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The_Professor

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Ethanol Craze
« on: November 28, 2007, 05:53:26 PM »
Ethanol Craze Cools As Doubts Multiply Claims for Environment, Energy Use Draw Fire;
Fighting on the Farm


By LAUREN ETTER
Front Page; The Wall Street Journal
November 28, 2007; Page A1

Little over a year ago, ethanol was winning the hearts and wallets of both Main Street and Wall Street, with promises of greater U.S. energy independence, fewer greenhouse gases and help for the farm economy. Today, the corn-based biofuel is under siege.

In the span of one growing season, ethanol has gone from panacea to pariah in the eyes of some. The critics, which include industries hurt when the price of corn rises, blame ethanol for pushing up food prices, question its environmental bona fides and dispute how much it really helps reduce the need for oil.
 
A recent study by the Organization for Economic Cooperation and Development concluded that biofuels "offer a cure [for oil dependence] that is worse than the disease." A National Academy of Sciences study said corn-based ethanol could strain water supplies. The American Lung Association expressed concern about a form of air pollution from burning ethanol in gasoline. Political cartoonists have taken to skewering the fuel for raising the price of food to the world's poor.

Last month, an outside expert advising the United Nations on the "right to food" labeled the use of food crops to make biofuels "a crime against humanity," although the U.N. Food and Agriculture Organization later disowned the remark as "regrettable."

The fortunes of many U.S. farmers, farm towns and ethanol companies are tied to corn-based ethanol, of which America is the largest producer. Ethanol is also a cornerstone of President Bush's push to reduce dependence on foreign oil. But the once-booming business has gone in the dumps, with profits squeezed, plans for new plants shelved in certain cases, and stock prices hovering near 52-week lows.

Now the fuel's lobby is pleading with Congress to drastically boost the amount of ethanol that oil refiners must blend into gasoline. But formidable opponents such as the livestock, packaged-food and oil industries also have lawmakers' ears. What once looked like a slam-dunk could now languish in pending energy legislation that might not pass for weeks, if ever.

? Is ethanol a good alternative to gasoline? Weigh in.Ethanol's problems have much to do with its past success. As profits and production soared in 2005 and 2006, so did the price of corn, gradually angering livestock farmers who need it for feed. They allied with food companies also stung by higher grain prices, and with oil companies that have long loathed subsidies for ethanol production.

The U.S. gives oil refiners an excise-tax credit of 51 cents for every gallon of ethanol they blend into gasoline. And even though it's the oil industry that gets this subsidy, the industry dislikes being forced to use a nonpetroleum product. The U.S. ethanol industry is further protected by a 54-cent tariff on every gallon of imported ethanol.

Ethanol prices peaked at about $5 a gallon in some markets in June 2006, according to Oil Price Information Service. The price soon began to slide as the limited market for gasoline containing 10% ethanol grew saturated. New plants kept coming online, increasing supply and dropping prices further. Today, the oil refiners that purchase ethanol to blend in need pay only about $1.85 a gallon for it.

The low ethanol prices help some oil refiners. "I'd pay a hell of a lot more for ethanol than I am right now.... I'm getting a windfall because it's priced so much less than its value to me," Lynn Westfall, chief economist for refiner Tesoro Corp., told investors recently. The ethanol tax credit will bring refiners an estimated $3.5 billion this year. Some oil companies use ethanol to stretch gasoline supplies or meet state requirements to make gasoline burn more cleanly. Ethanol that's voluntarily blended into gasoline reached a high this month, according to the Energy Information Administration.

The low prices reflect soaring output. Global ethanol production has grown to a projected 13.4 billion gallons this year, from 10.9 billion gallons in 2006, according to the International Energy Agency. The U.S. production is more than half of that total, or about seven billion gallons this year, up 80% in two years. It equals less than 4% of U.S. gasoline consumption.

Analysts expect U.S. production capacity to keep growing, encouraged both by high oil prices and by the hope that Congress will stiffen the mandate for refiners to use ethanol. Some observers regard the profit squeeze as part of an ordinary industry shakeout that will ultimately leave the best producers in a position to thrive. As ethanol prices were pushed lower and corn prices stayed high, ethanol profit margins dropped from $2.30 per gallon last year to less than 25 cents a gallon.

Turning Up the Heat

This year, even as the production glut was driving down ethanol's price, critics and opposing lobbyists were turning up the heat. Environmentalists complained about increased use of water and fertilizer to grow corn for ethanol, and said even ethanol from other plants such as switchgrass could be problematic because it could mean turning protected land to crop use. Suddenly, environmentalists, energy experts, economists and foreign countries were challenging the warm-and-fuzzy selling points on which ethanol rose to prominence.

"Our love affair with ethanol has finally ended because we've taken off the makeup and realized that, lo and behold, it's actually a fuel," with environmental and various other drawbacks, says Kevin Book, an analyst at Friedman, Billings, Ramsey Group Inc.

 
Against all the criticism and lobbying, "we're David in this fight," says Bob Dinneen, the ethanol industry's top lobbyist. Mr. Dinneen says the industry has been made a scapegoat for food price increases that are due to many factors, including higher oil prices and growing overseas demand for grain. He also faults the lack of a mature U.S. distribution network that would make it easier for consumers to get ethanol. His group, called the Renewable Fuels Association, and the National Corn Growers Association have formed a coalition to "unify the voices" in the ethanol community, he says.

Back in early 2005, President Bush gave ethanol a boost in his State of the Union speech by calling for "strong funding" of renewable energy. Energy legislation that summer required oil companies to blend a total of 7.5 billion gallons of "renewable" fuels into the nation's fuel supply by 2012. The legislation also effectively extinguished ethanol's chief competitor as a clean-burning additive, methyl tertiary-butyl ether, which had groundwater-pollution issues. The bill anointed ethanol as the default additive and instantly created demand nearly double what was produced that year.

"That was when the floodgates started coming open," says attorney Dan Rogers of the Atlanta law firm King & Spalding LLP, which arranges financing for ethanol plants. Hedge funds, private-equity investors and East Coast bankers started pouring money into ethanol. Producers such as VeraSun Energy Corp. and Pacific Ethanol Inc. went public. Mr. Dinneen, the lobbyist, hopscotched the country attending ribbon-cuttings at new plants that popped up in corn-growing states.

Local farmers who'd invested soon were cashing handsome dividend checks, even as new demand pushed up the price of corn. After languishing roughly in the $2-a-bushel range for three decades, corn jumped to above $4 early in 2007. So far this year, it's averaging $3.35.

In the past, livestock farmers supported ethanol because it was good for the overall farm economy. But now they began to complain that the higher corn price cut sharply into their profits. A meat-producer trade group called the American Meat Institute took a stand against federal support for biofuels last December, joined soon after by the National Turkey Federation and the National Cattlemen's Beef Association.

The farm fissure widened when livestock, meat and poultry groups started coordinating their lobbying with the oil industry, in discussions helped along by former Texas Congressman Charles Stenholm, who now lobbies for both industries.

Packaged-food companies, too, began pushing back, as one after another blamed biofuels' effect on grain costs for hurting earnings. In June, Dean Foods Co., H.J. Heinz Co., Kellogg Co., Nestle USA, PepsiCo Inc. and Coca-Cola Co. sent a letter to senators saying that requiring greater use of ethanol would affect their "ability to produce competitively available, affordable food."

Ethanol's opponents also began to highlight reasons why ethanol might not be such a boon to the environment, citing some recent research studies.

Strain on Water Supplies

One by the National Research Council said additional ethanol production could strain water supplies and impair water quality. A spring 2007 report by the Environmental Protection Agency said that "ozone levels generally increase with increased ethanol use."

A study coauthored by Nobel-prize-winning chemist Paul Crutzen said corn ethanol might exacerbate climate change as the added fertilizer used to grow corn raised emissions of a very potent greenhouse gas called nitrous oxide. The ethanol industry replies to that one with an Energy Department study concluding that use of ethanol reduces greenhouse-gas emissions by 18% to 28% on a per-gallon basis, provided that coal isn't used to run ethanol plants.

Opponents of ethanol also have hammered on an Agriculture Department projection that by 2010, less than 8% of the U.S. gasoline supply will come from corn-based ethanol -- and 30% of the corn crop will be used to make it. That suggests to some that the tradeoff between food and fuel is unbalanced.

At the same time, some foreign countries have been increasingly questioning ethanol. Mexico blamed it in part for contributing to rising prices of corn-based tortillas. China barred new biofuel plants from using corn, and Malaysia trimmed its biofuels production mandates. Cuban President Fidel Castro has called using food crops for fuel a "sinister idea." President Hugo Ch?vez of Venezuela ordered troops to secure his oil-producing nation's grain supplies, saying corn was to be used for food, not fuel.

The government of Quebec, which has offered loan guarantees for corn ethanol plants, recently decided not to initiate any new ones. Instead it will turn its attention to so-called cellulosic ethanol, which would be made from switchgrass, wood chips or other plant matter. It concluded that "the environmental costs of corn ethanol are higher than expected," says a spokesman for the province's minister of natural resources.

In recent months, U.S. lawmakers appear to have become more receptive to the anti-ethanol arguments. "People never thought they would have to make a trade between energy security and food security," says Jesse Sevcik, a lobbyist for the ethanol-opposing American Meat Institute.

The ethanol industry, accustomed to getting its way in Washington, hadn't faced such opposition before. It may not have helped that Mr. Dinneen, in a close echo of former Vice President Spiro Agnew's famous line, for months brushed off his foes as "nattering nabobs of negativity."

Mr. Dinneen says arguments about ethanol driving up food costs are overblown, in part because corn farmers will produce so much grain that corn prices will ease. But even though U.S. farmers this year planted their biggest crop since World War II, prices have stayed well above $3 a bushel, thanks to rising demand in developing countries and poor weather in some grain-growing nations. The price is expected to stay well above $3 next year as farmers shift some land from corn to two other crops whose prices have risen sharply, wheat and soybeans.

Bigger Plants

New and bigger ethanol plants, spurred by money from investors far from the Corn Belt, have contributed to production capacity that's expected to approach 12 billion gallons next year. But annual U.S. demand stands at just under 7 billion gallons.

So it's easy to see why the industry supports the Senate version of pending energy legislation, which includes a requirement that gasoline blenders use 36 billion gallons of renewable fuels by 2022. Up to 15 billion gallons of this would come from corn-based ethanol. The rest would come from cellulosic ethanol -- an industry that now barely exists -- or other fuels. A similar bill passed in the House has no such provision.

Mr. Dinneen, who has been lobbying on ethanol so long he's known as the "reverend of renewable fuels," says he's "reasonably confident" Congress will raise the ethanol mandate. He says he's talking with the military, labor groups, Southern black churches and others about how ethanol can help them. "We've got to build the biggest, baddest coalition we can."


http://online.wsj.com/article/SB119621238761706021.html
« Last Edit: November 28, 2007, 06:15:18 PM by The_Professor »
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kimba1

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Re: Ethanol Craze
« Reply #1 on: November 28, 2007, 06:16:50 PM »
the problem which nobody is bring up is ethanol requires petroleum to be used.
so it`s not really a true alternative
and judging from what i understand corn use more fuel than sugarcane to make ethanol.

Xavier_Onassis

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Re: Ethanol Craze
« Reply #2 on: November 28, 2007, 06:27:51 PM »
and judging from what i understand corn use more fuel than sugarcane to make ethanol.
=====================================================
With sugarcane, the entire plant is used.

With corn, it is only the kernals surrounding the cob, which is only a fraction of the plant.

With sugarcane, the squeezed out stalk, which is more than less than half of the plant by weight, called bagasse, is burned to fuel the distillery.

-------------------------------------------------------------------------------------------------------------------------
Corn ethanol is a very efficient way that Archer-Daniels-Midland (ADM) extracts tax money from the government. It is a lot less efficient as a way of extracting energy from corn.

The Iowa caucuses are very helpful in getting poiticians to swear allegiance to the overproduction of corn for ADM.

If the govt were serious about energy independence, it would be subsidizing research on a patent-free process to get cellulosic ethanol from plants that will grow wild, with no fertilization required. Switchgrass, perhaps hemp, other plants that grow rapidly and require no irrigation or fertilizer on land that we are not using to produce food. There is a lot of land that fits this description in the US.

Solar cells, geothermal, wind power, tidal power and ocean temperature differential dynamos are all technologies we could use, but won't, because Big Oil won't allow it.

They enjoy us being dependent on them.
They want us to be dependent on them.Not just us, all their customers.


 
 
 
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kimba1

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Re: Ethanol Craze
« Reply #3 on: November 28, 2007, 06:35:28 PM »
I`m leaning toward geothermal

but it`s tricky how to drill that deep and I`m not aware is this a cheap source or not.

wind sure isn`t.

Xavier_Onassis

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Re: Ethanol Craze
« Reply #4 on: November 29, 2007, 07:29:04 AM »
The success of geothermal depends on the area where one drills. A majority of Icelanders heat their homes with geothermal steam.
Wind power becomes less expensive once the windmills are installed. The main expense then is maintainence.

The question is not which option to choose, but where to install each for maximum benefit.
 
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The_Professor

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Re: Ethanol Craze
« Reply #5 on: November 29, 2007, 10:19:38 AM »
How much would a wind tower that could generate enough electricity for a 200 sq ft home cost to purchase, install and maintain? You would then have to compare this against your current electricity costs. Anyone know what the ROI is?

If it is similar to solar, count me out!
« Last Edit: November 29, 2007, 10:35:13 AM by The_Professor »
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"Liberalism is a philosophy of consolation for western civilization as it commits suicide."
                                 -- Jerry Pournelle, Ph.D

Xavier_Onassis

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Re: Ethanol Craze
« Reply #6 on: November 29, 2007, 10:32:52 AM »
I think you would have to do the math yourself. I know that somewhere in the world Solar water heating is affordable and cost-effective. I decided to install a solar water heater on my roof. When I investigated the four companies that were listed in the Yellow Pages, each and every person I spoke with was some sort of ignorant flake-o sales droid, and the prices were outrageous. I would not want anyone that hired these guys to send people up on my new $7000 tile roof. My house was built with a solar water heater in 1947, but it was lost in a hurricane in 1964, before I bought the house. The companies that used to sell these are all out of business.

In Israel and many other places, nearly everyone has solar water heaters: you can see this in aerial photos. I found a couple of companies there that make the things. They do not sell these in the US.

I know that windmills were an economical way to pump water on most farms across the West and Midwest in the 40's, 50's and 60's, because most farms had one. Apparently they need maintainence, because you don't see these very often in working condition.

The problem with solar cells is that the markup seems to be something like three to one, which is far too high for them to be affordable.



 
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The_Professor

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Re: Ethanol Craze
« Reply #7 on: November 29, 2007, 10:36:59 AM »
Also, XO, a solar water heater may take care of your hot water needs, but isn't that small potatoes compared to your TOTAL electricity needs?
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The_Professor

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Re: Ethanol Craze
« Reply #8 on: November 29, 2007, 10:42:04 AM »
see http://www.earthtoys.com/news.php?section=view&id=1860.

Actor Ed Begley is apparently serious about conservation and solar energy.
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"Liberalism is a philosophy of consolation for western civilization as it commits suicide."
                                 -- Jerry Pournelle, Ph.D

The_Professor

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Re: Ethanol Craze
« Reply #9 on: November 29, 2007, 10:51:11 AM »
"My friend and neighbor Ed Begley, Jr. is doing a TV show from his house.

http://www.earthtoys.com/news.php?section=view&id=1860

It's a reality sitcom about his devotion to the Green stuff, and Rachelle's more normal approach to life. They are a very nice couple. Ed is probably the nicest guy in the neighborhood. Incidentally his bio-degradable house cleaning stuff (takes the place of Ajax, Comet, and the various liquids; comes in a hand pump dispenser) called Begley's Best actually works very well. I buy it at Whole Foods. Ed is not a subscriber or advertiser to this site...

The roof of Ed's house is covered with solar cells, including  4 square meter two axis solar tracking system. His garage is half filled with batteries. It works: the night a tree fell across the power lines, Rachelle was watching television in her living room while everyone else was wandering around with flashlights in the dark. Ed claims to be off the grid, and actually selling surplus power to LA DWP. I once teased him about the fact that if he'd put the money the system cost in the bank the interest would pay his utility bills (which may or may not be true); but what he's doing is impressive, and an interesting experiment in just what can be done.

Yesterday walking past his house I had a thought: if we want to cool the Earth, paint our rooftops white. I don't know how much good that will do, but it ought to be a lot. Of course if you use rooftop solar cells, the energy is absorbed by the cells and eventually enters the Earth's heat balance as heat. Given the efficiencies, is it more "green" to paint your roof white and buy the energy it takes to heat your house in winter (it ought to be easier to cool in summer); or to put up solar cells and use that energy. How much does it change things to factor in the energy costs of making the batteries and solar cells?

I am going to suggest to Ed that he paint white the parts of his roof that don't have solar cells. Of course it's cold out there now; will that make it cost more energy to heat the house (they have two small children, so just not heating is out of the question).

And one last thought: if there a feasible way to use a heat pump to take solar energy off the roof and put it into the house? Or a way to make the roof white when it's hot and black when you want to absorb energy? But these are random thoughts.

I will say again: if the goal is to reduce CO2 (and I think that is a reasonable goal; we are running an open-ended experiment on CO2 levels, as I have said for twenty years, and this is Not A Good Thing To Do) -- if the goal is to reduce CO2 levels then we ought to be working on methods to do that. Preferably reversible methods: sowing iron into the sea to produce plankton blooms appears to be feasible, but the stuff then falls to the bottom and can't be retrieved. The good side of that method is that if you stop sowing iron the blooms cease and the CO2 fixing stops, so if we discover that we want the high CO2 levels we can allow them to rise again.

Electro mechanical methods that use energy are probably not unreasonable but they are not very elegant.

Query: is seeding the high altitude with contrails or water vapor thus increasing cloud cover and increasing the albedo or reflectivity of the Earth and thus lowering the solar energy absorbed under study? Surely it ought to be feasible? But once again that does nothing for CO2 levels, although it will change warming.

There is a lot of money being spent on Global Warming studies. How much is being spent on looking at actual ways to deal with it, as opposed to simple Luddism?

Ed Begley's house. The yard is low maintenance. The roof top solar arrays are hardly obtrusive. On the right is a detail of the steerable two-axis solar tracking array. There are many passive units on the roof as well." 

http://www.jerrypournelle.com/archives2/archives2view/view445.html#Begley
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"Liberalism is a philosophy of consolation for western civilization as it commits suicide."
                                 -- Jerry Pournelle, Ph.D

Xavier_Onassis

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Re: Ethanol Craze
« Reply #10 on: November 29, 2007, 02:55:54 PM »
Also, XO, a solar water heater may take care of your hot water needs, but isn't that small potatoes compared to your TOTAL electricity needs?
   
===================================================
All a solar water heater would do would be to take care of some to all of my hot water needs. But these things are low-tech, simple, and have only a pump, and still, there is no one that will sell one for anything like a reasonable price. All the salespeople I spoke with were total flakes who did not know even as much as one could glean from a 1950's issue of Popular Mechanix.

Solar cells are expensive and the system is far more complicated. Again, I know the technology exists, but it doesn't exist here and now, and it should.
"Time flies like an arrow; fruit flies like a banana."

kimba1

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Re: Ethanol Craze
« Reply #11 on: November 29, 2007, 02:59:54 PM »
what i don`t understand how come thier is so little on human power generator products.
I`d like a bike power battery charger.
obesity is growing in this country
this could be an extra incentive to exercise.
exercise equipment is expensive ,at least have it produce electricity
is our technology not advance enough to figure it out yet?

Xavier_Onassis

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Re: Ethanol Craze
« Reply #12 on: November 29, 2007, 09:39:50 PM »
I think the technology is here, it only awaits you to implement it and market it.

I think Junior high kids in particular need more exercise, and it would be excellent if we could get them to produce enough juice to light the house with every morning on treadmills.

I need to lose about 25 lbs. according to my doctor. When I was 25, I weighed 130 lbs., and it seems that every year I have gained a couple. I have students who will certainly be mammoth blobs, moveable only on sturdy wheels if they do this. Some girls need two chairs to sit in at the age of nineteen or twenty.

When I was in HS, the guy that repaired the school busses lived on a house on the HS campus with his family. His wife and his four daughters made cinnamon rolls and sold them to the students for a dime apiece. Huge, gooey cinnamon rolls. My guess is that each had about 700 calories, maybe more. All the daughters and the mother were ginormous, over 300 maybe over 400 lbs., and each of them slowly tooled around in a wheelchair before and after school and during lunch, with a plate of cinnamon rolls on her lap. The official word was that they all had a thyroid condition. The Mechanic father was a short, stocky guy and couldn't have weighed over 190.



"Time flies like an arrow; fruit flies like a banana."

kimba1

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Re: Ethanol Craze
« Reply #13 on: November 30, 2007, 12:52:49 AM »
I remember after college visiting some friends living in the burbs
and they had neighbor kids always visiting.
after awhile I broke down and told my friend
those are the biggest teenagers I`ve ever seen
that was 15 years ago
now alot of teenager are that chucky
somebody should make a ipod that only runs on walking power NOWWWW

Plane

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Re: Ethanol Craze
« Reply #14 on: November 30, 2007, 01:06:26 AM »