Topic: Ethanol … still a problem after the $6 billion federal subsidy expired

[Pandora]

It’s undoubtedly good news that Congress allowed a $6 billion annual subsidy for corn ethanol to expire.

But that’s not the end of the story, as the latest Fortune magazine documents.

Scott Cendrowski’s article is not yet posted online, but here are the salient points.

It turns out that while subsidies are gone, U.S. law still requires oil refiners to blend corn ethanol into fuel — some 12.5 billion gallons this year at least 15 billion gallons by 2015. That’s still a small portion compared with the 133 billion gallons of gasoline that the U.S. Energy Information Administration estimates Americans will burn this year, but nonetheless enough to keep upward pressure on corn prices. That law needs to change, argues Jeremy Grantham — who oversees nearly $100 billion at his Boston investment firm, is known for calling both the dotcom and housing bubbles and is an environmentalist to boot. “It [U.S. ethanol policy] is truly diabolical,” he says. “The subsidy was decoration. The mandate is the villain here.” …

… How can we even consider using a food crop like corn, he argues, for fuel? He has calculated that ethanol demand increases the global price of a bushel of corn by 20%. “It inflicts unnecessary pain on anyone who eats,” Grantham laments.

On and on it goes, where it stops, nobody knows.

[Weisshaupt]

On and on it goes, where it stops, nobody knows.

And how would they know its corn ethanol?  Ethanol is ethanol - no matter how its produced. Stupid government backscratching kickback Sh*t

[Pandora]

On and on it goes, where it stops, nobody knows.

And how would they know its corn ethanol?  Ethanol is ethanol - not matter how its produced. Stupid government backscratching kickback Sh*t

That's a good question.  Perhaps because the corn farmers are already geared up?

[Weisshaupt]

That's a good question.  Perhaps because the corn farmers are already geared up?

I am sure they are, though less so if the Govt isn't going to give them free money anymore. But to actually specify corn ethanol? There is probalby a govt inspector whose job is to certify that corn is used as stock for the mash in these distilleries.   

[Libertas]

 

 

 

[ToddF]

It's a great thing that professional Willard Mittens Romney supporter, Tim Pawlenty, mandated that Minnesotans have no choice in the gasoline they purchase.

[AmericanPatriot]

Pawlenty probably deserves the blame for a lot of things but not sure this is one of them.

I believe this is a fed mandate through the EPA

[BMG]

LINK

House Republicans are looking to eliminate government funding for the biofuels industry through the farm bill — and it feels so good. I am always pleased when any federally subsidized product, service, or industry is finally forced to face the music and compete in the free market based on its meritorious profitability rather than its political profitability.  …Granted, that doesn’t seem to happen often, due the ever-expanding size of our federal bureaucracy and the ensuing tendency to nurture bad policies, but it looks like the biofuels industry may at last find itself released back into the wild of unsubsidized competition.

[Glock32]

The reason ethanol is semi-sensible for a country like Brazil is because they already had a large and well developed sugarcane industry that produced a large amount of molasses as byproduct in the sugar refining process.  The molasses was basically a throwaway, so why not ferment it into alcohol?  None of that dynamic is in play here. It's ridiculous meddling.

[ToddF]

Pawlenty MANDATED the forced purchase of gasohol, and is still cheer leading the increase in the mandate to 15%. 

[Pandora]

Pawlenty MANDATED the forced purchase of gasohol, and is still cheer leading the increase in the mandate to 15%. 

Why does he DO that?  Does he buy into the manmade glowball warmink BS?  It takes more energy/$ to make the gasohol than it does to refine straight gas!

[Libertas]

Pawlenty MANDATED the forced purchase of gasohol, and is still cheer leading the increase in the mandate to 15%. 

Why does he DO that?  Does he buy into the manmade glowball warmink BS?  It takes more energy/$ to make the gasohol than it does to refine straight gas!

It is more to the ingrained knee-jerk conditioning in Minnie to kowtow to agri-business than a beleif in glowball warmink BS, I don't recall T-Paw parroting that side of the issue, so bottom line it is the pandering to farmers and the rest of the players in this crony market.  As G points out there is no leveraging of byproduct here, people are growing crops and irrigating fields to grow crops for ethanol, period.  It is wasteful from inception, period.

[ToddF]

I think the original justification from back in the Arne days was that gasohol cut pollution in the summer, so it was mandated in the summer months (or was it winter).  It was Pawlenty that made it year round.

[Alphabet Soup]

I think the original justification from back in the Arne days was that gasohol cut pollution in the summer, so it was mandated in the summer months (or was it winter).  It was Pawlenty that made it year round.

Summer. It has a tendency to break down and cause condensation during the cold, damp months.

BTW: I stopped and filled up at my local ethanol-free station today and the price of Supreme is down to only $4.35/gal.

Yay!

[BMG]

LINK

Livestock and poultry producers are longstanding foes of the ethanol industry, which now consumes roughly 40% of the U.S. corn crop. Producers of the corn-based fuel additive argue that it returns much of that back to livestock producers in the form of distillers dried grain, an ethanol byproduct that is used as feed. But as corn prices have soared to record highs this month, the livestock industry has intensified its criticism of ethanol.

A waiver would ease requirements that refiners blend ethanol with gasoline. Livestock producers argue the mandate props up corn demand regardless of how high corn prices climb, artificially inflating the market.

The Renewable Fuel Standard requires 15.2 billion gallons of ethanol, most derived from corn, be blended into gasoline this year. Mr. Pope called that figure "arbitrary."

Last week, U.S. Agriculture Secretary Tom Vilsack said the drought puts livestock producers "in deep trouble." However, he said the situation wasn't bad enough to warrant a reduction in government mandates for corn-based ethanol production.

 

LINK

Over the last several years, ‘the cost of corn has gone from a base of $2.40 a bushel to today at $7.40 a bushel, nearly triple what it was just a few years ago’…

Rising [corn] prices are already squeezing food producers’ “two to three percent” earnings margins. ‘Many of us had our costs hedged in the commodity markets and we all took on strident measures to control our cost structures… n the case of Smithfield, we closed six processing plants and one slaughter plant. We also closed 15% of all our live production business.” But “once those measures are done, we have no choice but to pass those prices down to consumers.

LINK

Smithfield lost $108 million in the first quarter of fiscal 2010; its hog-production unit posted a $162 million loss.

Sadly, it should be noted that a company that buys roughly 128 million bushels of corn and corn equivalents a year from U.S. farmers to feed 16 million pigs on farms across 12 states will now be buying their corn from Brazil because for the first time in US history, it is now cheaper to IMPORT corn from another country than it is to buy it domestically.

Nice.

[Libertas]

Yes, quite nice, and it probably takes what, about a 152B gallons of water a year to produce 15.2B gallons of corn ethanol?  (Assuming a 10:1 gallon ratio)  Where are the eco-nuts on that consumption?  The whole thing, like everything else the left touches, is corrupted by politics and riddled with contradictions...and people seem OK with it...

 

[John Florida]

Cattle ranchers are already cutting their hurds down because of the lack in grazing and water and beef prices may show a dip in the near future but will jump up in the long run so if you can stock up now.Here in Fl. most cattle are grass fed and were OK with water so far but prices will still jump up.

[charlesoakwood]

Last week, U.S. Agriculture Secretary Tom Vilsack said the drought puts livestock producers "in deep trouble." However, he said the situation wasn't bad enough to warrant a reduction in government mandates for corn-based ethanol production.

So, we will continue to burn our food.
                                                     Liberalism is a mental disorder.
                                                                                        Michael Savage    

[Pandora]

If the current crop failure isn't "bad enough", what does this POS think is.

[warpmine]

If the current crop failure isn't "bad enough", what does this POS think is.

It will only be "bad" as he says when the masses hunting these assholes down with aims to vanquish them permanently .