HAVE A GREAT THURSDAY READERS!

Well, only 11+ days until the "Game of the Century - Part 2" is here. There is absolutely no doubt that this LSU football team is "lazer focused" and will be fully prepared to put Bama away a 2nd time. And, if they do, this team will surely go down in history as one of the BEST teams to ever play NCAA football. They have played the most difficult schedule any NCAA football team has ever played, beating 8 teams that were in the top 25 ranking when LSU played them. Of those 8, three were in the top 5 - Oregon #3, Alabama #2 and Arkansas #3.

I'm sure most readers have now heard the news that LSU landed a HUGE commitment in Indiana Quarterback Gunner Kiel on Tuesday. He is a 5 * rated QB and rated as the #1 Quarterback in the Country. Thanks to strong and persistent efforts by Coach Miles and QB Coach Kragthorpe, including a visit to watch him play in his school's 4A Championship game, the work paid off. This guy put up over 2,400 yards passing and 29 TD's plus over 400 yards rushing and another 11 TD's running in his Senior year alone! I watched a video clip of him in their last game and I thought "WOW"! This guy is the real deal.........he looked like former Florida QB Tim Tebow "on steriods"! He can throw a lazer pass 60+ yards with incredible accuracy, and he can run. He's a big boy.......6'4" and 225 lbs. He has completed his High School classwork and will enroll at LSU in January. That will make him eligible to participate in Spring Practice. Together with Zack Mettenburger and Steven Rivers (Redshirt Freshman next year), LSU will have a GREAT quarterback core for several years to come.

Now to ethanol issues...........the article below indicates the ethanol industry is preparing and accepting the loss of their "golden goose" ethanol tax subsidies which are set to expire on December 31st (next week). It will be interesting to see if refineries will resume blending at least some ethanol free gas since they won't have their $0.45/gallon tax credit to offset their costs to blend the "corn gas".



Ethanol industry will survive end of tax credit
By Janet Kubat Willette
jkubat@agrinews.com
Date Modified: 12/21/2011 3:59 PM

The ethanol industry is already feeling the impact of the elimination of the volumetric ethanol excise tax credit.

The price of ethanol has dropped $1.10 in the last two months, said Randall Doyal, chief executive officer of Al-Corn Clean Fuels in Claremont. Blenders are selling the ethanol in their tanks to take advantage of the credit before it expires on Dec. 31.

He figures the price will straighten out in time and that most ethanol plants will weather the storm. After all, they knew the end of the credit was coming so they had time to prepare.

But anytime the market is upside down like it is now, it's painful, Doyal said.

The volumetric ethanol excise tax credit, which is also known as the blender's credit, was created in 2004. The amount of the credit has been reduced from 51 cents per gallon to the current 45 cents per gallon of ethanol blended with gasoline. The credit goes to blenders and fuel marketers, not to ethanol plants.

Jeff Broin, chief executive officer of Poet, said in a conference call earlier this month that the elimination of the credit may have a slight impact on ethanol plant profitability.

It will also impact drivers, increasing prices at the pump an average of 4 cents per gallon. Ethanol lowers all prices at the pump 17 cents per gallon, saving every driver in America $100 per year, he said.

The ethanol tax credit was visionary, Broin said. It nurtured a fledgling industry to where 10 percent of the nation's fuel supply is ethanol.

Ethanol is a homegrown fuel that lowers emissions leading to cleaner air and creates jobs in the United States.

Poet operates several ethanol plants in Minnesota and Iowa.

Ethanol plants have continued to improve efficiency since they began popping up across the countryside, Broin said. They have cut energy use in half and water use by 80 percent. The industry is increasing yield of ethanol per bushel of corn by nearly 20 percent.

The ethanol industry has matured to a point where it can survive without the tax credit, Broin said.

Unlike the oil industry, which has had subsidies for a hundred years, ethanol is willing to move away from its tax credit after 30 to 35 years, he said. Broin said he thinks the oil industry should give up their tax incentives and compete with ethanol on a level playing field.

Likewise, he said the ethanol industry isn't concerned about competing with other countries except in cases where those countries have a tariff.

"My concern is parity," Broin said.

Export markets for ethanol have grown in importance in the past 18 months to two years, he said. With the country locked at 10 percent ethanol use, it is exporting less expensive ethanol and importing more expensive oil.

The ethanol industry is working hard to get E15 to keep more U.S. ethanol in the country and displace more foreign oil. The Environmental Protection Agency did move to approve E15 about a year and a half ago, but there are numerous hurdles to installing E15 pumps, Broin said. He's confident that once the regulatory hurdles are cleared, E15 will be competitive in the marketplace.

Now is a time to evaluate the role the government plays in renewable fuels going forward, Broin said.

Maintaining the Renewable Fuels Standard and continued investment in cellulosic ethanol are critical, he said. Cellulosic ethanol has the potential to produce 80 billions gallons of ethanol per year, but no one is producing it yet on a commercial scale. The cellulosic ethanol tax credit expires at the end of 2012 and it's important that this be extended, he said.

The biofuels loan guarantee program is vital to getting the fledgling industry off the ground, Broin said.

"Pete" Landry........comments welcome..........at way2gopete@yahoo.com

MERRY CHRISTMAS ALL!

Merry Christmas to all my loyal website readers. From my family to yours, wishing you and your family a Healthy, Happy, Blessed and Joyful Christmas!

I will be announcing two new additions to PeteLandrysRealGas.com in early 2012. I really believe that you will be very excited to see the new additions.

"Pete" Landry

HAVE A GREAT WEDNESDAY READERS!

I presume readers have heard that LSU Football Coach Les Miles won the AP (Associated Press) "Coach of the Year" award today. Yet another great honor for a GREAT year for the LSU football program.

Here is an interesting article on the economics of making ethanol from sugarcane. Brazil makes all of their ethanol from sugarcane. But, according to this article, the high sugar prices do not make it favorable to make ethanol in the US from sugar cane compared to corn.



Sugarcane Ethanol Economics
By Mike Bryan | December 12, 2011

Ethanol production from sugarcane is clearly a viable option in various parts of the world. The consideration to produce ethanol from sugarcane is always just under the surface in any country that grows cane. It makes perfect sense. It’s plentiful, it’s relatively low cost compared to grain and is grown in many regions of the world and often on marginal land.

The deciding factor is not viability or technology, the issue is the world price of sugar. Between 2006 and 2011, the price of sugar, while having numerous peaks and valleys, has risen from about 18 cents per pound to as high as 29 cents per pound. Given the fact that global demand for sugar is on the increase and current weather conditions are not favorable in Brazil, Russia and some other parts of the world, it does not appear that the price of sugar will be coming down any time soon.

A debate has raged for years in the United States regarding the lifting of restrictions on the amount of sugar-based ethanol that can be imported, particularly from Brazil. On the surface, the argument can be made that ethanol is a global commodity and should be freely traded without restrictions. It could also be said that the establishment of trade barriers disadvantages developing countries economically.

But what it really comes down to is supply and demand. This is the primary problem with sugar-based ethanol. Because of high sugar prices, Brazil is now importing ethanol from the United States. This has nothing to do with its capacity to produce ethanol, but is related primarily to the world price of sugar and, more recently, drought conditions.

At a current price of nearly 23 cents per pound for raw sugar, it is simply not economically viable for Brazil or any other country to produce ethanol. The Australian sugarcane industry has looked at ethanol for years and to date only one small ethanol plant uses sugarcane as its feedstock.

So why would the United States, where it has been deemed strategically important to reduce our dependence of imported oil, move from that dependence to dependence on Brazilian ethanol, rather than continue to develop our own production? Energy security is not just relegated to oil, it’s about energy in all forms. Encouraging greater sugarcane-to-ethanol production by opening the door to expanded imports has environmental impacts, not the least of which could pose significant land use issues in developing countries.

The restrictions currently in place for imported ethanol have served America well and should be maintained. It has encouraged domestic production, while keeping sufficient amounts of imported product to help maintain a stable market.

That’s the way I see it!

Author: Mike Bryan
Chairman, BBI International
mbryan@bbiinternational.com

"Pete" Landry....comments welcome........at.....way2gopete@yahoo.com

HAVE A GREAT MONDAY READERS!

Only 21 days until the "Game of the Century - Part II" when our LSU Tigers will again face the Alabama Crimson Tide for the BCS National Championship on January 9, 2012 in the Mercedes Benz Superdome. A win for the Tigers would surely put this LSU team amongst the elite list of College teams to ever play the game. When they beat Bama for the second time, they will be 14-0, something no other LSU team has ever done. Up to now, LSU has beat 8 ranked opponents at the time they played them.......3 of which were in the top 5. By beating Bama again, they will have played 9 ranked opponents, of which 4 were in the top 5! That is an incredible resume, which very few College teams has ever done.

And, what about those Lafayette "Ragin' Cajuns" winning the R&L Carriers New Orleans Bowl Saturday night in the Superdome! A 50 yard field goal by the Cajuns with only 4 seconds left on the clock won the first bowl game for the Cajuns in 41 years! The quarterback for the Cajuns, Blaine Gautier from Paulina in St. James Parish, broke former Cajun quarterback Jake Delome's records for passing yards and touchdowns, a record that has stood for 15+ years! Congratulations to our ULL Lafayette Ragin' Cajuns!

Here's another interesting article on how the American public is starting to express their frustration with ethanol gasoline. With Federal subsidies for ethanol expiring on January 1, 2012, it'll be interesting to see if Louisiana refineries will resume blending at least some of their gasoline production as ethanol free gas next year.


Keelan: The anti-ethanol uprising
by Opinion | December 16, 2011

Editor’s note: This op-ed is by Don Keelan, a certified public accountant and resident of Arlington. The piece first appeared in the Bennington Banner.

If the Occupy Wall Street contingents believe they have a cause to create a revolution — move over. Their cause pales next to the one that the “Cylinder Index” crowd has.
And just so everyone knows who’s who, Occupy — or OWS — is a fairly recent phenomenon that had its origins, as its name describes, at New York City’s Wall Street. They claim to speak for the 99% of Americans who have been left behind and have no possible way, whatsoever, to share in the riches that the other 1% of Americans embrace. The allocation of the percentages can be questioned but for now it’s not important.

The “Cylinder Index” sector cannot quantify their legions but as you will shortly see, it is a large group of Americans. And I might add, the basis for their complaint emanates from frustration, costly outlays and time wasted — and it is because they can’t start their gasoline-driven small engines. The engines have been compromised by the inclusion of 10% ethanol in the gas mixture.
For the uninitiated, weekend do-it-yourselfers and recreational boaters and snowmobilers, measure their “life comfort level” by the number of things in their garages (or barns) that have gas-fired cylinders.

A Cylinder Index of 25 or greater represents a huge achievement not to mention a high degree of satisfaction with one’s station in life. And herein lies an example of that status:

Equipment and the number of cylinders
Pickup truck — 8
Snowblower — 2
Automobile — 6
Lawnmower — 1
Power boat — 2
Chain saw –1
Snowmobile — 2
Leaf blower — 1
4-wheeler (ATV) — 2
Weed trimmer — 1
Total: 26

So just imagine the frustration when one goes with pride into their garage and tallies up his or her “Cylinder Index’” If it comes close to the above, one has surely arrived at a heavenly state — they are at peace with themselves, their family and neighbors.
However, in recent years these folks are at peace with no one. They are raving mad. Their small engines will not start — they’ve been completely gummed up, clogged, because the gasoline they had placed in their small engines has been laced with 10 percent ethanol — a corn-based refined product.

When a mixture of gasoline, laced with ethanol sits for a while in a small engine the ethanol decomposes and turns into water and guck. And it is a known fact that most small engine owners do not use their equipment on a daily basis — therefore the decomposing process is well at work.

This raises the question — why do we use ethanol in the first place? According to some experts its use and production are costly and detrimental to the environment. And wouldn’t you know, the federal government provides farmers with billions of dollars in subsides to grow the corn.

It has been reported in the Washington Times, that over 24 percent of the corn crop must be diverted to the production of ethanol. This translates to 11 acres of corn for each car on the road. In the same Times article, it was noted that 21 acres of corn are needed to make a gallon of ethanol. When a car’s tank is filled up and its gas has been consumed, it will have produced 19 percent more carbon monoxide than regular gasoline.

The farm, energy and environmental lobbyists have done a terrific job in getting Congress to issue the ethanol mandates. Farmers must love them for it. The lobby groups have been so successful, the 10 percent mandate is scheduled to go up by 50 percent — to 15 percent ethanol content per gallon of gasoline. And one wonders why food costs are so high and meat from corn fed animals is priced out of reach?

The Cylinder Index folks are not happy — their engines won’t start and they know it will take weeks in the repair shops (assuming that they can get an appointment) and hundreds of dollars to get their small engines running again. And if this isn’t frustrating enough — they know that by using gasoline with ethanol they will get to repeat the process over again.

The Occupy Wall Street contingent has made its mark — but just wait until the Cylinder Index contingent finally conclude that they have had enough.

"Pete" Landry.........comments welcome......at way2gopete@yahoo.com

HAVE A GREAT THURSDAY READERS!

Here is yet another article citing continued pressure by food related industries to the continued increases in feed costs causing significant increases in poultry, beef, pork, etc. I'm sure this fight won't end soon.

Livestock, poultry groups request hearing to evaluate RFS

By Kris Bevill | December 07, 2011

A coalition of livestock and poultry lobby groups submitted a letter to the Senate Environment and Public Works Committee leaders on Dec. 7, requesting a hearing to evaluate the economic impact of the renewable fuel standard (RFS). A hearing is warranted based on increasing feed prices for livestock producers, according to the groups, which they believe is a direct result of increased ethanol production in response to RFS mandates.

“As representatives of the livestock and poultry industry, we remain concerned over the continued pressure on grain supplies and the impact this is having on the bottom line and risk management strategies of livestock and poultry producers,” the groups stated in the letter. The coalition, which includes the American Meat Institute, the National Pork Producers Council, the National Chicken Council and 13 other livestock and poultry groups, further expressed concern over reports that congressional support is growing for a modification to the RFS that would allow corn-based ethanol to qualify as an advanced biofuel. The coalition believes a modification of that sort would only exacerbate the already tight corn supply situation.

The coalition also cited the U.S. EPA’s recent discovery of fraudulent renewable identification numbers (RINs) as reason to examine the RFS, stating that the RIN system is likely only one of “potentially hundreds of areas that highlight the problems with the current rigid RFS compliance system.”

Matt Hartwig, communications director for the Renewable Fuels Association, said livestock groups are falsely blaming the ethanol industry for high corn prices and are ignoring the real factors at play in the commodity market. “The corporate livestock lobbies are seeking a return to the day when they could buy corn under the cost of production for American farmers,” he said. “In doing so, they are scapegoating ethanol as the cause of higher corn prices and giving a free pass to hedge funds, market speculators, oil dictators and a host of other factors that all play a greater role in raising corn and food prices than does ethanol.”

Barbara Boxer, D-Calif., serves as chairwoman of the Senate EPW committee. James Inhofe, R-Okla., is the ranking member of the committee. Both are outspoken opponents of corn-based ethanol. A representative for Boxer said the committee is currently reviewing the livestock coalition’s request for a hearing.

"Pete" Landry.........comments welcome...........at ...way2gopete@yahoo.com

HELLO READERS - HAVE A GREAT WEEK!

Hello Readers..........well, LSU's "Honey Badger" didn't get the Heisman, but the publicity should propel him for a much better showing next year, provided he continues to perform to the level he did this year, and stay out of trouble.

I know many LSU fans were upset to learn that the Tigers must play Alabama in "The Game of the Century - Part II" for the BCS National Championship on January 9th of next year. The Tigers opened a 1 point favorite, primarily due to the game being played in the Superdome, which is essentially a home field for the Tigers.

I haven't posted on the Blog in awhile, but I thought you might be very interested in this article which I found today. This action by Congress may in fact delay if not kill the "E-15" or 15% ethanol gasoline issue for awhile, although I'm sure the ethanol lobby group will fight "tooth and nail" to try to get 15% ethanol gasoline to market. Here's the article:

PS: I urge all readers to check their owners manuals regarding fuel recommendations. Even though the EPA, in it's approval of 15% ethanol gas indicated it was safe for 2001 and newer passenger cars and light trucks, many 2001 and newer vehicle owners manuals disagree. I have a 2008 Mercury Sable and a 2009 Ford F-150. Both vehicle owners manual warns "do not use fuel with greater than 10% ethanol. Any engine damage caused by use of other than specified fuel may result in engine damage and may not be covered by vehicle warranty"!

Last Updated: December 10. 2011 1:00AM

Lawmakers: Block ethanol blend

Bipartisan group says use of E15 may cause damage to engines

David Shepardson/ Detroit News Washington Bureau

Washington —A bipartisan group of more than 70 House members is urging a congressional block on higher levels of ethanol blended into gasoline.

Automakers and other engine makers have clashed with corn growers since 2010 over whether the United States should allow the use of a new blend of ethanol called E15 because it is 15 percent biofuel. The Environmental Protection Agency has approved the use in all vehicles from 2001 and newer.

In August, the EPA approved fuel labels designed to warn drivers of older vehicles not to use the fuel, but it still must be registered before the fuel can go on sale. In February, the House voted 285-136 to block the EPA from moving ahead with E15 regulations.

Now, in a letter to the top Republican and Democrat on the House Appropriations Committee, members of Congress want the block on higher ethanol levels included in a spending measure to fund the government's operations through Sept. 30.

"E15 is not ready for prime time," said the letter signed by Reps. Gary Peters, D-Bloomfield Township; Mike Rogers, R-Brighton; John Conyers, D-Detroit; Tim Walberg, R-Tipton; Bill Huizenga, R-Zeeland; Darrell Issa, R-Calif.; and Loretta Sanchez, D-Calif., among others. The amendment to block the fuel is co-sponsored by Peters and Rep. John Sullivan, R-Okla. "More thorough research and testing are necessary to ensure that E15 will not harm consumer investments," the letter said. "The desire to allow for more ethanol to enter the transportation fuel pool should not trump sound science."

Automakers and other groups have opposed approval of E15, warning it could damage engines in some models. Automakers "unanimously expressed concerns that E15 is likely to harm engines, void warranties and reduce fuel efficiency," said the congressional letter. The letter noted that the National Renewable Energy Laboratory says E15 causes significant damage to marine engines. Automakers have twice filed suit challenging approval of use for the fuel.

Growth Energy, an ethanol trade group that first sought the approval for the fuel in early 2009, said previously it expected E15 to be at pumps by the end of 2011. That seems unlikely now.

The group says it is essential to move to the higher blend in order to use the higher amounts of ethanol required by Congress under a 2007 energy act.

It says more than 136,000 new green-collar jobs will be created nationwide by moving to E15.

Opponents of ethanol argue that the use of more than 40 percent nation's corn has boosted food prices for consumers and feed costs for farmers. For the first time this year, more corn was used to produce ethanol than to feed animals in the United States.

dshepardson@detnews.com

(202) 662-8735

From The Detroit News: http://detnews.com/article/20111210/POLITICS03/112100322/Lawmakers--Block-ethanol-blend#ixzz1gCVGzzti

"Pete" Landry...........comments welcome.............at.................. way2gopete@yahoo.com

HAPPY THANKSGIVING READERS!

Wishing all of our readers a very happy Thanksgiving Day! Despite all the difficulties in our Country these days, we still have lots to be thankful for.

Don't forget the "Game of the Century - Part 2" tomorrow between our #1 Ranked and undefeated LSU Tigers and the #3 Ranked Hogs of Arkansas. Should be a great game. This will be the 7th ranked team the Tigers will have played this year, and the third in the top 5! No other team in the Country has played a schedule like LSU and survived undefeated. An LSU win Friday propels the Tigers to the SEC Championship game against the Georgia Bulldogs on December 3rd in the Georgia Dome. A win there puts the Tigers in the BCS National Championship game in the Louisiana Superdome on January 9th, possibly in a "re-match" against Alabama!

Here's another article I ran across about cattle farmers against the ethanol industry. Continued increases in ethanol production is causing substantial and continued increases in feed prices for cattle farmers. There is increasing pressure from many corners about the increasing impact that ethanol is having on all food products.

==================================================

Livestock farmers say ethanol eats too much corn

By Associated Press on November 23rd, 2011

DES MOINES, Iowa (AP) — Livestock farmers are demanding a change in the nation’s ethanol policy, claiming current rules could lead to spikes in meat prices and even shortages at supermarkets if corn growers have a bad year.

The amount of corn consumed by the ethanol industry combined with continued demand from overseas has cattle and hog farmers worried that if corn production drops due to drought or another natural disaster, the cost of feed could skyrocket, leaving them little choice but to reduce the size of their herds. A smaller supply could, in turn, mean higher meat prices and less selection at the grocery store.

The ethanol industry argues such scenarios are unlikely, but farmers have the backing of food manufacturers, who also fear that a federal mandate to increase production of ethanol will protect that industry from any kind of rationing amid a corn shortage.

The subject of debate is the Renewable Fuel Standard, a 2005 law requiring the nation to produce 7.5 billion gallons of renewable fuel by 2012. The standard was changed in 2007 to gradually increase the requirement to 36 billion gallons by 2022.

While a $5 billion-a-year federal ethanol subsidy is scheduled to expire this year, the production requirement will remain, unless it’s changed by Congress.

That has other corn consumers worried that if production falls and rationing is needed, ethanol companies will be exempt. The U.S. Department of Agriculture recently reduced its estimate of this year’s corn crop because of flooding in the Midwest and drought in the southern plains, and corn reserves are expected to fall to a 20-day supply next year. A 30-day supply is considered healthy.

At the same time, the price of corn for livestock feed has risen from an average of just over $3 a bushel in 2006-07 to an average of more than $6 this year.

“If we get a short crop, the ethanol industry does not participate in rationing and the brunt will fall on livestock and poultry,” said Steve Meyer, president of Paragon Economics, a livestock and grain marketing and economic advisory company in Adel, Iowa.

A bill introduced last month by Rep. Bob Goodlatte, R-Va., would partially waive the ethanol goals when corn inventories are low.

The Grocery Manufacturers Association, which represents more than 300 food and beverage makers, also has endorsed the bill.

“We’re behind livestock producers on this issue,” said Geoff Moody, the association’s director of energy and environmental policy. “We believe if there is a need to ration that ethanol will eat first because of the mandate.”

About 5.9 billion bushels of corn were used for animal feed last year; 2.4 billion were exported; and about 4.9 billion were used for ethanol, up from about 630 million bushels in 2000, according to the National Corn Growers Association. About 1 billion bushels were eaten by humans in products such as cereal, sweeteners, and beverages.

U.S. corn farmers have steadily increased production over the years thanks to hybrid seeds and improved techniques, but Meyer said a 20 percent decline in the harvest would be enough to force corn rationing and lead to feed shortages. That would leave livestock farmers with little choice, he said.

“We can’t shut down feeding,” Meyer said. “The only way to do that is to kill the animals.”

Even if there’s no rationing, ethanol manufacturers generally have been better able to cope with high corn prices than livestock farmers because their business has bigger profit margins, said Darrel Good, an agricultural economist at the University of Illinois.

Randy Spronk, who raises corn and hogs in Edgerton, Minn., said farmers don’t want to attack the ethanol industry but they want a plan in place if the corn supply should drop significantly.

“We really don’t want to attack ethanol but wise people make plans,” he said.

Matt Hartwig, chief of staff for the Renewable Fuels Association, called the effort to rewrite the fuel standard law “little more than a Trojan horse effort” to weaken or even eliminate it. He said the farmers’ complaints were overblown and most livestock producers and meatpacking companies were making good profits.

Also, the ethanol industry now produces about 1 billion gallons of ethanol more than is required and if corn supplies fall short, it could cut back, he said.

The Environmental Protection Agency, which administers the fuel standard, said in a statement that states can already ask for a waiver “under certain circumstances, including inadequate domestic supply or harm to the economy or environment of a state.”

Texas Gov. Rick Perry did this in 2008, claiming rising corn prices were hurting ranchers in his state. The EPA said it denied the request because the quota for renewable fuel wasn’t causing severe economic harm to the state.

Meyer said many farmers are skeptical about a process that leaves such decisions to the EPA administrator, who “many in agriculture believe won’t consider the best interest of livestock.”

Good, the University of Illinois farm economist, said meat supplies could tighten if competing demands force corn prices higher. He said it boils down to a simple choice: “We’re going to have to reduce our rate of increase in corn consumption or we’re going to have to produce more corn.”

© 2011 The Associated Press. All rights reserved.

"Pete" Landry..............comments welcome..................at way2gopete@yahoo.com

HAVE A GREAT WEDNESDAY READERS!

MEMO TO ALL BLOG READERS:

The readership of my "Blog" page has dropped off so much it hardly justifies my time to do this anymore.

Therefore, effective today, Wednesday, November 16, 2011, I will post a blog ONLY when significant news on ethanol gas, regulations, or other important ethanol related matter developes.

Thank you for your readership.

Alton "Pete" Landry

HAVE A GREAT SATURDAY READERS!

Saturday again..........several good football games on tap today that could affect the outcome of the rankings and the BCS. Standford plays at Oregon. Standford is a team, along with Oklahoma State that could possibly be LSU's BCS Championship competitor, presuming our Tigers win the rest of their regular season games. SO, let's all pull for Oregon!

Here's another interesting article on the impact that ethanol production is having on the cost of foods..........this time, turkey!

	Turkey Sticker Shock BY DENNIS WYATT Special to the Journal POSTED November 11, 2011 11:27 p.m. Have you checked out the price of turkey lately? You can thank Al Gore. Actually you can thank Gore and the Midwest ethanol subsidy lobby consisting of Republican and Democrat lawmakers alike. Gore was the leading cheerleader for ethanol as the elixir for all that ails America when it comes to energy. He led the charge to put in place ethanol subsidies. The end result: Ethanol gas that is not cost effective and has created a shortage of corn that in turn has sent food prices climbing. The hardest hit is Third World countries that rely partially on buying grain from American farmers to feed poor people. It is also hitting American consumers in the pocketbook. It is particularly noticeable as Thanksgiving approaches. Corn is the primary feed for turkeys. Ethanol subsidies have diverted much of the crop into fuel production essentially tripling the price of feed for turkeys. That puts the squeeze on turkey growers and ultimately you the consumer. It’s the classic lose-lose scenario from the government meddling with the marketplace believing they know better than the private sector. Not only are you footing the bill for ethanol subsidies but you are paying more for food because those subsidies are being used to give farmers better prices than the market allows. Farmers aren’t idiots. If Uncle Sam is willing to dole out bushels of more money at a set price for their corn crop why not go for it? The tragedy of all of this is the fact ethanol isn’t really cost effective. There are studies that indicate energy consumed to make ethanol has produced a situation where more energy is burned per gallon by the time you factor in production with ethanol than with oil. Here’s the math on the most cost effective year to date for corn ethanol subsidies. Corn ethanol subsidies in 2006 hit $7 billion for 4.9 billion gallons produced. That means it cost taxpayers $1.45 per gallon of ethanol produced. What did we get for that? Based on government research we became 1.1 percent more energy efficient while greenhouse gases were reduced a whopping 1/19 of a percent. It gets better. Once the emissions from the ethanol manufacturing process is factored into the equation, ethanol is actually increasing greenhouse gases By the way, not all of the subsidies in the program go to corn farmers. Oil companies will pocket $31 billion over the next five years to help them produce ethanol. Given the amount of subsidies needed to make ethanol compete with gas prices, do you think the oil companies would have gotten into ethanol production on their own? And if they had, do you think whatever long-term contracts they entered into would send corn prices as high as the guaranteed subsidies have from Uncle Sam? Gore, to his credit, admitted that the facts show that ethanol subsidies are a big mistake. And in a refreshing candor for a politician, he admitted at a European conference in December 2010 that the only reason he supported ethanol subsidies was political. He said, “One of the reasons I made that mistake is that I paid particular attention to the farmers in my home state of Tennessee and I had a certain fondness for farmers in the state of Iowa because I was about to run for president.” Several environmental groups have also urged Congress to drop the subsidies including Friends of the Earth. But like any government program it has now morphed into an entitlement in the eyes of those receiving it. Good luck finding enough members of Congress willing to go cold turkey by dropping the notion that they should use tax dollars to build loyalty among special issue constituents in their bid to keep getting re-elected. This Thanksgiving enjoy your artificially plumped up turkey in terms of price thanks to ethanol subsidies. As you’re forking over more money to eat a slice of turkey rest assured that your tax dollars are making sure oil companies, real Midwest farmers, and corporate farmers will have plenty of pork on their tables.

HAPPY FRIDAY READERS!

Sorry for being away from the "Blog" for a few days readers......I'm in the middle of a transition from my old 2003 Dell computer to a 2011 super fast HP new one with huge RAM memory and a HUGE hard drive. A local computer shop will transfer all of my data files from my old to the new computer tomorrow. I will be operating on the new computer tomorrow evening hopefully.

As you can surmise from the following article, the US Congress is no longer enamored by the government's ethanol program. There are more and more articles of late questioning not only the subsidies, which are set to expire on December 31st of this year, but also the substantial increases in the cost of food products. There is more and more convincing evidence that the tremendous rise in prices from all products made, directly or indirectly from corn is directly linked to ethanol production. We're in essence burning our food in fuel tanks of vehicles. I really believe this whole issue will come to a head soon.

Here's the article:

House hearing witnesses bash RFS, call for repeal of E15

By Kris Bevill | November 03, 2011

It was déjà vu all over again on Nov. 2 as representatives of the ethanol industry were forced to watch a House of Representatives Energy and Environment Subcommittee hearing on motor fuel standards from the sidelines. Earlier this year, the subcommittee held a hearing to discuss the scientific testing of E15, but failed to invite anyone from the ethanol industry to testify. On Nov. 2, the subcommittee again convened a panel to address the “Conflicts and Unintended Consequences of Motor Fuel Standards,” but declined to include any ethanol industry representatives. The petroleum industry was well-represented, however, as were several other witnesses who delivered remarks opposing the implementation of E15 and the RFS.

Committee Chairman Andy Harris, R-Md., opened the hearing by making clear his disapproval of the U.S. EPA and government policies to support biofuels and renewable energy. “Whether through government hand-outs, as in the case of Solyndra, or heavy-handed mandates as in the case of the RFS [renewable fuel standard], the picking of energy winners and losers by government fiat is an exercise in futility destined to fail miserably,” he said. He asserted that the EPA “continuously fails to do its homework” and said its approval of E15 based on one U.S. DOE study is an example of that failure.

Harris’s comments were echoed by Brendan Williams, senior director of advocacy for the National Petrochemical and Refiners Association. He testified that the E15 waiver approval puts refiners and consumers at risk for potential misfueling issues and urged Congress to repeal the EPA’s partial waiver for E15. Williams further stated that the concerns related to E15 provide an example of even greater issues associated with the RFS in general. “If the existing RFS program is carried out without changes, it will create great market and economic uncertainty, which will in turn threaten additional refining investment and job growth and harm consumers,” he stated. “Given the aggressive schedule of the mandate and the limits of what fuel and vehicle infrastructure can handle, our nation will soon face a practical limit [as to the amount of biofuels] that can be pushed into the fuel supply without causing significant consumer disruption.” He added that E85 could help to alleviate pressure on the blendwall, but said it has yet to become widely accepted by consumers and does not appear to be a viable compliance option for the RFS. “No small engines are designed for E85 and only a small fraction of the fleet of cars is designed for the fuel,” he stated. “E85 requires an expensive investment at retail stations because of the corrosive nature of ethanol. This issue is yet another in a panoply of problems associated with the current structure of the RFS.”

Margo Oge, the EPA’s Office of Transportation and Air Quality director, came to the defense of the RFS in her testimony, stating that when the policy is fully implemented it could displace 13.6 billion gallons of gasoline and diesel in 2022. “We also estimate that the fully implemented program would decrease oil import expenditures by $41.5 billion, result in additional energy security benefits of $2.6 billion, and reduce GHG [greenhouse gas] emissions by an average annualized rate of 138 million metric tons of CO2 equivalent per year,” she stated.

Oge also noted that the EPA has not registered E15 as a new gasoline under the Clean Air Act, so it cannot yet be legally sold into the marketplace. According to her testimony, ethanol industry representatives submitted emissions and health effects information related to E15 earlier this year, to be used in completing registration applications, and they are now in the process of developing additional information for that purpose. “Once complete, the information will be helpful to fuel producers in submitting registration applications for E15,” she stated. “Until such time as EPA approves a complete registration application, E15 may not be lawfully sold for use in model year 2001 and newer light-duty motor vehicles.”

The recently released National Academy of Sciences report, “Renewable Fuel Standard: Potential Economic and Environmental Effects of U.S. Biofuel Policy,” was referenced frequently during the hearing as proof of the policy’s ineffectiveness. However, Ingrid Burke, co-chair of the committee who authored the report, offered extensive written testimony on the conclusions reached in the report, often stating that the end results were inconclusive. The effect of 36 billion gallons of biofuels on GHG emissions compared to the energy-equivalent amount of petroleum is “uncertain,” she stated. Also, the effects of increased biofuel production on soil and biodiversity are likely to vary depending upon which practices and feedstock are used. “Thus, the effects of achieving RFS2 on those two environmental variables cannot be readily quantified or qualified largely because of the uncertainty of the future,” she stated. Nonetheless, the committee majority appeared only to be interested in one of the items mentioned in Burke’s testimony, releasing a statement that repeated a comment made by her suggesting that increased ethanol use could have a negative impact on air quality due to higher concentrations of certain pollutants.

Meanwhile, Oge pointed out during the question and answer session of the hearing that ethanol plays a vital role in the transportation fuels sector and cannot be completely omitted from the supply. “Ethanol improves the octane of gasoline, so it’s a very important product in gasoline,” she said. “Ethanol reduces the amount of benzene in aromatics so you end up with somewhat less toxic substances in the gasoline make-up.”

Ethanol groups spoke out in advance of the hearing in an attempt to make their voices heard despite being left off of the witness list. Brian Jennings, executive vice president of the American Coalition for Ethanol, submitted a letter to committee leaders expressing his disappointment in the lop-sided hearing and pointing out the importance of ethanol in reducing America’s dependence on foreign oil and creating jobs. Growth Energy, the group responsible for initiating the E15 waiver request, said the hearing contained a “chorus of critics” who used the hearing as an excuse to promote and protect their own special interests. “We need serious discussion about a national energy policy, including domestically produced alternatives like ethanol and next-generation biofuels,” CEO Tom Buis stated. “Instead, we are seeing special favors tossed like candy to Big Oil, which doesn’t need any more sweeteners considering the billions in taxpayer giveaways they’re already getting.”

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