Corn ethanol

iVillage Member
Registered: 02-19-2008
Corn ethanol
28
Wed, 05-06-2009 - 7:02pm

Democrats have loved ethanol for years, it is a green fuel. Republicans learned to love the high corn prices corn ethanol assured some constituants. Everyone was happy. Then today, I read the following story. Before posting the entire story, I've decided to post my favorite paragraph first.

"Ethanol is also bad for the environment. Science magazine published an article last year by Timothy Searchinger of Princeton University, among others, that concluded that biofuels cause deforestation, which speeds climate change. The National Oceanographic and Atmospheric Administration noted in July 2007 that the ethanol boom rapidly increased the amount of fertilizer polluting the Mississippi River. And this week, University of Minnesota researchers Yi-Wen Chiu, Sangwon Suh and Brian Walseth released a study showing that in California -- a state with a water shortage -- it can take more than 1,000 gallons of water to make one gallon of ethanol. They warned that "energy security is being secured at the expense of water security."

The article is at - http://online.wsj.com/article/SB124000832377530477.html

In September, ethanol giant VeraSun Energy opened a refinery on the outskirts of this eastern Iowa community. Among the largest biofuels facilities in the country, the Dyersville plant could process 39 million bushels of corn and produce 110 million gallons of ethanol annually. VeraSun boasted the plant could run 24 hours a day, seven days a week to meet the demand for home-grown energy.

But the only thing happening 24-7 at the Dyersville plant these days is nothing at all. Its doors are shut and corn deliveries are turned away. Touring the facility recently, I saw dozens of rail cars sitting idle. They've been there through the long, bleak winter. Two months after Dyersville opened, VeraSun filed for bankruptcy, closing many of its 14 plants and laying off hundreds of employees. VeraSun lost $476 million in the third quarter last year.

A town of 4,000, Dyersville is best known as the location of the 1989 film "Field of Dreams." In the film, a voice urges Kevin Costner to create a baseball diamond in a cornfield and the ghosts of baseball past emerge from the ether to play ball. Audiences suspended disbelief as they were charmed by a story that blurred the lines between fantasy and reality.

That's pretty much the story of ethanol. Consumers were asked to suspend disbelief as policy makers blurred the lines between economic reality and a business model built on fantasies of a better environment and energy independence through ethanol. Notwithstanding federal subsidies and mandates that force-feed the biofuel to the driving public, ethanol is proving to be a bust.

In the fourth quarter of 2008, Aventine Renewable Energy, a large ethanol producer, lost $37 million despite selling a company record 278 million gallons of the biofuel. Last week it filed for bankruptcy. California's Pacific Ethanol lost $146 million last year and has defaulted on $250 million in loans. It recently told regulators that it will likely run out of cash by April 30.

How could this be? The federal government gives ethanol producers a generous 51-cent-a-gallon tax credit and mandates that a massive amount of their fuel be blended into the nation's gasoline supplies. And those mandates increase every year. This year the mandate is 11 billion gallons and is on its way to 36 billion gallons in 2022.

To meet this political demand, VeraSun, Pacific Ethanol, Aventine Renewable Energy and others rushed to build ethanol mills. The industry produced just four billion gallons of ethanol in 2005, so it had to add a lot of capacity in a short period of time.

Three years ago, ethanol producers made $2.30 per gallon. But with the global economic slowdown, along with a glut of ethanol on the market, by the end of 2008 ethanol producers were making a mere 25 cents per gallon. That drop forced Dyersville and other facilities to be shuttered. The industry cut more than 20% of its capacity in a few months last year.

What's more, as ethanol producers sucked in a vast amount of corn, prices of milk, eggs and other foods soared. The price of corn shot up, as did the price of products from animals -- chickens and cows -- that eat feed corn.

Texas Gov. Rick Perry reacted by standing with the cattlemen in his state to ask the Environmental Protection Agency last year to suspend part of the ethanol mandates (which it has the power to do under the 2007 energy bill). The EPA turned him down flat. The Consumer Price Index later revealed that retail food prices in 2008 were up 10% over 2006. In Mexico, rising prices led to riots over the cost of tortillas in 2007. The United Nations Food and Agricultural Organization and other international organizations issued reports last year criticizing biofuels for a spike in food prices.

Ethanol is also bad for the environment. Science magazine published an article last year by Timothy Searchinger of Princeton University, among others, that concluded that biofuels cause deforestation, which speeds climate change. The National Oceanographic and Atmospheric Administration noted in July 2007 that the ethanol boom rapidly increased the amount of fertilizer polluting the Mississippi River. And this week, University of Minnesota researchers Yi-Wen Chiu, Sangwon Suh and Brian Walseth released a study showing that in California -- a state with a water shortage -- it can take more than 1,000 gallons of water to make one gallon of ethanol. They warned that "energy security is being secured at the expense of water security."

For all the pain ethanol has caused, it displaced a mere 3% of our oil usage last year. Even if we plowed under all other crops and dedicated the country's 300 million acres of cropland to ethanol, James Jordan and James Powell of the Polytechnic University of New York estimate we would displace just 15% of our oil demand with biofuels.

But President Barack Obama, an ethanol fan, is leaving current policy in place and has set $6 billion aside in his stimulus package for federal loan guarantees for companies developing innovative energy technologies, including biofuels. It's part of his push to create "green jobs." Archer Daniels Midland and oil refiner Valero are already scavenging the husks of shuttered ethanol plants, looking for facilities on the cheap. One such facility may be the plant in Dyersville, which is for sale. Before we're through, we'll likely see another ethanol bubble.

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iVillage Member
Registered: 02-19-2008
In reply to: postreply
Fri, 05-08-2009 - 2:08pm

A bridge fuel? Really? Could you direct me toward your oldest post referring to ethanol as a bridge fuel on this board?

I'd be interested to read it.

iVillage Member
Registered: 03-03-2009
In reply to: postreply
Fri, 05-08-2009 - 6:33pm

Here's the problem--the government (AND taxpayers) have subsidized fossil fuels. The real cost of using them is NOT what you pay at the pump. Think about Gulf War I, Iraq, the way we play footsie with dictators and military junta leaders in the Middle East (Saudi Arabia, Pakistan, Egypt) when they back our purposes (access to cheap oil). At the same time, our leaders make noises about "building democracies". Think about the hostility such actions have engendered in other peoples. For that matter, let us consider 9/11 itself. Had we not based our air ops in Saudi Arabia during GWI, would 9/11 have taken place?

And that's just a tiny bit of the geopolitical cost of oil. How about our building and construction practices? We've built ourselves building which are unlivable, for the most part, without very active (and energy dependent) HVAC systems.

Or how about sprawling metroburbs and their infrastructure--highways, sewer lines, power lines, developments, and the attendant disruption of ecosystems which previously were wet lands, farm fields, forests? Meanwhile, once-vibrant (and pedestrian-friendly) cities have rotted from the inside out. And believe me, the auto and fuel industries playing BIG roles in actively encouraging us to hop into a car--not on a bike, into a bus, trolley, or train.

The oil industry will do its damndest to avoid mentioning these factors and will instead yammer on about "our way of life" and other trite cliches which are meant to soothe as the vampire sucks again at our money, our environment, and our sense of gumption and courage.

BTW, that's what the whole dinking around with prices is meant to ensure--that real wealth will stay with the oil industry rather than any snippety little upstart with the temerity to buck the fossil fuel draculas. Anything comes along with real potential, fuel prices will drop SPECIFICALLY TO UNDERCUT ANY COMPETITION. Watch oil prices. Watch the oil lobby. Watch the messages of commercials. It's all there to see for anyone with the wit to fit the puzzle pieces together. Call the fossil fuel industries "monopolies" and you'll be much closer to the truth of what has happened in the so-called "private sector".

Jabberwocka

iVillage Member
Registered: 03-23-2003
In reply to: postreply
Fri, 05-08-2009 - 8:04pm

Ummm...you do realize that there are over 120,000 posts on this board?


iVillage Member
Registered: 03-03-2009
In reply to: postreply
Fri, 05-08-2009 - 9:28pm

You might be interested in this:


"The Obama administration took on the powerful farming interests in America's heartland today, making clear it does not see corn-based ethanol as part of the long-term solution to climate change.


The new proposals on the biofuel – in the face of intense pressure from agricultural companies and members of Congress from corn-growing states – were seen as the first test of Barack Obama's promise to put science above politics in deciding America's energy future.


Ethanol had once appeared to provide a transport fuel which did not increase carbon dioxide. But studies have suggested that the fuel needed to process the corn meant the ethanol could be more polluting than the fossil fuel it was meant to replace. Furthermore, the use of food crops for biofuel was blamed for a substantial part of the large price rises seen in 2008.


Administration officials set out a $1.8bn (£1.19bn) plan to develop a new generation of more environmentally-friendly biofuels that are not made from food crops and have a lower carbon footprint, while also providing an immediate bail-out of existing corn ethanol producers, which are suffering in the global economic crisis: falling petrol prices have undercut demand for ethanol at the pump.


Lisa Jackson, head of the Environmental Protection Agency, made clear she does not see corn-based ethanol as a permanent part of America's clean energy mix. "Corn-based ethanol is a bridge... to the next generation of fuels ," she said."


http://www.guardian.co.uk/world/2009/may/06/obama-ethanol-green-biofuel


Sort of nixes the whole thread premise. BTW, it didn't seem to me like you were self-quoting in reference to ethanol bridging between gasoline and next-generation fuels.

Jabberwocka

iVillage Member
Registered: 03-23-2003
In reply to: postreply
Fri, 05-08-2009 - 9:33pm

Okay, I spent about 20 minutes reading through old posts...and I couldn't find an exact 'bridge fuel' reference.


iVillage Member
Registered: 03-23-2003
In reply to: postreply
Mon, 05-11-2009 - 5:11pm

Thanks for that article!


iVillage Member
Registered: 02-19-2008
In reply to: postreply
Mon, 05-11-2009 - 8:09pm

No, the government has provided tax deductions for new fossil fuel exploration. This to encourage development of new fuel sources in the U.S.

The taxation of fossil fuels far exceeds any government incentive to find new fuel.

The situation with corn ethanol is completely reversed, government pays for corn ethanol by the gallon instead of taxing it by the gallon. Instead of paying $1 a gallon, ethanol makers get paid over half a buck a gallon. There is also a tax on external ethanol from Brazil to protect domestic ethanol production. This adds almost another $2 per gallon to our ethanol cost.

iVillage Member
Registered: 03-03-2009
In reply to: postreply
Mon, 05-11-2009 - 9:11pm

Huh?

You appear to be contradicting yourself in those first two paragraphs unless the "new fuel" refers to non-fossil fuel sources.

If that's the case, you appear to be arguing that the government OUGHT to back fossil fuels because of tax revenue in state and federal coffers. But as I pointed out before, we've spent massive amounts of money which have benefited the oil companies OR cleaned up after them. Net financial loss, NOT gain--or those oil companies would NOT have been reporting record profits last year.

Moreover, you're arguing against nonexistent adversaries on the corn-based ethanol issue:
--Obama doesn't support its production. http://messageboards.ivillage.com/n/mb/message.asp?webtag=iv-elinthenews&msg=15710.25
--I don't either. Would have thought my stance would be abundantly clear by now.

Jabberwocka

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