Ethanol and Petroleum Imports

This is the concluding post in a series looking at the impact of increased ethanol production on petroleum imports. Previous posts concluded that there has been little measurable impact on our petroleum imports as a result of increased ethanol production. In this post, I provide a spreadsheet to all the data and graphics used, and delve a bit deeper into the issue.

Previous posts in the series were:

Does Ethanol Reduce Petroleum Imports?

Ethanol, Imports, and the MTBE Effect

The spreadsheet that was used to tabulate all of this information is archived here:

Oil Imports Versus Ethanol Production

(For some reason the graphs don’t show up in the Google Documents link. However the data and calculations are all there).

Audacious Claims

One of the most frequently cited reasons for our U.S. ethanol policy is that it will reduce our dependence on foreign oil. Some of the more audacious claims actually suggest that one barrel of ethanol will displace more than one barrel of foreign oil. Here is a sampling of some of the claims. From the Renewable Fuels Association’s (RFA) “Energy Facts”:

FACT: The production and use of 9 billion gallons of ethanol in 2008 displaced the need for 321.4 million barrels of oil. It also saved American consumers and taxpayers $32 billion, an average of more than $87 million a day. This is the equivalent of eliminating oil imports from Venezuela for 10 months, or looked at another way, it would mean that the U.S. would not have to import ANY oil for 33 days.

The RFA’s page on industry statistics shows that ethanol production in 2006 was 9 billion gallons, which is 214 million barrels. Once refined, a barrel of oil will turn into products with an average BTU value of 126,000 BTUs/gal, versus 76,000 BTUs/gal for ethanol; therefore 214 million barrels of ethanol contain the BTU equivalent of 129 million barrels of oil. (Source: ORNL). The claim then is that ethanol with an energy equivalent of 129 million barrels of oil (BOE) displaced more than twice that much oil – 321 million barrels!

The RFA’s source on that was the consulting firm LECG, where director John M. Urbanchuk consults for the Renewable Fuels Association and the National Corn Growers Association. Thus, Urbanchuk is expected to spin a positive ethanol story, but one would hope he could do so without completely sacrificing his credibility. He has also been quoted:

The production of nearly five billion gallons of ethanol means that the U.S. needed to import 206 million fewer barrels of oil in 2006, valued at $11.2 billion. This is money that stayed in the American economy.

Source: Contribution of the Ethanol Industry to the Economy of the United States in 2006 (PDF download)

Even grander claims have been made by the U.S. Government. From DOE Assistant Secretary Alexander Karsner’s keynote address to the RFA’s National Ethanol Conference (link now dead) in Tucson, Arizona:

Last year, we contributed something on the order of a displacing 500 million barrels of oil, oil that we didn’t have to import from regimes that are hostile to our interest or might leverage energy economics over our future.

Here’s the same claim (that link has also been taken offline) by Paul Dickerson, Chief Operating Officer at the DOE’s Office of Energy Efficiency and Renewable Energy:

Over 6 billion gallons of ethanol were produced in the United States last year, and we have an additional 5 billion gallons of refining capacity under construction.

That effort means 500 million fewer barrels of oil that we have to import from the Middle East.

That’s from the U.S. Department of Energy. Those are pretty bold claims. How on earth are people coming up with these numbers? More importantly, can we go to the data and actually see this impact?

Probing the Data

The import situation is complicated by several factors, the biggest of which is the rapid run-up in petroleum prices over the past few years. The increase in prices caused overall demand to fall, which can be seen in Figure 1 below:

Figure 1. Net Imports Versus Total Demand

It is important to note that “demand” includes all crude oil, natural gas liquids (ethane, propane, butane, etc.), ethanol, fuel gas (offgas from the refinery used as fuel or feedstock), and asphalt. (See the full list of products covered here). This is important to understand, because if ethanol displaces petroleum, it has no impact on overall demand – since it is already included. What you would see in that case is merely a shift between ethanol and gasoline, for instance, with total demand remaining constant (actually it would have to go up a little due to ethanol’s lower BTU content).

The conclusion one draws is also influenced by the time period over which one looks. In the first post in this series, I looked at imports, demand, and ethanol production over the time period 2002 through 2007. The reason for choosing that particular time period was that this was when ethanol was ramping up sharply.

I left off 2008 because of the very sharp drop in demand due to the recession. However, as one reader pointed out, since ethanol is included in the demand number, it doesn’t really matter whether demand went up, down, or stayed constant. If ethanol is displacing imports, we should see that effect even if demand drops sharply. For example, if demand fell by 1 million barrels a day, then all else being equal I would expect imports to fall by 1 million barrels a day. Now add in expanding ethanol production, and I expect imports to fall by more than 1 million barrels a day.

What I observed was that between 2002 and the end of 2007, our petroleum imports do not appear to have been impacted at all by the increase in ethanol production. But that time period is complicated by a couple of things. First, the largest increase in ethanol production took place in 2008. Thus, the largest impact would be expected to show up in 2008 – a year I left off because of the recession effect.

Second, the phase-0ut of methyl-tertiary-butyl-ether (MTBE) took place during this time. I went into detail on how this would have impacted the issue in the second post in this series. The bottom line was that even when MTBE was taken into account, it still did not appear that ethanol production had a measurable impact on petroleum imports.

However, the MTBE phase-out was completed in the first half of 2006. So for the rest of this post, I want to focus on 2007 and 2008. (And as I write this, I don’t know what the answer is; I will work it out as I put the rest of this post together).

During 2007 and 2008, total demand fell by 434 million barrels. Domestic production fell by 74 million barrels. (You can see all of the data in this spreadsheet; there are comments indicating where different data originated). So then all else being equal, I would expect imports to fall by 434 million barrels, but then they also need to make up for the 74 million barrel domestic production deficit. That modifies the expected import change to (-434 million + 74 million) = – 360 million barrels.

Over that two-year time period, net imports actually fell by 466 million barrels. This is the first time period I have looked at over which the import change was less than the demand change, which is what I would expect to see if ethanol was displacing imports. The change certainly isn’t the often exaggerated 200 million or 500 million barrels, but over the course of 2007 and 2008 imports did fall by 106 million more barrels (53 million barrels per year) than would be expected on the basis of demand and domestic production changes. Over the longer time frame of 2002 through 2008, the cumulative increase in imports (+207 million barrels) is very close to what would be expected based on changes in demand and domestic production (-225 million barrels), still implying no measurable impact from ethanol.

How much ethanol was produced over that period of time? Per the RFA’s ethanol statistics, a total of 15.5 billion gallons of ethanol was produced in 2007 and 2008, which amounts to 369 million barrels. On an energy equivalent basis, this is equal to about 215 million barrels of finished petroleum products. Yet the measured fall in imports was less than half that value.

One of the problems here is that we may be looking for a needle in a haystack. By that, I mean that the contribution of ethanol is so small relative to that of overall demand, that any actual displaced imports would be lost in the noise. Figure 2 illustrates:

Figure 2. Ethanol Production Versus Total Demand

For this graphic, I have put ethanol production on the same scale as total demand to show the relative contribution. The production for ethanol in 2008 amounted to 0.59 million barrels per day of a total demand of 19.5 million barrels per day. For people who claim that the oil companies are threatened by the ethanol companies, that graphic puts things in perspective.

One could argue that the ethanol impact should show up most strongly in a comparison with gasoline demand. Figure 3 shows that effect:

Figure 3. Ethanol Production Versus Gasoline Demand

In fact, gasoline demand* did dip in 2008 by 300,000 bpd. Ethanol may have been part of the reason, but the increase in ethanol production was quite a bit less than the fall in gasoline demand. Corrected for energy content, the ethanol increase was less than half the drop in gasoline demand (which can be mostly explained by higher prices and recession, as shown below).

One thing Figures 2 and 3 show is the dip in demand in 2008, which followed a flattening of demand for a few years prior. Recall that since ethanol is included in the demand number, ethanol can’t be a cause of the drop in demand. Figure 4 shows part of the culprit:

Figure 4. Average World Crude Price Versus Total Demand

As crude prices began to climb in 2004, crude demand flattened. As the price skyrocketed in 2008, we were also entering a recession. The combination caused a sharp drop in demand. One interesting thing to consider is that since ethanol is mandated in increasing volumes each year, it is not impacted by the drop in demand. While total demand fell by 1.2 million bpd in 2008 relative to 2009, “demand” for ethanol actually increased by nearly 200,000 bpd – because the mandated increase has no allowance for overall drops in demand.

Conclusions

What to conclude from this exercise? The easiest conclusion is that the claims of petroleum import displacement have been at a minimum grossly exaggerated. It may even be that ethanol hasn’t backed any petroleum imports out, or that the impact is so small as to be unnoticeable.

All of these conclusions, however, point toward a common theme: Even our biggest source of alternative fuel is taking very little bite out of our petroleum consumption. Much more effective has been high prices and recession. In fact, I believe it unlikely that any combination of biofuels will ever replace even 50% (net) of our present petroleum consumption. That points toward the need for conservation as a critical component of any major effort to wean off of fossil fuels. Perhaps some combination of conservation, electrification, mass transit, and biofuels can make a significant impact on our fossil fuel consumption. But the graphics above should demonstrate that it isn’t a trivial matter to significantly impact our petroleum consumption.

*Total gasoline demand contains the ethanol contribution. Therefore, Figure 3 shows gasoline after subtracting out the ethanol volumes.

Special thanks to the Energy Information Administration for answering some of my questions about the data.

83 thoughts on “Ethanol and Petroleum Imports”

  1. Here we go again. The displacement is based on how much imported CRUDE oil is requided to yield gasoline. We use more gasoline than is in a barrel of oil. Domestic production of the prime desired component yields a net displacement larger than the volume of the gasoline replaced. Ah der.

  2. This is an excellent post by RR–but really, when one looks at the volume of ethanol produced, and total amount of crude consumed (in the USA), one can see that ethanol is just a small player on a large and crowded stage. Ethanol just ain't important to obtaining energy independence. If ethanol is our plan to reduce imports and obtain energy independence, it is a form of low comedy.

    The real answer lies in much higher mpg cars, such as PHEVs, or CNG vehicles. There, we can look forward to radical displacements of imported oil.

  3. The displacement is based on how much imported CRUDE oil is requided to yield gasoline. We use more gasoline than is in a barrel of oil.

    Your comment really doesn’t make any sense. Because we import various products – including a lot of finished gasoline – in fact all things being equal a specific volume of ethanol – say 1 gallon – would be expected to back out 0.60 gallons of oil product imports.

    But let’s assume as you say that the calculation is crude oil specific. A barrel of crude will produce around 20 gallons of gasoline, depending on the specific refinery configuration. 20 gallons of gasoline is the energy equivalent of about 32 gallons of ethanol. The way they come up with those outrageous claims – which is exactly what I think you are alluding to – is by suggesting that 32 gallons of ethanol can then displace the 42 gallon barrel of oil from which the 20 gallons of gasoline came. But this ignores that the barrel of oil also produces diesel, jet fuel, fuel oil, asphalt, etc. So if the barrel is displaced, imports of those items would have to increase to compensate. Thus, pretending that a barrel of ethanol can displace more than a barrel of oil simply is just hand-waving propaganda.

    RR

  4. Domestic production of the prime desired component yields a net displacement larger than the volume of the gasoline replaced.

    On second thought, instead of just making the claim, why don't you post some actual numbers showing how a barrel of ethanol displaces more than a barrel of oil imports? Please show your work and make your assumptions clear.

    RR

  5. In as much as my car gets about 80% the miles on E85 as it gets on gasoline, I'd like to see YOUR work on This:

    20 gallons of gasoline is the energy equivalent of about 32 gallons of ethanol.

    I'm assuming it's going to look something like 20/32 = .625

    But, that would only give the expected efficiency for, say, boiling water, a process in which OCTANE is not important. In the Real World of ICEs "Efficiency of Combustion in the Cylinder" is what's important.

    Anyway, if you wanted to claim 75% I wouldn't fight you too hard. Some cars/trucks aren't as efficient as the Chevy Impala (although, some are more-so.)

    So, with the new plant that just came online, we're now producing 11,644,000,000 gallons of ethanol on an annual basis. This translates into 8,733,000,000 gallons of gasoline, or thereabouts.

    This translates into the equivalent of 570,000 barrels of gasoline/day. Whether that amount, or the amount that will be produced when the last 180,000 bpd comes online, is of any importance is, I guess, dependent on how badly we need that 750,000 bpd in the coming years.

  6. I don't understand why five economically strong growth years are included,but two recession years can't be. If recession is the obvious reason for slackening demand,then the opposite is also true.

    Even so,the chart sems to show imports declining from '05 to date. And I doubt 2005 would have seen an increase if not for Katrina and Rita.

    "The claim then is that ethanol with an energy equivalent of 129 million barrels of oil (BOE) displaced more than twice that much oil – 321 million barrels!"

    129 million barrels of oil is nothing to sneeze at. Would the price spike have stopped at $140 a year later had we needed that much more oil? I don't think so.

  7. "Ethanol just ain't important to obtaining energy independence."

    As someone who hates smog,I'd think you would love ethanol as an oxygenate if nothing else Benny.

  8. The point Maury as far as I can tell is that the 129 million barrels doesn't show up as reduced crude demand. It is a claim, not demonstrated.

    Ethanol also increases evaporative emissions, making ground level smog worse. If you have been in L.A. lately, you notice that it is still a very smoggy city.

    WASHINGTON – Switching from gasoline to ethanol — touted as a green alternative at the pump — may create dirtier air, causing slightly more smog-related deaths, a new study says.

    Nearly 200 more people would die yearly from respiratory problems if all vehicles in the United States ran on a mostly ethanol fuel blend by 2020, the research concludes. Of course, the study author acknowledges that such a quick and monumental shift to plant-based fuels is next to impossible.

  9. rufus wrote: In as much as my car gets about 80% the miles on E85 as it gets on gasoline

    Out of 9 billion gallons of ethanol in 2008, less than 2% , or only 150 million gallons of E85 was used in Flex Fuel Vehicles. That means over 98% of the ethanol was used in E10 or less in cars that can not adjust to get the better BTUs/gallon that you get in your FFV.

    http://www.energy.ca.gov/2009_energypolicy/documents/2009-04-14-15_workshop/presentations/Day-1/09-Frusti_James_Mid-Level_Ethanol_Blends.pdf

  10. Jacobson’s study troubles some environmentalists, even those who work with him. Roland Hwang of the Natural Resources Defense Council, said that ethanol, which cuts one of the key ingredients of smog and produces fewer greenhouse gases, is an important part of reducing all kinds of air pollution.

    Jacobson’s conclusion “is a provocative concept that is not workable,” said Hwang, an engineer who used to work for California’s state pollution control agency. “There’s nothing in here that means we should throw away ethanol.”

    And Matt Hartwig, spokesman for the Renewable Fuels Association, the largest Washington ethanol lobby group, said other research and real-life data show “ethanol is a greener fuel than gasoline.”

    http://www.msnbc.msn.com/id/18162493//

  11. “Previous posts concluded that …”

    No, previous posts just demonstrated that RR is good at making a compelling argument by misusing statistics.

    “Audacious Claims”

    RR's did not learn from his mother two wrongs do not make a right. That is what RR likes to do, counter audacious claims.

    “In fact, I believe it unlikely that any combination of biofuels will ever replace even 50% (net) of our present petroleum consumption.”

    It was Monday, I bought 15 gallons of gas with 1.5 gallons of ethanol in it. A small step, but a step in the right direction.

    “That points toward the need for conservation as a critical component”

    That 15 gallons was for a month of commuting to work. I think RR should match my effort.

  12. Clee, the Detroit 3 are on track to have half of their vehicles be flexfuel by 2012. About 90% of new cars sold in Brazil are flexfuel.

    Kit, I've noticed that many people that are the loudest about what "I" should do don't do much, themselves.

    My wife is still employed. When %4.50 gasoline hit last year I said, "Bullhockey." We moved. We moved to within 3 miles of where she works. I bought a flexfuel.

    I'll drive down to Helena to fill up, tomorrow. The smile on my face will be two feet wide. It will, actually, cost me a couple of dollars since I have to, at present, drive 40 miles to fill up. BUT, every time I put E85 in my car I just imagine (I can't help myself) the nozzle, and a Saudi Sheik. I'm happy all day.

    There's more to life than money (Thank God.) My sense of satisfaction in taking action is enormous.

  13. I think we'd be better off if aliens sucked those oil reservoirs dry with a big straw or something. If we woke up tomorrow with no oil,we'd switch to electric cars in a heartbeat. Right now,we're like frogs in a stewpot. The water's getting warm,but we don't have the sense to jump.

    We don't need to replace half our liquid fuel. We need to replace all our transportation fleet.

  14. I'm pretty sure we're heading in that direction, Maury; but it takes quite a while to "turn the fleet over." Our challenge will be to survive in the meantime.

  15. …the Detroit 3 are on track to have half of their vehicles be flexfuel by 2012.

    Rufus~

    When burning E85, Flexfuel cars use more total energy than when the same car burns gasoline.

    Detroit converting its fleet to flexfuel may be good public relations for the incognescenti, but as far as saving any energy, they are only digging us into a deeper hole.

  16. No, previous posts just demonstrated that RR is good at making a compelling argument by misusing statistics.

    You are one person I am not going to tolerate hand-waving arguments from. What I did was lay out a case. What you did was hand-wave and make accusations. But you never brought your own data-based counterargument. All you said was “is not!” If you are going to do that, counter the argument with data. If you believe ethanol did back out petroleum imports when my conclusion was the opposite, then you need to bring the data. Hollow claims are worthless.

    RR's did not learn from his mother two wrongs do not make a right. That is what RR likes to do, counter audacious claims.

    Counter an audacious claim does not amount to a wrong. If you are accusing me of making audacious claims, see the previous paragraph. Put up or shut up.

    That 15 gallons was for a month of commuting to work. I think RR should match my effort.

    I just got a really good deal on a Honda Accord. First car I have had in over a year and a half. My “commute” to work is 2 miles each way. If it wasn’t raining every day (and it wasn’t akin to a death march alongside a highway with no shoulder) I would ride my bike. But anyway, my commute to work is about 80 miles a month. I can assure you that I don’t use 15 gallons commuting to work. I probably don’t use 3 gallons. So why don’t you match my effort?

    Then again, you never require factual information at your disposal, do you? You just think of something and write it, skipping completely over the step of fact-checking. I don’t know that you wrote a single accurate thing in this post, except perhaps you did put 15 gallons of gasoline in your car.

    A small step, but a step in the right direction.

    That’s sort of the whole point isn’t it? You have concluded that it is the right step. You don’t bring any data to support that argument, and when I bring data you still don’t bring data. So one wonders how on earth you reach your conclusions. If the topic is electricity, you seem to try a bit harder. For liquid fuels, you seem to check your brain at the door and just repeat clichés.

    RR

    P.S. Be careful on your next post. More hand-waving, in light of your comments here, will get deleted.

  17. I'll drive down to Helena to fill up, tomorrow. The smile on my face will be two feet wide. It will, actually, cost me a couple of dollars since I have to, at present, drive 40 miles to fill up. BUT, every time I put E85 in my car I just imagine (I can't help myself) the nozzle, and a Saudi Sheik. I'm happy all day.
    If it makes you feel good, more power to you. The FACTS certainly suggest that it's the Saudi Sheik laughing at you, not the other way round. But, hey, this is America: Why let the FACTS get in the way of a good story, or a heart-warming (and clueless) smile…

    No, previous posts just demonstrated that RR is good at making a compelling argument by misusing statistics.
    Talking about YOURSELF again, Mr. Iknowitall?

    That 15 gallons was for a month of commuting to work. I think RR should match my effort.
    And I think he should never stoop that low…

  18. Jacobson’s study troubles some environmentalists, even those who work with him.

    Can you name some that work for him, and that were troubled?

    The fundamentals are easy enough to understand. When added to gasoline, ethanol causes the total vapor pressure to come up. This means that components evaporate into the air more easily, leading to more hydrocarbons in lower levels of the atmosphere. That much is fact. The only portion that may be subject to debate is the effect of the overall net. Some components in the exhaust are lower as a result of burning ethanol; some are higher. Added to the higher vapor pressure, what is the net?

    And Matt Hartwig, spokesman for the Renewable Fuels Association, the largest Washington ethanol lobby group, said…

    Matt Hartwig said that? Hmm, I couldn’t have seen that one coming. I would expect the RFA to take be more open to studies that conclude that the product they spend all their time promoting – and are paid to promote – has some negative baggage. Next thing you will tell me is that defense attorneys work to discredit various pieces of evidence introduced against their clients.

    RR

  19. BTW, Rufus, it may interest you to note that the Canadians have concluded that E85 [is] No Greener Than E10 (what, they don't have a farm lobby in Canada?).

    So maybe next time you can save some time and some money and just fill up with regular. Just imagine the Saudi Sheik stopped laughing at you for the warm and fuzzy feeling…

  20. "Can you name some that work for him, and that were troubled?"

    I didn't write the article Robert. Maybe you could e-mail MSNBC. Now that you're convinced ethanol wastes energy and pollutes the environment,all that's left is the claim it costs American jobs. Then we can break out the graphs and charts that prove Iowa cornfields are possessed by demons. And there's bound to be a study that conclusively proves ethanol spreads STD's. Sheesh.

  21. rufus wrote:Clee, the Detroit 3 are on track to have half of their vehicles be flexfuel by 2012.

    Cool. I have never bought a car that got fewer than 26 miles per gallon (or had a fuel tank large enough that I could add 15 gallons in with the fuel light on and the fuel gauge pegged). I'm looking forward to the day when I can buy in the US, a FFV that gets more than 26 mpg. For now, I 'll just have to keep on waiting.

    But that's the future. RR's analysis is up to 2008, so no point in his changing his numbers. I notice that in that S.Dakota study, the non flex-fuel Impala got worse BTUs/mi on E10 than on E0.

  22. No, Optimist, the "Canadians" didn't conclude that.

    From your article:

    a briefing note prepared for Canadian Natural Resources Minister Lisa Raitt

    Someone sent someone a MEMO.

    I saw some "Memos" this Spring that the Actic was going to be "Ice-free" this summer. How did that work out?

  23. Like always, Love the column Robert – well done. Regardless of what a couple of the contributors(?) think.

    Today, in Europe oil is cheaper than 10 years back due to the exchange rate (the diving dollar).

    All the chatter about the Gulf countries pricing oil in something other than dollars? I think they effectively already have.

    Rufus – While driving back and forth to Helena – burning fuel all the way – just to buy the ethanol mix you think you are screwing the Saudis?

    The memos about the ice free artic were no doubt about the North West passage – and commercial ships did pass that way this year.

  24. Many of those that jabber on about ethanol's "energy balance," are lost in the past, and overlooking all of the stories (and, there are a lot of them) like this one.

    Corn Plus receives Awards for Energy Efficiency.

    They were the first to cut their nat gas bills by 50% using a fluidized bed reactor to burn their syrup. They, also, sell the ash to local farmers who "line up" to buy it.

    Chippewa Valley, and Poet are two others that have made significant inroads. There are many others either in the process of becoming more efficient, or waiting for financing to open up, again.

  25. Uh, no, Russ. A couple of "commercial ships" used the North East Passage (with the help of Two Nuclear-powered Russian ICEBREAKERS.

    And, I may not be "screwing" them, but I'm Not "Supporting" them, either.

  26. Instead of beating the drums against ethanol 24/7,maybe some of you guys can offer a better short-term solution. Something besides inflating tires or gasifying biomass for $5 a gallon. Statistics being so pliable,I'm sure a PHEV with 5 gallons of E85 will cause imports of oil to triple. So scoff up something better already.

  27. Now that you're convinced ethanol wastes energy and pollutes the environment, all that's left is the claim it costs American jobs.

    There you go again with the straw men. I post a conclusion you don’t like, and instead of attempting to refute it with data, you cast aspersions. It is really surprising to me that you aren’t at all interested in trying to determine the real impact of ethanol. You are already convinced that the real impact is good, and so you simply brush away anything that doesn’t fit that notion.

    Does it cost American jobs? Hmm, as ethanol has scaled up massive jobs were lost in the economy. That is true. However, I think we can safely attribute that to the recession. What I think is true is that the claims of job creation are also grossly exaggerated. Job creation just can’t be conjured up by mandate, unless someone is paying for it. If we wanted, we could make sure every able-bodied person is employed, and claim job creation for everyone. But there would be a cost, borne by the taxpayers.

    Something besides inflating tires or gasifying biomass for $5 a gallon.

    You miss the entire point of why I write these essays. The point is to determine whether our time and money invested in ethanol is giving the desired results. Maybe we would have saved more petroleum imports by spending our time and money making sure tires are inflated. But you don’t want to know the real answer. You conclude that ethanol is better than inflating tires, but you don’t bring any data to support that.

    Statistics being so pliable, I'm sure a PHEV with 5 gallons of E85 will cause imports of oil to triple.

    Do you have anything better than these sarcastic, hand-waving arguments? I bring data, and this is your response?

    RR

  28. It occurs to me that one more graph I need to include is ethanol production versus gasoline imports. That is where you would expect to see the impact most dramatically if it is there. I haven't graphed that, so I don't know.

    RR

  29. I have, from the start, been a little skeptical of Coskata; however, they Are sticking with their "about $1.00/gal" meme.

    Well, at one time it was less than a $1.00 (someone who was close to them told me they were claiming $0.80 at one time). As I noted, their gasification provider recently presented "$1.25 operating costs as long as they get tipping fees."

    But it's like they miss the whole point of running a demonstration plant. It is to get better design information so you know what your real expected operating costs will be. You don't claim that your costs are $1/gal when you have just opened your demonstration plant (or before).

    RR

  30. Pardon the sarcasm Robert,but your bias is more than obvious. I can look at those charts all day and still not see what you say is there. When the economy grows,demand goes up. Always has. When production platforms are toppled by hurricanes,imports go up. The US hit Hubberts Peak decades ago. Domestic production has slid ever since. I can see all that in your charts. What I can't see is that ethanol has had no positive impact. Sorry,but it just ain't there.

    Someone posted an article that said some guy's study concluded ethanol polluted the air. While the article also stated that his colleagues disagreed,you were eager to accept it at face value. You're on a mission of some kind.

    If I'm wrong about ethanol,we can always grow more corn. We can't grow more oil. Are we getting our money's worth? Why don't we see where the road leads before trying to answer that. The idea was for ethanol to lead to cellulosic ethanol,which would lead to less dependence on foreign oil. Whether it works or not,at least we're doing more than flapping our gums.

  31. Maury said: "We don't need to replace half our liquid fuel. We need to replace all our transportation fleet."

    Rufus said: "Doesn't the flexfuel Escape Hybrid get 26 mpg? Or, does that come out next year?"

    Maury said: "Instead of beating the drums against ethanol 24/7,maybe some of you guys can offer a better short-term solution. Something besides inflating tires or gasifying biomass for $5 a gallon… So scoff up something better already."

    Easy! Buy European cars. Available today, in massive numbers, no exotic new technologies required. In fact, don't even think of them as European cars — just BUY THE CARS THAT YOUR OWN AMERICAN MANUFACTURERS ARE MAKING FOR THE EUROPEAN MARKET!!! Seriously, my mind boggles: 26 mpg in a flexfuel Escape Hybrid available next year??? Woo hooo!!! I have been driving for 22 years, and I can definitely say that I have never, and would never, ever, drive a car with such piss poor fuel economy. (And no, I am not forgetting to convert from US gallons to imperial).

    Yesterday I looked at a list of the top 10 most fuel efficient cars available in the UK. The Toyota Prius (which by the way is dramatically more fuel efficient in its European incarnation than in the US, for no good reason that I can see other than Americans think 25 mpg is "good" instead of "appalling") barely made the bottom of the list. The new Honda Insight Hybrid was in there somewhere too (certainly not at the top). The rest were plain old ICEs. Not that I'd drive any of them, they're mostly too small for my liking. I prefer my nice bigger car, and am prepared to put up with only 45 mpg. That said, I'm due a change and should be able to upgrade to a more modern similar sized car that will do 55 mpg.

    Enough said. Let the Euro-bashing begin.

  32. I see no reason to "Bash" the Euros, Pete; but, keep in mind, the Ford Escape is a SUV. You can buy it in 4×4 configuration, and haul a heck of a lot of stuff (or people) up a snow-covered mountain.

    Everybody doesn't want an econobox.

    Also, the "we use diesel" game will quit working when oil gets in short supply (you only get around 12 gallons of diesel from a barrel of oil, you know.)

  33. "Everybody doesn't want an econobox."

    Not even PeteS, according to his own words.

    Damn! I just agreed with Rufus. And PeteS. This has been a tough week, I tell you.

  34. Also, the "we use diesel" game will quit working when oil gets in short supply (you only get around 12 gallons of diesel from a barrel of oil, you know.)

    Yeah, but we have you trusty Americans to swap your diesel for our gasoline. As long as you keep thinking 20 mpg is pretty ok, we'll happily use the better stuff. I just don't understand why you'd want to shoot yourselves in the foot so.

    Btw, for all the big-engined cars I've ever driven in the States, I've never had one that I'd say was a dramatically more pleasurable drive than a so-called Euro "econobox". (Well maybe if one got one's kicks out of rolling around like a waterbed on big soft suspension… ?)

    "the Ford Escape is a SUV. You can buy it in 4×4 configuration, and haul a heck of a lot of stuff (or people) up a snow-covered mountain."

    Fabulous. I must remember that the next time me and four of my neighbours get jobs up the same snow-covered mountain. In the meantime, the normal style of commuting done by me and 99% of the people in my country (and I suspect yours too) is nicely served by the "econobox".

  35. Why, why, why??? Why, does the 2009 Ford Taurus — which by everybody's admission is a big, boring car, for big, boring people — get 18.1 mpg (US) in real-world combined urban/highway driving. Why, in God's name, does it need a 3.5 litre engine? Is it a sports car? — then why do the reviews say it rolls like a dinghy in a squall on bends?

    Ok, it does 0-60 in 7.6 seconds, down from 9.2 seconds of its predecessor. By European big family saloon standards, that's awesome acceleration. But then Europeans with big family saloons seem to be happy with, say, the 0-60 in 11 seconds of a Volkswagen Passat 2.0 TDi. 'Cos lets face it, neither the Taurus nor the Passat are exactly "boy racer" material.

    The European Passat gets 58 mpg (Imperial) combined urban/highway and 69 mpg highway. (Yes, I know, more energy in diesel than gasoline etc. etc. etc, higher emissions too … except take a look at the Diesel Particulate Filter versions of all these engines starting to appear in Europe — much cleaner engines for just a small reduction in fuel economy).

    "Everybody doesn't want an econobox."

    "Not even PeteS, according to his own words."

    Yeah, I prefer something roomy… like a Passat.

  36. Somehow, I suspect your higher mpg Prius in Europe has more to do with differences in test cycles and measurement, rather than a true difference in the vehicles.

  37. Maybe. I looked up the Prius on one US government site and one UK government site, and one other UK site. I compared 1.5 litre petrol engines in all cases. All of the sites purported to give real-world combined urban/highway mileage (not manufacturers claims). The US EPA one gave 46 mpg combined ( = 55 mpg imperial). It also gave an average reported mileage from 18 users as 52 mpg combined ( = 62 mpg imperial). The UK sites both gave 66 mpg imperial, combined.

    (Btw, one of those sites was the one that gave the top 10 UK cars by mpg. I was mistaken earlier when I said the Honda Insight Hybrid wasn't at the top of the list. It was — at 83.1 mpg, imperial).

  38. One final thing — I forgot to mention the horrendous carnage on our European roads caused by driving all those flimsy econoboxes. I truly don't know how I make it to the office every day, what with those burning wrecks littering the motorway, and the screams of the trapped occupants (who fortunately can be cut out of their flimsy plastic and tinfoil toy cars with no more than a kitchen scissors).

    … except when I check the figures it seems to me that US road fatalities per vehicle mile are higher than most western European countries (not including mine, I hasten to add, lest I be accused of one-upmanship).

  39. This Wikipedia comparison of US and UK Prius fuel economy figures shows the same approximately 10% difference in results. I guess such a difference might well be the result of different measuring techniques. (It also mentions 11 diesel cars in the UK with better-than-Prius fuel economy).

  40. Pardon the sarcasm Robert, but your bias is more than obvious.

    Do you know what projection is, Maury? It is when you attribute your own attitudes to others. Your comment above is classic projection.

    I am not at all biased. I have nothing against ethanol. I am looking for answers. You don’t like the answers I found, so you cry “bias.” Note that you don’t show up with data to challenge me. That, my friend, is bias.

    I did not set out to prove that ethanol hasn’t backed out oil imports. I set out to find out if I could see it one way or the other. Had the answer been that imports were clearly backed out, I would have reported it just the same. And the funny thing is that you would accepted that conclusion without question. You know you are biased when you your basis for deciding whether a conclusion has merit depends on what the conclusion was.

    I can look at those charts all day and still not see what you say is there.

    And that is bias. You don’t see because you don’t want to see. You close your eyes and ears and say “la la la la, I can’t hear you.” This is not rocket science. If imports have been backed out, show me.

    When the economy grows, demand goes up.

    That comment shows that you don’t understand a single thing that I have written. It doesn’t matter if demand goes up, down, or stays the same. That won’t impact the conclusion, because ethanol is already in the demand number. I gave an example of this. If demand grows, and ethanol is making an impact, then I expect imports to grow more slowly than overall demand. Again, not rocket science.

    While the article also stated that his colleagues disagreed,you were eager to accept it at face value. You're on a mission of some kind.

    You have no idea of what you are talking about. First, I have actually read the study. I have corresponded back and forth with Jacobson. In fact, he has contributed to this blog. See Mark Jacobson Responds to Vinod Khosla.

    So it isn’t like I just read a news report, found the conclusion was anti-ethanol, and accepted it. I am very disappointed that you would assume such a thing. You have been here long enough that you should know my tendencies better than that. And where do you even see that I have accepted it? What I have done is explain the basis of his conclusions. It is basic science, not witchcraft. The principle that ethanol increases vapor pressure when mixed with gasoline is well known. The fact that more gasoline will be vaporized at ground level is well known. As I said, the only question is about the overall net impact when you look at evaporative emissions plus exhaust emissions. And because I already wrote this, it should be clear that I haven’t accepted the conclusions.

    But look at you. Have you read the study? You immediately challenged the study, and if you have not read it then it is you who is on the mission. You wish to reject any information out of hand that makes ethanol look bad. I have never simply posted anti-ethanol information. So I think you better give the next post a bit more thought before spewing forth a line of argumentation that you can’t support.

    RR

  41. The analysis shows that the drop in imports that one would expect from ethanol is not showing up in the data, but the discrepancy is not explained. I can't figure out how the discrepancy can be blamed on ethanol.

    What data numbers should ethanol directly affect?
    Transport of corn to the ethanol plant, and ethanol from the plant to the blender as well as running tractors and such to farm the corn, should show up as increased diesel demand.
    Whether ethanol increases your BTUs/mi in E5 or decreases your BTUs/mi in E85, that should show up changes in demand for gasoline.
    Whether ethanol increases or decreases the price of gasoline and thus encourages drivers to conserve or splurge, that should show up as changes in demand for gasoline.
    If you subtract out all the changes in demand, it seems to me you are subtracting out all the effects of the ethanol, and what ever you have left has nothing to do with ethanol and measures something else.

    Things like the changes in MTBE use, domestic production and storage that you mentioned and accounted for, energy inputs during refining, and maybe shrinkage.. oil spills, evaporation, measurement errors.. I feel like I'm missing something.

  42. The analysis shows that the drop in imports that one would expect from ethanol is not showing up in the data, but the discrepancy is not explained.

    As I said, the discrepancy may simply be that the contribution is so small to be lost in the noise. One thing that is clear, though, is the claims of big import displacement numbers are false.

    If you subtract out all the changes in demand, it seems to me you are subtracting out all the effects of the ethanol, and what ever you have left has nothing to do with ethanol and measures something else.

    No. When you look at overall demand, ethanol is in that number. So, ethanol ramping up can’t affect that number. When you look at gasoline, ethanol should be backing out gasoline, and as I said that may be part of the gasoline dip you see in 2008. But it just isn’t much relative to gasoline demand.

    The bottom line is that the displacement numbers have been exaggerated. That’s why they don’t show up. The real displacement is tiny, and so it may be lost by things like changes in inventory levels. This is why I showed ethanol versus total demand and gasoline demand on the same scale. You can see that even the ethanol ramp-up is minuscule relative to the total scale.

    RR

  43. All I know is if I drive 12,000 miles this year, I will, instead of using 12,000/26 = 461.5 gallons of Gasoline,

    use 12,000/21 = 571.4 of E85. That means I will use 571.4 X .15 = 85.7 of gasoline.

    461.5 – 85.7 = 375.8 gallons of gasoline I didn't use. As I've shown there might be 10 gallons of diesel involved in the farming, and transportation of this fuel. If I go hogwild, and allow 15 due to the btu difference, that leaves 360.8 gallons of petroleum not used.

    Now, maybe Petroleum really "Isn't" fungible. Maybe that 360 gallons has, in its final analysis, Nothing to do with the amount of Oil Imported. Maybe it came from the "Magic Faeries." Whatever.

    The 360 Gallons Wasn't used.

  44. No. When you look at overall demand, ethanol is in that number. So, ethanol ramping up can’t affect that number.

    I thought that's what I said. Ethanol, and all the side-effects of it that I mentioned, are in the demand number. So they aren't the cause of the discrepancy.

    At the least, one conclusion I see is that instead of 9 million gallons of ethanol displacing an equivalent BTUs of gasoline, some of it (maybe 1/5) displaced MTBE.

  45. It occurs to me that one more graph I need to include is ethanol production versus gasoline imports.

    Didn't find that gasoline imports had been backed out either. In fact, finished gasoline plus gasoline component imports increased each year from 2004 through 2007, before dropping by 120,000 bpd in 2008. The numbers below from the EIA:

    2004 – 790
    2005 – 955
    2006 – 994
    2007 – 1022
    2008 – 901

    One thing that did happen is that as ethanol ramped up and MTBE phased out, finished gasoline imports dropped sharply but gasoline blending imports (to mix with ethanol and make reformulated gasoline) went up sharply.

    RR

  46. PeteS said: It also mentions 11 diesel cars in the UK with better-than-Prius fuel economy

    What I read is "The third generation Prius is rated at 72.4 mpg-imp (3.90 L/100 km; 60.3 mpg-US) combined. Three smaller manual diesel powered cars exceed that figure."

    I tried to find those three in
    http://www.vcacarfueldata.org.uk/downloads/latest.asp
    but found only the Smart Fortwo diesel. The 2000 Honda Insight had better mpg, but the 2010 Insight does not.

  47. Being biased one way or the other isn't the worst thing in the world Robert. Let me ask you this. Do you look for reasons to like the ethanol program,or the other way around? Someone biased against ethanol might talk up the 50 cent per gallon subsidy. Someone with a bias for ethanol might talk about the actual cost per gallon of gasahol sold. Less than a nickle per gallon.

    And yeah,I've got a definite bias for ethanol. Corn ethanol is all-American. It's up there with apple pie and baseball imo. Maybe it will help lead to energy independence,maybe not. But,until we find out one way or the other,I prefer to root for the good guys.

  48. Funny you should bring that up Pete. I was reading about the Chevy Cruze yesterday. The diesel model gets 50MPG. Only available in Europe,of course. Something about US EPA standards driving the cost into the $40,000 ballpark.

  49. “Do you look for reasons to like the ethanol program, or the other way around?”

    Maury, I look for analysis done to approved standards using data backed by a quality assurance program.

    If 40 years, I have never had regulatory finding or a significant audit comment on documents I have written or reviewed. I have rejected lots of stuff until it gets fixed. It is just amazing that some get angry and reply with a personal attack. For example, I noted an error in a calculation. The rocket scientist who made the mistake said I was not qualified to make technical comments. I responded that he should not make high physics mistakes. It took 4 of super computer time to redo the calculations. I was surprised when the plots of the results showed no difference, which explains why the mistake was not caught before. Sometimes what you think is an important factor turns out to be an insignificant term.

    Next, I look for the incredible. Generally this is done in the context of a positive argument. If safety features are provided such that it is not possible to hurt some one, then hurting them is incredible.

    For example, I think terrorist making a dirty bomb out of spent nuclear fuel is incredible. First they would have to get past security. If they did this the most likely out come would be a back injury. Without a crane, they would never be able to gain access to spent the fuel. If they did get access to unshielded spent fuel, they would die before they make a bomb.

    So how can you tell if some one has an irrational anti- bias?

    They will make an argument about building new nukes saying could terrorist make a dirty bomb. After explaining why that is incredible, the anti-nuke will say what about this, what about that, and there are too many unanswered questions. The anti-nuke will eventually back to dirty bombs forgetting that question has already been answered.

    There is a pattern and Maury has correctly identified the bias.

  50. A couple of more ethanol plants just came online. The Annual Production Rate is now 11,862,000,000 Gallons

    That comes out to about 11,862,000,000 / 42 /365 or 773,000 Barrels/Day. Allowing that it only gets about 25% of the mileage of gasoline in our present fleet, and we seem to be replacing about 580,000 Barrels of Oil/Day.

    If we allow a very generous 15,000 barrel of diesel/day in the transportation, and farming of the corn/ethanol, and allow for btu diff. we are looking at about 560,000 bpd of Gasoline replaced.

    And, Gasoline just hit $1.97 for RBOB, which means that in a few days the nation-wide price of unleaded is looking like $2.70.

    $3.00 Gasoline by Christmas?

  51. I was watching the oil screen as I was typing. This should have read:

    Allowing that it only gets about 75% of the mileage of gasoline in our present fleet, and we seem to be replacing about 580,000 Barrels of Gasoline/Day.

  52. you only get around 12 gallons of diesel from a barrel of oil, you know.

    I have meant to comment on that. This is not universally true. It is true for U.S. refineries because they are configured to maximize gasoline production. But refineries can be built to produce more diesel.

    RR

  53. Regarding the use of diesel engines to improve gas mileage. Is it not true that a by-product of diesel production is gasoline? So to dramatically increase diesel production would also increase the "waste" product that is gas?

    So we really need a balance between diesel usage and gasoline usage?

  54. So we really need a balance between diesel usage and gasoline usage?

    Don't we kinda have that? Europeans use diesel, Americans use gasoline. Thanks!

  55. While determining the drivers of fuel and oil prices is an undertaking worthy of a business-school dissertation, we can simply say that European drivers pay more than double our prices—seven bucks for a gallon of gas and six for diesel (here's an illustrative graph). Why the big difference? Fuel taxes in Europe are not only historically much higher, the tax on diesel is less than gas. And it's been that way for over a decade. Over time, the high European taxes caused a marked difference in customer demand.

    Americans haven't been clamoring for diesels because our fuel is so comparatively inexpensive—and diesel engines cost so much more to manufacture. Diesel engines cost more because they require added equipment such as a turbocharger to make power levels close to a gas engine. They also need heavier-duty internal components to stand up to higher compression ratios. The time it takes to "pay back" the $1500 to $3000 cost premium of a diesel engine with fill-ups at the pump, is very long at current U.S. fuel prices. Consider a hypothetical $20,000 gas car that gets 30 mpg (3.33 gallons per 100 miles). Check the diesel engine option for $1500 and you'd see a 30 percent efficiency improvement (39 mpg or 2.56 g/100m). Over a 15,000-mile year, the diesel will save about 115 gallons. With our fuel prices, it would take more than four years to make back that $1500 investment. At six bucks a gallon for Euro diesel versus seven for gas, the payback is less than two years.

    http://tinyurl.com/ykxvj7q

  56. I've got to admit I like Europe's tax differential. Tax gasoline more and folks transition to diesel,which is 30% more efficient. Of course,Euro refiners can dump their extra gas in the US. Not sure where we could dump ours.

  57. And there's bound to be a study that conclusively proves ethanol spreads STD's.
    That one's easy: How many patients got STDs while sober? 😉

    Sheesh.
    Indeed. What is it with Uncle Sam and alcohol?

  58. Hats off to you, RR.

    You write a pretty straightforward column, showing that increased ethanol has had no decernable effect on oil imports. Show the data and the sources. So what do you get in reply?

    1. Ever the insults, from clever boy (according to his own analysis) Kit.
    2. Accusations of bias, from Mr. Objectivity (according to his objective self) Maury.
    3. More fiction from goo 'ld country boy (according to his zip code) Rufus.

    In response, nothing but patient explanations. Good for you, Robert!

    But let's be fair, gents. You make a lot of demands of poor Robert, and seldom post anything sensible in return. To restore the balance, I suggest each of you complete a homework assignment:
    1. Kit: produce some data to support your pro ethanol stance. Use of logic, as opposed to insults, is encouraged.
    2. Maury: produce some objective facts regarding the effects of increased ethanol consumption in the US. Remember to include the effect of all those increased vapors on the public's health, as well as the effect of all those subsidies on the public's wealth.
    3. Rufus: come up with an explanation why Robert was unable to show the 560,000 bpd saving you keep harping about. Did Robert miss something? Did you? Why the discrepancy?

  59. So we really need a balance between diesel usage and gasoline usage?

    We do a fairly good job of that already with commercial trucks running on diesel and light duty vehicles running on gasoline. We don't import much gasoline or export much diesel, percentage-wise. But sure, we could probably do better. The price mechanism is supposed to handle that.

  60. Gee,you sound so sure of yourself Optimist. How could I possibly respond to such wit,charm,and optimism? Isn't there even the teeniest chance Robert could be wrong? I don't think a team of Einstein's working on the problem for months could give us an answer with Robert's method. For one thing,there's no direct correlation between demand and imports. Storage can be added to or drawn down….for years on end. Unless that can be factored into those charts,this is all one big exercise in jawboning.

  61. My numbers are very straightforward, and I have verified them.

    As for Robert's failure to reconcile his numbers? I don't know. Maybe refinery operations are just too complex, what with MTBE being replaced, etc. To some extent, maybe ethanol replaced some nat gas (as regards mtbe.) The whole thing with isobutane. It's pretty complicated.

  62. I think this table is a more accurate picture. It doesn't show demand,but demand has nothing to do with how much ethanol contributes to supply anyway. Apparently,ethanol didn't start making a dent in products supplied until 2006. Maybe it was just replacing MTBE before then? At any rate,domestic production dropped 100,000 bpd from '06 to '08. Net imports dropped 1.35M bpd. Storage increased 140,000 bpd. That totals about 1.6M bpd. But,supplied products only dropped 1.27M bpd. That leaves a difference of 330,000. There's an increase of 350,000 bpd in the column titled "adjustments". That total apparently includes things other than ethanol. Still,I think it's pretty clear that ethanol is beginning to make a difference.

    http://tinyurl.com/yjr85pj

  63. Would ethanol be categorized under "Processing gain" since it's not a petroleum input, but it in the finished gasoline output? I'm not seeing much change in that number since 2003.

  64. Clee, processing gain is specific to what happens in the refinery. A barrel of oil will make products that are slightly less dense, so you may end up with a 42 gallon barrel of oil producing 45 gallons of products. Ethanol is not contained within that loop.

    RR

  65. No, ethanol would not be in the refinery processing gain, but note 5 says
    "Refinery and blender net production minus refinery and blender net inputs. See Table 5.8"

    Looking at note 4 for "Other Liquids" in Table 5.8 at
    http://www.eia.doe.gov/emeu/aer/pdf/pages/sec5_19.pdf
    "… Beginning in 1993, also includes oxygenates (net)"

    So, would that include the ethanol in E10, but not the ethanol in E85?

  66. "Refinery and blender net production minus refinery and blender net inputs. See Table 5.8"

    Yes, that is where I would expect to see ethanol.

    The EIA data keeping can be complicated, and I have had to write to them on a number of occasions to get clarification. This has been especially true on how they treat ethanol and blend stocks. You have to be careful, or you can end up double-counting.

    RR

  67. Robert,

    Interesting analysis, thanks for taking the effort to produce it.

    One factor that does not get accounted for in most studies of imported crude displacement is the value of the ethanol subsidies, ethanol mandates, and tariffs on imported ethanol.

    The value of the special financial advantages ethanol receives needs to be deducted from the amount of crude displaced.

    Which will lower ethanol's already negligible reduction of imported crude volumes.

    DURACOMM

  68. Maury said,

    yeah,I've got a definite bias for ethanol. Corn ethanol is all-American. It's up there with apple pie and baseball imo.

    Maybe it will help lead to energy independence,maybe not. But,until we find out one way or the other,I prefer to root for the good guys.

    Only someone unfamiliar with the hardcore rentseeking and regulatory jam downs of the ethanol producers could say that.

    They are definitely not good guys in any sense of the word.

    ADM’s Mistake (Mostly Corrected)

    Alex Tabarrok discusses the new movie about Mark Whitacre and price fixing at Archer Daniels Midland.

    ADM apparently was caught holding meetings with competitors to fix prices of certain chemical commodities, specifically Lysine.

    Here was ADM’s mistake, and it is one they have clearly learned from:

    in the modern American corporate state, there is no reason to engage in illegal private price fixing or cartel arrangements when corporations can achieve similar ends legally and openly through the government.

    If ADM was concerned about difficult competition depressing pricing, they could have emulated any of these examples:

    ——– Run to Congress to beg for strong tariff’s on foreign sources of their commodity product (as do the sugar and ethanol industries)

    ——– Run to Congress to seek subsidies for their product in the name of some public good – it doesn’t even have to be true (as does, well, ADM with ethanol)

    Fuel ethanol exists only because of years of hardball politics played by ethanol producers.

    Using government power to force consumers to buy your inferior product hardly qualifies as the action of good guys.

    DURACOMM

  69. One other thing ethanol supporters always overlook is the damage ethanol mania is causing to ag producers.

    How are the farmer investors who constructed ethanol production plants based on ethanol mania doing these days?

    How about the corn farmers who locked in financially unsustainable rent prices based partially on ethanol mania?

    Historically the energy sector of the commodities market has been the most volatile. The ag sector has been less volatile.

    Making ethanol from corn tied ag commodities into the highly volatile energy market.

    This increased volatility has substantially increased risk and difficulty in obtaining price protection in all sectors of the ag commodity market.

    The negative impacts from ethanol on ag producers roll on and on.

    Ethanol boosters, being mostly disconnected from the ag production, never see how much damage the policies they support cause to individual ag producers.

    DURACOMM

  70. First time post.
    I very much enjoyed this discussion. I am in a very different part of the Renewable Fuels Association silliness. You are countering their audacious energy displacement claims, and here in Iowa I am countering their equally ridiculous claims of job growth associated with biofuels production.

    For example, the same Mr. Urbanchuck that you cite indicated in a 2007 study that the state benefited from nearly 50,000 jobs because of ethanol production. My own analysis (I am an economist who actually studies rural economies) found that the best I could reasonably conclude were 4,500 total jobs. The gap was more than a magnitude of 10.

    The pro-ethanol people were outraged at my blasphemy, but alas, I am right. It is my job to be right. The RFA consultants foolishly were counting all of the corn farmers (they were already here) and the construction jobs that had ever put an ethanol facility. In short they were putting one over on a very gullible public and an even more gullible state and federal legislatures.

    This debate elicits the oddest collection of bogus statistics, but slowly research and earnestness is undercutting some of the damage done.

    Please keep needling the liars and the fools. It may not make them honest, but it keeps them on their toes.

    Many thanks,
    Dave Swenson

  71. "My own analysis (I am an economist who actually studies rural economies) found that the best I could reasonably conclude were 4,500 total jobs. The gap was more than a magnitude of 10."

    Dave, did you take into consideration the jobs lost due to a decline in corn exports caused by domestic ethanol production? These would include elevator employees who formerly channeled export grain throught the transportation network.

    Tom

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