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Ethanol

Texan

Well-known member
I'm starting to wonder if this worldwide food 'crisis' might cause Congress to make some changes in their ethanol mandates. It won't take much pressure from the press and an angry electorate to get Congress to throw the corn farmer overboard - seed, fertilizer and all. Is it already starting?

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Undoing America's Ethanol Mistake

By SEN. KAY BAILEY HUTCHISON | Posted Friday, April 25, 2008 4:20 PM PT


The Nobel Prize-winning economist Milton Friedman once said, "One of the great mistakes is to judge policies and programs by their intentions rather than their results."

When Congress passed legislation to greatly expand America's commitment to biofuels, it intended to create energy independence and protect the environment.

But the results have been quite different. America remains equally dependent on foreign sources of energy, and new evidence suggests that ethanol is causing great harm to the environment.

In recent weeks, the correlation between government biofuel mandates and rapidly rising food prices has become undeniable. At a time when the U.S. economy is facing recession, Congress needs to reform its "food-to-fuel" policies and look at alternatives to strengthen energy security.

On Dec. 19, 2007, President Bush signed into law the Energy Independence and Security Act. This legislation had several positive features, including higher fuel standards for cars and greater investment in renewable energies such as solar power.

However, the bill required a huge spike in the biofuel production requirement, from 7.5 billion gallons in 2012 to 36 billion in 2022.

This was a well-intentioned measure, but it was also impractical. Nearly all our domestic corn and grain supply is needed to meet this mandate, robbing the world of one of its most important sources of food.

We are already seeing the ill effects of this measure. Last year, 25% of America's corn crop was diverted to produce ethanol. In 2008, that number will grow to 30%-35%, and it will soar even higher in the years to come.

Furthermore, the trend of farmers supplanting other grains with corn is decreasing the supply of numerous agricultural products. When the supply of those products goes down, the price inevitably goes up.

Subsequently, the cost of feeding farm and ranch animals increases and the cost is passed to consumers of beef, poultry and pork products.

Since February 2006, the price of corn, wheat and soybeans has increased by more than 240%. Rising food prices are hitting the pockets of lower-income Americans and people who live on fixed incomes.

While the blame for higher costs shouldn't rest exclusively with biofuels — drought and rising oil costs are contributing factors — the expansion of biofuels has been a major source of the problem.

The International Food Policy Research Institute estimates that biofuel production accounts for between one-quarter and one-third of the recent spike in global commodity prices.

For the first time in 30 years, food riots are breaking out in many parts of the globe, including major countries such as Mexico, Pakistan and Indonesia.

The fact that America's energy policies are creating global instability should concern the leaders of both political parties.

Restraining the dangerous effects of artificially inflated demand for ethanol should be an issue that unites both conservatives and progressives.

As a recent Time cover story pointed out, biofuel mandates increase greenhouse gasses and create incentives for global deforestation.

In the Amazon basin, huge swaths of forest are being cleared to meet the growing hunger for biofuels.

In addition, relief organizations are facing gaping shortfalls as the cost of food outpaces their ability to provide aid for the 800 million people who lack food security.

The recent food crisis does not mean we should entirely abandon biofuels.

The best way to lower energy prices, and reduce our dependence on foreign oil, is to accelerate production of all forms of domestic energy.

Expanding biofuels while refusing to take other measures, such as lifting the ban on oil and natural gas production in Alaska and the Outer Continental Shelf, is counterproductive. We should be tapping into a broad portfolio of energy options, including clean coal, nuclear power and wave energy.

The key is increasing energy supply. By taking these measures, we can enable biofuels to be part of the energy solution, instead of contributing to the energy problem.

Congress must take action. I am introducing legislation that will freeze the biofuel mandate at current levels, instead of steadily increasing it through 2022.

This is a common-sense measure that will reduce pressure on global food prices and restore balance to America's energy policy.

As the Senate debates this issue, we must remain focused on the facts.

At one point, expanding biofuels made sense for America's energy security. But the recent surge in food prices has forced us to adapt. The global demand for energy and food is expected to rise about 50% in the next 20 years, and the U.S. is well-positioned to be a leader in both areas.

That will require a careful, finely tuned approach to America's farm products.

By freezing the biofuel mandate at current levels, we will go a long way to achieving that goal.


Hutchison is a member of the Senate Republican leadership and the senior senator from Texas.


http://www.ibdeditorials.com/IBDArticles.aspx?id=294015465776712


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The Case for Ending Ethanol Subsidies

By Diana Furchtgott-Roth Tuesday, April 22, 2008

At a time of soaring food prices and concern over carbon emissions, George Bush needs to rethink his biofuel policy.


Just in time for today’s Earth Day festivities, President Bush has announced a new initiative to combat global warming. He set a goal of stopping the growth in greenhouse gas (GHG) emissions by 2025 and reducing emissions thereafter. But rather than plan for 2025—which is another two or three presidencies away—Bush should immediately fix his ethanol policy, which is increasing GHG emissions and raising food prices not only in the United States but all over the world.

American companies are still trying to digest the ethanol mandates passed by Congress last December. Congress mandated the production of 9 billion gallons of ethanol or other renewable fuels this year; that number will gradually increase until it reaches 36 billion gallons in 2022. In addition, ethanol producers receive a tax break of 51 cents a gallon, and corn growers receive huge subsidies that may increase in the next farm bill.

Using ethanol for energy was supposed to be a win-win situation: the United States has so much corn, we were told, that it could use some to make gasoline, thereby reducing its GHG emissions and also reducing its dependence on foreign oil. But in the real world, unintended consequences are all too frequent.

Take the linkage between ethanol and GHG emissions. Scientists now believe that the production of ethanol actually creates more harmful emissions than it prevents. Indeed, Princeton University professor Timothy Searchinger and other researchers have concluded that “corn-based ethanol, instead of producing a 20 percent savings, nearly doubles greenhouse emissions over 30 years and increases greenhouse gases for 167 years.” (Their findings were published earlier this year in Science magazine.) The reason is that converting undeveloped land to cropland—in order to grow more corn and facilitate biofuel production—releases a massive amount of carbon dioxide. Only if biofuels are made from waste products or grown on abandoned agricultural lands does the production process actually reduce GHG emissions.

This might suggest that there are ways of producing biofuels that do not lead to increases in greenhouses gases: just produce them out of waste material, without cutting down forests or plowing over fields. Yet Larry Kumins, vice president of the Energy Policy Research Foundation, has shown that the level of U.S. ethanol production in 2007—about 8 billion gallons, or 5 percent of the gasoline pool—is optimal. Producing 9 billion gallons this year will be difficult, and producing 36 billion gallons in 2022 will be impossible with today’s technology.

Here’s why: since ethanol separates from gasoline in the presence of water, the blends of ethanol and gasoline that many of us put in our cars can’t be transported through pipelines. Instead, ethanol is shipped by rail, at greater cost than gasoline, and mixed with gasoline near the point of distribution. That’s why the 10 percent ethanol-gasoline blends are not available all over the country, only in major metropolitan areas.

In addition, ethanol production is contributing to increases in the price of food, both in the United States and abroad. Not only is corn being made into ethanol, but other crops are being abandoned in favor of corn.

Last Wednesday, the Labor Department reported that in the first quarter of 2008 food prices rose at a seasonally adjusted annual rate of 5.1 percent, up from 4.8 percent in 2007 and 2.2 percent in 2006. Department of Agriculture data show that eggs increased by 29.2 percent last year, compared to 4.9 percent in 2006. Oil products are forecast to rise by 7 percent to 8 percent this year.

Rising food prices have been especially hard on developing countries. Haitian Prime Minister Jacques Edouard Alexis recently lost his job over food riots, and the government of the Philippines is releasing supplies of food in hopes of preventing similar disturbances. Indonesia has just banned exports of wheat, and global rice prices are hitting new records.

Yet President Bush still believes in ethanol. “We worked with Congress to pass energy legislation that specifies a new fuel economy standard of 35 miles per gallon by 2020, and requires fuel producers to supply at least 36 billion gallons of renewable fuel by 2022,” he said in his speech last week. “This should provide an incentive for shifting to a new generation of fuels like cellulosic ethanol that will reduce concerns about food prices and the environment.”

The problem is that the new generation of biofuels is not yet commercially viable. When it becomes viable, perhaps with the help of government-funded research, it will undoubtedly succeed without government mandates.

Rather than set a new goal for stabilizing GHG emissions, Congress and President Bush could do one simple thing that would truly honor of Earth Day: eliminate ethanol subsidies and get rid of the mandates.


Diana Furchtgott-Roth, former chief economist at the U.S. Department of Labor, is a senior fellow at the Hudson Institute and a weekly columnist for The New York Sun.


http://american.com/archive/2008/april-04-08/the-case-for-ending-ethanol-subsidies
 

Texan

Well-known member
Food or fuel? The policy choice becomes agonising
Friday Apr 25 2008 13:35


In 1959, after years of lobbying from Texas oil men, President Dwight Eisenhower imposed a quota on US crude oil imports. The idea of the world's biggest oil importer putting up barriers to keep out foreign crude now seems ludicrous. With fuel shortages looming, the quotas were abandoned by Richard Nixon in spring 1973.

Yet the arguments marshalled in support of the quotas are all too familiar. Protecting the domestic industry was vital to national security, the oil men said: America needed to invest in production capacity in case foreign supplies were cut off.

Today, the US ethanol industry is running its campaign out of the same playbook: there is a lot of talk about energy security and producers are protected by a 54 cents a gallon import tariff. In the European Union, the focus is more on the supposed environmental impact, but the results are similar: the industry is also protected by a tariff and further import restrictions are being talked about in Brussels.

The combined crisis of food prices soaring as oil reached almost $120 a barrel this week should be the decisive signal that those policies are no longer tenable.

Biofuels such as ethanol are not the only reason, or even the main reason, that food prices are rising. The International Monetary Fund thinks the use of crops such as corn for biofuels accounts for only about 20 per cent of the rise in prices over the past couple of years; other estimates suggest the effect is even smaller.

But it is clear we have moved into a new era, in which food prices and fuel prices are tied more closely than ever before. That realisation has led some environmental groups - among them those, such as Friends of the Earth, who were among biofuels' biggest cheerleaders only a few years ago - to urge policymakers to stop the growth of biofuels.

Some politicians, with Gordon Brown, the UK prime minister, in the vanguard, have responded to these concerns by calling for a rethink of biofuels policy. Targets for the EU to meet 10 per cent of its fuel demand from biofuels by 2020 and for the US to have 36bn gallons of "renewable" fuels in its consumption by 2022 now look at risk.

Yet putting a brake on the expansion of biofuels is not an easy way out. At $120, the oil price has almost doubled in the past year. It is an extra problem that a fragile world economy really does not need, and abandoning biofuels would make it worse.

High oil prices are a sign that the balance of supply and demand is very tight. Policymakers can help curb demand: the new fuel economy standards for cars in the US will be a step in the right direction, although their effect is likely to be modest. Higher fuel taxes would be better: the call from John McCain, the Republican presidential candidate, for the federal petrol tax to be suspended over the summer is entirely counterproductive.

Changing demand patterns takes time, however, and while the world gets used to a permanently higher level of energy prices, there is a need for additional supplies.

Biofuels last year contributed about 1.3 per cent of world oil supplies: a small proportion, but still more than Indonesia, one of the earliest members of Opec, the oil producers' cartel. Over the next few years, their contribution as a share of the increase in oil supplies is expected to be much greater. If that contribution were lost, the supply-demand balance would be even tighter and the oil price even higher.

The effect of cutting biofuels production could be to make food inflation even worse: higher oil prices push up the prices of fertiliser and transport, some of the biggest components of agricultural costs.

It seems policymakers are damned if they do back biofuels, and damned if they do not.

The deus ex machina favoured by many politicians, especially in the US, is "second-generation" biofuels, such as cellulosic ethanol, which can be produced from straw or other plant waste and so do not compete with food supplies.

The pious declarations of support for cellulosic ethanol amount to pure wishful thinking, however: it is nowhere in large-scale production. There is a lot of corporate and government-supported research and development under way, but even supporters of cellulosic ethanol reckon commercial viability could be five years off. Cynics say it always will be.

There is a solution, however: the US and Europe can open their markets to more Brazilian ethanol made from sugar cane. Brazil has the potential for huge growth in ethanol production on land today used as pasture, where the impact of expansion on either food supply or deforestation would be small.

Brazilian ethanol is not the whole answer, but it can help, and other low and middle-income countries could with the right support also develop biofuels industries in ways that need not necessarily compete with food supplies.

Having opened the floodgates to foreign oil, Nixon had a change of heart after the Arab oil embargo. By the end of 1973, he was evoking the spirit of the moon landings and the Manhattan Project as he called for the US to make itself self-sufficient in energy by the end of the decade.

That bold initiative failed, of course; as all attempts at energy independence are doomed. If there is one good thing that can come out of the food and fuel crisis, it should be the recognition of that reality.



The writer is the FT's energy editor


http://us.ft.com/ftgateway/superpage.ft?news_id=fto042520081443510828
 

Sandhusker

Well-known member
I think people need to whoa up a little and calm down. The ethanol industry knows the future of ethanol lies in something other than corn. They will be moving away from corn because they know there are materials that are more promising, they won't need the government to tell them to use something else.
 

Larrry

Well-known member
Sandhusker you are right, so many people freakin out.

If you try to cut out corn based ethanol you will see an storm of escalation in gas prices like you have never seen before. Is it right to do this to the grain farmer after he has already made the expenditures of this years crops. Now is not the time to jerk the sheet out from under them.

Corn is only a transitional ethanol source it will be tweaked and refined and even most likely changes to another source such as cellulosic. Corn based ethanol has already become more efficient than when it started. Give it time to settle out.

Since there is a worlwide protein shortage and has been before ethanol, if given time the ethanol byproduct will start to fill this gap.

Why do we hear about a food shortage. There is no food shortage unless you want to say there is a cheap food shortage[b/]. Why are the grain farmers obligated to produce cheap food for people so they have more disposable income for boats, vacations, and othe non discretionary spending. Is the only way people going to survive is if grain farmers supply them with underpriced cheap food or underpriced cow feed. Why must we as ranchers have to rely on the tough times of the grain farmer in order that we can prosper. If we as ranchers could sell our cattle and they were more valuable because we could utilize some of their byproducts for fuel, we would jump at the chance. So why should we deprive the grain farmers a little profit so we can benefit.

Right now they claim that fuel would be at least 75 cents higher if we had no ethanol, do we want that. We can give the foreigner our money instead of the grain farmers, is that what we want.
Study the amout of grain in bread and other grain products. It is a neglible cost in the price of food. The main cost of food is fuel in the processing and delivery of it. I look at these times as a way to get more efficient and analyze the way we do things. This is just like many times in history that our ancestors have been faced with what they thought was a catastrophe. Time to adapt and improvise.
 

burnt

Well-known member
While there are many good points in the above posts, there are also some misconceptions. There are starving people in the world. Not that biofuels are necessarily to blame. Politics obviously plays a huge part in world hunger.

As a father of 4 well-fed, but occasionally picky kids, I have often thought of the absolutely gut-wrenching feeling that must go with seeing those kid's eyes looking at me if I could not provide enough food for them. I couldn't stand it.

Can you imagine what that must be like? Watching them slowly waste away and having no hope of feeding them a decent meal?

Furthermore, have you ever considered that fact that you and I had no say in where we were born? We in North America are the most privileged people in the richest part of world.

And we no more could choose to be born here than the starving kid in Haiti chose to be born on that seemingly God-forsaken, barren piece of rock.

I can't save the hungry of the world and I can't say that I am trying to. But one thing is for certain, if I do not give thanks for our providential good fortune, I don't deserve what I have been so richly given.

But how often do you stop and give thanks for the heaping plateful of food set before you? I think the Provider just might be taking notice. And we all know how much we appreciate ingratitude toward ourselves when we think we have done something for someone else.

Read the link below if you want your eyes opened to some pretty harsh realities. By the way, the guy who wrote this article writes some pretty good stuff.


http://www.thestar.com/comment/columnists/article/416328
 
A

Anonymous

Guest
Yep- burnt- and with the condition our US economy is in/heading (with some major economists still predicting implosion of our economy-and impending disaster)- and the world economy- with a lot of folks who aren't friends of us or the world controlling the worlds energy supplies and wealth-- the US could be in the same situation....

I still remember the stories Dad and Grandma told of the Depression era tarpaper shacks- with any type material folks could get their hands on for insulation (newpapers, cardboard, etc.) to keep the 30 below wind from blowing thru the cracks-- and the folks trapping and canning gophers for some protein to eat during the winter.... :shock:

Friedrat4.jpg
 

Sandhusker

Well-known member
I read today that rice is being rationed, but I don't think rice is being used in ethanol. It is a combination of a poor crop and too damn many people that eat rice.

At $5/bu, there is 8 cents of wheat in a loaf of bread. The Mrs. tells me that a loaf of bread is pushing $3. I don't see how anybody can argue that high wheat prices are causing a heck of a lot of problems.
 
A

Anonymous

Guest
Sandhusker said:
I read today that rice is being rationed, but I don't think rice is being used in ethanol. It is a combination of a poor crop and too damn many people that eat rice.

At $5/bu, there is 8 cents of wheat in a loaf of bread. The Mrs. tells me that a loaf of bread is pushing $3. I don't see how anybody can argue that high wheat prices are causing a heck of a lot of problems.

I saw the other day where the price of bread has increased 26% in the last year- eggs up 38%...I can't remember what they said milk was up....
 

Texan

Well-known member
A Texas Timeout on Biofuels

May 24, 2008; Page A10

The state of Texas is now in official opposition to the federal ethanol mandate. Governor Rick Perry has petitioned the Environmental Protection Agency for a one-year reprieve, and the reason is simple and increasingly familiar: Washington's ethanol obsession is hurting the state.

We all know that corn farmers everywhere love ethanol. Don't tell that to Texas cattle ranchers. Because of the mandate to add this biofuel to gasoline, ranchers are being forced into bidding wars with ethanol plants for the grains they feed their cattle. They don't appreciate being hammered on price because of a subsidy to corn growers. Thus, Governor Perry's petition.

The Governor's goal is to win a ruling from the EPA that suspends half the federal requirement that nine billion gallons of this product be added this year to the nation's fuel supply. Last week the EPA opened a 30-day public comment period on the Texas waiver request, the first step in what could lead to granting his request.

The most interesting thing revealed by this effort is that EPA holds the power to stand down from the ethanol fiasco. Congress gave EPA the authority to grant such waivers in the event the ethanol mandate had unforeseen consequences. Governor Perry argues that the mess in Texas qualifies.

By his calculation, if the mandate helps to push the price of corn to $8 a bushel (it's at nearly $6 now, up from $2 in 2004), it will cost the Texas economy nearly $3.6 billion this year. He says the dramatic spike in food prices may be due to a complex set of reasons, but the ethanol mandate is something that public officials can alter. The EPA has until late July to make a decision on the Texas petition.

Meanwhile, Congress merely throws more corn onto the ethanol bonfire. Under its 2005 mandates, Americans would be required to use 7.5 billion gallons of ethanol in 2012. But in December that was increased by 1.5 billion gallons and advanced to this year. Congress's target for 2022 is 36 billion gallons. They'll be growing corn on the Washington mall.

A countermovement has begun. Earlier this month, Texas Senator Kay Bailey Hutchinson called for a freeze in ethanol mandates and quickly got the support of two dozen of her Republican Senate colleagues, among them John McCain. Also, a provision in this week's farm bill would shave a tax credit given refiners who blend ethanol into gasoline to 45 cents per gallon from 51 cents.

A predictable backlash has set in against the Perry petition. Iowa Republican Senator Chuck Grassley and South Dakota Democrat Tim Johnson have written the EPA to defend ethanol as representing a small fraction of the rise in food prices. In line behind them are the Texas Corn Producers Association and the Texas Grain Sorghum Association.

At the moment, candidate John McCain, who has been losing lobbyist advisers, could use some help shoring up his credentials as an opponent of special interests. It looks as if Governor Perry has teed up a good one in the ethanol mandate. He might want to let voters know that EPA has the power to call a timeout on biofuels.



http://online.wsj.com/article/SB121158357510318781.html?mod=opinion_main_review_and_outlooks
 

Cal

Well-known member
Oldtimer said:
Yep- burnt- and with the condition our US economy is in/heading (with some major economists still predicting implosion of our economy-and impending disaster)- and the world economy- with a lot of folks who aren't friends of us or the world controlling the worlds energy supplies and wealth-- the US could be in the same situation....

I still remember the stories Dad and Grandma told of the Depression era tarpaper shacks- with any type material folks could get their hands on for insulation (newpapers, cardboard, etc.) to keep the 30 below wind from blowing thru their cracks-- and the folks trapping and canning gophers for some protein to eat during the winter.... :shock:

Friedrat4.jpg

Did they dip their canned gophers in pancake batter and deep fat fry them as well. Maybe you can share the recipe. My grandparents raised alot of chickens to butcher, as well as doing some major vegetable gardening...and sold cream, milk and eggs, besides raising some cattle and trying to raise some crops. Had we (collectively) not learned some better methods of farming, as well as no till, I'm afraid we'd all be back in the same dust bowl that they experienced during times of drought.
 

aplusmnt

Well-known member
Problem is ethanol should have never been propped up by the government or mandated to be used in the first place. The free market should have dictated rather ethanol or Bio-Diesel was a smart commodity. But they all bought into the Global Warming crap and wanted to make it look like they were doing something to lessen our dependency on foreign oil.

Now the problem is how do they undo what they started with out throwing some people under the bus. Most likely someone getting hammered will happen, may be the farmer, ethanol producers or us tax paying on both ends, one to the ethanol producers and another in some sort of subsidy to lower corn prices.

This will not be the first big mess to arise out of Global Warming, it will take decades for level heads to correct the Al Gore sky is falling mess.

I predict that when Nissan's battery powered car grabs hold in a couple years it will take say another ten years for it to grow to the point it pushes oil prices down and then the ethanol industry will fall by then also.
 

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