CARPE DIEM
Professor Mark J. Perry's Blog for Economics and Finance
Thursday, June 26, 2008
About Me
- Name: Mark J. Perry
- Location: Washington, D.C., United States
Dr. Mark J. Perry is a professor of economics and finance in the School of Management at the Flint campus of the University of Michigan. Perry holds two graduate degrees in economics (M.A. and Ph.D.) from George Mason University near Washington, D.C. In addition, he holds an MBA degree in finance from the Curtis L. Carlson School of Management at the University of Minnesota. In addition to a faculty appointment at the University of Michigan-Flint, Perry is also a visiting scholar at The American Enterprise Institute in Washington, D.C.
Previous Posts
- Warren Buffett Can Pay Higher Taxes Right Now
- Median Home Prices Have Risen 3 Straight Months
- Alaska's Governor Supports Drilling in ANWR, OCS
- The $10,000 Cowboy Boot
- Let's Not Deport the Tech Talent
- Free Trade Is Just Like Technology: They Both Lowe...
- Alaska vs. USA; and ANWR vs. USA
- 2001:Excessive Speculation Drove Oil Prices Down?
- Oil Prices Double, Futures Contracts Flat and Fall...
- Money-Making Speculators Must Stablize Markets; On...
22 Comments:
And now for the first time in recorded history a North Pole with no ice...
http://www.foxnews.com/story/0,2933,372542,00.html
Anon. 8:49,
I noticed the following passage from your link:
"At the end of last summer, the ice retreated to a record level when the Northwest Passage, the sea route through the Arctic, opened up briefly for the first time in recorded history"
Actually, the north west passage was free enough of ice to allow the historic voyage of the SS. Roch in 1942.
http://www3.bc.sympatico.ca/VE0NWP/MainPage.htm
Looking forward to seeing if the complete melting of the polar ice cap materializes or is just another overblown prediction along with intensification of tropical storms (which never materialized and has now been abandoned by the latest IPCC report) or 40 foot rise in sealevel (17 inches predicted by the latest IPCC report down from 36 inches in the previous report.
Scientists also predicted that 10 years after the mad cow outbreak in the UK that there would be between 15,000 - 100,000 cases of Kreutzfeld-Jakob, the human variant of mad cow, in the UK. We are past that the 10 years and still no plague in the UK or anywhere else in the world.
Saying it does not make it so.
"And now for the first time in recorded history a North Pole with no ice...
"...
Hmmm, then how does one explain the presence of arctic ice in these time stamped pictures?
Looking at the block diagram its yet another excellent example of the federal government attempting
social engineering through the tax code...
I mean would have bought a Prios if it hadn't been for the fact that taxpayers hadn't subsidized the purchase?
Subsidies? How much did that Iraq War cost, again? Oh, It's Not Over?
Efficiencies? I guess you'd go to the Marginal barrel, right? That would be the Tar Sands, wouldn't it?
Efficient? A gasoline-powered IC Engine achieves about 25%, at best.
Let's see what a properly tuned ICE running Ethanol is Capable of. 40%?!?
The "Tax Credit" on a gallon of ethanol is what? $0.45/gal?
And, Merril Lynch, and other analysts, say ethanol is Reducing the Price of a gallon of gasoline, How Much? $0.60/gal?
SO, here's the deal: We're using about 600,000 Barrels of home-grown ethanol/day. That's replacing about $20 Billion/Yr. in Middle-Eastern Oil, and saving us $0.60 gallon on our gasoline (by the way; how much would a barrel of oil increase in price if there was another 600,000 Barrels/Day added to the demand?
Price Supports on corn, and grains are Down $11 Billion.
268,000 Jobs. Income Taxes, Sales Taxes, etc.
Some corn ethanol plants are up to 4:1 LCA for their ethanol produced.
Clearly Mark, you need to, perhaps, study this a bit more.
"How much did that Iraq War cost, again? Oh, It's Not Over?"...
Funny thing but LIBERALS like rufus never seem to ask that question about the War On Poverty which is STILL going on 40+ years after it started and STILL hasn't accomplished nothing other than keeping bureaucrats feeding at the taxpayer financed trough...
Meanwhile unlike the so called war on poverty the War on Terror is Working...
Apparently 200+ years of attacks against American citizens by the Religion of Peace is merely something to ignore...
> And now for the first time in recorded history a North Pole with no ice... http://www.foxnews.com/story/0,2933,372542,00.html
=================
And now, for the umpteen-billionth time in history, a completely false allegation from the media in support of its faltering GW agenda.
=================
Let's start with this:
It will without doubt have come to your Lordship's knowledge that a considerable change of climate, inexplicable at present to us, must have taken place in the Circumpolar Regions, by which the severity of the cold that has for centuries past enclosed the seas in the high northern latitudes in an impenetrable barrier of ice has been during the last two years, greatly abated.
(This) affords ample proof that new sources of warmth have been opened and give us leave to hope that the Arctic Seas may at this time be more accessible than they have been for centuries past, and that discoveries may now be made in them not only interesting to the advancement of science but also to the future intercourse of mankind and the commerce of distant nations.
Sounds like it's talking about the above -- right?
The source:
President of the Royal Society, London, to the Admiralty, 20th November, 1817
Yes, *1817*
Frank, over at Varifrank, already dug out a nice picture of two US subs at the north pole... in May of 1987... and writes another of his wonderful rants about the idiocy of this claim.
And Frank points you to the article the above admiralty report comes from:
http://www.john-daly.com/polar/arctic.htm
An article about this claim written in 2000, the last time this hoary lie surfaced (The media figures the public's attention span/memory for such crap is about 8 years, but hasn't grasped the effectiveness of the internet in stimulating peoples' memories just yet)
John Daly's been dead for several years now, but, thanks to the web, he can still debunk recycled idiocies.
John Daly's site has been taken over by others, and still remains, despite his passing, as an excellent source (along with Greeniewatch as an effective source of anti-GW information to use as a check on the media BS (Greenie Watch has also jumped on this BS claim, and its refutation is the current topmost entry as I write this)
Since you may not want to read the moderately long Daly article, I thought I'd at least push this up for your consideration (emphasis mine):
The Skate found open water both in the summer and following winter. We surfaced near the North Pole in the winter through thin ice less than 2 feet thick. The ice moves from Alaska to Iceland and the wind and tides causes open water as the ice breaks up. The Ice at the polar ice cap is an average of 6-8 feet thick, but with the wind and tides the ice will crack and open into large polynyas (areas of open water), these areas will refreeze over with thin ice. We had sonar equipment that would find these open or thin areas to come up through, thus limiting any damage to the submarine. The ice would also close in and cover these areas crushing together making large ice ridges both above and below the water. We came up through a very large opening in 1958 that was 1/2 mile long and 200 yards wide. The wind came up and closed the opening within 2 hours. On both trips we were able to find open water. We were not able to surface through ice thicker than 3 feet.
Right. Apparently, there was open water at the north pole in *1958*. And note he said "both trips" -- Open water in winter as well as summer.
So much for "the first time in recorded history". The Daly article also has pix from a number of other polar expeditions.
Apparently, these "experts" are consulting their daughters' diaries for their "recorded histories" to which they refer.
"Oh, No! Santa Claus! He sank!!"
:-/
> Efficient? A gasoline-powered IC Engine achieves about 25%, at best. Let's see what a properly tuned ICE running Ethanol is Capable of. 40%?!?
Right. Except for one thing. Unless that ethanol was derived solely from waste biomass (i.e., corn shucks, stalks, etc.) IT WAS ALREADY CREATED USING A VERY FUEL INTENSIVE PROCESS.
Modern Ag uses a LOT of fuel to produce its food. Hence, to derive any "efficiency" for ethanol as a motor fuel, you also have to consider the fuel spent to produce it in the very first place (and yes, by all means, DO do the same for straight-up gasoline!!).
Follow the gasohol from the seed to the tailpipe, including processing and transport costs for both the ethanol and the base gasoline, vs. the same for just gasoline.
Unless it's from waste biomass (which needs to be disposed of anyway) it's blatantly obvious that the total fuel cycle for ethanol-based fuels SUCKS. The energy "savings" are negative.
Yes, there are other considerations -- like the money staying in the USA, the enhanced employment) but these are also cut down by the fact that THAT SURPLUS IS USED TO FEED THE WORLD'S HUNGRY.
So intead of feeding people, we get to drive our cars.
Hmmm...
Hmmm...
Feed people...
Drive cars...
Which is more moral?
I dunno.
You tell me.
You can't make decisions -- or justifications -- based on some little subset of the problem.
They poo-poo the phrase "The End Justifies the Means".
Actually, it DOES, by definition.
But you have to consider all the ends, not just those you personally want to consider.
If you want to pull out of Iraq, for example, you can be a self-centered ASS and say "Screw the Iraqis!". Me, I think they are going to be royally F***ed up the A** if we don't make certain that Iraq is reasonably stable by the time we get out of there. The result is likely to be a massacre that will make Darfur look like a quilting bee.
So, even IF you don't agree that we should have been there in the first place, you have to be a Real Grade-A self-centered DICK to not grasp that, having gone there, having removed the existing power structure, we OWE the Iraqis a measure of our help in restoring a valid, effective, and competent power structure, at least as long as they want that help and are contributing substantially towards that end.
And it's obviously to our long term benefit to do so -- a stable, relatively benign democracy in the Arab world would do absolute wonders towards changing the nature of the Middle East, and the power base used to promote Wahabbism and other Islamofascist memes.
It's not the only thing to be done, but it's a damned good start.
I really don't care if you don't think it can be done. Just stay the F*** out of the way of those who are doing it.
And yes, the cost is worth it. One nuclear weapon on NYC, or Chicago, or LA or Miami or DC will more than obviously cost a HELL of a lot more than this war could hope to cost from start to end.
We've already eliminated the chance that Saddam will provide some terrorist group with one of those. So the war's expense has been paid for already in savings of both lives and money.
Hey OBloodyHell, get some!
Nothing like slapping the clueless back to reality...:-)
Rufus - A "Liberal?"
Jeez, Looize :)
chuckling
O Bloody one, I supported the war from the first; and, I still do. But, the war was/is fought to protect Saudi oil. Nothing else. We didn't go into N. Korea to "Save" all those poor, starving Koreans, did we?
You know next to nothing about agriculture, or ethanol production. It takes 8 gallongs (or less) of diesel (or biodiesel) to grow 151 bushels of corn, which yields 435 gallons of ethanol, and gives back about 2,700 lbs. of high-protein cattle feed.
BTW, that's what "field corn" is. Cattle feed. Poor people don't eat field corn. Poor Cows eat field corn. And, then, they're eaten by RICH PEOPLE.
You need to stick with what you know. If you don't know anything, go Learn something.
Oh, and Thanks for the Great Picture of the 3 Subs at the North Pole. I'd never seen it. It's a Classic.
> O Bloody one, I supported the war from the first; and, I still do. But, the war was/is fought to protect Saudi oil. Nothing else. We didn't go into N. Korea to "Save" all those poor, starving Koreans, did we?
This is a simplistic perception of a complex geopolitical situation.
You might, perhaps, consider the last time the USA approached the northern border of North Korea with armed forces.
China, exceedingly nervous, counterattacked across that border (they happen to own the other side of it, capisce?) and we came REMARKABLY close to having the Cold War go Hot. A few million degrees hot. There are sources which indicate that, on the QT, we were closer to a hot war then than we were during the Cuban Missle Crisis.
We have relatively cordial relations with China. My presumption is that China has made it clear that they will keep The Little Gargoyle in check, just stay out of NoKo. And this claim is bolstered by some interesting travel events by "TLG" into China, something he wasn't known for doing.
Iraq, on the other hand, had no such protector, and represented a much more immediate threat than Iran. Regardless of the presence or absence of actual weapons (for which there is some evidence to support that they were removed or hidden prior to the invasion), it has been established by others (notably Duelfer, who is hardly a Bush admin policy shill) that Saddam was within 90 days of mass production of one bioweapon (anthrax or botulin, I forget which), and 6 months of another (the other of those two). It's also likely that he would have nukes by now, his programs were distinctly further along than Iran's.
Further, Iraq's populace is much better educated and thus was more likely to be responsive to moving their society forward to a modern, civilized state.
So, of the three, Iraq was far and away the best choice to send a clear message that we aren't about to ignore nations which support terrorist activities.
> You know next to nothing about agriculture, or ethanol production. It takes 8 gallongs (or less) of diesel (or biodiesel) to grow 151 bushels of corn, which yields 435 gallons of ethanol, and gives back about 2,700 lbs. of high-protein cattle feed.
> BTW, that's what "field corn" is. Cattle feed. Poor people don't eat field corn. Poor Cows eat field corn. And, then, they're eaten by RICH PEOPLE.
Really? Then explain, please, the otherwise mysterious world-wide rise in food prices, to the point where some of the poorer nations have had riots over these prices?
Also, when you're citing something specific like that, feel free to identify your sources -- because they thoroughly disagree with mine.
Here's one out of Cornell (emphasis mine):
Abstract Energy outputs from ethanol produced using corn, switchgrass, and wood biomass were each less than the respective fossil energy inputs. The same was true for producing biodiesel using soybeans and sunflower, however, the energy cost for producing soybean biodiesel was only slightly negative compared with ethanol production. Findings in terms of energy outputs compared with the energy inputs were: • Ethanol production using corn grain required 29% more fossil energy than the ethanol fuel produced. • Ethanol production using switchgrass required 50% more fossil energy than the ethanol fuel produced. • Ethanol production using wood biomass required 57% more fossil energy than the ethanol fuel produced. • Biodiesel production using soybean required 27% more fossil energy than the biodiesel fuel produced (Note, the energy yield from soy oil per hectare is far lower than the ethanol yield from corn). • Biodiesel production using sunflower required 118% more fossil energy than the biodiesel fuel produced.
Being honest, there are disagreeing sources:
We show that corn ethanol is energy efficient as indicated by an energy output:input
ratio of 1.34.
In any event, I believe the jury is still out on the value of corn for making gasohol.
As far as what sources of biomass are being used:
Expert Calls Biofuel 'Crime Against Humanity'
Mind you, I'm not a big fan of presuming competence of those working for the UN, but this jibes already with what I've heard elsewhere. So some people, who ought to know, certainly seem to be under the impression that the corn used is not just "feed corn".
And, while I'm not IN the Ag business, I've had connections with it going back into the 80s, and, back then, long before "ethanol fuels" became a publicly visible term, it was acked that mechanized food production in the USA is and has been, for a long time, a high-energy process.
I'm sure this has improved since then, but I'm equally sure that it's still an energy-intensive process. And I find it very hard to believe that mechanized corn-ethanol production, from seed to pump, is as efficient as you suggest, at "8 gallons or less". Maybe that's what is required to run the harvester. If so, it ignores the energy required to fertilize (and to make the fertilizer, not cheap), apply pesticides, water (not insignificant by any means) and transport to market, to reprocess said corn to ethanol, and to mix and transport the ethanol to the gas station.
"Rufus - A "Liberal?""...
Hmmm, you mean people other than liberals consider something (anything for that matter) from the Environmental Defense Fund as credible?
Regarding your ethanol comment (ethanol does have potential but its not useful everywhere), if ethanol is such a good deal why does it need the taxpayer to help prop it up?
I do have a question about this statement rufus: "SO, here's the deal: We're using about 600,000 Barrels of home-grown ethanol/day. That's replacing about $20 Billion/Yr. in Middle-Eastern Oil, and saving us $0.60 gallon"...
Is there a misplaced decimal point in there somewhere?
Maybe I'm misunderstanding something here because that looks to be somewhere in the neighborhood of $3300+ per barrel (20,000,000/600,000) and I'm thinking that's not such a great savings...
Juandos, 600,000 X $100/barrel (actually, our imported oil last month was running $96.00; but, it's rising fast) = $60 Million/day X 365 = $21.9 Billion.
Bloody One, Corn Plus in Winnebago, Mn uses 17,000 btus of nat gas to produce one gallong of ethanol. Add in approx 6,000 btus of nat gas to make the fertilizer, and dry the seed corn, and you have approx. 23,000 btus of nat gas plus a little less than 1,000 btus of diesel to plant, cultivate, and harvest the corn (I'm applying 40% of the nat gas used to make the fertilizer, and seed corn, and 40% of the diesel back to the ddgs.)
This 23,000 btus of nat gas + the 1,000 btus of diesel will, in a twenty or thirty percent blend, virtually replace 116,000 btus of gasoline. I make that out to be a little better than 4.5:1 LCA EROEI. probably better than the Tar Sands, and a heck of a lot more sustainable.
Those old figures from Pimental have been totally discredited. Even the Oil Companies don't bother quoting them any longer.
"Juandos, 600,000 X $100/barrel (actually, our imported oil last month was running $96.00; but, it's rising fast) = $60 Million/day X 365 = $21.9 Billion"...
That clarifies the problem rufus, thank you...
> Those old figures from Pimental have been totally discredited.
Pimental has reports going back to 1991 which may have been discredited. That link is to a much more recent study (2005, IIRC), one I doubt if it's been "discredited" already (link, please, if you feel otherwise, which specifically addresses his figures vs. more positive ones)
I also have to ask the obvious, along with juandos. If the stuff is so cost-effective, why does it need heavy subsidization? I could see it needing such 15-20 years ago, but there seems to be little reason to justify the recent substantial expansion of price supports for ethanol. There are also enough government pool vehicles to create an adequately sized "base" demand without having to directly subsidize it for the Rest Of Us.
And this is a mostly digressing aside, but I seem to recall that, since ethanol sucks up moisture like a sponge, it has issues with collecting water, and thus attendant issues with seals, corrosion, and related mechanical problems.
Bloody one, I think it was 05' (it might have been 03') that Pimental stated that after having studied all of the hybrids on the market he had concluded that 2.7 gal/bu was the theoretical limit for how much ethanol you could get out of a bushel of corn. And, I suppose he was right. For a couple of days.
Of course, the next thing you know Monsanto had some New Hybrids on the market, and today some of the newer refineries are getting 2.96 gal/bu.
This is just One, itty-bitty example of the folly of this type of study. Many plants are starting to "gassify" their syrup with fluidized-bed reactors. This cuts their nat gas usage in half. Others are using "waste" biomass in their process energy mix.
They have to be "supported" for a while longer because they're dependent upon an industry that hates them (the oil industry) for their distribution. The price subsidies, however, are starting to get whittled away. This is something I'm in favor of.
> Others are using "waste" biomass in their process energy mix.
Where this process is using waste biomass, I'm all in favor, as long as it once more shows itself to be at least close to efficient using a whole-fuel-cycle model (i.e., the expense of collecting and transporting the waste, as well as processing it, is at least in the viscinity of than that created for later use), such codicils allowed because one may balance dependence on foreign sources, etc., with such an additional expense).
I'd be a lot more interested in a local-site model for reprocessing such, because if you had small plants on larger farm areas which you shoved the waste biomass into, then only transported the fuel (or a higher energy-density precursor) your efficiencies would be better.
> Bloody one, I think it was 05' (it might have been 03') that Pimental stated that after having studied all of the hybrids on the market he had concluded that 2.7 gal/bu was the theoretical limit for how much ethanol you could get out of a bushel of corn. And, I suppose he was right. For a couple of days.
I'd prefer a citation which directly addressed this. Nothing personal, but
a) I've seen too many outright liars, who, when asked for a source for their information can't seem to come up with anything at all.
b) Equally important, I've seen too many people who take assertions made by certain organizations with a clear axe to grind as indisputable, despite the fact that they're among the first to whine if, say, Exxon even provided 25% financing towards an opposing study. For some people, the Envirolobby is a bunch of incorruptible archangels, while Exxon & their ilk are Beelzebub personified. Hence, I like to know who you're quoting.
Not to call YOU a liar, by any means -- I just prefer to know where the "facts" are coming from solely because in most debates, there ARE liars. And you could just be mistaken, too. As stated, I cannot possibly refute your claims, because I have no knowledge of who said it or what information they used to argue in favor of it.
;-)
Ya gotta make me work, eh, O Bloody One? Fair enough; Here is an analysis, performed fairly recently, that shows a range of yield for Wet, and Dry Mill Plants.
You will notice that the range for Dry Mill (the most common) Plants is 2.62 gal/bu (this is, basically, very old plants,) to 2.96 gal/bu (the newest plants.)
Bloody One, I'm not representing that Everyone who uses bad (old) statistics to criticize ethanol is a charlaton. It's just that the industry is changing at an astounding pace. Anything written a year ago is outdated. Anything written, or based on something written, in 2003 is describing an industry of the past.
p.s. A company that's cut its nat gas usage in half is Corn Plus, of Winnebago, Mn. I'll drop a link later for some other refineries that have adopted the same process. There are tens of other process improvements including fractionation, removing the corn oil, etc. I'll hold off on those till later.
Chou.
Post a Comment
<< Home