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Ethanol Policy Not Producing Desired Results
TAMU Times (Texas A&M University news release) ^ | March 7, 2012

Posted on 03/20/2012 12:46:17 PM PDT by Constitutionalist Conservative

The Energy Independence and Security Act of 2007 (EISA), which mandated a steep rise in domestic ethanol production, is causing unforeseen negative consequences for food prices while failing to live up to the desired gasoline results and other expectations, concludes a Texas A&M University research team headed by an economics professor who studies energy issues.

James Griffin

James M. Griffin, director of the Mosbacher Institute for Trade, Economics & Public Policy, which is part of Texas A&M’s Bush School of Government and Public Service, and Mauricio Cifuentes Soto, a graduate student assisting him, say in their report that the goal of EISA was to cut greenhouse gas emissions and to ease dependency on imported oil. Policymakers also thought the new blend of ethanol and conventional gasoline would cost motorists less, they note.

“EISA mandated ethanol production to grow from 4.9 billion gallons in 2006, to 36 billion by 2022,” says Griffin, author of A Smart Energy Policy: An Economist’s Rx for Balancing Cheap, Clean, and Secure Energy. “Today, at 14 billion gallons, we’re not even halfway there and the unintended consequences of the policy, especially those influencing world food prices, are negative and far outweigh the positives.”

With the best of intentions, he observes, lawmakers believed the policy would have a positive effect by lowering prices at the pump. Moreover, since corn plants absorb CO2 from the atmosphere, greenhouse gas emissions would fall significantly, and the U.S. would build energy security as domestic ethanol replaced oil imports from the Middle East.

Lawmakers had great hope for ethanol fuels.

On the positive side, the researchers point out that after adjusting for ethanol BTU efficiency losses of 40 percent less compared to conventional gasoline, refining costs, taxes and subsidies, the net benefit of the ethanol policy is just about 2.2 cents per gallon or $24 per year for a typical household consuming 1100 gallons per year.

Additionally, using CO2 life-cycle estimates by the Argonne National Laboratory, the authors assert that, ethanol reduced U.S. and world greenhouse gas emission — 0.42 percent of U.S. and 0.08 percent of world emissions.

Nevertheless, these benefits are minuscule when put in perspective. “Corn-based ethanol has done little to reduce the nation’s carbon footprint,” Griffin adds. “In contrast, the policy’s unintended consequences for food prices raise grave economic and ethical issues.”

The Texas A&M researchers also traced an increase in corn and grain prices to ethanol production. They refer to the United Nations’ FAO Food Price Index which shows that between Jan. 2007 and Sept. 2011, after adjusting for inflation, corn prices increased by 68 percent, cereals by 69 percent and dairy products by 46 percent.

One study (Hayes et al, 2009) the researchers cite quantifies how a $1 per bushel increase in corn prices impacts a wide variety of food products. The study shows, for example, that between 2005 and 2011 corn prices rose by $5 per bushel, beef rose 18.5 percent, pork 16 percent, poultry 17.5 percent, eggs 27.5 percent, milk 10.5 percent, cheese 9 percent, sugar and sweets 3.5 percent.

The researchers claim that not all these price increases are due to U.S. ethanol policies. However, even “if only one-fourth of this additional expenditure is attributable to ethanol, this would imply a loss to American consumers of $40 billion over the last 4 years.”

Even though these increased food prices might not look so significant, the world’s poor disproportionately share the burden of these policies because a large portion of their income is devoted to food alone, they add. According to the U.N., rising food prices plunged nearly 70 million people into extreme poverty in 2010-2011.

corn

An increase in corn and grain prices has been traced to ethanol production.

Finally, in regards to energy security, the authors claim that the benefits of ethanol policy are largely elusory. The fact that in 2011 ethanol displaced 5.6 percent of imported petroleum is irrelevant because the world oil market and its effects are global. Even though the U.S. imports no oil from Iran, for example, a disruption of Iranian supplies would trigger world-wide increases in all oil prices — even domestically.

Griffin and Cifuentes conclude that, instead of marching blindly ahead to EISA’s 2022 mandated production target of 36 billion gallons, the ethanol policy should be reassessed.

“To be sure, we should continue to support R&D for advanced biofuels such as cellulosic ethanol,” Griffin says. “In the interim, we should dismantle the ethanol mandates and trust markets to sort out the proper mix of ethanol in gasoline.”

For more on the study, go here.


TOPICS: Business/Economy; Extended News; Front Page News; Government
KEYWORDS: agw; agwfraud; biofuels; carbon; carbonfootprint; climatechange; co2; corn; cornprices; corruption; democrats; economy; eisa; energy; envirofascism; ethanol; ethanolmandate; ethanolscam; failedgreen; foodprices; fraud; gasprices; globalwarming; globalwarminghoax; liberalfascism; stopburningfood; thegreenlie

1 posted on 03/20/2012 12:46:20 PM PDT by Constitutionalist Conservative
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To: Constitutionalist Conservative

I hate ethanol!
It links food prices to energy prices and it just plain sucks.
My yard machines have been in the shop for going on 3 weeks, gunked up with ethanol

I put stabil in them.
How is ethanol good?


2 posted on 03/20/2012 12:49:17 PM PDT by mylife (The Roar Of The Masses Could Be Farts)
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To: Tolerance Sucks Rocks; steelyourfaith

AGW ping


3 posted on 03/20/2012 12:53:45 PM PDT by Constitutionalist Conservative (I'm a constitutionalist, not a libertarian. Huge difference.)
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To: Constitutionalist Conservative
Yet another colossal failed liberal scheme.
4 posted on 03/20/2012 12:57:17 PM PDT by Obadiah (We are all Brietbarts now.)
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To: Constitutionalist Conservative

There are also the Iowa Caucuses pressuring every Presidential contender to suck up to King Corn.


5 posted on 03/20/2012 1:02:17 PM PDT by AU72
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To: Constitutionalist Conservative

Why are we burning our food?


6 posted on 03/20/2012 1:02:17 PM PDT by szweig (HYHEY!! (Have You Had Enough Yet))
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To: szweig
It's not your food unless you own it. If you want to raise corn and sell it for less than its fair market value, go for it.

The author fails to mention that the price of corn has dropped from 2011 highs of $8.50 per bushel to a near term price of $6.47 and to $5.88 for 2012 new crop delivery.

7 posted on 03/20/2012 1:11:25 PM PDT by Mr. Lucky
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To: Constitutionalist Conservative
The desired result was a gov't mandated market for corn. The cover story was that it would reduce gas prices by increasing the supply. The "unexpected" result was a market distortion that produced higher food prices.
8 posted on 03/20/2012 1:21:58 PM PDT by Paine in the Neck (Romney's judicial appointments were more radical than Obama's)
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To: Constitutionalist Conservative; All

—as I have bored posters with in the past, as I spend some time in corn country during both the planting and the harvesting of corn, I have awaited in vain for any evidence that growers of corn are converting from diesel to ethanol in any of the pertinent equipment-—


9 posted on 03/20/2012 1:21:58 PM PDT by rellimpank (--don't believe anything the media or government says about firearms or explosives--)
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To: Constitutionalist Conservative
Finally, in regards to energy security, the authors claim that the benefits of ethanol policy are largely elusory.

Wouldn't that be "illusory"?

10 posted on 03/20/2012 1:31:08 PM PDT by Carry_Okie (The RNC would prefer Obama to a conservative nominee.)
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To: Constitutionalist Conservative
I've found a much better use for corn ethanol:


11 posted on 03/20/2012 1:32:27 PM PDT by DemforBush (A Repo man is *always* intense!)
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To: Mr. Lucky

Don’t you know, food and fuel are supposed to be nearly free.


12 posted on 03/20/2012 1:37:00 PM PDT by thackney (life is fragile, handle with prayer)
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To: Constitutionalist Conservative
... is causing unforeseen negative consequences for food prices while failing to live up to the desired gasoline results and other expectations....

Gee,.... yah think? This result was predicted by even those of us who aren't "energy specialists".

13 posted on 03/20/2012 1:37:17 PM PDT by Real Cynic No More (OBAMA!!'s name is all caps as sarcasm to indicate a lack of respect, as he does not deserve it)
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To: Carry_Okie

Both. Elusory = elusive, illosory = deluded.


14 posted on 03/20/2012 1:37:23 PM PDT by txhurl (Thank you, Andrew Breitbart. In your untimely passing, you have exposed these people one last time.)
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To: rellimpank
Conversion from diesel to ethanol is not practical. Different types of engines. Although alcohol would probably work better than gasoline would. :)

Conversion of an Otto cycle (4 stroke), like a gasoline engine, to alcohol, is somewhat more practical, just a matter of timing mostly.

Now, you could convert a Diesel cycle, or Diesel, to burn soy bean oil, or other vegetable oil. Not much conversion required, maybe some extra filtering and possibly a fuel pump change in some brands of engine. I don't know if the farmers do any of that or not. The difference is that the veggie Diesel fuel is energy wise equivalent to the petro Diesel fuel, while alcohol doesn't have near the energy content of pure gasoline.

I know a couple of people who have burned veggie Diesel, and not commerical Bio-Diesel either, in their trucks. One guy had fuel pump issues, in a Dodge truck IIRC.

15 posted on 03/20/2012 1:42:09 PM PDT by El Gato ("The second amendment is the reset button of the US constitution"-Doug McKay)
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To: El Gato

To be clear, i don’t mean burn the soy or corn oil itself, but rather a Diesel fuel made from them. People have burned used oil from McDonalds. Makes the exhaust smell like French Fries. :)


16 posted on 03/20/2012 1:45:03 PM PDT by El Gato ("The second amendment is the reset button of the US constitution"-Doug McKay)
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To: Carry_Okie
Elusory[ih-loo-siv]   elu·sive   /ɪˈlusɪv/ [ih-loo-siv] 1. eluding clear perception or complete mental grasp; hard to express or define: an elusive concept. 2. cleverly or skillfully evasive: a fish too elusive to catch.

In other words, the benefits are eluding them, they can't be found. Right word.

17 posted on 03/20/2012 1:45:58 PM PDT by Excellence (9/11 was an act of faith.)
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To: El Gato

Well, one thing; the small two-stroke engine just was not made to run on ethanol. At least, the fuel-system components are very succeptible to complete disintergration with only limited exposure to ethanol, and none of the additives prevent that, either. They may slow it but won’t stop it. Outboards that I have had did not suffer so much, but chain saws and weed eaters you have to dump the fuel out of and run ‘em dry, and still you get expensive damages in very short time. I hate ethanol. It is absolutely not necessary.


18 posted on 03/20/2012 1:46:56 PM PDT by arrdon (Never underestimate the stupidity of the American voter.)
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To: El Gato

“Makes the exhaust smell like French Fries.:)”

YUMMY!


19 posted on 03/20/2012 1:47:35 PM PDT by Twinkie (John 3:16)
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To: El Gato
--I should have made it more clear that I meant from the ground up--

--as an aside to this, have a friend who sold equipment in Wisconsin for years. When calling on an ethanol plant, he commented that some of the product must be used in the distillation heating. Response was "hell no--this stuff is too expensive--we use natural gas"--

20 posted on 03/20/2012 1:53:54 PM PDT by rellimpank (--don't believe anything the media or government says about firearms or explosives--)
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To: El Gato
Some of that increase in food prices is part of the general inflation, caused by all the government borrowing. But the rest is probably tied to the fuel-food coupling through the extra demand for corn and soybeans caused by the ethanol affair. To some extent that coupling has always been there. Since it takes fuel to grow the crops, and fuel to move it to market. But not as tight a coupling as we have now.

OTOH, knowing there was a pretty stable market, farmers have put more land into corn and soy beans, which are complementary crops. You can rotate between them, although it's a good idea to put in some alfalfa type crop into the rotation as well, along with some fallow time. My wife's grandfather did that, the sharecropper who farms the place now does it too. He's a very good steward of the land. He knows "Walt" would come back and haunt him if he wasn't. :)

Still, the government should have been subsidizing the alcohol by tax policy as they have.

21 posted on 03/20/2012 1:54:03 PM PDT by El Gato ("The second amendment is the reset button of the US constitution"-Doug McKay)
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To: mylife

Try that with a boat.

Mine was on the hard or tied to the dock most of the past two seasons because of ethanol damage. It cost the marina and the economy generally thousands of dollars for time I didn’t spend on the water, using gas, incurring scheduled maintenance fees, eating in their restaurant, shopping at West Marine, bait and tackle shops, etc.

I still haven’t got it resolved. Additives don’t do squat for ethanol problems. It corrodes the fuel system and in some cases can make the fuel tank fail. I pay special attention to opening up the lowest reaches of the bilges and getting in there physically to sniff them because of the concern for a fuel leak. I don’t want to be the last American in orbit.

ADM and the other multi-billion dollar agro-giants have corrupted and coopted the political process in the ‘red’ states to bend the process to their benefit. Republicans as much or more than Democrats are to blame. “It’s for the farmers!” is every bit as phony as “It’s for the chillrun!”. When people hear ‘farmer’ they think of American Gothic, when they should be visualizing Gordon Geccko.


22 posted on 03/20/2012 1:54:29 PM PDT by SargeK
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To: thackney

Except for silk stocking yuppie law students. They are entitled to free food, fuel and birth control. It’s in the Constitution.


23 posted on 03/20/2012 1:54:47 PM PDT by Mr. Lucky
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To: El Gato
Still, the government should NOT have been subsidizing the alcohol by tax policy as they have. Let the market decide.
24 posted on 03/20/2012 1:56:23 PM PDT by El Gato ("The second amendment is the reset button of the US constitution"-Doug McKay)
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To: Excellence
In other words, the benefits are eluding them, they can't be found. Right word.

There was nothing elusive about the technology or the economics. They were told many times and in no uncertain terms that processing corn into ethanol would consume nearly as much fuel as it produces and that it would raise food prices. The proponents painted an ILLUSION and sold it anyway.

25 posted on 03/20/2012 2:00:11 PM PDT by Carry_Okie (The RNC would prefer Obama to a conservative nominee.)
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To: mylife

pure-gas.org
click on TX


26 posted on 03/20/2012 2:01:10 PM PDT by Cold Heart
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To: Constitutionalist Conservative
less mileage, costs more... what's not to love??? and with the added bonus of increased food prices it's a twofer
27 posted on 03/20/2012 2:56:35 PM PDT by Chode (American Hedonist - *DTOM* -ww- NO Pity for the LAZY)
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To: mylife
About 3 to 4 years ago the shop where I get my yard mowers, weed eaters and chain saws worked said use 100% gasoline if you can find it.

The same advice from the shop where I bought a small outboard motor.

The same advice from the shop where I bought a small gasoline generator.

No way to prove it, but I feel like my fuel related repair bills have gone down, way down using 100% gasoline.

Premium gasoline (91 octane) with out any ethanol was running about 25 cents per gallon higher than Regular gasoline (87 octane) with 10% ethanol.

About a year ago the price differential jumped to 40 cents per gallon higher. I think sales were booming so stations tried the higher price for the summer months. Six months later (last fall) the difference fell back to 25 cents and has stayed there.

When I pull up to a dispenser at a gas station I pump 3 gallons of premium in my pick up tank before filling my 2 and 5 gallon gas cans. I have to assume that the hose and piping inside the dispenser were full of gasoline with 10% ethanol in it. Then I fill my gas cans.

After about a year of doing that I decided to use Premium in my pick to see how it did. The miles per gallon for the pick up went up 11%. Right now the cost difference is 7%. A savings of 4% isn't much, but it has to be better for the motor in the pick up as well.

Some people test to make sure the gas they are buying contains no ethanol. A retired man here on FR said his test kit cost just under $30. He said it was slow, but he was retired and had the time to make sure.

A year or two ago someone here on FR told this story:

A friend of his owned a Chrysler dealership. Some of the new cars he had sold kept having problems with the way they ran. His service department could not find the reason for the problem. Finally the dealer bought an expensive ethanol test kit and found that gasoline that was supposed to have 10% ethanol had up to 21% ethanol in it. The service department drained the gas tanks and filled the tanks with E-10, problem solved.

Not all Premium gasoline is free of ethanol. Most clerks in C Stores have no clue about what they are selling. I just go by the sign on the pumps. Yet at $85 an hour for repairs to an outboard a test kit might not be a bad idea.

Pure-Gas.org/ lists locations that sell ethanol free gas. You might find something in your area. The list is by no means complete, but it a place to start.

BTW I still add Seafoam or Stabil to gas that might be stored for awhile either in cans or gas tanks.

28 posted on 03/20/2012 3:52:10 PM PDT by TYVets (Pure-Gas.org ..... ethanol free gasoline by state and city)
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To: arrdon
I hate ethanol.

See Replies #26 and #28

29 posted on 03/20/2012 4:03:04 PM PDT by TYVets (Pure-Gas.org ..... ethanol free gasoline by state and city)
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To: TYVets

You cant get 100% gasoline.
That’s the trouble.


30 posted on 03/20/2012 4:03:18 PM PDT by mylife (The Roar Of The Masses Could Be Farts)
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To: Cold Heart

Hmmm... I may have to take a trip to lake Fork/Yantis

I bet its a marine pump I cant get the car to.
Still, Its a good idea for the mowers and such and it’s a fishing trip.
Thanks.


31 posted on 03/20/2012 4:08:25 PM PDT by mylife (The Roar Of The Masses Could Be Farts)
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To: Mr. Lucky
It's not your food unless you own it. If you want to raise corn and sell it for less than its fair market value, go for it.

I agree with every word of that. Of course, the fair market value of corn was seriously distorted because of the government's ignorant meddling in the market. The corn-based ethanol program has been very damaging to the economy and hasn't saved us any energy.

32 posted on 03/20/2012 4:23:54 PM PDT by BfloGuy (The final outcome of the credit expansion is general impoverishment.)
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To: Paine in the Neck

Wait a minute. Are you asserting that government action distorts the market?


33 posted on 03/20/2012 7:47:52 PM PDT by 1010RD (First, Do No Harm)
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To: sickoflibs; stephenjohnbanker; hiredhand; NFHale
PING for www.pure-gas.org ...

cash fer clunkers was a small part of the plan to rid us of evil old-school gas engines......

ethanol is destroying a LOT of engines/fuel systems, especially small 2 strokes and seasonal usage/lawn garden equipment...

and the irony of increasing the ethanol content, while it decreases MPG, is that the EPA gets a twofer on their ever increasing CAFE mandates...

i shrugged off the fact that i cant get pure gas locally, but i cant afford to replace power tools every couple yrs, so i may have to find an aviation fuel supplier at least for those small engines...but hey, if *sales* of new cars and power equipment looks good on paper for the economists, i guess its ok...NOT...!!!

death by a thousand cuts is currently at about 933 on gilbos scale, and counting...

34 posted on 03/20/2012 9:09:29 PM PDT by Gilbo_3 (Gov is not reason; not eloquent; its force.Like fire,a dangerous servant & master. George Washington)
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To: Gilbo_3; sickoflibs; stephenjohnbanker; hiredhand; NFHale

Gilbo’s scale is accurate....


35 posted on 03/20/2012 10:12:32 PM PDT by stephenjohnbanker (God, family, country, mom, apple pie, the girl next door and a Ford F250 to pull my boat.)
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To: mylife

Ethanol based gas has probably been the greatest boon to small engine manufacturers there has ever been.

I had about 3/4 quart of gas left in my tiller from last year, and it was running, but very rough.

Dumped it out and let the gas sit, totally blew the tank dry and filled it with new gas, ran like a champ!

Gas that was dumped out soon settled and was literally about 1/7 water. (plus the rust the water caused).

Ethanol gas is crap, plain and simple.


36 posted on 03/20/2012 10:20:09 PM PDT by djf (http://www.freerepublic.com/focus/f-chat/2801220/posts)
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To: djf

Ethanol draws water to itself.


37 posted on 03/20/2012 10:24:37 PM PDT by mylife (The Roar Of The Masses Could Be Farts)
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To: mylife

Yup.

Hydrophilic.


38 posted on 03/20/2012 10:33:25 PM PDT by djf (http://www.freerepublic.com/focus/f-chat/2801220/posts)
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To: Mr. Lucky

Yet another “Failed Green” technology.

I encourage others to check out the keyword “FAILEDGREEN” for other industries, technologies, and companies that have failed to accomplish the hope and change that their proponents claimed would result. Also feel free to add that keyword to appropriate articles.


39 posted on 03/21/2012 6:02:28 PM PDT by AFPhys ((Praying for our troops, our citizens, that the Bible and Freedom become basis of the US law again))
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To: Constitutionalist Conservative

Burning food for fuel is stupid.


40 posted on 03/22/2012 6:03:51 AM PDT by hadaclueonce (you are paying 12% more for fuel because of Ethanol. Smile big Corn Lobby,)
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To: hadaclueonce

Ethanol makes some sense in Brazil because the quality of the gasoline is so poor that the mixing of ethanol actually improves the overall quality

For a country with highquality gasoline like the US, it makes no sense at all unless you are an utopian liberal


41 posted on 07/10/2012 4:18:32 AM PDT by gaslucas1
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