Thursday, June 16, 2011

The Geography of Ethanol Support and Why Corn Ethanol is Doomed Without Taxpayer Dollars


From the Percolator Blog:

"Today the Senate voted 73-27 in favor of repealing a $6 billion tax credit for ethanol producers. The measure would end a 45-cent-per-gallon tax credit for ethanol refiners and a tariff of 54 cents per gallon on imported ethanol. The bill’s passage may be a pleasant surprise — ethanol is, after all, not so great for the environment. But which senators voted in favor of the tax credits is all too predictable (see maps above, click to enlarge)."


"A broad bipartisan majority of the Senate voted Thursday to end more than three decades of federal subsidies for ethanol, signaling that other long-sacrosanct programs could be at risk as Democrats and Republicans negotiate a sweeping deficit-reduction deal. The tax breaks, which now cost about $6 billion a year, had long been considered untouchable politically because of the power of farm-state voters and lawmakers. Iowa's role as the site of the first presidential caucuses has further elevated the political potency of the biofuel. 

Presidential hopefuls made a quadrennial ritual of going to Iowa and pledging to support the tax breaks, tariffs and mandates that supported production of ethanol motor fuels from corn. This year, however, some Republican presidential candidates have pointedly refused to endorse ethanol tax breaks. Thursday's vote doesn't by itself doom federal support for the corn ethanol industry. The House is expected to reject the repeal as unconstitutional because tax bills must originate in that chamber, and the White House opposes it. But the 73-27 vote signals that once-unassailable programs could be vulnerable."

MP: Paul Gigot of the WSJ pointed out a decade ago that "ethanol is produced by mixing corn with our tax dollars." Hopefully, given the reality of our worsening fiscal situation, the Senate vote today signals that taxpayer funding of ethanol will eventually end, and ethanol will have to survive on its economic and scientific merits.  Simply put, without tax dollars, the current political-motivated recipe for producing so much corn ethanol is doomed.   

65 Comments:

At 6/16/2011 11:21 PM, Blogger Rufus II said...

You're Way behind the political curve, here, Prof. This amendment to a bill that is unlikely to pass is a place-holder for the Thune/Klobuchar Bill.

The Thune/Klobuchar Bill, also, eliminates the $0.45/gal Tax Credit (VEETC,) and the $0.54 Import tariff on foreign ethanol.

It is Also SUPPORTED by the entire Ethanol Lobby, including all of the farm-state Senators.

You see, the VEETC goes to the Blenders (re: Oil Companies.) The Farmers, and Biorefiners don't get squat from it. It was thrown in as a sop to the oil companies when the RFS was passed.

Wholesale ethanol was selling on the CBOT for about $2.62, today, and, at that price, everyone in the chain makes money. By the end of the year it will probably be closer to $2.10 - $2.15/gal.

The only ones that really take any kind of a hit on this are the guys trying to market E85. They're in for another tough year, or two.

Everyone else in the industry is tired of taking heat over a subsidy that was going to someone else, and are glad to see it gone.

 
At 6/16/2011 11:32 PM, Blogger randian said...

You see, the VEETC goes to the Blenders (re: Oil Companies.) The Farmers, and Biorefiners don't get squat from it.


That's economically ignorant. The subsidy to blenders increases the price they can afford to pay for ethanol.

 
At 6/16/2011 11:34 PM, Blogger Rufus II said...

A lot of horse-trading got done in the last couple of days. To get an idea of the politics you have to look at who the swing votes were today, and how they swung between the Feinstein amendment that passed (with a lot of votes that went against the identical Coburn amendment, yesterday,)

and the McCain amendment (against blender pump infrastructure) that didn't.

The main thing the ethanol lobby wanted to save was some help for a nascent cellulosic industry. Also, they retained a little (very little in reality) support for Blender pumps, and infrstructure.

 
At 6/16/2011 11:38 PM, Blogger Rufus II said...

I'm just an ignorant hick.

Of course, I'm also cognizant that the oil companies have no choice, what with the RFS, and all. The ethanol industry has built out to exactly match the RFS (more or less.)

Also, they've been exporting ethanol to Brazil for over a year.

 
At 6/16/2011 11:39 PM, Blogger Rufus II said...

And, Europe.

 
At 6/16/2011 11:52 PM, Blogger DL said...

I was surprised that as many as 73 senators voted to end the subsidy.

Would be nice if we could end ALL farm subsidies, but that seems pretty far-fetched.


(specifically with regard to ethanol, I doubt that many of the “greenies” know that it takes 1700 gallons of water to produce one gallon of ethanol).

 
At 6/17/2011 12:00 AM, Blogger Rufus II said...

But, only 49 of that 73 voted for the identical emendment the day before, or for the McCain amendment a few minutes later.

Don't be naive. The Deal was Done. Everyone was free to vote for their anti-ethanol sponsors on that bill. It was a freebie.

Sausage-making at work.

 
At 6/17/2011 12:05 AM, Blogger Rufus II said...

96% of the corn that's used for ethanol is Not irrigated, and a good refinery uses about 2.5 gallons of water to produce a gallon of ethanol.

It takes a bit more than that to produce oil, and then gasoline. By a few thousand times, I'd say. And, then there's gasoline from tar sands bitumen; you probably don't want to go there.

 
At 6/17/2011 12:28 AM, Blogger Cabodog said...

My bad; thought they'd hijacked your story! Sorry Mark.

 
At 6/17/2011 10:10 AM, Blogger Randy Degner said...

It's unlikely that the VEETC will be repealed this year. The senate vote was purely cosmetic. However, it's unlikely to matter much as both the ethanol and biodiesel tax credits are set to expire at the end of the year anyway. In the debt-conscious environment in Washington, they are very unlikely to be renewed.

We should note however, that simply eliminating the tax subsidy (which all oil companies pass directly to their customers in the form of a cash rebate, by the way) will not make ethanol go away. The 2007 renewable fuels legislation MANDATES a growing volume of ethanol and biodiesel to be produced and consumed each year. Getting rid of this costly and counterproductive mandate is the only way to get rid of ethanol in gasoline and get corn back where it belongs...in the stomachs of hungry people.

 
At 6/17/2011 10:55 AM, Blogger Rufus II said...

Hungry people don't eat field corn.

Hungry Cows eat field corn,

and are, then, eaten by Rich people.

 
At 6/17/2011 1:29 PM, Blogger Andrew said...

He obviously didn't mean directly. Field corn is used in countless food-related processes. Plus, fields that grow corn for ethanol purposes could be used to grow other things. You just sound butt-hurt.

 
At 6/17/2011 1:37 PM, Blogger juandos said...

"Hungry people don't eat field corn.

Hungry Cows eat field corn,

and are, then, eaten by Rich people
"...

Again the rufus leaves out most of the reality steps...

Hungry chickens, what about them?

Hungry hogs, what about them?

The reverse of UN’s disastrous “oil for food” program: Ethanol uses 40% of US Corn Crop

 
At 6/17/2011 1:44 PM, Blogger Rufus II said...

:)

Nope, not at all.

I am an ethanol supporter, but I'm totally agnostic about the Blenders' Credit, and Tariff.

Iowa, Nebraska, Indiana, Illinois, S. Dakota, Ohio et al were growing field corn a long, long time before anyone heard of ethanol, and if ethanol goes away tomorrow, they'll still be growing corn there 10 years from now.

The only difference is, There are not, now, any direct, counter-cyclical subsidies ( there used to be, and they were quite high ) but, if the ethanol business went away, you better believe the subsidies would be back.

No, when it comes to this bill I'm just a bemused observer.

 
At 6/17/2011 1:47 PM, Blogger Rufus II said...

And, then, Juandos leaves out the part where we get 50% of that 40% back in the form of distillers Dried Grains.

:)

 
At 6/17/2011 1:50 PM, Blogger Rufus II said...

You do realize, Juandos, that that "hog feed" used to be Heavily Subsidized by YOU, right?

And, that it Is Not, anymore?

 
At 6/17/2011 1:54 PM, Blogger Bruce Hall said...

All things being equal except the subsidies... the EPA mandate to use ethanol in gasoline [10% going to 15%] not being rescinded... it would seem that the cost burden shifts from the general taxpayer pool to the fuel users directly.

After all, if the subsidies actually do reduce the cost of ethanol that goes into the gasoline, then a cost increase for ethanol plus the percentage increase in the mix should result in higher gasoline prices [unless, of course, if ethanol producers suddenly become more "efficient."

What we have here is another government unfunded mandate which is ultimately funded by people who have little say in the matter.

 
At 6/17/2011 2:01 PM, Blogger Rufus II said...

Bruce, even with today's very high (but, rapidly falling) corn prices, Wholesale Ethanol is $0.30 LESS than Gasoline.

Ethanol sells for less than Gasoline at least 95% of the time.

And, That IS before any subsidies are deducted.

 
At 6/17/2011 2:27 PM, Blogger Ron H. said...

"Ethanol sells for less than Gasoline at least 95% of the time."

But, without even questioning your numbers, does it sell for enough less to make up for the lower energy density of ethanol?

 
At 6/17/2011 2:37 PM, Blogger Rufus II said...

At this moment, Ron, it doesn't (not w/o the blenders' credit.)

You need a 15% discount. So, with wholesale unleaded at $2.90/gal you would need an ethanol price of $2.46/gal. We're about $0.16/gal over that at present.

I would imagine that we should cross the 15% threshold around the middle of Summer.

 
At 6/17/2011 2:40 PM, Blogger Rufus II said...

Of course, as I've said before, we saw what happened to gasoline prices when a million bbls/day of Libyan crude went off-line.

What would happen if we took a like amount of ethanol off-line?

 
At 6/17/2011 2:41 PM, Blogger juandos said...

"And, then, Juandos leaves out the part where we get 50% of that 40% back in the form of distillers Dried Grains"...

On what planet rufus?

"You do realize, Juandos, that that "hog feed" used to be Heavily Subsidized by YOU, right"...

Again on what planet rufus?

You know the answer to both those questions rufus, its called planet 'crony capitalism'...

I know a handful of 'hog ranchers' here in eastern Missouri who aren't seeing dime one from Uncle Sam...

 
At 6/17/2011 2:43 PM, Blogger juandos said...

"What would happen if we took a like amount of ethanol off-line?"...

Less 'crappy quality' gasoline coming out of the pumps?

 
At 6/17/2011 3:04 PM, Blogger Rufus II said...

Juandos, if you don't know about DDGS, and their replacement ability then you really don't understand the first thing about the whole ethanol business.

Juandos, do you really think farmers could raise corn, and sell it to hog farmers for $2.00 - $2.50 bu? Really? When farmers were selling $2.00 corn to the hog farmers the U.S. Gubmint (YOU) was subsidizing that corn to the tune of about $1.00/bu.

By the way, you were also subsidizing that corn that was sold to those Japanese, and Korean Hog Farmers, for the same amount.

 
At 6/17/2011 4:17 PM, Blogger juandos said...

"uandos, do you really think farmers could raise corn, and sell it to hog farmers for $2.00 - $2.50 bu? Really?"...

Yes rufus it can and does happen...

The range is actually a bit closer to $3/bu but not $3 or more per bu...

 
At 6/17/2011 4:34 PM, Blogger Rufus II said...

Juandos, $3.00/bu might, barely, cover seed, fertilizer, and rent. And, farming is about a heck of a lot more than seed, fertilizer, and rent.

 
At 6/17/2011 4:41 PM, Blogger Bill said...

How would the voting pattern in congress change (if at all) if, on issues like this, ethanol, etc. each member were placed behind a “veil of ignorance” such that no member knew which district in which state he/she represented?

 
At 6/17/2011 4:44 PM, Blogger Rufus II said...

Corn Support Payments were over $8 Billion in, ITIW, 2006. Last year I believe they were zero.

If ethanol went away, those counter-cyclical payment Would be back.

 
At 6/17/2011 4:48 PM, Blogger Rufus II said...

I'll put it this way, Bill; the supporters of Coburn's amendment have received $24 Million in Campaign Donations from the oil companies, hog farmers, meat processors, and other anti-ethanol interest groups.

With Senators, you gotta "cherchez le moolah." Those statewide campaigns are expensive.

 
At 6/17/2011 5:52 PM, Blogger Ron H. said...

"You need a 15% discount. So, with wholesale unleaded at $2.90/gal you would need an ethanol price of $2.46/gal. We're about $0.16/gal over that at present."

So, you are putting up numbers to show that ethanol is cheaper than gasoline, but based on the cost per mile, it isn't, so you are being dishonest.

You should check your numbers again in any case. The energy density of ethanol is 2/3 that of gasoline, so if gas is $2.90/gal, ethanol must be 2/3 of that, or $1.93/gal to be the same price per mile, and less than that to be called cheaper.

 
At 6/17/2011 6:04 PM, Blogger Ron H. said...

"What would happen if we took a like amount of ethanol off-line?"

Do you mean the same percentage or the same actual amount? One million bbl/day is more than the total US production of ethanol.

 
At 6/17/2011 6:46 PM, Blogger Rufus II said...

No Ron, I'm not being dishonest. Why would an old, broken-down, retired fart from Ms bother?

Energy Density (btus) is only half the equation. The other half is Octane (Ethanol is 114,) and burn characteristics. To make it simple, due to the oxygen atoms in the molecule you can compress the whey out of it. Thus, you can make it yield more power.

You can get many more miles per btu with ethanol than you can with gasoline (in an advanced engine.) That's why the X-Prize winner was an E-85 car. As was the winner of this most recent competition.

Anyways, we're getting out in the weeds. Suffice it to say, in a normal, fairly late model car you can expect to give up about 1.5% Mileage with E10 vs straight gasoline.

As for how much we save as a result of having ethanol in the marketplace competing with gasoline, the Study I linked earlier gave a number of $0.89/gal.

Again, consider what would happen to the price of gasoline if we didn't have the equivalent of 20 million cars running on ethanol.

What price would it take to bring demand/supply into equilibrium if we increased demand 800,000 bbl/day in the U.S., and/or 1.5 Million bbl/day, globally?

 
At 6/17/2011 9:53 PM, Blogger VangelV said...

All alternative energy schemes are doomed in their current form without massive subsidies. That said, there is no political will to end them at this time.

 
At 6/18/2011 2:27 AM, Blogger Ron H. said...

"No Ron, I'm not being dishonest. Why would an old, broken-down, retired fart from Ms bother?"

I don't know why you would bother, just like I don't know why you bother to promote a losing proposition like ethanol in the first place, that is only available due to government support and mandates. It is dishonest to compare prices per gallon without compensating for energy density.

"Energy Density (btus) is only half the equation. The other half is Octane (Ethanol is 114,) and burn characteristics."

As I'm sure you're aware, the octane rating of a fuel is a comparison of its anti-knock characteristic when compared to a mixture of isooctane and heptane.

In other words, it's a measure of how quickly it burns. The higher the octane rating, the slower it burns, thus allowing a higher compression ratio. This can, indeed, provide more power, but you will use more fuel doing it. There is no free lunch.

"You can get many more miles per btu with ethanol than you can with gasoline (in an advanced engine.) That's why the X-Prize winner was an E-85 car. As was the winner of this most recent competition."

You should probably refresh your knowledge of physics. A BTU is a BTU, and measures the same amount of energy no matter what the source. You will get 1.5 times as many BTUs per gallon from gasoline as from ethanol. This is not in question.

As it takes a certain amount of energy to move your car down the road one mile, you will need 1.5 times as much ethanol as gasoline to do it.

An advanced engine doesn't change physics as we know it, and isn't pertinent to this discussion, as none are currently available in large enough numbers to make any difference. Consider engines that are widely available now.

"Anyways, we're getting out in the weeds. Suffice it to say, in a normal, fairly late model car you can expect to give up about 1.5% Mileage with E10 vs straight gasoline."

No, we're not out in the weeds. This is an important point. You have presented prices per gallon that compare apples to oranges, and ignored the glaring problem with them.

Your claim of a 1.5% loss of mileage is overly optimistic. Do you have a credible reference for that?

 
At 6/18/2011 7:27 AM, Blogger VangelV said...

No, we're not out in the weeds. This is an important point. You have presented prices per gallon that compare apples to oranges, and ignored the glaring problem with them.

Your claim of a 1.5% loss of mileage is overly optimistic. Do you have a credible reference for that?


There is something else being missed here. That is the net energy return. Even if we accept some of the very bad assumptions for ethanol we see a very low energy return for the process. If I use the energy equivalent of a gallon of gasoline to produce ethanol that contains the energy equivalent of 1.1 gallons of gasoline each 1,100,000 gallons of ethanol production only yields 100,000 gallons of new fuel.

 
At 6/18/2011 1:29 PM, Blogger Rufus II said...

Your newer cars (some of them, anyway) will utilize more EGR (lessens the amount of fuel required, and, effectively raises compression) to get basically the same mileage on ethanol as on gasoline.

Look, a chocolate bar, or a twig of grass contains btus. But, you can't burn them in an ICE.

It's been proven time, and again that you can get more miles per btu from ethanol than from gasoline. It's, as you said, the burn characteristics.

As for EROEI, it's a loser argument, but, as of right now we are, if counting ALL inputs, using about 30,000 btus of nat gas, and 4,000 btus of diesel to produce 76,000 btus of ethanol. In the future most of those input btus will come from lignin (left over from the cellulosic companion plant.)

 
At 6/18/2011 1:35 PM, Blogger Rufus II said...

the overall winner of the EcoCAR: The NeXt Challenge was an extended-range electric vehicle using E85 designed and built by a team of Virginia Tech University. They awarded second place to another E85 EREV from Ohio State. For the DOE, ethanol was a huge winner.

The contest is important as it is a joint government and industry challenge to re-engineer a GM-donated vehicle to minimize the vehicle’s fuel consumption and emissions, while maintaining its utility, safety, and performance. The Virginia Tech team achieved the equivalent of nearly 82 miles per gallon—a 70 percent improvement in fuel efficiency over the stock vehicle. They did it using 85 percent ethanol as the conventional fuel.


Another Eco-Challenge - Another Winner

 
At 6/18/2011 2:55 PM, Blogger randian said...

The ecoCar is pointless. It's not a vehicle you'd actually want to drive.

 
At 6/18/2011 4:46 PM, Blogger juandos said...

"Juandos, $3.00/bu might, barely, cover seed, fertilizer, and rent"...

Rent?!?! Rent what?

 
At 6/18/2011 4:57 PM, Blogger Ron H. said...

"Your newer cars (some of them, anyway) will utilize more EGR (lessens the amount of fuel required, and, effectively raises compression) to get basically the same mileage on ethanol as on gasoline."

As I said, you need to learn some physics, and perhaps some automotive engineering also. You have this wrong.

First the physics: It takes an exact amount of energy to perform some amount of work. there is more energy in a gallon of gasoline than in a gallon of ethanol - period. If you believe differently, go look it up & come back when you understand it.

Look here for a good place to start. Check the references provided for more.

You can have more power or less fuel consumption, but not both at the same time. There is no magic at work here. There are no magical 200 mpg carburetors.

While you can improve efficiencies to some extent, so that more of the fuel used is actually doing something useful, most of these improvements have already been made. The characteristics of an ICE impose limits on that efficiency, and modern technology has come about as close to those limits as is practical. Future improvements in MPG will almost certainly come from lower power engines and smaller cars, perhaps at the expense of safety.

-continued-

 
At 6/18/2011 4:57 PM, Blogger Ron H. said...

Now, about the EGR: I'm assuming you mean Exhaust Gas Recirculation. The process recirculates exhaust gases into the combustion chamber, primarily to lower cylinder temperature, to prevent the formation of oxides of nitrogen which occur at high temperatures, especially when the air/fuel mixture is lean, as the lower amount of fuel provides less cooling. As an added benefit, recirculating exhaust gas provides a leaner mixture, and helps burn fuel more completely.

There are definite limits to how lean a fuel mixture can be, so when you write "use more EGR", I'm not sure what you mean - and I'm not sure you do either. As for "effectively raises ompression", It does no such thing.

As I'm sure you're aware, the EGR system only operates at a constant cruising speed. It is closed for acceleration, deceleration, at sustained high speeds, and at an idle, so that the air fuel mixture is sufficient for the demands of those operations.

"Look, a chocolate bar, or a twig of grass contains btus. But, you can't burn them in an ICE."

But you seem to think they can be cooked and distilled into a viable motor fuel, with a positive energy balance.

"It's been proven time, and again that you can get more miles per btu from ethanol than from gasoline. It's, as you said, the burn characteristics."

No, it hasn't been proved over and over, and I only explained what octane rating means. Let's see your proof. Please don't point to sites that produce or advocate for ethanol.

"As for EROEI, it's a loser argument, but, as of right now we are, if counting ALL inputs, using about 30,000 btus of nat gas, and 4,000 btus of diesel to produce 76,000 btus of ethanol."

I would love to see your evidence for this also. your numbers fly in the face of everything we know about ethanol production.

"In the future most of those input btus will come from lignin (left over from the cellulosic companion plant.)"

In the future we will all beam ourselves from place to place like they did in Star Trek.

What is practical in the near future? Are you really recommending we return to inefficient fuels like wood and straw? What then will we do for animal feed? That's another suggested use for this byproduct, isn't it? And what should be done with the resulting ash?

You might want to consider more carefully what you are advocating rather than just believing the promotional material from those who stand to gain from taxpayer subsidies and government mandates, and couldn't remain in business if exposed to the real market that decided 100 years ago that ethanol isn't a viable motor fuel.

 
At 6/18/2011 5:39 PM, Blogger Ron H. said...

"The ecoCar is pointless. It's not a vehicle you'd actually want to drive."

Oh, you're such a MEANIE for introducing reality to the discussion. :)

 
At 6/18/2011 6:08 PM, Blogger Craig said...

That's economically ignorant. The subsidy to blenders increases the price they can afford to pay for ethanol.

The blenders have to buy the ethanol. The federal government requires 10% of gasoline to consist of it. This does, certainly, make it more profitable, but it's a payoff to the oil companies for their trouble.

 
At 6/18/2011 6:38 PM, Blogger Rufus II said...

Juandos, "Rent" is the value of the land if you rented it out. Even if you own the land outright it's a consideration.

 
At 6/18/2011 6:41 PM, Blogger Rufus II said...

Ron, that would all be true if you were "Converting" that latent energy 100%. But, You're Not. An ICE on gasoline only achieves somewhere in the range of 25% efficiency. An ICE on E85 can achieve over 40% efficiency. It's all about how you can make it burn, and utilize the energy that's produced.

 
At 6/18/2011 6:44 PM, Blogger Rufus II said...

You keep telling me to look stuff up. I already have. You can use more EGR with Ethanol. And, most of our driving Is done at "cruising" rpm.

 
At 6/18/2011 6:54 PM, Blogger Rufus II said...

your numbers fly in the face of everything we know about ethanol production.

Ron, you Don't Know anything about ethanol production. I've posted the numbers many times, including this site. A good dry grind plant, such as one of Poet's) will use about 23,000 btus of nat gas per gal/ethanol produced. Your fertilizer will be in the range of 4,000 btus of nat gas. Diesel for farming, transporting corn, transporting ethanol by train will come out to about 4,000 btus. Some electricity will be used on the farm, and a few btus will be involved with the seed, etc.

Genera, and Inbicon are running their plants with lignin, now. Dupont's Blackhawk, Poet's Project Liberty, and Abengoa's Hugoton, Ks operation will be full-sized plants (approx. 25 Million gal/yr,) and they will all start construction this summer, and fall.

 
At 6/18/2011 7:02 PM, Blogger Rufus II said...

Animals don't eat lignin, Ron. They would starve to death. However, the ash does return nutrients to the soil. We used to burn our wheat stubble, and we got an extra couple of bu/acre the next year. I don't think they'll let you do that anymore.

But, whether you're using corn kernels, or stover, there is an edible by-product that Is fed to the livestock. In fact, in the case of corn, the Distillers Grains are a much more nutritious feed, higher in protein, than the corn kernel. After all, the only thing you've used to make ethanol is the starch.

Don't just repeat back the Saudi/Exxon-sponsored tripe from Fox News, and John McCain. Think for yourself. We were producing over 13 Billion Gallons of Ethanol last year, and corn was selling for about 7, or 8 cents/lb.

 
At 6/18/2011 7:22 PM, Blogger VangelV said...

As for EROEI, it's a loser argument, but, as of right now we are, if counting ALL inputs, using about 30,000 btus of nat gas, and 4,000 btus of diesel to produce 76,000 btus of ethanol. In the future most of those input btus will come from lignin (left over from the cellulosic companion plant.)

Only studies funded by the ethanol lobby and the idiots in Congress make claims like these. If the return were that high there would be no reason to subsidize ethanol.

 
At 6/18/2011 7:37 PM, Blogger Rufus II said...

Yeah, that's right Vange.

The Subsidy is going away. All of the ethanol lobbies, and the corn state Senators are supporting bringing the Subsidy to an end.

The only reason they're supporting Thune/Klobuchar instead of the amendment that just passed is Thune/Klobuchar save a small amount of funding for "Cellulosic" ethanol, and a very small amount for blender pumps.

The Subsidy (the $0.45/gal Blender credit) is History. It be gone.

 
At 6/18/2011 7:52 PM, Blogger VangelV said...

The Subsidy is going away. All of the ethanol lobbies, and the corn state Senators are supporting bringing the Subsidy to an end.

No they are not. Talk is cheap. Action matters. When the subsidies end and the mandates are stopped the domestic ethanol industry will die.

 
At 6/18/2011 7:59 PM, Blogger Rufus II said...

Vange, look at the co-sponsors on the Thune/Klobuchar Bill. They're all Corn State Senators.

You can have your own opinion, but you can't have your own facts.

All of the Ethanol Organizations have issued statements supporting said bill.

The VEETC goes to the Blender (oil co.,) not the biorefinery, or farmer. It was never anything more than a sop to the oil companies.

It be gone. And, the ethanol industry will be fine.

 
At 6/18/2011 9:10 PM, Blogger randian said...

The VEETC goes to the Blender (oil co.,) not the biorefinery, or farmer.

How is the blender keeping all that subsidy? Answer, they can't. Whichever blender uses part of their subsidy to pay extra for ethanol gets the business. In general, the blender won't benefit at all so long as there is competition among bidders for ethanol. All of it ends up in the refinery or farmer's hands. It's really a subsidy for farmers, not blenders.

This is the same phenomenon seen in things like subsidies for "energy efficient" home improvements. You don't think any of that benefits the homeowner, do you? If the government subsidizes the homeowner to the tune of $1500, the contractor will raise his price $1500. It's really a contractor subsidy, not a homeowner subsidy.

Corn states are happy to give up the direct cash subsidy because they're getting a back door subsidy, one less visible to a potentially angry voter: the 15% minimum ethanol mandate. Since there's no way they can satisfy that supply, prices will necessarily go up.

 
At 6/18/2011 9:36 PM, Blogger VangelV said...

Vange, look at the co-sponsors on the Thune/Klobuchar Bill. They're all Corn State Senators.

You can have your own opinion, but you can't have your own facts.


The vote to end the ethanol subsidies was lost.

The White house supports a bill crafted by the ethanol lobby. That means that the subsidies will continue one way or another and that all of the claims are just a smoke screen that hides the reality.

 
At 6/18/2011 9:37 PM, Blogger VangelV said...

Corn states are happy to give up the direct cash subsidy because they're getting a back door subsidy, one less visible to a potentially angry voter: the 15% minimum ethanol mandate. Since there's no way they can satisfy that supply, prices will necessarily go up.

The pro-ethanol groups and individuals love to pretend that mandates are not subsidies. Both need to be ended and ethanol needs to compete on its own merits.

 
At 6/18/2011 9:40 PM, Blogger Rufus II said...

You have no clue what you're talking about. Actually, most of the subsidy gets passed on to the consumer. Virtually all of it in E10, less of in E85.

There is no E15 Mandate. The "Obligated" Parties (usually, blenders) must use a certain amount (basically comes out to a bit less than 9% this year.)

E15 has been approved for model year 2001, and newer cars, but there's nothing "Mandatory" about it.

 
At 6/18/2011 9:45 PM, Blogger Rufus II said...

Actually, Vange, the Feinstein Amendment passed.

 
At 6/18/2011 9:50 PM, Blogger Rufus II said...

The mandates have to stay. There is no way on God's Green Earth that the oil companies would blend ethanol if they weren't forced. Exxon owns Oil Fields, not Corn Fields.

There's no way to know for sure how much the price of gas at the pump would jump if you removed 900,000 bbl/day of ethanol from the market; but the odds are it would be substantial.

 
At 6/18/2011 9:53 PM, Blogger Ron H. said...

"An ICE on E85 can achieve over 40% efficiency. It's all about how you can make it burn, and utilize the energy that's produced."

You keep talking of hypothetical conditions and lab experiments. In the real world, things work differently, and aren't nearly as simple as you would like to pretend. Gasoline engines can be made to run at 40% thermal efficiency also. Diesel engines can run even more efficiently at up to 50%. Gas turbines, jet engines, and rockets are highly efficient also. What do you think you can actually use to power everyone's car with? Keep in mind the theoretical limit of 73% for any heat engine, due to the temperature difference you can actually obtain.

Here are some facts you can't get around with promising sounding predictions from ethanol producers:

1. Current flex-fuel engines cannot be optimized for ethanol, and will always get worse mileage on ethanol than gasoline.

2. Since #1 is true, you must adjust for energy density when you discuss the relative prices of the two fuels.

3. There are currently 254 million vehicles in this country , most burn gasoline because it is abundant, cheap, and efficient for most general uses.

You CANNOT power anywhere near that number on ethanol alone, as there is no possibility of supplying the necessary amount by any known combination of means at this time. The scale required makes it impossible, whether it is due to land use limits, or other resources required that would have be diverted from other uses. We have been over this before.

So you cannot optimize ICEs for ethanol use, as there will be vast amounts of gasoline required for the foreseeable future. It would be easier and more practical to increase the compression ratio of gasoline engines or use diesel, which is even more efficient.

You haven't yet mentioned synthetic ethanol, but many of your favorite ethanol sites do. Maybe even you realize what a boondoggle that is. If you're going to use something else like natural gas as a fuel, Why not just use it directly rather than converting it into ethanol? Also, for those concerned about CO2 emmisions, and I'm not one of them, synfuels produce huge amounts of CO2 as a byproduct.

Based on your comments, I'm not yet convinced you understand how an EGR system operates. Keep in mind that the ideal air/fuel mixture for gasoline is 14.7:1, while that of ethanol is 9:1.

All in all, you are backing a losing proposition with hopeful and naive measurements that use unrealistic numbers and assumptions, without considering the realities. It might be fun to think about but it won't work.

If ethanol were a good idea, it would already be a widely used fuel without government involvement.

You can't point to experimental cars and Indy race cars, and say "Oh, look what we can do with ethanol." It doesn't translate to the real world. Just because something CAN be done, doesn't mean it SHOULD be done.

 
At 6/18/2011 10:18 PM, Blogger Rufus II said...

Ron, stoich is not 14.7 with E85 (Oxygen atoms, rmember.)

The Buick Regal 2.0L Turbo with DI, and VVT gives up about 10% on E85 (but turns out a bunch more horsepower.) When fitted with the coming Delphi Heated Injectors it should be down close to zero. It all depends on the engine, and the valve timing.

If you call $4.00/gal cheap more power to you. I'd just as soon be paying $2.81 (today's E-85 price at Kum and Go in Iowa.)

The DOE reports enough "waste" biomass in the U.S. to produce at least 80 Billion Gallons/Yr//ethanol. Of course, we don't need nearly that much since, as you correctly pointed out we will have a considerable amount of gasolione till well into the future.

 
At 6/18/2011 11:58 PM, Blogger randian said...

There is no E15 Mandate.

Not yet, but Congress is gearing up to make one. As I said before, that's why the corn states are going along with getting rid of the cash subsidy, they expect to get E15 in return. E15 will be more lucrative for them, and less visible, than cash subsidies.

 
At 6/19/2011 2:41 AM, Blogger Ron H. said...

"Ron, stoich is not 14.7 with E85 (Oxygen atoms, rmember.)"

No, it's closer to 9:1. You aren't reading carefully. this means more fuel by weight is needed if you are using E85.

Your claimed octane rating of 114 for E85 is incorrect. Even the Iowa RFA number of 100-105 is wrong. Actual engine tests have resulted in calculated octane ratings - (R+M)/2 - of 94 to 96. a little better than premium gasoline, but not enough to allow high compression ratios.

"If you call $4.00/gal cheap more power to you. I'd just as soon be paying $2.81 (today's E-85 price at Kum and Go in Iowa.)"

As always, you continue to play fast and loose with the numbers.

I don't believe you can pay as much as $4/gal anywhere in IA right now, and at the same Kum & go station (is this also a quick service whorehouse?) you can get unleaded gas for $3.55/gal. That makes E85 more expensive when you compensate for lower gas mileage.

This is in Iowa, where you are swimming in ethanol, and distribution costs are minimal. What about AZ, CA, FL or ME or other states where distribution has a significant cost? In the greater Phoenix area, for example, where there are all of 8 stations selling E85, the price is about the same for E85 and unleaded gas.

If you want to be taken seriously, you need to start using real numbers instead of making things up. Of course if you do that, you may not have much of an argument.

 
At 6/19/2011 9:12 AM, Blogger VangelV said...

The mandates have to stay. There is no way on God's Green Earth that the oil companies would blend ethanol if they weren't forced. Exxon owns Oil Fields, not Corn Fields.

That is a huge subsidy. If Exxon is forced to pay whatever it takes and there are barriers on foreign ethanol the corn lobby gets to clean up. Which is why it supported the so-called changes.

There's no way to know for sure how much the price of gas at the pump would jump if you removed 900,000 bbl/day of ethanol from the market; but the odds are it would be substantial.

No. Blending is a cost to the oil companies and there is gasoline that can be imported at a lower cost. Costs would go down, not up.

 
At 6/20/2011 1:40 PM, Blogger bruce said...

coal oil is a better fuel than ethanol because it has more btu's per gallon plus it burns cleaner.the air force is building a plant in alaska to use as fuel for it's planes.

 
At 6/20/2011 1:42 PM, Blogger bruce said...

burning your food is always a bad idea.

 

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