A Vicious Circle

What a vicious chain of events our politicians have set into motion. It just continues to worsen.

It started out innocently enough. Oil prices were climbing. Our energy production was shifting to an ever greater extent to countries that are hostile to the U.S.

So, Step 1 is to propose a solution:

1. Subsidize ethanol production to encourage biofuels and enhance energy security.

However, subsidies didn’t do the trick. It was still too expensive to produce ethanol. People still chose gasoline derived from hostile sources over more expensive ethanol. What we really needed was Step 2.

2. Let’s mandate ethanol usage.

At the point that the subsidy turns into a mandate, things change. Now, the fuel doesn’t have to be economically priced. It is going into the fuel supply regardless of the price. And this kicks off a massive expansion of ethanol capacity.

But soon we notice that too many people are building ethanol plants. This is causing a glut of ethanol, and putting downward pressure on the price of ethanol. On the other side, it is raising the price of corn. This lowers the margins for ethanol producers, and some producers start to go bankrupt. Projects are delayed or cancelled. The solution? Proceed to Step 3 (which was entirely predictable):

3. We need to raise the mandate for ethanol usage.

Unfortunately this leads to more of the problems that arose from the original mandate. Corn prices go even higher. Land prices continue to climb. Land is shifted to corn production, forcing commodity prices up in other areas. Very few segments of the population are experiencing true benefits.

The primary beneficiaries are commercial corn (and other commodity) farmers who purchased their land several years prior to the mandate. They are truly experiencing a windfall from these policies, and thus will fight the hardest to continue down this ill-advised road.

Secondary beneficiaries are lobbyists who defend the practice, as well as those who are willing to write papers (commissioned by the National Corn Growers Association) that downplay the consequences (or even better, point the finger in another direction).

The ethanol producer is hurt each time the overbuilding cycle occurs. They are starting to realize that the energy business is often low margin (and cyclical), and not as lucrative as they once thought. Maybe the solution is to increase the mandate again? 😉

The cattle rancher (like my Dad) and pig and poultry farmers get hurt from higher feed prices that cut into already razor-thin (or negative) margins.

The person trying to buy farmland is hurt by land prices that have exploded as a result of the mandates (unless they inherit family land).

The environment suffers as the mandated corn production means more herbicide, pesticide, and fertilizer usage, some of which ends up in our waterways.

The person who eats is hurt because higher commodity prices ripple through their food budgets, already stretched because of increasing energy costs.

So what’s the solution to this mess that has been made? I think it is simple, really. We all need to become either corn lobbyists or corn farmers. That way we all get rich and can afford to pay the financial consequences of spiralling inflation resulting from these mandates. (I suppose we will need to be subsidized for our farm purchase, since farms have gotten pretty expensive).

As for the impact on the environment? We can simply commission a study to show that there is in fact no impact on the environment. Ah, the aquifers. I forgot about those. Looks like I will need to commission another study.

Problem solved.

38 thoughts on “A Vicious Circle”

  1. Some days, you are annoying. Does actually being able to make the loan payments on the equipment for a business constitute a windfall?

    You spill out crap about oil companies making “fair profit” with an 11% ROI, and then call some farmer in Minnesota wealthy for replacing a tractor.

    Get out a calculator and do the math on the ROI over the last 30 years on any North American farm before you start spurting about getting rich farming.

  2. Bob, I have figured out the primary difference between the two of us. We have a lot of similarities, but you are a farmer. We farmed, but were primarily ranchers. Your ability to make loan payments is coming at the expense of my Dad being able to make them. So we are destined to see this issue differently.

    While I am very supportive of keeping farmers in business, I am highly unsupportive of the way we have gone about doing it.

    You spill out crap about oil companies making “fair profit” with an 11% ROI, and then call some farmer in Minnesota wealthy for replacing a tractor.

    2008 Farm Income Forecast

    In 2008, average farm household income is projected to be $89,434, up 6.3 percent from 2007 and 19.2 percent above the 5-year average of 2002-06.

    So, what’s a fair number, Bob? $89,000 is doing pretty well. It’s about 5 times what my Dad makes ranching, but I am sure you are working 5 times as hard to get yours.

    RR

  3. Bob,

    I would also point out that the windfall comes in the value of the farmland. While farmers are making higher incomes as a result of the mandates, the windfall is that their land values have tripled and quadrupled. A lot of farmers have in fact gotten rich off of this deal – off the backs of the rest of us.

    In fact, I have a second essay finished that I will post tomorrow which was actually the inspiration for this one. It shows that farmland is being priced right out of reach for someone who doesn’t own land and wants to get into farming. But that’s not you, is it? You are in the small category of beneficiaries that I noted above: A farmer who owned land prior to this government-mandated boom.

  4. “So what’s the solution to this mess that has been made? I think it is simple, really. We all need to become either corn lobbyists or corn farmers.”

    The solution is that whenever a state legislature or Congress passes an ethanol mandate, it must first apply to farmers and ethanol plants.

    Mandate corn farmers use corn ethanol to grow corn

    If corn farmers HAD to use ethanol to power all their ag equipment, and to make the fertilizer they need to grow corn, those farmers would quickly learn how poor and inefficient a fuel corn ethanol is.

    Mandate ethanol plants must use corn ethanol with which to make more ethanol

    The same with ethanol plants. If they HAD to use corn ethanol to power their plants (instead of natural gas and coal) they would quickly learn corn ethanol doesn’t have an EROEI of greater than one.

    Make ethanol mandates first apply to those who grow corn and make the ethanol. That would shine a lot of sunlight on to the whole corn ethanol mess.

    What’s sauce for the goose, should also be sauce for the gander.

  5. ???

    Read your own link:
    $75k is off-farm income, $13K is grain receipts.

    “In 2008, average farm household income is projected to be $89,434, up 6.3 percent from 2007 and 19.2 percent above the 5-year average of 2002-06. Average off-farm income of $75,805 in 2008, up 4.6 percent from 2007, accounts for nearly 85 percent of the average farm operator household’s income.

    The average income of households from farm earnings is forecast to be $13,629 in 2008, up 16.3 percent from 2007’s estimate and driven largely by higher cash grain and soybean receipts.”

    I am not farming, we own 1000 acres of prime farmland in Saskatchewan that is leased out. If I wanted to farm, I would need at least $1M for a basic serviceable line of used equipment and even with the price increases the best I could expect is $100/acre average over seeding input costs. That would be a 10% ROI on the equipment, but accounts nothing for the land and taxes. The renters are working with the difference of the land lease and about $60-70/acre available for equipment payments and profit.

    I am not farming because working a full-time job for 85% of my income doesn’t make sense to take the risk on a bad crop and floating the farm with a night job.

  6. $75k is off-farm income, $13K is grain receipts.

    While that is more in line with the ranching income that I am familiar with, this is greatly skewed by the number of small farms (which by my definition of windfall, wouldn’t qualify anyway). In fact, the bulk of the money that is being sucked out of our pockets ends up here:

    Commercial farm households (7.8 percent of family farms) derive nearly three-quarters of total income from farm sources. Operators of these farms are projected to average $229,920 in household income in 2008, a 9.3-percent increase over 2007.

    In other words, people who farm mostly for a living are doing pretty well.

  7. I am not farming, we own 1000 acres of prime farmland in Saskatchewan that is leased out.

    I am not familiar with land prices in Saskatchewan, but this is a good illustration of what I am talking about. A farmer in Iowa who owns 1000 acres of prime farmland has seen the value of his land increase by $4.5 million – driven in large part by ethanol mandates. That’s a fair bit of change. Some might call it a windfall.

    So, say what you want about ROI for oil companies. I suspect the value of your land has increased by far, far more than anything the average oil company worker or shareholder will ever see. Now for a young man who wants to get into farming, he is at quite a disadvantage now.

  8. The land prices here haven’t jumped substantially here yet, in fact my house in the suburbs of Regina is worth about as much as the 1000 acres.

    Last year we sold a 1/2 section (320 acres) to one of the neighbor kids who is in his 20’s who is interested in farming. It probably wasn’t a good time to sell, but he wanted it and it’s adjacent to his dad’s farm.

    Saskatchewan has a whole bunch of laws around foreign and corporate ownership of farm land and also around getting farmland designated commercial or industrial. There is some information here. Basically what it does is allows for family farms and incorporated family farms, prevents foreclosures on homesteads and blocks multinationals from corporate farming. This is a substantial reason why farmland is going for $300-$1000/acre in Saskatchewan and land a few hundred miles south is going for 4x-10x that. This realtor has a large portion of provincial farms for sale. The Farm Security Act basically ensures that farm land is being sold at whatever the local market sets it at without non-farm speculation.

    If you want to pick on something, pick on the farm states not implementing something similar in the USA and land speculation causing the land price hike. Otherwise farmland would only sell for what someone farming it could afford to pay.

    BTW: I agree mandated corn ethanol is stupid, but what I don’t agree with is that the cereal grain price hike is reversible. Done is done.

  9. “A farmer in Iowa who owns 1000 acres of prime farmland has seen the value of his land increase by $4.5 million – driven in large part by ethanol mandates. That’s a fair bit of change. Some might call it a windfall.”

    This is like an increase in stock price, it doesn’t put a penny in your pocket unless you sell the asset (at least part of it). The farmer might feel wealthier, but unless he cashes out, he’s not.

    but what I don’t agree with is that the cereal grain price hike is reversible. Done is done.

    It’s not like scrambling an egg, get rid of the market distorting subsidies and mandates, and the market will correct. Mind you, I don’t claim getting rid of the subsides and mandates will be easy. But as the pain gets stronger and more widespread, political pressure will build against them.

  10. If you want to pick on something…

    Bob, I think you got hung up on one small point, and missed the overall point of the essay. We have essentially set in motion an arms race with our biofuel policy, where we will find ourselves needing to up the mandate again and again to bail out ethanol producers. This only periodically gets them out of financial trouble, but keeps great pressure on grain prices – while only a select few reap the benefits.

  11. “We have essentially set in motion an arms race with our biofuel policy, where we will find ourselves needing to up the mandate again and again to bail out ethanol producers.”

    Make the mandate first apply to corn farmers and ethanol plants. That will put an instant stop to the “arms race.”

  12. Bob, I think you got hung up on one small point..

    You know I agree with you on the mistake of mandated ethanol, but what was your point?

    What you are saying is that farmers are subsidizing food by generating 85% of their income off-farm and land speculation has caused the price of farm land to far exceed it’s actual value as farmland and that is regardless of subsidies the farmer would receive to the point where someone who actually wants to buy some land to grow corn on can’t afford it.

    If you change your essay from “windfall for corn farmers” to “windfall for large agricultural corporations and land speculators“, we are 100% in line.

    Killing ethanol mandates isn’t going to fix much of anything for a young farmer if a state allows a scenario where the small farm is competing against a multinational agricultural corporation or someone in NYC speculating on corn land.

  13. OT news roundup:

    non-explosive hydrogen storage. Possible bottleneck: uses lithium.

    biofuel blends not so green, after all. It’s about biodiesel, not gasoline.

    Scientists working on process to paint steel sheeting w/PV. This would be part of the manufacturing process for steel sheeting for roofs, etc.

    Switching to electric cars would increase water usage It’s the differences in water usage between the petroleum industry and the electrical generation industries.

  14. Non-explosive hydrogen storage: “One promising approach is to chemically combine it with another element to form a solid which can later be broken down again.”

    Let’s see. First we would have to use energy to separate hydrogen from the oxygen in water molecules, or separate it from carbon by steam reforming the methane in natural gas.

    Then, we would chemically combine that hydrogen with another element to form a solid.

    Then we would use more energy to separate the hydrogen from that element at the point of use so we could burn the hydrogen giving us energy.

    That would be at least three places where we would undergo thermodynamic losses.

    Doesn’t sound like such a great EROEI to me.

  15. The tone of this essay is a bit cynical for you RR. Better go spend some time with the family…

  16. is a bit cynical..
    Yeah, but what’s my excuse? I should check my tone a bit before I hit “publish your comment”.

    I also sympathize with anyone trying to feed livestock for a living with rising feed grain prices. It’s impossible for an individual farmer to pass on increase in input costs to the consumer and they have to carry the extra cost out of whatever profit they might have had and sell their cattle at whatever the market price is. This has meant getting another job to buy corn to feed the livestock or getting another job to buy fertilizer and diesel to grow the corn. The only way the commodity market corrects be it grains or meat/poultry or other produce is when enough farms go under to cause a shortage in the commodity.

    The USA has been overproducing corn for the last 30 years and dumping it on the market, effectively keeping the price below the $3 it was in 1973 and it wasn’t until the ethanol situation that the surplus was used up. The other grains and beef/pork/poultry price has been set by by $2/bu corn and now that the grain price has adjusted the feedlots and ranchers are going to get squeezed.

    Sorry about the tone of my comments.

  17. I like the method of producing Ethanol in huge renewable amounts using waste sewage and marginal land, not crop land.

    This Idea I saw proposed in “Alcohol Can Be A Gas” by David Blume

    Google “Ten sections per County”

    Oh, and no commercial fertilizer required, and cleaner rivers and lakes as a bonus!

    If the input sewage is clean enough, we should also have a new source of feed for livestock as well in the spent mash from Cattails after the carbs are removed.

    Let’s end all energy subsidies to big oil and others.

    Our Military budget could be 1/10th the size it is now and Trans National energy giants can hire their own mercenaries to get at oil they want. Without our taxes paying for Big Oil’s protection, gasoline would probably be $15.00 a gallon.

    I suggest it would be cheaper for Big Oil to pay for it and deal straight up with Countries than paying for mercenaries, but that is a call they will have to make.

    Blume has an interview rotating on http://network76.com/

  18. I like the method of producing Ethanol in huge renewable amounts using waste sewage and marginal land, not crop land.
    I guess you’ll love pixie dust.

    Back in the real world, any fermentation-based technology, especially one that requires an energy-intensive distillation step, will never produce more than a small percentage (<5%) of our energy needs.

    And loose the talk about the byproducts. Once you scale ethanol up to the levels required to make a difference, you will be completely saturate the market for byproducts. As is already happening…

    Google “Ten sections per County”
    LOL! I did. All I got was a bunch of pages with the instruction: Google “Ten sections per County” What are you trying to keep me occupied?

  19. Hey fellow internet denizens!
    I think between robert rapier and bob rohatensky, we are witnessing the all-too-familiar case of

    Internet Fermentation

    We read something, and it ferments in our minds…brew, brew, brew, until we get so enbroiled we can barely stand it!!

    I know too well. On December 20th, my brother sent me a link to an article re “400 scientists deny climate change is really ocurring” and by December 27th, we would have been in a fist-fight if we lived closer.

    Tone and emphasis are missing from internet conversations. Also, the period between responses is too long for civil behavior. And too many “pick and choose” facts are available as ready ammunition.

    I can’t help it, you can’t help it, all of us on the internet get caught up in the “Fermentation”. It also has a lot to do with what I also refer to as “Format Authority”. Because “blogs” and “news” now look so similar, we all get riled up about opinions looking like “facts”.

    Though I told myself, “Relax, why dwell on this???!!!” in the trading of broadsides with my brother, I simply could not escape it, mentally.

    Let’s all be aware, and keep our sanity.

  20. Sorry about the expanded google search! Used to be only one or two links,,,

    A more full explanation is in “Alcohol Can Be A Gas” by David Blume http://ush2.com/

    Ten Sections per County

    All one needs is 1.5% of the worst land around. Empty gravel pits, certain mine tailing piles, flood plains too close to the river to build homes on, etc. aprox. 6300 acres in each US county devoted to feeding primary treated sewage to Cattails. Cattails are very high in Carbohydrates, which can be made today into Ethanol without any new technology. 2500 gallons per acre from starch, and 3x that in methane from cellulose using primary treated sewage we currently dump into the river.

    The net yield could be higher than 50 billion gallons of Ethanol fuel and 100 billion gallons of CNG equivalent (methane) almost exactly what US domestic and commercial transportation needs are.

    All this would cost far less than one year of the war on some terrorists and we would be much closer to Energy Independence.

    The money would stay here too, enriching small enterprises that would grow up to support the industry.

    We would also absorb the nitrates and phosphates in sewage and clean up a lot of rivers and delta areas where rivers empty into dead zone areas of ocean due to that pollution.

    The water coming out the far end of a cattail marsh would be fit to drink as a freebie, treated to tertiary levels.

    But that is not all: Each ton of residue from distillation has animal feed value for livestock or fishery use, assuming the input is free of industrial sewage.

    So much for the myth that some people will starve if we make fuel off the land.

    The question is what kind of land, and what crop grows best for fuel?

    We have been lead to ask the wrong questions!

  21. Although a portion of the rise in corn prices (and land values) can be explained by ethanol, not all of it can.

    Feel free to download the following paper, which does a fairly evenhanded job of explaining the current situation. Although written from a Michigan perspective, it applies to the entire US Corn Belt.

    Perfect
    Storm?

  22. regarding cattails, the University of Pennsylvania (or, was it Penn State?) did a study way back in the 1920s, where they produced a tremendous yield per acre in cattail corms. They are very high in pct. protein too. This was back around 1927, and they were quite enthusiastic, but we know the history from there…nada.

    I like that MABA article, “perfect storm”. One of the elements I was glad to see mentioned was the “protein crisis”, which is the real future problem that will exceed any current (the next five years) grain crisis. Right now, worldwide fisheries are due for a catastrophic collapse once stocks are reduced to irreversible levels, probably in the next ten years.

    There ought to be more investigation of “conversion rates” for potentially farming heretofore “unfarmed creatures” such as garden snails. Chickens will enthusiastically consume snails, and then may increase their own conversion rate, eating a larger pct. of protein (snails vs. corn) in their diet. Earthworms and other worms, like tubifex tubifex for feed to small fish (again, to be consumed further up the producton chain prior to reaching people consumption) should be receiving high USDA attention.

  23. Regardless of the benefits to farmers, subsidization of fuel to the expense of food is bad policy. If we want to make sure farmers get a good income, we can simply do direct subsidies.

    Similarly we shouldn’t be subsidizing oil companies either — at least not in boom times.

    What’s missing here is a policy that supports the consumer. Specifically what is our energy and transportation policy so that we can live our lives and proceed with our business.

    What we have is a supplier policy (how do I maximize profits for farmers, or for oil companies).

    When the interests of the farmers and oil companies align with that of the general citizen, no problem. When the don’t, you pay $4.00 for a corn dog.

    Mike

  24. RE: Anon, Perfect Storm.
    Thanks, Anon, that was quite entertaining. My favorite was this paragraph: Ethanol demand for corn nationally was 1.093 billion bushels in 2002 (10% of U.S. production), and hit just over 3 billion bushels in 2007 (21% of production). By 2015, ethanol will claim about 4.7 billion bushels annually from the U.S. corn crop (about 27%). Consider that even though the noise and news about ethanol has been almost hysterical in nature, out of a total corn production last year of 13.1 billion bushels, less than 25% was used for ethanol.

    Why blame ethanol? It’s only using 25% of the corn harvest! That leaves more than 75% to you whiners! LOL!

    I don’t think I have seen a business analyst make a dumber statement this year, and this year has had its share of those!

  25. One of the elements I was glad to see mentioned was the “protein crisis”, which is the real future problem that will exceed any current (the next five years) grain crisis.
    There is no protein crisis. As the Chinese get richer, they can afford to pay more for meat. In a global economy that affects meat prices everywhere. You can either pay more or eat less. And with the higher prices comes an increased supply.

  26. We have been lead to ask the wrong questions!
    Your friend, David Blume, has come up with a pretty absurd aswer. But don’t take my word for it. Ask yourself why he is writing a book about it, rather than building a pilot plant. If it is such a neat solution, it must be financially attractive, especially with oil @ $110/bbl.

  27. Optimist,

    Do You telegraph your plans ahead of getting contracts signed, etc?

    I cannot speak for David Blume as to weather or not he is farming today, or plans to, but I understand He is doing well with His book and is consulting others and having fun on Talk Radio cutting Pimentel’s lacking studies down to size.

    A Teacher who loves his profession does not waste his time behind a plow when he can help hundreds to thousands to do what he knows.

    David Blume is a wonderful Teacher. “Alcohol can be a Gas” is a bargain at twice the price. 600 pages on every aspect of the art and science of Ethanol and Permaculture.

  28. David Blume is not remotely believable. He has made some truly outrageous claims over ethanol. His energy return figures are laughable, as are his weird assertions that gasoline is a toxic waste product from the refining process. Gasoline is the main reason for the refining process, numb nuts. Those are the kinds of things that had me shaking my head as I read his claims. Some seem OK, and then you read some that are comically ridiculous.

  29. Since Roberto is hyping Blume, I decided to check out his site. He hypes a lot of technologies, including such spectacular failures as TDP. Roberto says that diesel can be made for $11 a barrell with TDP. No wonder he likes Blume, as these are the kind of claims that permeate Blumes work. Roberto says –

    TPD Thermal Depolymerization. Changing World Technologies. Son of Warren Buffet is said to be involved in this project. It is estimated this technology could convert crop waste, and garbage to #3 and #2 diesel for about $11 dollars a barrel in 2004 dollars (FRN). The project is supposed to be through the pilot plant phase but it has dropped off the radar. There is enough Waste from cities, farms, and the District of Columbia (bullsh*t and paper) to generate about the amount of oil the US imports each year. 4 billion barrels a year. This is renewable energy.

  30. The name calling factor is getting pretty loud around here.

    Why not stick to Blume’s book and read up on Gasoline mfg? I get it!

    Attempting to tar me and Blume with articles not related to Blume’s work is easier lifting, to attack Blume via non related associations from my postings. I get it.

    Good thing most people reading this can figure out whose emotions are getting in the way.

    BTW, if you have any factual reason to state why TDP disappeared, I would like to know. I can get nothing out of CWT.

    Gasoline is a historical waste product, and more.

    In the early days, J.D.R. used to flush volatiles down the river at night since there was no market for them.

    I’d call that a waste product when you have to rid yourself of something no one would buy.

    Lamp oil did not sell well when it exploded. J.D.R. fixed his problem by paying the Women’s Christian Temperance movement about 4 million dollars in gold to bribe a hard drinking Congress to have Ethanol outlawed and then could afford to jack up his prices to allow him to build distribution out of the cities and into the countryside, once farmers were no longer allowed to turn their crop waste products into Ethanol.

    Today, Big Oil makes less on gasoline than any other aspect of Oil. Many products like pesticides and herbicides can generate thousands of dollars in economic activity per barrel.

    The economic bottom of the production rung, is gasoline and that is an honest way to describe a waste product from an economic standpoint, especially since gasoline is no longer a product one can define as a specific compound.

    From personal experience, I know one retired fellow who worked at Chevron’s El Segundo refinery in California.

    He told me personally, “in the refining business, when something doesn’t turn out right, or is left over, it gets dumped into the gasoline mix, to be widely dispersed into the environment. That is how we get rid of things we can’t otherwise sell” they spread exposure risk by dilution.

    With most vehicles equipped with catalysts, that is probably not such a horrible idea, except for when a gallon of gas loaded with benzene or toluene or the cyclo variants from natural gas condensates runs through a 2 cycle engine and exposes the user to unburned carcinogens.

    Or runs rich in a 4 cycle ICE not equipped with catalyst.

    There are any one of 400 different official formulations for what is today called gasoline.

    If gasoline did not exist to absorb toxic waste leftovers, the expense of getting rid of them would be passed on to the consumer with much higher prices paid for everything.

    It doesn’t stop there. One has to figure how many people die each year from exposure to benzene and the rest of the unburned cancer causing agents that fill a large city like Los Angeles. By some estimates, it is about 20,000 deaths a year.

    One can’t say Ethanol would cause 20,000 deaths a year from what little acetaldehyde that would slip past a 2 cycle engine.

    That is just one large city.

    So, Go ahead. Claim pump gas, a.k.a. defacto gasoline is not a toxic waste product when compared to Ethanol.

    I’m listening.

  31. BTW, if you have any factual reason to state why TDP disappeared, I would like to know. I can get nothing out of CWT.
    You’ve come to the right site for answers on that:
    1. TDP: The Next Big Thing
    2. TDP: What Went Wrong

    Gasoline is a historical waste product, and more. In the early days, J.D.R. used to flush volatiles down the river at night since there was no market for them.
    That was then. This is now. Need a reference to figure the difference?

    I’d call that a waste product when you have to rid yourself of something no one would buy.
    At $3.50 going on $4.00/gal I wish I had some of that waste to get rid of…

    Today, Big Oil makes less on gasoline than any other aspect of Oil. Many products like pesticides and herbicides can generate thousands of dollars in economic activity per barrel.
    Funny that they are still making gasoline then. Or are you suggesting we go thank Big Oil for being so benevolent?

    …especially since gasoline is no longer a product one can define as a specific compound.
    When was gasoline ever a specific compound? What compound was that? This is turning into a new version of “The History of Petroleum”.

    From personal experience, I know one retired fellow who worked at Chevron’s El Segundo refinery in California.
    Careful now, the depth and breadth of your sources are showing…

    One can’t say Ethanol would cause 20,000 deaths a year from what little acetaldehyde that would slip past a 2 cycle engine.
    Perhaps. Perhaps not. How many people will starve to death thanks to higher food prices caused by ethanol? Or the lack of fresh water? The tanker accidents and fires? Not to mention deforestation leading to increased CO2 levels, billions in taxpayer subsidies, etc. etc. The acetaldehyde is only part of the problem.

    I’m listening.
    Did you omit something? Such as I’m listening selectively? Or I’m listening only to good things about ethanol?

    That was fun, Roberto! Can’t wait to do it again!

  32. Thanks for the TDP links from RR!

    The tanker car fires are well responded to by JT at the link You provided. No need for me to reinvent the wheel.

    Water can put out Ethanol fires just fine. You dilute the Ethanol to something less than 43%, IIRC, and it will not burn.

    When was it ever difficult for the local FD to dump 20 gallons H2O on a car fire with 15 gallons of a fully leaked out pool of ethanol burning? I can see the need to put an E-85 sticker on the bumpers of a car or some distinctive stripe to indicate something other than gasoline is the main fuel.

    I seem to remember INDY went to Alcohols in the late 50s or early 60s when I was a child. Must have been a reason for that. Could it have been Driver Safety?

    Spills:
    Ethanol is especially a good thing since rivers, lakes, and oceans have no problem handling Ethanol spills in the quantity they would present. That is one of the blessings of a widely dispersed energy system that can dilute into water with little permanent damage.

    Is Earth First going to bring suit because a few fish got drunk?

    Food: One percent of Corn is people food, one percent is whiskey (adult social lube?).

    92% is cattle feed, which includes the spent mash from distillation that only has the starches and sugars removed, making it a healthier food for cattle since cattle aren’t originally designed to eat grass variants, like corn.

    Cattle make faster gains on DDGS or wet cake and require fewer vet bills.

    It is a bit more money than raw corn, but it weighs under 50% of raw corn and weight gains are about 50% greater.

    The balance of corn goes to junk food additives like HFCS which I choose to live without.

    FYI, HFCS can trigger migraine headaches. I don’t know if it is due to GM corn or the properties of HFCS itself. My wife has to avoid HFCS at all costs.

    I submit the worst problem we collectively face is not Energy, but a lack of stable currency.

    If the dollar melts down in the next two years as some suspect it could, we will be forced to work with everything we have at our table.

    Since so much energy is not nailed down, we could see a lot of it shipped elsewhere and not to our country.

    Cattails from sewage will not look so low class in such a situation.

  33. The tanker car fires are well responded to by JT at the link You provided.
    Really? I thought JT had common sense beaten into him.

    Water can put out Ethanol fires just fine. You dilute the Ethanol to something less than 43%, IIRC, and it will not burn.
    According to the information provided it burns until it gets below 10%. If you have better information, please show it.

    Could it have been Driver Safety?
    Probably NOT! You are speculating…

    Ethanol is especially a good thing since rivers, lakes, and oceans have no problem handling Ethanol spills in the quantity they would present.
    Speculation… Remember, so streams are pretty small, so even a minor leak can be a major challenge.

    That is one of the blessings of a widely dispersed energy system that can dilute into water with little permanent damage.
    I see. An ethanol spill would cause a rapid spike of bacterial growth, with a corresponding drop in dissolved oxygen levels. The low oxygen levels can kill fish and other higher life forms. Familiar with red tides?

    Is Earth First going to bring suit because a few fish got drunk?
    No. But if thousands of fish get killed, you may get a nice class-action suit…

    Food: One percent of Corn is people food, one percent is whiskey (adult social lube?). 92% is cattle feed…
    Those numbers sound off. You have a link?

    …which includes the spent mash from distillation that only has the starches and sugars removed, making it a healthier food for cattle since cattle aren’t originally designed to eat grass variants, like corn.
    You haven’t figured out that to make a dent in gasoline consumption you are going to produce more DDGS than the earth’s cattle can consume, have you?

    The balance of corn goes to junk food additives like HFCS which I choose to live without. FYI, HFCS can trigger migraine headaches. I don’t know if it is due to GM corn or the properties of HFCS itself. My wife has to avoid HFCS at all costs.
    Be that as it may. We are still talking of more expensive food for everybody.

    I submit the worst problem we collectively face is not Energy, but a lack of stable currency. If the dollar melts down in the next two years as some suspect it could, we will be forced to work with everything we have at our table.
    Good luck with that! Mr. Bernanke clearly disarees with you. Can have an unhappy face on Wall Street, can we? The greenback is going down!

    Since so much energy is not nailed down, we could see a lot of it shipped elsewhere and not to our country.
    We’ll learn to conserve then.

    Cattails from sewage will not look so low class in such a situation.
    Still won’t be enough to make a dent, regardless of the dollar’s fate.

    An even if you were to make renewable energy from cattails (or anything else), converting it into ethanol is a waste. You could do much better going gasification -> hydrocarbon/mixed alcohols.

  34. Robert, you’re perpetuating an urban myth, namely that ethanol subsidies/mandates have something to do with energy policies.

    The reality is that ethanol subsidies/mandates are agricultural subsidies, started by companies like ADM (to be sure, they don’t help ranchers and dairymen). They always have been, and they still primarily are, to this day.

    To suggest otherwise is to feed an inaccurate perception that energy policy is difficult, and prone to mistakes: “Don’t be so sure that PHEV/EV’s will work – look at how badly ethanol turned out!”

    They’ve always been sold that way, but (almost) no one has believed it for a second until the last few years. Now, of course, some people are really hoping it will perform, but ag subsidies are still the most important political force supporting ethanol: farm income has close to doubled in the last couple years, entirely due to ethanol, and it would be political suicide for a politician to try to touch it.

    You’ve heard of the “Ethanol Pledge”, taken by all politicians in Iowa to maintain ethanol subsidies? Ethanol hasn’t survived the last 30 years because it did anything for energy, it’s because it was near and dear to farmers and food processors, especially ADM.

    OK, here’s some background info:

    http://www.grist.org/news/maindish/2006/12/06/ADM/index.html

  35. I agree that Ethanol from corn is pushed by corporate ag processors and grain farmers. While corn is behind that push, I am promoting Ethanol from alternative sources.

    As far as worrying about making too much DDGS for livestock from corn, that is just plain silly.
    There are many other uses now, and some novel possibilities.

    You can’t make too much of the stuff. It is high in protein, fats, minerals, etc. It will end up making superior manufactured breakfast cereals at some point. At the bottom, It can also return to soil and provide for the next crop to be grown. This may open new opportunities for some. Ingredients for a pound of breakfast cereal that is better for you that costs under a dime a pound for the main ingredient should be something that sells well. Our children might actually show up for school without low blood sugar.

    Energy would be saved exporting same as it weighs well under half what corn weighs since all that was removed by Ethanol processing is the carbs. We currently export 30% of our corn crop, cutting the weight by over half and volume by 2/3 would make for lots less expense on rail, barge, and ocean transport for feeding livestock in Europe, which is where most of that feed goes. Saving half the weight of export shipping can’t be all bad. Does Ethanol get a energy credit for this?

    Few foreign customers today want our corn for human food since lots of it contains GMO corn that is not healthy to consume in the first place, since it recently has been shown the modified RNA from the GM corn invades the digestive system and then resides there, playing havoc with our immune system, which is centered in the flora and fauna of our gut. It doesn’t take much brains to figure out that when a built in pesticide making gene invades your gut, there may be problems.

    Cattle, when given a choice, will pass on eating GM corn. I suspect they know something about what is good for them while our superior mind gets in the way of our over domesticated nose.

    The other thing not looked at is the penalty to make additives to boost gasoline basestock from 67 octane to higher levels, one has to add BTX or its cousins, carcinogenic aromatics that do not adequately exist in crude, hence an energy penalty required to make it.

    This requires an estimated energy penalty of 17.5% to make BTX from crude. When You have to add 28% BTX to basestock to have 87, 40% to make Premium, that energy adds up fast.

    Mixing 67 octane basestock with an equal volume of Ethanol yields a fuel that has 89.75 Octane.
    -page 357, 358 “Alcohol can be a gas”

    >Still won’t be enough to make a dent, regardless of the dollar’s fate.

    Really? I got to ask you, what is going to happen when those oil tankers turn toward China, India and Europe when our dollar can’t buy oil, and Cheney is running Haliburton from his corporate bat cave headquartered in the Middle East? Does anyone on this list understand we are about to be considered as trustworthy as a spaniard of olde, due to our inflated dollar?

    I feel using 6400 acres per County, (times 3000+ Counties) marginal land but not cropland may be one option we might not want to ignore at that point. Its either that, or we eat each other till our numbers drop to support levels. Using waste water chocked with nutrients that don’t belong in our rivers to begin with is not a bad thing, since we currently throw it away.

    The mash from those cattails could be thrown on other cropland as a fertilizer after methane digestion and used to reduce inputs to grow other food, provided toxic industrial sewage is kept out of the input stream from the cattail growing process.

    200 billion gal. gross on roughly 20 million acres without taking a single acre of crop land used to grow corn, soy, etc. Out of the 1,373 million acres of total farm land, that is not a penalty someone can worry about with a straight face, since it comprises under 1.5% of farm land.

    50 billion Ethanol Net
    150 billion (Eq.) as methane (gross)
    100 billion net Methane after using 50 billion or less, for distillation, good for transport or sale to industry or home.

    Piston vehicles in the US consume about 145 Billion gallons per year. Last time I checked, 50 plus 100 equal 150.

    Not one acre of cropland required. The 17 percent of cropland, under 71 million acres, (05) used for corn can continue to raise corn. (8 percent of ag land)

    I am not saying that I want a total switch to Ethanol and we shouldn’t as what would we do with the domestic stocks of left over toxic waste called Gasoline basestock?

    As long as we have domestic petroleum, we are going to have leftovers. We might as well burn it in our vehicles and process it through the catalytic converters.

    Mixing basestock with Ethanol gives us a better fuel without having to make extra carcinogen additives and throw away energy to make BTX and its cousins to raise octane.

    Besides, we don’t have vehicles designed for pure Ethanol, we still have hundreds of millions of vehicles that are designed to burn Ethanol’s substitute instead of the real thing.

    Historically accurate, since the ICE originally burned Ethanol and had to be dumbed down to use pump gas.

    I am driving a 92 Subaru Legacy multiport non turbo vehicle. I drive an average 40 mph commute that burns a 50/50 mix and typically run around one gear higher (5th.) with no knock.

    My MPG is very close to using straight pump gas once one gets used to running in taller gears since knock is a thing of the past.

  36. You can’t make too much of the stuff. It is high in protein, fats, minerals, etc.
    It may be good stuff, but if you produce too much of it, you end up giving it away. See the glycerol market for more on that. So, figuring a nice return for DDGS into your cash flow could be an expensive mistake.

    Few foreign customers today want our corn for human food since lots of it contains GMO corn that is not healthy to consume in the first place…
    Oh, it is not? Any scientific data to back up that bold claim.

    …since it recently has been shown the modified RNA from the GM corn invades the digestive system and then resides there, playing havoc with our immune system…
    You have bought into Frankenmonster science fiction, with the emphasis on fiction.

    Your body is designed to avoid foreign DNA and RNA from invading, through a variety of mechanisms. GM RNA is no different than normal RNA. There is no way it is getting into your system, unless someone put it into a purposefully designed virus. Not going to happen in GM food.

    It doesn’t take much brains to figure out that when a built in pesticide making gene invades your gut, there may be problems.
    It doesn’t take much brains to figure out that that entire paragraph is fiction.

    Cattle, when given a choice, will pass on eating GM corn.
    I seriously doubt that cattle can tell the difference. You have any data to back up the bold claim?

    The other thing not looked at is the penalty to make additives to boost gasoline basestock from 67 octane to higher levels, one has to add BTX or its cousins, carcinogenic aromatics that do not adequately exist in crude, hence an energy penalty required to make it.
    BTX is one way to increase the octane number, not the only way. Seems like many refiners are turning to iso-octane, now that MTBE has been outlawed.

    Really? I got to ask you, what is going to happen when those oil tankers turn toward China, India and Europe when our dollar can’t buy oil, and Cheney is running Haliburton from his corporate bat cave headquartered in the Middle East?
    The question of who outbids whom is hardly a foregone conclusion, in spite of weakness in the dollar. Your faith in China is touching, but perhaps premature.

    Mr. Cheney, unlike Mr. Bush I suspect, has long since discovered what a great virtue conservation is.

    I feel using 6400 acres per County, (times 3000+ Counties) [i.e. 19.2 million acres] marginal land but not cropland may be one option we might not want to ignore at that point.
    I’m afraid those numbers don’t add up. According to Mike Briggs at UNH, we would require about 9.5 million acres (15,000 sq mi) to grow enough fuel to support US transportation. Since algae are an order of magnitude better at producing biomass than any terrestrial plant, I submit that your (or David Blume’s) numbers are at least 10 times too low.

    Its either that, or we eat each other till our numbers drop to support levels.
    No need to frighten the children with your twisted Malthusian visions, Sicko!

    Using waste water chocked with nutrients that don’t belong in our rivers to begin with is not a bad thing, since we currently throw it away.
    Always a good idea to recover our wastes.

    The mash from those cattails could be thrown on other cropland as a fertilizer after methane digestion and used to reduce inputs to grow other food, provided toxic industrial sewage is kept out of the input stream from the cattail growing process.
    That’s right! Let’s send all those toxic industries to China! That’ll show ’em!

    200 billion gal. gross on roughly 20 million acres without taking a single acre of cropland used to grow corn, soy, etc. Out of the 1,373 million acres of total farm land, that is not a penalty someone can worry about with a straight face, since it comprises under 1.5% of farm land.
    Hard to believe that you can type these numbers with a straight face.

    I am driving a 92 Subaru Legacy multiport non turbo vehicle. I drive an average 40 mph commute that burns a 50/50 mix and typically run around one gear higher (5th.) with no knock.
    Do report back when your Subaru’s engine corrodes through one of its vital parts. Enjoy the drive until then!

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