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

Post in 'The Green Room' started by keyman512us, Mar 31, 2007.

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  1. babalu87

    babalu87 New Member

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    Maybe now there will be a reason to ditch this folly of an idea

    http://www.msnbc.msn.com/id/18941618/

    Looks like its time to start homebrewing again.

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  2. webbie

    webbie Seasoned Moderator Staff Member

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    "A very emotional issue". That's good.

    Even here in the USA, they say "watch out" when you propose new taxes on beer and....it used to be on smokes. But the smokers have given up on that one.

    First they come for your fatty snacks.
    Then they come for your cigs.
    Then they come for your Cuban cigars.
    Then, when they come for your beer, you ask "why me"?

    Yeah, in Germany, pure beer is like clean air. A birthright. Good thing is doesn't use corn (or does it?).
  3. DaveR

    DaveR New Member

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    There is always two sides to every issue. Thought for those who would like to become more informed about agriculture from producers perspective, the links below to the National Corn Growers Association and Illinois Farm Bureau would be a good starting point. Keep in mind that corn producers are glad to see market prices for corn finally covering significantly higher production costs caused by higher energy prices. In any business, if market prices do not cover production costs over the long run you have only hard choices to make. Many family farms have already disappeared over the past several decades because of market dynamics. Check out average corn prices over the past few years as compared to the economic costs discussed earlier. Read some of the information on modern farming practices that significantly reduce inputs while increasing outputs and do a better job of protecting the environment. Sometimes its too easy to be critical when you do not stop to investigate the other side of an issue and are far removed geographically, socially, and generationally from agriculture. Just sharing the links as means for those who are interested in becoming better informed than would otherwise occur from popular media reporting.

    You might find something of interest like even with increasing ethanol production corn exports have continued to grow. You might be surprised to learn that corn has been used as an industrial feedstock for a long time replacing petrochemicals for plastics and other applications far removed from its primary use as food and livestock feed. You might be surprised to learn than corn production has increased while land use for growing corn has declined significantly because of technology and better yields.

    http://www.ncga.com/WorldOfCorn/main/environment.asp

    http://www.ilfb.org/?r=0.5485193
  4. babalu87

    babalu87 New Member

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    Even more good news..........

    http://www.nj.com/business/ledger/index.ssf?/base/business-6/1181018191176330.xml&coll=1

    Of course those "in the know" will have some type of spin on this I am sure
  5. DaveR

    DaveR New Member

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    It would have been good if you had included the paragraph from the article that quoted the industry spokesman to say prices were expected to move lower in 2008 as producers increased milk supply to meet growing demand. Production and distribution costs for agriculture be it corn producers or dairy producers are substantially higher because of "Energy" costs. Energy costs will drive food prices higher even though there is often a market lag in commodity prices for corn, soybeans, wheat, oats, milk, cheese, beef, poultry, pork, etc. The food processors have been doing alright even though farm incomes have suffered the disconnect between rising energy costs and commodity prices with some assistance from government subsidies. Check out ADM, Tyson, Kellogs, and Walmarts earnings. They have fared much better than agricuture producers earnings over the past few years and many have hedged raw material costs in the markets buffering their earnings from the increase in commodity prices while unapologetically raising prices on consumers. How many of those compalining about rising food costs own stock in any of these processors and retailers and have enjoyed the benefit of stock appreciation at the expense of manufacturing and agriculture for the past two decades? How many of those complaining about rising food costs have been vocal in resisting and active in frustrating unapologetic domestic energy development in the U.S. to meet growing energy demand for the past two decades? No new refineries, No LNG terminals along America's coasts, No new coal fired electric generation, No new Nuclear generation, No oil and natural gas exploration off America's Coast or in ANWR, No ethanol, No biodiesel. No real energy development sufficient to meet growing demand. Energy still powers the economy and will ultimately affect the prices of all other commodities and products even in the information age. There has been a lag for many reasons including stagnant wages, improved efficiencies, and excess capacity in global markets but we are likely reaching the limit of these factors influence on restraining prices. Is this really surprising? The effect of supply and demand on market prices should not be a surprise to anyone. The expansive effect of rising energy prices on other prices should not be a surprise to anyone.

    Global demand is growing giving new life to commodity markets with higher prices increasing the incentive to produce more supply. Economics 101 at work. I have more trust in free markets than command and control government policy that inevitably leads to mass shortages and extreme rationing of products and services. Blaming corn prices that only recently are reflecting higher production (Energy) costs for driving food prices higher is a stretch from reality. No spin just the facts.
  6. Sandor

    Sandor Minister of Fire

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    I am not even going to read this. I went cross-eyed in less than 20 seconds.

    Learn how to articulate your ideas into meaningful paragraphs.
  7. jjbaer

    jjbaer New Member

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    Sandor,

    take an Evelyn Wood speed reading course......LOL....nobody reads more slowly than an engineer like me yet I read this guys post in about a minute...what he's saying is that Bab "cherry picked" words from the article and that the complete picture is that they expect prices to decrease in 2008...for an overall rise of not very much when looked-at long term.........
  8. jjbaer

    jjbaer New Member

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    Sandor,

    the way around this argument is this: let's say for arguments sake that the net return is negative......it still gets us off foreign oil...........I don't care if it takes, for example, 100 BTU's of coal burned to get, say, only 15 BTU's of ethanol because we have tons of coal and the ethanol weans us off foreign oil........so, short term, whatever it takes to get off foreign oil, I'm for.......
  9. jjbaer

    jjbaer New Member

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    Craig,

    Or, he'd have to be crazy as a fox.......there is a reason we'd want to do this. Picture this: we have unlimited coal. Use whatever coal it takes to turn corn into ethanol, even if it has a negative overall energy return because this gets us off foreign oil and all the politics that oil dependency comes with...............same argument with cutting our own wood.......the overall cost with gathering the wood (chains, saws, time, gas, etc) might be greater for some of us than in buying natural gas but many do it for another reason: so that when/if alternative heating sources spike in price, that you're not held hostage to energy companies.....same with making ethanol.....whatever it takes, DO IT and let's get the hell off the Arab oil pipeline and not be held hostage to middle east politics through oil.............
  10. begreen

    begreen Mooderator Staff Member

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    I don't agree that any resource, including coal is unlimited. There's a lot, but it is finite. And adding a lot more fossil fuel CO2 will be shooting ourselves in the foot and a zero-sum gain. Conservation is the first step, there really is no other viable alternative. But it's a moot point. The rail system is already at capacity. Freight trains are already running 24/7 out of Wyoming. Coal to produce fuel is not a solution in the short term and in the long term it sucks.

    But let's say we go with it and succeed in reducing consumption via ethanol to cut off using Saudi crude (totally unlikely). Even if we're not beholding to the Saudis, then to whom? We're reaching the point where nations want the resources for themselves first. North Sea crude is in decline as is Mexican. If not the middle east then who -Venezuela, Russia? As long as we're the addicts, it doesn't matter, they'll be able to pull the strings and we'll dance to them. In the short term we need to go on the wagon. In the long term we need a national strategic initiative to develop alternatives. Of course, as long as our policy is to divert half of our wealth towards empire building, this isn't going to happen.
  11. Sandor

    Sandor Minister of Fire

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    Cast, the problem is that we are burning diesel in many different ways to bring the ethanol to market. Thats the problem. I'll keep posting the anti-ethanol threads as long as it takes. Fertilizer is made from Natural Gas, and there are issues there as well. Oh, takes alot of water too, check out whats happening in the Carolinas.

    The coal issue is just starting to get going. There isn't a couple hundred years worth of energy there either if we expand the used for coal.

    The latest ethanol thread from TheOilDrum.com.

    http://www.theoildrum.com/node/2615
  12. DaveR

    DaveR New Member

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    As we continue to discuss the potential to utilize excess American agriculture production and capacity in renewable energy technologies including ethanol, biodiesel, and direct combustion, I continue to believe the concern over renewable energy competition with food while worthy of consideration is overblown. Coupling market prices for agricultural commodities to energy markets is certain to result in more rational market prices relative to real production costs driven by energy costs. The free market is more likely to better allocate these resources at optimal prices than government policy as represented by taxes, tariffs, and subsidies. The U.S. and European nations have faced extreme criticism from developing countries because of government agricutural subsidies which are claimed to keep developing nations from sustaining domestic agriculture. If the U.S. pursues new domestic markets for renewable energy technologies like ethanol, biodiesel, and direct combustion, the wealth of the nation serves to benefit the greater good of the nation and reduces criticism from developing nations on U.S. Agricutural Policy. I would suggest for those interested that searches for information on U.S. Agriculture Subsidies, Tariffs, and GATT. It makes for interesting reading.

    Here is some information for consideration from various sources.

    http://encarta.msn.com/encyclopedia_1741588397_2/Globalization.html

    http://www.cato.org/pubs/pas/pa-241.html

    http://www.timesonline.co.uk/tol/news/world/africa/article1629405.ece

    http://www.tradeobservatory.org/headlines.cfm?refID=18661

    http://law.jrank.org/pages/4201/Agriculture-Subsidies.html

    Biodiesel can help fuel agricutural production, ethanol can help fuel the transportation energy sector, direct combustion can help fuel the residential heating energy sector. All can help reduce dependence on foreign oil and leverage America's excess agricutural production and capacity to the greater good of America while offering potential to break the pricing power of foreign energy cartels and oil producing countries hostile to American interests. This is not not about replacing oil, coal, natural gas, or nuclear energy sources. It is about expanding energy alternatives, marshaling America's resources to reduce dependence on foreign oil and benefit America, moderating energy costs for the American economy and citizens, and taking a step in the right direction toward greater reliance on renewable energy alternatives.

    Developing nations that have complained about U.S. agricutural subsidies and their effect on global commodity markets should welcome this transition.
  13. JBinKC

    JBinKC Feeling the Heat

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    I am not really a fan of ethanol but it will buy us some time fairly inexpensively in changing our infrastructure to different alternatives which is currently almost a solely liquid energy based transportation economy. I feel it can only alleviate the liquid fuel shortage for maybe a decade or two and will become very damaging to current ecosystems over time especially if it is forced to expand much farther. I can see as the oil industry is really not willing to expand refinery capacity(which I would think would be the logical explanation to oil nearing peak production).

    I think the key to our future will rely on our ability to improve the efficiency and especially the storage of energy. If we fail I think our civilization may follow the Olduvai theory if it is let to play out.
  14. begreen

    begreen Mooderator Staff Member

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    It's not the ethanol per se that is the issue, but our use of corn as the source which I object to. If it were the sugar beet, then it would make a bit more sense. And if they turned the depressed parts of Mississippi and Louisiana in to sugar cane fields, then perhaps it would be ok. (Maybe include the whole state of Fla. ;-)) But corn, no. But then of course there is no bio-engineered version of the alternative crops and that won't help Monsanto, Dupont et al.

    And lest we think this is all glorious, sorry, biodiesel is not all coming from American agriculture. Seeing the handwriting on the wall with soy bean crops being displaced by corn plantings, biodiesel is currently turning to palm oil, from Malaysia. Wonder how long before we lose out in that competitive arena too?
  15. babalu87

    babalu87 New Member

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    Aye, and there is the rub.
    Until the profit margin is reduced we are all doomed.
  16. jjbaer

    jjbaer New Member

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    I agree there isn't a couple hundred years worth of coal left but we don't need it that long.....here's the game-plan: 1) use as much coal now as it takes to develop ethanol and get us off the Arab pipeline NOW! 2) in the interim, work on other means of ethanol production (from celluose, switch grass, etc) so that we can wean ourselves off corn as the sole source for ethanol and this in turn helps keep corn prices low and finally, 3) we only need to use coal for about 15-40 years more because fusion is just around the bend...........so.....we don't need coal for that long but we use it now to help make ethanol and tell the Arabs to stick it "where the oil doesn't flow".......LOL.........
  17. begreen

    begreen Mooderator Staff Member

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    Very naive plan, the numbers don't back it up. First, if ALL US corn production went to ethanol it still would make less than a 10% dent in our oil consumption. We are at capacity in our rail systems, how does the additional coal go anywhere? And show me the science behind cellulosic ethanol, where is the timetable for it to get into cost effective production? Maybe 10 years? Think the country can go 10 years with no corn to get a 10% reduction in oil imports? Well then, I have a bridge in NY for sale cheap that is looking for a buyer.

    If you want to really cut off the import of oil (only 10% is Arabian by the way), then reduce consumption! It would be faster and a much more realistic goal. But the truth is we won't do it. Even if we reduce consumption by 10%, it won't be Saudi oil we're cutting off. Our govt. and the Bush family are much to close the the royal family of Saudi Arabia. And the bottom line is they want us to stay addicted regardless of public spin.
  18. jjbaer

    jjbaer New Member

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    BeGreen....what's naive is doing nothing and complaining that we "can't do anything"......do you want red meat or fish with that "whine"....LOL.......but seriously, I agree that conservation is what can make the biggest, fastest and cheapest dent in the amount of oil we import however, I don't care where it comes from, if it ain't home grown, then it comes with baggage (strings attached)..........so, either way, we need to get off oil......

    Also, it's closer to 14% that could displace gas.........1 acre of corn yields about 328 gallons of ethanol. There are about 91 million acres of corn so if all corn went for ethanol we'd get 29 billion gallons of ethanol and since it only has about 67% of the BTU value of gasoline, that's about 20 billion gallons of gas equivalent. We consume 146 billion gallons of gas per year in the US so 20/146 = 13.6 or about 14% but you're correct, it's small. The point you miss however, is that ethanol is only one layer of a multi-layerd approach to solving this problem. Conservation, hybrids, electric etc are all part of a larger effort to beat this problem. And, I think you're wrong on cullelotic production...we're already able to do this......and it's not me saying this but rather the ethanol industry itself!! In fact, they've been able to do this since 2004 but there are other hurdles (financing, etc) to overcome. See the ethanol industries response here:

    http://www.ethanolproducer.com/expert-details.jsp?expert_id=6
  19. begreen

    begreen Mooderator Staff Member

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    No whining here, I've been suggesting aggressive steps from the get go, but there's been an administration in the way. - LOL - And I'm not opposed to ethanol, but as noted, just don't think we should be getting it from corn.

    Thanks for the link on cellulosic. Cool site, I'll spend some time there later.AFAIK, there still is no plant in commercial production and the test facilities. While they show it can be done, it is still not proving cost effective. Given the lower energy content of ethanol, current cellulosic costs are equivalent to oil at about $120/barrel. It appears there are valid arguments on both sides of the issue. But I agree it's coming and can't wait for golden waves of hemp growing across the country again :).

    http://i-r-squared.blogspot.com/2006/08/guest-post-on-cellulosic-ethanol.html
  20. jjbaer

    jjbaer New Member

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    I propse we just suck the "ether" out of the air and power our vehicles with that.........LOL....if that doesn't work, we can use "dark matter".....LOL
  21. Sandor

    Sandor Minister of Fire

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    I read Rapier's blog several times a week.
  22. DaveR

    DaveR New Member

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    Excessive profits invite increased production and competition if not artificially restrained by monopolies or government policy. This is where real inequities build in markets and command and control economies typically result in greater inequities than free markets where information and process are jealously guarded to support informed decisions.

    Let's just reduce the profit margin on everything sold in the U.S. to zero and then the world will be the perfect utopia. What is the optimal sales price that yields an optimal profit margin? Does one price fit all? Do bureaucrats know what the optimal sales price or profit margin is for all the goods and services traded in U.S. markets across the continent? Do bureaucrats know what value consumers are looking for, how much volume is needed to satisfy demand, where resources should be allocated to optimize market value, what new technologies are going to offer the optimal return on investment? Even with super computers capable of crunching unimaginable volumes of data modern bureaucrats are no better prepared to compete with free markets for setting prices, determining optimal profit margins, or allocating resources than Soviet Technocrats were in establishing fallacious five year plans. This has been tried many times with disasterous failure and misery for average citizens. The Soviet Union, China, Cuba, Venezuala and many other examples of command and control economies that decided the profit motive was what was wrong with the world and concluded bureaucrats were better at managing market prices and resource allocation are good indicators of expected outcome when the profit motive is cast aside. Even President Nixon tried this approach with wage and price freezes in the seventies with disasterous results lasting for a decade. For some these places might seem to offer utopia but I will stay in the United States and continue to support free people and free markets.

    What is needed is rationalization of Government policy in the form of taxes, subsidies, and tariffs to reflect current market realities. Reduce taxes, subsidies, and tariffs that introduce political bias and interfere with free market allocation of these resources and you will see some immediate changes relative to ethanol, biodiesel, sugar, corn syrup, and food costs that I suspect would yield better outcomes over the long run. Incentivize energy effeciency through tax credits for renewable energy technology, energy efficient technology in homes and transportation, and R&D at levels that deliver shorter return on investment timeframes for individuals and businesses and loose free market forces to change energy markets. Aggressive unapologetic domestic energy development is also needed to increase supply suffcient to sustain economic growth and market evolution toward new energy sources.

    Long live free people and free markets. Long live the profit motive.
  23. Sandor

    Sandor Minister of Fire

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    Oh, you mean the profit motive that sent the US manufacturing base to China?

    I don't think that the Chinese people are exactly free, and neither are their markets.
  24. begreen

    begreen Mooderator Staff Member

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    Yep, the same profit motive that has reduced our healthcare system into a shambles. It used to be that doctors were concerned with how to keep the patient in the best health. Now it's all about keeping the insurance companies happy and off their backs. The same profit motive that made Love Canal and the other 1305 superfund sites we're paying to clean up. The same profit motive that is giving the finger to the next generation - our kids.

    Our current track is like a snake eating its tail. Eventually, there's no snake left. As long as profits come before sustainability, its a one-way street that ends in a literally dead end.
  25. webbie

    webbie Seasoned Moderator Staff Member

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    Wow, how do we get from Ethanol to free markets and free people? If markets are really free, all of AG's agricultural friends should be sending their government subsidies back to Uncle Sam....ah, but I guess that is one decision of the bureaucrats they can get behind. And so it goes, when the gravy train is headed our way we champion those "free markets", but when it goes to someone else we feel the pain.

    Rather than "free markets" we should call them "expensive markets" because that is what they are! There is nothing free about them! Next time we have a natural disaster, buy some generators at your local HD and drive to the scene of the devastation...and sell them for double what you paid....

    YOU WILL BE ARRESTED. Yes, there are laws against that. Try paying an employee well under the minimum wage.....even if they agree to accept it (that sounds free to me), and you will be breaking the law.

    Please, please, please, please......don't equate free markets and free people....and the profit motive all in one sentence!
    "Certain inalienable rights bestowed by our creator, among them life, liberty and the pursuit of happiness". I guess the new meaning of liberty is free markets (not free men) and the pursuit of happiness is now the inalienable right to profit from the pain of other (including the taxpayer in subsidies).

    We have to stop praying at the altar of "growth", and understand that the pursuit of happiness in this world today is MORE about the right to clean air, clean water and decent medical care than it is about being able to set up a lemonade stand in the desert and charge $10.00 a cup.
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