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REPubs Move To Eliminate Ethanol Subsidies

Mike

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As Republicans Move to Nix Ethanol Subsidies, USDA Pushes ‘Flex Fuel Pumps’


Monday, June 13, 2011
By Susan Jones


(CNSNews.com) – Senate Republicans are moving to repeal all subsidies, mandates and tariffs on ethanol, the corn-based fuel additive.

A vote is expected Tuesday afternoon on Sen. Tom Coburn’s (R-Okla.) amendment repealing the ethanol subsidy.

In addition, Sen. Jim DeMint (R-S.C.) announced that he will introduce an amendment to repeal the renewable fuels standard that requires ethanol to be blended with gasoline.

The Obama administration, meanwhile, is urging gas station owners to apply for federal grants to purchase and install pumps that deliver fuel with a high ethanol content.

‘Bad policies’

“Washington's ethanol policies are a case study in why government attempting to pick winners and losers is a bad deal for taxpayers,” DeMint said. Americans are being forced to subsidize corn ethanol, which "drives up the cost of gas, lowers gas mileage, harms automobile engines, releases carcinogens into the air, and drives up food prices which harms the poor," he added.

"Unfortunately, Washington's bad ethanol policies don't end with just subsidies and tariffs; we must also repeal the mandate, which my amendment would do.”

Sen. Coburn says his amendment repealing the ethanol tax credit and tariff would save $3 billion for the remainder of this year and $6 billion annually.

“The days of placing spending programs in the tax code and giving them holy status are over,” Coburn said in a news release. “Eliminating the ethanol tax earmark and tariff would be a big step toward restoring fiscal sanity in Washington. Ethanol is bad economic policy, bad energy policy and bad environmental policy.”

A taxpayer advocacy group said the DeMint amendment “fills in the gaps” left by the Coburn amendment.

Americans for Tax Reform opposed the Coburn amendment on its own, because it eliminates a tax credit, which ATR views as increasing the net tax burden on Americans. But because the DeMint amendment also would permanently eliminate the death tax, ATR said it can now go along with Coburn’s amendment – but only in combination with DeMint’s.

“Our goal has been to repeal the ethanol tax credit, tariffs and the mandate totally --without raising taxes,” ATR said. “The Coburn amendment, combined with the DeMint Amendment, accomplishes this longstanding goal.”

Flex-fuel pumps

Banking on a future that includes ethanol, the U.S. Agriculture Department has set the goal of deploying 10,000 flexible fuel pumps at gas stations around the nation by 2015.

USDA is now offering grants to help eligible applicants purchase and install biofuel pumps that “offer Americans more renewable energy options.”

According to the Energy Department, most gasoline sold in this country is 10 percent ethanol, but flexible fuel vehicles can take a blend that’s 85 percent ethanol and 15 percent gasoline.

The funding for flex-fuel pumps and other energy-producing and energy-saving projects is available through USDA’s Rural Energy for America Program (REAP).
 

Red Barn Angus

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How do we find out how the vote turned out? That would be tomorrow. Does this have to go through both houses?
 

Mike

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Red Barn Angus said:
How do we find out how the vote turned out? That would be tomorrow. Does this have to go through both houses?
WASHINGTON, D.C.) – U.S. Senator Tom Coburn, M.D. (R-OK) released the following statement today regarding the Senate’s plan to vote this coming Tuesday on his amendment (#436) to repeal the ethanol tax earmark and tariff. Dr. Coburn’s amendment is identical to legislation (S. 871) he has introduced with Senator Dianne Feinstein (D-CA) to end the ethanol tax earmark and tariff. If enacted, Dr. Coburn’s amendment would save $3 billion for the remainder of this year and $6 billion annually.

“The days of placing spending programs in the tax code and giving them holy status are over,” Dr. Coburn said. “Economic conservatives and leading free-market groups like the Club for Growth understand that using the tax code to pick winners and losers kills economic growth and job creation. Today’s way of doing business is a tax increase on anyone who can’t hire a tax lobbyist or make large donations to special interest groups in Washington. Taxpayers are tired of this game and expect us to eliminate wasteful special interest spending in all of its forms.”

“Eliminating the ethanol tax earmark and tariff would be a big step toward restoring fiscal sanity in Washington. I urge my colleagues to support my amendment on Tuesday. Ethanol is bad economic policy, bad energy policy and bad environmental policy,” Dr. Coburn said.
 

Tex

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I think Coburn and Demint have this policy dead wrong.

I think that when the price of gas is over the price of ethanol, no subsidy is needed and it becomes a hand out, but as far as investing in a substitute for oil that is tied to a global price filled with cartels and shaky supply lines, investment in substitutes is not only prudent, but wise.

We don't have real markets when we deal with global supplies. Countries like China will gladly manipulate their currency to steal the "hot money" out of an economy and then lend it back to that economy. It has totally damaged our manufacturing economy and allowed republicans and democrats to borrow rather than tax what they spend.

We don't have strategic thinkers in Washington anymore. It is all about the who pays who off or the gotcha short term politics.

Ethanol will do quite well at these prices for oil without the subsidy. I do think it still needs to be blended with gas, by law if necessary, so that our country is not so easily bounced around by the mad men controlling the price of oil.

It seems neither party can put together economic floors to protect our industries from these global mad men. They either have to keep giving subsidies (don't get me started on the corn subsidies paid out to the very wealthy) when people don't need them anymore where they become another bottom line addition to profits for everyone including the wealthy at taxpayer expense or none at all.

In the mean time, the concentration of wealth in the country is at all time highs and getting more concentrated every day.

When will those in government see they have sold our country to the highest bidder? When it collapses? Didn't they just see how it happened in this, the longest recession since the Great Depression with no real end in sight?

Are these Congressmen just stupid or think we are to see them hide behind such ideological BS? Make them be as competent as China or other countries are in these global commodities.

A long term trade deficit, out of control fiscal deficits, concentration of wealth, and industries that leave the country is all we have been handed for the last 15 years. It hasn't helped the U.S. economy very much at all, has it? Can't we ask for just a little more competence than this?

Mike, I know you live in the land of hand outs. What do you think about all of this? Just a friendly discussion is all I am asking, not political BS.


Tex
 

hypocritexposer

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this bill would also end tariffs on foreign ethanol, like Brazilian. from what I understand it is sugar based vs. corn, is cheaper and less damaging environmentally
 

Tex

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hypocritexposer said:
this bill would also end tariffs on foreign ethanol, like Brazilian. from what I understand it is sugar based vs. corn, is cheaper and less damaging environmentally

Brazil has been a power house of a producer of many commodities because they cleared Amazon rain forest and introduced modern farming practices.

I guess your question could be whether clearing rainforest for ethanol from sugar is less damaging environmentally.

Sugar cane is just a grass that grows in tropical to subtropical areas that stores its energy in the form of sugar in its stalk. Maybe it is closer to swithgrass than corn (not the part that would be fermented for alcohol with current technology).

As the price of gas or oil goes up, so does the value of chopping rainforest to grow sugar cane.

All your rums come from sugar cane and your whiskeys from corn. Their fermentation is old technology.

I guess what I am asking is whether or not our legislators are smart enough with the (good-- yes I said it in parenthesis) programs they start to stop them when the subsidy part is no longer needed. It seems in ethanol they have not done that.

It doesn't mean ethanol subsidies were bad to get the industry started, but instead are being run incompetently by an incompetent Congress who can't figure these things out.

It didn't take too long in this discussion to come up with the natural parameters of the program to run it more competently--- mainly that you shouldn't have subsidies after the reason for the subsidy is gone due to market conditions. This was part of the reason the program was there in the first place--- to get us over that bridge.

I would like to see how much money the Congress saved in not paying subsidies to corn farmers because of ethanol and then how much the displacement of ethanol over gas decreased the price of gas in the U.S.

It seems the republicans in the article Mike put up were stuck on some ideological instead of practical parameters.

Republicans can not participate in starting programs like ethanol or medicare drug coverage and then because they didn't do correct oversight and the program gets out of control, to say government isn't the answer-----Maybe it is their competence or incompetence on the issue that is the problem in the first place.
Tex
 

Faster horses

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I don't have an opinion one way or the other. All I know is that
Flex Fuel where I live is $3.19/gal and gasoline is $3.79. I
don't think you get as much mpg with Flex Fuel, but for 60 cents
less per gallon it is more than worth it.

But I'm for whatever is best for our country in the long run.
 

Tex

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Faster horses said:
I don't have an opinion one way or the other. All I know is that
Flex Fuel where I live is $3.19/gal and gasoline is $3.79. I
don't think you get as much mpg with Flex Fuel, but for 60 cents
less per gallon it is more than worth it.

But I'm for whatever is best for our country in the long run.

You know, Faster horses, I think we all want what is best for the country.

My question is whether or not Congress is competent enough to do it or so partisan that they won't do it because of political reasons.



Tex
 

Red Barn Angus

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I don't think there is any question that ethanol is less efficient that gasoline. At those prices it would be about 15% cheaper. If you got 18 mph on straight gasoline, if you can find any, and you got 15 mpg on ethanol then you'd be paying more for ethanol. Less price isn't necessarily less expensive. Plus you are taking food and using it for fuel, thus driving up the price of food for all people. The only reason ethanol can be cheaper in price is the govt subsidy which is wrong. Plus the questionable amount of energy it takes to produce ethanol as compared with the amount of energy it delivers. I am not a fan of corn ethanol even though I do raise some corn. To me a better solution would be to produce our own oil that we already have and seem to not want to produce it. It is also frustrating that fuel pumps do not specify what it is that you are buying. I think pumps should have a sign indicating it they are pumping gasoline, ethanol or whatever. Some states may have that but Kansas and Missouri do not.
 

okfarmer

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Red Barn Angus said:
It is also frustrating that fuel pumps do not specify what it is that you are buying. I think pumps should have a sign indicating it they are pumping gasoline, ethanol or whatever. Some states may have that but Kansas and Missouri do not.

That actually surprises me as ethanol is reported to be hazardous to many small engines, at least the mechanics I have spoken with about my mower and atv.

Oklahoma labels all pumps with ethanol with the warning "may contain up to 10% ethanol", and it is NOT easy to find pure gasoline (for my small engines).
 

Tex

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Red Barn Angus said:
I don't think there is any question that ethanol is less efficient that gasoline. At those prices it would be about 15% cheaper. If you got 18 mph on straight gasoline, if you can find any, and you got 15 mpg on ethanol then you'd be paying more for ethanol. Less price isn't necessarily less expensive. Plus you are taking food and using it for fuel, thus driving up the price of food for all people. The only reason ethanol can be cheaper in price is the govt subsidy which is wrong. Plus the questionable amount of energy it takes to produce ethanol as compared with the amount of energy it delivers. I am not a fan of corn ethanol even though I do raise some corn. To me a better solution would be to produce our own oil that we already have and seem to not want to produce it. It is also frustrating that fuel pumps do not specify what it is that you are buying. I think pumps should have a sign indicating it they are pumping gasoline, ethanol or whatever. Some states may have that but Kansas and Missouri do not.

It also matters how much energy is taken out of gasoline or ethanol, not just whether or not it has a higher energy content than gasoline.

Red Angus, this article has some of your points in it:

http://pubs.ext.vt.edu/442/442-884/442-884.html


Fuel Ethanol

442-884

Zhiyou Wen, Extension Engineer, Biological System Engineering, Virginia Tech; John Ignosh, Area Specialist, Northwest District, Virginia Cooperative Extension; and Jactone Arogo, Extension Engineer, Biological System Engineering, Virginia Tech

As energy prices reach historic highs, there is a broad interest across the state in utilizing and producing renewable bioenergy from domestic agricultural products. Nationwide, it is expected that a 20 percent replacement of petroleum usage will happen over the next ten years. This is equivalent to 35 billion gallons of alternative fuel use by 2017, with fuel ethanol playing an important role in this transition. Fuel ethanol can be blended with gasoline (from 10 percent to 85 percent), and thus reduce the amount of gasoline used. In the United States, corn kernels are commonly used for producing fuel ethanol, and thus reduce the nation’s dependence on foreign oils. The purpose of this publication is to introduce the basics of fuel ethanol and answer questions regarding fuel ethanol.
Glossary

Gasohol – A mixture of gasoline and ethanol.

E10 – A gasohol blend of 10 percent ethanol and 90 percent gasoline, by volume

E85 – A gasohol blend of 85 percent ethanol and 10 percent gasoline, by volume

FFV (Flexible Fuel Vehicle) – A vehicle that can operate on any blend of up to 85 percent ethanol. If E85 is not available, the vehicle can operate on straight unleaded gasoline or any percentage of ethanol up to 85 percent.

VEETC (Volumetric Ethanol Excise Tax Credit) – A federal excise tax credit that was signed on American Job Creation Act of 2004 (JOBS Act) by President Bush.

DDGS – Corn Distillers Dried Grains with Solubles

Octane number – A measure of how well a fuel resists premature combustion (autoignition) or “knocking” in spark-ignition in internal combustion engines. Gasoline with too low of an octane rating converts fuel to heat rather than power, making for less efficient fuel usage and reduced engine life.

Oxygenate – A chemical that adds oxygen to the gasoline.
Engine warranty

Automobiles: Currently, all major automakers (General Motors, Ford Motor, DaimlerChrysler, Acura/ Honda, Audi, BMW, Hyundai, Infinti/Nissan, Isuzu, Jaguar, Kia, Land Rover, Lexus/Toyota, Mercedes- Benz, Mazda, Mitsubishi, Porsche, Roll Royce/Bentley, Saab, Saturn, Subaru, Suzuki, Volkswagen, and Volvo) approve the use of gasohol up to E10 under warranty for the vehicles they produce. The most recent automakers’ fuel recommendations are for their 2006 model vehicles, and the information can be accessed at http:// www.ethanolrfa.org/resource/facts/engine/documents/
2006AutoManufacturerFuelRecommendations04-18- 06.pdf.

Motorcycles: Major manufacturers of motorcycles (Harley-Davidson, Honda, Kawasaki, Suzuki, and Yamaha) approve the use of E10.

Small Engines: All mainstream manufactures of power equipment, snowmobiles, motorboats, and lawnmowers permit the use of ethanol blends up to E10 in their products. Generally, E10 unleaded can
be used anywhere that ordinary unleaded gasoline is used. However, due to the widely diversified products, always check the owner’s manual for specific information regarding the equipment.

FFV: FFVs produced from major automakers are guaranteed using ethanol blend up to E85. FFV owners do not have to fill up with E85 all the time because the vehicles can also run on regular gasoline, E10, or an ethanol blend between E10 to E85. To determine if your vehicle is an FFV, review http://www.e85fuel.com/ e85101/flexfuelvehicles.php.
Performance

Engine runs smoothly: Ethanol has a higher octane number (113) than regular unleaded gasoline (87) and premium unleaded gasoline (93). A higher octane number reduces the tendency for an engine to pre-ignite and knock; it runs more smoothly.

Complete combustion: Ethanol molecules contain 35 percent oxygen, and serve as an “oxygenate” to raise the oxygen content of gasoline fuel. Thus, it helps gasoline burn completely and reduces the build up of gummy deposits in the engine.

Prevent overheating: Ethanol burns cooler than gasoline, preventing engine valves from burning.

Antifreeze function: Ethanol has the ability to absorb water. Therefore, condensation in the fuel system is absorbed and does not have the opportunity to collect and freeze. Gas-line antifreeze is alcohol – usually methanol, ethanol, or isopropyl, which may be used at up to a 0.3 percent level in the car’s fuel tank. When E10 is used, it is able to absorb more water than a small bottle of methyl or isopropyl alcohol, therefore eliminating the need and expense of adding a gas line anti-freeze.

Energy content: As shown in Table 1, fuel ethanol contains around 33 percent less energy content than regular gasoline. The energy content of gasohol blends (E10 or E85) is determined by the energy content of ethanol and gasoline, and their ratio.

Engine power and fuel economy: The engine power and fuel economy are determined by the engine configuration, the efficiency of an engine, and volumetric energy content of the fuel used by the engine. For the same engine type and efficiency, the difference in fuel economy depends entirely on the volumetric content of the fuels. Due to the low energy content of ethanol (Table 1), E10 has approximately 2 percent lower mileage than regular gasoline. For example, a car averaging 30 miles per gallon (mpg) on gasoline would average 29.4 mpg when using E10. However, when using FFV running on E85, the mileage will drop significantly (10 percent to 15 percent lower than gasoline). A Consumer Reports article in the October 2006 issue reported on the poor fuel economy of FFVs fueled by E85. Currently, major automakers are optimizing their FFVs to run E85 more efficiently.



Table 1. Energy content of different fuels a,b

Fuel type


Ethanol


Regular gasoline


Premium gasoline


E10 gasohol


E85 gasohol

Energy content (BTU/gallon)


84,600


125,000
131,200

120,900


90,660
a BTU: British Thermal Unit
b Reference: Transportation Energy Data Book from Oak Ridge National Laboratory http://cta.ornl.gov/data/appendix_b.shtml.



Table 2. Fuel economy test of 2007 Chevrolet Tahoe a

E85


Fuel economy, mpg


Gasoline

7


City


9

15


Highway


21

13


150-mile trip


18

10


overall


14
a Consumer Reports (October 2006, ISSN: 0010-7174)



Volatility: Ethanol has a higher volatility than regular gasoline; therefore, its emissions increase slightly in warm weather due to evaporation.
Environmental benefits

Reducing tailpipe emissions: Fuel ethanol contains 35 percent oxygen; this assists gasoline in burning completely and significantly reduces smog and greenhouse gas emissions. Scientists at the U.S. Department ofEnergy Argonne National Laboratory have estimated a 12 percent to 19 percent reduction of greenhouse gas emissions carbon dioxide (CO2), methane (CH4), and nitrous oxide (N2O) when using an E10 blend (http:// www.ipd.anl.gov/anlpubs/1999/02/31961.pdf). Also, an E10 blend can reduce the emission of carbon monoxide (CO) by 30 percent, fine particle matter (PM) by 50 percent, toxins by 13 percent, and volatile organic compounds (VOC) by 12 percent (http://www.ethanolrfa. org/objects/documents/69/nec_whitten.pdf; NGGA)

It should be noted that ethanol increases the tendency of fuel to evaporate (be volatile) during warm weather. These slight increases in evaporative emissions from ethanol-blended fuel are more than offset by the greater reduction of CO, PM toxics, and VOC emissions due to the use of fuel ethanol. Additionally, reformulated gasoline in smog prone areas require refineries to manage the components in gasoline fuel to reduce the volatility of gasoline, specifically mandating that ethanol-blended fuels meet the same evaporative emissions standards as conventional gasoline.

Elimination of MTBE: MTBE (Methyl Tertiary Butyl Ether) is a compound derived from petroleum. It is an oxygenate additive for gasoline that causes it to burn completely. However, MTBE has serious problems, already having polluted ground water and possibly having carcinogenic properties. Ethanol can be used as an alternative oxygenate for MTBE and achieve the same combustion performance.

Safe in soils and ground water: Ethanol is nontoxic, water-soluble, and biodegradable; when spilled on land or in water, ethanol is quickly, safely, and naturally degraded. In addition, the presence of ethanol in gasoline proportionally reduces the presence of other toxic components originally contained in gasoline such as benzene and sulfur in the gasohol.
Energy balance

The energy balance for ethanol production refers to the energy used to grow and process the raw material into ethanol versus the energy contained in the ethanol itself. When cellulosic residues are used as raw materials, there is no doubt that ethanol production will have a strongly positive energy output. However, when cornstarch is used as a raw material, the energy balance is not conclusive. Since the early 1990s, a significant amount of research on the energy balance of corn-based fuel ethanol production has produced twoopposing viewpoints, positive energy balance and negative energy balance.

Positive energy balance: The mainstream conclusion is that ethanol has a positive energy balance, indicating that ethanol contains more energy than it takes to produce. This conclusion is supported by U.S. Department of Agriculture (USDA), Office of Energy Policy and New Uses U.S. Department of Energy, Argonne National Laboratory; Michigan State University, Colorado School of Mine; and the Institute for Local Self-Reliance.

In 2002, the USDA concluded that the net energy balance production is 1.35 to 1; in 2004, USDA updated this ratio to 1.67 to 1. Michael Wang from Argonne National Laboratory reported a 35 percent net energy gain. A Michigan State University study in 2002 found that ethanol produced from corn provided 56 percent more energy than is consumed during production. All those studies take into account the entire life cycle of ethanol production; including the energy used to produce and transport corn, the energy used to produce ethanol, and the energy used to distribute ethanol to the gas station.

The reason behind the net energy balance of cornderived ethanol is due to the fact that (1) the energy efficiency of agricultural production. U.S. agriculture uses about half the energy today to produce a bushel of corn today as was needed in the 1950s and (2) the increased production efficiency of an ethanol plant. Today’s ethanol plant produces 15 percent more ethanol from a bushel of corn, and uses 20 percent less energy in the process than five years ago. In addition, the co-products (e.g. distiller grains, gluten feed, corn sweeteners, etc.) are also created in ethanol production. This means not all the energy used by an ethanol plant is directed at producing ethanol, further improving the net energy balance of ethanol production.

Negative energy balance: Negative energy balance of ethanol production from corn has also been reported. Two major advocates of this position are David Pimentel of Cornell University and Tad Padzek of University of California, Berkeley. Both professors reported a negative energy balance for producing ethanol from corn. For example, a July 5, 2005, news release from Cornell University states, “Cornell ecologist’s study finds that ethanol and biodiesel from corn and other crops is not worth the energy.” (http://www.news.cornell.edu/ stories/July05/ethanol.toocostly.ssl.html). The website http://petroleum.berkeley.edu/patzek/index.htm alsocollects Professor Padzek’s arguments on the negative energy balance of biofuels.
U.S. fuel ethanol production

Driving force: High oil prices and energy security concerns are the major driving forces for boosting U.S. ethanol production. The United States is increasingly dependent on imported oil to meet personal, transportation, and industrial needs. The increasing domestic demand, the growing demands from China and India, the ongoing violence in the Middle East, and the occasional hurricane-caused disruption of oil production in the Gulf region, sent the oil price to historic highs (~$74/ barrel) during the summer of 2006. Currently, the U.S. imports 65 percent of its petroleum needs. The Energy Information Administration (EIA) estimates this ratio of imported petroleum will increase to 71 percent by 2025. Unfortunately, the Middle East owns two-thirds of the world’s known oil reserve. According to a 1989
study by the General Accounting Office, the U.S. has spent approximately $150 billion since 1968 in government subsidies to the oil industry. This does not include the money spent on military protection of Middle East oil supplies, which is estimated roughly at $50 billion per year since the turn of the century. These factors create a need to diversify the U.S. energy infrastructure with domestic production of renewable fuels.

Historical production: Figure 1 shows the U.S. fuel ethanol production from 1980 to 2005. Before 1991, the U.S. ethanol production was below 1 billion gallons. Since then, the production was relatively stable, maintainingtaining 1 to 1.5 billion gallons per year until 2000. Since 2000, the production has increased sharply. During the same period, the oil price also increased sharply.

bar chart Figure 1. Historic U.S. fuel ethanol production



Current production capacity: Based on the latest statistics (January 29, 2007) from the Renewable Fuel Association, ethanol production in 2006 was 4.9 billion gallons, the highest production in history. Currently, there are 111 ethanol refineries operated in 19 states, with a total 5.4-billion-gallon-per-year-production capacity. In addition to these existing plants, 76 new plants are under construction and the expansion of seven existing plants will add another 6 billion gallons of new capacity by the middle of 2009 (http://www.ethanolrfa.org/media/press/rfa/view.php?id=930). Figure 2 shows the locations of those refineries, the majority of those refineries are located in Midwest states.

World ethanol production: Brazil, the U.S., and China are the top three ethanol producers in the world. The ethanol production from these three countries accounts for 78 percent of worldwide ethanol production. Brazil was the biggest producer until 2005 when the U.S. exceeded Brazil and became the biggest producer. The top ten countries in terms of ethanol production are shown in Table 3.

Feedstock: Various sugar- and starch-based feedstock can be used for ethanol production, these include sugar cane, bagasse, miscanthus, sugar beet, sorghum, grain sorghum, switchgrass, barley, hemp,kenaf, potatoes, sweet potatoes, cassava, sunflower, molasses, whey or skim milk, corn, stover, grain, wheat, wood, paper, straw, and cotton. In the U.S., the primary feedstock is corn grain due to the favorable climate conditions for corn. In Brazil, sugar cane is the major feedstock.

Another group of feedstock which can be used for ethanol production is cellulosic materials, including various agricultural residues (e.g. corn stover, wheat straw), herbaceous materials (e.g., switchgrass) and woody materials (e.g., poplar wood).

US map Figure 2. U.S. ethanol refinery locations

Table 3. Annual ethanol production by top ten countriesa
Country 2004 2005
Brazil 3,989 4,227
U.S. 3,535 4,264
China 964 1,004
India 462 449
France 219 240
Russia 198 198
South Africa 110 103
U.K. 106 92
Saudi Arabia 79 32
Spain 79 93
Thailand 74 79
Worldwide 10,770 12,150
a Unit: millions of gallons; all ethanol grades
Reference: http://www.ethanolrfa.org/industry/statistics/#E
Incentive/tax benefit:

Renewable Fuel Standard (RFS): The Energy Policy Act (EPAct) of 2005 is comprehensive energy legislation that includes a nationwide Renewable Fuels Standard (RFS) that will double the use of ethanol and biodiesel by 2012.

Under the RFS, a small percentage of the nation’s fuel supply must be provided by renewable, domestic fuels including ethanol and biodiesel. EPAct ensures that the volume of renewable fuel blended into gasoline starts with 4.0 billion gallons in calendar year 2006 and nearly doubles to 7.5 billion gallons by 2012.

VEETC: The American Jobs Creation Act of 2004 (JOBS Act), which created the Volumetric Ethanol Excise Tax Credit (VEETC), replaces the previous federal ethanol excise tax credit. It allows a 51-cent refund for each gallon of ethanol blended with gasoline. For example, if ethanol is blended with gasoline at 10 percent (E10), blenders will receive 5.1 cents for each gallon of E10 sold.
Fuel ethanol in Virginia

Promotion program: Currently, the Virginia State Government provides the Biofuels Production Fund to producers of biofuels, specifically ethanol and biodiesel. A biofuels producer is eligible for a grant of $0.10 per gallon of pure biofuels sold in the Commonwealth from January 1, 2007 to January 1, 2017. To qualify, a biofuels producer must produce at least 10 million gallons of neat biofuels in the calendar year in which theincentive is taken. Each producer is only eligible for six calendar years of grants. The summary report can be accessed at http://www.eere.energy.gov/afdc/progs/ state_summary.cgi?afdc/VA.

In addition, the Hampton Roads Clean Cities Coalition (HRCCC, http://www.hrccc.org/) and Blue Ridge Clean Fuel Inc. (BRCFI, http://www.blueridgecleanfuels. org/) are two non-profit organizations that promote biofuel usage in Virginia.

Commercial producers: Currently, there are no commercial fuel ethanol producers in Virginia.

Distributors and retailers: The location of gas stations selling E85 can be found at http://www.e85refueling.com/.
Where to find additional information

The website of the Renewable Fuels Association (RFA) (http://www.ethanolrfa.org/) provides detailed information from ethanol basics to the most recent updates on the ethanol industry. RFA is the national trade association; it promotes policies, regulations, and research and development initiatives that will lead to the increased production and use of fuel ethanol. The membership of RFA includes a broad cross-section of businesses, individuals, and organizations dedicated to the expansion of the U.S. fuel ethanol industry.

The National Corn Growers Association (NCGA, http:// www.ncga.com/) is another advocate for fuel ethanol. The “renewable energy entities” on the NCGA website (http://www.ncga.com/GrowersResources/RenewableEnergy/ index.asp) is another source for ethanol fuel information.
World Wide Web resources

American Coalition for Ethanol http://www.ethanol. org

Renewable Fuels Association http://www.ethanolrfa.org

National Corn Growers Association http://www.ncga.com

National Ethanol Vehicle Coalition http://www.e85fuel.com/index.php

Department of Energy E85 Fleet Tool Kit http://www.eere.energy.gov/afdc/e85toolkit

Department of Energy Alternative Fuels Data Center http://www.eere.energy.gov/afdc/index.html

General Motors E85 Page http://www.gm.com/company/ gmability/environment/e85/index.html

Ford Motor Company Ethanol Vehicles Page http:// http://www.ford.com/en/vehicles/specialtyVehicles/environmental/ethanol.htm

E10 Unleaded http://www.e10unleaded.com

Governors Ethanol Coalition http://www.ethanol-gec.org

Ethanol Promotion & Information Council http://www.drivingethanol.org

Department of Energy Clean Cities Program http://www.eere.energy.gov/cleancities

Department of Energy National Renewable Energy Laboratory http://www.nrel.gov

Oak Ridge National Laboratory http://www.ornl.gov

National Corn-to-Ethanol Research Center http://www. ethanolresearch.com

Argonne National Laboratory http://www.anl.gov
Acknowledgements

The authors express their appreciation for the reviews and comments made by Robert Lane, Extension specialist, Virginia Seafood Agricultural Research and Extension Center; Robert Grisso, professor, Department of Biological Systems Engineering, Virginia Tech; and Percival Y.H. Zhang, assistant professor, Department of Biological Systems Engineering, Virginia Tech.



Reviewed by Jactone Arogo, Extension Specialist, Biological Systems Engineering

Virginia Cooperative Extension materials are available for public use, re-print, or citation without further permission, provided the use includes credit to the author and to Virginia Cooperative Extension, Virginia Tech, and Virginia State University.

Issued in furtherance of Cooperative Extension work, Virginia Polytechnic Institute and State University, Virginia State University, and the U.S. Department of Agriculture cooperating. Alan L. Grant, Dean, College of Agriculture and Life Sciences; Edwin J. Jones, Director, Virginia Cooperative Extension, Virginia Tech, Blacksburg; Jewel E. Hairston, Interim Administrator,1890 Extension Program, Virginia State, Petersburg.

May 1, 2009
 

Larrry

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Red Barn Angus said:
I don't think there is any question that ethanol is less efficient that gasoline. At those prices it would be about 15% cheaper. If you got 18 mph on straight gasoline, if you can find any, and you got 15 mpg on ethanol then you'd be paying more for ethanol. Less price isn't necessarily less expensive. Plus you are taking food and using it for fuel, thus driving up the price of food for all people. The only reason ethanol can be cheaper in price is the govt subsidy which is wrong. Plus the questionable amount of energy it takes to produce ethanol as compared with the amount of energy it delivers. I am not a fan of corn ethanol even though I do raise some corn. To me a better solution would be to produce our own oil that we already have and seem to not want to produce it. It is also frustrating that fuel pumps do not specify what it is that you are buying. I think pumps should have a sign indicating it they are pumping gasoline, ethanol or whatever. Some states may have that but Kansas and Missouri do not.

Would you take a new market for your beef if you could. I know I would. So I don't begrudge the corn farmers another market if they can. Higher corn prices willl only encourage more corn proiduction.
 

Red Barn Angus

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I don't begrudge the corn farmers a thing. They are only taking advantage of a situation presented to them as am I in a small way. I still think it wrong to use food for fuel. Especially when we have so many sources of oil that we are not utilizing. Higher food prices affect everyone and, fortunately, I will probably eat but some may not. I just think it is awful government policy. I enjoy higher beef prices as well but a person wants to consider all the input costs both in cattle and in corn before they get too excited.
 

Red Barn Angus

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I agree Mike. Doggone it, I was hoping but I suppose until we get rid of the dumbocrat majority in the Senate we will be able to accomplish little.
 

Faster horses

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when we drove to Canada and Alaska last fall we got 22 mpg consistently
with our Yukon. Here we get 18 mph on the highway (I know, not good)
and about 15 town and distance driving combined. We get 14 mpg with
E-85. I did find this:



If you have an FFV, depending on the area in which you live, E85 may be cheaper per gallon than gasoline, which could help economically offset the lower mileage performance. Some biofuel advocates argue that simple changes to the engine will increase mileage performance with E85 (see the Resources section). On the other hand, gasohol is more widely available, and if you have (or want) to reduce emissions in your area, it may be a good alternative with no significant impact to mileage performance.
 

hypocritexposer

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Faster horses said:
when we drove to Canada and Alaska last fall we got 22 mpg consistently
with our Yukon. Here we get 18 mph on the highway (I know, not good)
and about 15 town and distance driving combined. We get 14 mpg with
E-85. I did find this:



If you have an FFV, depending on the area in which you live, E85 may be cheaper per gallon than gasoline, which could help economically offset the lower mileage performance. Some biofuel advocates argue that simple changes to the engine will increase mileage performance with E85 (see the Resources section). On the other hand, gasohol is more widely available, and if you have (or want) to reduce emissions in your area, it may be a good alternative with no significant impact to mileage performance.



Everything is better in Canada. :wink: :lol:
 

burnt

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Larrry said:
Red Barn Angus said:
I don't think there is any question that ethanol is less efficient that gasoline. At those prices it would be about 15% cheaper. If you got 18 mph on straight gasoline, if you can find any, and you got 15 mpg on ethanol then you'd be paying more for ethanol. Less price isn't necessarily less expensive. Plus you are taking food and using it for fuel, thus driving up the price of food for all people. The only reason ethanol can be cheaper in price is the govt subsidy which is wrong. Plus the questionable amount of energy it takes to produce ethanol as compared with the amount of energy it delivers. I am not a fan of corn ethanol even though I do raise some corn. To me a better solution would be to produce our own oil that we already have and seem to not want to produce it. It is also frustrating that fuel pumps do not specify what it is that you are buying. I think pumps should have a sign indicating it they are pumping gasoline, ethanol or whatever. Some states may have that but Kansas and Missouri do not.

Would you take a new market for your beef if you could. I know I would. So I don't begrudge the corn farmers another market if they can. Higher corn prices willl only encourage more corn proiduction.

That is a major oversimplification of the corn-for-ethanol issue. It totally ignores the matter of a subsidy to one industry causing serious damage to another.

Usually any form of subsidy distorts international trade, but this time the damage in evident within national boundaries.
 

Larrry

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burnt said:
Larrry said:
Red Barn Angus said:
I don't think there is any question that ethanol is less efficient that gasoline. At those prices it would be about 15% cheaper. If you got 18 mph on straight gasoline, if you can find any, and you got 15 mpg on ethanol then you'd be paying more for ethanol. Less price isn't necessarily less expensive. Plus you are taking food and using it for fuel, thus driving up the price of food for all people. The only reason ethanol can be cheaper in price is the govt subsidy which is wrong. Plus the questionable amount of energy it takes to produce ethanol as compared with the amount of energy it delivers. I am not a fan of corn ethanol even though I do raise some corn. To me a better solution would be to produce our own oil that we already have and seem to not want to produce it. It is also frustrating that fuel pumps do not specify what it is that you are buying. I think pumps should have a sign indicating it they are pumping gasoline, ethanol or whatever. Some states may have that but Kansas and Missouri do not.

Would you take a new market for your beef if you could. I know I would. So I don't begrudge the corn farmers another market if they can. Higher corn prices willl only encourage more corn proiduction.

That is a major oversimplification of the corn-for-ethanol issue. It totally ignores the matter of a subsidy to one industry causing serious damage to another.

Usually any form of subsidy distorts international trade, but this time the damage in evident within national boundaries.

I did not defend the subsidy
 

Tex

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burnt said:
Larrry said:
Red Barn Angus said:
I don't think there is any question that ethanol is less efficient that gasoline. At those prices it would be about 15% cheaper. If you got 18 mph on straight gasoline, if you can find any, and you got 15 mpg on ethanol then you'd be paying more for ethanol. Less price isn't necessarily less expensive. Plus you are taking food and using it for fuel, thus driving up the price of food for all people. The only reason ethanol can be cheaper in price is the govt subsidy which is wrong. Plus the questionable amount of energy it takes to produce ethanol as compared with the amount of energy it delivers. I am not a fan of corn ethanol even though I do raise some corn. To me a better solution would be to produce our own oil that we already have and seem to not want to produce it. It is also frustrating that fuel pumps do not specify what it is that you are buying. I think pumps should have a sign indicating it they are pumping gasoline, ethanol or whatever. Some states may have that but Kansas and Missouri do not.

Would you take a new market for your beef if you could. I know I would. So I don't begrudge the corn farmers another market if they can. Higher corn prices willl only encourage more corn proiduction.

That is a major oversimplification of the corn-for-ethanol issue. It totally ignores the matter of a subsidy to one industry causing serious damage to another.

Usually any form of subsidy distorts international trade, but this time the damage in evident within national boundaries.


If one is to take your point, burnt, then one could say that the mideast oil cartels cause serious damage to all our industries (which it does).

We don't need a subsidy when the price of oil is so high that it drives up the price of corn. There is a point where this program should have been a floor subsidy only, and not a continual one that drives corn because of the subsidy, not the price of oil.

In other words, the subsidy is fine and may serve good policy goals when it is only paid when we have cheap oil coming out of the mideast (the govt. could buy the extra oil and put it in the nation's Strategic Petroleum Reserves). When oil is more expensive and it drives the value of corn over the costs of production, we shouldn't be paying the subsidy any more as the value of corn is ALREADY OVER the production costs.

Brazil had such a deficit of oil that it developed its own alcohol fuel based system and it worked. They didn't have to fight in the mideast to keep their fuel lines supplied or worry abut the next terrorist and what they might do to long world supply lines of energy. They used their cheap sugar to fuel their energy consumption.

Tex
 

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