Big Corn and Ethanol Hoax

[TrainTrac]

A great column by one of America's preeminent economists.



Personally, I quit buying E85 for my ST when I saw the significant drop in MPG and realized it was actually costing me more money. And I have a real problem with a product and industry that can't compete in a free market without gov't (i.e. yours, mine,and our tax money) subsidies.

Big Corn and Ethanol Hoax



One of the many mandates of the Energy Policy Act of 2005 calls for oil companies to increase the amount of ethanol mixed with gasoline. President Bush said, during his 2006 State of the Union address, "America is addicted to oil, which is often imported from unstable parts of the world." Let's look at some of the "wonders" of ethanol as a replacement for gasoline.



Ethanol contains water that distillation cannot remove. As such, it can cause major damage to automobile engines not specifically designed to burn ethanol. The water content of ethanol also risks pipeline corrosion and thus must be shipped by truck, rail car or barge. These shipping methods are far more expensive than pipelines.



Ethanol is 20 to 30 percent less efficient than gasoline, making it more expensive per highway mile. It takes 450 pounds of corn to produce the ethanol to fill one SUV tank. That's enough corn to feed one person for a year. Plus, it takes more than one gallon of fossil fuel -- oil and natural gas -- to produce one gallon of ethanol. After all, corn must be grown, fertilized, harvested and trucked to ethanol producers -- all of which are fuel-using activities. And, it takes 1,700 gallons of water to produce one gallon of ethanol. On top of all this, if our total annual corn output were put to ethanol production, it would reduce gasoline consumption by 10 or 12 percent.



Ethanol is so costly that it wouldn't make it in a free market. That's why Congress has enacted major ethanol subsidies, about $1.05 to $1.38 a gallon, which is no less than a tax on consumers. In fact, there's a double tax -- one in the form of ethanol subsidies and another in the form of handouts to corn farmers to the tune of $9.5 billion in 2005 alone.



There's something else wrong with this picture. If Congress and President Bush say we need less reliance on oil and greater use of renewable fuels, then why would Congress impose a stiff tariff, 54 cents a gallon, on ethanol from Brazil? Brazilian ethanol, by the way, is produced from sugar beet and is far more energy efficient, cleaner and cheaper to produce.



Ethanol production has driven up the prices of corn-fed livestock, such as beef, chicken and dairy products, and products made from corn, such as cereals. As a result of higher demand for corn, other grain prices, such as soybean and wheat, have risen dramatically. The fact that the U.S. is the world's largest grain producer and exporter means that the ethanol-induced higher grain prices will have a worldwide impact on food prices.



It's easy to understand how the public, looking for cheaper gasoline, can be taken in by the call for increased ethanol usage. But politicians, corn farmers and ethanol producers know they are running a cruel hoax on the American consumer. They are in it for the money. The top leader in the ethanol hoax is Archer Daniels Midland (ADM), the country's largest producer of ethanol. Ethanol producers and the farm lobby have pressured farm state congressmen into believing that it would be political suicide if they didn't support subsidized ethanol production. That's the stick. Campaign contributions play the role of the carrot.



The ethanol hoax is a good example of a problem economists refer to as narrow, well-defined benefits versus widely dispersed costs. It pays the ethanol lobby to organize and collect money to grease the palms of politicians willing to do their bidding because there's a large benefit for them -- higher wages and profits. The millions of gasol

 

[Rodger Tellefson]

Yup, the American people are duped again.

 

[EddieS'04]

Why cant we seem to get this message out to the masses'?

Someday we are going to drill and build more refineries anyway. In the end I dont think big money will allow this nation to be crippled. Damn the tree huggers..:wacko:

 

[Rodger Tellefson]

Damn the tree huggers..

Without the trees we have no clean air. What happens when all the trees are gone? We would have no wood to build houses, and that is just the tip of the iceburg. No, I am not a tree hugger, but . . .

 

[TomT]

The US is not alone. Many countries in Europe also have bio-fuel requirements. Everyone's getting desperate. Like it or not the earth is running out of oil and we have either got to find an alternative or reduce our use. I'm afraid Americans are to damn spoiled to reduce their use. Here's a good article on bio-fuels:

 

[Bill Barber]

The earth is not running out of oil, is plenty of oil in this country,canada, and central america.

We just need to be able to get to it and refine it.

As far as tree huggers and trees, the reality is, houses should not be made of wood, commercial construction uses steel as so should the residential builders.

 

[TomT]

Maybe I should have said "affordable oil". Yeah, there will always be oil available in a physical sense, just hope you don't mind paying out of your arse for it.

 

[Jack Wiley]

Agree, the whole ethanol game is geared around subsidies for farmers and big agri for corporations like ADM. Ethanol as a fuel is a low density energy source. Race cars using nitromethanol or methanol in Formula 1, Indy Cart use the fuel for different reasons namely higher compression, detonation issues. The consumer once again is hit with higher costs.

Interestingly ethanol based fuels pollute 3 times more hydrocarbons than gasoline or diesel fueled vehicles. Great book on the oil, fuel crisis myth is by Robert Bryce, "Gusher of Lies"

Bryce is I believe a PhD. in herbology (oil science engineering) worked for the big oil cos. and now is a consultant. He publishes the Energy Tribune an oil industry tome. For real fuel savings drive a VW TDI Rabbit, Jetta.

 

[Bart Adkins]

fact is we (the UsA) should've been working on this 20 years ago. Ethanol is costly to make now...but there are countries in central and south america that are 100% energy independent. They make their ethanol from sugar cane waste. They make it really cheap like $0.15 a gallon because the refineries are built right next to the sugar processing plants...they also sell pure ethanol, but you won't see that here 'cuz you can drink it :lol:...we have put it off long enough...and it wont be cheap or easy...but ethanol is the wat to go imo. the auto makers just have to step up their technologies and the poor Saudi oil tycoons that profit in the billions each year might have to settle for a regular Rolls Royce instead of a solid gold one

 

[blksn8k]

This looks promising. I just hope GM doesn't drop the ball and turn this into a negative.

 

[blksn8k]

Coskata company bio.

 

[A K]

A fellow in PA recently patented a process to extract ethanol from grass. If he's successful, that's a step in the right direction.

 

[Larry Gamble]

Yep, I ran E85 for a very short while. At first, E85 was 50 to 65 cents cheaper than the E10 stuff we have to buy here in Milwaukee. That was an OK trade to suffer the loss in MPG but still save some money.



Now, I just buy the E10 because the Rippy Mart is only discounting E85 by 10 CENTS from the E10. There is no way I'm taking that sort of MPG hit and have it cost me more money!

 

[EddieS'04]

Rodger Iam not against saving trees. I know how they help the enviroment. This country is being hoaxed by all of this and alot of what is PC.

 

[Kevin Lang]

Ethanol is costly to make now...but there are countries in central and south america that are 100% energy independent.

That's because they have sugar crops to get ethanol from. The US doesn't have that.



Brazil and such don't have big oil....their conglomerates are based around the sugar.

 

[Gavin Allan]

The US subsidizes the Corn Industry way too much. All the high-frutcose corn syrup has made the citizens in this country FAT because humans process frutcose differently than glucose.



Big Corn is truly a threat to this country in many ways. We are fat and unhealthy due to big corn. We are burning our food due to big corn. We are paying more money due to big corn.



Let the free market work. Stop spending my tax dollars to subsidize Big Corn.

 

[Richard L]

The purpose of using E85 is to reduce our dependance on foreign oil, It is widely known that E85 gives much poorer mileage than conventional gasoline and is also responsible for much of the rise in food prices as more farmer are planting corn for E85 production. This has reduced the wheat crop and other produce due to the inflated price of corn.



That's the main reason that I don't like E85. I don't think we should be using a viable food source to make fuel for our cars.



It's a proven fact that sawgrass will produce more alcohol per acre and you can grow 4 crops per year to corns one crop. If they want to make E85 they need to switch to using sawgrass not corn.



...Rich

 

[Roger Batts]

Having grown up in a small town that was created by the discovery of oil, I have heard all sides of this story. There is one very interesting thing that I have heard from people that know how much oil is in the ground here just in the Texas, Oklahoma, Arkansas, and Louisiana area. There is enough oil in just those four states to power the United States for the next couple of hundred years even with our current rate of consumption and the level we are increasing that consumption. It's just that organizations like Greenpeace and other groups that don't want us to do any kind of drilling or expanding our refineries have too many hands in our politicians' pockets, therefore, they have their ears and votes.

 

[Ryan Schaecher]

Without the trees we have no clean air. What happens when all the trees are gone? We would have no wood to build houses, and that is just the tip of the iceburg. No, I am not a tree hugger, but . . .

Don't get me wrong, I love trees, especially old trees that surround a new house, etc. However, the whole "we need trees to clean the air" is a stretch to reality. Yes, they do help, however, they are at best the 4th highest CO2 absorbing entity, following The Oceans, Grass, and Soil.



We have about as many tree in the US today as there was in 1600. There are more trees now than there were in 1900.



In 1952 there were 5 million acres of plantation trees. Today, more than 37 million acres, a 7400% INCREASE. Every year, 2.6 million acres of trees are planted, or about an area the size of Connecticut. This is without goberment requirements. Compare that to the government programs of the 1930's and 40's that planted a total of 2.3 million acres. Free market at work once again.