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By Robert Rapier on Oct 13, 2010 with 84 responses

EPA Grants E15 Waiver for Newer Vehicles

Tags: E15, EPA, ethanol

The news was just announced:

EPA Grants E15 Waiver for Newer Vehicles

WASHINGTON – The U.S. Environmental Protection Agency (EPA) today waived a limitation on selling fuel that is more than 10 percent ethanol for model year 2007 and newer cars and light trucks. The waiver applies to fuel that contains up to 15 percent ethanol – known as E15 – and only to model year 2007 and newer cars and light trucks. This represents the first of a number of actions that are needed from federal, state and industry towards commercialization of E15 gasoline blends. EPA Administrator Lisa P. Jackson made the decision after a review of the Department of Energy’s (DOE’s) extensive testing and other available data on E15’s impact on engine durability and emissions.

“Thorough testing has now shown that E15 does not harm emissions control equipment in newer cars and light trucks,” said EPA Administrator Lisa P. Jackson. “Wherever sound science and the law support steps to allow more home-grown fuels in America’s vehicles, this administration takes those steps.”

A decision on the use of E15 in model year 2001 to 2006 vehicles will be made after EPA receives the results of additional DOE testing, which is expected to be completed in November. However, no waiver is being granted this year for E15 use in model year 2000 and older cars and light trucks – or in any motorcycles, heavy-duty vehicles, or non-road engines – because currently there is not testing data to support such a waiver. Since 1979, up to 10 percent ethanol or E10 has been used for all conventional cars and light trucks, and non-road vehicles.

Additionally, several steps are being taken to help consumers easily identify the correct fuel for their vehicles and equipment. First, EPA is proposing E15 pump labeling requirements, including a requirement that the fuel industry specify the ethanol content of gasoline sold to retailers. There would also be a quarterly survey of retail stations to help ensure their gas pumps are properly labeled.

The Energy Independence and Security Act of 2007 mandated an increase in the overall volume of renewable fuels into the marketplace reaching a 36 billion gallon total in 2022. Ethanol is considered a renewable fuel because it is produced from plant products or wastes and not from fossil fuels. Ethanol is blended with gasoline for use in most areas across the country.

The E15 petition was submitted to EPA by Growth Energy and 54 ethanol manufacturers in March 2009. In April 2009, EPA sought public comment on the petition and received about 78,000 comments.

The petition was submitted under a Clean Air Act provision that allows EPA to waive the act’s prohibition against the sale of a significantly altered fuel if the petitioner shows that the new fuel will not cause or contribute to the failure of the engine parts that ensure compliance with the act’s emissions limits.

The key point here is that they have “allowed it” in limited situations. I think the problem now is going to be actually getting retailers to sell it, and buyers to buy it. With the recent spike in corn prices, ethanol is again more expensive than gasoline on an energy equivalent basis. Sales of E85 were already falling, so it is hard to imagine that demand for E15 is going to be high. Further, retailers could be liable if people damage older vehicles by fueling with E15, so they will take a cautious approach. It is somewhat of a logistical nightmare for retailers to offer E15 for only specific vehicles.

I think this will be like the situation before the ethanol mandates — that market simply won’t grow very quickly unless/until it is mandated. So, the bottom line is that I don’t expect much to change with this ruling. But I do expect that the next round of lobbying will be to turn this into an E15 mandate.

  1. By Fred on October 13, 2010 at 2:44 pm

    “that market simply won’t grow very quickly unless/until it is mandate.”

    If it’s a mandate, it isn’t a market. It’s central planning. It will work about as well as central planning ever has.

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  2. By paul-n on October 13, 2010 at 2:48 pm

    So you will be allowed to use E15 in the newer vehicles, and the retailers are allowed to sell it – so far so good.  But if you are not allowed to use it in older vehicles, are you breaking the law if you do so, and who enforces that?  Hopefully, it is not the retailers responsibility – drivers must be responsible for what fuels they choose to put in their engines.

    But as RR points out, more ethanol makes it more expensive, so most people won;t use it unless mandated – but how then do you enact a mandate for some cars and not others .  It can be done with a new class of vehicles from here on, with different size fuel nozzles etc, but how do you mandate that some existing vehicles must use this (more expensive) fuel and others not?

     

    I can see the calls coming for a special subsidy for E15 to make it cheaper, as that is the only way people will use it, and even then, many will be (rightly or wrongly) suspicious of it.

     

    One interesting possibility would be if the ethanol industry agrees to give up its subsidy on E10 and apply it all to E15 (and E85).

     

    That said, I agree that with corn getting expensive, the only way the ethanol industry will stay/grow is by mandate, or by switching away from corn as the feedstock – either way, ethanol is going to be more expensive than the gasoline it is trying to replace.

     

    Of course, and across the board oil tax of $1/gal or so would remove the need for all this nonsense of mandates and subsidies for ethanol, or any other alternative fuels.

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  3. By Optimist on October 13, 2010 at 2:53 pm

    Crud! More spinelessness from the Obama administration.

    “Wherever sound science and the law support steps to allow more home-grown fuels in America’s vehicles, this administration takes those steps.”

    O? I guess what really motivated the decision would sound more like: “Wherever an opportunity arises to help out Democratic candidates, especially with some pointless and meaningless pandering, right before an important election, this administration takes those steps…”

    And, as if your life ins’t complicated enough, the government gladly piles on more complexity. And why not? Your elected prostitutians certainly have enough time on their hands to figure all this stuff out…

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  4. By Wendell Mercantile on October 13, 2010 at 3:04 pm

    But if you are not allowed to use it in older vehicles, are you breaking the law if you do so, and who enforces that?

    Paul,

    Why would you want to use E15 unless someone made you?

    If vehicles from pre-2007 aren’t supposed to use it, that must mean there will be E10 pumps for the older vehicles and E15 pumps for 2007 vehicles and beyond.

    Who (or what) will keep the people under the E15 mandate from using the E10 and E0 pumps?

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  5. By savro on October 13, 2010 at 3:11 pm

    Paul N said:

    So you will be allowed to use E15 in the newer vehicles, and the retailers are allowed to sell it – so far so good.  But if you are not allowed to use it in older vehicles, are you breaking the law if you do so, and who enforces that?  Hopefully, it is not the retailers responsibility – drivers must be responsible for what fuels they choose to put in their engines.


     

    This might give Kit more opportunities to make citizen’s arrests. But seriously, the waiver is for the right to sell E15, not to purchase or put it into your car. Can the EPA stop me from running my car on vegetable oil, or whatever else I want to run it on?

    Also, I doubt that “proper labeling” will be enough to inform most clueless people about what they’re purchasing. But the alternative, to require retailers to ensure they’re not selling E15 to older cars won’t work either. Many states don’t even require there to be an attendant filling up your gas tank.

    But as RR points out, more ethanol makes it more expensive, so most people won;t use it unless mandated – but how then do you enact a mandate for some cars and not others .  It can be done with a new class of vehicles from here on, with different size fuel nozzles etc, but how do you mandate that some existing vehicles must use this (more expensive) fuel and others not?

    With the dropoff in mileage, why would anyone fill their tank with E15 unless they were forced to or it’s cheaper than the alternative?

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  6. By PeteS on October 13, 2010 at 3:45 pm

    I am taken aback by the lack of faith portrayed in these comments. Where’s Rufus when you need him to remind you that ethanol is tuppence hapenny at the refinery gate?

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  7. By paul-n on October 13, 2010 at 5:17 pm

    Rufus and the ethanol industry are probably out drinking some corn whiskey to celebrate!

    Though I don;t think this is anything really to celebrate.  

    As Optimist suggests, its almost like an announcement, made to please the corn/ethanol people, before an election, but, for all the reasons discussed here (and likely a few others) it is unlikely to actually achieve anything, except open up new avenues for mandates and subsidies. 

     

    Sam, as I understand the rules, it is illegal to put a blend of more than 10%E, or any other fuel, other than that specified by the manufacturer,  into anything other than a flex fuel vehicle.  It is because the vehicle may not then be emissions compliant.  While I have not heard of people being caught for that, they are caught for removing catalytic converters etc, so the emissions law is taken, and enforced, seriously.

    This new system will indeed be too confusing as to which cars can use what grades (although Brazil has worked this out), and the ethanol industry’s solution to that, is to get E10 phased out completely, so that it is all E15.

    That will indeed minimise confusion, but will force everyone to use it.  And they will point to the precedent of unleaded fuel to support their case, and argue for a new cash for clunkers scheme for any cars too old to use E15 – which, of course, the automakers will support.

    And they will argue that anything less will kill the industry, and that can;t happen as there is too much invested in it – i.e. they have made themselves “too big to fail”, at least too big in terms of political influence.

    Meanwhile, every motorist will be asking why they are having to pay more…

    I just can;t see a win-win coming out of this.

     

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  8. By Wendell Mercantile on October 13, 2010 at 5:18 pm

    Many states don’t even require there to be an attendant filling up your gas tank.

    Samuel,

    Perhaps that’s the ‘secret’ part of the EPA’s plan. What if they also require full-time attendants at each filling station to ensure E15 goes into only 2007 and later vehicles? They could give them all nice para-military uniforms and spiffy shoulder badges that say something like “E15 Compliance Patrol” and make them part of Homeland Security. Just imagine what that could do for the unemployment rate?

    Maybe they could even teach them citizen’s arrest procedures at E15CP boot camp. The script might be something like this: “Hey mister, I saw you putting E10 in that car. Shut your pie hole and nip it in the bud. In the bud I say. Don’t look at me that way. You’re in big trouble now. Citizens arrest. Citizens arrest!”

    It could make FDR’s Civilian Conservation Corps look like the bush leagues.

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  9. By OD on October 13, 2010 at 5:44 pm

    Perhaps that’s the ‘secret’ part of the EPA’s plan. What if they also require full-time attendants at each filling station to ensure E15 goes into only 2007 and later vehicles? They could give them all nice para-military uniforms and spiffy shoulder badges that say something like “E15 Compliance Patrol” and make them part of Homeland Security. Just imagine what that could do for the unemployment rate?

    That will surely make rationing easier when the time comes. Help control the rioting at gas stations as well. Oh the possibilities!

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  10. By Benny BND Cole on October 13, 2010 at 5:56 pm

    I get the impression that Americans would rather be taken carnally by Cape African Bulls in the middle of the road, than to pay higher gasoline taxes.

    E15 that is okay to buy but not a mandate? Endless complications and rules followed up by more special tax breaks and government subsidies?

    Please, just add $3 dollars onto the price of gasoline….

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  11. By savro on October 13, 2010 at 7:50 pm

    Wendell Mercantile said:

    Many states don’t even require there to be an attendant filling up your gas tank.

    Samuel,

    Perhaps that’s the ‘secret’ part of the EPA’s plan. What if they also require full-time attendants at each filling station to ensure E15 goes into only 2007 and later vehicles? They could give them all nice para-military uniforms and spiffy shoulder badges that say something like “E15 Compliance Patrol” and make them part of Homeland Security. Just imagine what that could do for the unemployment rate?


     

    This sounds like a statutory rape law.

    Car owner: I would like to top off my tank with E15.”

    Jimbo Jr. (the gas station attendant): “Ma’am, what year was your vehicle born?”

    Car owner: “This here vehicle is 4 years old.”

    Jimbo [Taking out his calculator to compute the years]: “OK, looks like your car is young enough to be injected with E15.”

    2 months later…

    Herman Despartes Esq.: “Your honor, my client’s vehicle was below… errm… above the age of consent. We are seeking $57MM for damages and $176MM for psychological harm caused.”

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  12. By savro on October 13, 2010 at 8:01 pm

    Paul N said:
     

    Sam, as I understand the rules, it is illegal to put a blend of more than 10%E, or any other fuel, other than that specified by the manufacturer,  into anything other than a flex fuel vehicle.  It is because the vehicle may not then be emissions compliant.  While I have not heard of people being caught for that, they are caught for removing catalytic converters etc, so the emissions law is taken, and enforced, seriously.


     

    Paul, are you sure about this? I can easily understand how a law can be enacted that prohibits the sale of certain products, and I can even understand how it’s possible to outlaw the removal of a catalytic converter (though it’s not as simple since I can’t see where to pinpoint the illegal action; if it’s the removal of the converter, then what happens if I remove it but keep the car in my garage; and if it’s the act of driving a car without a catalytic converter, what happens if you remove it and I drive it, who’s responsible? I guess the second option makes more sense between the two. Food for thought.)

    But it’s more difficult for me to understand how a law can be enacted against the actual filling of the fuel. Unless you’re saying it’s illegal to drive a car with a blend higher than E10.

    I’d appreciate a link, if you have one, with more detailed info on the legalities (or illegalities) of fuel blends and catalytic converters.

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  13. By paul-n on October 14, 2010 at 1:57 am

    Sam,

     

    I actually found a legal document from the EPA on this, but as Kit says, it is mostly gobbledygook – by lawyers, for lawyers.

    However, some more readable information from the EPA is here;

    The Clean Air Act of 1972 set specific standards for motor fuel quality, and you can not vary outside this without a “waiver”. Waivers do get given for various reasons (e.g. the low sulphur and summer grade Reid Vapour Pressure requirements were temporarily waived after Hurricane Katrina), and one was given in 1978 that allowed for up to 10% ethanol in the fuel.  It is this waiver that Growth Energy sought to change;

    In March 2009, Growth Energy and 54 ethanol manufacturers petitioned the Environmental Protection Agency (“EPA” or “The Agency”) to allow the introduction into commerce of up to 15 volume percent (vol%) ethanol in gasoline.  In April 2009, EPA sought public comment on the Growth Energy petition and subsequently received about 78,000 comments.  Prior to today’s action, ethanol was limited to 10 vol% in motor vehicle gasoline (E10). While E15 is only 5% more ethanol than E10 when considering the total fuel portion, moving from E10 to E15 represents a 50% increase in the volume of ethanol present in gasoline and thus represents a 50% increase in the use of renewable fuels in gasoline.

    The petition was submitted under Clean Air Act section 211(f)(4), which allows an applicant to demonstrate that a new fuel or fuel additive will not cause or contribute to the failure of an emission control system to achieve compliance with the emission standards to which it has been certified over its useful life.  EPA reviewed the applicant’s submission based on four criteria: 1) immediate and long term tailpipe emissions 2) immediate and long term evaporative emissions, 3) materials compatibility, and 4) driveability and operability.

    So, it has been illegal to sell E15 as there was no waiver. It has been illegal to use it, or any blend greater than E10,   as it had not been proven that it will not affect the emissions control system.  The only exception is for Flex Fuel vehicles, which have been certified that that E85 (and M85, in some vehicles) wil not affect the emissions control system. I think it is even illegal to run a Flex fuel on E15 to E70, as it has not been proven that it won;t affect the emissions control system!

    As for removing catalytic converters, that is back in the Clean Air Act itself, from this link which looks like a document from The X-Files;

    Under federal law, catalytic converters may not be removed 

    and replaced with “converter replacement pipes’ by any person. 

    The 1990 Clean Air Act Amendments even prohibit private 

    individuals from installing “converter replacement pipes” on their 

    own vehicles. Anyone who installs such pipes would violate section 

    203(a)(3)(A) and (B) of the Clean Air Act (Act). 

    Basically, you can’t tamper with the emissions control system.  You can;t even convert your own car to flex fuel, without getting it certified by the EPA that it will meet emissions requirements – you have to go through the same process as the manufacturers!
    In theory, this even applies to removing the engine and converting to electric – you have to prove that it will meet the regulations!  The EPA is changing the regulations to recognise these cases that did not exist when said regulations were written.
    And I also found the proposed sticker for the gas pumps;
    Incidentally, the whole EPA page is all about whether the different ages of vehicles (<2007, 2000-2007, pre-2000) will meet the emissions requirements.  It says absolutely nothing about compatibility with the engine’s fuel system, or whether it might cause damage to the engine.  That liability, presumably rests with the carmaker, the sellers of the fuel, and/or the ethanol industry.  
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  14. By perry on October 14, 2010 at 7:31 am

    Instead of waiting a few more weeks for testing to be completed on ’01 and newer models, they decided to grant this waiver now. They even designed the little sticker for 2007 and newer models. It makes no sense, except that elections are next month. Early voting is already underway in some states.

    There’s a video on youtube of a regular Tahoe driven on E-85 for 100,000 miles. The fuel system components look better than one driven on regular gasoline for a shorter distance. The EPA should be a one man job. A part time job at that.

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  15. By Douglas Hvistendahl on October 14, 2010 at 8:18 am

    All of this ignores the basic point: is ethanol an affordable and renewable fuel with everything calculated. The information I have studied says it is not.

    BTW, re the Picken natural gas plan as a transition: read : “The Grand Energy Transition” by Robert A. Hefner III. A 50 year veteran of the energy drilling industry gives the history of why we have consistently understated the amount of available natural gas. Another case of political pressure resulting from fossil fuel lobbying. To be exact, we have used more natgas since the 70s than the oil industry said was the maximum possible amount, and current reserves are a multiple of that “maximum.” We are using more oil than we are finding. The natgas industry is finding more than we are using by looking in places not associated with petroleum. This upsets the petroleum industry!

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  16. By Kit P on October 14, 2010 at 9:28 am

    I would buy E15 for
    the wife’s 2007. I might even use E15 in an older car as an act of
    civil disobedience.

     

    Clearly there is a
    difference doing things that adversely affect other people and
    driving yourself nuts trying to keep up with an out of control EPA.
    If you ‘unplug’ a plugged up catalytic converter you would not affect
    anyone unless you live in the place with poor air quality. Where I
    live no one checks catalytic converter and gas pumps do not have
    vapor collection systems but in California they do.

     

    Leave it to Paul to
    clearly define the issue,

     

    “I actually found
    a legal document from the EPA on this, but as Kit says, it is mostly
    gobbledygook – by lawyers, for lawyers.”

     

    I have been reading
    regulation long enough that I do not find it gobbledygook. Not that
    I have ever done this, but an old car may not be worth the cost of a
    new catalytic converter. A repair shop will not remove the catalytic
    converter but they might suggest a way to ‘fix’ the problems.

     

    So when an
    individual completes the ‘fix’, that individual is in compliance with
    both the letter and the spirit of the law. The letter that Paul
    provided looked like a clear attempt at extortion under the guise of
    authority. When people in government have tried to bully me I simple
    tell them that I will be spending the rest of the day at the closest
    federal court because laws and regulation apply to civil servants
    too. Is this BS, sure it is. It works every time at changing the
    tone of the conversation back to civil.

     

    Just for the record,
    do not play the ‘redress of wrong’ card when you have actually done
    something wrong. I got pulled over once in an old car with out of
    state plates. The state trooper wanted to search my car because he
    said I did not use my turn signal correctly. Of course he was
    looking for drugs. I told him I wanted to audit his federal taxes.
    Another time, I got a speeding ticket in Idaho (really hard to do)
    because I had just passed someone driving slow. Although I thought I
    was driving safely, I was still wrong.

     

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  17. By Kit P on October 14, 2010 at 9:45 am

    Perry wrote,

     

    “The EPA should be
    a one man job. A part time job at that.”

     

    I have a great deal
    of respect for the NRC but not the EPA because they are too
    political. The EPA people I have worked with out of field offices
    have all been reasonable people too. When Clinton was president, the
    EPA was writing threatening letters to utilities with coal plants.
    The EPA said they were not threatening letters but if I got one of
    those letters I would be shaking in my boots and hiring a bunch of
    good lawyers.

     

    If you want to
    change the laws, go to congress and change the law. That is what
    Bush did.

     

    One of the local
    issues in the congressional race between a first term congressmen and
    a state senator. Our electricity rates have gone up as a result of
    $300 million in pollution control equipment for each large coal plant
    that is not required. In any case rates are still lower than the
    national average. Neither candidate had any responsibility in the
    matter but both are pointing fingers at the other.

     

    The EPA would be a
    better agency if it moved 50% of the people out of DC to field
    offices to enforce regulation rather than thinking of new ones.

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  18. By russ-finley on October 14, 2010 at 12:03 pm

    I could see this backfiring on the ethanol industry if car problems real and imagined begin cropping up that get blamed on possibly accidently filling a car from the wrong pump. If I owned a gas station I wouldn’t touch this stuff with a ten foot pole.

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  19. By perry on October 14, 2010 at 12:21 pm

    In another month, a waiver for cars newer than 2000 will be approved. If they ever get around to testing clunkers, they’ll get approved too. I wouldn’t expect E15 to be sold much until then. People can run their own test at home. Put some gasoline in a glass jar. Sit it on a shelf next to a bottle of vodka. Come back in a few years and see which you’d rather put in your car.

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  20. By paul-n on October 14, 2010 at 2:35 pm

    Just to be clear, Kit the legal document was not the one I linked to – it took two pages to say what the summary document did in two paragraphs.  

    I have to agree with Perry that it seems a bit odd to make this approval for 2007+ cars only, issue the sticker etc etc, when, in  a matter of months, a decision will be made on the 2000-2007, and things may have to change again.

     

    I wonder where Rufus is?

     

     

     

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  21. By Wendell Mercantile on October 14, 2010 at 8:46 pm

    I might even use E15 in an older car as an act of civil disobedience.

     

    Not while I’m around Kit. I’ll throw a citizen’s arrest on you so fast it’ll make your head spin, plus I’ll make sure it goes on your permanent record. Cool

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  22. By Rufus on October 14, 2010 at 8:49 pm

    Hic

    :)

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  23. By PeteS on October 14, 2010 at 8:50 pm

    Paul N said:

    I wonder where Rufus is?


     

    Finding it difficult to type while holding a “Mission Accomplished” sign. Laugh

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  24. By Rufus on October 14, 2010 at 9:13 pm

    Naw, this ain’t much of a story. You won’t be seeing E15 at a filling station near you.

    It’s purely a pre-election, political move. A Strange move, but a move, nonetheless.

    You might see some E15 popping up in a few months, after they’ve approved it for 2000, and newer, cars; but, I wouldn’t even bet on That.

    Some of the few stations (very few) that have Blender Pumps might put it in the Blenders, hoping a few people might, after using E15 for awhile, decide to “shoot the works” and give E25, or E30 a try.

    Anyways, it’s pretty much a non-story at this time.

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  25. By paul-n on October 14, 2010 at 9:31 pm

    Jeff Broin of POET would seem to agree with you (or you agree with him);

    Approval of E15 in 2007 and newer vehicles is a positive first step toward opening the market for more ethanol to compete with gasoline. However, the EPA must move quickly to take the next step: approval of E15 for use in older vehicles.

     

    As a pre election move, I guess there is not much downside here, the gov gets some goodwill from the ethanol/corn folks, while no motorist is forced to buy the stuff (yet).

     

    If I was building, or refurbishing, a gas station anywhere near an ethanol distillery, (like right in front of it), I would have a separate storage for E0 gasoline, and one for E100 ethanol, and set up a “dial-a-blend” pump.  At present, the settings would be E0, E10, E15 and E85, but then you just change the settings, not the equipment,  every time they change the rules/blend limits.

    That way the retailer can keep all his customers happy, and also then claim the tax credit, while it is still there.

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  26. By Rufus on October 14, 2010 at 10:53 pm

    Paul, a lot (most?) of the retailers that feature E85 do sell E0. As a result of selling E85 they don’t have to worry about not meeting their “mandate,” so they can sell both E0, and E10.

    Btw, E10 is normally somewhere between $0.10 and $0.13/gal less than E0.

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  27. By Wendell Mercantile on October 14, 2010 at 11:01 pm

    Anyways, it’s pretty much a non-story at this time.

    Rufus~

    Aw c’mon, I’m surprised you’d say that. Even without an E15 pump at one of your Tunica filling stations, diehards such as you could achieve an E15 blend by putting the correct ratio of E10 an E85 in the tank.

    I bet Kit P. could even give you a differential equation (or two) to help you calculate that ratio. Or he could build you a quick reference table to keep in your glove compartment. Something with guidance such as “1.6 gallons of E85 plus ten gallons of E10 = 11.6 gallons of E15.”

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  28. By Rufus on October 14, 2010 at 11:02 pm

    Oh, also, in almost all cases the gasoline in E10 is Not the same gasoline in E0. The giveaway is the Octane rating. If you see E10 with an Octane Rating of 87 the gasoline in the blend is 84 Octane. Remember, Ethanol has an Octane Rating of 114. If you blended 10% Ethannol with 90% 87 Octane Gasoline you would end up with an Octane Rating of 89.7

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  29. By Rufus on October 14, 2010 at 11:09 pm

    Wendell, your “diehards” have been splash-blending E20, and E30 for a long time.

    Remember, the Brazilians switched ALL of their cars over to E20, and higher blends a long time ago. No muss, no fuss. They just did it. They had No problems that I’ve ever heard of.

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  30. By paul-n on October 15, 2010 at 12:31 am

    And many of the Brazilian cars are made by GM and Ford…

     

    Wendell, you should know from Kit’s posting’s that his preferred means of calculation is a slide rule – he could probably draw one up faster than I can do a spreadsheet.

     

    As a result of selling E85 they don’t have to worry about not meeting their “mandate,” so they can sell both E0, and E10.

    So it is the retailer that has to meet the mandate – I thought is was the wholesalers/oil companies?  How is that enforced? 

    What happens if no one is buying E85 or even E10, but he needs to sell it to meet the mandate – does he discount it?

     

     

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  31. By Rufus on October 15, 2010 at 1:53 am

    Paul, you are absolutely right. It is the “blender” that is the obligated party. But, the more ethanol a retailer such as Kum and Go, or MFA sells, the more E0 the blender can supply them with.

    I think most of the retailers that sell E85 do fairly well with it. Of course, as in any business, some don’t. There can be a myriad of reasons that are pretty well imagined. No use wasting the space trying to enumerate them.

    Valero, the blender/supplier to, I guess, nearly all of the stations in the Memphis area I believe just informed the stations one day that all gasoline would be E10. Then, they all went to court, and whatnot, over whether Valero would supply those with blender pumps with E0. Supposedly, some sort of compromise was reached (but, I haven’t seen any ‘blender’ pumps in Memphis.

    My impression is that fuel distribution is a pretty dog eat dog business. With, probably, some of the smartest people in the universe everywhere you look.

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  32. By Kit P on October 15, 2010 at 9:36 am

    “he could probably
    draw one up faster than I can do a spreadsheet.”

     

    And get the right
    answer to two significant figures. Part of navy nuke training is
    doing ball park math. To design a reactor core and model it over
    expected operation requires a supper computer. However, for a
    certain ‘window’ of operations, an operator predicts what will
    happens and then see that the plant responses as expected.

     

    The first thing I do
    when I review a calculation is do a back of the envelope calculation
    and right down what I expect the answer to be.

     

    I have a basis of
    using E15 in my ’89 Ranger. I am not worried about breaking it
    somehow. I think we learn by pushing the envelop. If I can support
    something I will and see what happens. So far it looks to me like
    corn ethanol is a good way to produce transportation and reduce the
    the environmental impact of both oil and growing food.

    [link]      
  33. By Wendell Mercantile on October 15, 2010 at 9:42 am

    the Brazilians switched ALL of their cars over to E20, and higher blends a long time ago. No muss, no fuss. They just did it. They had No problems that I’ve ever heard of.

    No muss, no fuss, eh? They must have far fewer lawyers in Brazil.

    I have a basis of using E15 in my ‘89 Ranger. I am not worried about breaking it somehow. I think we learn by pushing the envelop.

    I like that Kit P. You’ve applied the true test pilot spirit of “pushing the envelope” to a 21 year old truck.

    [link]      
  34. By paul-n on October 15, 2010 at 2:21 am

    I can see a real feast for the lawyers, if it gets to the point where a “blender” is not meeting their mandate.  They get fined, but what if their retailers refuse to take E10, who is at fault?  Does the blender then just stop selling, and lose their customers.

    Dog eats dog would be right, when it gets to that point.

    It never fails to amaze me the ability of governments to set up systems for people to game – Laws, made by lawmakers, and it seems the party that always benefits, is the lawyers.

    I hope your Buick Regal is the success you hope it will be – it seems the ethanol industry needs a few more reasons for customers to want to buy E fuels – price will no longer be on their side.

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  35. By perry on October 15, 2010 at 10:15 am

    I’d like to have 500 or so gallons of ethanol on hand when the fit hits the shan. Whether it’s gas lines around the block, or prices in the stratosphere, we all know it’s just a matter of time. Gasoline can’t be stored indefinitely, even with fuel stabilizers. Ethanol can. Problem is, you can’t buy E100.

    I know I could make my own. Getting the permit and building a still wouldn’t be a problem. Quality control could be. I wouldn’t want one bad batch screwing up my car when the time came to use it. It would sure help if it were possible to buy straight ethanol.

    [link]      
  36. By Wendell Mercantile on October 15, 2010 at 10:47 am

    Perry~

    You can buy straight methanol now, and for a lot less than ethanol. I know, the energy density of methanol is lower; but as we all know, the energy density of ethanol is also lower than gasoline and diesel.

    Methanol still has the potential to be our liquid fuel salvation. When needed we will be able to make if from our vast supply of coal, natural gas, and from the huge reserves of methane clathrates under the oceans.

    [link]      
  37. By Kit P on October 15, 2010 at 10:50 am

    “You’ve applied
    the true test pilot spirit of “pushing the envelope” to a
    21 year old truck.”

     

    I should have
    started a new paragraph to better communicate the idea. It is the
    American farmers who are pushing the envelop. I am just along for
    the ride.

     

    Not requiring the
    consumer to modify a POV is an important point especially when you
    look at those rate of change differential equations. The number of
    people using E10 now is much greater than the number using EVs. If
    all of the sudden cars start failing because of E10 (not because the
    driver was stupid and did not use the correct fuel), then we have
    learned something.

     

    Wendell operates
    under the paradigm that something bad might happen so we should do
    nothing new. I know that when you do things, sometimes bad things
    happen. When they do, we learn the root cause and fix it. Wendell
    is a pilot so I he would agree that the consequences of bad things
    happening should not kill people. If I ruin an old ICE, no big deal;
    it is just a learning experience. If biofuels causes a plane to
    crash, that is a big deal.

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  38. By Rufus on October 15, 2010 at 10:52 am

    Guys, don’t hang your hat on gasoline being cheaper than ethanol over any extended period. Bottom line is: We have over 100 Million Acres laying around doing nothing, right now. We don’t have a hundred million oil wells laying around idle.

    [link]      
  39. By Kit P on October 15, 2010 at 11:21 am

    “I’d like to have
    500 or so gallons of ethanol on hand ..”

     

    One has to conclude
    that Perry is suicidal and has gross disregard for the safety of his
    family and neighbors. Leave the storing of large amounts of energy
    to professionals in facilities designed to have a safe distance.
    Two local news stories related to energy. A gasoline tanker parked
    upside down and someone was burning down an old building and it
    caused a massive explosion.

     

    Doomers like to
    prepare for some massive crisis while ignoring the potential winning
    the Darwin Award.

    [link]      
  40. By Rufus on October 15, 2010 at 12:25 pm

    Don’t worry, Perry; ethanol is easy to make. If I didn’t own a flexfuel car I would probably buy an E85 Conversion kit. They only cost a couple of hundred dollars, but they might get real expensive (and hard to get) for a time if gasoline Really spiked.

    [link]      
  41. By Wendell Mercantile on October 15, 2010 at 12:54 pm

    They only cost a couple of hundred dollars…

    Rufus~

    Why do you think it is the ethanol industry has never gone into the business of promoting, selling, and installing E85 conversion kits? They could even sell and install them at special low prices.

    The people who make ink, toner, and computer printers long ago figured out that if they sold the printers at dirt-cheap prices they could make their profit selling ink and toner cartridges. Why is the ethanol industry so dense that they haven’t figured out a good way to get more customers to buy their product would be to help people easily and inexpensively convert their cars to burn E85?

    [link]      
  42. By Rufus on October 15, 2010 at 1:40 pm

    Wendell, it costs something like $150,000.00 PER ENGINE for EPA approval. There are dozens, and dozens, and dozens of different engines out there. It’s just beyond the capability of their business models right now.

    The small companies that produce these products do so without EPA approval (which, technically, I guess, they don’t need since they, themselves, are not “installing” the product.) If the “Industry,” itself, got involved I imagine there would be a lot of kickback from the EPA, etc.

    Right now, those guys are just trying to refine their manufacturing, purchasing, and marketing processes so as not to go broke. It’s a tough business, and they’re competing with some brilliant, and powerful folks. Keep in mind that your average ethanol refinery is owned by a bunch of farmers, and small-town investors, and is managed by a guy that used to work down at the local Co-op.

    They have a Lot of growing (and smartening-up) to do. :)

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  43. By perry on October 15, 2010 at 6:54 pm

    Kit P said:

    One has to conclude
    that Perry is suicidal and has gross disregard for the safety of his
    family and neighbors.


     Only if one is a drama queen. I grew up with a 500-gallon tank of diesel in the yard. My dad had a thing for Mercedes diesels and diesel wasn’t sold everywhere in those days. Nobody died. Nobody got hurt. It was all quite boring, in fact.

    [link]      
  44. By Kit P on October 15, 2010 at 9:13 pm

    Well Perry diesel
    and fuel oil are different than other fuel because it is very
    difficult to make it explode. My mother had one in her basement. I
    had three houses with oil heat. I also had a house with propane, the
    propane was set a safe distance from house by code.

     

    Safely storing fuel
    for use is a common practice. Hording volatile fuels for some
    apocalyptic crisis is stupid.

     

    “Nobody died.
    Nobody got hurt. It was all quite boring,”

     

    Do me a favor Perry,
    next time you are sitting at a stop light count the number of people
    going by in the cross traffic talking on cell phones. The everybody
    is doing it argument.

     

    Perry’s argument is
    people do stupid things all the time and do not die. Just saying
    Perry you might want to check the properties of 500 gallons of
    ethanol so that one of the unintended consequences of being a
    survivalist is not your early demise.

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  45. By paul-n on October 16, 2010 at 12:03 am

    “it costs something like $150,000.00 PER ENGINE for EPA approval.”

    So there is the first problem.  Even the EPA’s website says that doing flex fuel conversions is illegal.  

    There is a government goal to use X billions of gallons of ethanol, and then this arm of government closes off one of the best pathways to get there, that does not involve people spending big $ on new vehicles when they have good ones already – that just don;t happen to be flex fuel.

    Surely the ethanol industry and the automakers could co-operate on this to get kits approved for the most common models.  There are numerous late model (US made) vehicles that have a flex and non-flex version (mostly PU’s SUv’s and minivans) – surely it can’t be too hard to do that, and surely the government could waive the fees.  It would be much better value than what they have had trying to do cellulosic, Range Fuels, etc etc.

     

    I know the automakers want to sell new cars, but maybe they might just help out their existing customers here – it is helping to reduce oil imports, after all.  

     

    In Australia in WW2, Ford issued detailed specs and instructions on how to run its vehicles on wood gasifiers.  If there was a  war/oil embargo tomorrow, I am sure  we would very quickly have the auto makers saying which of their non flex fuel vehicles can be used with ethanol, and how much, so why not find the answers and give them out now.

    Boeing and Airbus are working with their customers to get existing jets to be able to run on biofuels (not that it is cost effective, mind you), rather than just saying “buy some new ones” – it would not be a big deal, and it would not hurt the carmakers to do the same.  

     

     

    [link]      
  46. By perry on October 16, 2010 at 8:18 am

    Kit P said:

    Well Perry diesel
    and fuel oil are different than other fuel because it is very
    difficult to make it explode. 

     


     

    Quite the opposite Kit. Diesel is more volatile than gasoline, which is more volatile than ethanol. Diesel fumes at a concentration of .6 % will go boom when you make a spark. For gasoline, an air concentration of 1.4% is necessary. Ethanol needs a 3% concentration. Diesel will also make the biggest bang of the three.

     

    I never mentioned the apocalypse btw. I wouldn’t hoard for that. I plan to just bend over and kiss my butt good-bye.

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  47. By Kit P on October 16, 2010 at 3:35 pm

    Perry you are
    demonstrating my point. Perry should not be storing large amount of
    fuel because he does not understand the the physical properties of
    fuel.

     

    “I never
    mentioned the apocalypse btw.”

     

    I suspect Perry was
    engaging in hyperbole and will to get a big tank of fuel but just in
    case.

     

    Maybe be Perry
    should listen when someone tells him something is dangerous. In our
    area one man is home from the hospital and another is near death.
    The difference is a little distance because headed the warning and
    was walking away before the unexpected explosion.

     

    Volatility is the
    tendency of a substance to vaporize. Perry was describing the
    explosive range.

     

    “A highly volatile
    fuel is more likely to form a flammable or explosive mixture with air
    than a non-volatile fuel.”

     

    “Flashpoint is the
    minimum temperature to which the pure liquid fuel must be heated so
    that the vapour pressure is sufficiently high for an explosive
    mixture to be formed with air when then the liquid is allowed to
    evaporate and is brought into contact with a flame, spark or hot
    filament.”

     

    For #2 diesel:

     

    Flash
    Point: >125°F”

    http://www.petrocard.com/Produ…..DS-ULS.pdf

     

    For gasoline:

    Flash
    Point: -49 °F”

    http://www.petrocard.com/Produ…..tional.pdf

     

    For ethanol:

     

    “50 to 55.4°F”

    http://www.valero.com/V_MSDS/D…..207909.pdf

     

    What these
    properties mean is that a tank of diesel on a farm or construction
    site is relatively safe because it will not vaporize under normal
    conditions. Gasoline and ethanol will immediately If diesel fuel
    leaks on a hot surface like a running engine an explosive atmosphere
    could result in a confined space like a ship.

     

    I provided the MSDS
    because anyone storing large amounts of fuel will need them to
    discuss with their insurance agent, lawyer, and local fire marshal.

    [link]      
  48. By Wendell Mercantile on October 18, 2010 at 11:25 am

    Diesel is more volatile than gasoline, which is more volatile than ethanol.

    Perry~

    I suppose that’s why long ago the U.S. military decided all of their battlefield trucks, tanks, and generators be diesel-powered instead of gasoline-powered, right? You’ll find they made that move because vehicles with diesel engines are much more difficult to set afire and explode when hit by enemy fire than those with gasoline engines. In fact, the gasoline-powered M4 Sherman tank of WW II fame was so disposed to catch fire when hit by enemy fire, that U.S. Army tankers nicknamed it the “Ronson,” after the popular cigarette lighter of the era whose marketing slogan was, “Lights first time, every time.”

    After the U.S. Army saw how much less vulnerable German and Soviet armor was with their diesel engines, the U.S. also switched to diesel.

    Aircraft designers would have also switched to diesel, but it’s only in the last few years that lightweight, diesel-powered reciprocating engines for airplanes have been developed. Turbojets, turboprops, and turbofans have always been able to burn both jet and diesel fuel.

    [link]      
  49. By ronald-steenblik on October 18, 2010 at 11:52 am

    Rufus wrote:

    Keep in mind that your average ethanol refinery is owned by a bunch of farmers, and small-town investors, and is managed by a guy that used to work down at the local Co-op.

    It depends on what you mean by “average”. If you mean the mode (the most frequent occurence), that is probably the case. But bear in mind that, according to the Renewable Fuels Association,  the top four producers (POET Biorefining, Archer Daniels Midland, Valero Renewable Fuels, and Green Plains Renewable Energy) account for more than half of current capacity. The next nine, led by Spanish-owned Abengoa Bioenergy, combined with the Big 4 account for half of capacity. And among the other half are plants owned by companies like Cargil, Louis Dreyfus Commodities, and Pacific Ethanol.

    [link]      
  50. By Wendell Mercantile on October 18, 2010 at 1:49 pm

    Interesting piece in the NY Times about how corn prices have shot up recently. Doesn’t say anything about what that will do to the cost of corn ethanol, but obviously there is a connection: Rising Corn Prices Bring Fears of an Upswing in Food Costs

    My guess is that neither the Energy Independence and Security Act of 2007, nor the EPA — when making this decision about E15 — took into account the effect of corn ethanol on world food prices.

    [link]      
  51. By paul-n on October 18, 2010 at 2:33 pm

    Wendell, at the risk of being nit-picky, I have to correct you about the aero diesel engines.

    Aircraft designers would have also switched to diesel, but it’s only in the last few years that lightweight, diesel-powered reciprocating engines for airplanes have been developed.

    Actually, there were thousands of diesel powered planes flying around in the 1930′s  in fact, they were preferred for transatlantic flights, because they used only 2/3 the fuel.

    Fascinating write up here, from 1940;

    http://www.enginehistory.org/diesels.htm

    and another good one here; http://www.avweb.com/blogs/ins…..892-1.html

    Which includes this now familiar theme; “What finally did the Packard {diesel} in was higher-performance gasoline engines made possible by 87-octane gas. Pilots were more interested in speed than economy and range”

    Sounds just like the discussion people have about diesel cars (absent the emissions rules). 

    As a testament to the just how efficient those diesel planes were, the world endurance record (non stop flying, without refueling) was set by two guys flying a Bellanca CH-300 Pacemaker, with a Packard diesel engine (16L, 9cyl, 240hp, 550lb engine, http://en.wikipedia.org/wiki/P…..rd_DR-980), in 1931.

    The plane flew, with two pilots, for 84 hours without refueling. The record stood for 55yrs, until Dick Rutan;s purpose built Voyager broke the record, while doing its round the world flight.

    The most famous aero engine was the Junkers Jumo, opposed piston, opposed crankshaft, two stroke engine, used in the Junkers JU86 bomber

    http://en.wikipedia.org/wiki/J…..s_Jumo_205

    The engine was very efficient, using just 220g/kWh (0.35lb/hp-hr) – as good as any similar sized commercial diesel engine today! 

    But they stopped using this engine for military aircraft because, while very fuel efficient, it lacked the acceleration and peak power/performance needed in combat – as a former pilot yourself, I expect you’d agree with that!

    There are companies trying to develop aero diesels today – they still have not matched the performance levels of the 30′s,  and are struggling with the high certification costs for aero engines, and the static market for light plane engines.

    I would think the better market is in competing with the small turbo prop engines, as, while lightweight, they are expensive and their specific fuel consumption is double that of the diesels.  But I won’t hold my breath for that to happen.

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  52. By paul-n on October 18, 2010 at 2:48 pm

    That story in the NY times is blatant piece of scare mongering.

     

    The headlines reads “fear of an upswing in food costs”,

    but in the body of the report;

    Other foodstuffs are not likely to see as strong an impact, according to economists.

    That is because the cost of basic grains makes up only a small fraction of the total cost of most manufactured foods that contain them, such as breakfast cereals or bread. A large part of the cost of those items comes from transportation, processing and marketing.

    The federal government forecasts that food prices will rise as much as 1.5 percent this year and 2 to 3 percent next year. The average annual increase in food prices over the last 10 years was 2.9 percent.

    If food prices rise by 3 %, that will make them one of the least rising consumer cost items there is.  

    If they were to compare the rise in other living costs over the last 10yrs, like health care, housing, insurance, banking costs, etc, I expect food to be the least of them.

    Also in that story;

    But experts warn that the impact could be much greater if next year’s harvest disappoints and if 2011 grain harvests in the Southern Hemisphere also fall short of the current robust expectations.

    Well, duh!  If the next year’s harvest, around the world,  fails, there will be shortages/price rises – who knew?

     

    Food in the US is amongst the cheapest in the world.  They only reason why anyone would not be able to afford food is because some other things in the US are so expensive – that is what the NYT should be writing about.

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  53. By Wendell Mercantile on October 18, 2010 at 3:05 pm

    Actually, there were thousands of diesel powered planes flying around in the 1930’s in fact, they were preferred for transatlantic flights, because they used only 2/3 the fuel. Fascinating write up here, from 1940.

    Thank you Paul, I was not aware of that. I did know Zeppelins such as the Hindenburg and other airships used diesels, but not about the Packard for civilian fixed-wings. It does make much sense for a long-range airliner where acceleration is not important.

    But they stopped using this engine for military aircraft because, while very fuel efficient, it lacked the acceleration and peak power/performance needed in combat – as a former pilot yourself, I expect you’d agree with that!

    Yes, concur. I probably should have said above that designers didn’t switch to diesels for military aircraft because of the weight penalty and poor acceleration. Had performance not suffered, they would certainly have liked to since tanks filled with flammable, easily-ignited, high-octane AVGAS were the most vulnerable parts of a WW II fighter or bomber in a crash or aerial combat.

    [link]      
  54. By paul-n on October 18, 2010 at 3:25 pm

    The aero diesels are something I have been following for some time.  The history of the current developers reads a lot like the cellulosic and algae folks – lots of impressive claims and websites, but only a few products available (which are “un-certified” engines), and on one has achieved the timelines they stated – where have we heard that before?  Only difference is that no gov money is involved.

    The specs for one of them, Delta Hawk, show a BSFC that is 10% higher than what the Junkers engine got!

    http://www.deltahawkengines.co…..if00.shtml

     

    They are targeting the light aviation market as 100LL fuel is a scarce commodity, but how many people are going to re-power their planes?

    Where I think these would really makes sense is for light-medium commercial avaiation.  Create a significant fuel saving, for planes that fly all day every day, and you are onto something.  

    This plane held the record for the most fuel efficient passenger plane for 50 years (until the Airbus A380), put diesel engines in it and it would regain its crown – and it is much better  looking – I would pay money to fly in one of these;

     

     

    More of the story about this at the Low Tech Magazine

     

    [link]      
  55. By Kit P on October 18, 2010 at 4:01 pm

    “The crop will still probably be the third-largest on record, but …”

     

    No matter how good the news, the NYT always has a but!

     

    “The export market is also going strong.”

     

    That is one of the things I lay awake at night thinking about, reducing US trade deficit.  So what do you do when the news is really, really good?  You worry about too much worry. 

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  56. By ronald-steenblik on October 18, 2010 at 4:24 pm

    Paul,

    Let’s put those numbers into perspective. Americans spend $1,200,000,000,000 — $1.2 trillion — on food each year, not including alcoholic beverages. (Slightly less than half of that expenditure in meals eaten outside the home, slightly more than half for groceries.) So a 3% increase translates into $36 billion dollars.

    Second, while a doubling of the price of corn doesn’t have much of an effect on the price of a box of highly processed, highly packaged corn flakes (the ethanol industry’s iconic foodstuff for these kinds of comparisons), it makes a big difference to somebody who earns less than $2 per day, who spends upwards of 50% of her income of food, and who depends on minimally processed, minimally packaged corn meal as a staple food.

    In short: please think outside of North America.

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  57. By Wendell Mercantile on October 18, 2010 at 4:59 pm

    …while a doubling of the price of corn doesn’t have much of an effect on the price of a box of highly processed, highly packaged corn flakes.

    A doubling of price would add only a few cents to a box of corn flakes. The same doubling would have a much bigger effect on the price of corn ethanol. Although corn ethanol is certainly highly-processed, the cost of the feedstock is a bigger share of the final cost of ethanol, than the cost of the feedstock contributes to the final cost of corn flakes, tortillas, or corn meal gruel.

    [link]      
  58. By Wendell Mercantile on October 18, 2010 at 5:05 pm

    They are targeting the light aviation market as 100LL fuel is a scarce commodity, but how many people are going to re-power their planes?

    Paul,

    Those who want to keep flying will. It seems inevitable that 100LL will probably be completely gone in five years or so.

    The other option might be to convert the engines to MOGAS, although that will be difficult because of the compression ratios involved. Ethanol as an octane enhancer might save the day, but right now putting any fuel containing ethanol in an airplane piston engine is a surefire way to ruin it.

    [link]      
  59. By paul-n on October 18, 2010 at 5:24 pm

    Ron,

    I’m not sure what your first point is – are you saying $36bn is a trivial number, or a large number?  For 308 million people, that is $117/yr/person, much less than is spent on coffee, cellphones, cable tv, etc etc. So i don’t think it’s a big deal.  In fact, it might even be good if more money was spent on food rather than cable tv, cellphones etc?

     

    I don’t disagree that someone who earns  $2/day will have trouble eating if they are buying corn on the world market.  But is it really the US (or any other country) obligation to keep food prices down for the benefit of the rest of the world?

    When food aid is given to Africa, we hear complaints from African farmers that they are going broke, because local prices fall, from all the free food.  Now this happens, and those African farmers should do better with higher food prices, yet still there are complaints?

    Production of food should be one of the first and foremost goals for any country.  If they have to buy it from other countries I think it is unreasonable to expect the exporters to keep it cheap for their benefit – that is not how markets work.  If they don’t want to be subject to world price fluctuations, they can of course, ban all exports/imports and de-link their domestic prices from world ones.  They might starve in famine year, of course, but they can do so satisfied they did not pay too much for world prices for corn.  

    If they don’t want to buy it, or can’t afford it because of what the US does or doesn’t do with corn ethanol, etc, then they can, and should grow it themselves – even the US won’t discourage that (I hope).

     

    Of course, if many of those $2/day countries didn’t have so many mouths to feed, they may not have a food problem in the first place, but that’s a whole different story.

     

     

     

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  60. By paul-n on October 18, 2010 at 5:37 pm

    Ethanol as an octane enhancer might save the day, but right now putting any fuel containing ethanol in an airplane piston engine is a surefire way to ruin it.

    Why is that – the fuel system not set up for it?

     

    These guys claim to have a no ethanol alternative to 100LL, based on biomass feedstock, but you can bet it won’t be cheap!

     

    http://www.swiftenterprises.co…..index.html

     

     

    [link]      
  61. By Wendell Mercantile on October 18, 2010 at 5:54 pm

    These guys claim to have a no ethanol alternative to 100LL, based on biomass feedstock, but you can bet it won’t be cheap!


    I’m sure it won’t be, but 100LL is not cheap.  Last week I paid $4.85 per gallon.

    [link]      
  62. By Kit P on October 18, 2010 at 7:44 pm

    PaulN did a good job

    of replying to Ron. Some of you may want to skip my post, I see no

    reason to be civil to Ron.

     

    RR edit: If you see no reason to be civil, then everyone gets to skip your post. Deleted.

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  63. By paul-n on October 18, 2010 at 7:56 pm

    Wendell Mercantile said:

    These guys claim to have a no ethanol alternative to 100LL, based on biomass feedstock, but you can bet it won’t be cheap!

    I’m sure it won’t be, but 100LL is not cheap.  Last week I paid $4.85 per gallon.

    Regular unleaded in Vancouver is $1.17/L =$4.42/gal (and Cdn dollar is now at parity again).

    But really, if you can afford to own a light plane, you can afford the fuel.

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  64. By savro on October 18, 2010 at 8:02 pm

    Paul N said:

    I don;t disagree that someone who earns  $2/day will have trouble eating if they are buying corn on the world market.  But is it really the US (or any other country) obligation to keep food prices down for the benefit of the rest of the world? 


     

    I’m not sure if Ron was implying that the U.S. has a responsibility to the world to keep food prices as low as can be (he may have just been introducing another angle into the discussion by saying that the U.S. was not the only one that would be impacted, but the entire world as a whole, and that some may be affected a lot more than others; but I’ll leave that to Ron to clarify), but I definitely agree with Paul on this. The primary responsibility of any government is to look out for their own people, not the rest of the world. That does not mean we should be bullies and start wars for economic gain, but if a government did not consider the interests of its own citizens ito be their primary responsibility then they’re not doing the job they were elected to do.

     

    Kit, I hate to have to say this, but there was no reason to attack Ron the way you did. Address the points, even with fervor, but –as hard as it may be for you– try to limit the personal attacks.

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  65. By paul-n on October 18, 2010 at 9:15 pm

    I’ll wait for Ron to say something on that topic now…

     

    In the meantime, it seems that at least someone is going to use E15 in late model vehicles – NASCAR!

    http://mmc-news.com/2010/10/17/nascar-to-shift-to-e15-fuel-in-2011/

    Quite a progressive move for a sport that only gave up unleaded fuel in 2007, and will go to using fuel injection next year!

     

    I wonder if the EPA will be there to make sure all vehicles are newer than 1997, and that no one is using more than 15%, and that they are meeting emissions rules?

    [link]      
  66. By Wendell Mercantile on October 18, 2010 at 11:53 pm

    But really, if you can afford to own a light plane, you can afford the fuel.

    True (mostly), although fuel prices have caused many people to stop flying, or to severely cut back*.

    By the way, I don’t own an airplane. The one I flew last week belongs to the outfit for whom I work.
    __________
    * With the expected drop in flying proficiency. That’s a real problem facing the flying community — at least those who fly as a hobby. Many of them are on a shoestring.

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  67. By paul-n on October 19, 2010 at 12:06 am

    I guess flying is in the same category as powerboating – if you are just doing it for recreation, you have to accept the cost, or not do it.  If it’s for business, you have to price in the cost.

    Just with (recreational) boating you can always go sailing instead!

     

     

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  68. By ronald-steenblik on October 19, 2010 at 2:55 am

    Paul,

    Sam was right that I was trying to bring another perspective to a number that you treated (it seemed to me) as insignificant: the rate of increase in the cost of food. Thirty-six billion dollars is $36 billion dollars. It is the equivalent of a regressive tax, because the percentage of food in family budgets rises as their household income falls. If prices rise as a result of unavoidable changes in market-driven supply and demand, so be it. That’s where social-insurance policies kick in. But if part of that increase is due to government policies, then I think it is worth asking who are the winners and who are the losers from those policies.

    I am astonished that you would write, “In fact, it might even be good if more money were spent on food rather than cable tv, cellphones etc?” It would be good if that is what people wanted to do of their own volition — e.g., because they wanted to eat more healthily, or because they wanted to support local farmers, or simply because it gave them the warm fuzzies to do so. But otherwise, no.

    By pointing out the effects on poor people elsewhere, I was not arguing that it was the responsibility of rich countries to keep down the price of food for poor countries. But, given that the rich countries have done exactly that for many years (through export subsidies and food aid), it is rather irresponsible, don’t you think, to then put in place policies that help double or even tripple the prices of grains and vegetable oils. You speak of third-world farmers, Paul. I was thinking of the hundreds of millions of urban poor, and landless peasants, who must purchase their food.

    Even for farmers in developing and least-developed countries, the high prices have been a mixed blessing, because they have also been accompanied by much greater price volatility. That means that a farmer may pay a high price for seeds at the beginning of the season, only to find that the price of the crop at the end of the season has fallen once again.  

    And yes, corn is an important human staple in many countries of Africa, Latin America, and in Haiti and Mexico. Much of that corn is of a different variety than that used to produce corn ethanol, but the corn markets are linked. Back in 2008, when rising prices for tortillas sparked street protests in Mexico, the price of feed corn had risen enough that some farmers were turning to white corn (the stuff from which corn flour is made) as livetock feed.

    Finally, for those who see every rise in agricultural commodity prices as a good thing, don’t forget the long-run effects of prices that are higher than the marginal costs of production: rents that become capitalized into the value of farmland. The big winners are always the owners of arable land. Those who buy that land, or have to rent land (30% of farmland in Iowa is rented) gain nothing. Moreover, by raising the price of land, policies get locked in, because no politician wants to be responsible for farm foreclosures. TV crews don’t run stories on farmers whose land values increased by 10% over the previous year, but they sure love to show distraught families suffering as they witness the old homestead go up for auction.

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  69. By Kit P on October 19, 2010 at 10:16 am

    Ron wrote,

     

    “Paul. I was
    thinking of the hundreds of millions of urban poor, and landless
    peasants, who must purchase their food.”

     

    Do you mean that
    commodity that has been made dirt cheap by the productivity of the
    American farmer?

     

    “it is rather
    irresponsible, don’t you think, to then put in place policies that
    help double or even tripple the prices of grains and vegetable oils.”

     

    See Ron, I think you
    are just repeating stuff that journalist at the NYT have made up.
    The last time I checked, inflation adjusted food costs have been
    trending down since WWII. The problem American farmers is a shortage
    of markets. Processing some of the energy out of corn and other
    grains before feeding to animals, increases the market. A good thing
    for farmers. The doubling of electric is a big local issue. Our
    electric rates are still lower that the national average and the cost
    to heat a efficient house is still pretty cheap. The reason for the
    increase is new regulations. Sounds reasonable when you add in
    perspective.

     

    Ron is creating an
    erosional issue by leaving out perspective.

     

    “but the corn
    markets are linked”

     

    I always link the
    word ‘linked’ to some wild leap of logic that is about to follow. In
    this case there was a riot in a county with a corrupt corrupt
    government therefore it must be our fault.

     

    “rich countries”

     

    What I have noticed
    about “rich countries” is that the level of corruption is much
    less and we hold ‘irresponsible’ accountable. 

    See Ron I have so
    much empathy for poor people that I might make an extra effort to
    find the root cause of a problem so they can fix it.

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  70. By Wendell Mercantile on October 19, 2010 at 4:34 pm

    Look towards the bottom of this page to see the design for the label the EPA has proposed go on filling station E15 pumps: EPA Announces E15 Fuel Pump Labeling Proposal

    I’m sure this will keep people from unauthorized filling of their older cars with E15. It even says, “Federal law prohibits its use in other vehicles and engines.” Using bold, italic letters on “Prohibits” ought to do the trick.

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  71. By paul-n on October 19, 2010 at 10:34 pm

    Wendell, I put that label up on this thread in post #15.

     

    @Ron,

     

    I guess we can’t really control what rises and falls as a result of government policies.  Not long ago we were advocating fuel taxes – they are equally regressive, but that doesn;t make them all bad.

     

    Why did i say this?

    “In fact, it might even be good if more money were spent on food rather than cable tv, cellphones etc?

    Because food is an essential part of life, the other things are not.  As with water, when it is very cheap, or free, people tend to waste/abuse it.  I am not saying that food or water should be unaffordable, but that we should value them above cable tv etc.  What happens is people pay the phone, cable etc, and then complain about the cost of food and water, often by tweeting on their iphone.  The fact that half of the nations food budget is spent on restaurants etc is staggering.  Eating out used to be something done for a treat, not because you are hungry.  Of what is left, the vast majority is on processed foods.  If people are prepared to buy raw ingredients and make things themselves, they can eat cheaply.  When people on food stamps are buying Coca Cola and cornflakes, instead of drinking water and having porridge for breakfast, they are spending their money on food processing, not food itself.

    I will maintain that all the other “costs of living” have gotten out of hand – but food, water/sewer, electricity and fuel have not, but these are the ones that get complained about most.

    I have no problem with the farmers getting more for their product.  The real problem, of course, is all the agribusiness and food manufacturing/distribution/retail between them and their customers.  People have gotten lazy and forgotten how to prepare food, and complain when the cost of prepared foods go up.  For the family that buys oatmeal, flour, potatoes etc by the sack and make things themselves, food is still cheap.  It may not be exciting, and it may be a bit of work to prepare, but that’s life.  If you prepare your own food, you waste little and enjoy it more, and will likely be healthier too.

     

    I won’t defend the agricultural policies of the US Government – I don’t agree with many of them, and they mostly benefit agribusiness, not family farms.  But, one thing they have been successful at doing is making sure the country can feed itself, cheaply and have some left over for export.  Whether they ensure the country can feed itself healthily is another matter.

    But, to take a different line, even if food (basic food) was free, the urban poor, would still be urban poor.   The US is not going to adopt Scandinavian style social policies anytime soon, so there will always be an underclass, regardless of food prices.

     

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  72. By Wendell Mercantile on October 19, 2010 at 10:49 pm

    I put that label up on this thread in post #15.

    Paul,

    Neat. How do you embed images in a post?

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  73. By paul-n on October 20, 2010 at 1:56 am

    Sam may be able to explain a better way, but here is how I do it;

     

    You need to open an account with a photo sharing site like Flickr, or Google’s  Picasa (what I use).  You can then copy any images you find, or create (like excel graphs) and upload them to that site.   

    In Picasa you then take the option to “link to this photo”, select the size you want (400 to 800 pix is best) and check the box the says “image only, no link”.

    In the box below where it says “embed image”, so code will appear like this;

    http://lh5.ggpht.com/_a9ylxZVm…..0horse.jpg

    Finally, I then copy this code, come back to here, and use the tree  icon in the toolbar.  It prompts you to paste in the “image URL”, which is that code.  Ignore all the other boxes there and click “Insert”

    then, back in your post,  just hit enter once, and the image will appear, like this one of what happened in East Germany when they ran out of oil;

     

     

     

    Sounds like a lot of work, and Sam probably has a more elegant way, but this is what I do for your viewing pleasure!

    You may need to register and log in  (which I don’t know why you don’t do anyway) to get the picture tool, and a whole bunch of other useful HTML tools.  There is also a private messaging function available, so you can PM other CER members without posting for all to see.

     

    So join the club and put up your pictures! – just not the ones from the summer holiday, or the time you got caught with the C.O.’s daughter, etc

     

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  74. By ronald-steenblik on October 20, 2010 at 3:11 am

    Paul wrote:

    fuel taxes – they are equally regressive, but that doesn;t make them all bad

    Are they equally as regressive as food? Everybody eats. Not everybody (especially not urban poor in America’s central cities) drives. Moreover, look around. Who owns Hummers or Escalades? It’s not poor people.

    Here is a graph of total household expenditures in leading spending categories in Canada, in 2002. Note that spending by low-income households is mainly for necessities, with roughly 52% of total household spending being for items in three categories: food, shelter and clothing. Fuel does not make it to that list.

    Canada -- Expenditure by quintile

    Of course, the share is much greater in developing countries among those living on less than $1 per day (in dollars of 2006):

    And here is a table of the average share of household expenditure on gasoline in California (a state with high gasoline prices) by decile, from an article published in 2008 (year of data are not given, but likely from mid-2000s). Note that the incidence changes depending on whether one looks at all households or only ones with cars: much lower for the former than the latter. But even among households with cars, gasoline expenditure was 1/4 the share of what it was on food.

    Second, our exploration of the merits of fuel taxes on previous strings was in the context of cutting income and payroll taxes. That is not what you are talking about here. Here is a graphic illustration of the impacts on different income quintiles in British Columbia of its carbon tax. Notice that the change in tax burden has been more or less neutral for the 3rd and 5th income quintiles, a net gain for the 1st and 2nd quintiles, and a net loss only for the 4th quintile.

    BC carbon-tax incidence

    There are so many normative statements in the rest of your post, I have to catch my breath. Again, you are expressing your own view about the importance that people should put on food in comparison with other things they buy as a defense of higher food prices. Discretionary spending on higher-quality food is very different than a general increase in the price of all food, including the most basic foods. From a consumer perspective, a choice to spend more income on more expensive but better-quality food is good if that is what consumers want; spending more simply because what they were purchasing before has suddenly become more expensive is not.

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  75. By paul-n on October 20, 2010 at 4:18 am

    Good charts Ron.

    I won’t argue that food costs are not regressive, and that wasn’t my point.  Of course the lower income groups spend more of their income food, but that is why they get to spend a lot less on taxes, even though this does not always make up the difference.  Lower income households also tend to have more mouths to feed too, but that is their choice (generally).

    Nor am I saying they should buy more expensive foods – I am saying they buy a lot of junk foods (in America) that they needn’t.  There are plenty of cheap, ingredient style foods to be had – they are boring and need preparation but they are cheaper.  Yes, it’s tough being poor, but I’m sure it was much worse for our grandparents in the Depression.

    Yes, I have strong views about the value that people put on food and water compared to other things.  When I was managing the water utility, I got tarred and feathered for suggesting that a monthly water cost higher than cable tv was reasonable, good even, in order to upgrade treatment to make it safer (after seven people died of Ecoli in water elsewhere in Canada) .  But to have clean, safe food (and water) available where and when you want it, does not come for free.  And when it is not available, at any price,  or it is not clean and safe, then you  realise how important it really is, and will pay almost anything for it

    As with gasoline, I prefer food to have a real price, and then help those who can’t afford it, rather than keep the price artificially low that is then subsidising those who can afford it.  That is, essentially, how they do health care here.   Even for the lowest quintile there, 17% of your income on food does not seem outrageous.  Yes, it sucks to be poor, and that is why we have social programs (some countries more than others).  But these decisions are up to the Government of The Day for the country concerned.

    So the US policies are making the cost of corn artificially high – try buying a litre of milk in Canada – it is WAY higher because of silly protectionist pilicies (which somehow seem exempt from any free trade agreements.

    Of course, cattle farmers don’t have to pay high prices for corn, either.  They could introduce radical new technology like letting the cattle walk around and graze (that saves oil too), or feed stuff other than corn – cattle are designed to process “cellulosic” feedstocks that ethanol distilleries can’t, and they are much cheaper than corn.

    In fact, if US corn stays expensive because it is being used for ethanol, that might not be a bad thing, as we would collectively eat less of it, and less corn fed beef/pork, as I am far from convinced that the amount eaten is healthy for either man or beast.

     

    If higher food prices shine a spotlight on the cost of processing and delivering food, and the government’s social programs for low income earners, that is a good thing.  It gets much less attention than does fuel prices, which as your charts show, are far less important.

     

    Now, as for the BC carbon tax, that is a great chart, which I have not seen before.  The “tax neutral” result is pretty good.  The only problem is that the tax is about an order of magnitude too low to actually make any significant changes in carbon consumption/offsetting.  A tax that pays out as much as it earns, but does not make the behaviour change it was supposed to make, is not worth having.

    And, as much as the fuel/carbon taxes are a great idea on paper, the problem is, that for North America anyway, they are very unlikely to ever be introduced at levels high enough to make a real difference.

     

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  76. By savro on October 20, 2010 at 9:57 am

    Paul N said:

    Sam may be able to explain a better way, but here is how I do it;

     

    You need to open an account with a photo sharing site like Flickr, or Google’s  Picasa (what I use).  You can then copy any images you find, or create (like excel graphs) and upload them to that site.   


     

    You do not need to open an account on Flick or Picasa. The easiest way is to upload your chart or image to imgur which does not require you to open an account with them.

    When pasting the URL into the image embed button on CER, make sure that you are linking directly to the image (it should end in .jpg, .jpeg etc.) and not just to a page which has the image plus some other information displayed.

    It’s also possible to upload the image directly to our servers, but that’s a little more complicated. The easiest way is through imgur which takes all of 20 seconds once you get used to it.

    As Paul said, you will need to register here on CER in order to embed images.

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  77. By Kit P on October 20, 2010 at 4:08 pm

    “Yes, it’s tough being poor, but I’m sure it was much worse for our grandparents in the Depression.”

     

    Are you sure?  My mother who grew up during the depression always said you could not be poor if you lived in a town with a good library.  

     

    Start by checking out,

     

    “Seventy-five years ago, a St. Louis widow named Irma Rombauer took her life savings and self-published a book called The Joy of Cooking. ….Joy of Cooking – selected by The New York Public Library as one of the 150 most important and influential books of the twentieth century – has taught tens of millions of people to cook, helped feed and… delight millions beyond that, answered countless kitchen and food questions,”

     

    One of the important lessons of life is get in line first at the potluck if you want some of my green bean casserole.  The recipe was on the back of a soup can but that never that it was not a favorite.  Oatmeal cookies cost next to nothing and the recipe was on the back of a Quaker Oats box.

     

    The point here is that Ron did not post a graph that measures measure pride and joy of being self reliant.  

     

    “I am saying they buy a lot of junk foods”

     

    What I see in Ron’s and Paul’s post is buried judgmental BS where they are worried about how others live and how to keep them from ‘wasting’ energy.  They know how to take care of the poor.  Trust them!

     

    “after seven people died of Ecoli in water elsewhere in Canada”

     

    Caused by gross negligence on the part of one public safety official and not lack of spending on infrastructure. 

     

    “They could introduce radical new technology like letting the cattle walk around and graze (that saves oil too),”

     

    Do you have any idea of the environmental impact of that?  Paul has a good plan to screw up the environment and make sure that the city poor can no longer afford meat.  

      

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  78. By ronald-steenblik on October 20, 2010 at 5:15 pm

    Paul, you wrote:

    Yes, I have strong views about the value that people put on food and water compared to other things.  …  But to have clean, safe food (and water) available where and when you want it, does not come for free. … As with gasoline, I prefer food to have a real price, and then help those who can’t afford it, rather than keep the price artificially low that is then subsidising those who can afford it.

    Paul, we agree that, in most cases, things should be priced at their real price, if possible taking into account externalities. But your argument was not simply one of eliminating policies that artificially depress prices. Rather, you wrote:

    In fact, if US corn stays expensive because it is being used for ethanol, that might not be a bad thing, as we would collectively eat less of it, and less corn-fed beef and pork, as I am far from convinced that the amount eaten is healthy for either man or beast.

    Whoa! Unless you are advocating vegetarianism, then what we are talking about here is your notion of an optimal level of consumption of meat. This is not like externalities associated with, say, the consumption of gasoline, which generally are negative no matter how much is consumed. Rather, there are negative implications for the individuals consuming the item, which increase the further from their optimal consumption level. At a stretch, one could argue that, in a country with socialized medicine, dealing with the health consequences of individuals who over- or under-consume certain foods also has a bearing on other contributors to the social-security system.

    Ignorring the implications your suggestion has for freedom of choice, trying to achieve the optimal level of consumption through increasing the prices of food commodities is a blunt instrument indeed — about as poorly targeted at the root problem that one could imagine. But, at least if the instrument of the price increase were a tax, society (via the government) stands a chance of getting something in return. The instrument that you applaud, an artificial increase in the price of corn through policies that stimulate the demand for that corn for fuel, does not even do that: in the short term, it leads to a pure wealth transfer to farmers, the bulk of whom have higher average incomes than the average American. In the longer term, it raises the price of farmland and encourages the conversion of land that used to grow other crops (or pasture) to corn. So, you achieve artificial asset-price inflation, and possibly a reduction in the kinds of alternatives to corn that you say you want to encourage.

    The United States used to produce a lot more oats and wheat. Acreage planted to these crops have steady declined over time in exchange for corn. Why? Because policies made corn growing relatively more profitable.

    Three years ago, on Grist, I posted a link to an article about a group of Hmong farmers who were finding it increasingly difficult to be able to make the rental payments on land they had rented from a local corn farmer, and which they were using to grow organic vegetables for sale to local markets. The article is no longer available, but here is an exerpt from my posting:

    Hmong farmers, who immigrated to the U.S. after the Vietnam War, grow vegetables using organic and biodynamic techniques on rented land in Minnesota. With the ethanol boom driving up demand for corn, the landowners are pushing the Hmong out, even though their farms are three times more profitable than a typical Minnesota farm. (I presume the writer meant, “even though, prior to the ethanol boom, their farms WERE three times more profitable than a typical Minnesota farm.”)

    The point is: if your concern is obesity, or malnutrition, address those problems more directly. If you think people whould be willing to buy more organic (or some other kind of food), the last policy you should be wanting to encourage is one that helps corn crowd out those other crops.

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  79. By paul-n on October 22, 2010 at 4:01 am

    Kit, the water incident I refer to (Walkerton Ontario) was indeed caused by the gross negligence of one idiot.  It also prompted the BC government to institute new standards for water treatment, of which my system (I had been in charge of for six weeks) did not meet, and needed a proper filtration system and continuous turbidity monitoring system with alarm.  Under BC law, for non municipal water systems, the cost of that MUST be recovered through the water rates.  The government’s reasoning being that a system that does not generate enough revenue to maintain itself, and meet the appropriate standards, is not viable, and will eventually lead to a failure – I agree with that, though my customers did not, and were firmly of the opinion it should be “free”  .

     

    AS for for the farming,  well, open range and fenced field cattle grazing has been around for as long as cattle have been domesticated, (several thousands of years) , so I think it has proven itself to be sustainable.  I did walk through a cattle farm in England that had been doing so continuously since 1690 – it looked in pretty good shape.  Granted, a poorly managed grazing operation can cause degradation of land and water, but a poorly managed feedlot can do even more.

    An interesting look at a “new” way to reduce soil erosion and improve soil fertility, by “overgrazing”  (actually strip grazing)  here.

     

    @ Ron, 

    Unless you are advocating vegetarianism, then what we are talking about here is your notion of an optimal level of consumption of meat.

    Actually I am saying that cattle, like people, are healthier when not fed excessive amounts of starch.  Cattle are designed for cellulose, and even DDG’s from corn distilling are healthier than the corn itself.  But grass fed beef not only tastes better (in my opinion), it is also healthier.  Has less fat overall, high levels of Omega 3′s,and so on (eaxmple here). When I was growing up on the farm, we got given a half ton truckload of surplus wheat, from a neighbour, who suggested we use it to feed our chickens (which we let run all over the place)  We actually had a new batch hatch, and we kept most of them penned, and fed on wheat.  The chickens grew faster, but we all agreed they did not taste as good as the free range ones, and the hens, when laying eggs, their eggs were not as yellow, or firm, and when making my Pavllova (an Australian meringue type dessert), did not beat up nearly as well (duck eggs whip up better still, but that’s another story.  Our local butcher, who had had been doing meat for 35 yrs, was also of the opinion that the grass fed stuff was better.  Cattle farmers in our area also found they had less health issues with grass fed cattle.

     

    The United States used to produce a lot more oats and wheat. Acreage planted to these crops have steady declined over time in exchange for corn. Why? Because policies made corn growing relatively more profitable.

    I will disagree with you here.  The reason why oats was grown was mainly as horse feed, in the days when horses were used instead of tractors.  Post WW2, oat production declined steadily.  Even “peak oats” in the 50′s, was not as much corn as was grown in the 1860′s!

    Wheat has steadily risen until 1981 and has been static since then – that may be due to corn being more profitable.  The other feed grains, sorghum and barley have declined from the 90′s onwards, certainly displaced by corn, but this trend started a decade before the ethanol mandate was in place.

    this chart certainly shows why, in the US, corn is, and always has been, King!

    There is lots of cropland set aside in the us curently, and, if people look, they can find land to grow stuff.  However, that land may not be where they live now, or conveniently near a city, or have irrigation water available – all those lands are probably being used already, so the Hmong farmers will  have to crowd something else out, or got to where there isn’t something else already.

    The main thing driving up farmland prices in BC, is he chance to convert the farmland into residential development property, or “hobby farms”.  Nothing really to do with gov policies there, just that most (arable) farmland here is also nice land to live on, and thus gets sold to the highest bidder, as you would expect.  someone who does not need to make a living off that land can pay more for it than someone who does.  In the real farming area of Canada (prairies) , there is still plenty of land to be had, but, as in the US, if you want the good stuff, you will pay.  Or else buy it cheap and improve it. In the case of growing vegetables, there are good reasons why many farmers use greenhouses, more productive and you can start with cheap land.

     

    My original point, now lost in all these other things, is that if people cannot afford food, in the US, it is not because the price of food is too high, it is because they spend their money/food stamps on other things before buying enough (real) food.

    I do not think a change in the corn price of from 6 to 10c per lb ($3 to$5/bu) is really going to make much difference.

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  80. By ronald-steenblik on October 22, 2010 at 10:45 am

    And my point, Paul, is you keep talking only about the United States (and a little bit about Canada). But, since you only want to focus on these countries, then fine, I’ll stick to talking about only them in this string.

    I did not say that the decline in oats production in the United States (I was speaking of recent years, not the decline in consumption for horse feed) was due to ethanol-support policies, but to policies that have made other crops more profitable. Here is a quote from an article from twenty years ago, ”Farm program effects on the U.S. oats industry – includes related article on the price support program for rye“, National Food Review, Jan-March, 1990 by Linwood Hoffman, Mark Ash:

    In marketing year 1988/89, about 67 percent of all oats consumed as grain in the United States, both on and off farm, was livestock feed (table 1). Food and seed uses claimed most of the remainder, about 22 percent and 11 percent, respectively. Exports were insignificant.

    The importance of imports has been growing. Between 1950/51 and 1986/87, they were a small percentage of supply, ranging from 1 to 5 percent. However, the 46 million bushels imported in 1987 accounted for 8 percent of supply. The estimated 68 million bushels imported in 1988 equaled 17 percent of supply.

    One reason for the decline in production is that oats have become less profitable compared with other crops, such as corn, soybeans, wheat, and recently, barley. Government farm programs have allegedly provided some of the disincentive for producing oats.

    Wheat production grew strongly post WW-2, but has been declining on average since 1980 (see graphic).

    Here is the USDA’s latest projection of wheat acres. Yields may continue to improve. But the area planted has been declining in recent years, and the USDA expects it to decline further.

     

    Kansas used to be a predominantly wheat-producing state. Now it grows almost as much corn (in rotation with soybeans) as wheat. In North Dakota, the share of wheat plantings in total broad-acre grain plantings has falleen from around 80% in 2000 to 60% today. We are looking at MAJOR transformations in the U.S. agricultural economy.

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  81. By Kit P on October 22, 2010 at 12:01 pm

    “I agree with
    that, though my customers did not, and were firmly of the opinion it
    should be “free”

     

    Pual, tell them to get over it.  I know people who
    think electricity should be free and that investors should pay for
    pollution control equipment. I think teachers and dentist should
    provide there services for free too.

     

    “I did walk
    through a cattle farm in England that had been doing so continuously
    since 1690..”

     

    Wow Paul, sounds
    like you are advocating aristocrats with gout and malnutrition for
    the masses. Care to think where you would have fit into the system
    in 1690. I have walked down a 100,000 head feedlot with a zero
    discharge CWA NPDES permit in semi-arid Washington State. Next door
    there was a meat packing plant and surrounded by wheat fields. The
    rail road goes right by too. Care to estimate how many can now
    afford beef from this relatively small operation. Just for the
    record all CAFOs in the US require CWA NPDES permits.

     

    “but a poorly
    managed feedlot”

     

    Which do you think
    is more likely to be poorly managed, regulated big business or small
    operations that just let cows dump in the creek?

     

    “so I think it has
    proven itself to be sustainable.’

     

    You are kidding
    right? You want to think about that again. Past practices in the
    semi-arid inter mountain western North America had a devastating
    effect that are just now being understood. If you are interested in
    how wonderful the old good days before Euro trash spoiled everything,
    read the journals of Lewis and Clark. Life was brutal waiting for
    the salmon runs or following the migration Buffalo.

     

    All the watermelons
    who envision a sustainable world think there place is will be the
    King and forget about the paupers. I envision a world of 9 billion
    well fed people with clean drink traveling to new places on the
    Internet. If industrial agriculture regulated to the hilt is what it
    takes so be it.

     

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  82. By paul-n on October 22, 2010 at 11:24 pm

    Ron, given that this discussion started out on the topic of ethanol I think the US focus is appropriate.  I also think that any country, that plans food policies based in any way imports from US is asking for trouble – it will, in effect, make their domestic situation subject to US price fluctuations, not their own needs.  The example of Haiti comes to mind.

    There is equally no question that corn has increased at the expense of other grains, but I am not sure there is anything explicitly wrong with that.  If it is the most profitable product for the farmers, who can blame them?  Govt policies have certainly helped this, and that is the gov’ts perogative to do that, for better or for worse.  There is still enough wheat for everyone to have bread and pasta, enough barley for beer, enough oats for the horses and my porridge, etc etc.

    Whatever else we may say, the US policies have long ensured that country is net self sufficient for food.  If all the other countries of the world could achieve just that, the world would be a much better place.

     

    Kit,  the particular cattle farm in England had been granted to this particular family, of then “peasants” by the aristocrats in 1690 – some kind of reward for service – an concept used from Julius Ceasar to today.  Not all landowners are the landed gentry.  I will maintain that the fact they have done for three centuries, and maintained their land in good condition shows that it is sustainable.  

    Which do you think
    is more likely to be poorly managed, regulated big business or small
    operations that just let cows dump in the creek?

    I think it is more likely that a poorly managed version of either will cause trouble, and a well managed version of either won’t.  

    We shouldn’t assume that small, free range operations are the only ones caapcble of polluting creeks;

    http://www.wallacesfarmer.com/…..ns/9/39246

    Bruce Feedlot of Hastings in southwest Iowa has agreed to pay a $31,573 civil penalty for its unauthorized discharges of pollutants into Indian Creek and its tributaries in Mills County.

    The fact that some irresponsible farmers may do it wrong,  does not mean it can’t be done right.  The fact that some feedlots do it wrong, also does not mean it cant be done right, as in your example.  My original point was, if cattle farmers do not want to suffer high corn prices for feed, there are other ways to raise cattle.  The feedlot model has been the most profitable, hence its proliferation, while corn is cheap.  If corn gets, and stays, expensive, then other methods, or other feeds, will become more competitive – nothing wrong there, the cattle guys will adapt, and people (myself included) will keep eating beef, even at twice the price.

    If industrial agriculture regulated to the hilt is what it
    takes so be it.

    I don’t disagree with that, though, in reality, all agriculture should be subjected to the same rules – even a small organic farm does not have the right to pollute waterways.  That does not mean that all agriculture should be industrial, though this is generally the most profitable.

    As for other other countries, some better regulation is what they need, among other things, like honest government.  There are many examples there (e.g. Zimbabwe) where the small, family model has been disastrous.  But the industrial model, if ineptly managed, as some of those countries will do, will fare little better.  

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  83. By ronald-steenblik on October 23, 2010 at 8:25 am

    Paul wrote:

    Ron, given that this discussion started out on the topic of ethanol I think the US focus is appropriate.

    On this we disagree: once the discussion turns to food prices, a US focus is parochial. There is a world market out there for food commodities, and what the United States affects prices on the other side of the world.

    I also think that any country, that plans food policies based in any way imports from US is asking for trouble – it will, in effect, make their domestic situation subject to US price fluctuations, not their own needs.  The example of Haiti comes to mind.

    Great. To hell with stupid Hong Kong and Singapore, which can’t become self-sufficient in food. And let’s ignore Haiti. They’ve had such bad government. Pity that it will take years for them to restore their soil, but that’s their problem, eh? 

    Not only countries that import grains from the United States are affected by changes in U.S. export prices. In global markets, price changes infiltrate into all transactions.

    Govt policies have certainly helped this, and that is the gov’ts perogative to do that, for better or for worse.

    Gee, it is the government’s perogative to set policies. So, end of story. I guess we live in the best of all possible worlds, led by the most intelligent and perfect policy makers, so there is no point in discussing policies any further.

    There is still enough wheat for everyone to have bread and pasta, enough barley for beer, enough oats for the horses and my porridge, etc etc.

    Enough for you and me, sure. Enough for everyone? No. It is the poorest in the world who first start rationing their consumption, turning to less digestible fare to keep their stomaches full. Mud pies anyone?

     

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  84. By Kit P on October 23, 2010 at 12:54 pm

    “I don’t disagree
    with that, though, in reality, all agriculture should be
    subjected to the same rules – even a small organic farm does not
    have the right to pollute waterways.”

     

     

    One of the things I
    noticed when I walked down and talked too about 50 farming operators,
    small organic farmers where all loons who did not know much about
    what they were doing. Larger organic farm operation had an
    agronomist on staff or retainer to manage soil issues.

     

    The big
    multinational energy company that I developed renewable energy for
    had an agronomist on retainer who was an organic fertilizer expert.
    You can learn a lot listing to agronomists talk as they walk down a
    field. Industrial ecology is basically looking at what nature does
    very well and do it on an industrial scale.

     

    “Great. To hell
    with stupid Hong Kong and Singapore, which can’t become
    self-sufficient in food.”

     

    I am not hearing
    anyone one saying that. So Ron if you want to send people on a guilt
    trip the least you can do is give us a concrete what we should
    change. How often do we hear politicians campaign on a platform of
    change but neglects to tell us what the new course will be. When the
    captain of a ship tells the helmsmen to turn starboard 5 degrees, it
    is followed with steady up on 270. To avoid cutting the ferry in
    half, five people should have yelled ‘captain do you see the ferry?’
    but they all assumed he knew what he was doing.

     

    “Enough for
    everyone?”

     

    You bet, I see no
    problem producing enough food and energy to meet the needs of
    everyone. Sure many in China and North Korea do not have food and
    electricity but I suspect the root cause is 60 years of repressive
    government policies by the leaders of those countries. Furthermore,
    when PNW apples growers are being put out of business by cheap
    imports from China, I have to wonder why they are having trouble
    feeding there own populations.

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