.
With World Wide food demand continuing to increase, and weather being weather (Texas and Oklahoma being in another 7 year drought) , conversion of large production fuel and sugar corn to nutritional corn should not that much of a problem. Assuming there is enough seed stock developed to make the conversion.
I would suggest that some of the million could be used to make 100 phone calls and get data from the appropriate sources regarding improved food corn seed availability.
Although this scenario is simplistic to the point of being a given, and certainly can not be claimed as original thinking, I have read nothing of it. Anyone have any sources relating to this??
Ethanol fuel is not a bad idea. The Brazilians use it as a lever against their petroleum producers. When one's price goes up, they lean toward the other.
Ethanol from a single source, with all the attendant lobbying and racketeering is the problem.
There are lots of ways to make ethanol. Many of them are more efficient than the current processes that employ corn.
The public should demand sound energy policy, not giveaways to any particular constituency among the producers and deliverers of our energy.
No using ethanol as fuel is not a bad idea, except Brazil uses sugar cane, not corn (food).
Do you mean to suggest Senetor Bob Dole and Archer Midland Daniels did not have the Natioal good in mind when they passed legislation mandating use of corn ethanol in gasoline?? Afterall Bob Dole had your pleasure in mind when he endorsed Viagra for erectile disfunction
Shit must be good. We're still getting screwed - hard.
Once you remove the ethanol from the gas, and adjust the price accordingly, you'll find that gas ain't cheap. It also allows for a fake boost to octane levels. Meaning cheaper refining for shitgas with a shiny marketing number on top of it.
I've got a problem with that bit. Could you clarify that pls Bruce, because it looks like a maths flaw.
I sought out a retailer who refuses to sell blended gas. My gas is pure gas. No corn gas. My mileage went up 10%.
I am still in awe of a nation that wastes more energy producing energy that sucks as bad as corn gas does. The juice is not worth the squeeze. Please forward the million bucks to me.
Indeed...I know a light haul trucker that uses 100% gas. No "food gas" as he calls it. Saves him thousands per annum
While I really enjoy this blog, this post and almost all the comments seem completely backwards. Demand for ethanol comes from the refiners as it is the cheapest source of octane:
This from the EIA:
Over the last decade, ethanol has emerged as a significant component of motor gasoline (Figure 2), along with reformate, alkylate, fluid catalytic cracker gasoline, and butane. Ethanol has also become a significant source of octane. The fuel ethanol that is blended into motor gasoline has an average octane rating of 115, which is greater than the octane rating of either finished regular (87) or premium (91-93) motor gasoline. With the higher octane of ethanol blended into gasoline, the octane of the gasoline blendstock shipped from refineries has declined. The U.S. Environmental Protection Agency estimated that refiners are currently producing 84 octane blendstock that, when blended with ethanol, will meet the 87 octane minimum for regular-grade finished gasoline. Similarly, refineries are producing 88 octane blendstock that, when blended with ethanol, will meet a 91 octane premium-grade finished gasoline requirement.
This is largely why there was no diversion of corn from ethanol during last year's drought -- the refiners were going to keep up demand whether it was mandated or not. So, how is doing away with the mandate going to reduce ethanol use by refiners?
How much subsidation has gone into producing ethanol? Don't cherry pick either. Count everything from R&D (in academics and industry) to planting the corn or switchgrass or whatever, to maintaining the plants, to harvesting the plants, to liberating the fermentable sugars, to running the fermentation, to running the distillation, to dealing with the waste, to delivering the finished ethanol, to blending the product. Moreover, how much energy (in Joules) went into all that compared to how many Joules you got out of burning the ethanol you produced? Sustainable my ass.
This is the argument that has been consistently put forth by the EPA and all the supporters of ethanol.
The info on the 3.3% reduction in total fuel efficiency is here:
http://www.eia.gov/tools/faqs/faq.cfm?id=27&t=10
Do the numbers for the 3T miles that are driven. Very big numbers. Assume this is correct, then the real cost of ethanol is very high for consumers.
This blog was not an effort to make a case, pro or con, re ethanol. It was a report on a law that is up for a vote. The law, if passed, would authorize an expenditure of $1m to answer this question and publish the results.
Are you telling me you don't want to ask and answer this very important question? I'm asking you - if you were a Congressman, how would you vote?
bk
For the record, in my opinion the mandate is stupid and does nothing for the environment or climate change and was a sop to the farm lobby. The point is that it has been the refiners driving the train, or, in other words, demand is being driven significantly by the market. Presumably, absent the mandate, the refiners would still look to ethanol for cheap octane.
... and one more thing: if the Iowa caucuses didn't exist, I doubt that we'd have an ethanol mandate.
Monsanto v. Exxon
Research has shown that research causes white rats in laboratories.
I haven't trusted those critters ever since the Hitchhiker' Guide to the Galaxy expose.
Burning alcohol produces aldehydes. Adehydes are very carcinogenic. They produce a white vapor emission; less visible than nitrates and sulphurs, but more deadly. The health consequences of burning alcohol must appeal to the arrogant fools, and their pharma backers.
There is technology which allows ethanol to be synthesized from natural gas. It cost betwen $1-2$ per gallon. However, it is illegal to sell this in america since it is not food based. Therefore it is exported.
Alcohol addiction is a desease and ruins families.
Ethanol is and always will be about agriculture producers delivering a refined product to the market place. Not the raw commodity. In those flyover states, jobs are important. Make the corn and refine it into ethanol and then let the commodities traders and buerocrats do what they will.
The colonists revolted from the british for the very same reason. (England punished anyone making finished goods) 'mericans were just supposed to make the raw materials like good tax slaves.
Those people in the flyover states and can back to making food for all the poor people in the world.
The liberals that I know tell me that corn in indigestible - they won't eat it. I guess it is not sold in Whole Foods.
Ethanol is a leftover from W Bush. (who is from Texas). Natural gas in automobiles is far more likely, no oil refineries, no c.a.f.e. standards. There is supply in abudance, and new transportation and storage technology. Leave ethanol to the drinkers.
Stupid politics is when you jump up and down about gun control, while the economy burns, foreign policy burns, and the public is really burned. They start buying PHYSICAL gold, even while it is way overpriced historically. Yet people love your money so much they buy gold like it was on sale at half the price. Imagine what would happen if gold lost half it value, there wouldn't be any available. People would be holding parties to turn in their fiat currency for gold, (and drinking ethanol) all because of stupid political decisions.
"If ethanol is scrapped, then big oil and big refiners will win big."
True, but consumers win bigger-er through lower prices at the pump, better efficiency on the road, and less engine problems that are introduced by ethanol...
Right up until the oil runs out. Let's not lose sight of why ethanol was attempted--first, the additive used before ethanol was polluting ground water and making people sick. Second, the US is in way over its head with oil dependence. And for those of you who say there is no alternative, you're probably right, but the implications of that are severe--millions of lives are at stake.
NONE of those reasons are why ethanol exists. Those are the excuses used by criminals who enrich themselves with a new method of plunder (via the oligarchy).
The answer you're looking for is crony capitalism combined with plausible deniability.
If politicians cared about the reasons you state, the same would hold true for all the other disasters they foster (like all of the "free" money failing to keep up with the ponzi schemes).
The air pollution benefit of added ethanol certainly doesnt require 10% in there. And adding ethanol to gas SUBTRACTS from our petroleum supplies. It doesnt extend them, at least not via the farmed corn fermentation method. I gather cane sugar ethanol is a little more effective, and maybe cellulosic ethanol will be less subtractive than corn derived stuff.
Because most americans will not A) read this B) understand it C) don't give a fuck as long as they are allowed to drool on their masters member, we are fucked. Literally fucked
You speak the truth and nothing but the truth.
I agree. He speaks the truth. Maybe 25k people will read this. The media will not take the spin that I did. The vast majority of the people who are paying for this will have no clue what is happening. In this case, we're fucked.
I always chuckle at those who chuckle about ethanol blends. You can crunch numbers all you like, but you should identify the values of "all" attributes of ethanol. Don't cherry-pick those costs you like and ignore those costs you don't like.
What about it's anti-knock qualities?
http://www.chem.queensu.ca/chembook/articles/Fuel_additives.htm
With MTBE on the way out, what do you propose be used as an additive? What are your economic costs/benefits?
When all is said and done, I hope this article is not a typical example of sound economics... then again, maybe it is.
Yeah, I can really appreciate how quiet all of my non-functioning engines are.
Now, Mr. Additive Expert, what do you propose to use as an alternative? Or are you trying to tell us that a destroyed engine is more valuable than a functional one?
BTW, why are you cherry-picking knocking? Shouldn't you be looking at ALL of the costs?
Ethanol, a huge part of the Democrats global warming lie
Bruce,
Thank you again for pointing out one of the absurd points of American life. There are many more.
Your commentary is not about ethenol only. The enthenol lobby is just one more way by which like minded people have bought a political process by which they can extricate money from the general population. This lobby is not unique or the most agregious.
Among its major functions, the US Government now fuctions as the licensor - giving special interests the license and permission to feed off the American citizen.
But it doesn't have to be that way. We can change that. This is how:
28th Amendment (The Constitutional Emergency Amendment)
Corporations are not persons and shall be granted only those rights and privileges that Congress deems necessary for the well-being of the People. Congress shall provide legislation defining the terms and conditions of corporate charters according to their purpose; which shall include, but are not limited to:
1, prohibitions against any corporation;
a, owning another corporation,
b, becoming economically indispensable or monopolistic, or
c, otherwise distorting the general economy;
2, prohibitions against any form of intervention in the affairs of government by means of;
a, congressional lobbying
b, electoral sponsorship or advocacy
c, educational sponsorship or publication
d, media news reporting
3, provisions for;
a, the auditing of standardized, current, and transparent account books
b, closing the FRB and the establishment of state-owned banks
c, civil and criminal penalties to be suffered by corporate executives et al for violation of the terms of a corporate charter.
And, as an option, or a separate 29th amendment:
The 16th Amendment to the United States Constitution is hereby repealed and Congress shall re-write the U.S. Code to reflect the changes embodied herein.
Ok with stripping corporate rights as long as corporate income taxes are eliminated. We know corporations do not really pay taxes, they just collect them from individuals (customers and shareholders). Eliminating corporate taxes will also eliminate much of their incentive to lobby weak elected officials. And philosophically, it seems on entities that can vote (individuals) should be taxed.
This of course would "require" higher personal income taxes. But better the taxes be more visible to voters than being buried in product prices. Then maybe voters would demand less government -- sadly, not.
"This of course would "require" higher personal income taxes."
Absolutely NOT!! There's no real need for income taxes at all. There are much better ways to collect taxes that don't involve a ton of rules, exemptions, and useless paperwork.
Yeah, Like that will ever happen
+1 anyway
That's the only thing stopping it; fear that it won't.
Just sign-on when the petition comes around.
Remember: Ethanol is not an additive to gasoline, it is an adulterant.
Let's start a Scarlet "A" sticker program, right next to the "This fuel may contain up to 10% Ethanol" one.
The large scale, industrial production and use of ethanol in the developed world is a sordid tale to say the least.
Go long net-loss energy sources I guess, right..? <ugh>
Ethanol is a renewable energy source - so that makes it Green.
Really? It is certainly possible that the process of getting a renewable energy resource to market can be far more destrutcive to the environment than doing the same with a finite energy resource.
Then again, a significant part of being “Green” is emotional and religious.
Did you not notice that Bruce capitalized "Green" (making it a pejorative).
That statement tripped me up at first too, but the next line about political IOUs made the tone of the comment obvious.
HERESY!
BURN THE WITCH.
like electric cars, you hear the brain trust, lead by obonehead, that electric cars are great (nevermind all the mileage and load capacity limitations), and how it's clean and 'renewable'. WHERE THE FUCK DO THEY THINK THE ELECTRICITY COMES FROM????
A: The coal and nuclear they are trying to get rid of...
Futher bolstering Bruce's comment, 'Welcome to America and its stupid politics.'
But they are so smug and feel so good about themselves driving that electric car.
Isn't self-esteem based upon lies what it is all about?
You wouldn't take that away from them, would you?
Next you will say plastic surgery is unnatural!
Ah but posturing against coal and nuclear works politically, and what is the harm shaking down a big industry? The financial sector is fully in the fold. GE is in there. BP. The car industry. The education sector from K to post doc. Just gotta add preK. Baby steps.
Indeed, if food becomes scarce and Nestle et al privatize global water supply perhaps "green" will be perceived differently emotionally and perhaps even religiously?
Food did get more expensive. And that touched off the Arab Spring.