Posts tagged “Brazilian ethanol”
For those of you who missed it, the corn ethanol lobby failed to convince Congress to extend the ethanol import tariff (54 cents/gallon) as well as the blenders tax credit (46 cents/gallon), which were slated to expire at the end of 2011 …sound of crickets chirping.
My guess is that because we exported almost 9% of our ethanol production last year, it was hard to argue that we still needed a tariff to protect us from Brazilian ethanol imports, especially since Brazil was our biggest customer. In a related vein, it should also be hard to argue that we mandate ethanol use to reduce oil imports while exporting ethanol to Canada (second largest customer and largest oil importer) as well as the United Arab Emirates (our fifth largest customer).
As for the tax credit, well, paying oil companies to blend something they were already legally mandated to blend never did make much sense, except maybe to the oil companies who were not about to look that gift horse in the mouth.
I woke up in Switzerland this morning after having spent the past 3 days in the Netherlands. Later today I travel to Germany. The weather here is cold. I love Europe, but do not miss riding my bike in rain that is 1 degree above freezing (as I had to do in the Netherlands on Tuesday). Switzerland is blanketed with snow; the country from the air looks like a Christmas card. I have been told that there is even more snow in Dresden, which is my next stop. I have been trying to keep up on energy news, and there have been some interesting developments. The previous essay has also hit the 200 comment mark (Blogger is clearly not designed… Continue»
A couple of years ago I was thinking about the possible fates of various nations in a world in which depleting oil reserves begin to have a very strong impact on oil prices. I had visions of $100+ oil and eventually $5-10 gasoline, which would place a crushing burden on the U.S. economy. Of course higher prices will motivate people to conserve (and will contribute to recession), and then you may find yourself in a situation in which the supply/demand balance once again tips toward excess supply (as we found ourselves in as oil approached $150/bbl). Prices fall. The economy starts to recover. What happens then? Prices rise, putting the brakes on recovery. This is what I postulated in The… Continue»
I have written previously about Brazil’s “ethanol miracle,” and the tendency of the media and various advocates to ignore facts and embrace hype: Lessons from Brazil Vinod Khosla Debunked There are two take home messages from those essays. First, ethanol provides a small fraction of Brazil’s transportation fuel, not 40% as is often reported. Second, the gap between supply and demand is gaping in the U.S., but very small in Brazil. Hence, ethanol is able to play a larger role in Brazil simply because Brazilians don’t use nearly as much energy as does the average American. But it is coming up on 3 years since I updated the numbers, and I have been asked how the numbers in Brazil stack… Continue»
Note that in the following essay, I am not trying to come down either for or against ethanol tariffs, but rather to discuss what I see as the key issues surrounding them. U.S. energy policy is slanted to favor U.S. farmers and ethanol producers, and I am merely trying to explain the tariffs within that context. ——————- You are probably aware that the U.S. imposes a $0.54/gallon tariff on ethanol that we import from Brazil. Brazil’s President Luiz Inacio Lula da Silva met with President Obama last week and implored him – in the name of a better environmental policy – to remove the “absurd tariffs on ethanol.” In response President Obama said the situation is “not going to change… Continue»
The following is an essay I wrote by request for another website. Regular readers won’t see anything they haven’t seen before, but I figured I would go ahead and post here as well. It is a condensed version of some of the topics I have hit here several times. ————————- Every president since Nixon has promised to make the U.S. energy independent. Yet each successive administration has seen us become ever more dependent upon fossil fuels extracted from foreign lands. Why does a noble goal such as energy independence elude the U.S.? Let’s investigate. Money Talks The U.S. is an energy hog. We are 5% of the world’s population, and we consume 25% of the world’s oil. We consume on… Continue»
As I traveled through India on a recent business trip, the topic of energy was constantly on my mind (as it is every time I travel). I found out some interesting things about jatropha, toured a sugarcane ethanol plant, found a wind farm in the middle of nowhere, and encountered a native ethanol skeptic. Here are my impressions. Ethanol in India: Another Brazil The highlight of my trip was definitely the tour of the Sanjivani sugar cane plant near Shirdi. This could be a model to the rest of the world (with some exceptions) regarding how ethanol should be produced, as they have the entire life cycle covered. They take in the sugarcane from local farmers, and they produce sugar…. Continue»
At least according to a new story in Time, which is a blistering critique of our ethanol policies. It also documents the change of heart that has taken place among some prominent ethanol boosters. The Clean Energy Scam In Brazil, for instance, only a tiny portion of the Amazon is being torn down to grow the sugarcane that fuels most Brazilian cars. More deforestation results from a chain reaction so vast it’s subtle: U.S. farmers are selling one-fifth of their corn to ethanol production, so U.S. soybean farmers are switching to corn, so Brazilian soybean farmers are expanding into cattle pastures, so Brazilian cattlemen are displaced to the Amazon. It’s the remorseless economics of commodities markets. It is a sobering… Continue»
A lot of people presume that technology is going to provide a nice, cost-effective solution to our energy problems. Who could blame them, when you have people like Ricardo Hausmann, the director of Harvard University’s Center for International Development telling them that it’s all true? Professor Hausmann expressed this view in an Op-Ed piece in Financial Times: Biofuels can match oil production Hausmann, like so many others, doesn’t have a clear understanding of just how much oil we actually consume. As I have pointed out before, the entire U.S. output of ethanol is only equivalent to a single mid-sized oil refinery. The scale difference is immense. And Hausmann’s article represents the kind of delusional thinking that runs rampant among those… Continue»
Dear CNN, Over the weekend, I watched your special report We Were Warned: Out of Gas. I had previously seen the original version, “Out of Oil”, and wrote to CNN at that time pointing out a number of inaccuracies in the report. (It appears that the transcript still reflects the earlier version). Those inaccuracies remain in the newer version, so again I feel compelled to point them out. While I think the overall message of the report is essential, you give critics ammunition by not having all of your facts in order. So let’s look at some points. First, we have Frank Sesno stating “Ethanol now accounts for nearly 40 percent of Brazil’s transportation fuel.” This is inaccurate. Diesel accounts… Continue»