Exchange with an Ethanol Advocate

I am working on a biodiesel post, but I am having an exchange with an ethanol advocate that is worth capturing here. Over at the blog 7 Deadly Sins, a number of fallacious arguments in favor of ethanol subsidies have been given. I responded, and this led to the exchange that I capture here.

I have become used to unsavory tactics by the pro-ethanol contingent. You wonder why such tactics are necessary, if their arguments are any good. This is also what happened following my testimony to the legislature against the ethanol mandate. People wanted to hurl insults and call names, but nobody was interested in engaging the facts.

Note that in the exchange, the following occurred:

1). Ad hominen argument right off the bat (implying that I am a “Big Oil shill”).
2). A false accusation that I am against alternative energy research.
3). A false accusation that I committed argumentum ad verecundiam.
4). A hand wave on the energy balance issue (said it isn’t important).
5). Brought up the cost of the war in Iraq (which he says he supports).
6). Concludes by repeating the ad hom, and then falsely says that I am just suggesting we should stick with Big Oil.

Exchanges like this fascinate me. What was missing from his response? He didn’t actually address my arguments. He made a number of false accusations, and demonstrated quite clearly that he engaged in very selective reading of what I wrote, but he did not address the arguments. He said he doesn’t believe the calculation from my first blog entry – that it takes over $4.00 of ethanol subsidies to displace a single gallon of gasoline – but he wasn’t willing to attempt a rebuttal.

Let’s hit 1-6 above, and then dissect his opening post a bit more.

Responses to 1-6 Above

1. Considering the time and energy I have devoted to alternative energy research, calling me a Big Oil shill is ludicrous. There will be certain issues over which my personal interests and those of my employer will coincide. Defeat of a grain-based ethanol mandate was one such issue. Had they asked me to go testify against a biomass ethanol mandate, or a biodiesel mandate, I would have refused. (Not that I am for mandates, but I can see true benefits in the case of biomass or biodiesel). Besides that, calling me a “Big Oil shill” is simply a way of telling readers not to pay attention to my arguments.

2. This is pretty funny, considering the amount of time I have spent doing alternative energy research. This was the topic of my thesis, after all. I strongly support alternative energy research. I don’t support throwing money into an endless black hole with no real benefits.

3. Let me provide a definition here: argumentum ad verecundiam: the fallacy of appealing to the testimony of an authority outside his special field. Anyone can give opinions or advice; the fallacy only occurs when the reason for assenting to the conclusion is based on following the improper authority. There are a couple of glaring problems here. First of all, this is my field. I didn’t make an appeal to an authority. Second, I supported my arguments with factual observations and calculations.

4. The energy balance issue is certainly important. First, if we use coal to make ethanol (or methanol), we have given up any pretense that this is an issue of renewable energy. (He says this doesn’t matter to him anyway). But the second thing is, we can use natural gas directly as a transportation fuel. Speeding up the rate at which we use it by making ethanol (and subsidizing the process!) is incredibly inefficient, and wasteful.

5. As I noted, I did not support going to war in Iraq. I would be willing to pay a much higher price for gasoline in order to keep us out of war. Note that I am not protesting the war, as we are already engaged. But I regret that we went to war, as I predicted it would not be over any time soon, and the cost in lives and money would be a lot higher than the administration had predicted. But we are there, and I support our troops.

6. Just another indication that he is interested in trying to force-fit my position into some predefined category. Unfortunately, he is trying to stick me into the wrong category.

Furthermore….

Here are some responses to his initial posting. His comments are in italics:

Lots of my conservative brethren are fond of saying that the government should build roads and secure the country. Investing in an Ethanol infrastructure does both.

This claim is ironic, considering that the ethanol subsidy is paid for out of the Highway Trust Fund (1):

The 1998 Transportation Equity Act for the 21st Century (TEA-21) extended the costly excise tax exemption through 2007. In addition to the tax exemptions, three income tax credits are provided for alcohol fuels that are biomass derivatives (renewable resources) and used as fuel: the alcohol mixtures credit, the pure alcohol fuel credit, and the small ethanol producer’s credit. The tax exemptions have cost the Highway Trust Fund about $10.4 billion in needed revenues. Balances in both the highway and mass transit accounts will be depleted between 2003 and 2015, according to estimates by the Congressional Budget Office.

I submit that the consumers have no freedom now and cannot while a very few big oil companies control the price and supply.

That demonstrates a tremendous ignorance of the oil industry. ExxonMobil, the biggest public oil company in the world, controls something like 3% of global oil production. How on earth can they control oil prices? Is he implying collusion? If so, he needs to get on the phone and call the FTC. Of course the FTC has already found that collusion is not taking place (2).

Gasoline prices are increasing primarily because of market conditions, not collusion or other anti-competitive activities, according to a report released yesterday by the Federal Trade Commission.

“The vast majority of the FTC’s investigations have revealed market factors to be the primary drivers of both price increases and price spikes.”

Oil prices are set on the open market. Strong demand and tight supplies are why oil prices are as high as they are.

The impact of Katrina is nothing compared to what is coming in the Middle East.

I will agree with that. I submit that fossil fuels are entering a new phase of being incredibly expensive. Unfortunately, due to the high fossil fuel inputs into ethanol, they will follow the upward trend.

Farm lobby or big oil, your choice. What is the difference? One is in Wisconsin the other only extracts cash from Wisconsin. One is mainly your local employers, the other is beholden to terrorist supporting states. I know which I would pick.

The real misunderstanding is that supporting grain-ethanol will ever help us get off of Mideast Oil. It will not. We simply can’t make enough to replace what we get from the Middle East. So it’s not a choice. The choice is “farm lobby, plus Mideast Oil”.

I dislike farm subsidies as much as the next conservative. If you want to be fair, compare the total money spent on farm subsidies against the cost of the war in Iraq.

Again, all the farm and grain-ethanol subsidies in the world wouldn’t eliminate our need for Mideast Oil. You are setting up choice that doesn’t really exist.

Is Ethanol the long-term solution? Maybe, maybe not, but it is clearly better than continuing the status quo and bowing down to our Saudi masters.

Grain-ethanol is not going to change that status quo. Cellulosic ethanol, biodiesel, and conservation could accomplish this. Let’s spend our tax money on something that can actually make a difference.

References

1. ETHANOL CONTINUES TO REAP SUBSIDY WINDFALL

2. FTC Finds No Collusion In Rising Gasoline Prices

8 thoughts on “Exchange with an Ethanol Advocate”

  1. Bravo, Robert. I don’t think I’ve ever been so captivated by a topic that is so generally considered to be as dry as “nuts & bolt energy conversion.” I was never much of a physics or chemistry buff…

    Thank you.

  2. Thanks again for the comments, Andrew. I spent some time over at your blog last night. My kids walked in and started cracking up over that colonic picture.

    I am almost done with a biodiesel post. I hadn’t intended to write so much about ethanol at the beginning, but I guess there was a lot of ground to cover. In fact, I still have one more to go where I dissect the latest USDA study. I can’t believe the snowjob they have tried (and mostly succeeded) in pulling over on the public.

    RR

  3. Well, a funny thing happened during my debate over at the blog 7 Deadly Sins. All of the comments suddenly vanished. Now, I have a theory as to why this happened. But I will let the posts speak for themselves, since I learned a long time ago to archive what I write. I saved about the last 5 exchanges, and I will reproduce them here for posterity.

    First Exchange

    (I had noted that he falsely accused me of making an argument from authority. This was his response to that).

    You spend half your essay building up the facts that you ware born on a farm, are a chemical engineer and work for Big Oil. We should believe your argument that Ethanol is a sham because you are an expert.

    Actually, I spent 1 paragraph describing my credentials, which are pertinent, but not once did I argue that ethanol is a sham because I am an expert. I argued that it is a sham on the basis of the argument I put forth. That is where your mistake in claiming argument from authority lies.

    As far as AdHoms, I don’t see one in my response. I said your essay was a primer for Big Oil shills, not that you are one.

    You did write in your closing “as all Big Oil Shills”. This is an ad hom, because you are trying to focus attention on things that aren’t relevant to the actual argument. Whether or not I was a “Big Oil Shill” should have no bearing at all on whether my arguments are correct.

    You came here to argue, I think it more incumbent upon you to understand the positions exposed here than I am to venture forth to your site and make a long study.

    I understand what you wrote in this essay. It indicates a general ignorance on grain-ethanol. Yet in your response, you have made such ludicrous claims as I am against alternative energy. Even in the essay of mine that you read and responded to, it should have been clear that I am strongly in favor of alternative energy.

    I expect technology to get better and will support anything that gets us closer to energy independence in the future. You seem to be arguing (much like many others) that since ethanol does not work 100% right now, we should just forget it.

    You couldn’t be further from the truth. Grain ethanol is a very mature technology. Barring the kind of quantum leap I discussed in my 2nd blog entry, it is unlikely to get much better. There are much better things we should be spending money on. Ethanol from biomass has real potential, but still has the problem that the product is full of water that must be removed. Biodiesel, on the other hand, isn’t miscible with water, and it has about twice the energy content of a gallon of ethanol. My argument is that we should drop grain-ethanol and focus on something that actually makes sense, instead of subsidizing an acceleration in our use of natural gas and topsoil.

    If we take as a given (I do not) that $4 figure…

    Would you like to give a shot at rebutting it? You would be the first (but not the first to try).

    But the main point is not that I am against subsidizing alternative energy. I am against subsidizing it in a case where the benefits are questionable. If we gain ethanol, but use up our natural gas and our topsoil, while displacing a small fraction of our dependence on the Middle East, what have we gained? We can’t produce enough ethanol to significantly impact our need for foreign oil. Even if we turned 100% of the corn crop into ethanol, we would displace about 10% of our oil imports (while using up all of our domestic natural gas).

    Besides, you don’t really want to get into a subsidy argument when the costs of the war are added to the oil side, do you?

    By all means, let’s do so. I want the public to know what they are paying for gasoline. Add the $250 billion cost to date of the Iraqi war in there. But note that ethanol also benefits from these “subsidies”, since they have a substantial fossil fuel input. That’s why energy balance matters. And as I mentioned, even if we were turning all of our corn into ethanol, we would still need Middle Eastern oil.

    If you really want to understand the complexities of this issue, I encourage you to read my essays. I am providing a cold, hard analytical look a the situation. I am trying to be completely objective. I would love to be wrong about grain-ethanol, but I haven’t seen any indication that I am.

  4. Second Exchange

    (This was in response to another advocate who chimed in).

    First of all, please understand 1 thing. I am not your enemy. I am passionate about alternative energy. I just believe grain-ethanol – which is currently all of the ethanol you find in ethanol blends – is not the way to go.

    Ethanol is fuel that is usable and deliverable to the market. E85 would make a significant dent in overall oil consumption if it was used in the just he major US cities.

    If 100% of the corn crop was turned into ethanol, it could displace about 10% of our gasoline consumption, while accelerating our use of natural gas and topsoil.

    Ethanol production creates by-products such as cattle feed. Never is there a credit discussed for the ethanol by-product.

    Not true. All of the energy balance calculations (except maybe Pimentel’s) take a BTU credit for the animal feed. If they didn’t, this would be a no-brainer. The only way the energy balance gets into positive territory is that by-product credit.

    Ethanol can be produced without Natural Gas.

    Grain ethanol can’t. You need natural gas to make fertilizer. You need it for the distillation. Now, you could supply the distillation energy from coal, and I think that is what future plants will do. But I very seriously doubt you can produce enough natural gas from animal wastes to run a boiler that makes enough steam to do the distillation. You might displace a very small amount. But you would still be better off to use the natural gas as fuel, and not take the efficiency hits from all the steps required in between as is the case with ethanol.

    Farmers continue to lower the cost of production for corn. Genetics have significantly increased per acre yields.

    They have, but 1). That trend is flattening out, as it must; and 2). All of the energy balances already take credit for the yields in the highest yielding states. Therefore, it is unreasonable to assume there is much room for improvement.

    Ethanol plants are relatively cheap to build and big oil is not building all that many more oil refineries.

    I don’t believe we are building any more refineries, but we are expanding the ones we have.

    Ethanol producers no longer need a subsidy they just need market access.

    You are way out in left field on this one. Only rarely over the past 20 years has the spot price of ethanol been cheaper than that for mid-grade gasoline. You can see that here: http://www.neo.ne.gov/statshtml/66.html This, despite the fact that ethanol has a much lower BTU value. As I have calculated in my blog, the current ethanol price is equivalent to a gasoline price of $3.65. Hardly anyone would buy it if it weren’t for subsidies. Look at this quote from the recently released Hirsch report, commissioned by the DOE: “Ethanol from biomass is currently utilized in the transportation market, not because it is competitve, but because it is mandated and highly subsidized.”

    RR

  5. Third Exchange

    You continue to complain about a AdHom that was so subtle that I didn’t notice it, and apologized for as well. Then you come out and chide me on my general ignorance, claim that the issue is too complex for me and then, on your blog claim that I have tremendous ignorance.

    Here is the problem as I see it. From the beginning, you have made a lot of claims, supported by a lot of rhetoric, but you have backed up very little with evidence. You claimed argumentum ad verecundiam where it wasn’t appropriate. You insinuated that I am a shill. You said I am against alternative energy. You suggest that there is a problem with my calculation, while refusing to engage on it. You called the energy balance issue “pap”, without explaining why you believe that is. You falsely claimed that I spent half a post describing my credentials, and this was an argument from authority. You have accused me of lying. This is all nothing but rhetoric. You have failed to engage on the facts.

    This is the pattern that I observe so often from pro-ethanol forces. They get so emotional about the issue that they simply can’t engage on the facts. Look at your first response: “removed due to excessive harshness”. I wanted to document this sort of pattern that I have seen so many times. I have nothing personal against you, but you should know that there is a very good, fact-based reason that there are so many critics of ethanol. If the energy balance was not so poor, I would support it. You will see this if you read my almost-completed entry on biodiesel.

    Note again the rhetoric in your current response. You write “on your blog claim that I have tremendous ignorance”. That’s just rhetoric, man. You made an absurd claim about a few big oil companies controlling the supply and price. That does display tremendous ignorance of the oil industry, which is what I wrote. I am not commenting on your “general ignorance”, but on this 1 specific issue.

    As for the claim I didn’t hit your points, I actually did rebut your $4 claim, I guess you missed it.

    I guess I missed it as well. Especially since you wrote I will not try to refute your $4 figure; I just dismiss it as hyperbole, and then didn’t mention it again. Would you mind pointing out the rebuttal?

    It is doubly ironic that you make this claim since you never ever took the time to see that we agree on much (algae, biomass, biodeisel, more tech).

    I am addressing your ethanol claims, nothing more. I am happy that we can find some areas of agreement. But today, subsidized ethanol is grain ethanol. Anyone who argues for continued subsidies is arguing for subsidized grain ethanol. I repeat that I believe this is insanity.

    RR

  6. Final Exchange

    This is going exactly nowhere.

    Not for lack of trying on my part. I have engaged your claims. You have replied largely with rhetoric, and time after time failed to back up a point when I asked you to. Oh, well. I think you will like my post on biodiesel. I have been a biodiesel fan for years. Funny thing for a lying anti-alternative energy Big Oil Shill to like, eh?

    RR

    ———————
    Well, that was more or less the gist of it. Wonder what made him delete that exchange? 🙂

  7. What I read on your ethanol is very good. One point I would like to make if I missed it in your detailed analysis, forgive me for stating it again, but growing corn is very hard on the soil.

    I agree with you that ethanol may have a place, but in terms of cost and what other sources of energy are available now, Ethanol in my opinion should not be considered.

    Wind power is making a dramatic change in the United States. In 2005 2,431 Megawatts were added to our Electrical capacity at a cost of over $3 billion. The cost per megawatt is probably close to $1.25 to 1.3 Million. For a standard 5-Megawatt windmill the cost would be about $6.5 Million.

    One megawatt will provide 251 homes the power they need. A five-megawatt windmill will provide over 1,200 homes the power they need. The windmill capacity added in 2005 alone will provide power to 2.3 million homes. The $5 billion ethanol tax credit paid to subsidize ethanol in one year would buy enough windmills to produce power for over 3.8 million homes a year. In ten years nearly half of all our homes could be powered using windmills.

    What do we get for this size of investment? How does it compare to Ethanol? After a bit of math we find that 5 Megawatts is equivalent to 1,790,292 gallons of Ethanol a year. At the current price of $2.489 per gallon of unleaded gas and the fact Ethanol has just 70% of the energy content, we are looking at an energy value of $3,580,584. Because it consumes more energy to convert the Biomass to ethanol than it contains, the cost is somewhat higher than $3.5 million. Now add in the cost of a distillation plant, maintenance and labor and it is easy to see that wind power after just two years pays for itself when compared to Ethanol.

    Wind energy has great benefits:

    It replaces fossil fuels and the price fluctuations we have seen over the past two years.

    It can provide a steady income to farmers. Every farm has some portion that is not producing an economically viable product. Placing a windmill in these locations can provide income and royalties to the farmer.

    It is renewable, clean and cost competitive now.

    Fuel Levelized costs (cents/kWh) (1996)

    Wind (with PTC) 3.3-5.3
    Gas 3.9-4.4
    Wind (without PTC) 4.0-6.0
    Coal 4.8-5.5
    Hydro 5.1-11.3
    Biomass 5.8-11.6
    Nuclear 11.1-14.5

    Further cost reductions can be achieved as wind power gains acceptance. Lenders charge a premium to finance wind farms because the view them as novel. This will change.

    How does wind work

    Where are the best locations

    What are the economics of wind power

    Comparative Costs of Wind and Other Energy Sources

    Comparative Air Emissions of Wind and Other Fuels

  8. William,

    I quoted an article in my first essay describing who hard corn-growing is on the soil. This factor is always given a free pass when ethanol economics are mentioned.

    I agree about wind. Part of my testimony to the legislature contained some facts about wind power, and a plea that we should develop this resource in my state.

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