Letter: Ethanol hasn't made fuel dent

Ever since I began my research of ethanol gas when it first appeared in Louisiana, I have been of the fervent belief that the premise for throwing $billions of taxpayer monies at ethanol was just another stupid political game.  How can you reduce dependence on imported crude oil  if you lose 8% gas mileage on the highway and 10-12% around town?   You have to use MORE GAS so there is absolutely NO advantage, unless, of course you are a "tree hugger"!

Then, the other premise that it would reduce automobile exhaust emissions and less CO2 emissions to the atmosphere, resulting in cleaner air.  That has been "debunked" by several major university studies.  The added energy to produce a gallon of ethanol for exceeds the energy it creates.  Then the major deforestation of forests to produce more and more acreage on which to grow corn takes away forests that absorb CO2 from the air!   Plus the huge increase in emissions from more and more farm equipment to grow, harvest and transport corn to ethanol factories and move the ethanol from the factories to refineries (ethanol CANNOT be transported by pipelines like crude oil, gasoline and other products because ethanol is corrosive to the pipelines) to blend add considerably to emissions.  Then, the ethanol plants themselves are huge consumers of water and also emit more emissions than are saved by the end product.


Then, we, the taxpayers who funded this ethanol experiment are paying twice....first to fund this experiment through subsidies for the ethanol industry ($6 billion/year until subsidies were ended 1/1/12), then by significantly increases in food prices, particularly all food products made from corn.  Before the 2007 "Energy Security and Independence Act" that mandated billions of gallons of ethanol in gasoline, increasing annually, corn was selling for less than $2/bushel.  It is now OVER $8.25/bushel and still going up.


The ethanol lobby groups argue that ethanol production does not increase the cost of food products.  See the graph below which I copied from a research report on this issue last year.  As you can see, the food price curve follows the corn ethanol graph almost perfectly.  Draw your own conclusion..........

This HUGE government experiment must STOP!

Comments welcome...........send to way2gopete@yahoo.com

"Pete"
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Letter: Ethanol hasn't made fuel dent

 Posted August 31, 2012 at 6:01 p.m.
W.S. (Bill) Pryor, Knoxville

In April 2007 I submitted a Citizen's Voice in which I expressed my concerns that ethanol from corn would adversely affect many areas of our economy. These concerns were mainly related to potential rises in corn prices because of ethanol demands and the inevitable rise in costs to consumers of corn-based commodities. Joseph DiPietro, then University of Tennessee vice president for agriculture, was prompt and detailed in his rebuttal. His contention was that corn-based ethanol was merely one option in alternate fuel production, supplemented by cellulose-based ethanol from switchgrass, poplar trees and field residue after corn harvest. We are currently hearing little of that prediction.

In the ensuing five years, the vast majority of ethanol has been, and continues to be, corn based. Corn prices have steadily risen and food prices have followed suit. In addition, millions of taxpayer dollars have been thrown at anything containing the word "ethanol." A demonstration ethanol distillery for switchgrass use was built in East Tennessee, and there has been little reported on the results of this showcase enterprise. Gasoline and food prices continue their upward spiral (before hurricanes in the Gulf) with no abatement so long as fossil fuels are not a welcome guest at the energy supply table.

I have no ax to grind other than my displeasure each time I pay nearly $60 for a tank of regular gasoline that should, in my estimation, cost $35. Take $100 in $5 bills to pay for your next tank of gasoline and see how different it feels to leave with $40. This feeling is muted by swiping a credit card and pulling out a white receipt showing your cost. The obsession for alternate fuels development, while fossil fuels lie unused, is a prolonging factor in this dilemma.

EDITORIAL: Beware bad gas

Here's an interesting article on the EPA's new 15% ethanol gas, or "E15".  Even though most oil refiners are opposed to E15, the first gas station to sell this fuel opened in June in Kansas.  I've written several articles about MAJOR ISSUES with E15 on the "Ethanol Articles" page of the website.  If you have not read these before, you may want to check them out.  It is possible we may see E15 in Louisiana and Mississippi either late this year or in 2013.  Retailers are VERY SKEPTICAL of E15 due to huge liability issues. 

"Pete"
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EDITORIAL: Beware bad gas

Uncle Sam OKs junk food for cars
By THE WASHINGTON TIMES - Friday, August 31, 2012

The corner gas station soon might be pumping fuel with an extra slug of ethanol. That’s bad news for drivers because they could be saddled with the bill for big repair expenses. Drivers can thank the Environmental Protection Agency (EPA) for this because bureaucrats there have been unrelenting in their push to dilute pure gasoline with a politically correct additive.

In June, the EPA waived Clean Air Act restrictions on the sale of E15, a fuel blend containing 15 percent corn alcohol. A coalition of automakers, fearful that a boost of ethanol in fuel will harm engines, succeeded in winning a temporary stay of the waiver. On Aug. 17, however, the U.S. Court of Appeals for the D.C. Circuit swept away a legal challenge to the sale of “midlevel” ethanol, ruling that the manufacturers lacked standing to contest the EPA’s waiver.

(Read full article here: http://www.washingtontimes.com/news/2012/aug/31/beware-bad-gas/ )

FINALLY GOT POWER BACK THIS AFTERNOON!

HELLO READERS......FINALLY GOT POWER BACK IN MY NEIGHBORHOOD IN LAPLACE THIS AFTERNOON!  We lost power at 7:00 am on Wednesday night as the hurricane made landfall.  Afraid to run my computer on a generator and that's why I have not posted since losing power.  Getting tired of living off a generator for 5 days.  This is the 3rd time in 7 years we've been without power for 5-7 days each.  Having to give more and more thought to buying one of those natural gas whole home generators.  But, we were among the fortunate folks in LaPlace that did not get water in our homes.  Each day we learn of more and more of our friends whose home flooded from Hurricane Issac.  I'll explain more about how this hurricane did so much damage to LaPlace, flooding an estimated 2,000 or more homes.

What did you think about LSU's first game last night??  Too many mistakes and missed opportunities for me.  But, I'm sure as they get a few games under their belt, they will improve.  Receiver Jarvis Landry looked GREAT with a two spectacular catches.   And both Hilliard and Blue running for over 100 yards wasn't too shabby.  Mettenberger will certainly get better.  He threw several "thread the needle" passes that last year's QB's could have never done.

Here's an article which contains to paint "doom and gloom" for food prices next year, in large part due to ethanol gas.

"Pete"
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PUBLISHED AUGUST 25, 2012
USDA still sees 2013 retail food prices up 3-4%
The USDA also said on Friday it still expects 2.5 per cent to 3.5 per cent food inflation in 2012. 

WASHINGTON - Consumers are still expected to pay three to four per cent more for food next year, with a severe drought decimating US crops this year, the US Department of Agriculture said on Friday.
The USDA's forecast for 2013 food prices was unchanged from last month.
The worst drought in 50 years is pushing up US corn and soybean prices and is expected to impact retail costs next year, the department said in its food price outlook.
But, the "full extent of the drought and its effects on commodity prices are as yet unknown," the department said.
Earlier this month, the USDA slashed its corn and soybean crop estimates for this year.
But an expected record soy crop in Brazil could allay fears of a global food shortage.
The USDA also said on Friday it still expects 2.5 per cent to 3.5 per cent food inflation in 2012.
While retail food costs remained the same between June and July, consumers paid 2.3 per cent more for food in July compared to a year ago.
Beef prices were up 0.6 per cent in July from June, while egg prices fell 0.3 per cent during the month.
Dairy prices also fell in July, down 0.5 per cent, as cereal and bakery product costs rose 0.4 per cent.

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"