Ethanol no image

Published on December 19th, 2008 | by Derek Markham

46

Environmental Groups Oppose Ethanol Bailout in Stimulus Package


Ethanol

Environmental groups and food producers oppose the Renewable Fuels Association’s requests for support from the stimulus package that includes $1 billion to finance current operations and a $50 billion federal loan guarantee, as well as job tax credits.

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The Clean Air Task Force, Environmental Working Group, Friends of Earth, and the Network for New Energy Choices released a statement today saying that federal government subsidies and mandates for corn-based ethanol produce potentially catastrophic consequences to the environment, and have no payback to taxpayers in terms of alleviating global warming effects, providing for energy security, or even simply reducing the cost of driving. The group’s stance:

“With evidence mounting that biofuels are worsening global warming and harming water quality and wildlife habitat, it makes no sense for the federal government to lavish billions more on an industry already flush with government assistance. It is time for ethanol to stand on its own.”

The spokesman for Renewable Fuels Association, Matt Hartwig, responded: “We are not asking for a bailout or anything like that.”

But environmental groups say that the ethanol industry already receives more federal support than any other renewable energy program. According to the EWG statement, two out of every three dollars that the government spends on what it calls renewable energy programs (including wind, solar, and geothermal) already goes to the ethanol industry.

“It’s utterly irresponsible to continue to expand this conventional biofuels industry.” – Craig Cox, Environmental Working Group

Food producers aren’t happy either, saying that America should be looking toward second generation solutions that don’t compete with the need to produce affordable food. “An additional $50 billion in government support for the corn ethanol industry will only calcify the status quo and reduce the urgency for innovation,” says Scott Openshaw, with the Grocery Manufacturers of America.

The RFA replied to the detractors, stating that “The RFA recognizes that by stimulating increased production, innovation, and investment in new technologies and cellulosic feedstocks, a revitalized renewable fuels industry can help bail out the flagging U.S. economy and lessen America’s dependence on foreign oil.”

Update: Just after finishing this post, I Tweeted it, and got a response from @nathanschock, saying “The environmental groups are opposing something that doesn’t exist.” He left a link to Biofuels Journal, which published this statement from RFA:

“America’s ethanol producers share the vision of President-elect Obama of a domestic industry that is innovating to include ethanol production from a wide array of materials including switchgrass, wood chips, and municipal solid waste.

That vision can only become a reality if today’s ethanol technologies and producers are successful. As such, the RFA is having discussions with the Obama team on how ethanol fits into a green stimulus package.

Today, ethanol is the only alternative transportation fuel having any impact reducing America’s dependence on foreign oil. Moreover, ethanol is uniquely poised to employ new technologies and scale up production significantly in the short term to greatly reduce imports of foreign oil and more meaningfully help address the issue of global warming.

Ethanol production must be at the core of any green initiatives designed to reduce foreign oil dependence, create economic opportunity, and address climate change by changing how Americans fuel their cars.”

I disagree with @nathanschock. Asking for one billion dollars to continue operating sounds like a bailout to me.

Image: Aunt Owwee at Flickr under Creative Commons




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About the Author

lives in southwestern New Mexico and digs bicycles, simple living, organic gardening, sustainable lifestyle design, slacklining, bouldering, and permaculture. He loves good food, with fresh roasted chiles at the top of his list of favorites. Catch up with Derek on Twitter, RebelMouse, Google+, or at his natural parenting site, Natural Papa!



  • Jeff Baker

    The Real Next Generation Ethanol:

    Today, demand for ethanol is restricted by the “blending wall” and how much gasoline is being pumped. We want to make more ethanol, but there aren’t enough flex-fueled vehicles on the road to consume it. Increasing the blending wall is a good short term solution for increasing ethanol demand. But then what? Will the EPA continue to inhibit ethanol growth? Will production of ethanol continue to be restricted, because only a certain percentage is allowed in gasoline? Or could new technology create unlimited growth and demand? Hold that thought.

    Corn ethanol is not only a fuel, it’s also a food production system. The byproducts of corn ethanol, distillers grains, supplement a huge dairy feeding, cattle feeding, poultry feeding, and fish feeding system, and export business. Corn cobs are made into cellulose ethanol. Corn oil goes to food or fuel. GreenShift is extracting surplus corn oil from distiller’s grains at 4 locations, and they’re building 12 more sites, enough crude oil to make 20 million gallons of biodiesel a year. We only make ethanol and distillers grains from about a third of the feed corn crop. That would yield 580 Million gallons of biodiesel every year. Make ethanol and distillers grains from the entire feed corn crop, and you would get roughly 30 Billion gallons of ethanol and 2 Billion gallons of biodiesel, without additional corn acreage. And now, with Algae in the fast lane, even the waste products of corn ethanol production are valuable. Could existing corn ethanol plants become the foundation for a much bigger biofuel industry?

    Recently, it was announced that ALGAE will be grown on ethanol waste products: CO2, nutrient rich effluent, and waste heat. This is a joint venture between Green Plains Renewable Energy (a corn ethanol production company) and BioProcess Algae LLC (an algae production company). Wayne Hoovestol, Chief Executive Officer said: “Algae is potentially a by-product of ethanol that makes the process cleaner and greener through carbon sequestration…Algae production fits into Green Plains’ business model since we are already in the business of marketing biofuel and feed products.” BioProcess Algae will be produced at Green Plains’ ethanol plant in Shenandoah, Iowa, from the plant’s CO2, waste heat, and nutrient rich effluent water, all of which algae thrives on.

    Biodiesel will be made from algae oil, ethanol from algae starch, and animal feed from algae protein. If biodiesel is the main objective, then an oil rich strain of algae will be grown. If ethanol is the priority, then a strain of algae, up to 96% starch will be grown. Or if animal feed is the primary goal, 60% high protein algae strains such as chlorella or spirulina (also used for human consumption) will be produced and marketed alongside distiller’s grains. All exploited from the waste products of an existing fuel and feed infrastructure. Algae production integrated into corn ethanol refineries will dramatically improve the profitability and the energy balance of the fuel.

    We currently have 240 million vehicles on the road valued at $6 Trillion, consuming liquid fuels. And, over 95% of the new vehicles being built also run on liquid fuel. These vehicles consume roughly 140 Billion gallons of gasoline, 60 Billion gallons of diesel fuel, and 9 Billion gallons of ethanol every year. Although E-85 (normally cheaper than gasoline) can be used in some of these vehicles, overall consumption is limited by the small percentage of flex-fuel vehicles on the road, by less than 2,000 pumps, and by lower mpg. Flex-fuel mandates and high compression, turbo-charged engines optimized for ethanol, coming in the next few years, may change that.

    What is more significant right now is the phenomenal spread of retail blender pumps that mix E-20, E-30, and E-40 from locally produced ethanol. Blending ethanol at the pump is becoming popular, because many people have discovered the MPG sweet spot of their particular engine. Some people are actually getting better mileage and more power on E-20 and E-30 than they get on regular gasoline. And the fuel is much cheaper, because the shipping cost of locally made ethanol is much lower, and because part of the 51 cent per gallon ethanol blending subsidy is being passed on to consumers.

    Still, blending ethanol with gasoline may continue to restrict its growth for years to come. Some auto makers are finding a way around that. Suzuki and several others are introducing vehicles that’ll run from zero to 100% pure ethanol. Now the issue will be: Where can you pump pure ethanol? This is a new beginning for the fuel’s liberation from gasoline, back from the days of Henry Ford’s Model A, which ran on 82% ethanol and 18% water.

    Is there a higher use for ethanol than blending it with gasoline? Note the higher octane, the fabulous flame speed, the ultra fast vaporization rate, and the unique way that the hydrogen bonds change when ethanol combines with water. We want to exploit these characteristics. Did you know that if ethanol is mixed in a 50-50 solution with water and then vaporized, it will still combust?

    Missing from the current debate is the REAL Next Generation Ethanol, a solution of 2/3 ethanol and 1/3 water. Ethanol-water technology is a basic, inexpensive, onboard reformer that converts the solution into hydrogen, on a conventional ICE engine or coupled with a fuel cell. This is now being demonstrated by DongFeng, a major Chinese automaker, although the original process seems to have been created in 2004 by Lanny Schmidt, Chemical Engineering Professor at the University of Minnesota. Professor Schmidt published a scientific paper in Science magazine called “Renewable Hydrogen from Ethanol by Autothermal Reforming.”

    The 2/3 ethanol 1/3 water reformer is remarkable. It produces a stream of hydrogen instantaneously, using very little energy. It is self-powered from byproducts of the reforming process. And, not only does it strip all the hydrogen from the hydrogen rich ethanol, it also strips half the hydrogen from the water.

    ITM Power has a device that converts internal combustion engines to run on either gasoline or hydrogen (with the flick of a switch). Combine this device with an onboard reformer, and you can convert existing vehicles to run on hydrogen made from ethanol and water.

    As a cheap source of hydrogen, a liquid fuel such as ethanol-water is safe. It can be carried in a conventional liquid fuel tank. It does Not have to be hyper-compressed into expensive high pressure hydrogen tanks, with couplings and hoses that might eventually spring leaks and become problematic. Shipping and handing ethanol-water is cheaper, easier, and safer than shipping and handling bulky, invisible hydrogen. “Hydrogen on Demand” from liquid ethanol-water carried on the vehicle may prove to be the most practical and the most efficient way to power internal combustion engines and fuel cells. Efficient because the ethanol distillation cost is cut in half with 1/3 water left in solution. And because 20% additional hydrogen is coming from the water. This will also dramatically improve the energy balance of ethanol and lower the cost, especially when used in fuel cells, which are almost 3 times more efficient than internal combustion engines.

    This is how we can produce massive quantities of domestic biofuel and solve our liquid fuel demand. We could partially distill the ethanol, leaving 1/3 water in solution with the fuel. We could adapt ALL of our over 200 ethanol refineries to produce Algae from their waste products. And from the algae, produce more biodiesel, more ethanol, and more high protein algae feed.

    Biodiesel made at or near algae-corn ethanol plants would supply long haul truckers and local farmers with cheaper fuel. Then a transition would be made to high torque hydrogen fuel cell electric tractors and long haul trucks, developed to run on ethanol-water. For next generation cars and light trucks, Plug-in Electric Hybrids equipped with internal combustion engines and then fuel cells could also be powered with ethanol-water.

    Ethanol demand would no longer be restricted by gasoline. Conventional vehicles with internal combustion engines would phase-out over a 20 year period, as fuel cells mated to plug-in electric hybrids replace them. With this technology, we consume domestic ethanol and water, instead of gasoline and foreign oil.

    Open Source, Publish Freely, Jeff Baker

  • Jeff Baker

    The Real Next Generation Ethanol:

    Today, demand for ethanol is restricted by the “blending wall” and how much gasoline is being pumped. We want to make more ethanol, but there aren’t enough flex-fueled vehicles on the road to consume it. Increasing the blending wall is a good short term solution for increasing ethanol demand. But then what? Will the EPA continue to inhibit ethanol growth? Will production of ethanol continue to be restricted, because only a certain percentage is allowed in gasoline? Or could new technology create unlimited growth and demand? Hold that thought.

    Corn ethanol is not only a fuel, it’s also a food production system. The byproducts of corn ethanol, distillers grains, supplement a huge dairy feeding, cattle feeding, poultry feeding, and fish feeding system, and export business. Corn cobs are made into cellulose ethanol. Corn oil goes to food or fuel. GreenShift is extracting surplus corn oil from distiller’s grains at 4 locations, and they’re building 12 more sites, enough crude oil to make 20 million gallons of biodiesel a year. We only make ethanol and distillers grains from about a third of the feed corn crop. That would yield 580 Million gallons of biodiesel every year. Make ethanol and distillers grains from the entire feed corn crop, and you would get roughly 30 Billion gallons of ethanol and 2 Billion gallons of biodiesel, without additional corn acreage. And now, with Algae in the fast lane, even the waste products of corn ethanol production are valuable. Could existing corn ethanol plants become the foundation for a much bigger biofuel industry?

    Recently, it was announced that ALGAE will be grown on ethanol waste products: CO2, nutrient rich effluent, and waste heat. This is a joint venture between Green Plains Renewable Energy (a corn ethanol production company) and BioProcess Algae LLC (an algae production company). Wayne Hoovestol, Chief Executive Officer said: “Algae is potentially a by-product of ethanol that makes the process cleaner and greener through carbon sequestration…Algae production fits into Green Plains’ business model since we are already in the business of marketing biofuel and feed products.” BioProcess Algae will be produced at Green Plains’ ethanol plant in Shenandoah, Iowa, from the plant’s CO2, waste heat, and nutrient rich effluent water, all of which algae thrives on.

    Biodiesel will be made from algae oil, ethanol from algae starch, and animal feed from algae protein. If biodiesel is the main objective, then an oil rich strain of algae will be grown. If ethanol is the priority, then a strain of algae, up to 96% starch will be grown. Or if animal feed is the primary goal, 60% high protein algae strains such as chlorella or spirulina (also used for human consumption) will be produced and marketed alongside distiller’s grains. All exploited from the waste products of an existing fuel and feed infrastructure. Algae production integrated into corn ethanol refineries will dramatically improve the profitability and the energy balance of the fuel.

    We currently have 240 million vehicles on the road valued at $6 Trillion, consuming liquid fuels. And, over 95% of the new vehicles being built also run on liquid fuel. These vehicles consume roughly 140 Billion gallons of gasoline, 60 Billion gallons of diesel fuel, and 9 Billion gallons of ethanol every year. Although E-85 (normally cheaper than gasoline) can be used in some of these vehicles, overall consumption is limited by the small percentage of flex-fuel vehicles on the road, by less than 2,000 pumps, and by lower mpg. Flex-fuel mandates and high compression, turbo-charged engines optimized for ethanol, coming in the next few years, may change that.

    What is more significant right now is the phenomenal spread of retail blender pumps that mix E-20, E-30, and E-40 from locally produced ethanol. Blending ethanol at the pump is becoming popular, because many people have discovered the MPG sweet spot of their particular engine. Some people are actually getting better mileage and more power on E-20 and E-30 than they get on regular gasoline. And the fuel is much cheaper, because the shipping cost of locally made ethanol is much lower, and because part of the 51 cent per gallon ethanol blending subsidy is being passed on to consumers.

    Still, blending ethanol with gasoline may continue to restrict its growth for years to come. Some auto makers are finding a way around that. Suzuki and several others are introducing vehicles that’ll run from zero to 100% pure ethanol. Now the issue will be: Where can you pump pure ethanol? This is a new beginning for the fuel’s liberation from gasoline, back from the days of Henry Ford’s Model A, which ran on 82% ethanol and 18% water.

    Is there a higher use for ethanol than blending it with gasoline? Note the higher octane, the fabulous flame speed, the ultra fast vaporization rate, and the unique way that the hydrogen bonds change when ethanol combines with water. We want to exploit these characteristics. Did you know that if ethanol is mixed in a 50-50 solution with water and then vaporized, it will still combust?

    Missing from the current debate is the REAL Next Generation Ethanol, a solution of 2/3 ethanol and 1/3 water. Ethanol-water technology is a basic, inexpensive, onboard reformer that converts the solution into hydrogen, on a conventional ICE engine or coupled with a fuel cell. This is now being demonstrated by DongFeng, a major Chinese automaker, although the original process seems to have been created in 2004 by Lanny Schmidt, Chemical Engineering Professor at the University of Minnesota. Professor Schmidt published a scientific paper in Science magazine called “Renewable Hydrogen from Ethanol by Autothermal Reforming.”

    The 2/3 ethanol 1/3 water reformer is remarkable. It produces a stream of hydrogen instantaneously, using very little energy. It is self-powered from byproducts of the reforming process. And, not only does it strip all the hydrogen from the hydrogen rich ethanol, it also strips half the hydrogen from the water.

    ITM Power has a device that converts internal combustion engines to run on either gasoline or hydrogen (with the flick of a switch). Combine this device with an onboard reformer, and you can convert existing vehicles to run on hydrogen made from ethanol and water.

    As a cheap source of hydrogen, a liquid fuel such as ethanol-water is safe. It can be carried in a conventional liquid fuel tank. It does Not have to be hyper-compressed into expensive high pressure hydrogen tanks, with couplings and hoses that might eventually spring leaks and become problematic. Shipping and handing ethanol-water is cheaper, easier, and safer than shipping and handling bulky, invisible hydrogen. “Hydrogen on Demand” from liquid ethanol-water carried on the vehicle may prove to be the most practical and the most efficient way to power internal combustion engines and fuel cells. Efficient because the ethanol distillation cost is cut in half with 1/3 water left in solution. And because 20% additional hydrogen is coming from the water. This will also dramatically improve the energy balance of ethanol and lower the cost, especially when used in fuel cells, which are almost 3 times more efficient than internal combustion engines.

    This is how we can produce massive quantities of domestic biofuel and solve our liquid fuel demand. We could partially distill the ethanol, leaving 1/3 water in solution with the fuel. We could adapt ALL of our over 200 ethanol refineries to produce Algae from their waste products. And from the algae, produce more biodiesel, more ethanol, and more high protein algae feed.

    Biodiesel made at or near algae-corn ethanol plants would supply long haul truckers and local farmers with cheaper fuel. Then a transition would be made to high torque hydrogen fuel cell electric tractors and long haul trucks, developed to run on ethanol-water. For next generation cars and light trucks, Plug-in Electric Hybrids equipped with internal combustion engines and then fuel cells could also be powered with ethanol-water.

    Ethanol demand would no longer be restricted by gasoline. Conventional vehicles with internal combustion engines would phase-out over a 20 year period, as fuel cells mated to plug-in electric hybrids replace them. With this technology, we consume domestic ethanol and water, instead of gasoline and foreign oil.

    Open Source, Publish Freely, Jeff Baker

  • Jeff Baker

    The Real Next Generation Ethanol:

    Today, demand for ethanol is restricted by the “blending wall” and how much gasoline is being pumped. We want to make more ethanol, but there aren’t enough flex-fueled vehicles on the road to consume it. Increasing the blending wall is a good short term solution for increasing ethanol demand. But then what? Will the EPA continue to inhibit ethanol growth? Will production of ethanol continue to be restricted, because only a certain percentage is allowed in gasoline? Or could new technology create unlimited growth and demand? Hold that thought.

    Corn ethanol is not only a fuel, it’s also a food production system. The byproducts of corn ethanol, distillers grains, supplement a huge dairy feeding, cattle feeding, poultry feeding, and fish feeding system, and export business. Corn cobs are made into cellulose ethanol. Corn oil goes to food or fuel. GreenShift is extracting surplus corn oil from distiller’s grains at 4 locations, and they’re building 12 more sites, enough crude oil to make 20 million gallons of biodiesel a year. We only make ethanol and distillers grains from about a third of the feed corn crop. That would yield 580 Million gallons of biodiesel every year. Make ethanol and distillers grains from the entire feed corn crop, and you would get roughly 30 Billion gallons of ethanol and 2 Billion gallons of biodiesel, without additional corn acreage. And now, with Algae in the fast lane, even the waste products of corn ethanol production are valuable. Could existing corn ethanol plants become the foundation for a much bigger biofuel industry?

    Recently, it was announced that ALGAE will be grown on ethanol waste products: CO2, nutrient rich effluent, and waste heat. This is a joint venture between Green Plains Renewable Energy (a corn ethanol production company) and BioProcess Algae LLC (an algae production company). Wayne Hoovestol, Chief Executive Officer said: “Algae is potentially a by-product of ethanol that makes the process cleaner and greener through carbon sequestration…Algae production fits into Green Plains’ business model since we are already in the business of marketing biofuel and feed products.” BioProcess Algae will be produced at Green Plains’ ethanol plant in Shenandoah, Iowa, from the plant’s CO2, waste heat, and nutrient rich effluent water, all of which algae thrives on.

    Biodiesel will be made from algae oil, ethanol from algae starch, and animal feed from algae protein. If biodiesel is the main objective, then an oil rich strain of algae will be grown. If ethanol is the priority, then a strain of algae, up to 96% starch will be grown. Or if animal feed is the primary goal, 60% high protein algae strains such as chlorella or spirulina (also used for human consumption) will be produced and marketed alongside distiller’s grains. All exploited from the waste products of an existing fuel and feed infrastructure. Algae production integrated into corn ethanol refineries will dramatically improve the profitability and the energy balance of the fuel.

    We currently have 240 million vehicles on the road valued at $6 Trillion, consuming liquid fuels. And, over 95% of the new vehicles being built also run on liquid fuel. These vehicles consume roughly 140 Billion gallons of gasoline, 60 Billion gallons of diesel fuel, and 9 Billion gallons of ethanol every year. Although E-85 (normally cheaper than gasoline) can be used in some of these vehicles, overall consumption is limited by the small percentage of flex-fuel vehicles on the road, by less than 2,000 pumps, and by lower mpg. Flex-fuel mandates and high compression, turbo-charged engines optimized for ethanol, coming in the next few years, may change that.

    What is more significant right now is the phenomenal spread of retail blender pumps that mix E-20, E-30, and E-40 from locally produced ethanol. Blending ethanol at the pump is becoming popular, because many people have discovered the MPG sweet spot of their particular engine. Some people are actually getting better mileage and more power on E-20 and E-30 than they get on regular gasoline. And the fuel is much cheaper, because the shipping cost of locally made ethanol is much lower, and because part of the 51 cent per gallon ethanol blending subsidy is being passed on to consumers.

    Still, blending ethanol with gasoline may continue to restrict its growth for years to come. Some auto makers are finding a way around that. Suzuki and several others are introducing vehicles that’ll run from zero to 100% pure ethanol. Now the issue will be: Where can you pump pure ethanol? This is a new beginning for the fuel’s liberation from gasoline, back from the days of Henry Ford’s Model A, which ran on 82% ethanol and 18% water.

    Is there a higher use for ethanol than blending it with gasoline? Note the higher octane, the fabulous flame speed, the ultra fast vaporization rate, and the unique way that the hydrogen bonds change when ethanol combines with water. We want to exploit these characteristics. Did you know that if ethanol is mixed in a 50-50 solution with water and then vaporized, it will still combust?

    Missing from the current debate is the REAL Next Generation Ethanol, a solution of 2/3 ethanol and 1/3 water. Ethanol-water technology is a basic, inexpensive, onboard reformer that converts the solution into hydrogen, on a conventional ICE engine or coupled with a fuel cell. This is now being demonstrated by DongFeng, a major Chinese automaker, although the original process seems to have been created in 2004 by Lanny Schmidt, Chemical Engineering Professor at the University of Minnesota. Professor Schmidt published a scientific paper in Science magazine called “Renewable Hydrogen from Ethanol by Autothermal Reforming.”

    The 2/3 ethanol 1/3 water reformer is remarkable. It produces a stream of hydrogen instantaneously, using very little energy. It is self-powered from byproducts of the reforming process. And, not only does it strip all the hydrogen from the hydrogen rich ethanol, it also strips half the hydrogen from the water.

    ITM Power has a device that converts internal combustion engines to run on either gasoline or hydrogen (with the flick of a switch). Combine this device with an onboard reformer, and you can convert existing vehicles to run on hydrogen made from ethanol and water.

    As a cheap source of hydrogen, a liquid fuel such as ethanol-water is safe. It can be carried in a conventional liquid fuel tank. It does Not have to be hyper-compressed into expensive high pressure hydrogen tanks, with couplings and hoses that might eventually spring leaks and become problematic. Shipping and handing ethanol-water is cheaper, easier, and safer than shipping and handling bulky, invisible hydrogen. “Hydrogen on Demand” from liquid ethanol-water carried on the vehicle may prove to be the most practical and the most efficient way to power internal combustion engines and fuel cells. Efficient because the ethanol distillation cost is cut in half with 1/3 water left in solution. And because 20% additional hydrogen is coming from the water. This will also dramatically improve the energy balance of ethanol and lower the cost, especially when used in fuel cells, which are almost 3 times more efficient than internal combustion engines.

    This is how we can produce massive quantities of domestic biofuel and solve our liquid fuel demand. We could partially distill the ethanol, leaving 1/3 water in solution with the fuel. We could adapt ALL of our over 200 ethanol refineries to produce Algae from their waste products. And from the algae, produce more biodiesel, more ethanol, and more high protein algae feed.

    Biodiesel made at or near algae-corn ethanol plants would supply long haul truckers and local farmers with cheaper fuel. Then a transition would be made to high torque hydrogen fuel cell electric tractors and long haul trucks, developed to run on ethanol-water. For next generation cars and light trucks, Plug-in Electric Hybrids equipped with internal combustion engines and then fuel cells could also be powered with ethanol-water.

    Ethanol demand would no longer be restricted by gasoline. Conventional vehicles with internal combustion engines would phase-out over a 20 year period, as fuel cells mated to plug-in electric hybrids replace them. With this technology, we consume domestic ethanol and water, instead of gasoline and foreign oil.

    Open Source, Publish Freely, Jeff Baker

  • Martin K.

    The only people that still support corn-ethanol subsidies are those who get them and the politicians. Supporting corn-ethanol subsidies doesn’t scare away votes, it buys them.

  • Martin K.

    The only people that still support corn-ethanol subsidies are those who get them and the politicians. Supporting corn-ethanol subsidies doesn’t scare away votes, it buys them.

  • Martin K.

    The only people that still support corn-ethanol subsidies are those who get them and the politicians. Supporting corn-ethanol subsidies doesn’t scare away votes, it buys them.

  • Bobby Fontaine

    Jeff Baker?

    Please email me at

    bobbyfontaine@verizon.net

    I follow your comments on hydrous ethanol and write about it as well. I would like very much to to be able to contact you directly and I also have some information I believe you could make very good use of.

  • Bobby Fontaine

    Jeff Baker?

    Please email me at

    bobbyfontaine@verizon.net

    I follow your comments on hydrous ethanol and write about it as well. I would like very much to to be able to contact you directly and I also have some information I believe you could make very good use of.

  • Bobby Fontaine

    Jeff Baker?

    Please email me at

    bobbyfontaine@verizon.net

    I follow your comments on hydrous ethanol and write about it as well. I would like very much to to be able to contact you directly and I also have some information I believe you could make very good use of.

  • Lindsay S.

    Ethanol concentrations above 10%-15% damage most engines and fuel systems made today. Corrosion issues abound if you want your car to last.

    As for Jeff Baker’s statement: “Some people are actually getting better mileage and more power on E-20 and E-30 than they get on regular gasoline.” I don’t see how this is possible. Ethanol has less energy than gasoline – how can you get better mileage?

    Back to the original article and the use of bailout funds for the ethanol industry – it’s about time the use of algae and other fibrous material was actually used rather than the current oil-fertiliser-corn-ethanol cycle of lunacy. As the ethanol industry stands today – worldwide – the taxpayers funding this have been and continue to be conned by the people making the $.

  • Lindsay S.

    Ethanol concentrations above 10%-15% damage most engines and fuel systems made today. Corrosion issues abound if you want your car to last.

    As for Jeff Baker’s statement: “Some people are actually getting better mileage and more power on E-20 and E-30 than they get on regular gasoline.” I don’t see how this is possible. Ethanol has less energy than gasoline – how can you get better mileage?

    Back to the original article and the use of bailout funds for the ethanol industry – it’s about time the use of algae and other fibrous material was actually used rather than the current oil-fertiliser-corn-ethanol cycle of lunacy. As the ethanol industry stands today – worldwide – the taxpayers funding this have been and continue to be conned by the people making the $.

  • Lindsay S.

    Ethanol concentrations above 10%-15% damage most engines and fuel systems made today. Corrosion issues abound if you want your car to last.

    As for Jeff Baker’s statement: “Some people are actually getting better mileage and more power on E-20 and E-30 than they get on regular gasoline.” I don’t see how this is possible. Ethanol has less energy than gasoline – how can you get better mileage?

    Back to the original article and the use of bailout funds for the ethanol industry – it’s about time the use of algae and other fibrous material was actually used rather than the current oil-fertiliser-corn-ethanol cycle of lunacy. As the ethanol industry stands today – worldwide – the taxpayers funding this have been and continue to be conned by the people making the $.

  • Tim Cleland

    “As for Jeff Baker’s statement: “Some people are actually getting better mileage and more power on E-20 and E-30 than they get on regular gasoline.” I don’t see how this is possible. Ethanol has less energy than gasoline – how can you get better mileage?”

    Theoretically it’s possible because ethanol has a higher octane rating of 110. Although, gasoline has higher energy content, a higher percentage of ethanol’s energy can be harnessed in an IC engine because the higher octane rating allows the compression-stroke and power-stroke to be longer. The same is true for diesel. Diesel fuel has only ~10% higher energy content than gasoline, but a good diesel engine will be about 40-50% more efficient than an equal-sized gasoline engine.

    My guess is that if anyone is getting better MPGs with E-20 or E-30, it’s either because it’s a turbo/supercharged engine and the ethanol permits higher boost without knocking, or it’s a modified

    engine (higher compression ratio).

    An engine that were designed for ethanol (and not simply to accomodate it like current flex-fuel vehicles), but be more like a diesel, longer stroke, higher compression ratio and probably a turbo.

    -Tim

  • Tim Cleland

    “As for Jeff Baker’s statement: “Some people are actually getting better mileage and more power on E-20 and E-30 than they get on regular gasoline.” I don’t see how this is possible. Ethanol has less energy than gasoline – how can you get better mileage?”

    Theoretically it’s possible because ethanol has a higher octane rating of 110. Although, gasoline has higher energy content, a higher percentage of ethanol’s energy can be harnessed in an IC engine because the higher octane rating allows the compression-stroke and power-stroke to be longer. The same is true for diesel. Diesel fuel has only ~10% higher energy content than gasoline, but a good diesel engine will be about 40-50% more efficient than an equal-sized gasoline engine.

    My guess is that if anyone is getting better MPGs with E-20 or E-30, it’s either because it’s a turbo/supercharged engine and the ethanol permits higher boost without knocking, or it’s a modified

    engine (higher compression ratio).

    An engine that were designed for ethanol (and not simply to accomodate it like current flex-fuel vehicles), but be more like a diesel, longer stroke, higher compression ratio and probably a turbo.

    -Tim

  • Tim Cleland

    “As for Jeff Baker’s statement: “Some people are actually getting better mileage and more power on E-20 and E-30 than they get on regular gasoline.” I don’t see how this is possible. Ethanol has less energy than gasoline – how can you get better mileage?”

    Theoretically it’s possible because ethanol has a higher octane rating of 110. Although, gasoline has higher energy content, a higher percentage of ethanol’s energy can be harnessed in an IC engine because the higher octane rating allows the compression-stroke and power-stroke to be longer. The same is true for diesel. Diesel fuel has only ~10% higher energy content than gasoline, but a good diesel engine will be about 40-50% more efficient than an equal-sized gasoline engine.

    My guess is that if anyone is getting better MPGs with E-20 or E-30, it’s either because it’s a turbo/supercharged engine and the ethanol permits higher boost without knocking, or it’s a modified

    engine (higher compression ratio).

    An engine that were designed for ethanol (and not simply to accomodate it like current flex-fuel vehicles), but be more like a diesel, longer stroke, higher compression ratio and probably a turbo.

    -Tim

  • http://thermosaver.com thermosaver

    The facts are that ethanol:

    1. Can be used in almost any car or truck with minor or no modification.

    2. It can and is distributed by the same filling stations that currently sell gas and uses all the same equipment.

    3. It produces almost no pollution when burned.

    4. The same bio-mass that created it absorbs CO2.

    5. All corn or other grain products used to make it are intended for animal feed not human food. This corn is not suitable for human consumption.

    6. Once corn or grains are fermented, starch is converted into protein, increasing protein content by up to 40%.

    7 This protein rich produce (silage) is most always fed to the same animals in feed lots who benefit.

    8. Manure from the feed lot, which is a waste product, can be collected and placed in a manure digester that not only reduces the waste by 80% (smell free), but also produces methane (natural gas) which is burned to run the ethanol plants.

    9. This entire process is CO2 neutral.

    10. Pure ethanol is over 116 octane, meaning more efficient high compression engines can use it.

    11. Garbage trash and ag-wastes can also make it.

    I agree that it is a bad idea to use coal or other fossil fuels to make it.

    However, if the use of ethanol was widely adopted it would solve a lot of the world’s major economical and ecological problems.

    When you hear that it that it is bad news consider Deep Throat’s admonition to Burnside (i.e. All the Present’s Men) “Follow the money”

    Thermosaver

  • http://thermosaver.com thermosaver

    The facts are that ethanol:

    1. Can be used in almost any car or truck with minor or no modification.

    2. It can and is distributed by the same filling stations that currently sell gas and uses all the same equipment.

    3. It produces almost no pollution when burned.

    4. The same bio-mass that created it absorbs CO2.

    5. All corn or other grain products used to make it are intended for animal feed not human food. This corn is not suitable for human consumption.

    6. Once corn or grains are fermented, starch is converted into protein, increasing protein content by up to 40%.

    7 This protein rich produce (silage) is most always fed to the same animals in feed lots who benefit.

    8. Manure from the feed lot, which is a waste product, can be collected and placed in a manure digester that not only reduces the waste by 80% (smell free), but also produces methane (natural gas) which is burned to run the ethanol plants.

    9. This entire process is CO2 neutral.

    10. Pure ethanol is over 116 octane, meaning more efficient high compression engines can use it.

    11. Garbage trash and ag-wastes can also make it.

    I agree that it is a bad idea to use coal or other fossil fuels to make it.

    However, if the use of ethanol was widely adopted it would solve a lot of the world’s major economical and ecological problems.

    When you hear that it that it is bad news consider Deep Throat’s admonition to Burnside (i.e. All the Present’s Men) “Follow the money”

    Thermosaver

  • http://thermosaver.com thermosaver

    The facts are that ethanol:

    1. Can be used in almost any car or truck with minor or no modification.

    2. It can and is distributed by the same filling stations that currently sell gas and uses all the same equipment.

    3. It produces almost no pollution when burned.

    4. The same bio-mass that created it absorbs CO2.

    5. All corn or other grain products used to make it are intended for animal feed not human food. This corn is not suitable for human consumption.

    6. Once corn or grains are fermented, starch is converted into protein, increasing protein content by up to 40%.

    7 This protein rich produce (silage) is most always fed to the same animals in feed lots who benefit.

    8. Manure from the feed lot, which is a waste product, can be collected and placed in a manure digester that not only reduces the waste by 80% (smell free), but also produces methane (natural gas) which is burned to run the ethanol plants.

    9. This entire process is CO2 neutral.

    10. Pure ethanol is over 116 octane, meaning more efficient high compression engines can use it.

    11. Garbage trash and ag-wastes can also make it.

    I agree that it is a bad idea to use coal or other fossil fuels to make it.

    However, if the use of ethanol was widely adopted it would solve a lot of the world’s major economical and ecological problems.

    When you hear that it that it is bad news consider Deep Throat’s admonition to Burnside (i.e. All the Present’s Men) “Follow the money”

    Thermosaver

  • Ronald S.

    Derek,

    It seems that any time that anybody writes an article criticizing ethahol policy it brings out the clowns. Jeff Baker must spend all of his days cutting and pasting the same replies to blogs like yours. How much is the RFA paying you to do that, Jeff? As for Thermosaver’s facts, they are more like half lies. Let’s take them one by one:

    The facts are that ethanol:

    “1. Can be used in almost any car or truck with minor or no modification.”

    Only in blends up to 10%. Some may be able to handle up to 20% or 30%. But going beyond that, unless the vehicle has been built to be able to use high concentrations, is courting trouble.

    “2. It can and is distributed by the same filling stations that currently sell gas and uses all the same equipment.”

    Again, only in low concentrations. E-85 requires big investments in special tanks, lines and pumps. That is why both the states and the federal government are offering generous subsidies to filling stations to undertake the conversions. Note: other fuels, like butanol, would not require such investments.

    “3. It produces almost no pollution when burned.”

    That is not true. It producers fewer of some pollutants that are released through the burning of gasoline, but more of others. On balance, Mark Jacobson, an atmospheric chemist at Stanford University, estimates that if the entire U.S. gasoline-powered fleet were to convert over to E-85 entirely, there would actually be a slight increase in the number of deaths due to air pollution (mainly from increased ground-level ozone).

    “4. The same bio-mass that created it absorbs CO2.”

    I think the writer means that the amount of CO2 released in burning the ethanol is the same amount absorbed in the plants from which the ethanol has been derived. But that is not the only CO2 released.

    “5. All corn or other grain products used to make it are intended for animal feed not human food. This corn is not suitable for human consumption.”

    Not true. “Feed corn” IS used in a number of food products. It is also ground and used as food (corn meal) in some poor countries. But for Thermosaver to say that the corn “is intended for animal feed not human food”, as if that settles the food-vs-fuel debate, implies he must really think that most Americans are as dumb as two planks. What does he think those animals are fed for. As pets? Most livestock I know have one purpose in their short lives: to provide milk or to be butchered for meat — i.e., food.

    6. Once corn or grains are fermented, starch is converted into protein, increasing protein content by up to 40%.

    Thermosaver is referring to distillers’ grains. He fails to mention that the starch used for ethanol still has a value as food. Hogs and chickens cannot tolerate large portions of distillers’ grains in their diets. If ethanol was such a great boon for the livestock industry, why are they complaining so loudly?

    “7 This protein rich produce (silage) is most always fed to the same animals in feed lots who benefit.”

    Exactly: it benefits mainly beef producers with intensive feedlots (with their requirement to use large amounts of antibiotics, hardly environmentally friendly facilities) located near the ethanol plants. It harms dairy farmers located outside the Midwest, and hog and poultry farmers everywhere.

    “8. Manure from the feed lot, which is a waste product, can be collected and placed in a manure digester that not only reduces the waste by 80% (smell free), but also produces methane (natural gas) which is burned to run the ethanol plants.”

    It can be, but it is not being done on a large scale.

    “9. This entire process is CO2 neutral.”

    This is the biggest half-truth. Even the U.S. Government admits, in its life-cycle models, that the CO2 savings from ethanol production, on a life-cycle basis, are meagre.

    “10. Pure ethanol is over 116 octane, meaning more efficient high compression engines can use it.”

    Yeah? And how many of those can you find on America’s roads at the moment?

    “11. Garbage trash and ag-wastes can also make it.”

    Yes, and if you were to equip them with parachutes, pigs could fly. The fact is, NO amount of ethanol is being produced commercially from refuse or agricultural wastes at this time.

    “I agree that it is a bad idea to use coal or other fossil fuels to make it. However, if the use of ethanol was widely adopted it would solve a lot of the world’s major economical and ecological problems.”

    Next joke. The expanded acreage devoted to corn is already contributing to increasing the Dead Zone in the Gulf of Mexico. And the reduction in wheat and soybean acreage through increased corn planting is a factor driving deforestation in the Amazon.

    How ironic that Thermosaver should suggest that readers “Follow the money”. On that, I agree with him wholeheartedly. They will find that the money trail leads to all manner of subsidies, tax breaks and government regulations that favor ethanol.

  • Ronald S.

    Derek,

    It seems that any time that anybody writes an article criticizing ethahol policy it brings out the clowns. Jeff Baker must spend all of his days cutting and pasting the same replies to blogs like yours. How much is the RFA paying you to do that, Jeff? As for Thermosaver’s facts, they are more like half lies. Let’s take them one by one:

    The facts are that ethanol:

    “1. Can be used in almost any car or truck with minor or no modification.”

    Only in blends up to 10%. Some may be able to handle up to 20% or 30%. But going beyond that, unless the vehicle has been built to be able to use high concentrations, is courting trouble.

    “2. It can and is distributed by the same filling stations that currently sell gas and uses all the same equipment.”

    Again, only in low concentrations. E-85 requires big investments in special tanks, lines and pumps. That is why both the states and the federal government are offering generous subsidies to filling stations to undertake the conversions. Note: other fuels, like butanol, would not require such investments.

    “3. It produces almost no pollution when burned.”

    That is not true. It producers fewer of some pollutants that are released through the burning of gasoline, but more of others. On balance, Mark Jacobson, an atmospheric chemist at Stanford University, estimates that if the entire U.S. gasoline-powered fleet were to convert over to E-85 entirely, there would actually be a slight increase in the number of deaths due to air pollution (mainly from increased ground-level ozone).

    “4. The same bio-mass that created it absorbs CO2.”

    I think the writer means that the amount of CO2 released in burning the ethanol is the same amount absorbed in the plants from which the ethanol has been derived. But that is not the only CO2 released.

    “5. All corn or other grain products used to make it are intended for animal feed not human food. This corn is not suitable for human consumption.”

    Not true. “Feed corn” IS used in a number of food products. It is also ground and used as food (corn meal) in some poor countries. But for Thermosaver to say that the corn “is intended for animal feed not human food”, as if that settles the food-vs-fuel debate, implies he must really think that most Americans are as dumb as two planks. What does he think those animals are fed for. As pets? Most livestock I know have one purpose in their short lives: to provide milk or to be butchered for meat — i.e., food.

    6. Once corn or grains are fermented, starch is converted into protein, increasing protein content by up to 40%.

    Thermosaver is referring to distillers’ grains. He fails to mention that the starch used for ethanol still has a value as food. Hogs and chickens cannot tolerate large portions of distillers’ grains in their diets. If ethanol was such a great boon for the livestock industry, why are they complaining so loudly?

    “7 This protein rich produce (silage) is most always fed to the same animals in feed lots who benefit.”

    Exactly: it benefits mainly beef producers with intensive feedlots (with their requirement to use large amounts of antibiotics, hardly environmentally friendly facilities) located near the ethanol plants. It harms dairy farmers located outside the Midwest, and hog and poultry farmers everywhere.

    “8. Manure from the feed lot, which is a waste product, can be collected and placed in a manure digester that not only reduces the waste by 80% (smell free), but also produces methane (natural gas) which is burned to run the ethanol plants.”

    It can be, but it is not being done on a large scale.

    “9. This entire process is CO2 neutral.”

    This is the biggest half-truth. Even the U.S. Government admits, in its life-cycle models, that the CO2 savings from ethanol production, on a life-cycle basis, are meagre.

    “10. Pure ethanol is over 116 octane, meaning more efficient high compression engines can use it.”

    Yeah? And how many of those can you find on America’s roads at the moment?

    “11. Garbage trash and ag-wastes can also make it.”

    Yes, and if you were to equip them with parachutes, pigs could fly. The fact is, NO amount of ethanol is being produced commercially from refuse or agricultural wastes at this time.

    “I agree that it is a bad idea to use coal or other fossil fuels to make it. However, if the use of ethanol was widely adopted it would solve a lot of the world’s major economical and ecological problems.”

    Next joke. The expanded acreage devoted to corn is already contributing to increasing the Dead Zone in the Gulf of Mexico. And the reduction in wheat and soybean acreage through increased corn planting is a factor driving deforestation in the Amazon.

    How ironic that Thermosaver should suggest that readers “Follow the money”. On that, I agree with him wholeheartedly. They will find that the money trail leads to all manner of subsidies, tax breaks and government regulations that favor ethanol.

  • Jeff Baker

    Subsidies paid to the Petroleum Industry are SIX times higher than what is paid on all biofuels combined (ethanol, biodiesel, and biogas). There may also be even bigger hidden subsidies to Big Oil that are kept secret. Coal and natural gas are also subsidized. Furthermore, every dollar spent on subsidizing ethanol results in tens of thousands of jobs created and a huge economic stimulus from the spin off, plus County, State and Federal tax revenue. Ethanol subsidies pay for themselves many times over. The Bush Administration has also been spending over $200 Billion a year to control the oil supply in Iraq and to protect an oil pipeline in Afghanistan. Add that to the cost of your gasoline, diesel fuel and your airline ticket.

    We also have a huge Trade Deficit of about $700 Billion a year, and $500 billion of that is caused by buying foreign oil with debt instruments. On that, we pay revolving interest on fuels made from foreign oil. This is taken out of our income tax payments by the IRS and then paid to the Federal Reserve Corporation (not a government agency) which has a monopoly on lending money to the United States Government. We pay no floating interest on domestic ethanol, biodiesel and biogas.

    Ronald S: Regarding your abusive and false claim: I am not being paid anything from The Renewable Fuels Association or from any other entity. I am an independent researcher with zero financial interests in any form of biofuels or alternative energy. On the potential of ethanol, I see the cup half full and rising, not half empty.

  • Jeff Baker

    Subsidies paid to the Petroleum Industry are SIX times higher than what is paid on all biofuels combined (ethanol, biodiesel, and biogas). There may also be even bigger hidden subsidies to Big Oil that are kept secret. Coal and natural gas are also subsidized. Furthermore, every dollar spent on subsidizing ethanol results in tens of thousands of jobs created and a huge economic stimulus from the spin off, plus County, State and Federal tax revenue. Ethanol subsidies pay for themselves many times over. The Bush Administration has also been spending over $200 Billion a year to control the oil supply in Iraq and to protect an oil pipeline in Afghanistan. Add that to the cost of your gasoline, diesel fuel and your airline ticket.

    We also have a huge Trade Deficit of about $700 Billion a year, and $500 billion of that is caused by buying foreign oil with debt instruments. On that, we pay revolving interest on fuels made from foreign oil. This is taken out of our income tax payments by the IRS and then paid to the Federal Reserve Corporation (not a government agency) which has a monopoly on lending money to the United States Government. We pay no floating interest on domestic ethanol, biodiesel and biogas.

    Ronald S: Regarding your abusive and false claim: I am not being paid anything from The Renewable Fuels Association or from any other entity. I am an independent researcher with zero financial interests in any form of biofuels or alternative energy. On the potential of ethanol, I see the cup half full and rising, not half empty.

  • Jeff Baker

    Subsidies paid to the Petroleum Industry are SIX times higher than what is paid on all biofuels combined (ethanol, biodiesel, and biogas). There may also be even bigger hidden subsidies to Big Oil that are kept secret. Coal and natural gas are also subsidized. Furthermore, every dollar spent on subsidizing ethanol results in tens of thousands of jobs created and a huge economic stimulus from the spin off, plus County, State and Federal tax revenue. Ethanol subsidies pay for themselves many times over. The Bush Administration has also been spending over $200 Billion a year to control the oil supply in Iraq and to protect an oil pipeline in Afghanistan. Add that to the cost of your gasoline, diesel fuel and your airline ticket.

    We also have a huge Trade Deficit of about $700 Billion a year, and $500 billion of that is caused by buying foreign oil with debt instruments. On that, we pay revolving interest on fuels made from foreign oil. This is taken out of our income tax payments by the IRS and then paid to the Federal Reserve Corporation (not a government agency) which has a monopoly on lending money to the United States Government. We pay no floating interest on domestic ethanol, biodiesel and biogas.

    Ronald S: Regarding your abusive and false claim: I am not being paid anything from The Renewable Fuels Association or from any other entity. I am an independent researcher with zero financial interests in any form of biofuels or alternative energy. On the potential of ethanol, I see the cup half full and rising, not half empty.

  • Ronald S.

    “Subsidies paid to the Petroleum Industry are SIX times higher than what is paid on all biofuels combined (ethanol, biodiesel, and biogas)”, according to Jeff Baker.

    You don’t mention your source, Jeff, but Friends of the Earth — hardly a friend of the oil industry — estimates that “Between tax incentives, royalty relief, research and development subsidies and accounting gimmicks” U.S. oil and gas companies “will receive more than $32.9 billion from the federal government over the next five years.”

    http://www.foe.org/pdf/FoE_Oil_Giveaway_Analysis_2008.pdf

    Let’s round that up to $35 billion, and make it an even $7 billion a year. It says, further, that Ex-Im and OPIC Loans to the same companies between 2000 and 2006 cost an additional $15.6 billion, or $2.2 billion a year. Let’s assume the annual rate over the next five years will rise to $3 billion a year. Add the two together and you get an even $10 billion a year. The EIA, by the way, reports that subsidies to are only $2.15 billion a year:

    http://www.eia.doe.gov/oiaf/servicerpt/subsidy2/pdf/execsum.pdf

    (Yes, I think that that is an under-estimate.)

    Last year, the USA produced 1.85 billion barrels of crude oil, or 77 billion gallons.

    http://tonto.eia.doe.gov/dnav/pet/pet_crd_crpdn_adc_mbbl_a.htm

    If one allocates that whole $10 billion a year in subsidies to just crude-oil production (i.e., ignorring the natural gas produced with those subsidies), it comes to around $0.13 per gallon. If you allocate it to all petroleum consumption consumed (7.55 billion barrels, or 317 billion gallons), it works out at just $0.032 per gallon.

    I am not defending oil subsidies, but neither do two wrongs make a right.

    Currently, just the federal volumetric ethanol excise tax credit (VEETC) alone is $0.51 per gallon. (It will drop to $0.45 per gallon next week.) A number of small producers benefit from an additional payment of $0.10 per gallon on the first 15 million gallons they produce in a year. And numerous states provide subsidies and tax breaks for ethanol or biodiesel as well.

    But let’s only compare federal subsidies. By my reckoning, even the $0.45 per gallon tax credit for ethanol (i.e., the value of just one of the many subsidies on offer) is almost 3.5 times greater than $0.13 per gallon for gasoline, even before adjusting for differences in energy content (which would make it 5 times as big). So, per gallon, you have the subsidy rates the wrong way around.

    No let’s go back to the totals. Under the schedule for the new Renewable Fuels Standard, fuel suppliers are required to blend 62.1 billion gallons of “renewable biofuel” (at a subsidy rate of $0.45/gallon) and 7.65 billion gallons of “advanced biofuel” (at a rate of $1.01/gallon for cellulosic ethanol and $1.01/gallon for biomass-based diesel) over the next five years — i.e., between 2009 and 2013.

    http://www.ethanolrfa.org/resource/standard/

    That comes to $35.6 billion in federal subsidies over the next five years — i.e., more than the FoE estimates the oil industry will receive in “tax incentives, royalty relief, research and development subsidies and accounting gimmicks” over the same period.

    I have shown you my accounting. Now kindly show me yours. On the potential for ethanol subsidies to grow, I see the cup already full and spilling over.

    P.S., Imports of crude oil, fuel oil and other petroleum products was $317 billion dollars in 2007. Perhaps the bill will approach $500 billion dollars in 2008. But it is likely to be back at the 2007 (or lower) in 2009. Still a big number, I agree.

    P.P.S., A return of tens of thousands of jobs created per dollar spent on subsidizing ethanol is an incredible return indeed. At that kind of pay-off, every man woman and child in the whole world should by now be working for the industry.

  • Ronald S.

    “Subsidies paid to the Petroleum Industry are SIX times higher than what is paid on all biofuels combined (ethanol, biodiesel, and biogas)”, according to Jeff Baker.

    You don’t mention your source, Jeff, but Friends of the Earth — hardly a friend of the oil industry — estimates that “Between tax incentives, royalty relief, research and development subsidies and accounting gimmicks” U.S. oil and gas companies “will receive more than $32.9 billion from the federal government over the next five years.”

    http://www.foe.org/pdf/FoE_Oil_Giveaway_Analysis_2008.pdf

    Let’s round that up to $35 billion, and make it an even $7 billion a year. It says, further, that Ex-Im and OPIC Loans to the same companies between 2000 and 2006 cost an additional $15.6 billion, or $2.2 billion a year. Let’s assume the annual rate over the next five years will rise to $3 billion a year. Add the two together and you get an even $10 billion a year. The EIA, by the way, reports that subsidies to are only $2.15 billion a year:

    http://www.eia.doe.gov/oiaf/servicerpt/subsidy2/pdf/execsum.pdf

    (Yes, I think that that is an under-estimate.)

    Last year, the USA produced 1.85 billion barrels of crude oil, or 77 billion gallons.

    http://tonto.eia.doe.gov/dnav/pet/pet_crd_crpdn_adc_mbbl_a.htm

    If one allocates that whole $10 billion a year in subsidies to just crude-oil production (i.e., ignorring the natural gas produced with those subsidies), it comes to around $0.13 per gallon. If you allocate it to all petroleum consumption consumed (7.55 billion barrels, or 317 billion gallons), it works out at just $0.032 per gallon.

    I am not defending oil subsidies, but neither do two wrongs make a right.

    Currently, just the federal volumetric ethanol excise tax credit (VEETC) alone is $0.51 per gallon. (It will drop to $0.45 per gallon next week.) A number of small producers benefit from an additional payment of $0.10 per gallon on the first 15 million gallons they produce in a year. And numerous states provide subsidies and tax breaks for ethanol or biodiesel as well.

    But let’s only compare federal subsidies. By my reckoning, even the $0.45 per gallon tax credit for ethanol (i.e., the value of just one of the many subsidies on offer) is almost 3.5 times greater than $0.13 per gallon for gasoline, even before adjusting for differences in energy content (which would make it 5 times as big). So, per gallon, you have the subsidy rates the wrong way around.

    No let’s go back to the totals. Under the schedule for the new Renewable Fuels Standard, fuel suppliers are required to blend 62.1 billion gallons of “renewable biofuel” (at a subsidy rate of $0.45/gallon) and 7.65 billion gallons of “advanced biofuel” (at a rate of $1.01/gallon for cellulosic ethanol and $1.01/gallon for biomass-based diesel) over the next five years — i.e., between 2009 and 2013.

    http://www.ethanolrfa.org/resource/standard/

    That comes to $35.6 billion in federal subsidies over the next five years — i.e., more than the FoE estimates the oil industry will receive in “tax incentives, royalty relief, research and development subsidies and accounting gimmicks” over the same period.

    I have shown you my accounting. Now kindly show me yours. On the potential for ethanol subsidies to grow, I see the cup already full and spilling over.

    P.S., Imports of crude oil, fuel oil and other petroleum products was $317 billion dollars in 2007. Perhaps the bill will approach $500 billion dollars in 2008. But it is likely to be back at the 2007 (or lower) in 2009. Still a big number, I agree.

    P.P.S., A return of tens of thousands of jobs created per dollar spent on subsidizing ethanol is an incredible return indeed. At that kind of pay-off, every man woman and child in the whole world should by now be working for the industry.

  • Ronald S.

    “Subsidies paid to the Petroleum Industry are SIX times higher than what is paid on all biofuels combined (ethanol, biodiesel, and biogas)”, according to Jeff Baker.

    You don’t mention your source, Jeff, but Friends of the Earth — hardly a friend of the oil industry — estimates that “Between tax incentives, royalty relief, research and development subsidies and accounting gimmicks” U.S. oil and gas companies “will receive more than $32.9 billion from the federal government over the next five years.”

    http://www.foe.org/pdf/FoE_Oil_Giveaway_Analysis_2008.pdf

    Let’s round that up to $35 billion, and make it an even $7 billion a year. It says, further, that Ex-Im and OPIC Loans to the same companies between 2000 and 2006 cost an additional $15.6 billion, or $2.2 billion a year. Let’s assume the annual rate over the next five years will rise to $3 billion a year. Add the two together and you get an even $10 billion a year. The EIA, by the way, reports that subsidies to are only $2.15 billion a year:

    http://www.eia.doe.gov/oiaf/servicerpt/subsidy2/pdf/execsum.pdf

    (Yes, I think that that is an under-estimate.)

    Last year, the USA produced 1.85 billion barrels of crude oil, or 77 billion gallons.

    http://tonto.eia.doe.gov/dnav/pet/pet_crd_crpdn_adc_mbbl_a.htm

    If one allocates that whole $10 billion a year in subsidies to just crude-oil production (i.e., ignorring the natural gas produced with those subsidies), it comes to around $0.13 per gallon. If you allocate it to all petroleum consumption consumed (7.55 billion barrels, or 317 billion gallons), it works out at just $0.032 per gallon.

    I am not defending oil subsidies, but neither do two wrongs make a right.

    Currently, just the federal volumetric ethanol excise tax credit (VEETC) alone is $0.51 per gallon. (It will drop to $0.45 per gallon next week.) A number of small producers benefit from an additional payment of $0.10 per gallon on the first 15 million gallons they produce in a year. And numerous states provide subsidies and tax breaks for ethanol or biodiesel as well.

    But let’s only compare federal subsidies. By my reckoning, even the $0.45 per gallon tax credit for ethanol (i.e., the value of just one of the many subsidies on offer) is almost 3.5 times greater than $0.13 per gallon for gasoline, even before adjusting for differences in energy content (which would make it 5 times as big). So, per gallon, you have the subsidy rates the wrong way around.

    No let’s go back to the totals. Under the schedule for the new Renewable Fuels Standard, fuel suppliers are required to blend 62.1 billion gallons of “renewable biofuel” (at a subsidy rate of $0.45/gallon) and 7.65 billion gallons of “advanced biofuel” (at a rate of $1.01/gallon for cellulosic ethanol and $1.01/gallon for biomass-based diesel) over the next five years — i.e., between 2009 and 2013.

    http://www.ethanolrfa.org/resource/standard/

    That comes to $35.6 billion in federal subsidies over the next five years — i.e., more than the FoE estimates the oil industry will receive in “tax incentives, royalty relief, research and development subsidies and accounting gimmicks” over the same period.

    I have shown you my accounting. Now kindly show me yours. On the potential for ethanol subsidies to grow, I see the cup already full and spilling over.

    P.S., Imports of crude oil, fuel oil and other petroleum products was $317 billion dollars in 2007. Perhaps the bill will approach $500 billion dollars in 2008. But it is likely to be back at the 2007 (or lower) in 2009. Still a big number, I agree.

    P.P.S., A return of tens of thousands of jobs created per dollar spent on subsidizing ethanol is an incredible return indeed. At that kind of pay-off, every man woman and child in the whole world should by now be working for the industry.

  • Ronald S.

    Corrections (always easier to see once in print):

    “The EIA, by the way, reports that subsidies to NATURAL GAS AND PETROLEUM LIQUIDS IN 2007 WERE only $2.15 billion a year:”

    “… 7.65 billion gallons of “advanced biofuel” (at a rate of $1.01/gallon for cellulosic ethanol and $1.00/gallon for biomass-based diesel) … “

  • Ronald S.

    Corrections (always easier to see once in print):

    “The EIA, by the way, reports that subsidies to NATURAL GAS AND PETROLEUM LIQUIDS IN 2007 WERE only $2.15 billion a year:”

    “… 7.65 billion gallons of “advanced biofuel” (at a rate of $1.01/gallon for cellulosic ethanol and $1.00/gallon for biomass-based diesel) … “

  • Ronald S.

    Corrections (always easier to see once in print):

    “The EIA, by the way, reports that subsidies to NATURAL GAS AND PETROLEUM LIQUIDS IN 2007 WERE only $2.15 billion a year:”

    “… 7.65 billion gallons of “advanced biofuel” (at a rate of $1.01/gallon for cellulosic ethanol and $1.00/gallon for biomass-based diesel) … “

  • Lint

    “Only in blends up to 10%. Some may be able to handle up to 20% or 30%. But going beyond that, unless the vehicle has been built to be able to use high concentrations, is courting trouble.”

    You’re talking about one guy, but you’re using a half-lie, so who’s the liar?

    ANY fuel injected car made in the last 10 or so years is able to run straight from ethanol just by letting all the extra fuel being delivered by the oxygen sensor readings. But you’ll be limited on not hitting the topmost of power-output due to the injection never being meant to deliver all that fuel. (you’re limited by your injection’s programming and/or injectors size/flow)

    It’s kinda bad to have a car where you can’t hit the floor once in a while, but wide-open-throttle was never a sign of economy or environment concern either. So just putting E85 in a gasoline-only car is not a smooth solution, but it is still possible.

    If you want to convert your car to E85 all you have to do is open your fuel injectors by 30% approx., you can use your stock ones just widened by electrolysis and you’re good to go. (warning: older cars may have to have an E85 approved fuel pump) That’s DEFINITELY not a big change under the hood and works on all cars.

    In fact, often cars have injectors large enough to be able to run on E85 with just a simple IC reprogramming, no mechanical change is required.

    So, one can state: any car can run on E85 with little to no changes.

  • Lint

    “Only in blends up to 10%. Some may be able to handle up to 20% or 30%. But going beyond that, unless the vehicle has been built to be able to use high concentrations, is courting trouble.”

    You’re talking about one guy, but you’re using a half-lie, so who’s the liar?

    ANY fuel injected car made in the last 10 or so years is able to run straight from ethanol just by letting all the extra fuel being delivered by the oxygen sensor readings. But you’ll be limited on not hitting the topmost of power-output due to the injection never being meant to deliver all that fuel. (you’re limited by your injection’s programming and/or injectors size/flow)

    It’s kinda bad to have a car where you can’t hit the floor once in a while, but wide-open-throttle was never a sign of economy or environment concern either. So just putting E85 in a gasoline-only car is not a smooth solution, but it is still possible.

    If you want to convert your car to E85 all you have to do is open your fuel injectors by 30% approx., you can use your stock ones just widened by electrolysis and you’re good to go. (warning: older cars may have to have an E85 approved fuel pump) That’s DEFINITELY not a big change under the hood and works on all cars.

    In fact, often cars have injectors large enough to be able to run on E85 with just a simple IC reprogramming, no mechanical change is required.

    So, one can state: any car can run on E85 with little to no changes.

  • Lint

    “Only in blends up to 10%. Some may be able to handle up to 20% or 30%. But going beyond that, unless the vehicle has been built to be able to use high concentrations, is courting trouble.”

    You’re talking about one guy, but you’re using a half-lie, so who’s the liar?

    ANY fuel injected car made in the last 10 or so years is able to run straight from ethanol just by letting all the extra fuel being delivered by the oxygen sensor readings. But you’ll be limited on not hitting the topmost of power-output due to the injection never being meant to deliver all that fuel. (you’re limited by your injection’s programming and/or injectors size/flow)

    It’s kinda bad to have a car where you can’t hit the floor once in a while, but wide-open-throttle was never a sign of economy or environment concern either. So just putting E85 in a gasoline-only car is not a smooth solution, but it is still possible.

    If you want to convert your car to E85 all you have to do is open your fuel injectors by 30% approx., you can use your stock ones just widened by electrolysis and you’re good to go. (warning: older cars may have to have an E85 approved fuel pump) That’s DEFINITELY not a big change under the hood and works on all cars.

    In fact, often cars have injectors large enough to be able to run on E85 with just a simple IC reprogramming, no mechanical change is required.

    So, one can state: any car can run on E85 with little to no changes.

  • Ronald S.

    Lint: by putting conditions on what kinds of cars can run on E85 you are proving my point. It is not a half-lie to say that “But going beyond that, unless the vehicle has been built to be able to use high concentrations, is courting trouble.”

    Here is a quote from James D. Halderman, an ASE-certified master technician, a member of the Society of Automotive Engineers, and the author of 12 textbooks on cars:

    http://www.daytondailynews.com/news/content/oh/story/wheels/2008/10/18/MPSWLS1018DDNStraightTalk.html

    “CAUTION: Never use E85 in a vehicle that is not designed to use E85. Major damage can occur to the fuel system components, which could cost thousands of dollars to repair.”

    Go ahead: use E-85 in your own car. I’m not going to stop you. But I am also not going to advise people to try E-85 in their vehicles unless they check out what it may do to their particular car (which, in some cases, may be nothing) … and whether their car would still be under warranty if something goes wrong.

  • Ronald S.

    Lint: by putting conditions on what kinds of cars can run on E85 you are proving my point. It is not a half-lie to say that “But going beyond that, unless the vehicle has been built to be able to use high concentrations, is courting trouble.”

    Here is a quote from James D. Halderman, an ASE-certified master technician, a member of the Society of Automotive Engineers, and the author of 12 textbooks on cars:

    http://www.daytondailynews.com/news/content/oh/story/wheels/2008/10/18/MPSWLS1018DDNStraightTalk.html

    “CAUTION: Never use E85 in a vehicle that is not designed to use E85. Major damage can occur to the fuel system components, which could cost thousands of dollars to repair.”

    Go ahead: use E-85 in your own car. I’m not going to stop you. But I am also not going to advise people to try E-85 in their vehicles unless they check out what it may do to their particular car (which, in some cases, may be nothing) … and whether their car would still be under warranty if something goes wrong.

  • Ronald S.

    Lint: by putting conditions on what kinds of cars can run on E85 you are proving my point. It is not a half-lie to say that “But going beyond that, unless the vehicle has been built to be able to use high concentrations, is courting trouble.”

    Here is a quote from James D. Halderman, an ASE-certified master technician, a member of the Society of Automotive Engineers, and the author of 12 textbooks on cars:

    http://www.daytondailynews.com/news/content/oh/story/wheels/2008/10/18/MPSWLS1018DDNStraightTalk.html

    “CAUTION: Never use E85 in a vehicle that is not designed to use E85. Major damage can occur to the fuel system components, which could cost thousands of dollars to repair.”

    Go ahead: use E-85 in your own car. I’m not going to stop you. But I am also not going to advise people to try E-85 in their vehicles unless they check out what it may do to their particular car (which, in some cases, may be nothing) … and whether their car would still be under warranty if something goes wrong.

  • Jeff Baker

    Ronald S:

    Your figures on oil and gas subsidies are way off. You take the very lowest estimates by Friends of the Earth and EIA which are way under the majority of other estimates. The most accurate methods for figuring energy subsidies are at Earthtrack. Their method averages a range of high and low studies. In 2006 they say Oil and Gas got $39 Billion (52%); Coal got $8 Billion; Nuclear got $9 Billion; Mixed Renewables got $6 Billion; and Big Oil got most of the $6 Billion worth of Ethanol Blending subsidies:

    http://www.earthtrack.net

    Urban Lehner says:

    “Whenever ethanol subsidies are discussed and the 51 cent blenders credit in particular, I would argue that this is not a subsidy to the ethanol industry but rather it is another subsidy to the oil companies. It is my understanding that the blenders credit accrues to the people that do the blending of the ethanol which is primarily the fuel distributors (oil companies). The purpose of the blenders credit was to help offset the additional investment for them to store, blend, and distribute ethanol blended fuels. I have yet to see “blender credit income” on an income statement from my local ethanol plant. It does indirectly benefit my ethanol plant by opening up markets for more ethanol. But make no mistake; this blenders credit provides an incentive for the oil companies to utilize more ethanol, because they can make a lot of money doing it.”

    http://www.dtnprogressivefarmer.com/dtnag/common/link.do?symbolicName=/ag/blogs/template1&blogHandle=editorsnotebook&blogEntryId=8a82c0bc1cb6339b011cc2cfc5af0095

    A Greenpeace study puts oil and gas subsidies between $15 Billion and $35 Billion a year:

    http://cleantech.com/news/node/554

    The Cato Institute estimates Big Oil subsidies at between $78 Billion and $158 Billion a year:

    http://www.treehugger.com/files/2008/07/hidden-big-oil-subsidies-stop-them.php

    Clifford D. May says:

    “Former CIA director James Woolsey estimates that U.S. oil companies receive preferential tax treatment worth more than $250 billion a year — and that doesn’t include the military costs necessary to keep oil supplies flowing around the world.”

    http://www.unionleader.com/article.aspx?headline=Clifford+D.+May%3A+OPEC's+sheiks+must+think+Americans+are+stupid&articleId=99df355b-cedf-44eb-8bf1-66b277bd3262

  • Jeff Baker

    Ronald S:

    Your figures on oil and gas subsidies are way off. You take the very lowest estimates by Friends of the Earth and EIA which are way under the majority of other estimates. The most accurate methods for figuring energy subsidies are at Earthtrack. Their method averages a range of high and low studies. In 2006 they say Oil and Gas got $39 Billion (52%); Coal got $8 Billion; Nuclear got $9 Billion; Mixed Renewables got $6 Billion; and Big Oil got most of the $6 Billion worth of Ethanol Blending subsidies:

    http://www.earthtrack.net

    Urban Lehner says:

    “Whenever ethanol subsidies are discussed and the 51 cent blenders credit in particular, I would argue that this is not a subsidy to the ethanol industry but rather it is another subsidy to the oil companies. It is my understanding that the blenders credit accrues to the people that do the blending of the ethanol which is primarily the fuel distributors (oil companies). The purpose of the blenders credit was to help offset the additional investment for them to store, blend, and distribute ethanol blended fuels. I have yet to see “blender credit income” on an income statement from my local ethanol plant. It does indirectly benefit my ethanol plant by opening up markets for more ethanol. But make no mistake; this blenders credit provides an incentive for the oil companies to utilize more ethanol, because they can make a lot of money doing it.”

    http://www.dtnprogressivefarmer.com/dtnag/common/link.do?symbolicName=/ag/blogs/template1&blogHandle=editorsnotebook&blogEntryId=8a82c0bc1cb6339b011cc2cfc5af0095

    A Greenpeace study puts oil and gas subsidies between $15 Billion and $35 Billion a year:

    http://cleantech.com/news/node/554

    The Cato Institute estimates Big Oil subsidies at between $78 Billion and $158 Billion a year:

    http://www.treehugger.com/files/2008/07/hidden-big-oil-subsidies-stop-them.php

    Clifford D. May says:

    “Former CIA director James Woolsey estimates that U.S. oil companies receive preferential tax treatment worth more than $250 billion a year — and that doesn’t include the military costs necessary to keep oil supplies flowing around the world.”

    http://www.unionleader.com/article.aspx?headline=Clifford+D.+May%3A+OPEC's+sheiks+must+think+Americans+are+stupid&articleId=99df355b-cedf-44eb-8bf1-66b277bd3262

  • Jeff Baker

    Ronald S:

    Your figures on oil and gas subsidies are way off. You take the very lowest estimates by Friends of the Earth and EIA which are way under the majority of other estimates. The most accurate methods for figuring energy subsidies are at Earthtrack. Their method averages a range of high and low studies. In 2006 they say Oil and Gas got $39 Billion (52%); Coal got $8 Billion; Nuclear got $9 Billion; Mixed Renewables got $6 Billion; and Big Oil got most of the $6 Billion worth of Ethanol Blending subsidies:

    http://www.earthtrack.net

    Urban Lehner says:

    “Whenever ethanol subsidies are discussed and the 51 cent blenders credit in particular, I would argue that this is not a subsidy to the ethanol industry but rather it is another subsidy to the oil companies. It is my understanding that the blenders credit accrues to the people that do the blending of the ethanol which is primarily the fuel distributors (oil companies). The purpose of the blenders credit was to help offset the additional investment for them to store, blend, and distribute ethanol blended fuels. I have yet to see “blender credit income” on an income statement from my local ethanol plant. It does indirectly benefit my ethanol plant by opening up markets for more ethanol. But make no mistake; this blenders credit provides an incentive for the oil companies to utilize more ethanol, because they can make a lot of money doing it.”

    http://www.dtnprogressivefarmer.com/dtnag/common/link.do?symbolicName=/ag/blogs/template1&blogHandle=editorsnotebook&blogEntryId=8a82c0bc1cb6339b011cc2cfc5af0095

    A Greenpeace study puts oil and gas subsidies between $15 Billion and $35 Billion a year:

    http://cleantech.com/news/node/554

    The Cato Institute estimates Big Oil subsidies at between $78 Billion and $158 Billion a year:

    http://www.treehugger.com/files/2008/07/hidden-big-oil-subsidies-stop-them.php

    Clifford D. May says:

    “Former CIA director James Woolsey estimates that U.S. oil companies receive preferential tax treatment worth more than $250 billion a year — and that doesn’t include the military costs necessary to keep oil supplies flowing around the world.”

    http://www.unionleader.com/article.aspx?headline=Clifford+D.+May%3A+OPEC's+sheiks+must+think+Americans+are+stupid&articleId=99df355b-cedf-44eb-8bf1-66b277bd3262

  • Ronald S.

    Jeff Baker,

    I did not “take the very lowest estimates by Friends of the Earth and EIA”, I mentioned the EIA (and noted that I thought their estimates were too low) and cited the actual FoE estimates, not the low end of any range from them. The FoE study is a forward-looking analysis, counting the major subsidy and tax-programs supporting U.S. oil production, and is therefore appropriate for comparing against the value of the volumetric ethanol excise tax credit.

    But I’m delighted that you’ve cited Earth Track’s stimates, as I have great respect for their work.

    Two things: First, I guess you missed on the Earth Track website the two reports that Doug Koplow, President of Earth Track, wrote that were highly critical of current support programs for ethanol and biodiesel. The most recent one can be downloaded from here:

    http://www.earthtrack.net/earthtrack/library/BiofuelsUSupdate2007.pdf

    In that study, which considers a wider range of support programs for ethanol than just the VEETC, Koplow arrives at a total estimate of subsidies to ethanol of $1.05 to $1.25 per gallon, or $1.45 to $1.75 per gallon of gasoline equivalent (i.e., adjusting for its lower heat value).

    Nowhere will you find in any of Earth Track’s studies on ethanol any statement supporting Urban Lehner’s view that the VEETC is a subsidy to the oil companies. Indeed, the VEETC is the largest element in Earth Track’s ethanol-subsidy estimates. Pure and simple, the VEETC is a tax credit that, while paid to blender, basically allows ethanol producers to sell their product at a higher price than they would be able to otherwise.

    The Renewable Fuels Association — no friend of the oil industry (or so they say) — has fought vigorously to retain and extend it. If the oil companies and not the ethanol industry were the main beneficiaries, why would it bother? The RFA and others in the industry also defend the $0.54/gallon import tariff on Brazilian ethanol because they say that it is necessary in order to compensate taxpayers for the fact that Brazilian ethanol is also eligible for the VEETC. But if the VEETC were only benefiting oil companies, why should the domestic ethanol care?

    And are you going to tell us that you would be happy for Congress to let the VEETC expire? Somehow I doubt that. Or, is your (and the rest of the industry’s) real agenda to get the VEETC for corn-ethanol converted to a producer payment, like the $1.01 producer tax credit that will go into effect for cellulosic ethanol at the beginning of next month?

    Let’s return to the question of the value of government support for the oil industry. Of the various estimates you cite, only Earth Track’s allow for an apples-with-apples comparison with ethanol. Greenpeace’s estimates include such items as government expenditure for “construction and protection of the nation’s highway system.” Well, if that counts as a subsidy for petroleum, then it should also count (suitably pro-rated) as a subsidy for other transport fuels, including fuel ethanol. The source you cite for the Cato study is a secondary one. My reading of it is that Cato calculated that the US spent between $30 billion and $60 billion a year safeguarding oil supplies in the Middle East during the 1990s; the higher numbers ($78 to $158 billion) are from some other source, not attributed. (It could be the 1998 study by the International Center for Technology Assessment, which also counted road-building costs, as well as externalities such as noise pollution, which again are equally applicable to cars run on biofuels as to cars run on petroleum fuels.) Your quote of Clifford D. May quoting former CIA director James Woolsey as saying that U.S. oil companies receive preferential tax treatment worth more than $250 billion a year seems to be a case of Chinese whispers. Woolsey said nothing of the sort. What he said, in testimony before the Senate Committee on the Judiciary on 28 February 2006 was that: “[W]e continue to borrow a billion dollars every working day, about $250 billion per year, to import oil ….” That is not the same as a “preferential tax treatment worth more than $250 billion a year”.

    http://judiciary.senate.gov/hearings/testimony.cfm?id=1770&wit_id=5227

    The question of whether, and how much, of the cost the U.S. military presence in the Middle East can be attributed to protection of oil-supply lines, and of U.S. oil supply in particular, is a contentious one. But lets take Earth Track’s estimate of $39 billion a year as the best estimate of subsidies to the oil industry that includes some of that cost. Whereas the FoE estimate ($10 billion per year) relates to support for domestic production of oil and gas, Earth Track’s applies to total supply of oil consumed by the United States, which is a much large number. According to the EIA, it was 7.55 billion barrels in 2007, or 317 billion gallons:

    http://tonto.eia.doe.gov/dnav/pet/pet_cons_psup_dc_nus_mbbl_a.htm

    Dividing $39 billion by 317 billion gallons (i.e., ignoring natural gas production) yields a subsidy rate of $0.123 per gallon. That is far less than the rate of subsidization of ethanol and biodiesel, each of which exceeds $1.00 per gallon.

    Happy Holidays.

  • Ronald S.

    Jeff Baker,

    I did not “take the very lowest estimates by Friends of the Earth and EIA”, I mentioned the EIA (and noted that I thought their estimates were too low) and cited the actual FoE estimates, not the low end of any range from them. The FoE study is a forward-looking analysis, counting the major subsidy and tax-programs supporting U.S. oil production, and is therefore appropriate for comparing against the value of the volumetric ethanol excise tax credit.

    But I’m delighted that you’ve cited Earth Track’s stimates, as I have great respect for their work.

    Two things: First, I guess you missed on the Earth Track website the two reports that Doug Koplow, President of Earth Track, wrote that were highly critical of current support programs for ethanol and biodiesel. The most recent one can be downloaded from here:

    http://www.earthtrack.net/earthtrack/library/BiofuelsUSupdate2007.pdf

    In that study, which considers a wider range of support programs for ethanol than just the VEETC, Koplow arrives at a total estimate of subsidies to ethanol of $1.05 to $1.25 per gallon, or $1.45 to $1.75 per gallon of gasoline equivalent (i.e., adjusting for its lower heat value).

    Nowhere will you find in any of Earth Track’s studies on ethanol any statement supporting Urban Lehner’s view that the VEETC is a subsidy to the oil companies. Indeed, the VEETC is the largest element in Earth Track’s ethanol-subsidy estimates. Pure and simple, the VEETC is a tax credit that, while paid to blender, basically allows ethanol producers to sell their product at a higher price than they would be able to otherwise.

    The Renewable Fuels Association — no friend of the oil industry (or so they say) — has fought vigorously to retain and extend it. If the oil companies and not the ethanol industry were the main beneficiaries, why would it bother? The RFA and others in the industry also defend the $0.54/gallon import tariff on Brazilian ethanol because they say that it is necessary in order to compensate taxpayers for the fact that Brazilian ethanol is also eligible for the VEETC. But if the VEETC were only benefiting oil companies, why should the domestic ethanol care?

    And are you going to tell us that you would be happy for Congress to let the VEETC expire? Somehow I doubt that. Or, is your (and the rest of the industry’s) real agenda to get the VEETC for corn-ethanol converted to a producer payment, like the $1.01 producer tax credit that will go into effect for cellulosic ethanol at the beginning of next month?

    Let’s return to the question of the value of government support for the oil industry. Of the various estimates you cite, only Earth Track’s allow for an apples-with-apples comparison with ethanol. Greenpeace’s estimates include such items as government expenditure for “construction and protection of the nation’s highway system.” Well, if that counts as a subsidy for petroleum, then it should also count (suitably pro-rated) as a subsidy for other transport fuels, including fuel ethanol. The source you cite for the Cato study is a secondary one. My reading of it is that Cato calculated that the US spent between $30 billion and $60 billion a year safeguarding oil supplies in the Middle East during the 1990s; the higher numbers ($78 to $158 billion) are from some other source, not attributed. (It could be the 1998 study by the International Center for Technology Assessment, which also counted road-building costs, as well as externalities such as noise pollution, which again are equally applicable to cars run on biofuels as to cars run on petroleum fuels.) Your quote of Clifford D. May quoting former CIA director James Woolsey as saying that U.S. oil companies receive preferential tax treatment worth more than $250 billion a year seems to be a case of Chinese whispers. Woolsey said nothing of the sort. What he said, in testimony before the Senate Committee on the Judiciary on 28 February 2006 was that: “[W]e continue to borrow a billion dollars every working day, about $250 billion per year, to import oil ….” That is not the same as a “preferential tax treatment worth more than $250 billion a year”.

    http://judiciary.senate.gov/hearings/testimony.cfm?id=1770&wit_id=5227

    The question of whether, and how much, of the cost the U.S. military presence in the Middle East can be attributed to protection of oil-supply lines, and of U.S. oil supply in particular, is a contentious one. But lets take Earth Track’s estimate of $39 billion a year as the best estimate of subsidies to the oil industry that includes some of that cost. Whereas the FoE estimate ($10 billion per year) relates to support for domestic production of oil and gas, Earth Track’s applies to total supply of oil consumed by the United States, which is a much large number. According to the EIA, it was 7.55 billion barrels in 2007, or 317 billion gallons:

    http://tonto.eia.doe.gov/dnav/pet/pet_cons_psup_dc_nus_mbbl_a.htm

    Dividing $39 billion by 317 billion gallons (i.e., ignoring natural gas production) yields a subsidy rate of $0.123 per gallon. That is far less than the rate of subsidization of ethanol and biodiesel, each of which exceeds $1.00 per gallon.

    Happy Holidays.

  • Ronald S.

    Jeff Baker,

    I did not “take the very lowest estimates by Friends of the Earth and EIA”, I mentioned the EIA (and noted that I thought their estimates were too low) and cited the actual FoE estimates, not the low end of any range from them. The FoE study is a forward-looking analysis, counting the major subsidy and tax-programs supporting U.S. oil production, and is therefore appropriate for comparing against the value of the volumetric ethanol excise tax credit.

    But I’m delighted that you’ve cited Earth Track’s stimates, as I have great respect for their work.

    Two things: First, I guess you missed on the Earth Track website the two reports that Doug Koplow, President of Earth Track, wrote that were highly critical of current support programs for ethanol and biodiesel. The most recent one can be downloaded from here:

    http://www.earthtrack.net/earthtrack/library/BiofuelsUSupdate2007.pdf

    In that study, which considers a wider range of support programs for ethanol than just the VEETC, Koplow arrives at a total estimate of subsidies to ethanol of $1.05 to $1.25 per gallon, or $1.45 to $1.75 per gallon of gasoline equivalent (i.e., adjusting for its lower heat value).

    Nowhere will you find in any of Earth Track’s studies on ethanol any statement supporting Urban Lehner’s view that the VEETC is a subsidy to the oil companies. Indeed, the VEETC is the largest element in Earth Track’s ethanol-subsidy estimates. Pure and simple, the VEETC is a tax credit that, while paid to blender, basically allows ethanol producers to sell their product at a higher price than they would be able to otherwise.

    The Renewable Fuels Association — no friend of the oil industry (or so they say) — has fought vigorously to retain and extend it. If the oil companies and not the ethanol industry were the main beneficiaries, why would it bother? The RFA and others in the industry also defend the $0.54/gallon import tariff on Brazilian ethanol because they say that it is necessary in order to compensate taxpayers for the fact that Brazilian ethanol is also eligible for the VEETC. But if the VEETC were only benefiting oil companies, why should the domestic ethanol care?

    And are you going to tell us that you would be happy for Congress to let the VEETC expire? Somehow I doubt that. Or, is your (and the rest of the industry’s) real agenda to get the VEETC for corn-ethanol converted to a producer payment, like the $1.01 producer tax credit that will go into effect for cellulosic ethanol at the beginning of next month?

    Let’s return to the question of the value of government support for the oil industry. Of the various estimates you cite, only Earth Track’s allow for an apples-with-apples comparison with ethanol. Greenpeace’s estimates include such items as government expenditure for “construction and protection of the nation’s highway system.” Well, if that counts as a subsidy for petroleum, then it should also count (suitably pro-rated) as a subsidy for other transport fuels, including fuel ethanol. The source you cite for the Cato study is a secondary one. My reading of it is that Cato calculated that the US spent between $30 billion and $60 billion a year safeguarding oil supplies in the Middle East during the 1990s; the higher numbers ($78 to $158 billion) are from some other source, not attributed. (It could be the 1998 study by the International Center for Technology Assessment, which also counted road-building costs, as well as externalities such as noise pollution, which again are equally applicable to cars run on biofuels as to cars run on petroleum fuels.) Your quote of Clifford D. May quoting former CIA director James Woolsey as saying that U.S. oil companies receive preferential tax treatment worth more than $250 billion a year seems to be a case of Chinese whispers. Woolsey said nothing of the sort. What he said, in testimony before the Senate Committee on the Judiciary on 28 February 2006 was that: “[W]e continue to borrow a billion dollars every working day, about $250 billion per year, to import oil ….” That is not the same as a “preferential tax treatment worth more than $250 billion a year”.

    http://judiciary.senate.gov/hearings/testimony.cfm?id=1770&wit_id=5227

    The question of whether, and how much, of the cost the U.S. military presence in the Middle East can be attributed to protection of oil-supply lines, and of U.S. oil supply in particular, is a contentious one. But lets take Earth Track’s estimate of $39 billion a year as the best estimate of subsidies to the oil industry that includes some of that cost. Whereas the FoE estimate ($10 billion per year) relates to support for domestic production of oil and gas, Earth Track’s applies to total supply of oil consumed by the United States, which is a much large number. According to the EIA, it was 7.55 billion barrels in 2007, or 317 billion gallons:

    http://tonto.eia.doe.gov/dnav/pet/pet_cons_psup_dc_nus_mbbl_a.htm

    Dividing $39 billion by 317 billion gallons (i.e., ignoring natural gas production) yields a subsidy rate of $0.123 per gallon. That is far less than the rate of subsidization of ethanol and biodiesel, each of which exceeds $1.00 per gallon.

    Happy Holidays.

  • http://www.drblt.net Dr BLT

    I’m not sure I support this sort of bailout or not. Throwing money at problems seems to be the only way the economic crisis is being handled right now.

    That being said, I like any perspective on the economic crisis that introduces an element of hope. As a psychologist, my take on this phenomenon is that it is psychological, based on fear.

    The loss of the economy, as we knew it prior to this recent crash, involves a grieving process that I believe will culminate with recovery.

    The catalyst for that recovery is hope. Follow the message contained in these songs and you’ll understand what I mean.

    Everything is Fallin’ Apart

    Dr BLT

    words and music by Dr BLT copyright 2008

    http://www.drblt.net/music/EveryThingIsDemo2.mp3

    Dr BLT altered cover of Blue Oyster Cult classic

    http://www.drblt.net/music/DontFearDem2.mp3

    and as I said in my totally original Dr. BLTune…

    Spread Some New Year Cheer

    Dr BLT

    copyright 2007 Frosty Rock Records

    http://www.drblt.net/music/SpreadDemo2.mp3

    BTW, great predictions for a…

    Future 2 Behold

    Dr BLT

    words and music by Dr BLT copyright 2008

    http://www.drblt.net/music/future3.mp3

  • http://www.drblt.net Dr BLT

    I’m not sure I support this sort of bailout or not. Throwing money at problems seems to be the only way the economic crisis is being handled right now.

    That being said, I like any perspective on the economic crisis that introduces an element of hope. As a psychologist, my take on this phenomenon is that it is psychological, based on fear.

    The loss of the economy, as we knew it prior to this recent crash, involves a grieving process that I believe will culminate with recovery.

    The catalyst for that recovery is hope. Follow the message contained in these songs and you’ll understand what I mean.

    Everything is Fallin’ Apart

    Dr BLT

    words and music by Dr BLT copyright 2008

    http://www.drblt.net/music/EveryThingIsDemo2.mp3

    Dr BLT altered cover of Blue Oyster Cult classic

    http://www.drblt.net/music/DontFearDem2.mp3

    and as I said in my totally original Dr. BLTune…

    Spread Some New Year Cheer

    Dr BLT

    copyright 2007 Frosty Rock Records

    http://www.drblt.net/music/SpreadDemo2.mp3

    BTW, great predictions for a…

    Future 2 Behold

    Dr BLT

    words and music by Dr BLT copyright 2008

    http://www.drblt.net/music/future3.mp3

  • Uncle B

    If pure unadulterated Ethanol were available at the pumps, how long would it take Asian manufacturers to provide the super-charged, high performance engines to take advantage? I think not long! They(Asians) are much more flexible than GM, who can’t seem to get the “Volt” off the drawing board, in spite of their EV-1 experience! The Asians have put to market many electric and gasoline/hybrids, and VW has withdrawn a diesel/electric hybrid,plug-in, while Americans dilly dally, burning up the last of Saudi Oil, at manipulated prices, while the rest of the world converts to other fuels, other life-styles not requiring so much personal mobility, and the price of Beef, which requires copious amounts of fuel to produce, goes up each day! A breaking point approaches! We will ether have to Shiite or get off the pot! and soon! Oil broke $78.00 bbl today, and rising, exponentially, like an ominous tsunami over our economy! Ethanol may be part of the answer, but it is much more effective, over-all, in fuel cells driving electric motors than in piston engines.

  • Uncle B

    If pure unadulterated Ethanol were available at the pumps, how long would it take Asian manufacturers to provide the super-charged, high performance engines to take advantage? I think not long! They(Asians) are much more flexible than GM, who can’t seem to get the “Volt” off the drawing board, in spite of their EV-1 experience! The Asians have put to market many electric and gasoline/hybrids, and VW has withdrawn a diesel/electric hybrid,plug-in, while Americans dilly dally, burning up the last of Saudi Oil, at manipulated prices, while the rest of the world converts to other fuels, other life-styles not requiring so much personal mobility, and the price of Beef, which requires copious amounts of fuel to produce, goes up each day! A breaking point approaches! We will ether have to Shiite or get off the pot! and soon! Oil broke $78.00 bbl today, and rising, exponentially, like an ominous tsunami over our economy! Ethanol may be part of the answer, but it is much more effective, over-all, in fuel cells driving electric motors than in piston engines.

  • Uncle B

    If pure unadulterated Ethanol were available at the pumps, how long would it take Asian manufacturers to provide the super-charged, high performance engines to take advantage? I think not long! They(Asians) are much more flexible than GM, who can’t seem to get the “Volt” off the drawing board, in spite of their EV-1 experience! The Asians have put to market many electric and gasoline/hybrids, and VW has withdrawn a diesel/electric hybrid,plug-in, while Americans dilly dally, burning up the last of Saudi Oil, at manipulated prices, while the rest of the world converts to other fuels, other life-styles not requiring so much personal mobility, and the price of Beef, which requires copious amounts of fuel to produce, goes up each day! A breaking point approaches! We will ether have to Shiite or get off the pot! and soon! Oil broke $78.00 bbl today, and rising, exponentially, like an ominous tsunami over our economy! Ethanol may be part of the answer, but it is much more effective, over-all, in fuel cells driving electric motors than in piston engines.

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