The many, many uses for corn

KEEP SAFE READERS AS HURRICANE ISSAC BATTERS SOUTH LOUISIANA!  


Here's a rather interesting article, in particular the picture which shows the many, many uses for corn.  Thought you might find this interesting............

"Pete"
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The many, many uses for corn

August 27, 2012: 5:00 AM ET

·         

The bulk of all the corn grown rarely becomes food. Here's where it goes.

By Cecilia Paasche, contributor

In a good year the U.S. corn crop comes in at 13 billion bushels, accounts for 55% of the world's corn exports, and is worth about $60 billion. But 2012 is not a good year. As drought ravages the farm belt, production is forecast at 10.8 billion bushels, and corn has hit a historic high of $8.29 a bushel. A look at the industries that suffer from corn's high cost.

(Picture below this from “Pictures” file)

WELL, HERE WE GO AGAIN

WELL, HERE WE GO AGAIN...........TROPICAL STORM ISSAC WHICH MAY MAKE LANDFALL ON THE ANNIVERSARY OF INFAMOUS HURRICANE KATRINA ON AUGUST 29th, 2005.  While the storm is not yet a hurricane, it is projected to be a Cat 1 or at most a Cat 2 when it makes landfall.  As of 11 pm Monday night, the path still seems to be directly over the city of New Orleans, unless a shift in path happens in the next 18-24 hours.

BE SAFE AND DO WHAT IS BEST FOR YOUR FAMILY.........heavy rains may be the main issue, especially if the storm stays over the city for awhile.  Check all your street drains to be sure they are clean.  I may or may not post tomorrow night........if we lose power, will definitely not post.

Here's another article on "food vs fuel" that I thought was very interesting.  I can only post the first two paragraphs without paying a large fee to post the entire article, but just click on the link provided to read the full article.

"Pete"
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Rethinking the food vs. fuel debate
Drought, low corn yield force reconsideration of the Renewable Fuel Standard for ethanol
By Dave Juday - August 26, 2012
This year's drought, along with recent news reports of the lowest corn yield in 17 years, has rekindled the food vs. fuel debate — and, for good reasons. When Congress passed the Energy Independence and Security Act in 2007, an ambitious schedule for incorporating ethanol into the nation's fuel supply known as the Renewable Fuel Standard (RFS) was established. Though ethanol was sold as a way to make our energy supply more secure, little consideration was given to what every farmer knows: Mother Nature can be fickle, as this year's drought proves.
Congress made several faulty assumptions, among them: that future supplies of corn would be plentiful, that demand for motor fuel would increase and that the state of fuel-making technology would ensure our energy future. Lawmakers just bet the market wrong.

(Read full article here:  http://www.baltimoresun.com/news/opinion/oped/bs-ed-food-versus-fuel-20120826,0,5692524.story )

Drought burns ethanol makers

HAPPY MONDAY READERS........We all need to keep an eye on weather due to possible threat from Issac.  I really don't understand why so many Parishes in South Louisiana are panicking so fast and issuing mandatory evacuations and closing all schools?  The weather service admits the projections will NOT be very clear until at the earliest mid day Monday.  As of Sunday night , there is not even a clearly defined eye.  And, it has not even yet made Hurricane level 1...........

Here's an article which shows how the ethanol manufacturing plants are suffering during this extreme drought which is taking a heavy toll on the corn crop.

"Pete"
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Drought burns ethanol makers
BY FRANCINE KNOWLES Business Reporter/fknowles@suntimes.com  August 24, 2012

Decatur-based Archer Daniels Midland and other ethanol producers in the state are taking hits due to the continuing drought, and storm clouds remain on the horizon for the businesses in the near-term, industry experts say.
Topeka Capital Markets analyst Ian Horowitz, who recently downgraded ADM’s stock from “buy” to “hold,” expects ADM to report ethanol-related losses in its next two fiscal quarters.
The agriculture business giant, the largest U.S. producer of ethanol and the world’s biggest corn processor, last month said weaker ethanol results hurt its fiscal fourth quarter profit, which sank 25 percent to $284 million from a year earlier.
Its bioproducts business, which includes its ethanol results, reported a $61 million operating loss, compared to a $111 million profit a year earlier. For the year, the business lost $74 million, a plunge from the $749 million it earned last year, when it benefitted from high ethanol prices.

The drought, combined with the over capacity the industry was already grappling with, also has reduced profits at Big River Resources, said Raymond Defenbaugh, president of the company. Big River Resources owns four plants —including one in Downstate Galva — and has investments in another.
The worst U.S. drought in decades has led to a runup in corn prices, the main feedstock for ethanol producers.

Operating at a loss
“We’ve seen negative operating margins for most ethanol producers ... all due to the higher pricing,” Horowitz said.
There’s more pain to come, predicted Darrel Good, a professor of agricultural and consumer economics at the University of Illinois.
There “will clearly be reduced profitability” in the months ahead for the industry, he said.
It’s an industry that has seen explosive growth. U.S. ethanol production has grown from producing 1.8 billion gallons of ethanol in 2001 to 13.9 billion last year, according to the Renewable Fuels Association. The number of plants more than quadrupled from 50 in 1999 to 209 this year, the group said.
ADM wouldn’t comment on whether it has reduced its ethanol production because of the drought.
Defenbaugh, who also is president of Illinois Renewable Fuels Association, said a “number of plants” in the state have cut back about 15 percent on production.
Production at Big River Resources’ plants has been cut back about that amount, he said.

Illinois not idling
But producers in the state haven’t had to idle plants here, unlike elsewhere in the U.S., industry experts say.
“Right now I’m unaware of any Illinois companies idling production due to the drought,” said Matt Hartwig, spokesman for the national Renewable Fuels Association, which lists 14 ethanol plants in Illinois on its website.
They “really have not been squeezed enough” to temporarily shut down, Good said. “We know that’s not true nationwide.”
Indeed, due to the drought, Texas-based Valero Energy Corp. idled two of its ethanol plants, one in Indiana and one in Nebraska; and a separate Nebraska plant also has been temporarily idled, according to the association.
Across the country, “Many plants are running at less than full capacity due to market conditions,” Hartwig said.
The U.S. Energy Information Administration said earlier this month ethanol production fell 12 percent from 920,000 barrels per day for the week ending June 8, to 809,000 for the week ending July 27.

HAVE A GREAT SUNDAY READERS!

HAVE A GREAT SUNDAY READERS.......REMINDER THAT I DO NOT POST ON SUNDAYS.

"Pete"

JUST 8 MORE DAYS TIL SOME "FOOSBALL"!

ONLY 8 MORE DAYS BEFORE OUR BELOVED LSU TIGERS TAKE THE FIELD TO BEGIN THE 2012-2013 QUEST FOR ANOTHER NATIONAL CHAMPIONSHIP.   I don't know if readers have seen the "Death Valley" night lighting system just completed with purple and gold lighting on the arches on the stadium North End Zone?  Here is a pic..........just beautiful at night!  And, the facelift on the outside of the stadium is gradually restoring it to what it used to be, and of course, the addition to the South end zone to wrap it to the existing east and west sections will bring the stadium to a little over 100,000 capacity!  Look at this pic...........

                                                 GEAUX TIGERS!!

                                         
                                           Tiger Stadium North End Zone Night Lighting


Back to ethanol business.........yesterday, I posted an article on a company that has just secured a government backed loan to build a plant to demonstrate a new process to make ethanol from grass and other materials instead of corn.......sounds refreshing and worth looking into.  But, today, I ran across this article which is not so optimistic about this new technology.........here is the article:

HAVE A GREAT WEEKEND READERS.................

"Pete"
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Before there was Solyndra, there was cellulistic ethanol
Posted by Travis Fain on Friday, August 24, 2012 at 4:15 pm

The U.S. Department of Agriculture's official announcement this week of a $99 million, 80 percent loan guarantee for a new cellulistic ethanol plant in Sampson County, reminded me in tone of the otpimism we heard down in Georgia, when a similar project was announced back in 2007.

That optimism turned out to be mis-placed, as did various loan guarantees, government grants, tax incentives, employment expectations and private investments. From my former colleagues at The Macon Telegraph:

In 2007, the Colorado-based Range Fuels was awarded a $76 million grant from the U.S. Department of Energy under the Bush administration, plus the loan guarantee and a state grant, in order to build and start operating the country’s first cellulosic ethanol plant. Cellulosic ethanol is made from the woody or fibrous plants -- in this case wood chips -- rather than from food crops such as corn.

But the plant, which was scheduled to open in 2008, never scaled up to full operation and shuttered early this year after making one test batch of fuel. About 30 workers were laid off, said John Lee, executive director of the Treutlen County Development Authority.

The plan for Sampson County is much the same as the plan was in Georgia - a private company (in this case Chemtex, with U.S. offices in Wilmington, but owned by the Italian company Gruppo Mossi and Ghisolfi) is relying on government seed money and promising jobs in a rural area. Chemtex plans to use switchgrass to generate biofuel, as opposed the the wood chips at issue in Georgia.
As in 2007 Georgia, the state's biofuels office says the state is perfectly suited to producing the building block of this natural fuel in abundance (see paragraph 8).
Obviously cleaner domestic energy is a laudable goal for the U.S. government to pursue. Inarguably failure is an important part of progress. Perhaps Range Fuels' failure in Georgia (and this additional ethanol plant bankruptcy here in North Carolina) helped pave the way for success in Sampson County.

But let us ask: What has changed? The USDA's answer to that question, provided by its communications department, is below:

Over the past 3 years, USDA has taken a number of steps to improve the processes to mitigate the risk and improve the prospects for success for investments in the 9003 program.

For example, in 2011, USDA, incorporating public comments, proposed and implemented a stringent new rule (Federal Register Vol 76 No. 30). In addition, the agency developed policies to further strengthen the program such as:

• Provided an additional level of application processing by including state Rural Development officials.

• Strengthened the application review by adding an Independent Score Review Team.

• Improved the underwriting process and analysis by requiring additional technical operating data and validation prior to issuance of loan note guarantees and establishing a Debt Service Reserve Account.

• Increased frequency and depth of loan recipient financial status and construction monitoring. Construction monitoring requirements increased from quarterly to monthly 

reviews. Agency management updates are now provided on a weekly basis.

Those sound like significant changes. But they won't accomplish much if the technology doesn't work, and that has been the problem with cellulistic ethanol.

ETHANOL FROM GRASS??

"TGIF READERS"!

Here's another proposed for an "Advanced Biofuel Plant" to produce ethanol from non-food products, but instead from "grass"!  The technology for doing this is in the early stages and has a way to go before it can become commercial on a large scale.  The good thing about this new design is that it WOULD NOT use corn as feed stock.

"Pete"
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Chemtex lands $99M USDA loan guarantee for North Carolina cellulosic biofuels project

Jim Lane | August 23, 2012

In North Carolina, Chemtex announced that it has received a $99 million conditional loan guarantee from USDA, under the USDA’s 9003 Biorefinery Assistance Program for the engineering and construction of “Project Alpha.”

Chemtex is in discussions with the State of North Carolina to locate Project Alpha, a 20 million gallon per year cellulosic ethanol facility, in the Sampson County area, with a projected start-up date in 2014. Project Alpha is planning to use dedicated non-food energy feedstock crops, which can be grown on low-value and marginal land such as hog lagoon sprayfields.

Branch Banking & Trust (“BB&T”) will be the Lender of Record for the Project – and the Stern Brothers Group have been acting as investment bankers for the deal. The USDA’s loan guarantee approval is subject to conditions that Chemtex must meet prior to closing of the loan.

Processing technology

Chemtex will use Beta Renewables’ PROESA technology to produce cost-competitive ethanol using non-food biomass as its feedstock.  This is the same technology that will be used at the world’s first commercial-scale cellulosic ethanol plant in Crescentino, Italy, expected to start operations in the fall of 2012, and also in a series of plants to be built by GraalBio in Brazil.  Because PROESA Technology enables the use of multiple types of feedstock, farmers gain flexibility in choosing which non-food crops to grow.  Project Alpha has received additional support from the USDA in the form of a Biomass Crop Assistance Program (BCAP) Award that will help farmers and land owners with start-up costs of planting new energy crops.

Chemtex is a global engineering and technology company wholly-owned by Italy’s Gruppo Mossi & Ghisolfi.  Chemtex specializes in delivering value-added project solutions for its clients in the bio-fuels, renewable chemicals, energy, environmental, petrochemical, polymers and fibers industries.

Beta Renewables is a unique $350 million (€250M) joint venture formed by Chemtex, TPG and TPG Biotech.  Beta Renewables has invested over $200 million (€140M) in the development of the PROESA Process.

Feedstocks

In partnership with the Biofuels Center of North Carolina, Chemtex has identified nearby farmland that is currently growing Coastal Bermuda grass to manage swine lagoon effluent. Conversion from Coastal Bermuda to high yielding energy grasses, including miscanthus and switchgrass, will provide Chemtex a cost effective biomass feedstock for cellulosic ethanol production and area swine farmers with increased economic opportunity as well as the land stewardship benefits of enhanced effluent management.

In June of this year, Chemtex was awarded $3.9 million by the USDA, under its Biomass Crop Assistance Program, to support the establishment of over 4,000 acres of miscanthus and switchgrass across eleven counties in North Carolina.

The feedstock will be part of the biomass supply for Chemtex’s facility. The net increased revenue to local growers is projected to be $4.5 million per year. Chemtex is working with local farmers and producer organizations to begin growing energy grasses for the facility. About 30,000 acres will be required to supply the facility with sufficient feedstock.

Reaction from Washington

“Today’s announcement supports the Obama Administration’s ‘all-of-the-above’ energy strategy to embrace alternative American-produced feedstocks that support our nation’s energy independence and provide jobs in rural areas,” said Vilsack. “At USDA we are focused on the production of renewable energy from a wide variety of non-food sources, including energy grasses. The facility we are announcing today will help create more than 300 jobs in North Carolina and is a perfect example of how producing home-grown energy is good for the economy and good for our energy future.”

GET READY TIGER FANS - 9 MORE DAYS!

READY FOR SOME FOOTBALL?  ONLY 9 MORE DAYS UNTIL LSU's FIRST GAME OF THE NEW SEASON IN "DEATH VALLEY"!  Coach Les Miles was VERY complimentary of new QB Zachh Mettenberger after the last full practice.........he is the new REAL new team leader and apparently relishes the opportunity.  He sure seems to be "THE REAL DEAL"!  We'll know more after the first several early season games for sure.

By the way, I keep forgetting to put in a plug for Scott Long of "DandyDon.com".  He produces a GREAT site following on his recently deceased Legendary Dad (Don Long) who was one of the most ardent LSU fan ever!  If you don't currently read Dandy Don, you should check it out.  I put a shortcut on my computer desktop and read it every morning.  He puts up stuff about LSU that not other site has.........check it out.

Here's another article from a critic of corn ethanol.  He does have some very interesting points.

"Pete"
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Ethanol From Corn Is A Dumb Idea!
By Gary Hunt  |  Commodities  |  Aug 20, 2012 08:19AM GMT  |  

There is a lot of hot air blowing in Iowa and across the US Midwestern states—and I am not just talking about politics or wind energy production. The combination of an extended drought plus the ethanol mandate plus the weak economy plus the 2012 Presidential election cycle has combined into a ferocious debate over all of these issues. 

On August 10, 2012 The US Department of Agriculture released a specialized crop forecast sure to send corn prices higher than their already record setting $8 per bushel. The USDA report said corn production would be “sharply lower” down 22.6 bushels per acre to 123.4 bushels per acre making the current harvest the lowest forecast since the 1995-96 growing season. The number of acres of corn expected to be harvested for was also reduced by 1.5 million acres reflecting USDA’s estimate of failed crops due to drought conditions. 

Lower corn production hits home with higher food prices. It also hits hard because US Renewable Fuel Standards require blending ethanol into gasoline. For 2012, 13 billion gallons of ethanol is required to meet the target but that requirement gradually increases each year from 9 billion gallons in 2008 to 36 billion gallons by 2022. The RFS also requires the use of cellulosic ethanol made from non-food crops except none is produced commercially in the US since it is uneconomic so refiners must buy credits or pay a penalty for not using it.

To maintain supply lines in the face of reduced domestic corn production, imports are forecast to increase this year by 45 million bushels to 75 million bushels. USDA said total US corn supply for the growing year would likely be at a nine year low falling by more than 2.0 billion bushels. As a result USDA expects total US corn use to also fall by 1.5 billion bushels to 11.2 billion bushels—the lowest corn use in 6 years. 

The first sacrifice in corn short years is feed for livestock. Ranchers have already begun to cull the herds. In a campaign stop in Iowa August 13, 2012 President Obama announced that USDA would step up its purchase of meat buying $170 million in pork, chickens, lamb and catfish as the culling of the herds will create a short-term glut in the market with falling prices. The US will use the meat it hopes to buy at bargain prices for US food programs. Economists predict longer term spikes in meat and other food prices as supply shortages ripple through the supply chain. 

US EPA could waive the RFS ethanol use, but don’t count on it. Because of the ethanol mandate available corn supplies in shortages follow the price higher with the ethanol mandate, driving up the cost of gasoline refiners who are required to buy it at any price unless EPA issues a waiver. So far it has shown no indications it will do so. Last year, US EPA denied a waiver requested by the State of Texas in the face of its severe drought conditions. 

USDA has a spotty record of forecasting these things but the conditions on the ground suggest a worst case scenario this year in the absence of rain and the scorching hot temperatures. And the worst case is exactly where the ugly politics of ethanol are taking us for the rest of this election cycle. Even environmental groups which once favored ethanol production have soured on it claiming it uses more energy to produce than its saves in imports and emissions reduction. But ethanol is the poster child for artificial markets created by government mandates and subsidies that are tough to stop once constituencies are in place. 

As is true on many issues during this election cycle, facing reality about our economy, job creation, taxes, subsidies and pet causes is causing angst. Ethanol mandates should be causing a lot more angst than they are. Politicians campaigning in Iowa are unlikely to be truth-tellers on this subject. A healthy election debate on the pros and cons of the renewable fuel standard and the unintended consequences of ethanol mandates is good for the country and might even lead to a consensus on a way forward to pull our economy out of the ditch, but a lot of mud-slinging is going to happen getting there.

Have a GREAT Wednesday readers!  I continue to search for articles that may shed some light on this continuing saga of corn vs food.  It is a very complicated issue, compounded this year largely due to the HUGE drought in the corn producing States, the worst drought in nearly 50 years.  The crop damage is already estimated at 35% or so and likely go higher.  Plus, the EPA ethanol mandate that 12+ billion gallons of ethanol to be produced soaks up nearly 40%+ of the corn grown.  SO, what's left for corn for food products when the drought has taken much.  That's what has driven the corn prices from $6.25/bushel to now $8.30/bushel.

Here's yet another article which debates that corn prices CAN be brought down if the EPA's mandate is reduced significantly.  In an election year, I personally believe there is a proverbial "snowball's chance in hell" that this will happen.  SO, those "pricey" steaks will likely become unaffordable for many people and they will be forced to switched to tortillas.......but, oops, I forgot that those are made from corn also!

"Pete"
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Study: U.S. could put a big dent in food prices by relaxing ethanol rules

Posted by Brad Plumer on August 21, 2012 at 3:59 pm

The worst U.S. drought in half a century has hampered the country’s corn production and caused plenty of worry about the rising cost of food worldwide. But the spike also raises a policy question.  Should the United States now suspend its rules that divert a hefty portion of the U.S. corn crop—40 percent, by some counts—into ethanol fuel for cars and trucks?

One top U.N. food official, José Graziano da Silva, has already called for an “immediate, temporary suspension” of the U.S. ethanol mandate in order to ease the pressure on world food prices. But how much would this actually help? Here’s one possible answer. A new paper (pdf) out from three agricultural economists at Purdue University finds that even a partial relaxation of the mandate could reduce corn prices by up to 20 percent next year. (It’s probably too late to seriously affect prices this year.) But, as always, there are complications involved that make these estimates uncertain.

Currently, the EPA’s Renewable Fuel Standard requires refiners to blend a certain amount of ethanol in with their gasoline. In 2013, this will require about 13.8 billion gallons of ethanol. Since corn ethanol is the most viable form of ethanol in the United States at the moment, this creates a hefty—and fairly inflexible—market for corn. And that causes corn prices to rise higher than they otherwise would.

What would happen if the EPA relaxed this mandate? As the Purdue authors note, a lot depends on how quickly refiners and blenders could switch away from ethanol. That’s not as technically easy as it sounds—these refiners have already made preparations for blending ethanol. What’s more, under the EPA program, the producers of ethanol can carry over credits from year to year, giving them some flexibility to deal with shortages. That complicates matters further.

So the Purdue authors modeled a couple of different situations to determine how the price of corn might be affected in 2013. Roger Pielke Jr. has created a very handy graph that shows different options under a “strong drought” scenario:

Let’s break this chart down: In the first option, the EPA doesn’t alter its ethanol program at all. Corn prices remain elevated next year — staying around $8.57 per bushel. Under the second option, the EPA doesn’t alter its program at all, but ethanol producers use as many of their existing credits (RINS) as possible to deal with the shortage. Corn prices drop about 7 percent. In the third case, the EPA allows a little more flexibility in its rules, say, by partially relaxing the mandate or by allowing U.S. refiners to use imported sugarcane ethanol. Prices drop by about 13 percent.

Under the fourth option there, the EPA allows a fairly big relaxation of the ethanol rule next year. (A waiver this year is unlikely.) Refiners are required to use 25 percent less ethanol. And ethanol producers can carry over their credits from previous years. In that case, corn prices could drop more than 20 percent, to $6.56 per bushel. That’s about where corn prices would have been if we only had a “weak drought” this year. In other words, by relaxing the ethanol rule, the EPA could essentially turn a “strong drought” into a “weak drought” as far as prices are concerned.

Still, the Purdue authors note that there’s no simple solution here. The drought has already hurt the corn crop this year. That corn isn’t coming back. At best, by relaxing the ethanol rule, the EPA could redistribute the pain a bit:

In considering a waiver, EPA cannot change the loss, but can only redistribute it among the affected parties—ethanol producers, livestock producers, corn growers, and ultimately domestic and foreign consumers. To the extent that the refining and blending industry has flexibility, issuing a waiver helps livestock producers and livestock product consumers, and it hurts ethanol producers and crop growers.

So far, the Obama administration has shown no indication that it will relax the ethanol mandate, although the EPA just announced it would take public comments on a waiver proposal. In the meantime, the Department of Agriculture has tried to assist livestock producers by buying up millions of dollars worth of pork, chicken, and beef. That might help meat producers. But it doesn’t change the fact that the combination of a drought and tight ethanol rules will hike corn and other food prices—particularly for developing countries overseas.

* Updated to note that the EPA is preparing to open a 30-day comment period on requests to waive the ethanol mandate.

EPA seeks input on ethanol mandate waiver requests

Do hope all readers had a GREAT weekend.  College football is just 12 days away folks!  LSU's first game is on Saturday, August 31st in "Death Valley"!  Glad the first 3 games will be at home, even they're against rather weak opponents, except Washington, so it will give the team a chance to get their timing down.  Folks, I've seen videos and read reports of some who have seen some of the practice sessions, and new QB Zack Mettenburger is the "REAL DEAL".   The offense loves him and he has apparently earned the team's respect as their leader, a role which he said he relishes.  He has an arm like a "rocket" as quoted by a couple of his receivers.  In one video I saw him throw, with a very quick "flick of the wrist" a 65 yard pass and hit the receiver on the numbers.  His passing is VERY accurate per his receivers.   His receivers have given themselves a nickname..........."The Fab Five"!  For the first time in nearly 5 years, LSU finally has a QB!  It's a shame Les Miles didn't let him play more last year.........but, his time is NOW!

The EPA today put out a notice that they will post a request for comments in the Federal Register (as required by law) on the request for waivers on their "Ethanol Mandate".  Several State Governors have petitioned for a waiver and the list is growing.  Below is one of several articles I've read on this subject today.  Maybe, just maybe, their may be a ray of hope in scaling back this terrible mandate to hopefully stop the runaway price increased in food costs?  Making ethanol for gas with food is NOT a very smart idea to begin with.

"Pete"
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EPA seeks input on ethanol mandate waiver requests                                        Reuters - 6:11 p.m. CDT, August 20, 2012


WASHINGTON (Reuters) - The U.S. Environmental Protection Agency on Monday said it has begun weighing requests to suspend the U.S. ethanol mandate, which requires refiners to blend ethanol into gasoline, and is seeking public feedback.

The governors of North Carolina and Arkansas asked the agency last week to temporarily waive the U.S. quota on ethanol made from corn, because the worst drought in 50 years has driven corn prices higher and hurt livestock producers who depend on the grain for feed.
The EPA asked on Monday for public comment on the need for an ethanol waiver. The 30-day comment period will begin once the notice is published in the Federal Register.

"This notice is in keeping with EPA's commitment to an open and transparent process to evaluate requests the agency receives under the Clean Air Act, and does not indicate any predisposition to a specific decision," agency spokeswoman Alisha Johnson said in a statement.

By law the agency has until November 13 to make a decision on the waivers, meaning EPA could act on the requests after national elections on November 6.

Aimed at reducing U.S. reliance on foreign oil, the Renewable Fuels Standard, or RFS, would require 13.2 billion gallons of ethanol to be made from corn this year.

The EPA is seeking input on whether the RFS would severely hurt the economies of Arkansas, North Carolina or any other part of the United States and what effect a waiver would have on ethanol demand and corn prices.

The agency is also asking, if a waiver is needed, how much should the mandate be eased and when should it apply.

A petition by Texas Governor Rick Perry in 2008 was rejected when the agency said waiver requests had to show the mandate itself was severely harming a region's economy and not just contributing to economic damage.

U.S. livestock groups have argued that complying with the mandate at a time of historic national drought is causing major economic harm to meat and dairy producers.

It is unclear that a waiver would weaken corn prices. Refiners will likely continue buying almost as much ethanol even without the mandate since they use it as an additive to make cleaner-burning fuel required in much of the country.

Ethanol industry groups say the mandate offers some flexibility for fuel blenders responsible for complying with the RFS, including the ability to buy bankable credits if blenders cannot buy enough physical ethanol to meet requirements.

(Reporting by Ayesha Rascoe; Editing by Gary Hill and Jim Marshall)

Court dismisses challenge to EPA's introduction of E15

WOW, what a wet and soggy weekend.  I don't know how widespread the rain was in Louisiana, but in LaPlace we had 8 inches in 3 days!  Thought I'd have to take my boat out of my boat shed to use it at one point..........

Well, a US Appeals Court in Washington D.C. dealt a blow to all litigants in lawsuits asking the courts to stop the 15% ethanol to allow auto manufacturers to complete their long term testing.  The court by a 2-1 margin dismissed the lawsuits.  I've read about 15 articles on this from many different papers, but none indicated if the dismissal will be challenged in a higher court or not.  If it is not challenged to a higher court, we may be stuck with E15!  However, the one thing on consumers side, that is if you oppose E15 and the way EPA approved it in "partial waivers", is that auto makers have warned customers in their owners manuals and even on gas caps of some newer cars NOT TO USE GAS WITH GREATER THAN 10% ETHANOL, and, if they do, and their engine is damaged, their WARRANTY WILL BE VOID!  And, this includes 2001 and newer cars and light trucks that the EPA said it is safe to use E15 in!  Retailer stores that sell gas are also opposed to it and many have said they will not sell it even if offered (it is OPTIONAL for retailers to sell it).......their biggest concern is the potential liability involved.  So the "saga" continues...........all I have to say about E15 is SELLER AND BUYER BEWARE!  As far as my study shows, the ONLY vehicles that can use this new fuel safely are the vehicles which bear the "FLEX" decal........these vehicles were designed with different fuel pumps, fuel lines, injectors and other components to attempt to reduce the corrosion from the higher ethanol blends.  And, of course, the added cost to manufacture these autos were subsidied by us the taxpayers through government tax credits to the auto manufacturers!   E15 should NOT be used in anything else.....PERIOD!  It is most CRITICAL that it NOT BE USED in marine engines, motorcycles, jet skis, 4 wheelers, chain saws, home generators, and all gas powered lawn and garden tools, PLUS any vehicle that is not a FLEX vehicle.  It will destroy these engines (proven by tests) and warranties will NOT cover damages!  I have an article on this E15 issue on the "Articles" page of my website.

HAVE A GREAT MONDAY READERS!  

"Pete"
=========================================

Court dismisses challenge to EPA's introduction of E15

WASHINGTON, DC, Aug. 17

08/17/2012

By Nick Snow - OGJ Washington Editor

A federal appeals court dismissed a legal challenge to the US Environmental Protection Agency’s introduction of gasoline with a higher ethanol blend into the marketplace. The three-judge US Appeals Court for the District of Columbia ruled 2-1 that the petroleum industry and two other groups did not have legal standing in the matter.

The attempt by refiners and product importers to draw a causal link between the waivers they challenge and costs they would incur introducing the 85% gasoline-15% ethanol blend (E15) “ultimately rings hollow,” the Aug. 17 decision said.

“If anything is ‘forcing’ these entities to incur the costs of introducing a new fuel, it is the obligations set by the [federal Renewable Fuel Standard], competitive pressures, or some combination thereof,” it continued. “EPA’s partial waivers simply provide a new choice of fuel for manufacturers to produce. There is not a cause of these costs providing the petroleum group with standing.”

It also denied standing to engine manufacturers, who warned that introducing E15 could harm their products, and food businesses which produce, market, and distributed products requiring corn.

Officials from the American Petroleum Institute and American Fuel & Petrochemical Manufacturers immediately criticized the ruling.

“AFPM members want to ensure that all fuels sold into commerce are safe for consumers, effective and reliable, but today's decision confounds our ability to do so,” said Charles T. Drevna, the association’s president.

“Vehicle testing has confirmed that E15 damages certain engines,” he continued. “In fact, vehicle manufacturers have begun to include warnings on their gas caps that E15 could void vehicle warranties. This decision will harm every American who owns a car, truck, or small engine equipment.”

API Downstream Director Bob Greco separately said that it was astounding the court found that refiners, who must comply with the federal ethanol mandate contained in the 2007 Energy Independence and Security Act, don’t have legal standing.

“EPA approved E15 before vehicle testing was complete, and we now know that the fuel may cause significant mechanical problems in millions of cars on the road today,” he said.

Contact Nick Snow at nicks@pennwell.com.

EPA is pressured to drop ethanol mandate while drought drives corn prices up

More State Governors are demanding that the EPA stop the ethanol mandate, at least until corn crops recover.........probably not until next year.  Even the United Nations is putting pressure on Obama to stop the ethanol.  The US has in past years been a major corn exporter, which is essential to feed poor countries.  With the large crop loss this year, unless the ethanol mandate is stopped, there is real concern there will again be food riots across the World, and even possibly in the U.S.

"Pete"
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EPA is pressured to drop ethanol mandate while drought drives corn prices up
By Doug McKelway
Published August 16, 2012
FoxNews.com

With record drought destroying crops across the country, corn prices are skyrocketing, and that is causing a world-wide ripple effect, including on the cost of the corn-derived gasoline additive ethanol.
Corn prices are up 60 percent this summer, Christopher Hurt, a Purdue University economic professor, estimates. And now Democratic governors from Maryland, Delaware, North Carolina and Arkansas have joined ranchers, poultry farmers and the United Nations director-general for food and agriculture in asking the Environmental Protection Agency to waive the federal requirement that gasoline contain 10 percent ethanol.

"It's universally acknowledged that ethanol is raising the price of food," Kenneth Green of the American Enterprise Institute said. "It's not lowering the price of gas. In fact, it may be raising the price of gas, and it's having a devastating environmental effect in terms of coastal pollution."
Green says coastal "dead zones" may be increasing because of the run-off from fertilizer-intensive corn crops. But the human economic costs are potentially more severe.
The Department of Agriculture estimates that food inflation will hit 3 percent to 3.5 percent this year, then 3 percent to 4 percent next year. The U.S. is the world's largest food exporter. For the poorest countries dependent on U.S. exports of corn, the impact may cost lives.
The Obama administration, however, hasn't acted to waive the ethanol mandate.
"What I can tell you is that the EPA has made it clear that they are working closely with the Department of Agriculture to keep an eye on yields," White House spokesman Jay Carney told reporters Friday. "They will evaluate all the relevant information when assessing that situation."
More recently, when asked about the president's commitment to ethanol, Deputy White House Communications Director Jen Psaki said, "He absolutely believes in it. He thinks it's a driver of the economy here and a key component of renewable energy."
Indeed, ethanol mandates have won favor in the corn belt -- where corn prices and profits have set records in recent years. As evidence of that, more corn now goes to the production of ethanol than to the production of food and cattle and poultry feed. Many of those same corn belt states, including Iowa, Ohio, and Michigan, happen to be key swing states in the upcoming presidential election.

Even if there were political will to challenge the mandates, the ethanol industry has now become an entrenched player in Washington.
"Once it's entrenched, you have a locked-in lobby that won't let you pry it out," Green said. "No matter that your environmental groups have walked away from it, international groups have walked away from it. Everybody has acknowledged it's bad public policy, but it's dug in like a tick."

U.S. use of corn for ethanol is high but hyped:

The role of corn's future in continued debate.  Here's an article from Reuters on that issue.  The pressure continues to grow on the Obama administration to either reduce or put a complete hold on the ethanol mandate at least until corn inventories are restored.  The incredible drought in the corn growing states continues unabated.  Before it's all said and done, it is very possible that at least 50% or more of this year's corn crop will be lost.  New figures from the US Department of Agriculture should be out soon...........

"Pete"
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COLUMN-U.S. use of corn for ethanol is high but hyped: Wynn

 Energy »
Wed Aug 8, 2012 10:43am EDT
(The author is a Reuters market analyst. The views expressed are his own.)
By Gerard Wynn

Aug 8 (Reuters) - The U.S. ethanol industry is right to complain that its consumption of corn is routinely exaggerated, by opponents of biofuel and in wider commentary, but it still consumes enough to make a minimum blending mandate look vulnerable.

A U.S. drought and shrinking corn yields have thrown a focus once more on the role of biofuels, four years after a rise in grain prices led to a food-versus-fuel debate and riots in developing countries.

(Read entire article here:  http://www.reuters.com/article/2012/08/08/column-wynn-ethanol-corn-idUSL6E8J65JU20120808

Obama’s Big Bacon Bailout

I think you may find this article very interesting.  Obama's solution to the severe damage to the US corn crop due to the worst drought in over 50 years...........I don't think it takes a "rocket scientist" to figure out that this plan is NOT THE ANSWER and will only make the problem worse.

Instead what his administration needs to do is SUSPEND the ethanol fuel mandate so corn will be available for meat, hog, poultry and other meat producing farmers.  This "Big Bacon Bailout" does absolutely NOTHING to help these farmers AND, make more corn available for food products.  This is shameful!  Total "lack of leadership".  Consumers will be left to "eat ethanol" since there may not be enough corn to manufacture the hundreds of products made from corn.

"Pete"
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Obama’s Big Bacon Bailout
August 14, 2012 | 11:05 am 
Charlie Spiering  The Washington Examiner

Standing in front of a field of shriveled ears of corn, President Obama  unveiled a government plan to help out farmers and livestock producers.
The federal government, he declared, was prepared to spend up to $170 million dollars on meat, thanks to his executive directive.

“We’re not just talking about a few strips of bacon here,” the President insisted.  “It turns out that the federal government buys a lot of meat for military bases, hospitals, colleges, food banks and cafeterias, and because of the drought, there are a lot of folks out there that are trying to sell meat right now.”

Up to a million dollars will be used to buy pork products.
As I noted yesterday, livestock producers are suffering due to a corn shortage, due to the drought hitting the Midwest this summer. That puts livestock producers in a tight spot, due to the high cost of feed.
But they are in even more trouble, thanks to an ethanol mandate requiring that 13.2 billion gallons of corn starch-derived biofuel be produced in 2012. Forty percent of the nation’s corn crop now goes to ethanol producers, compared with 36 percent for feed.

With high feed costs, livestock producers are forced to slaughter their herds, rather than spending the money on expensive corn to keep them alive. If you have a freezer, now would be the time to fill it, as the cost meat is expected to drop at the expense of livestock producers.
Thanks to the president’s “meat plan,” however, the government plan will prop up the price of meat in order to help producers rather than relaxing the ethanol mandates. “We’ll freeze it for later — but we’ve got a lot of freezers,” Obama explained in Iowa.

But while Obama’s “meat plan” will absorb the meat surplus in 2012, the cost of meat will skyrocket in 2013, when production slows down. The Department of Agriculture has already predicted a 4 percent jump in beef prices in 2013, and a 2-3 percent jump for poultry, eggs, and pork.

This year, stock up and save by filling up your freezer in advance. But hurry, Obama is already at the store emptying the shelves for the government’s big bloated shopping cart.

A Hungry World Population? Oh Well, Let Them Eat Ethanol!

The debate over corn for gas or food is still very hot due to the continued EXTREME drought in the corn belt states.   The drought and extreme heat has lasted so long that it is unlikely even if rain were to come, that it would do much good.  The corn crop loss will likely exceed 50% of the crop when the final figures are in.  AND, given that ethanol gas gets 1st priority on corn with approximately 40%+ of the corn crop going to ethanol, you can see that this does  not leave a whole lot for animal feed and human food.....

"Pete"
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A Hungry World Population? Oh Well, Let Them Eat Ethanol!

Patrick Michaels, Contributor - Forbes
At the interface of public science and public policy

This year, given the expected yield reductions, we could easily destroy over half of our corn producing mandated ethanol.
…Here come the corn riots.
Climate change policies—much more than the vagaries of climate–are now beginning to create the instabilities that cooler heads have been warning about for years.
Corn prices on the Chicago Board of Trade are now at or near record levels, around $8.30 per bushel for spot delivery. The rise in recent weeks has been dramatic, driven by the perception of declining yields caused by hot and dry conditions mainly in the upper Midwest.
Much of this corn is beyond redemption as grain.  High temperatures render corn’s pollen sterile, and the narrow pollination season—usually around ten days in a given field—dictates that once this time has passed, there’s likely to be very few kernels set on each ear.  While rain may allow the plant to recover, its value as feed is dramatically reduced.
(Read the full article here:  http://www.forbes.com/sites/patrickmichaels/2012/07/22/a-hungry-world-population-oh-well-let-them-eat-ethanol/)

The U.S. corn growing region is massive in extent, so that some residual yields are always preserved.  The drought of the mid-1950s was a widespread and multi-year event, but it only reduced  yields (the amount produced per acre) around 20%.  The current drought is comparable in extent, but not in magnitude nor in duration. Yet.
Back then, the average yield was around 45 bushels per acre (a bushel is 56 pounds of shelled corn), and rising at a pretty constant rate that began with the large-scale adoption of hybrid corn, which began in the 1930s.
Despite the wailings of Paul Ehrlich and his tiresome compatriots, there were no great famines because of some fantasy “limits to growth” that were forecast to soon to be breached.  Instead, corn yields continued their steady climb.  A good year now yields around 160 bushels. Between then and now, there have been several bad years caused by drought, heat, and blights, and pretty much every one of them has seen the same percentage toll on yields, about 25 % of the maximum expected value at the time.
The Department of Agriculture’s July 11 projection is for a 9% reduction from that nominal 160. But it’s been pretty hot and dry since that estimate was made (with data from many days before 7/11), so things are going to drop further, which is why corn prices continue to climb.
Which brings us to ethanol.  It comes from corn. The amount to be produced is a mandate, not a choice. It’s 13.2 billion gallons this year.  Last year we burnt up 40% of our crop.  This year, given the expected yield reductions, we could easily destroy over half of our corn.
The U.S. is by far the world’s largest producer, and our abundant supply is a major factor in keeping the price of the world’s most abundant feed and food grain low—generally around $3.00/bushel.  That was before George W. Bush decided that the answer to global warming was to produce ethanol from corn.  Hence the rise in corn price that commences with the 2007 passage of the ethanol mandates, followed soon by global food riots.  $8.00 corn today will likely bring much more of the same.
Bad weather is a fact of life in agriculture. In the last four decades, the time of maximum and increasing carbon dioxide concentrations, there’s no evidence of an increase in the number of bad crop-years, nor a change in the magnitude of the percent drop in yields that occurs. 2012 is shaping up like a garden-variety crummy year.
What we have seen is a change in policy, not of the weather.  Now, the Saudi Arabia of corn burns up half of its supply, instead of selling it to a hungry world.  All of this was brought to you by our greener friends and, yes, Republicans, working the political process hand in hand.  Later, the environmental community realized—as some of us had been telling them for years—that corn ethanol results in an increase in carbon dioxide emissions, not a decrease.
Of course, there is little chance that the disproportionately influential farm lobby is going to swallow changing the ethanol mandate when its constituents are making money hand-over-fist because of an artificially induced shortage.  It’s also an election year. But, isn’t it just too bad about those poor people in Mexico and around the world who actually will suffer for the insanity and depravity of our agricultural/environmental policy?

Ethanol groups to Congress: Try not to 'out-guess' markets

Now the ethanol groups fight back over demands that the ethanol mandate be eased back or stopped altogether due to the huge corn crop loss from the worst drought in over 50 years in the corn belt..........something will have to be done about this, and soon - or we may again face World food shortages - in large part due to ethanol gasoline and unfavorable climate conditions!

"Pete"
===============================================

Ethanol groups to Congress: Try not to 'out-guess' markets

By Zack Colman - 08/02/12 03:13 PM ET
  
A pair of ethanol industry trade groups on Thursday accused lawmakers and livestock groups of spreading misinformation to kill a rule that promotes corn ethanol production. 
Some lawmakers critical of ethanol have called for the Environmental Protection Agency’s (EPA) renewable fuel standard (RFS) to be waived because of drought conditions lowering the corn harvest and raising prices. 
A bipartisan coalition of lawmakers held a press conference earlier Thursday urging EPA Administrator Lisa Jackson to waive the standard. They said the EPA can waive the RFS in whole or in part when complying with the rule causes severe economic or environmental harm.
But Renewable Fuels Association CEO Bob Dinneen said the rule should only be waived when ethanol refiners say they cannot meet the rule’s production targets. He added that this won't happen this year. 
“The bottom line is this — the RFS is about refiners being able to meet their obligations,” Dinneen said. “Refiners can meet their obligations because of the flexibility built into this program.”
The RFS calls for a certain amount of corn ethanol to be blended into traditional transportation fuel each year. Dinneen said the original mark for 2012 was 13.2 billion gallons, but EPA has revised that downward to 13 billion gallons in response to decreased overall demand for gasoline. 
Growth Energy CEO Tom Buis said he's never heard a "bigger whopper" in Washington than the argument that the RFS is hurting food supplies.  
In a response to a question from E2-Wire, he said Congress should not try to “out-guess” the market by calling for an RFS waiver. Crop yields could rebound to drive prices back down like they did in 2008, which was when Texas Gov. Rick Perry (R) asked for an RFS waiver for economic reasons, he said. EPA denied Perry’s request.
“We’re in that crazy part of the year,” Guis said of corn prices. “It’s kind of the silly season on speculation at this point.”
Dinneen and Buis cautioned lawmakers and the EPA about acting prematurely on the RFS. They said ethanol producers already are curtailing production in response to the high prices. And in previous years, ethanol refiners had overproduced corn ethanol, leaving about 800 million gallons sitting in stocks and 2.5 billion gallons worth of credits that refiners can use

The end of ethanol?

Do hope everyone had a great weekend.  Be very careful as you drive to work this week as many schools are opening and the traffic will be more congested.

The corn for ethanol or food controversy continues to soar!  Many US Congressmen and Senators are pressuring Obama and his EPA to reduce or put a hold on the ethanol mandate so more corn is available for food.  This would hopefully also reduce the VERY HIGH price of corn.  Before the drought in the corn belt states began, corn was selling for in the low $6/bushel.  It is now over $8 and continuing to increase.  Meat, pork, poultry and other food producing farms are not only having to pay extremely high prices for feed for their animals, but many can't find enough corn and are sending their animals to market early.  That may result in very short term lower meat prices, but next year's prices will be very high due to a shortage of animals for food.

Here's another story of the issue of corn for ethanol.............

"Pete"
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THURSDAY, AUG 2, 2012 12:03 PM CDT

The end of ethanol?
The drought is destroying corn fields -- and threatening American politicians' most cherished alternative fuel
BY SARAH LASKOW      

Americans excel at processing government-subsidized corn into products — cheap beef, cheap chicken, cheap sugar. We’ve also gotten very good at turning corn into relatively expensive bio-based fuel. In 2010, corn processors turned 10 times as much American-grown corn into ethanol as into high-fructose corn syrup. That same year, for the first time, our addiction to fuel outstripped our addiction to hamburgers — more corn went into ethanol than into feed for livestock.

For years, national politicians could only benefit by supporting ethanol. Oil companies weren’t too worried about it. Farmers loved it, and they lived in swing states. Even as think tankers, scientists and some environmentalists tallied reasonable objections to turning millions of acres of corn into fuel, the Iowa ethanol pander became a rite of passage for presidential candidates. But now, with this summer’s drought killing off America’s most valuable crop, the ethanol industry is finally facing critics with actual political clout — meat producers, auto companies and the average American family. One bad crop of summer corn won’t dismantle the business ethanol producers have built. But it could herald the decline of an industry that’s been propped up for years by political convenience rather than economic or environmental sense.

I first heard the rumblings against ethanol from a dairy farmer in upstate New York a few weeks back: The economics of running a dairy farm were dire enough, he said, without ethanol producers driving up the price of ever-scarcer corn. By the beginning of this week, worries and dissatisfactions like his had coalesced into an official letter of complaint from turkey growers, pork producers, dairy farmers and cattlemen to the Environmental Protection Agency. These producers would rather not compete with the ethanol industry to buy grain, and their coalition made a simple enough request of the Environmental Protection Agency: Just for the moment, stop giving the ethanol industry a boost.

Because of the political benefits of supporting corn-based ethanol, the biofuel gets more support from the government than any other kind of clean energy. When a group of think tanks analyzed government investment in clean tech from 2009 to 2014, they found that tax credits and incentives for creating and burning biofuels together added up to “the single largest contribution to federal clean energy deployment expenditures.” Recently, though, support for those incentives has eroded. Subsidies for corn-based ethanol ended in 2011. The industry still benefits, though, from a standard that requires a minimum volume of biofuel powers the country’s vehicles. It’s an important market-driver for the ethanol industry, and it’s what meat producers are asking the Environmental Protection Agency to temporarily suspend.
The meat industry isn’t alone in its skepticism of the renewable fuel standard: The auto industry is also less than fond. The standards require purveyors of fuel to gradually ramp up the amount of biofuel they use until 2014, when 14.4 billion gallons of biofuel will go into American’s trucks, planes and automobiles. In practice, that means that anyone who has a car will be buying into the clean energy revolution: All gas available at the pump will be blended with ethanol, in increasingly higher percentages. To meet this goal, the ethanol industry has pushed for gas stations to sell E15, a blend that contains 15 percent ethanol. American auto companies have been arguing for years that gas with that much ethanol blended in will screw up their cars, making the engine, fuel storage and emissions systems less durable. Right now, the auto industry has been losing this argument: In Lawrence, Kan., the first E15 pump in the country opened up in mid-July.

Cars and meat — is there a more American coalition? Add to that a third ally — the grocery shoppers of America, the moms and dads who just want to buy their kids milk and chicken fingers — and ethanol might have the beginnings of a problem.

For years, America’s ethanol push has been driving up food prices, just not in American grocery stores. And while a worldwide food crisis sounds like a problem, American politics have never been particularly responsive to hunger in Africa or the Middle East. This corn-killing drought, though, could affect food prices here in America. Across the world, spikes like this one have encouraged political unrest. The Obama administration won’t fall because of $7 boxes of cereal, but rising food prices certainly could create a broader base of voters who’d rather put corn-based products in their mouths than in their gas tanks.

If the political logic for ethanol falls apart, there’s little left to recommend it. Renewable resources aren’t necessarily infinite, and biofuels extract a high cost in land and in water. The World Policy Institute has calculated, for instance, that it takes 32 gallons of water to produce enough oil to drive from New York to D.C. and back again. The production of enough corn-based biofuel to fuel the same drive requires more than 35,000 gallons of water, according to the Institute.

Even renewable energy advocates and experts don’t necessarily see the widespread use of biofuels as a key component to reducing carbon emissions. In his book “Reinventing Fire,” the Rocky Mountain Institute’s Amory Lovins argues that biofuels make the most sense for trucks and planes — modes of transportation that can’t be easily electrified. These biofuels need not come from corn but from plants that people don’t eat — switchgrasses, sorghums and trees like poplars and willows. Conveniently, some of these crops have a greater chance of thriving in a changed climate, in which droughts like the one killing the corn this summer become ever more frequent.