Ethanol from corn...What they're not telling you.

Good, I'm thrilled that corn prices are going up. I want to see corn farmers become rich men. Maybe that pig farmer should grow corn instead. There are farms in Massachusetts that are just hanging by a thread. Corn grow up here so this could be a good high-cash crop.

E85, ethanol fuel will solve all our problems. The Federal Tax on gasoline should be doubled and any taxes on ethanol should be eliminated.

Jabberwocky said:

Good, I'm thrilled that corn prices are going up. I want to see corn farmers become rich men. Maybe that pig farmer should grow corn instead. There are farms in Massachusetts that are just hanging by a thread. Corn grow up here so this could be a good high-cash crop.

E85, ethanol fuel will solve all our problems. The Federal Tax on gasoline should be doubled and any taxes on ethanol should be eliminated.

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E85 will create more problems than it will solve. The ERoEI of nearly 1:1 is not going to work.

The government pays ethanol producers 51 cents a gallon! It also slaps a 50 cent a gallon tax on ethanol from Brazil!

But not on oil......from Venezuela!

No, they won't help with your wood stove!

Strange........

As far as hemp, one of the main reasons the government is scared of it....well, it's a long story. But they don't want people who are laid back and generally happy. It does not make for a good worker class. They want people who tow the line, wake up early and climb over each other for the next buck.

The actual historic reason for hemp being illegal is more of the same as we see right now. Turns out the users were mostly mexican and black. The southwest states lobbied the US government to make it illegal because:

"after the Mexican Revolution of 1910, a flood of Mexicans immigrated to the United States and introduced recreational marijuana use. A public misconception that Mexicans and other minorities committed violent crimes while under the influence of marijuana, which caused many states to criminalize marijuana, was promoted by Harry J. Anslinger's media interviews, faulty studies, and propaganda films that claimed marijuana caused violent, erratic, and overly sexual behavior.

In the 1930s, marijuana was targeted on a federal level with the passage of the Uniform State Narcotic Act, the Marijuana Tax Act, and the creation of the Federal Bureau of Narcotics. DuPont and William Randolph Hearst played a role in the criminalization of marijuana, as hemp was threatening their company's respective products."

So Dupont didn't want natural products competing with his chemicals, and folks didn't want mexicans (and black) enjoying themselves. The same forces exist today.

I would guess that hemp could provide some nice bio pellets and logs.....after the other parts of the plant have been used.

As far as smoking the stuff, that's up to the individual. Certain personalities seems to fit better with it, and others do not. I remember being in Jamaica when I was 18 and there it is generally smoked only by males. "It makes me crazy" was a typical comment from the women. I remember a watershed article years ago in Rolling Stone explaining why my generation stopped smoking the stuff (largely). I thought the article was pretty accurate.

It said that when we were teens and smoked the stuff, we looked at the dog and thought it was funny.
But now, we were the Dog! The idea being that at first it provided an escape from ourselves, but now it made us more self conscious and perhaps paranoid. Certainly that is not true for all, but the article obviously reflected the feelings of many.

Sandor said:

Jabberwocky said:

Good, I'm thrilled that corn prices are going up. I want to see corn farmers become rich men. Maybe that pig farmer should grow corn instead. There are farms in Massachusetts that are just hanging by a thread. Corn grow up here so this could be a good high-cash crop.

E85, ethanol fuel will solve all our problems. The Federal Tax on gasoline should be doubled and any taxes on ethanol should be eliminated.

Click to expand...

E85 will create more problems than it will solve. The ERoEI of nearly 1:1 is not going to work.

Click to expand...

Here is a link to read to really understand the reality about ethanol.

http://i-r-squared.blogspot.com/2006/11/cellulosic-ethanol-reality-check.html

It is worth pointing out when discussing hemp, that the stuff grown for "recreational" use is totally different than that grown for agricultural / fuel / other uses.

1. The recreational stuff is selectively bred for chemical effect, (Though the gov'ts claim of "several times stronger" is false - the difference is more on the order of different varieties of grapes or apples. The actual MEASURED amounts of canabinoids has stayed almost the same)

2. More importantly the GROWING techniques for recreational pot is different from agricultural - recreational plants are grown with lots of room, careful separation of the male and female plants (only the female plants are useful) and great effort is made to protect the female plants from pollination. The plants either make seeds or make canabinoids, so a pollinated plant makes much lower grade product, nearly worthless... In essence the plants have to be grown almost individually

3. "Agricultural" hemp is grown with a much higher plant density (How dense depends on what you are after as the primary purpose in your harvest), no effort is made to segregate the plants, and pollination is desired (especially if growing for seeds) the plants are basically treated like a hay or wheat field.

4. The "street name" for Agricultural stuff is "Ditch Weed" or "lousy crap" - it has minimal effect, you could almost think of it as the equivalent of "naturally denatured"

Now I'm not going to pretend that if agricultural plants were being grown, there wouldn't be a certain amount of seeds diverted into recreational growth, but that would just lower the price on the existing supply to a reasonable level - In Amsterdam, where it's quasi-legal, a gram of high-quality pot (a Cannibus Cup winning strain) goes for about the same as a good bottle of table wine ~10-15EU. The amount of work needed to grow the stuff for recreational use is such that it is unlikely to get a lower price no matter how large the potential supply.

OTOH, in the few places where agricultural hemp is grown, despite the limited supply, it is priced by the TON - which gives some indication of relative values.

Products MADE from agricultural hemp are non-psychoactive, most don't even contain enough cannabinoids to be detected - so burning your hypothetical compressed hemp bio-log would likely be dissapointing in everything but the amount of heat output... :coolhmm:

Gooserider

Webmaster said:

And, believe it or not, these patriotic oil companies do not want to pay for the mess they created - even with hundreds of billions of dollars profit IN ONE QUARTER. They think you should pay!

Ethanol - I have to agree with Castro on this one - a dangerous precedent to turn the #1 food crop in the world into Hummer Fuel....I'd rather a super efficient diesel/electric hybrid with the idea of large scale electric from wind, solar and other such sources.

But try telling this to Archer Daniels Midland or Monsanto......The GOP is screaming about 75 million to peanut farmers, while billions are going to waste on Ethanol....and the reason is - They think you are distracted by this and truly believe they have the renewable energy interests of our country/future in mind.

Stuff like this makes me want to the government NOT to promote alternative fuel.

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Ethanol does not consume the entire corn kernel. It consumes the starch leaving several possible by-products depending on the process (wet milling vs. dry milling) that have nutritional and commercial value. DDGs are one of these byproducts being sold as feed. Furthermore, ethanol is not the only industrial use of corn. Check Out some other industrial uses that are growing for corn as a feedstock because of higher petroleum prices ...

http://www.ontariocorn.org/classroom/products.html

The government does not subsidize producers of ethanol. The government subsidizes blenders of ethanol and gasoline. While corn ethanol is not the most energy efficient choice it is a step in the right direction and soon to be followed by cellulosic ethanol with many industry leaders looking to transition existing facilities over to more competitve technologies. I for one would be interested in seeing reductions in Government tariffs on sugar imports and ethanol along with reductions in Government subsidies beyond covering American agriculture from uncertainties in the natural environment including pests, disease, and weather. I for one would not force energy conversion through artificial market manipulation with wrong headed carbon taxes and carbon cap and trade schemes that transfer income and wealth from average American citizens into government coffers. I would encourage alternative energy through expansion of tax credits for energy efficiency and conservation, renewable energy technology, and biofuels left to compete in the free markets based upon the economic value delivered to consumers.

Castro is wrong along with other communist nations that have been unable to feed much of their own populations because of wrong headed command and control economies and have enjoyed the benefit of cheap subsidized American corn in global markets to prop up their own failed policies and tyrannical governments. Read up on agricultural production in the former Soviet Union under their audacious five year plans and farm collectives. Studied Soviet economic in college back in the eighties before anyone really believed the mighty Soviet Union would collapse. Agriculture was a disaster requiring the Soviets to purchase cheap American Corn and Wheat. Chavez will soon destroy Venezuela's economy and agricutural base and be looking for cheap commodities in global markets to prop up his dictatorial regime. I suspect it would be better if these tyrants and dictators found it more difficult to make the choice between guns and butter. It might help to keep their expansive political designs in check. Besides soda pop, cookies, candy and a host of other sweetened American foods relying on corn syrup instead of sugar are hard to defend as essential to American diets and relative to health care costs have extracted a high toll on the American economy because of existing government policy.

Government subsidy of agriculture falls as market prices for corn and other agricultural commodities better cover production and economic costs that have risen dramatically with higher energy costs and increasing land values. This is not a bad thing for America. Nearly two billion bushel of corn have been exported annually into global markets at great expense to American taxpayers and little return to American farmers. It represents a hemorrhage of America's wealth. That corn along with other excess agricultural production and capacity is better utilized at home for renewable energy initiatives that improve agricultural commodity prices and reduce dependence on foreign oil. Besides the U.S. has been repeatedly critized by most nations because of Agricultural subsidies that have supposedly flooded global markets with American corn and produce keeping global markets prices too low for their own domestic producers to compete. These many countries should now be happy their domestic producer do not have to compete with American Agriculture that is increasingly focused on meeting America's needs for food and renewable energy.

Ethanol, biodiesel, and direct combustion of biomass that utilize America's excess agricutural production and capacity for renewable energy initiatives to benefit American farmers, American rural economies, American citizens, and American government is not a bad thing. While these renewable energy initiatives are not likely to replace oil and natural gas, they offer opportunity to leverage American renewable eenrgy resources to break the pricing power of foreign energy cartels and reduce the flow of American energy dollars into the coffers of America's adversaries. American energy dollars spent in support and benefit of American Agriculture, Rural Economies, American Citizens, and Government is not a bad thing.

Just for fun take those nearly two billion bushel of corn exports and assume they have an effective energy content in direct combustion applications of 7000-7500 BTU/Lb of energy at current market prices. Compare that to an equivalent energy content in one barrel of crude oil at current market prices and then determine the potential swing in America's trade balance from keeping these energy dollars invested in American Renewable Energy Initiatives. Maybe the free market would better allocate these resources over the long run. It has before. Maybe Americans should let the rest of the world step up and grow food for their own people instead of spending so much for guns and weapons often used against Americans. The world just might become a better place.

AGENERGY said:

The government does not subsidize producers of ethanol. The government subsidizes blenders of ethanol and gasoline.

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This is semantics. You are talking to intelligent people here. Yes, the credit is 51 cents a gallon and is given only to the blender, but that means E85 gets a credit of 85% of 51 cents per gallon.

And surely you know that ADM is the largest receiver of this tax credit in the country?

So it's plain silly, IMHO, to try to claim that the government does not subsidize producers. By giving ADM over 50 cents a gallon, they add vast profits to ADM, who therefore will buy more at higher prices.

Even the ethanol industry association claims only a small "net gain" in energy as to the total BTU of fossil fuel input needed to make the ethanol. Others claim it is a net loss. For debates sake, let's call it equal. That stinks if it is true.

It seems a shame to build a false economy on a shaky foundation. This would also be bad for those who want to burn corn and other biomass, since a 50 cent a gallon subsidy increases the price of the commodity for everyone. So maybe we will pay this extra "tax" on everything from tacos to corn syrup, in order to fool ourselves that we have "clean" fuel. But it certainly isn't clean if even 50% of the energy is fossil fuel based, let alone taking my tax money.

As to Cuba, that is a whole nother story, but they do spend $236. a person yearly on health care - and they have as long of a life expectancy, and much lower infant mortality. Taking politics aside, we should be able to do a lot better considering we spend at least 15-20X as much per person (and often more). I know I spend over 15K and the doctors office is tough to get into! I get voice mail and they rarely call me back. In any case, as with climate change, the issue of corn being fuel instead of food in the end will not affect you and me as much (except for the extra "tax" mentioned above), but it will effect the poor and hungry of the world.....as usual, we could care less as long as we have some "clean" fuel for the tank.

BeGreen said:

Ironically, the surge in ethanol subsidies seems to be affecting the building of oil refineries. Would you want to compete in this arena when congress is pushing for a 5 fold increase in biofuels? Here's an interesting take on the market. I think the WSJ quote at the end is right on:

http://marketpower.typepad.com/market_power/2006/04/ethanol_subsidi.html

And from the NY Times:
http://www.nytimes.com/2007/05/24/business/24refinery.html?_r=2&pagewanted=1&hp&oref=slogin

Our policies are poorly thought out and lack strong incentives for conservation, innovation and diversification. All it will take is another natural disaster to bring this home.

“If we get a bad corn crop, we will end up paying for it at the pump and on the food shelves,” he said. “We are not buying security. We are increasing volatility.”

Simply put, demand is outstripping supply. If Americans want to bring down gas prices - drive less. If every American drove say 2 miles less per week, to save (at our national average of 16.7 mpg) say 16 oz. of gas per week, that would equal 30 million gallons of gas! Or put another way, 30 million gallons of gas equals the entire output of the west coast's largest refinery (running 24/7) in 8.5 days.

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Here is another perspective from the NCGA for consideration. Food prices do not necessarily seem directly affected by corn prices. Have you noticed food prices moderating as corn prices have reached historic lows when adjusted for inflation? No but you have seen profit margins improve for processors and food companies while farmers have struggled against the odds for decades to keep the family farm viable.

http://www.ncga.com/news/OurView/2007/052507.asp

Corn supply is increasing with critics finding reason to be critical of this expansion also. Criticism is easy, finding real solutions that are economical and do not negatively affect average Americans citizens already over taxed and over burdened by higher energy costs is the challenge.

Government policy in the guise of tariffs and limits on sugar and ethanol imports keep prices for food and ethanol higher than free markets would likely establish. I am not a big ADM supporter and would remind everyone ADM has done well no matter which political party has controlled government. You might be surprised to find ADM was a big supporter for tariffs on sugar imports also. But ADM is not the only ethanol producer in the country although they are the largest getting a head start on everyone else in ethanol back during the Carter Administration's policy initiatives for renewable energy. Check it out. Many ethanol producers are independent operations and many investors are farmers who have seen corn prices fall while energy and production costs have risen.

It is easy to attack a single sentence when I clearly stated favoring a reduction in tariffs and subsidies to allow free market allocation of the resources. I believe competition is good for Average American citizens and that government policy as represented by taxes, tariffs, and subsidies are far too reactionary, focused on short term posturing rather than long term outcomes, and resistant to reasonable change when market realities change. I'll trust free markets where accurate information is available to consumers and reasonable regulation by government keeps the markets and process honest to better allocate these resources. I'll trust the American people to keep government honest and hope more citizens accept this responsibility.

As for energy, conservation is important with well insulated homes, high efficiency furnaces and central air conditioners, and adoption of renewable energy technologies that make economic sense critical for improved energy security. However, unapologetic energy development of coal, oil, and natural gas along with increased refinery and electric capacity are critical with supply of these resources artificially constrained by government policy for the past couple of decades by many of the same consituencies that oppose ethanol, nuclear energy and other alternatives that can meet growing demand and reduce pricing pressure for energy that is negatively affecting disposable income of average American citizens, especially those with fixed incomes or low incomes.

Conservation alone will not address the problem although it is part of the solution. By the way my family favors the smaller economy car that gets 40 miles/gal over the truck that gets only 25 miles/gal. We are conserving like many other consumers choosing more fuel efficient vehicles at great expense to Detroit's Big 3.

I didn't mean to jump on a sentence. After all is said and done, my biggest interest is exactly how much energy it takes to make ethanol. This takes out the confusion. Only a fool (or a profiteer) would choose to make one form of energy from another one without an extremely good input to output ratio. This is even more so when greenhouse gases are concerned, because we have much more of those when we use 1/2 gallon of fossil fuel to make 1 gallon of ethanol (this assume it take 70,000 BTU to make 90 something).... then we have the greenhouse gases from the total 1 1/2 gallons!

Perhaps there are solutions to the problem of poor output vs. input. But until the numbers are nailed down, I'd rather burn the corn straight or eat/process it.

Pretty good article here showing both sides:
http://feinstein.senate.gov/05speeches/ethanol-oped.htm

Their summary pretty much matches my opinions:
Pimentel thinks we'd get more return on our energy investment by growing trees for woodstoves or other such uses. "Wood is an extremely valuable resource," he says. "We already get 3 percent of our energy from biomass – the same as we get from hydropower. But that's thermal energy, not liquid fuel."

Patzek thinks the U.S. needs a two-pronged approach, neither of which involves ethanol. First, he says, we need more efficient cars. Doubling the average car's fuel efficiency would cut gasoline needs in half, while converting all of the nation's corn production into ethanol would only satisfy 12 percent of current needs, he says.

Similarly, he says, we could reduce fuel needs by redesigning cities to be livable, rather than "drive-in deserts."
Secondly, he says, we need to remember that corn is merely a natural means of converting solar energy into chemical energy, and that it's not really all that efficient at doing so. Solar cells are much more efficient, and could be harnessed to make hydrogen fuel.
Rather than subsidizing ethanol production, Patzek says, we should invest in research designed to make it possible to produce these cells more efficiently.

-------------end quoted material......

Think of it that way - corn is just a way of collecting solar energy, but must be regrown every year, processed, pollutes the water, etc. etc. - What if that corn field was covered with a solar array? Or, better yet our roofs.

It's a similar argument that vegetarians like myself make. You can eat 1 lbs of wheat, corn or soybean protein. Or, you can feed 16 lbs of the same stuff to cows and get one pound of beef. The rest turns to farts, CO2, Manure, etc.

The material seems to show that efficiencies and yields are getting better - but IMHO they are not better enough. Maybe if one gallon of fossil fuel would make 3 gallons of ethanol, then it might be acceptable, but this does not even seem possible at this point.

So let them keep working on it, but prove that it makes sense before we buy it.

Webmaster said:

Think of it that way - corn is just a way of collecting solar energy, but must be regrown every year, processed, pollutes the water, etc. etc. - What if that corn field was covered with a solar array? Or, better yet our roofs.

It's a similar argument that vegetarians like myself make. You can eat 1 lbs of wheat, corn or soybean protein. Or, you can feed 16 lbs of the same stuff to cows and get one pound of beef. The rest turns to farts, CO2, Manure, etc.

The material seems to show that efficiencies and yields are getting better - but IMHO they are not better enough. Maybe if one gallon of fossil fuel would make 3 gallons of ethanol, then it might be acceptable, but this does not even seem possible at this point.

So let them keep working on it, but prove that it makes sense before we buy it.

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I am familiar with Pimentel's perspectives on Ethanol. Here are some other studies done by Cornell University and Ohio State University on the Energy content of corn and other biomass converted into ethanol or direct combustion. You may find the information of interest.

http://www.climateandfarming.org/pdfs/FactSheets/IV.B.2Biomass.pdf

http://www.cornell.edu/landgrant/resources/RenewableEnergy.pdf

http://www.oardc.ohio-state.edu/ocamm/keener3.htm

It is no suprise that direct combustion of various biomass yields better energy economics than converting it into liquid fuels. You will see why wood wastes and switchgrass are viewed with growing interest by the ethanol industry because of improved energy yields. Some ethanol plants are even beginning to look at biomass for process steam and heat and possible electric generation to improve the energy yields which critics bemoan. Ultimately free market economics often yield better outcomes than government forcing through taxation, subsidies, and tariffs. I would agree with those who encourage a phaseout of tariffs on foreign ethanol and subsidies of domestic ethanol.

However, the following article discussing Chinese ethanol exports arriving in the U.S. is cause for pause and concern. We subsidize corn production to support farm policy and assure abundant supplies of corn for domestic markets and then ship surplus corn production oversees at market prices below production costs into countries like China who in turn produce ethanol to ship back into the U.S. There is something wrong with government policy that encourages this kind of outcome. Not necessarily surprising but still disturbing. So we may well find agreement that Government may not be the best at promoting renewable energy initiatives through taxation, tariffs, and subsidies. I personally would prefer free market economics to guide these outcomes.

http://www.iht.com/articles/2006/09/05/business/ethanol.php

Modern farming practices have greatly improved efficiencies and moderated pollution of waterways. Many criticisms are almost reflexive and recycled from bygone days with little regard for modern farming practices that minimize inputs and maximize outputs through technology. As for solar energy, if it was an economically viable technology with decent payback on investment we would already be using it more extensively than we are. If you were to cover those corn fields with sufficient solar arrays to replace current electric generation capacity from coal, you and the rest of the world would very likely go hungry. I believe technological innovation will make solar energy an increasingly viable alternative for niche markets. With advances in material sciences likely to bring new break through technology into the market within a generation solar will grow as free market economics justify its advancement. It is not likely to replace coal as a primary and low cost energy source for electric generation. Reasonable regulation can balance economic and environmental concerns over coal with much improvement already evident when compared to the industry just 3-4 decades back. IMHO solar is no more market ready for mass commercialization than ethanol, biodiesel, and direct combustion technologies. It has its place and is certain to grow as humanity faces the necessity of harnessing cleaner, efficient, and more economical renewable energy alternatives. Until this transition occurs aggressive unapologetic energy development offers the energy resources necessary to sustain the economy and fund R&D essential to drive this natural market evolution in energy.

As for food choices, I am strictly an omnivore by nature. However, if the cattle, swine, and poultry industries do decide to raise prices on U.S. consumers because of higher corn prices I would think this might be good news for vegetarians. It seems all industries look for reasons to raise prices but when costs recede few seem anxious to follow this reasoning to its logical conclusion of lower prices.

AGENERGY said:

Food prices do not necessarily seem directly affected by corn prices.

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Really?

http://enterprise.southofboston.com/articles/2007/05/26/news/news/news03.txt

Food prices have increased 6.7 percent since Jan. 1, more than three times the 2.1 percent of all of 2006, according to figures released by the U.S. Department of Labor.

Nothing to do with the fact that they are making fuel from corn right?

The biggest increases are being seen in beef and poultry and fresh produce, according to Brian Todd Brian Todd of The Food Institute, a New Jersey-based food information network. And, the cost of eggs is expected to be 16 percent higher than a year ago.

Again, it cant be that silly fuel issue right?

He attributed the recent surge in prices to the high cost of feed for livestock


“Nationally, food prices are forecast to increase 3 to 4 percent,” Todd said. “Four percent is the highest since 1990.”

Here is my favorite nugget from the story, sounds like some of our posters

Even with the rising prices, Todd said grocery stores report steady sales.

DUH, grocery stores and funeral homes. Business is always steady.

babalu87 said:

AGENERGY said:

Food prices do not necessarily seem directly affected by corn prices.

Click to expand...

Really?

http://enterprise.southofboston.com/articles/2007/05/26/news/news/news03.txt

Food prices have increased 6.7 percent since Jan. 1, more than three times the 2.1 percent of all of 2006, according to figures released by the U.S. Department of Labor.

Nothing to do with the fact that they are making fuel from corn right?

The biggest increases are being seen in beef and poultry and fresh produce, according to Brian Todd Brian Todd of The Food Institute, a New Jersey-based food information network. And, the cost of eggs is expected to be 16 percent higher than a year ago.

Again, it cant be that silly fuel issue right?

He attributed the recent surge in prices to the high cost of feed for livestock


“Nationally, food prices are forecast to increase 3 to 4 percent,” Todd said. “Four percent is the highest since 1990.”

Here is my favorite nugget from the story, sounds like some of our posters

Even with the rising prices, Todd said grocery stores report steady sales.

DUH, grocery stores and funeral homes. Business is always steady.

Click to expand...

Great post Babs!

Converting food into liquid fuel, what a great idea! Corn ethanol has an ERoEI of nearly 1:1. Insanity! (unless I'm drinking it)

Electrified transportation is really the only answer.

Ag, it sounds like you may agree - in a roundabout way - that ethanol may not be the fuel of the future. Rather that direct combustion may be so much more efficient. The trouble, as you know, with many studies on the ethanol thing....is that they only take the energy input into account AFTER the corn is grown. They do not take the diesel the farm tractor uses, the fertilizer NG input (very large) and all the other assorted inputs.

Sort of like saying "the firewood is already here, split and seasoned, and all I have to do is figure out how much energy it takes to get it into the stove". No, the truck and chain saw and human time and energy do count!

I support direct combustion of biomass, even food stuffs if they prove to be the best inputs. Notice the IF. If it turns out that another crop can be grown or harvested (wood waste, grass, other bio that is usually thrown away...peanut hulls, etc.), then I support that. Actually, even if they are close in input/output I support all of them.

But we agree on that the corn market is mature enough that we don't need to pay people to burn it. And, if public policy did call for this, I would support a direct tax on fossil fuels to be used on the other end of the equation...that is, take from the fossil fuels and invest in the renewables.

All in all, it's probably good that we are exploring all these avenues....even the ones that will not work out. One mistake leads to a better way.....except for those forever subsidies, which sometimes reward mistakes. In the scheme of things, it's not a lot of money. And, I'd rather give money away to Americans...even ADM stockholders and farmers (in turn), than use it to fight useless wars (burning oil all the way). Sometimes it is the best of evils. In a perfect world, we'd do all the research first.....and then make policy. In this one, we just listen to the lobbyists and look for stuff that makes a good 15 second news blurb.

BTW, welcome to the forum Ag and thanks for posting! Don't take us all too seriously......some old grumps (yours truly included) here.

babalu87 said:

AGENERGY said:

Food prices do not necessarily seem directly affected by corn prices.

Click to expand...

Really?

http://enterprise.southofboston.com/articles/2007/05/26/news/news/news03.txt

Food prices have increased 6.7 percent since Jan. 1, more than three times the 2.1 percent of all of 2006, according to figures released by the U.S. Department of Labor.

Nothing to do with the fact that they are making fuel from corn right?

The biggest increases are being seen in beef and poultry and fresh produce, according to Brian Todd Brian Todd of The Food Institute, a New Jersey-based food information network. And, the cost of eggs is expected to be 16 percent higher than a year ago.

Again, it cant be that silly fuel issue right?

He attributed the recent surge in prices to the high cost of feed for livestock


“Nationally, food prices are forecast to increase 3 to 4 percent,” Todd said. “Four percent is the highest since 1990.”

Here is my favorite nugget from the story, sounds like some of our posters

Even with the rising prices, Todd said grocery stores report steady sales.

DUH, grocery stores and funeral homes. Business is always steady.

Click to expand...

Really. If energy costs increases are not recovered by Agricultural producers in the market price received for corn and other commodities grown, who do you think pays to keep American agriculture viable via taxes and subsidies? Agriculture subsidies fall as market prices rise to cover production costs. You have been paying for rising energy costs impact on Agriculture all along but through the backdoor with taxes and a growing budget deficit. Food costs have been rising often in the form of reduced portions sold for the same price which is not captured in inflation numbers. You just have not thought about it because this is left out of popular mass media reporting. Too difficult for Americans to think about.

Energy costs are the driver behind price increases even though some would like to deflect the spotlight away from oil, electric, and natural gas as the culprit for obvious reasons. Reduce tariffs on sugar and all of that corn syrup driving up health care costs in America would be replaced by lower cost imported sugar. Reduce tariffs on Brazilian ethanol and the domestic industry would have to become more competitive. Reduce regulation and restrictions on domestic energy exploration, refining capacity, and electric generation to increase supply and prices for energy would fall. Government policy and energy costs are the main drivers behind rising prices for energy and food. It is really kind of laughable to blame corn prices which are only now at levels that cover economic costs of production. It was estimated economic costs for the production of corn in Illinois averaged from $2.74 to $3.11/Bushel in 2006. You can read about it for yourself in the following link. Those low corn prices everyone loved were far below the cost to produce the commodity and market prices now better reflect those higher costs.

http://www.farmdoc.uiuc.edu/manage/newsletters/fefo07_05/fefo07_05.html

Did American consumers really see benefit from these low commodity prices or were they paying for it all along?

Do you really find it hard to believe that there has already been a tremendous increase in production and distribution costs because of energy prices affecting the food chain from farm to retail to consumer? It has just not been recognized by consumers nor reported by the popular mass media because it was another inconvenient truth. Electric is our salvation? You may want to consider where all the additional electricity is going to come to fuel the transportation sector from in an already strained electric grid with the proponents of Electric conveniently forgetting their opposition to expansion of coal and nuclear electric generation.

You might want to get some balanced information from farm state publications.

Webmaster said:

Ag, it sounds like you may agree - in a roundabout way - that ethanol may not be the fuel of the future. Rather that direct combustion may be so much more efficient. The trouble, as you know, with many studies on the ethanol thing....is that they only take the energy input into account AFTER the corn is grown. They do not take the diesel the farm tractor uses, the fertilizer NG input (very large) and all the other assorted inputs.

BTW, welcome to the forum Ag and thanks for posting! Don't take us all too seriously......some old grumps (yours truly included) here.

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Actually I support ethanol as a viable alternative to supply some of the transportation sector Energy requirement. However, I do believe we would all be better off letting the free market allocate the resources to their highest and best use based upon price which is the most unbiased method devised for resource allocation. Government policy in the guise of taxes, tariffs, and subsidies often introduce bias into this allocation that suboptimizes outcomes and leads to greater waste of resources. I believe ethanol is one of many possible alternatives and that cellulosic ethanol will improve energy yields that you are rightly concerned about. However, I do not believe it is necessary for an analysis to take into account the energy required to grow corn if corn's market price reflects its costs of production and the price of ethanol in the market reflects its cost of production relative to alternative fuel choices (i.e. gasoline, Brazilian ethanol, electricity, hydrogen, etc.). That is the wonderful thing about free markets and the invisible hand that guides pricing when information and process is kept honest and true for consumers to make informed choices. Government policy in the guise of taxes, tariffs, and subsidies often interjects bias into free markets resulting in a host of negative and unintended consequences which Government is ever so loathe to admit and change long after problems are recognized by average American citizens. But I do digress.

Is ethanol the fuel of the future, no I do not necessarily think so. But it is a step in the right direct and the natural market evolution of new energy sources is not likely to occur overnight. Remember there is yet great debate on the origins of humanity that may offer insight into those who trust free market evolution of energy vs those who would attempt to force new energy into being with Government policy. It is always interesting to see the contortions humanity will put itself into to frame a debate. I along with everyone else. The transportation sector of energy is vital to the economy and we are rightly concerned to lessen dependence of foreign oil to protect vital national interests. If ethanol, biodiesel, and biomass diversify our energy sources in the short term, then I support their development.

Here is another possible technology on the horizon that may well displace ethanol and biodiesel sooner rather than later. The good news is some of America's best and brightest minds uncluttered from the chains of the past are keenly focused on the opportunities of the future to meet one of humanity's greatest needs for survival in an uncertain and unpredictable world. Energy has fueled humanity's advance and civilization's progress. I am optimistic that new solutions lie just over the horizon.

http://news.uns.purdue.edu/x/2007a/070314AgrawalBiomass.html

March 14, 2007

New biofuels process promises to meet all U.S. transportation needs
WEST LAFAYETTE, Ind. - Purdue University chemical engineers have proposed a new environmentally friendly process for producing liquid fuels from plant matter - or biomass - potentially available from agricultural and forest waste, providing all of the fuel needed for "the entire U.S. transportation sector."

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AGENERGY said:

Electric is our salvation? You may want to consider where all the additional electricity is going to come to fuel the transportation sector from in an already strained electric grid with the proponents of Electric conveniently forgetting their opposition to expansion of coal and nuclear electric generation.

You might want to get some balanced information from farm state publications.

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Actually, AG....it is our salvation but for the moment you are also correct about the grid not being able to handle it. At current electric prices, you get about 150 miles per gallon equivalent when using all electric! The new car GM is working on (GM Volt Concept) has battery power for 40 miles (most like the Prius only have battery charge for a few miles and they're not plug-in-the-wall capable) and, when the GM car runs on battery power, the cost is 2.1 cents per mile which equates to about 150 miles on $3 or the price of 1-gallon of gas......hence, 150 miles per gallon and it charges off a 120 volt house circuit......now...when the battery is exhausted, it acts like the Prius and an on-board gas engine charges it but the GM car may also have a fuel cell option instead.

As for the grid issue, it (grid) will catch-up in relation to the demand for electricity. And, for those who say "we're just transferring the emission problem from a gas engine tail pipe to a power plant stack", the emissions are actually estimated to be reduced about 27% when they come from a power plant because they're more tightly regulated and monitored than are car engines. So, short of getting fusion, electricity is the way to go. Also, the "holy grail" is no gas engine at all............and doing this reduces a whole host of other problems......little to no oil or gas needed for the gasoline engine (stick that up the Middle Easts ass), potentially no gear box and no gear oil, zero emissions at the tailpipe, etc......

In my humble opinion, I agree corn-based ethanol is not the way to go. However, we need to look at it for what it really is--a stepping stone to cellulose derived ethanol. Eventually, cellulose ethanol will be cost competitive. So having corn-based now allows for the infrastructure to be in place for the transition. The future, in my humble opinion, will be some type of plug in hybrid with bio-based, or partially bio-based fuels. Plug in gybrid is the key. Unfornately, at night our base load for electricity goes wasted. with on-board computers, it is no problem for a vechile to charge at reduced demand rates. Think of it as using waste.

As far as the notion of food prices increasing b/c of corn based ethanol I am all for them increasing. As a physician, I continually see the detrimental health effects of our obese society. Type II diabetes is a national health crisis. we are a nation based on inactivity coupled with cheap food

sstanis said:

As a physician, I continually see the detrimental health effects of our obese society. Type II diabetes is a national health crisis. we are a nation based on inactivity coupled with cheap food

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I made the same comment concerning the fact that about 40% of medical costs are due to obesity (diabetes, bad joints, heart disease, etc.).....society shouldn't have to pay huge medical costs associated with people who chose to be overweight and who won't exercise personal responsibility and lose weight.....I went as far as to say they should be denied medical insurance if they're not willing to do their part and stay fit.........but ah

The questions of energy, food supply and medical costs affect us all. But that is what a country is! I would say to Cast that there are many countries in the world where the people are fitter, and therefore they don't have to pay as much. Cuba is one....average of $250 a person per year for all medical costs and they live as long as we do.

Lots of countries in Europe too. I'm sure they all need engineers.

IMHO you are either a member of our country and society or not. You cannot exclude everyone because of all these issues.

Anyway, that is getting off subject again, and high corn prices are not likely to stop people from consuming more fat....in the USA. In Cuba, it works....since they have plenty of food, but not many times as much as they need.

I do agree that all of these things are part and parcel - plug-in hybrids would be nice. Up here in Ma. they use the electric to pump the water up to the top of a mountain and then use the generation capacity during the day when it falls back down. It must lose a LOT of efficiency in the process of going up and back down (anyone know how much?).

Every little bit helps.

I hope we look back someday and see this as the start of something that actually continues, as opposed to our usual path of scraping all the improvements as soon as energy gets cheap again.

Webmaster said:

The questions of energy, food supply and medical costs affect us all. But that is what a country is! I would say to Cast that there are many countries in the world where the people are fitter, and therefore they don't have to pay as much. Cuba is one....average of $250 a person per year for all medical costs and they live as long as we do.

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You're saying the same thing I am, Craig...IF we were more fit, we wouldn't be paying such outrageous medical premiums........we're saying the same thing....

BeGreen said:

What is even sadder and more immoral is that we are exporting our way of life, as fast and aggressively as possible. In many cases, especially with BT crops and the herbicides that go with them, we have strong armed nations into accepting them against the will of their people and leaders. Nations that never had an issue with diabetes, depression, osteoporosis, heart disease, etc. have in one generation learned what can happen by striving for the American ideal.

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It's NO COINCIDENCE that Americans got fat about the same time the agricultural and food processing weenies found that there was an unwilling audience for their "liquid sugar"....i.e., fructose, etc. is shoved into everything we eat and drink.....even bread........ That and very cheap, fat-filled fast food....don't believe me......ask sstanis...he's a doctor, isn't he.......???

castiron said:

BeGreen said:

What is even sadder and more immoral is that we are exporting our way of life, as fast and aggressively as possible. In many cases, especially with BT crops and the herbicides that go with them, we have strong armed nations into accepting them against the will of their people and leaders. Nations that never had an issue with diabetes, depression, osteoporosis, heart disease, etc. have in one generation learned what can happen by striving for the American ideal.

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It's NO COINCIDENCE that Americans got fat about the same time the agricultural and poof processing weenies found that there was an unwilling audience for their "liquid sugar"....i.e., fructose, etc. is shoved into everything we eat and drink.....even bread........ That and very cheap, fat-filled fast food....don't believe me......ask sstanis...he's a doctor, isn't he.......???

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Don't blame agriculture. Government policy in the guise of taxes, tariffs, and subsidies drove the advance of corn syrup back in the seventies and eighties. The same government policy launched the ethanol industry. Agriculture relative to family farms have found little lasting benefit to any of this and have struggled through many ups and downs with little to show for it but survival after several decades.

2 liter bottles of coke at the local super - 10 of them for $10.

Wow, I think you could distill that stuff and burn the sugar/syrup and make out!