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Posts tagged “ethanol subsidies”

By Robert Rapier on Sep 26, 2009 with no responses

Does Ethanol Reduce Petroleum Imports?

One of the main arguments in favor of ethanol production in the U.S. is that it supports the goals of energy independence by getting us off of foreign oil. After all, we could just tell the entire Mideast to take a hike while we grow our own fuel. In fact, there have been some truly grandiose claims made around this theme. Of course if we are making more ethanol, we are importing less oil as a result. Right? Maybe not. Has anyone actually taken a good look? A couple of years ago, I looked at total gasoline consumption in an essay called The Mythical Ethanol Threat. My conclusion from that was that despite the rapid ramp up of ethanol, there… Continue»

By Robert Rapier on Jun 19, 2009 with 2 responses

Oil Companies Acquire More Ethanol Plants

As I noted in my essay Big Oil Buys Big Ethanol, I expected that we would see more oil companies buying up troubled ethanol assets. Per the Houston Chronicle, Sunoco has become the latest: Oil companies shop for discounted ethanol plants FULTON, N.Y. — When Sunoco closed this week on the acquisition of a bankrupt ethanol plant for pennies on the dollar, it became just the latest oil refiner to step into the alternative fuels market. Traditional refiners under pressure to reduce emissions are finding new avenues to meet evolving environmental standards, and finding big bargains along the way. However, I think the article largely misses the point of why these transactions are taking place: The plant is close to… Continue»

By Robert Rapier on Jun 7, 2009 with no responses

How to Calculate Ethanol’s Value

There was a comment following the previous post that claimed that ethanol producers are making money – minus subsidies – at $1.75 a gallon. I attempted to set the record straight in the comments, but I thought this was probably worth a post. The way the blender’s credit works is that gasoline blenders get a credit – recently reduced to $0.45/gal – against the federal gasoline taxes they have to pay for each gallon of ethanol blended into the gasoline pool. However, it is not true that this subsidy actually benefits the oil companies. Ethanol proponents like to make that claim, but any time there is talk of getting rid of the credit, they are the ones who scream loudly…. Continue»

By Robert Rapier on Jun 3, 2009 with no responses

Accoya, Ethanol, and an Anniversary

Coming up I have a book review ready to go for Green Algae Strategy: End Oil Imports And Engineer Sustainable Food And Fuel. However, I will wait another day or so to put that out there. For now, I will just share a couple of interesting links that readers sent to me. On the topic of my current job, a reader just noted that TreeHugger has an article (and pictures) on the bridge in the Netherlands that I have mentioned a couple of times: Wood Bridge In Netherlands As Strong as Steel and a Lot Prettier Have I mentioned that I love wood as a building material? If sustainably harvested it provides a strong, beautiful material that can last for… Continue»

By Robert Rapier on Apr 10, 2009 with no responses

The 2009 EIA Energy Conference: Day 1

The Plenary I covered Energy Secretary Steven Chu’s comments in the previous post. Here, I will cover the rest of Day 1. This is not so much a comprehensive summary as it is a collection of observations and things I otherwise found to be interesting. My notes at times are spotty, so if someone was there and feels like this essay contains an error, please let me know. Following Chu’s talk, Professor William Nordhaus of Yale gave a talk entitled Energy and the Macroeconomy. I got called out during his talk, so I missed most of it. What I do remember him arguing is that oil embargoes are completely worthless, because oil is fungible. If Venezuela decided not to sell… Continue»

By Robert Rapier on Mar 17, 2009 with no responses

The WSJ Hates Ethanol

Actually, according to them everybody hates it:Everyone Hates Ethanol I can assure them that corn farmers, ethanol producers, and ethanol lobbyists don’t hate ethanol. But they are correct that a coalition of strange bedfellows has united in opposition to our ethanol policy. The article makes a lot of good points, but it is quite harsh: These days, it’s routine for businesses to fail, get rescued by the government, and then continue to fail. But ethanol, which survives only because of its iron lung of subsidies and mandates, is a special case. Naturally, the industry is demanding even more government life support. Corn ethanol producers — led by Wesley Clark, the retired general turned chairman of a new biofuels lobbying outfit… Continue»

By Robert Rapier on Dec 26, 2008 with no responses

Government and Industry Incompetence

I fear that gross incompetence in our federal and state governments – as well as in some of our major industries – is going to make life much more challenging for our children and grandchildren. The list this year alone is long. The financial sector took too many risks that didn’t pay off while showering their executives with huge bonuses, so they needed bailing out. We offered up a $700 billion (and counting) package. The auto industry got caught with big inventories of the wrong kinds of cars when oil prices skyrocketed. Another bailout. Then the SEC failed to act on tips that Bernie Madoff was in the process of frittering away $50 billion – and the taxpayer is going… Continue»

By Robert Rapier on Jul 4, 2008 with no responses

Show Me

I got a kick out of this story from the newest issue of Subsidy Watch: New research from Missouri refutes allegations that ethanol mandates save money A report from a Missouri-based research organization debunks the claim that Missourians are saving money through a state law requiring that retail gasoline contain a minimum of 10% ethanol. The report is in reaction to an assertion by the Missouri Corn Merchandising Association (MCMA), alleging that Missourians will save more than US$ 285 million through the E-10 mandate in 2008, and nearly US$ 2 billion over the following decade. The MCMA arrived at these numbers by taking the price difference between pure-grade gasoline and E-10 blended fuel, and multiplying it by Missouri’s projected annual… Continue»

By Robert Rapier on May 16, 2008 with no responses

Redundant Ethanol Subsidies

The proposed farm bill just sent to President Bush (and expected to be vetoed) contains several ethanol provisions. One is to cut the corn ethanol subsidy from $0.51/gal to $0.45/gal. Forbes explains: Ethanol For Everyone! It also includes $1 billion for energy-related programs, including several provisions related to ethanol and other biofuels. Notably, it reduces the tax credit paid to ethanol producers from 51 cents to 45 cents per gallon. The bill also establishes a sugar-to-ethanol program and includes a temporary tax credit of up to $1.01 per gallon for production of cellulosic ethanol, made from non-edible products like wood chips. “Now that the ethanol industry has matured, it is appropriate to curb the tax subsidy provided to ethanol,” says… Continue»

By Robert Rapier on Mar 11, 2008 with no responses

Farm Prices Headed North

What prompted my previous essay on the vicious circle that has been started was this story: Farmland prices continue to jump The latest results mirror a trend noted by the U.S. Department of Agriculture in an earlier report. USDA officials found that the average value of an acre of Wisconsin farmland, about $2,250 in 2002, had jumped to $3,366 in 2006, the last year for which data is available. That’s a nearly 50 percent increase. The appreciation was even more marked in the southwest corner of the state, where prices have increased fourfold in the last five years. Prices are “going through the roof,” said Ed Kraisinger, a real estate agent who markets farmland in Grant, Iowa, Lafayette and Sauk… Continue»