Ethanol: A Tragedy in 3 Acts

Business Week Online ^ | Thursday April 27 2006 | Ed Wallace

[Brian Allen]

Amid the current panic about gas prices many people are embracing ethanol. But that's not such a good idea

During the comment period for the RFG (reformulated gas) program, supporters of ethanol had argued that the volatile organic compound (VOC) emission standards in the program -- 42 U. S. C. 7545 (k) (3) (B) (i) -- would preclude the use of ethanol in RFG because adding ethanol to gasoline increases its volatility and raises VOC emissions, especially in the summertime.

Background The American Petroleum Institute v. the U.S. Environmental Protection Agency [Docket #94-1502 (Heard by the U. S. Court of Appeals for the District of Columbia Circuit and decided on April 28, 1995)]

If there were ever a time when the truth in advertising standards should be put back into place, it's now -- during the current (third) attempt to convince the public that the massive use of corn-derived ethanol in our gasoline supply will alleviate our need for foreign oil. Ultimately, the answer to just one question determines ethanol's actual usefulness as a gasoline extender: "If the government hadn't mandated this product, would it survive in a free market?" Doubtful -- but the misinformation superhighway has been rerouted to convince the public its energy salvation is at hand ....

[defenderSD]

The whole problem here is that liberals and environmentalists simply will not leave business alone and insist on over-regulating, harassing, taxing, and sueing the private sector at every opportunity. Liberals are in a constant cold war against the private sector. The right way to reduce pollution and increase energy independence is to produce more oil and gasoline and develop more fuel-efficient engines and transmissions and lighter vehicles. This ethanol mandate is just plain stupid and a huge unjustified tax on the American public and a subsidy for an uneconomical industry that could never survive without subsidies.

[P-40]

This looks like a completely uneconomical mess to me.

Ethanol will hopefully be a short-lived product as it is by far not the best alternative out there...but the marketing realities call for it to be around awhile. The perfect biofuel would never make it to market if the consumer had to do even the most basic of modification to their vehicle in order to use it.

[defenderSD]

Could this industry survive without government subsidies? That's the test of whether it's an econmically beneficial industry. I strongly doubt that it would survive without tariffs, subsidies, and a transfer or cash flow from consumers to ethanol producers.

[defenderSD]

traansfer or cash flow = transfer of cash flow

[P-40]

Could this industry survive without government subsidies?

That remains to be seen. The subsidies going to the oil industry may be cut if the Democrats get their way. From what I understand, the subsidies from the energy bill were not all that much of a benefit to the big oil companies, just the smaller ones, which is most likely the alternative fuels market. Subsidies to farmers will not be affected; they never are.

This is an industry for government to get the ball rolling and then get out.

[CedarDave]

I've often wondered how much environmental damage has been wrought on third-world countries by our locking up our own natural resources so that they can not be developed in a somewhat-environmently friendly manner. ANWR is one example, selective logging in NW forests is another. So in addition to our jobs being moved to a third-world country, resource extraction with little regard for the environment occurs there.

Interestingly enought, after only a few seasons of crop growing in the former rain forests, the soil is barren of nutrients and you have a barren desert in the middle of the tropics with soil erosion, silty runnoff and impacts on the rivers. I'm not saying it all could have been averted, but our shutting down of industry with the demand for raw materials unabated leads to this inevitable outcome.

[jurroppi1]

O.K. I'll bite. If all I have to do is the most basic of modifications to my vehicle, it would probably be cheap, and so easy just about anyone with a pulse could do it. If the perfect biofuel came along in this scenario I'd be all over it, provided I didn't have to pay more for it that what I currently pay, and that it was actually a cost-effective solution unlike ethanol.

Any more ethanol in the current fuel at the pump, and you may as well kiss your engine goodbye (along with any drivetrain warranty), unless of course it's already flex-fuel capable.

[Ditto]

Super Hustler to the World.

These are the people that should be investigated. But it won't happen since ADM has nearly every member of Congress in their pocket.

[Myrddin]

Same problem with groundwater depletion around Blackfoot and Shelley areas of eastern Idaho. The potato farmers are salivating at the prospect of selling potatoes for ethanol generation. It might be a good thing for them this year as there is a pest in the potatoes that has caused international rejection of the current crop for export. Still, the aquifer is depleted and silly options like diverting Snake River water underground are being floated by the farmers.

[moehoward]

Good read bump

[ketelone]

Haha lets not forget the HUGE subsidies going to ConAgra for the production of corn syrup, when buying sugar from abroad costs 1/10th the price.

Because the corn syrup industry has successfuly lobbied the powers that be to introduce tarrifs on sugar, everyone loses bigtime on sugar.

[chemicalman]

Delivering ethanol is a problem, also. It scavenges water, so if there's any water in a pipeline, the ethanol isn't any good. So no companies use pipelines to deliver ethanol. All ethanol has to be delivered in tanker trucks or railroad tankers. That type of delivery is expensive.

[CedarDave]

Unlike the Great Plains of the midwest, the Snake River Plain is basaltic and is a good source of rechargable groundwater. There may be areas where extraction and recharge don't balance (especially in dry years), but on the whole the aquifer is recharged by runoff from the mountains (that disappears once streams intersect the basalt), and seepage from the river and lakes formed by dams on the river. I look at the area as one gigantic sponge. The Great Plains, OTOH, receive little recharge except direct precipitation, which is generally sparse (though some low-flow rivers such as the Platte, Arkansas, and Canadian run through them).

[Brian Allen]

Brings to mind the execrable Bob Dole, former senator of Archer Daniel Midland.

And now that he's moved up in life, from street walker to call-girlything, for Viagra.

[eleni121]

I am mostly unbaware of the ethanol advantages or disadvantages but certainly depleting ground water to grow more corn would not be a good idea. What about sugar (beet) cane? Does growing cane or beets need as much water I wonder?

One thing for sure (?): we need to become energy independent.

[P-40]

If all I have to do is the most basic of modifications to my vehicle

If you have a diesel engine, you can run the thing on cheaply produced vegetable oil...but you have to either heat the oil up before you use it or get the engine hot with a separate tank of diesel. Not complicated but not too cheap of a conversion to get much interest. A biodiesel blend can run with little to no modifications, but you still use diesel and you have more in processing to make the stuff. Not a bad deal though and this market shows a lot of promise.

For gas engines....gas sucks. You can make ethanol from all sorts of products but ethanol is still a pain to work with...but ethanol has the name recognition so ethanol it will be for a time.

[CedarDave]

Right you are. Which is also why MTBE is such a problem in the environment -- it is preferentially miscible in water so that MTBE in gasoline from a service station fuel leak will move into groundwater much as your favorite bourbon disperses in water in your before-dinner drink.

[CougarGA7]

I think the most interesting thing I've seen on Ethonol was in an article posted here yesterday. In order to make enough ethonol to meet America's current demand for gasoline would require us to uses 71% of our farm land to grow the fuel.

[Ditto]

What about sugar (beet) cane? Does growing cane or beets need as much water I wonder?

You can grow sugar cane in the US in Florida and Louisiana. I'd say turn the New Orleans 9th ward into sugar cane fields. No shortage of water and a much better use of the land than government housing that will only flood again.

[Mamzelle]

I still think we ought to devote some research resources to this.