Ethanol: "Dangerous, Delusional Bullshit"
Ethanol: Fails a Cost-Benefit Test Ethanol production in the United States has been steadily growing and is expected to continue growing. Many politicians see increased ethanol use as a way to promote environmental goals, such as reducing greenhouse gas emissions, and energy security goals. This paper provides the first thorough benefit-cost analysis of increasing ethanol use beyond four billion gallons a year, and finds that the costs of increased production are likely to exceed the benefits by about three billion dollars annually. It also suggests that earlier attempts aimed at promoting ethanol would have likely failed a benefit-cost test, and that Congress should consider repealing the ethanol tariff and the ethanol tax credit.
Abstract of a new research paper "The Benefits and Costs of Ethanol," by Robert W. Hahn and Caroline Cecot, both of the AEI-Brookings Joint Center for Regulatory Studies.
From Robert W. Hahn's editorial in yesterday's WSJ:
To hear the candidates tell it -- especially those on the stump in Iowa -- ethanol is the answer to America's energy-security woes. And back in Washington, politicians since 1978 have been putting your money where their mouths are: Ethanol is currently subsidized to the tune of 51 cents per gallon when blended with gasoline.
To make sure foreigners don't share the ride on the ethanol gravy train, moreover, Congress has imposed a 54-cent tariff on imported ethanol.
6 Comments:
The findings aren't surprising. Compared to oil-based fuels, ethanol has some properties that make it really difficult to ship (or pipeline, for that matter), which really adds to its costs.
Unlike oil, it's hydrophilic, which is a fancy word that means it easily mixes with water. That means whatever container it's shipped in has to be absolutely watertight, which makes them a lot more expensive to make. Oil, which we all know doesn't mix with water, doesn't have that problem.
On top of that, it's a really good solvent, which means that it dissolves stuff really well and can get contaminated really easily. Especially from the inside of a container that isn't maintained clean enough. As a shipper, you would have to maintain a dedicated fleet of ethanol containers or carriers that you couldn't really use for anything else.
The flip side of being a really good solvent is that ethanol is also really good at corroding things - that means you have to use special materials to line any of the components that might come in contact with it. This is really strike three against pipelines originating in the corn belt of the U.S., and that means that the distribution costs for ethanol will never be as low as that for oil as it will always require greater infrastructure costs.
Looking at unintended consequences, if you have a lot of people driving older cars (typically, poor people), odds are their engines and fuel systems won't have the ability to handle prolonged exposure to the stuff and will tend to wear out faster. Newer cars don't have the issue since they've been designed to handle it. For the poor however, you just made life a lot more expensive.
I probably shouldn't mention it doesn't produce as much power per gallon as oil, which means that you would need to use a lot more gallons of it to do the same things, or that the ethanol subsidies create huge distortions in the agriculture industry, which has resulted in many other crops, and not just corn, becoming more expensive....
Then again, if the U.S. was really serious and wanted to reduce the costs of producing ethanol to where it might be more feasible, there's a better way - one that reduces dependence on mid-east based oil, fights inflation, provides greater yields and promotes free trade.
But so far, subsidizing ethanol isn't really about any of these things....
US produced ethanol is projected to be 5.7 billion gallons in 2007 representing ~5% of gasoline consumption when blended.
EIA Data
Brazil has the capacity to export 2.2 billion gallons of ethanol.
Brazil's Export Capacity
Importing all of the Brazilian export capacity into the US is a drop in the bucket as far as US liquid fuels consumption is concerned.
US crude oil production inexorably declines year over year, Mexico has now slipped to 3rd place on the import list and is crashing fast. Tar sand production in Canada can barely keep up with declining US crude production and Mexican imports.
Ethanol (either domestic or foreign) is the equivalent of a band-aid on a severed artery and is not the solution to mid-east oil dependance.
It's hard to make someone understand what is in his narrow interest to not understand. That applies to people who see either their paycheck or votes at stack.
Brazil, by the way, isn't the fountain of ethanol it has been made out to be. Sugar cane is a very labor intensive crop in Brazil and field workers' health is suffering from cane related effects. A little bit of some field hand's life is in each gallon of Brazilian ethanol.
In his opinion piece (Ethanol’s Bottom Line – Nov 24) Robert Hahn tells much less than half of the story: By his own calculations the 51 cent per gallon subsidy for ethanol is an excellent bargain compared to the tax-payer subsidies for gasoline. Securing access to Middle Eastern petroleum is currently costing the taxpayer approximately $2.00 per gallon. Not to mention interest on the war debt or other tax breaks for the petroleum industry. Of course better technologies for producing ethanol from cellulose are rapidly emerging and should be “subsidized” heavily along with other forms of renewable energy. This will reduce our dependence on foreign oil and save U.S. tax payers trillions of dollars in costs to maintain a military presence in oil rich countries around the world.
Justin StormoGipson, MD
Coeur d Alene, Idaho
I agree with all that has been said about Ethanol as the future fuel....ethanol is "barking up the wrong tree":-).
The future of transportation energy is in electronic resources...the lithium-ion battery to the phosphate lithium-ion battery technology is growing daily from the cell phones, to hand tools, to cars driven with electric engines..the present battery can be recharged in a few hours by plugged in at home et al to a full charge...Mini Cooper technology places electric engines in the wheels...electric engine vehicles go faster, are stronger, and last longer than the present combustion engines...
Regardless of the naysayers - what are our options to fuel the vehicles of TODAY?
I drive less, and I will be looking to blend fuels myself with Ethanol mixes. Both of our vehicles are late model 4 cyl - that helps already.
Electric vehicles some say? What might your suggestions be to generate all of that power?? >crickets chirping< and how much COAL (yes, coal dear friends) would have to be burned to supply all that energy demand? Or maybe we could just construct a nuclear reactor in every other county in America....
And if I hear the word Hydrogen as a fuel alternative one more time I'm going to slap someone in the face with a wet trout.
Have a nice day and a better tomorrow.
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