Posted on 06/16/2011 6:46:47 PM PDT by SeekAndFind
Yesterday’s vote failed for procedural reasons but they cleaned it up today and nailed down a remarkably bipartisan consensus. Eyeball the roll: 38 Democrats, 33 Republicans, and both independents voted yes, with no votes coming mainly from plains-states senators eager to keep the campaign cash flowing. When you’ve got both senators from California and both senators from Oklahoma on the same side of an issue, you’re working magic, my friends.
The vote also could have ramifications on future votes to reduce the deficit. Much of the GOP conference supported Feinstein’s bill even though it does not include another tax break to offset the elimination of the ethanol tax credit.
As such, the vote could also represent a setback for influential conservative Grover Norquist, head of Americans for Tax Reform (ATR), who said a vote for the plan would violate the anti-tax pledge most Republicans have signed unless paired with a separate tax-cutting amendment…
Feinstein’s amendment to an economic development bill would quickly end the credit of 45 cents for each gallon of ethanol that fuel blenders mix into gasoline. The credit led to $5.4 billion in foregone revenue last year, according to the Government Accountability Office.
The amendment also ends the 54-cent per gallon import tariff that protects the domestic ethanol industry.
It was a vote about ethanol but it wasn’t really a vote about ethanol. For instance, although this bill would strip away federal subsidies, it does nothing about the federal mandate specifying U.S. consumption of 36 billion gallons in “renewable fuels” each year until 2022, which means there’s plenty of business still to come for ethanol special interests. What the vote is really about, at least to the Norquistians among us, is whether this might signal a new willingness by GOP leaders to strike a grand bargain with Democrats on deficit reduction that would include tax hikes. Tom Coburn, the anti-Norquist, insists that there’s no signaling here for the simple reason that lifting a subsidy isn’t the same as raising taxes, even if both have the effect of raising revenue. The rebuttal is that Coburn actually did vote for tax hikes when he supported the Bowles/Simpson Deficit Commission plan that ended up failing last winter. Ethanol is the flashpoint, but the wider war is over whether there’s room for compromise on taxes in the name of finally solving America’s debt problem — which explains why the sniping between Team Coburn and Team Norquist has turned remarkably nasty at times. This dispute isn’t going away — on the contrary, it’ll get hotter — so watch Coburn’s floor speech today and then spend five minutes with this excellent backgrounder from Andrew Stiles on the deepening conservative wedge. It’ll serve you well down the road if/when a deficit package finally hits the floor.
I don’t understand how it “reduces the supply of liquid fuels”?
Corn ethanol will die, at least as we know it, if this should pass the House.
Other forms of ethanol production will spin up as a result, but there will be some short term pain at the pump as the “let’s burn food” fuel additive is replaced with “let’s burn weeds or other stuff that isn’t food.”
The next step is to eliminate the ethanol mandate entirely.
It can form residues on the back of intake valves, but most of the problems with ethanol are how it gums up and/or destroys the fuelling system.
The corn ethanol providers are already finding that corn ethanol is uneconomical even with the subsidies. Many corn ethanol refineries have closed. This would probably kick a bunch more of these ill-advised adventures over the edge into bankruptcy. This would reduce the amount of ethanol available to blend into gasoline.
There is corn and then there is fuel corn.
LLS
Ethanol remains mandated. But, without the subsidy, it will be more expensive.
Ergo, the price of fuel at the pump will go up.
The consumer is gonna pay -- instead of the taxpayer.
He's listed among the Nays.
Yes, it does. Plus, there are all kinds of consequences involved not addressed. First, ethanol is the oxygenate component of gasoline that replaced the banned carcinogen MTBE which reduces air pollution. Also, the absence of the tax credit effectively kills the program just as it is making major progress. The program was designed to stimulate the building of the ethanol plants, now providing 10% of our fuel, which are scheduled to switch over to using cellulose instead of corn for the feedstock. Great progress in cellulosic ethanol has been made and cellulosic ethanol plants are now coming on line. I figure someone does not want our fuel supply coming from corn stover, waste cellulose, and switchgrass, so they are going to kill a program that would have worked just fine.
Please read my subsequent post #20 above.
It says the subsidy is paid to the “fuel blenders”. Is this the same as “corn ethanol refineries”?
The fuel blenders are still required to use the product, so demand should remain the same, less what reductions come from higher prices.
Yes?
I will supply this excellent description by NVDave...
You are right on the falsehood of ethanol being useful for emissions control in automobiles. If anyone asks me “how to get farmers to get ethanol out of our gas tanks” I tell them the real culprit here isn’t the farmers, it is the EPA and the environmentalists.
The whole sorry episode of how we arrived at ethanol in our tanks is thus:
1. EPA decides that smog is caused (in part) by unburnt fuel in open-cycle or carbureted auto engines. To this end, they decide that adding an “oxygenate” to the fuel (a substance that has an abundance of oxygen molecules in excess of the carbon and hydrogen molecules that could eat up all the oxygen on their own, leaving the surplus of O’s for use in the combustion of gasoline) is desired.
2. The first oxygenate is MTBE, what was effectively a waste by-product the refiners had laying about in oil production.
3. ChemE’s and hydrologists tell the EPA to NOT go down this road, as MTBE is highly volatile and VERY mobile in soil. If you have a tank leak of (eg, diesel), the diesel tends to reach an equilibrium in the soil and stay relatively immobile. Pour some MTBE on top of that spill from 30 years ago and *straight* down it goes, into the water table. The ChemE’s and hydrologists told the EPA and environmentalists this in the early 90’s, to no avail. MTBE starts getting blended into fuels in urban areas, starting in the home of all envirowhacko nonsense, California.
4. Over the years, the predictions of ground water contamination come true - in spades. Google (or otherwise search) for “MTBE” and “ground water.” Prepare to be shocked.
5. So the EPA starts casting about for a oxygenate that has less (not “no” but “less”) mobility in the soil. American farmers, who at that time were suffering under crushing low commodity prices, step forward and say “How about ethanol? We have this HUGE surplus of corn (and in the mid-90’s, they were not lying - we had huge carry-outs, crushing low prices, etc) and we can turn this into ethanol pretty cheaply, add this to the gasoline and there you go. Oxygenate.
BTW - ever wonder why methanol and ethanol burn with a pale blue flame, even if all you’re doing it lighting up a puddle? You can get oil products to burn with a pale blue flame if you force-feed the fire more air or O2, but you don’t need to do anything other than light up a puddle of alcohols and the burn with a blue flame. Why is that? Because the combustion throws off an excess of oxygen for the combustion’s requirements, that’s why. When you’re casting about for an oxygenate, start with anything that, in a puddle, burns with a pure blue flame.
5. This works for awhile, first getting rammed down the throats of urban gasoline markets. Yes, ethanol is hygroscopic and therefore will add water to your infrequently used tanks of gasoline (eg, boats, small engines) and yes, it varnishes up faster than pure gasoline. I’ll grant people ALL those complaints about ethanol in gasoline. They’re all true. So are the issues with seals and rubber.
But...
6. Detroit, never failing to exhibit their crass stupidity and ignorance of fundamental engineering, just wants to shove ethanol into cars as tho it is gasoline. Detroit takes no effort to use ethanol as what it could have been - a huge booster of engine efficiency.
Let me bore people for a sec with some engine engineering: One of the limiting factors of gasoline engine efficiency is the low compression ratio. At higher compression ratios, gasoline engines with spark ignition go into “pre-detonation” (which many people mistakenly call “pinging”). In the old days, you used to pay mucho dinero for higher octane gasoline to solve this pre-det problem. High octane fuel also, like ethanol in gasoline, has a lower amount of BTU’s per gallon - ie, you’ll get lower MPG in an engine that does not require high-octane gasoline by using it. You get more “power per gallon” in lower octane fuel.
But in the old days, we used to increase octane by adding TEL - Tetra Ethyl Lead. Us old farts here will remember leaded fuel. In aviation fuel, they used to add toluene and other aromatic hydrocarbons to increase the octane. Those old WWII fighters had terrific effective compression ratios - way the heck up there once you put in the high-boost setting on the blower or closed the gate on the turbo. WWII avgas was up near 130 octane. Even today, avgas is 100 octane “low lead” fuel - just for Cessna or Piper bug-mashers. Toluene, however, is toxic like benzene, just not as bad as benzene, so the addition of toluene for Mom, Dad and Junior going to the shore or mowing the law is right out.
Enter ethanol, which has a test octane of 129. IF (and that’s a huge if) Detroit had their head somewhere other than their nether regions, they could have used the oxygenate mandate of ethanol to boost the efficiency of gasoline engines. Ferrari has done this with one of their fire-breathing engine of about 500HP - on E-85, they get more MPG and more HP with E-85 than normal gasoline. How? Boosting the compression ratio, probably by changing the pistons or cylinder heads. Detroit, however, makes no such attempts.
7. But do we even NEED ethanol in our gasoline any more? No. With “closed cycle” electronic fuel injection now the overwhelming majority of the US auto fleet, no, we no longer need ethanol or MTBE in our gasoline. At all.
Really, we don’t. The only cars that really benefit from additional O2 in the fuel are the open-cycle (eg, throttle body injection) systems or cars with carburetors. OK, so your classic 50’s Chevy will smoke a little bit. So what? How often do you pull that beauty out of the garage? Four, five times a year? This is not a frequency, nor is the ownership rate of such old cars, sufficient to justify the policy of adding oxygenate to fuel any more.
8. So now corn *and* oil prices are zooming upwards, thanks in part to China, thanks in part to Ben and his Magic Federal Reserve Helicopter, which looks a little like a CH-47 “Chinook,” only about the size of the Queen Mary. If you ever look up and see something that you think is a UFO with rotors, scattering little bits of confetti on the wind? That’s Ben. He’ll be the little bald guy on the jump ramp on the rear, flinging paper out of a big burlap sack.
Now we’re in the worst of all possible worlds: We have crappy gasoline which many people hate for the increased maint expense, but which adds nothing other lower mileage than we otherwise would get on modern cars (because Detroit has their head up their buttocks), we have a bizarre economic policy of effectively paying oil companies to do this to us, and farmers no longer need this subsidy, yet they get blamed for it, even tho with the prices in the commodity markets, no one needs the blenders’s credit to create an ethanol market.
Oh, and we have supposed “free market supporting” pols who stump based on this insanity.
For me, someone who has traced out the full map of this insanity, it is maddening. I really don’t like farmers getting the bad rap, when it really isn’t their money people are talking about with the blending credit per gallon, even tho I am in favor of eliminating ag subsidies (provided we have sound trade policies to go with it, and that does not mean “free trade” as we now have it). I’m resigned to the fact that Detroit is staffed with morons and retards for engineers (and I say that as a retired engineer) and there’s nothing we can do about that, either.
What can we do?
Want to eliminate ethanol people? Get rid of the mandate for oxygenate. I think this is possible, when coupled with a push on the issue of food prices. Show that ethanol has little efficacy any more in terms of clean air, while adding somewhat to food prices. Get rid of the oxygenate mandate and the issue goes away as soon as oil prices come down and corn prices are still high. Poof, the ethanol plants will close up or mothball quickly.
My son is a mechanic and he says ethanol ruins small engines like lawnmowers and boats.
Fuel blenders are the distributors at pipeline terminals. Ethanol producers do not receive specific federal subsidy, contrary to the articles of faith on FR.
I knew what you meant about Thune.
As for Maine, they aren’t on the top ethanol producer states list and I doubt Maine produces much corn.
Source please........
It can be. It’s a gray area - a ethanol refinery can be the point at which the gas and ethanol is blended, or the ethanol could be transshipped to a a fuel depot or even an oil refinery for mixing there.
Either way, this will introduce additional price sensitivity all down the chain from the ethanol refiner - and more importantly, drive costs up for the refiner as well, at a time when they’re just marginal as it is.
Normally I dislike it when a government kills off an industry through regulation, but this is something the government picked as a ‘winner’ over the protests of anyone who wasn’t in the Corn Belt. They deserve some payback.
Yawn...
“I hate ethanol. I firmly believe it somehow damages the engine. Grrrr”
Can E15 Gasoline Really Damage Your Engine?
http://www.popularmechanics.com/cars/alternative-fuel/biofuels/e15-gasoline-damage-engine
http://www.usatoday.com/money/industries/energy/2010-10-13-ethanol-standard_N.htm
Is there an additive that will cut the gummy crap that really works?
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