Congress Discovers Ethanol Economics Don't Work

[WildCat]

I just noticed this study the CBO published this month. We all know that ethanol production is subsidized, but this is the first time the CBO actually estimated what that subsidy is per gallon of ethanol. The result? Every gallon of ethanol receives $1.78 in government subsidies. Ethanol from cellulose is even worse, requiring $3 per gallon in subsidies. Biodiesel isn't much better, receiving $2.55 in subsidies per gallon. And it's also an extremely expensive way to reduce greenhouse gases, cost estimate is $754 per ton of reduced greenhouse gas emissions.

It's time to end this expensive charade. I'm not holding my breath though.

 

[shecky]

About time. Could this mean the end of ethanol subsidies?

 

[Gord_in_Toronto]

About time. Could this mean the end of ethanol subsidies?

I could be. But this will be a political decision. How powerful are the lobbies of the people who get the subsidies?

 

[Tony]

Another reason to be against the ethanol scam:

http://www.energytribune.com//artic...Weedwhacker-and-Your-Snowmobile-and-Your-Boat

An increase in the amount of ethanol in your gasoline won’t hurt your lawnmower…if it’s a push-reel. Otherwise be prepared for big repair bills.

While that sounds alarmist, the threat is real. This fall, the Obama administration will, through the EPA, likely approve a change in federal regulations that will allow gasoline retailers to increase the “blend rate.”

The blend rate refers to the federal rule that limits ethanol blends to no more than 10% for standard automobiles. Commonly known as “E10,” the fuel contains 90% gasoline and 10% alcohol. But recent comments from the Obama administration indicate that the EPA will provide a bailout to the corn ethanol industry, which will likely allow retailers to blend up to 15% ethanol into U.S. gasoline supplies.

 

[Beerina]

As near as Wikipedia can tell, mohair^WP is still subsidized, as it's still an item the government needs to guarantee an ample supply of for WWII.



What were we talking about in this thread again?

 

[ravdin]

About time. Could this mean the end of ethanol subsidies?

Assuming that our public servants in Congress are in the habit of making sound, rational decisions based on objective facts, yes.

Aw, crap- I think I just spotted the fallacy.

 

[MG1962]

I just noticed this study the CBO published this month. We all know that ethanol production is subsidized, but this is the first time the CBO actually estimated what that subsidy is per gallon of ethanol. The result? Every gallon of ethanol receives $1.78 in government subsidies. Ethanol from cellulose is even worse, requiring $3 per gallon in subsidies. Biodiesel isn't much better, receiving $2.55 in subsidies per gallon. And it's also an extremely expensive way to reduce greenhouse gases, cost estimate is $754 per ton of reduced greenhouse gas emissions.

It's time to end this expensive charade. I'm not holding my breath though.

Looks at the 40 years or so of economic dislocation currently unfolding in the gulf - I think the subsidy is a great idea

 

[Meadmaker]

About time. Could this mean the end of ethanol subsidies?

Not unless some state moves its caucuses in front of Iowa.

 

[casebro]

In an economy that is more and more government based each year, The costs of the subsidies will be seen as proof positive of just how much good the ethanol production IS for the economy. Don't expect them to end.

 

[Paranormal Inquirer]

In an economy that is more and more government based each year, The costs of the subsidies will be seen as proof positive of just how much good the ethanol production IS for the economy. Don't expect them to end.

Government spending is a necessity in these economic times, but that does not necessarily mean spending to help those who are inefficient. If we are expanding our government and expanding our deficit spending, we may as well use that to spend more on the environment, states in need, schools, etc.

 

[WildCat]

Looks at the 40 years or so of economic dislocation currently unfolding in the gulf - I think the subsidy is a great idea

If corn ethanol production actually produced more energy that it uses you'd have a point. Unfortunately, it doesn't.

 

[MG1962]

If corn ethanol production actually produced more energy that it uses you'd have a point. Unfortunately, it doesn't.

Yes and of course there is no way the technology is going to improve - and I guess when oil does run out - we all haul arse like the Flintstones....cause well ethanol is not as effiecient yet as oil

 

[WildCat]

Yes and of course there is no way the technology is going to improve - and I guess when oil does run out - we all haul arse like the Flintstones....cause well ethanol is not as effiecient yet as oil

Billions has been poured into improving the technology, and we have little to show for it.

And ethanol can never replace oil, there simply isn't enough arable land in the US to supply that amount, even if we stopped growing food entirely and some technological breakthrough resulted in a 100% energy surplus from ethanol production.

eta: you're free to lobby your own government to pour billions into this sinkhole.

 

[Tricky]

Wildcat is correct on this one. Ethanol is a very inefficiant method of producing fuel which comes with all sorts of other problems, such as fertilizer pollution of rivers. While the intentions of those pushing through these rules and subsidies may have been noble, the experiment has proved to be a failure. Now it exists only because Big Ag has makes a lot of money off of subsidies, enough to afford a lot of lobbyists.

And what Tony says is also true. Ethanol is very bad for most engines. This results in even more hidden costs, with energy being required to replace engines more often. That is not to say that there isn't some place for ethanol manufacturing in our energy picture, but it should be efficient and directed. If it cannot compete without subsidies, then it should shrink until it finds a niche.

 

[JoeTheJuggler]

While I'm not about to defend ethanol, I'd like to point out that the oil industry has enjoyed some pretty massive tax breaks over the years, even while posting record profits.

(Personally, I think any solution to our energy problems has got to involve getting us off the one-person-one-car/suburban sprawl mindset.)

 

[The Central Scrutinizer]

I just noticed this study the CBO published this month. We all know that ethanol production is subsidized, but this is the first time the CBO actually estimated what that subsidy is per gallon of ethanol. The result? Every gallon of ethanol receives $1.78 in government subsidies. Ethanol from cellulose is even worse, requiring $3 per gallon in subsidies. Biodiesel isn't much better, receiving $2.55 in subsidies per gallon. And it's also an extremely expensive way to reduce greenhouse gases, cost estimate is $754 per ton of reduced greenhouse gas emissions.

It's time to end this expensive charade. I'm not holding my breath though.

In other news, the sun came up in the east today.

This has been well known for years. Not sure why they're just now getting around to admitting it.

"Using food to run cars is dumb" - Charles T. Munger

 

[Beerina]

If by "they", you mean Congress, well, they knew all along it was a costly boondoggle intended to aid senators in corn states. It is to fuel what the Osprey is to the military -- unjustified, unwanted, costly, but some senators want it for their home state.

 

[Tricky]

"Using food to run cars is dumb" - Charles T. Munger

...unless you've got a "Mr. Fusion" like in Back to the Future.

 

[Drysdale]

While I'm not about to defend ethanol, I'd like to point out that the oil industry has enjoyed some pretty massive tax breaks over the years, even while posting record profits.

(Personally, I think any solution to our energy problems has got to involve getting us off the one-person-one-car/suburban sprawl mindset.)

So you bike or use mass transit everywhere?

 

[linusrichard]

So you bike or use mass transit everywhere?

That's bogus. Even assuming JtJ occasionally rides in a car by himself, that doesn't make him wrong. You can recognize what the problem is and what part of the solution might be even if you have found it difficult to get 100% on-board in your own personal life.

Part of the problem is that in much of this country there isn't viable mass transit, so if your commute is too far to bike, you're out of luck. That doesn't disqualify you from advocating a reduction in driving.

It's just like the "Al Gore is fat and flies a big plane" stuff. Either Al Gore is right or Al Gore is wrong. But the size of Al Gore's personal carbon footprint is not relevant to figuring that out.

I think if everyone had an idea of "I'll do what I can, and raise awareness so that others can do what they can," it could have a very large cumulative impact. If everyone has an idea of "Everyone who doesn't live totally green is a hypocrite if they try to encourage others to live green, so I'm going to ignore the problem and turn my a/c to 59 and drive my Hummer 2 blocks to the 7-11 to pick up smokes," that could also have a very large impact.