Road kill ZOT!
Posted on 05/31/2011 1:44:23 PM PDT by 2ndDivisionVet
Sarah Palin was asked Tuesday about the sticky subject of ethanol subsidies, and she said that not only they should they be squelched but that all federal energy subsidies should be eradicated.
"I think that all of our energy subsidies need to be relooked at today and eliminated," Palin told Real Clear Politics at a coffee shop in Dillsburg, Pa. "And we need to make sure that we're investing and allowing our businesses to invest in reliable energy products right now that aren't going to necessitate subsidies because, bottom line, we can't afford it."
Ever the maverick, Palin was responding was in direct opposition to Mitt Romney, who last week in Iowa, came out in favor of government subsidies for ethanol, the fuel produced from corn and other farm products.
"I support the subsidy of ethanol. I believe ethanol's an important part of our energy solution in this country," Romney told a supporter from West Des Moines on Friday.
Neither former governor has officially stated his or her intention to run for the GOP nomination for president; however, Romney is expected to throw his hat in the ring later this week.
One former governor who has committed to running is Tim Pawlenty. In fact, it was in his statement announcing his candidacy that he also backed the elimination of ethanol and other energy subsidies. Unlike Palin, however, Pawlenty wants to take it slowly.....
(Excerpt) Read more at latimesblogs.latimes.com ...
Ahhhh... Earl Butz.
Mr. “Plant Fencerow to Fencerow!”
Yes, Earl was, in part, responsible for the low prices of commodities. But, he could affect only ag commodities. If you looked at the macro charts of most all commodities from the early 70’s to about 2002, you’d see that prices went down, adjusted for inflation.
Gold went down. Silver went down. Both peaked right about the same time as ag commodity prices last peaked.
Oil came down. Remember oil at $15/bbl? When we started farming in 1999, I seriously considered replacing 200HP electric irrigation pumps with diesel engines. On paper, it looked like it would be a suave move.
Older farmers told me “Don’t go there.... we’re here to tell you that one day soon, prices will shoot back up again and you’ll have to put the electric motors back on... just stay put and get other things done.” I’m glad I listened to them - in the space of only seven years, we would have been broke feeding those diesels.
Old (I’m talking in their 80’s old) farmers could have told you that his all was coming. They’ve seen it before. They remember the last debt deflation. They’ve seen these cycles come and go. They knew that they had to do 20 years “on the outs,” and now they’re going to have their 10 years “on the upside.”
Farming, more than anything else, taught me the wisdom of listening to old guys. I buy old guys a shot or two at a bar in a small town where they still “make something real” and then sit back and learn.
Correct.
The various economic studies on the matter reckon that if we eliminate the blenders’ credit on ethanol, that corn prices might go down, oh, $0.25/bu, perhaps as much as $0.40/bu, and gasoline prices might go up by $0.05 to $0.10/gal.
For farmers who are near the break-even, that quarter to half-buck means a great deal. For someone with a SUV, that $0.10 might not be as bad a back-breaker every week, but it will add up over a year. Nonetheless, it wouldn’t result in gas shooting to the moon, nor corn cratering. We could eliminate the blending credit *at these price levels* and it wouldn’t be the end of the world either way.
It’s official: she’s not running.
It appears you have a firm grasp of just how that whole farm subsides/food prices connection works. Very, very few people do.
I think the biggest single reason for subsidies, is cheap food, not the farmers votes. Ethanol excluded perhaps.
No politician wants to face a voting block enraged at high food prices, and so they vote for subsidies, blame the farmer, reap cheap food prices. It almost seems like everyone wins. Except, of course, they don’t.
I was worried you missed the most serious cause until I read the last paragraph. True the oxygenate mandate is worthless and needs to go, because it is a government mandate, issued by fiat from a group of administrative law morons that make those Detroit schleps look bright. IT'S ALL THE GOVERNMENT MANDATES, not just one.
Also, ethanol was in gasoline before MTBE (by an earlier mandate), and leftist shills created MTBE to redirect subsidy money to themselves.
From an earlier post by me: " Additionally, ethanol is grossly more expensive to produce than gasoline, and the subsidy revenue pursuit causes disasters such as the MTBE pollution scandal which purpose was to shift subsidy income from Archer Daniels Midland to more leftist politically connected chemical companies (many foreign) that manufactured MTBE from their waste products."
I do not denigrate Archer Daniels Midland, or farmers by this comment, as they were the standard source of ethanol in the US at the time the government mandated ethanol. ADM simply filled a need.
CARB and Cal EPA, on the other hand tried to create a need for MTBE by using the force of law to lock ADM out of the market and seize the subsidies. That they would create from scratch the unnatural and most dangerous pollutant in history was just fine for the purpose: personal enrichment.
Yeah, I'm familiar with the horsepower an efficiency engineering, but I prefer nitromethane over toluene. I love the smell of nitro in the morning,... and Wagner.
Sarah Palin sure brings out the best in us!
Oh, yes. I’m in a fairly rural area and see all the big farm equipment at work often. I’ve often wondered what kind of “mileage” that equipment gets, especially when one observes a half-day of almost non-stop motion, to plow or harvest even a modest size field.
Does anyone have a graph of corn (commodity) prices over the last few (say 5 or 10) years, up to May, 2011?
Now THAT is a great post, and one of the main reasons I like visiting FR! There’s a lot of info. to be found here, some wrong, of course, some better than other, and some great. I have a friend in automotive technology (better than most Detroit Engrs. for sure) and he tried to explain to me the tech part of what you posted, but even though I’m an engr. too (electronics), it’s hard to absorb that much info. while we are also working on my car! So I only really picked up about 1/2 of it.
I can only think of a few things to add or question:
1) I think an additional effective “leg” to the argument could be added if people truly realized how much ethanol can add to the maintenance / repair costs and UN-reliability of their vehicles. I would guess (someone correct me if I’m wrong) that unless someone drives a LOT, the increased maintenance costs exceed the cost of poorer mileage achieved with ethanol type fuels. (For starters, go ask your local mechanic working at a shop rate of $80/hour what it’ll cost to pull your car’s gummed up fuel in-tank filter, and the inline fuel filter, and replace them. Since I’ve learned the hard way* I do that work myself every couple years, or before most any really long trip, on my wife’s minivan in particular.)
2) Problem is, unless we get someone like a Palin in charge, what are the odds that oil prices are going to decline and stay there for a protracted period? Especially with consumption ramping up in China and elsewhere.
3) I infer from your info. that ethanol based fuel still has some “extra” mobility in soil, correct? That might be another effective argument - people really don’t like the idea of their water being contaminated - for good reason.
4) Who the heck is going to explain this to the mass of citizens / on a national level? I think a Palin, with her known background in energy issues, could do it, perhaps enlisting the aid of some really well-known “car” or racing personality who knows the tech end forward and backward, and using visual aids much like Reagan used to do. (FWIW, I still believe Reagan’s promise allow speed limits on Interstate highways to go back up to 65 mph was worth a couple % points on election day, 1980.)
*You **REALLY** don’t want to be pulling your in-tank fuel filter out, to clean it, with your wife looking on, because you’ve suddenly coughed to a stop at dusk on the (gets very low traffic & at that time/location there was no cell phone service there) Cherohala Skyway. (Sheepish mea culpa!)
Road kill ZOT!
She will not get the nomination however.
That right there's enough reason to vote for SOMEONE ELSE.
I wouldn’t be sure about that.
I can’t seem to get this chart to post, but here’s a link for inflation adjusted corn prices from 1973-2008:
http://www.inflationdata.com/inflation/images/charts/Corn/corn_inflation_chart.htm
And then for the last 5 years (but not adjusted for inflation, I believe, and in per ton instead of per bushel):
http://www.indexmundi.com/commodities/?commodity=corn&months=60
Also from the latter source:
Anyone have an opinion as to whether or not $8/bushel corn (in 2011 dollars) will keep, say, at least 90% of corn farming operations in the black, for the next 5 years?
I’ll grant you immediately that nitro will boost your effective head pressures (which, if you could VASTLY increase the extraction stroke on a four-stroke engine, would get you a huge improvement in efficiency), but nitro has this problem (well known problem, actually) of stripping the oil off the cylinder walls, leading to early ring scoring on the bore. Not something that Detroit is going to mess with.
Farm equipment doesn’t measure fuel efficiency in “mileage,” they measure (in US units) in HP-hr/gal of standard #2 diesel fuel.
A good tractor engine (for example) will get 18+ HP for one hour on one US gallon of #2 diesel. Before they started mandating idiotic emissions crap on farm diesels, the best units could get 20 HP-hr/gal of diesel.
The best German engines (Deutz, water cooled) get a bit more - like 22+ HP-hr/gal of diesel.
If you want to see relative efficiencies of farm tractors, you need to look at the US standard test suite, the Nebraska Tractor Tests:
http://tractortestlab.unl.edu/
They’re considered the unbiased tests for ag tractors in the US. They test for fuel efficiency, pulling HP (or what we call “draft” HP), PTO HP, engine HP, fuel consumption, etc.
Depends on the costs of diesel and fertilizer.
The costs of diesel hit farmers several ways:
1. Cost of getting inputs shipped in (fertilizer, fuel, seed, etc).
2. Costs to the farmer of shipping product out (sometimes seen in basis),
3. Costs directly to him in operating his own machinery.
Then fertilizers, especially phosphorous fertilizers, are a killer recently. Nitrogen is something you can address with crop rotations and plow-down crops. Phosphorous isn’t. The only ways you can add phosphorous is by adding rock-derived P, or adding things like bone meal, etc. Phosphorous is the gating issue in how well roots develop.
Right now, my guesstimate of the “break even” price for corn farmers is somewhere in the mid-to-high $4/bu range - like $4.50 to $4.90, depending on the costs of shipping per bushel.
Now, that ASSUMES that their crop makes test weight and they’re getting average yields. Break either of those assumptions and they’re going to take a huge hit.
For that matter; we haven't seen YOURS, either.
Plus, you talk weird, and your mother dresses you funny.
And, too, there’s the niggling little detail that a “pollutant” is only a “pollutant” if it leaves behind the specific toxins you test for above permissible levels. So, if my chemical product leaves behind sulfates below permissible levels, and oxides of nitrogen below permissible levels, but also seven other toxins you don’t check for, then my chemical product is NOT a “pollutant” even though its probably more toxic, overall, that whatever “evil” chemical it replaced.
All that to say, the whole ethanol/MTBE charade involved WAY more than EVER met the public eye, and the refiners got rooked, big time. FedGov said, at the outset, they could use either ethanol or MTBE as an oxygenate, so they picked MTBE. Then, the same FedGov came back a few years later with the press saying “BAD refiners! You picked mean, nasty, inexpensive, vile MTBE when you could have picked beautiful, pristine, holy ethanol! BAD, EVIL refiners!”
There’s even more to it than that, but you get the gist.
Your government at work...
YES!!! Thank you!! I have been waiting for that for almost 5 months :p He annoyed the heck out of me.. think it’s a retread (like NS)?
Excellent.
This illustrate not only clear thinking and sound economics on the part of Gov. Palin, it is also one of those rare, true repudiations of socialism that it is so good to hear.
We have grown up with subsidies scattered all over various industries. Subsidies are just another term for socialism.
And the effect is that they cause shortages and raise costs unnecessarily.
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