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Oil Companies and Ethanol Plants: Slash, Burn and Buy

By David Blume, Author
February 26, 2009   |   91 Comments

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With all of the corporate bailouts and economic disasters our country is facing at present, it really is easy to welcome the wallet-relief provided by currently low transportation and heating fuel prices. As the saying goes, "Why look a gift horse in the mouth?" It isn't comfortable to consider that the relatively calm waters international oil prices present could be covering an insidious undertow that is quietly dragging our renewable and alcohol fuel industry down to the OPEC equivalent of Davey Jones's Locker where it will lay submerged until the big oil pumps finally do run dry.

The information and views expressed in this article are those of the author and not necessarily those of RenewableEnergyWorld.com or the companies that advertise on its Web site and other publications.

91 Reader Comments
Comment
1 of 91
February 26, 2009
This is really a lot of conspiracy talk that I feel does not meet the editorial standards of this website. Alleging a conspiracy is generally the approach of those who lack depth of understanding about a subject such as commodity markets or the energy industry.

After all, Velero is a refiner that has no direct economic interest in the price of oil or corn, merely the difference in price between them and the refined products that they produce. Period.
Comment
2 of 91
February 26, 2009
Mike,

I disagree with you. Your comments:

"After all, Velero is a refiner that has no direct economic interest in the price of oil or corn, merely the difference in price between them and the refined products that they produce. Period."

Now that they've bid for Verasun I would imagine that they will soon have a greater economic interest in the price of oil or corn and how the production / cost to ethanol will compete with their "other" refinery interests...
Otherwise why buy Verasun in the first place ?
Comment
3 of 91
February 27, 2009
I do not think Ethanol production is going to be a major concern to the Oil Companies. The Food Industry is not about to let Big Oil take their land for fuel resources, when it is needed for the Food Markets.. And using corn for Ethanol production is a waste of time and energy when comparing that same energy in making hydrogen....for a hydrogen fuelled economy....or growing Algae for Algae Oil.... The costs are higher for making Ethanol in comparison to making hydrogen, or growing algae......which distills down to no profit....

Corn which is starch needs to be converted into sugar, unlike sugarcane which is a better crop to use for Ethanol production. Given the climatic areas Brazil has the right crop and climate and land areas to make it work, whereas the US does not... Corn is a loser for Ethanol Production.
Comment
4 of 91
February 27, 2009
Smaller is better. The "Field-to-Pump" strategy developed by Renergie, Inc. uses a network of 5 MGY advanced biofuel manufacturing facilities. The ethanol is processed locally and directly marketed locally.

The U.S. Environmental Protection Agency has granted a testing exemption to Renergie, Inc. Under the test program, the first of its kind in the U.S., Renergie will use variable blending pumps, not splash blending, to precisely dispense hydrous ethanol blends of E10, E20, E30, and E85 to test vehicles for the purpose of testing for blend optimization with respect to fuel economy, engine emissions, and vehicle drivability. Sixty vehicles will be involved in the test program which will last for a period of 15 months.

Hydrous Ethanol
Preliminary tests conducted in Europe have proven that the use of hydrous ethanol, which eliminates the need for the hydrous-to-anhydrous dehydration processing step, results in an energy savings of between ten percent and forty-five percent during processing, a four percent product volume increase, higher mileage per gallon, a cleaner engine interior, and a reduction in greenhouse gas emissions.

Variable Blending Pump
In the U.S., the primary method for blending ethanol into gasoline is splash blending. The ethanol is "splashed" into the gasoline either in a tanker truck or sometimes into a storage tank of a retail station. Renergie believes the inaccuracy and manipulation of splash blending may be eliminated by precisely blending the ethanol and unleaded gasoline at the point of consumption, i.e., the point where the consumer puts E10, E20, E30 or E85 into his or her vehicle. A variable blending pump would ensure the consumer that E10 means the fuel entering the fuel tank of the consumer's vehicle is 10 percent ethanol (rather than the current arbitrary range of 4 percent ethanol to at least 24% ethanol that the splash blending method provides) and 90% gasoline.

Visit the Renergie weblog at renergie.wordpress.com.
Comment
5 of 91
February 27, 2009
Mike was right, this is conspiracy hogwash. Oil companies can't control the price of oil - despite the fact they wish they could.

1. Countries, not companies hold close to 80% of the worlds oil reserves
2. If OPEC can't keep the price from falling off a cliff how are oil companies going to manipulate the price?
3. Oil companies stand to make a lot more money with high oil prices - not buying ethanol companies
4. If oil companies really wanted to buy the companies at a discount there are easier and cheaper ways to do it. Short the stock until it is beaten down to a good acquisition level.

Bottom line, this is not reporting. This is whining about an industry that could not stand on its own merit and was swiftly dealt with when the commodity bubble burst.
Comment
6 of 91
February 27, 2009
This article makes multiple assertions without providing any proof. Why would the author make such provocative statements without including documentation?
The story is suspect and detracts from the credibility of this website.
Comment
7 of 91
February 27, 2009
What a bunch of goobly-gook. It was tax-payer funded governmental tax credits based on mis-guided and faulty thinking by our elected state and federal leaders that created the current ethanol debacle. Ethanol at any cost was the mantra! We have the environmental high ground. All we have to do is throw money at it it will all work. Never-mind that a sensible feed stock doesn't exist in the United States, as it does in Brazil. Never mind that it will divert food and land to producing ethanol rather than low-priced food for people. Never mind that technologies for cellulosic ethanol are not mature. And your answer? 1. Blame Big Oil! not the government being bamboozled by environmental zealots in their crazed campaign to rid the atmoshpere of toxic carbon doxide at all or any costs. 2. Throw more money at it. Ignore agricultural, ecological, market, economic and social realities. We, and we alone, know what's right. If the market or private industry won't do, the government must step in and take over. Our mantra rules!!!
Comment
8 of 91
February 27, 2009
If any ethanol production is not celulosic and secured by perennial crop feedstuffs there will not be much future to consider. The rate of topsoil erosion in the USA by intensive and irresponsible farming is insuring there will be little enough topsoil to provide adequate groceries in the future. Crop stover that was previously returned into the land is now mostly harvested as biomass and animal bedding, which in itself would be ok if the manure it produced was all returned to the soil.
Perenial crops, by their nature, do not require the soil to be tilled every year, thereby leaving a stronger root system and cover to prevent erosion, which is rapidly destroying our topsoil all across the country. The chemical plant foods from the petro biz do not replace soil organic matter, and this single factor is still the main reason we will not need to worry much about future fuel sources from food crops, much less where the food for suberbia will come from .
.....If we do not learn how to produce energy from current sunshine, our lifestyle and freedoms will be drastically curtailed in the future, and only delayed briefly by other means.
Comment
9 of 91
February 27, 2009
If you'll notice oil has spiked due to Iranian nuclear testing. I think it's a good thing for oil cos. to be buying ethanol cos. to increase domestic supplies. I also think it's good to diversify feedstocks, such as switchgrass or algae.
Comment
10 of 91
February 27, 2009
Can the farmers who grew on contract process their own product somehow? I believe it would be unwise to feed corn grown for fuel directly to animals. Is it legal to process small batches into alcohol, for fuel use on the farm? I am very concerned for small farmers, though some in the responsible-farming community are saying Vilsack may try to help some small farmers. A Rodale website has proposed making on-ramps to the highway of organic production for conventional farmers, and I was reminded of the organic pre-emergent methods on which David Blume has some patents. I understand also that there now is some interest in the South in using kudzu. I seem to recall that allowances have been made for back-yard production of alcohol. Is this still true? We are an inventive people. If oil spikes again soon, individuals and communities will make other arrangements if their allotment of dollars are not enough to stay warm and safe. People across the spectrum of opinion are alarmed about consolidation beyond reasonable scale and about the number of people losing jobs and homes. Assuming the food-production industry does not overlap the power industry is not an assumption I would make. I don't know to what degree these industries do or don't overlap, and I am not sure how one would go about doing that research, but it is an interesting topic. Ironically, I just received a solicitation in the mail from MADD wanting road-blocks to stop drunk-driving. If we can't afford to drive, we won't need road-blocks, and if the prisons are closing because we can't afford them, why bother with road-blocks? The warning about the past not necessarily predicting the future seems especially appropriate. I read this with great interest.
Comment
11 of 91
February 27, 2009
Paying American farmers an extra $1 a bushel is not worth political instability in Mexico.
Total energy in over energy out for alcohol is near negative, and if soil carbon was accounted for (which it never is) we are talking way negative.

Biochar, the modern version of an ancient Amazonian agricultural practice called Terra Preta (black earth, TP), is gaining widespread credibility as a way to address world hunger, climate change, rural poverty, deforestation, and energy shortages… SIMULTANEOUSLY!

Modern Pyrolysis of biomass is a process for Carbon Negative Bio fuels, massive Carbon sequestration,10X Lower Methane & N2O soil emissions, and 3X Fertility Too.
Every 1 ton of Biomass yields 1/3 ton Charcoal for soil Sequestration, Bio-Gas & Bio-oil fuels, so is a totally virtuous, carbon negative energy cycle.


The UN recognizes Soil as a Carbon Sink;
UNCCD Submission to Climate Change/UNFCCC AWG-LCA 5
"Account carbon contained in soils and the importance of biochar (charcoal) in replenishing soil carbon pools, restoring soil fertility and enhancing the sequestration of CO2."
www.unccd.int/publicin...

This new Congressional Research Service report (by analyst Kelsi Bracmort) is the best short summary I have seen so far - both technical and policy oriented.
assets.opencrs.com/rpt... .

Given the current "Crisis" atmosphere concerning energy, soil sustainability, food vs. Biofuels, and Climate Change what other subject addresses them all?

This is a Nano technology for the soil that represents the most comprehensive, low cost, and productive approach to long term stewardship and sustainability.

Carbon to the Soil, the only ubiquitous and economic place to put it.
Comment
12 of 91
February 28, 2009
Mike, Paul, and Rick hit the nail on the head.

Just last summer biodiesel was selling for $6.00 a gallon in Seattle. Nobody could afford it. The distributor lost half of his business. Biofuel proponents were all blaming the high price of oil for driving up the cost of the feedstock (food).

It is now selling for much less but because it is still more expensive than diesel, the blame falls on oil yet again.

The biggest biodiesel refiner on the west coast is on the edge of bankruptcy. They are staving it off by exporting biodiesel to Europe and undercutting suppliers there with our dollar a gallon subsidy. So much for energy independence. They would sell it to Europe if we were at war with Europe.

A law that would make all biofuel refineries use biofuel to power themselves instead of fossil fuels would put them all out of business.

I agree that publishing opposing viewpoints is what debate is all about and debate it the only way to flush out reality. However, the only debate taking place on this site is in the comments. Every article published to date has been pro-biofuel.

I also wonder if the renewable energy crew ever reads these debates. It is hard to imagine how they can still be so pro-biofuel when the scientific, environmental, and economic arguments, against this government funded boondoggle are so overwhelming.

Don't like "big oil?" Do what my family has done. Use a little common sense and cut your use 80%. Trade in your SUV or useless pickup for a Prius or Jetta other high mileage car. Get your butt on a bike for around town errands.
Comment
13 of 91
February 28, 2009
One more,

When I saw the phrase "slash and burn" in the title I thought "Finally, an article about the downsides of biofuels." Poor choice of words.
Comment
14 of 91
February 28, 2009
I agree Russ...this site does not allow or publish articles about the energy costs comparisons to making ethanol vs. hydrogen.....nor have I ever seen an article on Algae Oil.... Why? I think this site is MidWest financed.....

Think about it. Cars are made very close to the Midwest farmers who grow corn for ethanol...Certainly its keeps their club intact.....but they are in serious financial difficulties.....Changing the car production factory assembly line that makes cars for what? electrical use, hybrid use, solar panel use, hydrogen use, algae oil use, ethanol use.....is daunting to say the least.
Comment
15 of 91
March 1, 2009
David Blume predicted the knee-capping of alcohol producers before it happened. The point was that big corporations lobbied a silly subsidy in and are completely capable of lobbying it back out when it suits their purposes. Using corn is as scientifically silly as it gets, that is why it was lobbied in. The point was to sell GM seeds, fertilizer, pesticides, and transportation fuel, and then to say oops, as if farmers lobbied it in. Small, less-advantaged farmers are then bankrupted so their property can be taken. If they commit suicide, as in India, it is even more convenient for big corporations. This pattern is tolerated in the U.S. with less protest than in other places, but there is a limit to how long this pattern can be maintained. Health risks of biocides are increasingly researched by consortia of true scientists fired by corrupt universities, and organic consumption grows. It's just a matter of time until the tipping point hits. Physicians for Social Responsiblity now sponsor post-card campaigns aimed directly at big corporations. Why waste time lobbying government when they only listen to big-pocket lobbyists anyway? I agree that pro-cotts and boycotts are reasonable, but if you boycott, send a post card to let them know why, and get your circles of friends and relatives to do the same. Lobbying for mandated stuff takes too long and does not work if you do not have substantial influence-purchasing capital. So, kleptocrats or kleptocans, which is worse? They both give huge sums to provably inept big-spenders. I can't decide.
Comment
16 of 91
March 1, 2009
I must say that it is refreshing to read the responses to this article, which several commentators aptly describe as "conspiracy hogwash".

Mr. Blume's allegations are pretty serious. The least he could do is provide evidence to back them up. The fact that he doesn't, and that RenewableEnergyWorld.com did not require that he do, reflects badly on the editorial credentials of this web site.

If there is a conspiracy out there, it is led, as Mary Saunders points out, by those corporations that are more adept at cultivating government favors and subsidies than they are at creating products that add value and that compete in the market place, rather than relying on government mandates.
Comment
17 of 91
March 1, 2009
Here, for what it is worth, is an alternate view on Valero's likely acquisition of VeraSun's ethanol plants:

www.tradingmarkets.com/.site/news/Stock%20News/2200682/
Comment
18 of 91
March 2, 2009
I read recently of a potential increase in sugar cane Ethanol from Africa, and in particular Mozambique. The private equity company concerned is siting the US African Growth and Opportunities Act (this allows for tax-free ethanol imports to the US from sub saharan Africa) as it's USP over Brazilian sugar cane Ethanol. The site should produce 225M litres in Dombe, Mozambique. Given Big Oil's propensity to cripple the domestic alcohol fuel market in the US, how would they tackle the challenge from Mozambique? Furthermore can the US do anything to protect the local market from tax free African competition?
Comment
19 of 91
March 2, 2009
Peak Oil is past. Oil is running out.

What are you going to use to replace oil?

What are you going to use to replace food when most of the earth is a vast desert due to global warming?
Comment
20 of 91
March 2, 2009
Hello Fred, there is some good news about food if you know where to look, and the implications for energy-production are related. Maintaining soil health, life, and diversity is key, and it is being done well by some humans, such as the Amish. When international companies brought different seeds to the Punjab, the characteristics of the plants produced by those seeds were greater exportable yields of grain seeds. The over-all bio-mass produced was less, however, less for animal food and less for returning to the soil. Plowing was no longer done with animals, but with machines that farmers took long-term loans for. This kind of farming wears out the soil, and yields drop. When this happens, a turn-around in farming methods can occur. One of my sources for this is Vandana Shiva, an Indian quantum physicist turned crusader for seeds adapted to local conditions. She and Wangari Maathai, a Kenyan woman who won a Nobel prize for bravely advocating for native trees right in the face of a notorious dictator, are among world-wide crusaders for cooperating with flora to produce tastier food and attractive ways of heating and cooling. Geoff Lawton, Sepp Holzer, and Masanobu Fukuoka are off-shore sources that can be web-searched. Searching food forest will yield more sources, some in the U.S. There is also an institute here that is researching perennial grain plants. I don't remember the link, but probably you can find it in a search. Monoculture agriculture is necessary for stratified elites and boom/bust economies, but it is not necessary for abundant production of food and shelter. Perhaps this is why the earth's forests and seeds are under such pressure. To some of us, seeds are more precious and valued than gold. To survive, we will need to change the way we interact with plants and animals. Importing fuel alcohol makes no sense to me, while we exterminate bio-mass. Who comes up with this stuff?
Comment
21 of 91
March 2, 2009
Steve Webster: "Never-mind that a sensible feed stock doesn't exist in the United States, as it does in Brazil. "

Sugar cane grows in many areas of the US, just as it does in Brazil. Not only that, sugar beets with roughly the same production per acre of exactly the same product will grow in all areas of the country with sufficient moisture--including Alaska.

SW: "Never mind that technologies for cellulosic ethanol are not mature."

Fischer-Tropsch process for converting biomass into liquid fuels was developed in 1924. It was used in wartime on a wide scale during WW2 by Germany when the loss of North Africa and the bombing of Ploesti severely cut oil reserves. Germany set up and implemented its synthetic and biofuels program in a matter of months. Fischer-Tropsch process is 85 years old and can be used on any type of biomass, and can produce a wide range of hydrocarbon output. How mature do you want a technology to be? Ethanol was being produced from wood in commercial quantities by thermochemical means in both the US and Germany 120 years ago.

SW: "Never mind that it will divert food and land to producing ethanol rather than low-priced food for people."

The final product of ethanol distillation is DDG--low cost high protein animal feed. The last time I checked meat, eggs, and dairy products are still food.

SW: "Blame Big Oil! not the government being bamboozled by environmental zealots in their crazed campaign to rid the atmoshpere of toxic carbon doxide at all or any costs. "

It seems to me that you have a high degree of environmental concern. If the only environmental concern you have is the inside of your pockets---why are you on a RE forum? To call names and spout conservative agenda propaganda? If you want to rant about government waste and fraud, why not rant about the bank bailouts by your conservative pals?
Comment
22 of 91
March 2, 2009
Mary S.---"Hello Fred, there is some good news about food if you know where to look, and the implications for energy-production are related. Maintaining soil health, life, and diversity is key, and it is being done well by some humans, such as the Amish. "

I agree Mary. The end result of biofuel production by whatever means is either ash or compost. Both of which has been nature's way of enriching the soil for billions of years.

If we take care of the earth, the earth will take care of us.
Comment
23 of 91
March 2, 2009
I asked a fellow attendee at the Organicology conference what his favorite plant to grow is. He said red sorghum. I am not personally familiar with this plant, but people who know it have agreed it is a wonderful plant. Some sorghums grow on the same roots for more than one season.

Another person I asked said quinoa. This plant can get gigantic in one season.

On the same weekend as Organicology, there was a Yard, Garden, and Patio show. I worked the Portland Permaculture Guild booth.

I feel fortunate to live here where people are nuts about, well, nuts, in addition to vegetables, grains, fruits and even the ornamentals that I personally have not much interest in.

The fire marshall wanted us to spray our sheet-mulching demo straw with water, periodically, which we did, but I was amazed at the number of people who approached our booth by saying, "Oh, we did that."

Straw isn't as flammable as people think because it usually has a high silicon content, but we had fun with the spray bottle anyway.

Diversity will probably win out in the end because it is more attractive than monoculture, not because it is more sensible.

A dwarfed wheat plant may produce more white flour, but it isn't very pretty. Increasing numbers of us don't like white flour all that much. Aside from the bleach and its nutritional challenges, it's boring, it lacks texture, its fiber content is insufficient, and it takes too much embedded energy to produce it.

Dwarfed cereal plants were part of the alleged green revolution. We are paying the costs of that imperial revolution now: lost topsoil, poisoned rivers, small-farm bankruptcies and suicides. Take a look on Rachel's Friends' links if you want to see some of the birth defects.

It is this kind of detailed conversation that we need to take to a public level. I believe we are going to get there, but it's taking far more time than I would prefer.
Comment
24 of 91
March 2, 2009
Mary---I am in Portland too. flwetdog@hotmail.com

Diversity is not only attractive from an aesthetic point of view---it is also far safer for us. Monocultures are subject to blights, and other types of failures. The Irish Potato famine would be a good example.
Comment
25 of 91
March 3, 2009
Ethanol.
You can't get something from nothing! So forget about the high performance yields of rapid growing plants; they take nutrients from the soil, that destabilizes the soil and more nutrients must be added if the high-performance yield it to continue with the next crop. I farmed for many years; if you plant a crop every year, your soil structure will be compromised and crop yield will drop. When you plant crops, whether food or other, suitable for ethanol production, has about as much promise as the DOT COMS! By the way, if you don't believe me, try drinking the ethanol produced from corn rather than eating the corn (on the cob). That should convince you that ethanol production is a born loser.
Comment
26 of 91
March 3, 2009
Beets are legumes.
Comment
27 of 91
March 3, 2009
Interesting article, David. Our company believes the best bioenergy answer is the production of ethanol, electricity and feed from sweet sorghum ("Chinese sugar cane"). I must admit that I have suspicions about the oil companies. But they are not even the most sinister special interests preventing economical biomass energy crops in the US. Environmental groups have promoted monopolization of the electricity industry through renewable mandates controlled by utilities (instead of feed-in tariffs for independents). Electric utility monopolies also rigged deregulation though all sorts of advantages for old power plants (stranded cost subsidies, grandfather environmental exemptions, etc.). Agricultural commodity groups have promoted the subsidization of corn to the detriment of alternative crops. Many of these groups also supported recent mandates requiring uneconomic ethanol production from cellulose, even though it is economic when used for electricity generation. Our company is relocating overseas away from this corrupt country that is trying to kill renewable energy by requiring uneconomic technologies.
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28 of 91
March 3, 2009
It's very difficult to get around corruption. My current notion about that is that you just have to go around it until God Herself deals with it, which She presently appears to be doing, sort of.

As for alcohol from offshore, we need more drunk fish as much as we need more oiled coots, and greasy humans. I guess companies come up with these ideas because it is easier than dealing with legislation in restrain of trade. All levels of our present governments are expert in this.

That's all for now--gotta run.
Comment
29 of 91
March 3, 2009
http://www.renewableenergyworld.com/rea/news/article/2009/03/iowa-finalizes-cellulosic-partnership-with-poet1
Comment
30 of 91
March 3, 2009
Poor Fred, please don't be fooled by Poet's propaganda trying to escape itself from the food versus fuel debate. Cellulosic ethanol makes no more sense than corn ethanol. Poet doesn't even bother to mention cellulosic ethanol is subsidized by a staggering $1.01 per gallon, plus about 64 cents for collection of cellulosic materials (cobs are easiest to collect but there is much less yield). Then there is even more government subsidy in the form of federal and state loan money they get to build plants, that are about 5 times more capital expensive than corn ethanol plants of similar capacity. Enzymes alone are about 40 cents per gallon. Cellulosic ethanol will never be competitive to corn yet alone cane ethanol. Even Brazil can't produce cellulosic ethanol competitive to their cane ethanol when the feedstock is free at the plant in the form of bagasse and using a very low-cost, low-yield process. Ever hear of the government synthetic fuels corporation of the 1970s? America is disgracing itself and causing a future energy crisis since economies around the world will not be able to afford ethanol competitive with $100 per barrel oil (that cellulosic ethanol companies like Novozymes say they need to produce it).
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31 of 91
March 3, 2009
Mike, the first commentator, is right on. If you don't use some editorial discretion - - think peer review - - your credibility is at stake. This article is downright silly. Any business, oil company or otherwise, is going to invest in ethanol only if it fits their business model and they can make money at it. Valero is an independent refiner: unlike the major integrated oil companies, they do not produce crude oil out of the ground and have to buy it on the open market. Owning ethanol refineries is consistent with their refinery business strategy, and having a well-financed company behinds these plants can only be good for the ethanol industry.
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32 of 91
March 3, 2009
Charles, I would agree with you if the energy industry was a free market with a level playing field. But it is neither. I have provided government policies that have distorted energy markets through monopolies, subsidies and mandates. Money can be made in ventures that would be uneconomic in free markets and can't be made in ventures that would be economic in free markets. The current economic collapse was government-induced with lobbying from special interests including large energy corporations and not just in energy, but banking, health care, housing, agriculture, etc. The credibility of America is vanishing throughout the world.
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33 of 91
March 3, 2009
I should also talk about conspiracies and government corruption in the messed up oil industry. Most remaining cheap oil and gas appears to be near Persian Gulf. Countries in the region have nationalized their oil industries to establish the OPEC cartel. There are buddies with US oil companies and pols like George W. The government-induced monopoly distorts energy markets. They like practicing alternating cycles of predatory pricing of new entrants and price gouging of consumers. They are preventing the development of alternative energy while still siphoning off the world's wealth. I haven't worked through all of the numbers but the kind of money they are making could allow them to buy up much of the world's farmland if a new competitive alternative energy was discovered. The US should be enforcing antitrust laws against these demons to prevent market manipulation and stabilize fuel prices. Some economist think the oil price rise to $140 per barrel was as much responsible for the current economic collapse as the US government's manipuation of the housing market by lowering interest rates. How's that for risking my credibility, Charlie?
Comment
34 of 91
March 3, 2009
Responses from Author David Blume of Alcohol Can Be A Gas.

To Mike: No conspiracy theory here, its just business as usual. In my debate with a writer from Dow Jones, she replied to my analysis of futures gaming with, "Of course, but what's the problem with one industry torpedoing another?" I don't believe in coincidence theory any more than conspiracy theory. In a conspiracy you need a host of cooperating players. This destruction of alcohol fuel was engineered solely by one industry against the other. No basis for conspiracy accusations in that since no one conspired. Its just an example of bare fisted capitalism.

To Dominic: Ethanol has always been of concern to oil beginning with the fact that alcohol was the first and dominant auto fuel until Rockefeller funded Prohibition, which was a constitutional amendment that did nothing to stop drinking but ended the sale of alcohol fuel giving Rockefeller full control of the fuel market. Alcohol from various crops can be produced for about $40 per gallon and often for much less. This is extremely threatening to oil companies that hope to capitalize on oil sands, oil shale and coal to liquid fuels which cost more than double alcohol's production cost.

To Paul: Last year oil companies had a $125 billion dollar PROFIT. About 2-5% of that was enough to fully game the corn futures system driving up corn prices even though there was a SURPLUS of 1.6 million bushels. Standard economic theory would have fully predicted a DROP in corn prices. It took massive contract buying to make the price of corn defy economic gravity.

To Steve: Taxpayer funded subsidies for oil as reported by the Center for Technology Assessment are over $5 per gallon not counting Iraq which is arguably a huge subsidy for oil. Alcohol's subsidies are less than 50 cents per gallon.

Comments continue in next post
Comment
35 of 91
March 3, 2009
To Phil: Many of the crops in my book are either perennial or soil building, not depleting, especially when the nutrients in the mash are returned to the soil since NO soil nutrients end up in the alcohol. Only carbon dioxide, water and sunlight make up the starch or sugar made into fuel. The remaining mash contains all the soil nutrients and either can go directly back into the field in small scale plants or through animals first as feed before manure is returned to the soil.

To Daniel: Totally agree that crop diversification is essential for American Agriculture in general. Oil companies will never be able to corner the market on futures contracts for cattails, mesquite or buffalo gourd.

To Mary, Yes farmers can produce alcohol at a good price and sell their fuel locally. It's the preferred business model in Alcohol Can Be A Gas.

To Erich, The UN debunked the Mexican corn riots being tied to ethanol production. Yellow US feed corn is not sold in Mexico for tortilla production-that's locally produced white or blue corn. The Mexican food riots had to do with corn production food subsidies being ended driving up to 10 million small farmers off the land and concentrating food production in a small number of corporate hands. Cynical use of the ethanol propaganda to cover gouging the public in Mexico on food prices is what really happened.

Dear Russ, A Btu is not a Btu. In other words why use very useful liquid fuel to produce heat at an alcohol plant when you can use biomass or less desirably, coal or natural gas, which are not very convenient for running cars. In other words a Btu of Alcohol is far more useful than a Btu of coal. The best documented EROEI is 8.3:1 in Brazil with cane. Now that Corn Plus in Minnesota got off fossil fuels and started firing its corn ethanol plant with corn cobs its EROEI is about 6:1 instead of the usual 1.6:1 when using fossil fuels.

Comments concluded in following post
Comment
36 of 91
March 3, 2009
If our military were defensive in nature, it wouldn't be sensible to require that its budget be counted as a subsidy to the oil and gas industries.

A consultant for the Oregon Department of Energy showed a map of Iraq obtained through the Freedom of Information Act. It showed how Cheney had planned to carve oil production from Iraq up among the industry.

It didn't go the way Cheney planned, still, we do not pay per gallon at the pump what it costs to get that gallon to us. This is a major problem not only for us, but for the world. Some of you who have read me here before know I'm in favor of calling it the Violence Footprint.

We have mal-investment all over this economy. If the industry conspires, it hasn't done such a very good job of it in the sense that even the conspirators will suffer from the present mess.

They should throw up their hands and let us move to transparency and out of draining our resources into military actions.

Gen. Schwartkopf, Ron Paul and a few others told them exactly what was going to happen in Iraq. It's not like nobody knew.

Some power company meter guys just showed up at my door to test my meter. I quizzed the senior one of the pair while the young guy changed and tested the meter. The company supplying my power is owned by Warren Buffet. The meter guy thinks well of Warren Buffet and that the company is run well. He says Buffet understands micro-grids are coming and that the company just needs to deal with it.

I don't know about that, but I hope Buffet isn't part of the crew trying to force an LNG line into Oregon, using FERC. I might have to put solar on my roof and go off-grid if that were so. I don't want a penny of mine going to hurt organic family farms in Oregon on behalf of FERC and cronies.
Comment
37 of 91
March 3, 2009
Oh come on David, you are no fun. When the establishment tries to write me off as a conspiracy nut, I enjoy teasing them by using a loose definition such as "A joining or acting together, as if by sinister design."
Comment
38 of 91
March 4, 2009
Right on, David. I couldn't agree more. When I get a minute I'll add more comments. Thanks, Shuma
Comment
39 of 91
March 4, 2009
David Blume writes, "Alcohol from various crops can be produced for about $40 per gallon and often for much less." I assume that's a typo and he meant to say $40 per barrel. If he is talking about Brazil, I agree. If he is talking about the United States, I don't. On a cost-of-production basis, that may have been true when corn was selling for $2 per bushel, but with corn selling for over $3.50 per bushel, many producers are operating in the red, even with the price support provided by the $0.45/gallon federal VEETC and various state-level subsidies and tax exemptions, and crude oil selling at more than $45/barrel.

He notes that oil companies had enough money so that even 2-5% of their profits would have been enough "to fully game the corn futures system driving up corn prices", yet provides no evidence to prove that they in fact did that. I guess he holds no truck with the possibility that bad weather at the beginning of the growing season in 2008, combined with biofuel mandates that meant that ethanol producers HAD to buy corn at whatever price, that factors other than "gaming of the futures system" by oil producers might have actually been the dominant cause for the run-up in corn prices. (Indeed, the corn-ethanol industry loves to take full credit for driving up the price of corn and thereby "saving" taxpayers subsidies that would otherwise have had to be paid out in marketing loan payments.)

Comments concluded in following post.
Comment
40 of 91
March 4, 2009
(Continued from above.)

David Blume then claims that "Taxpayer funded subsidies for oil as reported by the Center for Technology Assessment are over $5 per gallon not counting Iraq which is arguably a huge subsidy for oil. Alcohol's subsidies are less than 50 cents per gallon."

Where does one begin? Unless Mr. Blume has in mind a different study, the one from the CTA to which he refers was published in 1998.

http://www.icta.org/doc/Real%20Price%20of%20Gasoline.pdf

Notable among the subsidies to oil that were counted in that study were: (i) subsidies for road infrastructure; (ii) the costs of externalities related to road accidents and traffic noise; (iii) costs of externalities related to air pollution. If it is fair to attribute type (i) and (ii) subsidies to petroleum transport fuels, then it is equally fair to attribute them to biofuels. As for type (iii) subsidies (actually, un-internalized externalities), numerous studies have shown that the overal external costs associated with producing and consuming ethanol are roughly on par (or worse) than producing and consuming petroleum fuels.

http://www.renewableenergyworld.com/rea/news/article/2008/12/wind-water-and-sun-beat-biofuels-nuclear-and-coal-for-energy-generation-study-says-54292

Even if one looks only at the combustion stage, ethanol produces lower emissions of some pollutants, but more of some others. Similarly, while biodiesel produces lower sulphur emissions and fewer particulates, its combustion producers higher levels of NOx. So, if one is going to count air-pollution externalities, we would need to credit some to biofuels as well.

Comments concluded in following post.
Comment
41 of 91
March 4, 2009
Oil is bad for the environment. It fouls oceans and waterways, kills fish and birds. Fouls beaches, breeding grounds, and does not degrade biologically---it persists for many many years. It continues to release toxins into the water and land for as long as it exists. Sulphur from oil and coal causes acid rain that kills everything eventually. Tars from the Exxon Valdez wreck over thirty years ago STILL contaminate Alaskan and Canadian shorelines after 30 years. Both coal and petroleum are produced from strip mines. Both coal and oil produce greenhouse gasses.

We have to import 70% of the petroleum we use now. This is crippling the economy and is a major cause of the current economic disaster---and it is getting worse with every day that passes. Not only that, dependence on foreign energy places America at the mercy of despots, terrorists and pirates. Due to the geography and politics of the region, a few Somali pirates in a motorboat with one well placed missile could bring the US to it's knees.

George Bush and Dick Chenney rowed us out into the middle of the ocean of government debt to support a war to guarantee oil companies low cost oil reserves to sell at inflated prices. Now the boat is sinking(the economy). How long do you want to be treading water? Thanks to oil we'll be paying off debt for over 100 years as it is now.

So you don't like biofuels and you think support of biofuels and environmental issues is a conspiracy? If it is, it is a damned small conspiracy compared to the outright control and manipulation of the Executive, Congress, and Judicial branches of government for the last 8 years by energy and financial lobbies bent on greed and short term profits.

So, in order to get America out of the mess we are in---we need to get rid of petroleum and coal as energy sources. If we don't do that, it doesn't matter what else is done.
Comment
42 of 91
March 4, 2009
As for counting U.S. military expenditures in Iraq as "arguably a huge subsidy for oil", the answer to that can be summed up in one phrase: we broke it [Iraq], and now we are obliged to fix it. By the way, Iraq accounted for less than 5% of U.S. imports of crude oil imports in 2007, and an even smaller share of its total supply.

Other studies that have tried to assign realistic U.S. military and Coast Guard expenditures to oil, and add these to the tax benefits and other subsidies benefitting petroleum, generally come up with numbers on the order of $40 billion per year in 1998 dollars.

www.greenpeace.org/raw/content/usa/press-center/reports4/fueling-global-warming.pdf

(Note: Friends of the Earth -- hardly a friend of Big Oil -- recently estimated that subsidies to the oil industry amounted to around $7 billion per year; but they didn't count in military expenditures.)

Let's, for argument sake, say that the value a decade later is twice that: $80 billion dollars per year. Divide that by the 317 billion gallons of petroleum products consumed in the United States in 2007 and that comes to ... 25 cents per gallon.

Detailed studies of subsidies to ethanol, however, have come up with estimates on the order of $1.00 per gallon, not "less than 50 cents per gallon", as David Blume claims. (He is only counting the federal tax credit.) There are a wide range of other federal and state subsidies that need to be added to that. See, for example, the study for the Global Subsidies Initiative:"

www.globalsubsidies.org/en/research/biofuel-subsidies-united-states-2007-update

All this is NOT to defend subsidies to petroleum. They should be ended as soon as possible. But defending subsidies to biofuels by reference to subsidies to petroleum is not an argument that stands up to scrutiny.
Comment
43 of 91
March 4, 2009
The idea of ending all the subsidies is appealing. They are an entrance point for corruption, mal-investment, and over-use of resources.

The tough question is how to get subsidies off. This is an urgent question for those wishing to promote bio-diversity.

Subsidies for corn are a disaster for soil quality and consequently a threat to fuel from bio-mass in general.

Other plants are more suitable for alcohol production. Many of the other plants to do not require yearly tilling and planting.

Implementing change from a poor start using corn seems a daunting task.
Comment
44 of 91
March 4, 2009
"Implementing change from a poor start using corn seems a daunting task."

You nailed it on the head, Mary Saunders!
Comment
45 of 91
March 4, 2009
"[A] few Somali pirates in a motorboat with one well placed missile could bring the US to it's knees." -- Fred Linn

That is pure hyperbole. The world's largest oil tanker, the 318,000 dead-weight-ton VLCC (Very Large Crude Carrier) Hua San, can carry about 2.2 million barrels of oil. Sink a tanker like that (or take it hostage), and 0.6% of U.S. monthly petroleum imports have been disrupted.
Comment
46 of 91
March 4, 2009
It is
amazing how many apologists there are for the oil industry that has given
us life-threatening climate change, millions dead
and wounded in immoral wars, puppet governments and despotic rulers, every
human rights abuse known.... So what do
you like, tar sands, shale oil and or coal to gas? Enjoy these pictures
of Tennessee.
http://images.google.com/images?source=ig&hl=en&rlz=&q=tennessee%20coal%20s
ludge%20spill&um=1&ie=UTF-
8&sa=N&tab=wi

The bottom line is Alcohol Fuel production is:
Local. We buy locally produced food from farmers markets, why not locally
produced energy?
Sustainable. Depending on the region, there is a crop, (often a weed,
kelp beds using no crop land, mesquite trees from
desert land, cattails from marshes, etc.), from which to make ethanol
requiring no cultivation, fertilizers, pesticides, just
harvest, distill and go.
Jobs producing. According to DOE, small-scale, locally produced,
CO2-sequestering ethanol can create 25 million, non-
exportable jobs.
Environmentally cleaning. Moving to an ethanol energy supply will
sequester 12X the CO2 from the air as it takes to
produce. What do plants need? CO2!
American. Yes, no more war. Imagine.

go to www.alcoholcanbeagas.com and view the links below.

We can all chase our tails with unachievable, high tech, GMO alternatives
like fictitious cellulosic ethanol, and nice but non-
scalable and non-transmittable solar and wind, OR we can get busy pushing
for Independent Ethanol Production, and take
back this country! Remember, not all ethanol is created equally. Local, sustainable, organic, non-subsidized, job-creatin

http://www.sciencefriday.com/program/archives/200808153 10 min.

http://www.youtube.com/watch?v=x-Y08RSDP6s 5 min.

http://www.youtube.com/watch?v=Jew3ah24Zj4 78 min. (most comprehensive,
watch it during dinner or folding laundry).

http://www.huffingtonpost.com/david-blume/bailout-gm-but-heres-what_b_14584
4.html
Comment
47 of 91
March 5, 2009
"It is amazing how many apologists there are for the oil industry." -- Shuma Hallam

Don't fall for that easy dichotomy, Shuma. This is not a question of "oil or ethanol". Yes: the production and combustion of fossil-fuels (oil, natural gas, coal, peat) has been the leading contributor to climate change. But agriculture and deforestation, particularly through the use of nitrogenous fertilizers and the release of carbon through the conversion of natural ecosystems (the red and green slices in this chart) are also important.

www.epa.gov/climatechange/emissions/globalghg.html

Deforestation, partly for agriculture (particularly for palm oil production) is why Indonesia is the third leading emitter of GHG emissions in the world:

http://news.mongabay.com/2009/0219-indonesia.html

And subsidies for biofuels made from crops is helping to accelerate this process.

Setting the facts straight on oil is not apologizing: it is showing that the arguments of the "apologists for corn-ethanol", who frequently defend their industry as the pure-of-heart David taking on the nasty, brutish Oil Industry Goliath, in many cases do not stand up to scrutiny. Corn ethanol has lots of its own problems but, instead of owning up to them, the usual ploy of the corn-ethanol defenders is to try to deflect attention by shifting the focus to oil ... and exaggerating the differences.

The emerging consensus view among independent-thinking scientists and environmentalists is that it is better to concentrate our efforts on conservation, improve the efficiency of energy use (especially in transport), leave grasslands and forests unploughed, and support research into second- and third-generation biofuels, than to continue propping up biofuels made from grains and oilseeds.

www.physorg.com/news155229840.html

That means, yes, that some petroleum will continue to be used. But it would continue to be used in any case under the biofuel mandates currently set by the federal government.
Comment
48 of 91
March 5, 2009
Fred said

"…What are you going to use to replace oil?…"

You have asked this question a hundred times. Let me answer it for the hundredth time:

Not biofuels. Find me a source that claims we can grow enough biofuel made from food to replace oil. Don't start on the algae and cellulosic, they don't exist in commercially viable quantities. One thin is for sure, using much less oil will certainly buy us time to find a substitute.

"…What are you going to use to replace food when most of the earth is a vast desert due to global warming?…"

Certainly, putting food in gas tanks isn't the answer, especially since that also destroys the forests of the world and just makes global warming worse.

"…The final product of ethanol distillation is DDG--low cost high protein animal feed. The last time I checked meat, eggs, and dairy products are still food…."
70 percent of a kernel of corn is lost from the human food chain when you make ethanol from it. The more corn you use for ethanol, the less there is for food. How can you not understand that? This isn't rocket science.
Comment
49 of 91
March 5, 2009
Fred,

No doubt that we can make biofuels out of practically any organic material in any number of ways. But not economically. That is the problem.

"...The end result of biofuel production by whatever means is either ash or compost. Both of which has been nature's way of enriching the soil for billions of years.

If we take care of the earth, the earth will take care of us...."

Destroying biodiverse carbons sinks to grow soybeans is not my idea of taking care of the earth.
Comment
50 of 91
March 5, 2009
Fred said:

Sugar cane grows in many areas of the US, just as it does in Brazil. Not only that, sugar beets with roughly the same production per acre of exactly the same product will grow in all areas of the country with sufficient moisture--including Alaska.

Not true. Define "many areas" for us, with source. Go here for the truth:

http://photos.mongabay.com/06/0509net_energy.jpg
Comment
51 of 91
March 5, 2009
To underscore Russ Finley's point about ethanol from sugar cane and sugarbeets, the USDA -- hardly an institution with a bias against domestically produced ethanol -- has analyzed the cost of producing ethanol from these two sources time and again, and each time it concludes that these sources are not economically viable. For a good summary, see this article:

www.ethanolproducer.com/article.jsp?article_id=2627&q=&page=all

To quote:

"In July 2006, the USDA published 'The Economic Feasibility of Ethanol Production from Sugar in the United States.' The report states the average cost to produce ethanol in dollars-per-gallon units (including feedstock and processing costs) from sugarcane in Brazil is 81 cents, excluding necessary capital costs. ... To produce ethanol from sugar beets or sugarcane in the United States, in markets assumed to be relatively constant, the USDA reports one would pay the per-gallon price tags of $2.35 and $2.40, respectively."
Comment
52 of 91
March 5, 2009
I would like to refer the naysayers and scoffers to this review of Alcohol Can Be a Gas! by Albert Bates. Should answer many questions and allow you to touch the scope of the vision in place.

http://www.thegreatchange.com/blumereview.html

Enjoy!
Comment
53 of 91
March 5, 2009
Well, thank you, Michael Winks. I am sure that David Blume's book contains lots of fascinating and useful information. As for Albert Bates' review of the book, however, I am struck by these two paragraphs:

"Just exactly what is the appropriate role for alcohol fuels is an old, but ongoing discussion, and it has been known to get heated at times. The Tortilla Rebellion in Mexico, catastrophic overplanting of maize and soya, gene splicing by multinationals for cellulosic substrate alchemy, forest clearing worldwide -- these are serious concerns.

"As I write this, the U.S. Senate is considering legislation to increase ethanol production by giving generous subsidies to the U.S. farm belt. The pending bill mandates the use of 15 billion gallons of biofuels annually by 2015 and 36 billion gallons by 2022 (up from 8.5 billion subsidized gallons now). Nearly all of this would be corn ethanol, taken from grain stocks, with the stover burned or plowed in. Beginning in 2016, the government would ask farmers to add the corn stover, along with switch grass or wood chips, to make annual increases of 3 billion gallons in "cellulosic" ethanol. This legislation faces opposition from Big Oil and food manufacturers, but is just the kind of massively soil-destroying, economically bankrupting, petro-addicted type of legislation that is likely to be viewed by politicians as harvesting votes in the Iowa caucuses."

Let me repeat that last bit: "... the kind of massively soil-destroying, economically bankrupting, petro-addicted type of legislation that is likely to be viewed by politicians as harvesting votes in the Iowa caucuses."

Wow. So what's to disagree with?

Yet here, on this blog, David Blume defends the very same policies and practices that were created by that (and previous) federal legislation, along with similar legislation at the state level.

Perhaps you or David Blume can explain this apparent inconsistency.
Comment
54 of 91
March 5, 2009
Dear David

Nice try, but it wasn't a coincidence that half a dozen commenters independently recognized this article as a thinly veiled conspiracy theory. It's too late to back pedal now.

"… No conspiracy theory here, its just business as usual… Its just an example of bare fisted capitalism…."

If you really believe the above then your entire premise disappears in a puff of smoke because in a real market (bare fisted capitalism), consumers are king. In this case consumers are forced to subsidize the fuel and then forced to buy it back regardless of what it costs. Forcing products down consumer's throats is what the Soviet Union used to do. It isn't economically sustainable.

But you really don't believe the above because below you turn right around and hand us yet another conspiracy theory; Prohibition was a front funded by Rockefeller to crush the ethanol fuel industry. In reality, ethanol never had a chance against a super energy dense and inexpensive source of liquid fuel that is simply pumped out of a hole in the ground and cracked.

"…Ethanol has always been of concern to oil beginning with the fact that alcohol was the first and dominant auto fuel until Rockefeller funded Prohibition, which was a constitutional amendment that did nothing to stop drinking but ended the sale of alcohol fuel giving Rockefeller full control of the fuel market…."

This Wikipedia article does a great job detailing the real history of prohibition:

http://en.wikipedia.org/wiki/Prohibition_in_the_United_States
Comment
55 of 91
March 5, 2009
And the conspiracy theories don't stop there. Below David gives us a third conspiracy theory claiming that the oil companies drove up the price of corn (but not wheat, and soy, and rice, and metals and…) by gaming the commodities market:

"…Last year oil companies had a $125 billion dollar PROFIT. About 2-5% of that was enough to fully game the corn futures system driving up corn prices even though there was a SURPLUS of 1.6 million bushels. Standard economic theory would have fully predicted a DROP in corn prices. It took massive contract buying to make the price of corn defy economic gravity…."

Biofuel enthusiasts were all claiming that the high price of oil was what caused food prices to soar. Also, standard economic theory cannot predict short-term spikes in commodities markets driven by speculators (which were not, as David claims without evidence, funded by oil companies). The speculation was driven by the fact that the world has been consuming grain faster than it is grown for most of the past several years. Speculators were hoping to profit on food shortages.

Contrary to what the term insinuates, a corn surplus is the corn that gets sold on the world market rather than consumed domestically. A surplus is a form of insurance. It is a good thing that farmers have always sought. Without a surplus, really bad things happen when crop yields tank.
Comment
56 of 91
March 5, 2009
Russ, I think what David Blume was referring to was the carry over of grain from one crop year to the next, which was 1.6 million bushels at the beginning of the marketing year beginning September 2007.

www.ers.usda.gov/Data/feedgrains/StandardReports/YBtable4.htm

If there were no carry-over, there would be no cushion against supply disruptions, and grain prices would spike before the new harvest came in. So, as you rightly point out, Russ, people often mistake (or intentionally mischaracterize) the marketing-year carry over as a "surplus", as if it is corn that simply was produced in excess of requirements.

THAT, it decidely is not.
Comment
57 of 91
March 5, 2009
Just to clarify the carry-over, if one looks at the quarterly figures from the USDA table to which I linked in comment 57, one can see the rise and fall of stocks. At the beginning of marketing year 2007 (i.e., the end of August 2006), they stood at 1.3 billion bushels. By end November 2006, the summer's harvest had been added to those, bringing the total corn in stocks to 10.3 million bushels. Over the course of the next 9 months it declined to 6.9 million bushels (end February 2007), then 4.0 million bushels (end May 2007), and finally 1.6 million bushels (end August 2007). The harvest from the summer of 2007 crop then brought the stocks up almost 10.1 million bushels at the end of November 2007 -- a bit down on the year before.

One can easily understand the market phsychology of the time. With each passing quarter in 2008, stocks thereafter declined, as they always do. Those corn processors that needed corn to keep in business saw the chance of a disasterous harvest, colliding with an expected big increase in corn use for ethanol, increase in probability with each day and week that heavy rains in the Midwest delaying planting. Futures prices were bid up.

In the event, the rains stopped in time ... just, and the corn complex once again dodged a bullet.
Comment
58 of 91
March 5, 2009
You contradict yourself below, David when you tell us

"…especially when the nutrients in the mash are returned to the soil since NO soil nutrients end up in the alcohol…."

followed by the boast that an ethanol refinery is burning corn cobs instead of letting them enrich the soil (necessitating more use of petro-based fertilizers):

"…Corn Plus in Minnesota got off fossil fuels and started firing its corn ethanol plant with corn cobs…"

"…Yes farmers can produce alcohol at a good price and sell their fuel locally…"

The fact that you can count the number of farmers doing so on one hand strongly suggests that although the technology for making moonshine has been around for centuries, small-scale production of it for use on the farm is uneconomical. Very few farmers (if any) are running their farm equipment solely on biodiesel or ethanol created by themselves from the crops they grew themselves.

"…The UN debunked the Mexican corn riots being tied to ethanol production…"

Link to source please.

"…Cynical use of the ethanol propaganda to cover gouging the public in Mexico on food prices is what really happened…."

Here you go with your fourth in a series of conspiracy theories. It was not cynical, nor was it propaganda. Your article is what I would call propaganda The US also exports white corn to Mexico. When yellow corn planted for ethanol use displaces white corn, economic theory would predict the price of white corn will go up, which it did. Although speculation was the main cause (of several causes) of food price increases, it was fueled by ethanol's consumption of corn.
Comment
59 of 91
March 5, 2009
"As I write this, the U.S. Senate is considering legislation to increase ethanol production by giving generous subsidies to the U.S. farm belt. The pending bill mandates the use of 15 billion gallons of biofuels annually by 2015 and 36 billion gallons by 2022 (up from 8.5 billion subsidized gallons now). Nearly all of this would be corn ethanol, taken from grain stocks, with the stover burned or plowed in. Beginning in 2016, the government would ask farmers to add the corn stover, along with switch grass or wood chips, to make annual increases of 3 billion gallons in "cellulosic" ethanol. This legislation faces opposition from Big Oil and food manufacturers, but is just the kind of massively soil-destroying, economically bankrupting, petro-addicted type of legislation that is likely to be viewed by politicians as harvesting votes in the Iowa caucuses."

Let me repeat that last bit: "... the kind of massively soil-destroying, economically bankrupting, petro-addicted type of legislation that is likely to be viewed by politicians as harvesting votes in the Iowa caucuses."

Wow. So what's to disagree with?"

I believe this is called cherry picking, common on the Internet. Try reading the whole review. You do know how to read, right?
Comment
60 of 91
March 5, 2009
This is a stunning thread.

Russ, clearly you don't live in Oregon with a wide circle of 20+-something and 50+-something friends.

I know a farmer who operates his farm on bio-fuel he makes himself. He has some big rigs, and his wife delivers to his CSA customers all over the place, once per week, and he's part of a farmers' group where a lot of them may do this. They pass around tips on all sorts of things.

I also know a semi-retired optometrist who gets it somewhere for cheap, which he needs because he commutes to Portland to bring his kid to school and to go to work out in the boonies. He also has a car fetish.

It's not a question of "if" concerning bio-fuels.

It's a question of how-much, how-soon, and whether conventional people are going to be much aware of it until all of a sudden it's going to seem as if it came from nowhere.

That it doesn't show up on official government statistics somewhere doesn't mean it isn't happening. My son's professor friend at MIT is threatening to make his own in his garage.

I'm only one person. My contacts are kind of random. My son reminds me constantly that the weird Portland we love so much is not like other places, especially not like Massachusetts, according to him. Portlanders are sort of famous for friendliness.

Nonetheless, I don't believe Oregon has a monopoly of tinkerers and eccentrics.

At the Oregon capitol the other day, I had a conversation with a solar lobbyist who actually had an entire trade-show-like set-up in the actual lobby. We were discussing the titles we need to sell renewable feed-in's better in Oregon. We agreed having tariff in the name was a no-go. I gave him my Renewable-Energy-Credit spiel, and he said, "Oh no, we need to call it Payment, so then it's a REP." I had to agree that selling REP's to reps probably has more literary appeal. Maybe Ken Kesey is looking down with approval.
Comment
61 of 91
March 5, 2009
Thanks for the clarification, Ron. I conflated the terms export and surplus.
Fred, all of the following have already been refuted. You ignore the refutations and repeat your exhortations.

Fred said: "…Oil is bad for the …"

So are the vast majority of biofuels being produced today. It is a matter of which is least of two evils. As pointed out before, the following study quantifies which is worse for the environment and the study does not include the latest science on crop displacement and nitrous oxide levels. Corn and soy biodiesel are have worse environmental scores than gasoline and biodiesel respectively. See figure 3 in source : http://www.theoildrum.com/node/2976

Fred said: "…It fouls oceans and waterways, kills fish and birds…."

So do biofuels:

"…Research indicates that the nearly tripling of nitrogen levels into the Gulf over the past 50 years from human activities has led to a dramatic increase in the size of the dead zone [which reached the size of New Jersey last summer]…." Source http://www.noaanews.noaa.gov/stories2008/20080715_deadzone.html

And from this source: http://gristmill.grist.org/story/2008/3/11/161525/767

"…In January, a grand jury indicted a Missouri businessman in the discharge [of glycerin], which killed at least 25,000 fish and wiped out the population of fat pocketbook mussels, an endangered species…."
Comment
62 of 91
March 5, 2009
One more thing I can't resist: dissing contests are amusing on late-night TV. Done to excess, they are distracting. If they cause demoralization, they are counter-productive to common goals. Those who can keyboard their thoughts on here are all accepted by me as being very, very smart and paying attention to issues that should be at the top of more priority lists than they are presently at the top of. Coming to a particular place by different routes may give us cultural-sensitivity issues to deal with, as we used to say in the social-work biz (we had to get trained in it, and it was fun). We have had a recent Queen of Demonization (according to a fellow senator, who tried to take it back after he said it). Why don't we let her keep her tiara? And yes, I do know I just did what I was dissing. Ugly, huh?
Comment
63 of 91
March 5, 2009
Fred said: "…Sulphur from oil and coal causes acid rain that kills everything eventually…."

Acid rain is from coal. Certainly, displacing coal by co-firing corn cobs in a coal plant would be a better use of them than burning them to heat a corn ethanol refinery.

We have to import 70% of the petroleum we use now. This is crippling the economy and is a major cause of the current economic disaster---

Biofuels are far more expensive than petroleum. Every gallon you purchase has either a dollar or 50 cents of subsidy hooked to it. Again, imported oil is the least of two evils and the best way to reduce imports is through efficiency, not displacement of petroleum with food in our gas tanks. My family reduced oil use for transport 80% via a high mileage car and an electric assist bicycle. But I repeat myself.

Fred said: "…Not only that, dependence on foreign energy places America at the mercy of despots, terrorists and pirates…"

Spare me. Imperium Renewables just got slapped with a duty by Europe to make them quit undercutting their biodiesel producers with their subsidized fuel. How do you achieve energy independence if your refiners export what they produce? But I repeat myself.

Fred said: George "…Bush and Dick Chenney rowed us out into the middle of the ocean of government debt to support a war to guarantee oil companies…"

Bush was the biggest biofuel supporter of them all. Where did the "addiction to oil" quote come from? But I repeat myself.




Fred, all of the following have already been refuted. You ignore the refutations and repeat your exhortations.

Fred: "…Oil is bad for the …"

So are the vast majority of biofuels being produced today. It is a matter of which is least of two evils. As pointed out before, the following study quantifies which is worse for the environment and the study does not include the latest science on crop displacement and nitrous oxide levels. Corn and soy biodiesel are have worse environmental scores than g
Comment
64 of 91
March 5, 2009
Oops. Ignore the last part of the above post which repeats what I said earlier ... cut and paste snafu.

Fred said: "….So … you think support of biofuels and environmental issues is a conspiracy?…"

That's a strawman argument. Nobody said that. Go here for the definition of a strawman argument:

http://en.wikipedia.org/wiki/Straw_man

Fred said: "...If it is, it is a damned small conspiracy compared to the outright control and manipulation of the Executive, Congress, and Judicial branches of government for the last 8 years by energy and financial lobbies bent on greed and short term profits...."

Fred, you just described the very process that has stuck a 50 cent subsidy per gallon on corn and a dollar per gallon on biodiesel that is in turn blended into citizen's fuel where they are forced to buy it by government fiat.
Comment
65 of 91
March 5, 2009
Mary,

The internet is an unprecedented, underutilized media for debate.

Mary said: "…I know a farmer who operates his farm on bio-fuel he makes himself. He has some big rigs, and his wife delivers to his CSA customers all over the place, once per week, and he's part of a farmers' group where a lot of them may do this…."

Because he is not just making fuel for his own farm, he is by definition a small time biofuel refiner who just happens to have is operation co-located on his farm. And one has to wonder how much of the biodiesel produced comes from crops he grew and how much from purchased supplies of vegetable oil. It doesn't much matter, in this case. Small farmers are free to make moonshine and biodiesel if they choose. They just should not be using fellow citizen's tax dollars to do it.
Comment
66 of 91
March 5, 2009
"I believe this is called cherry picking, common on the Internet. Try reading the whole review. You do know how to read, right?"

Oh my gosh, Michael, you've discovered my weakness! Even as I write this, though I can see the letters and words clearly, I can't actually read what I've just written. I must be one of the few people in the world with that affliction!

No, picking out 10% of a 2000-word review to quote, especially since a good third of the review is a discussion of climate change, not ethanol, is not cherry picking. What I quoted was a central point made by the reviewer, one that is highly relevant to this discussion, and I quoted it in full. If you don't like what I quoted, then it is up to YOU to highlight what you want others to pay attention to.

The general thrust of the review is that both the reviewer and David Blume prefer alternative feedstocks to corn. That is what makes Blume's defense of corn ethanol so surprising.

I know you can read, Michael Winks, so I ask again: please explain this apparent inconsistency.
Comment
67 of 91
March 5, 2009
Great article David! Big Oil, represented by the propaganda spewing American Petroleum Institute & heavily funded by our tax dollars, continues to do what it has always done - wage war against its only true competition: Ethanol.
Henry Ford had it right from the beginning: ethanol is the best fuel to power our cars. Oil burning contributes to global warming, releases harmful pollutants into the air we breathe, pollutes the water ways, the cause for many wars, etc, etc.
Ethanol reduces CO2 emmissions by at least 30% (up to 85% from cellulosic sources - Argonne National Labs), burns very clean - catalytic converters are not needed in cars running pure alcohol - try doing that with dirty gasoline! Alcohol engines can take advantage of the high octane rating of ethanol and produce V8 power from high compression 4 or 6 cylinder engines.
Anyway, keep up the good fight against the oil interests - the alcohol economy will show us the way forward as the world runs out of oil and the oil lobby is exposed for all their lies & deceit over the years.
Comment
68 of 91
March 5, 2009
Russ, I agree about getting rid of subsidies, if we could figure out how, and maybe this is as good a venue as any for floating proposals on that. My point though is like Mike's, above. Bio-fuels can be used on a small-scale and pencil out for people. Government operations in restraint of trade hurt small operations and stifle adoption of new ways of doing things. My retired friend doesn't even process his. He got a unique car that he can just pour veg oil straight into. This stuff is happening now, but it's pretty underground. We don't have sufficient human and civil rights left that advanced adopters feel safe in going more public than having their trusted friends know what they are doing. Rather than going in the right direction with rights, many believe it is getting worse, and what people believe matters because they act on those beliefs. We are lucky in Portland because the city government doesn't do much except in response to complaints. One of our mayors stood up to federal agencies that were scaring people with military actions downtown and told them to cut it out. Montana has done that as well I understand. There are moves in some states to roll back intimidation tactics by federal agencies and big corporations. People do all sorts of things here, and others who want those freedoms move here in droves. Reputedly, and I did see this on public TV, there are lots of places to plug in your PHEV, if you have one. This is good for our property values, but it's a loss for the places people move from and for our progress on energy improvements as a nation. It's also a gentrification challenge for our modest-income people, in the places where there is greater freedom of speech and action.
Comment
69 of 91
March 6, 2009
Ron----"All this is NOT to defend subsidies to petroleum. They should be ended as soon as possible. But defending subsidies to biofuels by reference to subsidies to petroleum is not an argument that stands up to scrutiny."-----------

True enough---however, to claim we should not use biofuels because they need to be subsidized is also an arguement that does not stand up to scrutiny. Fossil Fuels have been heavily subsidized for over 60 years, begining with production incentives in World War 2. If biofuels are not subsidized they are placed in the position of being forced out of the market by government favoritism. If you want to get rid of subsidies to biofuels, fine, get rid of all the subsidies and favored treatment for fossil fuels as well.

Russ----"Small farmers are free to make moonshine and biodiesel if they choose. They just should not be using fellow citizen's tax dollars to do it."-----

Do you mean like the government giving leases at bargain basement prices(and in some cases free) to pump oil or dig coal out of public lands?
Those lands belong to all the citizens of the US, not the oil and coal companies. I've never received a dime---nor have I ever heard any oil or coal company putting anything BACK into the land that they have destroyed.
Most farmers that I know are very concerned about putting something BACK into the land they farm. They want their grandchildren and their granchildren's children to be able to farm the same land.

I'm not a big fan of subsidies----but we need a level playng field.

We need to get rid of fossil fuels, no question, environmentally, economically, and we need to do it in a way that does not disrupt what we have now, in a way that we can introduce gradually with a minimum of fundamental change and at a price that doesn't bankrupt us.

Biofuels are the best way we have of doing all those things.
Comment
70 of 91
March 6, 2009
Fred,

1) Subsidies for biofuels per gallon dwarf those provided for petroleum.

2) We would all like to see oil subsidies end.

3) Why do we allow our government to subsidize oil on one hand and biofuels on the other?

4) It's insane for every industry to beg for government subsidies because their competitors have them.

5) The above arguments are moot if the fuels you subsidize are more environmentally destructive than fossil fuels.
Comment
71 of 91
March 6, 2009
One way to mitigate against harm caused by subsidies is to improve how solvent companies take responsibility for harm such as the harm from sludge-slides and pollution. If the death of one four-year old from inappropriate medication can prompt Sen. Grassley to go on a detailed corruption hunt against the pharmaceutical companies, perhaps he should have a competitor in going after fossil-fuel companies for reparations.

Governments usually pay for health care for survivors. Usually the survivors are low-income. No doubt the cost is higher if advantaged people get caught in the slides and pollution.

Santa Barbara organizations have been in the forefront in stopping broadscale spraying of biocides, both by governments and by chemical-farmers.

Stopping these practices is conservative of energy, a tactic approved of in some of the opinions above.

Perhaps some of the same sophisticated legal minds who helped with the Santa Barbara cases might help to make a more even playing field for renewable energy practices on a national scale.

If conventional farmers can no longer afford to buy proprietary seeds and biocides, we could be nearing ripeness for a broad change in how farming is done.

Along with these changes could come a move from dwarfing grains to perennial grains, with all the savings from fuel used for tilling. In addition to that, open pollinated varieties may produce more substrates for mycillial conversion of fiber to fuel.

Personally, having tasted bread made from mash, I would prefer to eat that than to have it used for fuel, but perhaps we can share.

Great improvement in our energy practices could be harvested from changing how we grow and use food crops. Health improvements from wider diversity could be obtained as well.

We are in for massive change. It may be time to choose where you want to be in the parade.
Comment
72 of 91
March 6, 2009
David Blume knows his stuff. If you have any doubt, go to his website and listen to some of his interviews. I've read his book cover to cover. His alcohol fuel solution is simple and brilliant!
Comment
73 of 91
March 7, 2009
"Fossil Fuels have been heavily subsidized for over 60 years, begining with production incentives in World War 2. If biofuels are not subsidized they are placed in the position of being forced out of the market by government favoritism." -- Fred Linn

Fred, we all agree on the need to eliminate subsidies to all fossil fuels.

But there are several points that need to be borne in mind when talking about PAST subsidies to the oil industry. First, one has to make a distinction between the equity argument and the efficiency argument. Many people, on grounds of equity, would like to see the oil industry pay back the subsidies it has received (at least the amount that was pure rent -- i.e., generated profits). But that does not automatically lead to the conclusion that if the government succeeds in doing that, it should turn around and spend that money on supporting biofuels. If there were a public referendum on how to spend the recovered money, my guess is that the electorate might choose to spend it on improving the nation's health system, or other parts of the nation's social infrastructure, and not necessarily on biofuels.

Past subsidies are sunk costs. Many of those subsidies and government interventions that have helped the oil industry are also ones that have helped perpetuate more generally the dependence of the country on a transport system -- determining the very pattern of our cities and suburbs -- built around liquid fuels burned in internal combustion engines.

The biofuel industry is not seeking to change that. Indeed, it relies on the continuing existence of refueling stations created originally to dispense pure petroleum fuels, and on sales of vehicles that can run on blends of biofuels and petroleum fuels. Thus, conversely (and perversely), subsidies and regulatory favors for ethanol-blending pumps and flex-fuel vehicles also benefit petroleum, as both can also easily be used for gasoline.

Two wrongs don't make a right.
Comment
74 of 91
March 7, 2009
--------"The biofuel industry is not seeking to change that. Indeed, it relies on the continuing existence of refueling stations created originally to dispense pure petroleum fuels, and on sales of vehicles that can run on blends of biofuels and petroleum fuels. Thus, conversely (and perversely), subsidies and regulatory favors for ethanol-blending pumps and flex-fuel vehicles also benefit petroleum, as both can also easily be used for gasoline."-----------

Perhaps you should point that out to the people you have put on a pedestal and defend so vigorously. This very simple logic seems to have escaped them entirely.

---------"Two wrongs don't make a right."----------

So, let's get rid of all subsidies to oil and see what happens. Let's get rid of all oil leases on public lands, depletion allowances, and everything else. If the price goes down, then we can get rid of any subsidies for biofuels. If the price goes up[for petroleum]----we won't need subsidies for biofuels.

How stupid is it to fund the EPA to protect the environment on the one hand, and to subsidize fossil fuels that are most major cause of environmental damage at the same time?
Comment
75 of 91
March 7, 2009
"Perhaps you should point that out to the people you have put on a pedestal and defend so vigorously." -- Fred Linn

Back to your ludicrous attempts at character assassination, eh Fred? So tiresome that you continue to promote the false notion that if somebody isn't a staunch defender of current biofuel policies then they must be working for the oil industry. I guess you still can't fathom that there are those who might be thinking outside that narrow sandbox.

By the way, nowhere have I defended the oil industry or put them up on a pedestal. As I stated above, it is dishonest to exaggerate the differences between the oil industry and the biofuels industry. One is Goliath, the other is a Goliath wanabee. Come up with some better arguments; ones that can't be so easily refuted. Please.

And, as I have pointed out a hundred times, the argument that the oil industry isn't interested in ethanol is refuted by the facts: they are in the business of making a profit from selling liquid fuels. You write, "This very simple logic seems to have escaped them entirely." No it hasn't, and that's the point: Shell is now the largest distributor of biofuels in the world, and other oil majors have gone into joint ventures with ethanol producers. Biofools like you try to promote the myth that the two industries are in an epic battle. But we all know what they get up to when the curtain is drawn.

Hey, I agree with you that we should end subsidies to fossil fuels. But don't expect a big price increase if the production-related subsidies to U.S. domestic oil production are removed. The value per gallon of all the domestic royalty breaks and tax concessions comes to less than 10 cents per gallon. In any case, oil products are priced at world prices, and would continue to be even if the subsidies were removed. That is NOT an argument to not bother de-subsidizing, however. Those billions could usefully be used for other public purposes.
Comment
76 of 91
March 7, 2009
Continuing my previous point (Comment No. 75), the biofuel industry should not expect that de-subsidizing oil will make much of a difference for their profitability. What WOULD make a difference is a carbon tax. If gasoline were charged a carbon tax of around 50 cents per gallon (corresponding to around $50 per metric tonne of CO2 equivalent), the rate of tax on cellulosic ethanol would be in the range of 5 to 10 cents per gallon.

Of course, then other ways to save on higher gasoline costs -- conservation, downsizing of vehicles, public transport, people moving closer to where they work -- would also be stimulated, and not just biofuels. But that's the point of a carbon tax.

One wonders why people here defending biofuel subsidies never support the idea of a carbon tax. Could it be that they don't like the idea of levelling the playing field among petroleum alternatives?
Comment
77 of 91
March 7, 2009
Pulling the character assasination card in a debate always risks a backfire.

Fred said:

"...Perhaps you should point that out to the people you have put on a pedestal [the oil industry] and defend so vigorously...."

If by educating the public on the negatives of today's arable land usurping biofuels we are supporting big oil, then by vigorously defending the biofuels industry you are putting on a pedestal those who abuse and enslave cane and palm workers, steal the land of indengenous people, increase the cost of food to the poor, destroy biodiverse ecosytems to plant crops, and American refiners who export biofuels to Europe instead of selling it domestically to help make us "energy independent."
Comment
78 of 91
March 7, 2009
Problems with carbon tax: given to entity that does not produce, contributes to federal power, does not support local solutions for local micro-climates, regressive for working people.

A few legislators in Oregon have decided to raise the beer tax by 15 times. We have had a thriving micro-brew industry here in recent year, and government is the only vendor for hard liquor. No tax increase was produced for hard liquor.

To me this is emblematic of what government does to working people and small business on behalf of big business and its own interests.

Tax credits and energy-production payments are more crony-neutral. The government never gets its hands on the money. Local brainstorming for local conditions has a better chance without excluding people with marginalization techniques governments have been so good at.

The amount of junk law selectively enforced is worrisome.

It promotes a harmful veneer of grease floating on top of the ecosystem.
Comment
79 of 91
March 7, 2009
---"The value per gallon of all the domestic royalty breaks and tax concessions comes to less than 10 cents per gallon."-------

Which shows the value that the taxpayers are getting for giving away publicly owned resources to oil and coal companies.

The petroleum and coal industries would not last 10 minutes without government leases allowing them to steal raw materials at bargain basement prices and destroy the environment to maintain a monopoly position.
Because 70% of the oil being used is imported. This is killing our economy. Charge a tariff on imported oil. Get rid of leases giving away public lands and waters to enrich a few.

----"One wonders why people here defending biofuel subsidies never support the idea of a carbon tax. Could it be that they don't like the idea of levelling the playing field among petroleum alternatives?"-------

Or could it be that we are just plain sick and tired of monopoly industries using and abusing the government to maintain their monopoly and reap enormous profits at the expense of taxpayers?

The economy is in the sewer and everyday more and more good people who work hard and are just trying to get by, are thrown out of jobs because of rich CEOs, bankers, Wall Street brokers, and politicians whose only interest is greed and creating new and complex ways to reap profits from those who work for a living. We are tired of being lied to, robbed and exploited.

I may be a "biofool" as you say. But I have a big stick. My friend Teddy gave me this stick. My friend Teddy also told me about snakes. There is a snake in the grass. Snakes wear suits and ties and carry briefcases. Teddy told me how to spot snakes. He also told me how to use the stick. It's the same stick that Teddy used when he found snakes in the grass. These are the same kind of snakes that Teddy found too. Black snakes. Oil snakes. Coal snakes.
Comment
80 of 91
March 7, 2009
"Problems with carbon tax: given to entity that does not produce, contributes to federal power, does not support local solutions for local micro-climates, regressive for working people. A few legislators in Oregon have decided to raise the beer tax by 15 times. We have had a thriving micro-brew industry here in recent year, and government is the only vendor for hard liquor. No tax increase was produced for hard liquor." -- Mary Saunders

Mary, I don't understand your first statement. Carbon taxes aren't given, they are levied. How do they not support local solutions? If anything, they discourage long-distance transport (including of goods) based on fossil fuels. They need not be regressive for working people: every economist I know who advocates a carbon tax also advocates reducing income tax or the payroll tax by an amount equal to the revenues collected by the tax. That can be done in a progressive way.

As for the fact that the Oregon State government raised the tax on beer and not on hard liquor may have been unfair (I can't say, as I don't know the details), but that does not mean that a carbon tax could not be designed and applied fairly.

"My friend Teddy also told me about snakes. There is a snake in the grass. Snakes wear suits and ties and carry briefcases." -- Fred Linn

I must admit, Fred, you're always good for a laugh! Nice imagery! Thanks for that!
Comment
81 of 91
March 8, 2009
Taxes are taken by government people who may choose to use it to meet privately at spas in Virginia or at the fancy meeting place de jour with lobbyists. They may prefer to use taxpayer money rather than just letting the lobbyists pay. We are supposed to have new rules about influence that might produce a consequence for them if they just let lobbyists pay.

These two groups are not drilling in geothermal, installing solar panels, or taking the tops off mountains causing sludge slides that kill children in heart-rending scenes. They consume energy. They talk about energy. They don't deliver it.

Economists are not, in the opinion of most working people I know, people who would understand the real world of retail clerks, secretaries, and that kind of person.

Government could temporarily reduce a tax, saying it is to make up for another tax. The frequency of bait-and-switch on this, historically, makes a lot of people demoralized.

Government, big-corporation, and big-labor leaders live lives akin to that of Marie Antoinette for a broad sector of the rest of the population. Why these KOL's (key opinion leaders) don't get this escapes me.

In the brainstorming part of attacking problems, as many perspectives as can be had render more options for better decision-making. In my son's math/science magnet program, the kids got this. They wanted as many geeks on the team as they could get, and they would have been happy with 50 kids and no teacher, as long as the kids were motivated geeks.

We have profound cultural differences about what constitutes hard work and about how good decision-making ought to be accomplished. We are paying hefty costs for dysfunctional ways. Some advantaged people have opted out, as have Indian and Chinese ag workers.

We need to empower communities to do new things. Monopolies need to give it up. They do harm, up, down, and sideways.
Comment
82 of 91
March 8, 2009
Mary, you say that "economists are not, in the opinion of most working people I know, people who would understand the real world of retail clerks, secretaries, and that kind of person." Is that from experience, Mary? I know plenty of economists who spent the early part of their working lives performing low-paying office or manual work.

OK, so we need to empower communities to do new things. I'm all for that? What's your answer, especially in the context of this string? I'm genuinely interested.
Comment
83 of 91
March 8, 2009
My description of most economists is experience-based. Professors usually have wives or other servants.

This is why Obama is having a hard time finding peers with clean enough tax records to "serve" in for-profit jobs often referred to as "public service."

Statistically, there are probably more persons, slightly, in the servant class than in the self-defined public-servant class.

Even those of us who have served as wives wanted wives. Who doesn't want a slave?

As for their having once had real jobs, all I can say about that, having had two medication-free childbirths, is sometimes the blood goes elsewhere from the brain, so it is easy to forget painful things. When the pains hit for the second time, the memories come flooding back.

We've got Ph.D.'s now who are hiding Piled Higher and Deepers for jobs driving taxis--ouch.

As others have said, we need to remove legislation in restraint of trade.

We need feed-in methods, market-based rates ASAP. Companies doing this voluntarily will be the best choice. According to a service guy who came to my house, the meters are not a barrier.

The rates in Gainesville wouldn't begin to fly in Portland. I marvel that they got this to go. There are few U.S. micro-climates where you could call it a FIT or set it so high. Nonetheless, it is the miracle that proves change possible, on a pilot basis.

Could we clone Gainesvillians and give them cultural sensitivity training so they could play well on the Upper Left Coast?

Given the times, if we don't do Renewable Energy Payments soon, people are going to wildcat widely. It takes sophistication to do this, but Mother Earth News, and other sources have ads for how. People don't keep paying for those if they don't work.

Calling it REPs would work better here because we are poly-cultural. In areas with lots of German-Americans, you could call it FIT.
Comment
84 of 91
March 9, 2009
Thank you, Mary. And as for biofuels ... ?
Comment
85 of 91
March 9, 2009
So, Ronald, does this mean you agree we should remove laws that restrain trade and that punish small businesses in favor of the too-big-to-fail?

Are you on board with letting a thousand flowers bloom?

With David's book out there, and with race car drivers wanting ethyl, we are likely to already have some seriously wide wildcatting in alcohol, especially in the south, where there's so much kudzu and other biomass to play with.

I can tell you Paul Stamets, of Fungi Perfecti, is so busy that competitors have sprung up to supply people who want shorter shipping times. This could be some people with cellulosic experiments. It could also be bio-remediators, food lovers, people wanting cheap filters, farmers wanting better soil, or people wanting interesting insecticides. There's this ghoulish picture of a mushroom sticking out of a carpenter ant's head, you know.

Precious few of these people are going to live near Santa Barbara and be as smart as David Blume in negotiating paperwork. My guess is there is a fairly nice critical mass of good lawyers there. In many places, it will likely take a stable of good lawyers to get subsidies, but some of them may.

As I have said before, I would love a level playing field, but right now we don't have a legal environment that is crony-neutral. Very smart and connected people will wangle subsidies, that's just how it works.

Other guys will be doing low-tech, low-crony stuff for their own use until or unless our too-big-to-fail-cabals-in-restraint-of-trade fall off their horses, like Saul of Tarsus, and start to appreciate the many talents and capabilities of ordinary people and small cooperatives of ordinary people.
Comment
86 of 91
March 9, 2009
Mary, I am all for letting a thousand -- or, even, better, hundreds of millions -- of flowers bloom. I won't give a blanket agreement that "we should remove laws that restrain trade", as there may be some that are necessary (among others to avoid the formation of monopolies), though in general I am in no position to disagree that that many of the laws that restrain trade are probably counter-productive. Laws that disfavor small businesses and favor the too-big-to-fail would be a problem, definitely.

I must admit I'm having a hard time understanding all of your points. But I agree, of course, that "Very smart and connected people will wangle subsidies, that's just how it works." We see that with the combined power of the corn and agri-business (including ethanol) lobbies, as well of the fossil-fuel industries. That is why David's defense of large-scale, subsidized, industrial corn-ethanol (Comments 34 and 35 above) -- often based on eroneous arguments about policies and their effects -- is so surprising.

If people want to grow their own fuels, all power to them. But if they then use those fuel on roads without paying the fuel excise tax, they could be charged with tax evation. And if they sell their fuel on the open market they will be getting a price artificially elevated by the federal blenders credits and (in the case of ethanol) a hefty import tariff.
Comment
87 of 91
March 9, 2009
Governor Bobby Jindal has signed into law the Advanced Biofuel Industry Development Initiative, Act 382, the most comprehensive and far-reaching state legislation in the nation enacted to develop a statewide advanced biofuel industry. The legislature found that the proper development of an advanced biofuel industry in Louisiana requires implementation of the comprehensive "field-to-pump" strategy:

(1) Feedstock other than corn;
(2) Decentralized network of small advanced biofuel manufacturing facilities;
(3) Variable blending pumps, in lieu of splash blending, will offer the consumer E10, E20, E30 and E85; and
(4) Hydrous ethanol.

"Field-to-Pump" is a unique strategy created by Renergie to locally produce and market advanced biofuel ("non-corn ethanol") via a network of small advanced biofuel manufacturing facilities. The purpose of "field-to-pump" is to maximize rural development and job creation while minimizing feedstock supply risk and the burden on local water supplies.

Please feel free to visit http://en.wikipedia.org/wiki/Field-to-Pump for more information.
Comment
88 of 91
March 9, 2009
Maybe I didn't back-ground the fungi comments very well. Some fungi break carbon bonds well, quickly, and at low temperatures. There are possibilities for cellulosic fuel using fungi.

If people are playing in their garages and basements with this, maybe the Apple of bio-fuel will surface from such a classic U.S. venue rather than from a university lab financed by corporations or governments.

I didn't do what David asked because I am also not a fan of big operations or of anything that might increase agricultural inputs for more production of the kind of corn that humans don't eat themselves.

I am a fan of David though. David has been a proponent of other sources than annual plants for alcohol production. I agree with this.

I don't like tariffs, but transporting alcohol to a place that could well make its own makes no sense. Worse, it is likely to harm the rights of cane workers in Brazil against land-grabs and machines from the multi-nationals and to harm the Amazon basin by deforestation. I heard these issues first from David, but I searched myself and found other sources also.

If big operations get blenders' credits, then little ones should too, but it probably is not going to work this way when big operations design their next legislative plays, a possibility David has been aware of.

It may be easier to bust people for fuel taxes where there are tolls and radio-frequency-identification cards for paying tolls. Will people who go to 100% home-brew bio-fuel be targets? When people get chased for taxes, they will of course make the Geithner, et. al. defense, clogging our courts worse than they are now.

I wonder how many jurisdictions will be prioritizing to chase these taxes down and what would be the cost-benefit analysis of doing so?

I trust that David wants to help people who are caught in the gears of paradigm change.
Comment
89 of 91
March 10, 2009
Thank you, Mary.

I agree that there is much potential for exploiting fungi, particularly as a way to improve water retention in soil and to deliver nutrients.

You say, "transporting alcohol to a place that could well make its own makes no sense." I disagree. One has to look at the big picture. The majority of the U.S. population lives close to the coasts, not in the Midwest. Yet, thanks to the tariff, they get much of their fuel ethanol carried by train and tanker truck from the Midwest, rather than by energy-efficient tanker ships from Brazil. Per tonne-kilometer, ships consume considerably less fuel than rail and a fraction of trucks.

Saying that trade should be discouraged if "a place ... could well make its own" is a weak argument. Growers in Iceland have shown they can grow bananas in hothouses using local geothermal steam for heat and lamps running on hydroelectricity for illumination. Its very expensive, but they can do it. But, of course, they are smart enough to have zero import tariffs on bananas rather than attempt to grow the fruit themselves.

If, say, you formed a community co-op that produced your own cellulosic ethanol, you would still be free to use your own home-made stuff: nobody would force you to use Brazilian ethanol. But a tariff is applied nationally. Keeping it there gives people on Long Island, New York, say, no choice but to pay more for their ethanol (whether Brazilian or US) than they would otherwise.

Yes, I have also read the articles on labor abuses in Brazil -- though they are not by any means occurring on every sugarcane plantation. Maintaining an import tariff is not going to change that. Nor is it going to save the Amazon. Quite the opposite: by supporting the production of corn ethanol and soy biodiesel in the United States, prices for corn and soybeans have risen, stimulating new production of those crops throughout Latin America.

(Continued.)
Comment
90 of 91
March 10, 2009
Mary, you write: "If big operations get blenders' credits, then little ones should too." Agreed. But that begs the question of whether there is a strong public policy argument for providing the subsidies in the first place -- i.e., whether the credits are cost effective. The federal subsidy for ethanol (which has mainly benefited corn ethanol) has been in existence now for more than 30 years. How much longer? Would it make sense for the Federal Government to subsidize the displacement of all gasoline consumption (half of total petroleum consumption) at an ongoing and continuous cost of $200 BILLION per year?

You say, "It may be easier to bust people for fuel taxes where there are tolls and radio-frequency-identification cards for paying tolls. Will people who go to 100% home-brew bio-fuel be targets?"

If they are using the home-brew biofuel in vehicles driven on state or federal roads, yes. (If the fuel is used only by the home brewer for use in his or her farm machinery, no.) That is only fair: federal and state excise taxes in the United States are how roads are funded. The taxes are, in short, user fees. Anybody who uses the roads and does not contribute to their upkeep is, in more ways than one, a "free rider."

To quote a web site from Washington State:

"Motor fuel blenders, suppliers, exporters, and importers must register with DOL [Department of Licensing], report fuel sales, and pay fuel tax as necessary. Fuel tax evasion is a crime."
Comment
91 of 91
March 10, 2009
If an editor from REW is following this thread, perhaps there will a consideration of distiling (pardon the pun) some of the details for further discussion. I am a nobody. Nonetheless, if I can follow the thread, so can a lot of other nobodies, and this could be helpful for eroding some of the disdain that established businesses have for renewable energy. I think of it as something of a charm offensive. Many scientists and engineers do not see charm as a priority, it appears. Vandana Shiva is a noted exception. How often does a quantum physicist get repeated standing ovations in an hour's presentation?

So, here are some questions to explore.

Why are subsides so harmful? My stab at one answer to this is the coercion of less advantaged people to the benefit of more advantaged. This is why I do not like FIT's set above market, unless the premium for the FIT were to come from programs such as the Blue Sky initiative in Oregon where people voluntarily pay more to encourage renewables.

With an exhaustive, audited examination of subsidies, lobbying for something more fair might be more effective, in some state legislatures if fairness on the federal level is not an option.

Some initiatives, such as the one in Gainesville can be accomplished on a more local level than state, as long as there is wide public support in the jurisdiction.

This is all I have time for right now. I wanted to say how much I appreciate the forum and the discussion.
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