Some Things I Learned About Ethanol
1) It takes more energy to make ethanol than the fuel itself produces.
Reality: Not so. Critics like to cite a 2005 study that shows a negative energy balance for ethanol, but that study was coauthored by a former oil company employee. It is contradicted by five others showing that corn ethanol delivers 20 to 50 percent more energy output than it takes to produce, and cellulosic up to 600 percent more. The National Resources Defense Council calls corn ethanol "energy well spent."
2) Ethanol is expensive to produce.
Reality: Ethanol costs about $1 a gallon to produce at typical facilities, which explains why E85 was selling for $1.95 at pumps in South Dakota this summer. In 2004, it was selling for $1.40 a gallon wholesale. Prices spiked higher recently because oil companies mismanaged the switch to ethanol as a replacement for the environmentally disastrous additive MBTE. Once demand and supply reach equilibrium, it can profitably sell for $1.40 a gallon without subsidies.
3) There's not enough land to grow crops for ethanol.
Reality: Former secretary of state George Schultz and ex-CIA director R. James Woolsey estimate that 30 million acres can replace half our gasoline. I estimate that 40 million to 60 million acres can replace our gasoline needs. By taking land now used to grow export crops and instead planting energy crops, it's feasible to eliminate our need to import oil for gasoline.
4) Switching to ethanol is expensive.
Reality: It didn't cost much in Brazil. Automakers already produce 10 flex-fuel models. There are almost as many flex-fuel vehicles in California as there are diesel cars and light trucks. A new car can be made flex-fuel-capable for about $35. And the cost to adapt a retail gas pump for E85 is a bargain – as little as $10,000.
5) Ethanol is unfairly subsidized.
Reality: Yes, ethanol producers and blenders share in a 51-cent-a-gallon federal credit that costs taxpayers about $2 billion a year. The majority of that accrues to oil companies, not farmers. But not mentioned by critics is the 54-cent-a-gallon tariff on imported ethanol, which hampers global competition. Meanwhile, the US also directly subsidizes Big Oil. The General Accounting Office reports that the industry has netted $82 billion from just one line item alone, something called "excess of percentage over cost depletion," and there are many other such clauses.
6) Cars that run on ethanol get lower mileage.
Reality: Ethanol gets 25 percent lower mileage compared to gasoline. But that difference is likely to shrink dramatically as engines are optimized. The Saab 9-5 gets only 18 percent less mileage and can be further optimized easily. Significantly, the cost per mile driven should be lower using E85.
From: My Big Biofuels Bet
Personal commentary
One take-away question here is, why the heck is 82 billion, and probably a lot more, of our taxes going to subsidizing the oil companies who are logging record profits??? At exactly what point did people lose control in this country and bureaucracy and business take over? Is this the best system available? Will we look back on this time someday as the dark ages of greed and territorialism of the mammalian mind or will we become so dependent on the system for survival that we give away all of our rights to those representing our security for protection from our fellow man? Or something else? So many threads unwinding in the web of wryd.
But it may get worse before it gets better. It seems obvious that money is a major player in our government, in the laws it enacts and the allocation of taxes it collects. Here's a little projection, from my crystal ball. You can verify this in, oh, probably less than 5 years from this posting. The pharmaceutical companies enjoy revenues that make the oil companies look like kids at lemonade stands. A lucrative strategy will emerge between them, the government and the insurance companies (another major player in our laws and taxes) to classify some condition as requiring mandatory treatment. They've tried and botched this with flu shots, but the next frontier will be something they can define as an "epidemic" and something that is a syndrome ("syndrome" is a catch-all label popular in allopathic medicine as a way to classify a group of symptoms in order to prescribe specific treatments without looking too deeply into the underlying causes) which, conveniently, we have medications to treat. A locked-down market, a sure thing, like shooting fish in a barrel. This might be their opening.
Here's how it could unfold. There will be a lot build up in the media about spiraling health costs. There will be an upsurge in media about a spiraling epidemic. The insurance companies will ask to government to connect the dots and help the people out of exorbitant healthcare expenses with laws. Congress will select a few key pharmaceuticals/patents and regulate the rates, as they do petroleum. They will legally permit insurance companies to deny coverage for members who can be identified with this epidemic that refuse the approved treatment. Insurance companies benefit because it cuts their costs (and I'm curious about their investment portfolios, do they include pharm companies I wonder?), and I'm sure they will then lower their charges, just like the oil companies do. Pharmaceutical's benefit is obvious and the government benefits by the taxes it enacts on the medicine. Now, if this happens, will this be some loony conspiracy theory? I think it could be problematic if it is predictive. And that could be good. And if I'm wrong? Well I'll be glad.
Reality: Not so. Critics like to cite a 2005 study that shows a negative energy balance for ethanol, but that study was coauthored by a former oil company employee. It is contradicted by five others showing that corn ethanol delivers 20 to 50 percent more energy output than it takes to produce, and cellulosic up to 600 percent more. The National Resources Defense Council calls corn ethanol "energy well spent."
2) Ethanol is expensive to produce.
Reality: Ethanol costs about $1 a gallon to produce at typical facilities, which explains why E85 was selling for $1.95 at pumps in South Dakota this summer. In 2004, it was selling for $1.40 a gallon wholesale. Prices spiked higher recently because oil companies mismanaged the switch to ethanol as a replacement for the environmentally disastrous additive MBTE. Once demand and supply reach equilibrium, it can profitably sell for $1.40 a gallon without subsidies.
3) There's not enough land to grow crops for ethanol.
Reality: Former secretary of state George Schultz and ex-CIA director R. James Woolsey estimate that 30 million acres can replace half our gasoline. I estimate that 40 million to 60 million acres can replace our gasoline needs. By taking land now used to grow export crops and instead planting energy crops, it's feasible to eliminate our need to import oil for gasoline.
4) Switching to ethanol is expensive.
Reality: It didn't cost much in Brazil. Automakers already produce 10 flex-fuel models. There are almost as many flex-fuel vehicles in California as there are diesel cars and light trucks. A new car can be made flex-fuel-capable for about $35. And the cost to adapt a retail gas pump for E85 is a bargain – as little as $10,000.
5) Ethanol is unfairly subsidized.
Reality: Yes, ethanol producers and blenders share in a 51-cent-a-gallon federal credit that costs taxpayers about $2 billion a year. The majority of that accrues to oil companies, not farmers. But not mentioned by critics is the 54-cent-a-gallon tariff on imported ethanol, which hampers global competition. Meanwhile, the US also directly subsidizes Big Oil. The General Accounting Office reports that the industry has netted $82 billion from just one line item alone, something called "excess of percentage over cost depletion," and there are many other such clauses.
6) Cars that run on ethanol get lower mileage.
Reality: Ethanol gets 25 percent lower mileage compared to gasoline. But that difference is likely to shrink dramatically as engines are optimized. The Saab 9-5 gets only 18 percent less mileage and can be further optimized easily. Significantly, the cost per mile driven should be lower using E85.
From: My Big Biofuels Bet
Personal commentary
One take-away question here is, why the heck is 82 billion, and probably a lot more, of our taxes going to subsidizing the oil companies who are logging record profits??? At exactly what point did people lose control in this country and bureaucracy and business take over? Is this the best system available? Will we look back on this time someday as the dark ages of greed and territorialism of the mammalian mind or will we become so dependent on the system for survival that we give away all of our rights to those representing our security for protection from our fellow man? Or something else? So many threads unwinding in the web of wryd.
But it may get worse before it gets better. It seems obvious that money is a major player in our government, in the laws it enacts and the allocation of taxes it collects. Here's a little projection, from my crystal ball. You can verify this in, oh, probably less than 5 years from this posting. The pharmaceutical companies enjoy revenues that make the oil companies look like kids at lemonade stands. A lucrative strategy will emerge between them, the government and the insurance companies (another major player in our laws and taxes) to classify some condition as requiring mandatory treatment. They've tried and botched this with flu shots, but the next frontier will be something they can define as an "epidemic" and something that is a syndrome ("syndrome" is a catch-all label popular in allopathic medicine as a way to classify a group of symptoms in order to prescribe specific treatments without looking too deeply into the underlying causes) which, conveniently, we have medications to treat. A locked-down market, a sure thing, like shooting fish in a barrel. This might be their opening.
Here's how it could unfold. There will be a lot build up in the media about spiraling health costs. There will be an upsurge in media about a spiraling epidemic. The insurance companies will ask to government to connect the dots and help the people out of exorbitant healthcare expenses with laws. Congress will select a few key pharmaceuticals/patents and regulate the rates, as they do petroleum. They will legally permit insurance companies to deny coverage for members who can be identified with this epidemic that refuse the approved treatment. Insurance companies benefit because it cuts their costs (and I'm curious about their investment portfolios, do they include pharm companies I wonder?), and I'm sure they will then lower their charges, just like the oil companies do. Pharmaceutical's benefit is obvious and the government benefits by the taxes it enacts on the medicine. Now, if this happens, will this be some loony conspiracy theory? I think it could be problematic if it is predictive. And that could be good. And if I'm wrong? Well I'll be glad.
Frustrating to say the least. We are experiencing our ongoing sagas right here in our little town. If you read John Grisham's latest book "The Innocent Man" it will give cause for serious thought. Was the blog about the Ferrari a true one?
ReplyDeleteYa, the Ferrari story is true. Course, he's guilty as sin and will probably get off scot-free; the power of lawyers. Maybe this will be the inspiration for Sam to further his career objectives in that arena.
ReplyDelete