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Comments
No I am addressing this to the one who is twisting my words, YOU.
In the big picture, they are similar concepts.
No they are not, completely different rules and applications. Plus one is an absolute while the other is conditional.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
In that respect, I see E85 and diesel being in the same boat, i.e. mature technologies that create minimal buzz among buyers and virtually no hype from the techies. The adoption curve applies nicely to hybrids, but not to something like this, which may well be viewed by consumers as a slightly appealing commodity, rather than a breakthrough technology that warrants enthusiasm or payment of a premium price.
The one advantage that E85 has over diesel is that consumers could get FFV cars without any sacrifice, as the manufacturers could simply add FFV capability to gas-powered cars at low cost. Customers wouldn't need to do anything special to get them.
But whether there will be fuel to buy and whether consumers will buy it are two different questions.
I'm not twisting your words, I'm offering your definition and then asking whether there is a "subsidy", i.e. a check paid to ethanol producers.
I'm not seeing any such "subsidy", and it is Gagrice who keeps referring to it as such. So where is this subsidy?
(And no, I'm not talking about subsidies to corn growers that get paid no matter what happens to the corn. I don't want to turn this into a thread in which we protest Fritos or corn-on-the-cob eaten at weekend barbeques.)
It is a subsidy. You have to OWE taxes to get a Tax Credit. I do not see where any of these ethanol companies are making a Profit. No Profit, No tax, No Tax Credit. Only subsidies. Would you rather I call it by its legitimate Name. It is Corporate Welfare on a grand scale. You need to do some studying on taxation and what the terms mean.
1978:
The first time gasohol was defined, it was in the Energy Tax Act of 1978. Gasohol was defined as a blend of gasoline with at least 10 percent alcohol by volume, excluding alcohol made from petroleum, natural gas or coal. For this reason, all ethanol to be blended into gasoline is produced from renewable biomass feedstocks. The Federal excise tax on gasoline at the time was 4 cents per gallon. This law amounted to a 40 cents per gallon subsidy for every gallon of ethanol blended into gasoline.
Whether it is a subsidy or tax credit such as the Hybrid Tax Credit, I don't see any difference. It is giving preferential tax treatment to one type business and screwing the other. All costing you and I, if you pay taxes.
http://www.eia.doe.gov/kids/history/timelines/ethanol.html
OK, if I give you this one. Who are the ethanol blenders? Are they the oil refiners, oil producers or ethanol producers? In other words, who gets the benefit of this 51 cent per gallon law, the Federal government calls a subsidy?
Has anyone noted the correlation between the increase in production and placement of fuel pumps? There isn't one. It should be a linear parallel curve.
My take is the additional ethanol production has been directed towards blenders to make more states E10. It also makes E85 a fraud unless we have a stepped plan to roll to E85 (or other) fuel.
You don't seem to understand how deal structures often work. The blending operations could be structured to throw off these tax credits to investors, which do pay taxes and which buy into the ownership entity in exchange for receiving the tax credits.
I don't know specifically how the ethanol blenders set this up, but here's a fair guess of how it likely works:
-Ethanol blender sets up entity to construct a blending facility (For fun, let's call it the Acme Bio Refinery, LP or LLC.)
-Some ethanol producer installs a general partner, managing member, etc. to build and operate the facility to be owned by Acme.
-Investors (limited partners or members) put up the bulk of the money in exchange for a large chunk of ownership in Acme.
-Each year, Acme receives tax credits, which it allocates to the various partners/ members based upon their percentage of ownership or the allocation in their agreements. Those different entities get to take the tax write off. If the investors get more credits than the amount that they invested, and they have enough taxable income otherwise to use the credits, then those credits effectively provide a positive yield to them.
In any case, even if they didn't pay taxes because they generate net losses, what would you care? In those cases, a tax credit that can't be used by the taxpayer is effectively a free gift to the government, as Uncle is handing out a tax voucher that has no value to the recipient.
No, there wouldn't necessarily be a correlation. The service stations will install pumps if there are customers who demand the fuel, and at this point in time, most of us don't even have vehicles that can use the fuel, hence not much demand.
Most current ethanol production is being diverted to making E10. Being that ethanol production is about 3% of gas consumption, there isn't even ethanol to make E10 for everyone, let alone E85. I would imagine that the initial focus will be on getting E10 to everyone, before transitioning to wider E85 distribution (which may itself not be an achievable goal is the biomass production isn't sufficient.)
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
But it is the case, Uncle Sam is giving hefty sums of money for people to produce ethanol. It doesn't matter how the money gets there, be it by check, tax credit, cash or Magical Oil Fairy it all has the same result. Large sums of tax money wasted on a pipe dream.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
I'm not doing that, but fine, let's do this:
Using a strict tax accountant's definition of these terms (subsidy = payment from government to some recipient, tax credit = a "voucher" of sorts for taxes owed, deduction = reduction in amount of of taxable income), show us this "subsidy" to which Gagrice is referring.
Again, using this strict terminology, I don't see a subsidy. I do see a "tax credit", but not a subsidy (payment by Uncle to the ethanol producers or blenders).
My big picture goal here is to discuss specifically who is getting what out of this. Since we have some allegations on this thread about "scams", conspiracies, etc., I'd like to see some specifics of what these folks are talking about.
Thats like saying "I see the forest, but I can't see any trees".
Ever heard of the term "payment in the form of a tax credit"
The subsidy is there, don't call it something else in a feeble attempt to deny it. The payments are made hence it is subsidized.
I'd like to see some specifics of what these folks are talking about.
Well if you have been reading the same forum I have you would have seen them.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
Mr and Ms America read Car and Driver, Motor Trend, Road and Track and Popular Mechanics.
Mr and Ms America browse web sites (like this one, and many more) and we google our heads off sometimes to find sources of information and answers.
Based on a real quick look-see at the words used by those apparently being paid to express their opinions and report their stories, the word "subsidy" is being used to describe the "incentive" offered by the US government to stimulate (ostensibly) the production and adoption of Ethanol fuel mixes.
"The Folks" are also being incented (via tax credits) to buy hybrids, diesels and FFV's and for all I know wind-power, solar-power and the power of love machines.
Big oil would probably love to be subsidized to cook that shale in Colorado for about the next 4 years to see if a large scale viable production facility can be brought on line.
GM would probably like a billion to develop a quiet, clean, powerful, non-smelly blutech passenger car suited Turbo Diesel.
Right now the King Corn, so to speak is getting the " " to the tune of $.51 per gallon.
The paid pros (or is that prose) call it a subsidy. :shades:
I'm not a CPA, I'm not a tax attorney (although I am a tax payer) and I don't know nuthin' 'bout birthin' no babies, but right now, today, the sum and substance of the "other" folks (the paid ones) writings is that Ethanol is "enjoying" a $.51 per gallon subsidy that gasoline and diesel (dino) don't enjoy.
If all these folks are wrong, well stop the presses, cut of my legs and call me shorty.
If they are using a word to -- in spirit, yet not in complete, accurate "technical, legal or accounting" terminology -- get an idea across that is a rose by another name, why don't we just agree to disagree on the technical term and agree that most of us understand it to be a financial incentive that plain old dino fuel doesn't get?!?
All the articles I can pull up in 5 minutes time that discuss the $.51 figure use the word subsidy or subsidize.
Maybe the fact that they all use the word doesn't make it right -- but the great mass of people who will read and hear this stuff repeated will, more or less, get the gist of it.
I find it more interesting to "argue" about mileage claims (per tankful) since there still seems to be some disconnect between the does too, does not crowd.
The ethanol subsidy is a subsidy not a tax write off.
Tax credits and tax deductions are two different animals.
In #1612, you once again made an effort to distinguish between deductions and credits:
No they are not, completely different rules and applications. Plus one is an absolute while the other is conditional.
So, are you claiming that tax deductions aren't a form of subsidy, but tax credits are? In your mind, is one inherently better or worse than the other?
I would say the answer is the cost of oil. $75 a barrel oil has opened up a few eyes to what might be coming.
"How much tax revenue are we getting from ethanol production?"
A 40 million gallon per year plant will boost state and local tax rates by an average of $1.2 million depending on rates. A 40 MGY plant will also add 41 direct jobs and 694 jobs through the entire economy. Source: Homegrown for the Homeland
You don't need to be an accountant to see this from a big picture standpoint.
-Calling it a "subsidy" without context is horribly misleading, because Uncle isn't handing over fat checks to the ethanol industry, as Gagrice would like us to believe.
Instead, the government is using tax incentives, to stimulate industry, which in turn should create jobs (i.e. more taxes to be collected) and infusions into the communities.
It's not much different from providing tax write-offs and credits for all sorts of things, from getting a deduction for your kids on your 1040 (yes, Uncle wants you to reproduce and create new little taxpayers for the future of the country) to writing off the interest on your house. (Yes, Uncle wants you to own a house, invest in your community, and help your local banker.)
The credit isn't just a welfare check, but provides something in return. If it encourages investors to build infrastructure that creates employment and a broader tax base, I don't necessarily see the problem. These may prove to be the chinchilla farms of the decade (if you remember the reference), but the jury is still out on that.
Perhaps the Feds should eliminate the need for the refiners to add an oxygenate to the fuel (since oxygenates are essentially worthless with modern emmissions equipment). By eliminating the various states mandates for E10, this would free up essentially all ethanol production for E85. Ethanol would then only have to be trucked short distances (from the local ethanol plants just to those local stations with pumps for E85) and then the MARKET could regulate the price of E85 via local supply and demand.
As it's been noted, the current demand for ethanol is an ARTIFICIAL demand due to mandates for E10. Artificially high demands and short supply = artificially high prices.
This way, we can focus on realistic REGIONAL solutions to our efforts to reduce dependencies on imported oil. By seeing IF E85 can compete with gasoline on a local basis, without built-in artificial demands, perhaps this would give us a clue about whether or not we should continue to pursue ethanol as a nationwide solution?
http://www1.eere.energy.gov/biomass/pdfs/final_billionton_vision_report2.pdf
and
http://www.ethanol.org/PressRelease71905bhtm.htm
I believe that it depends upon your goals and motivations.
If the motivation is to reduce dependency upon foreign oil and to diversify our energy consumption profile, then it might be worth encouraging ethanol development just for that purpose, even if there is no obvious economic payoff. The main benefits of biofuels, whatever they are, may be largely geopolitical, rather than strictly financial.
I sit with my trusty laptop and watch the boob-tube and read a lot of the stuff written here and post.
There are just so many posts it is like having 17 24 hour a day news channels -- there just isn't time! :surprise:
Yep what appears to be on the horizon is $40 - $50 bbl oil, now that's the reason to get into Ethanol while the. . .er, what's the reason again?
I don't want to put words in your mouth, but it SOUNDS like what you are saying is that it is okay (in fact, perhaps desireable) for the Feds to 'subsidize' (and I use the term loosely) corn-based ethanol production EVEN IF it can't compete with gasoline based purely on the financials, now or even perhaps in the future?
So what else is new?
So, are you claiming that tax deductions aren't a form of subsidy, but tax credits are?
Yes.
But understand that tax write offs, tax deductions and tax credits are three different things. They are not Interchangeable.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
It is in my mind for sure. If the government says I can write off the interest on my house. He gives that incentive or tax break to everyone that buys a home. He does not say if you live in Iowa you can write off your home loan interest but not if you buy a home in California. With the Ethanol subsidy as well as the subsidies for raising corn, it is giving one group an incentive and not the competing group. It is the same as the phoney tax credit for buying a hybrid, electric or diesel car. It picks out one group of people and gives preferential treatment because they are doing what Congress wants them to do. Why doesn't the guy buying the Civic that gets 40 MPG get a tax credit? He is using less fuel than the fat cat in the Lexus GS450h getting maybe 25 MPG. Tax credits that are specific to one group of people are a form of government manipulation of the people. I think it is wrong whatever they are choosing to subsidize this year.
But the government is handing over large sums of taxpayer money to the ethanol industry. It might not be in the form of fat checks but they are getting the equivalent of it.
The credit isn't just a welfare check, but provides something in return.
Yeah It gives ADM exec's and shareholders thicker wallets at the expense of you and me. That money could be spent much better elsewhere.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
I'm not discussing the intracacies of the tax code, but whether "deductions" are somehow superior to "credits".
In broader conceptual terms, I don't see the difference. Both result in lower taxes being paid by the taxpayer.
That being said, both deductions and credits can be viewed as being superior to direct subsidies, because there is generally a stimulus attached to taking these, i.e. the recipient had to pay something to someone else in order to generate the expenses that produce the credit or deduction.A credit offers some advantages to a deduction, because the benefit of the credit is higher (and therefore, more directly tied to the action that generated the credit.)
What, in your estimation or direct experiences, even, are the geopolitical benefits (and as an extension to that question, what then are the geopolitical goals?)
Now, since I do not have any reason to believe one way or another vis a vis geopolitical this that or the other thing, I wonder "if" the financial consequences are negative, how long we might consider sustaining such a proposition with it being an economic drain?
Perhaps that is rhetorical -- for I certainly would have no clue as to what the "patience" to pump money into an endeavor that has perhaps some positive geopolitical benefits but also carries with it negative economic benefits might be.
My sense is the encouragement of alternatives purpose is to find "alternatives" specifically and primarily to ONE source of foreign oil -- Middle Eastern oil -- PERIOD and to find ways to "buy time" while we slowly (over generations) drain the entire earth of its fossil fuels (notably, in this instance petroleum.)
Energy independence (from you know who) and the equivalent of adding filler to a scarce and expensive food (crab, yea, how about crab? "you want lots of crab and a little filler, or a bit less crab and more filler or a whole lot less crab and a whole bunch more filler?") seem to be what the spirit of our drive to stimulate the production and utilization of ethanol is all about.
I still wonder what other folks think are the geopolitical benefits and how much loss economically will be tolerated and for how long.
Inquiring mind. :shades:
Don't you remember the reason. It is to transfer money out of your pocket and into ADM's pocket.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
It might be, it depends upon your agenda.
Some approach strictly in terms of pump price economics, others are more concerned about supply crunches, still others are worried about the political implications, while others still are most concerned about the environment. Some others combine some or all of the above.
I am viewing this largely from a geopolitical perspective, I am worried about where the US is getting its energy and increasing competition for resources coming from superpowers-in-the-making such as China.
Right now, we are already fighting one war because of our concerns of future global oil supplies, one that comes at a high price to our treasury (Iraq costs the equivalent of about $0.75 per gallon), our future prestige and human life on all sides, so oil dependency doesn't come cheap.
I seriously doubt that we are going to quit using oil anytime soon, but I believe to be incredibly dumb and shortsighted to put all our bets on foreign oil if we intend to remain a superpower over the long run. Diversification should be a priority, and if costs some money to get there, then so be it.
The last thing that the US needs is to find itself caught with its pants down, just as occurred during the OPEC crises, those are shortsighted non-policies that we can't afford to pursue. That being said, I'm skeptical that ethanol is, by itself, enough to remedy it, so I would favor developing it simultaneously with other sources, and then sort out later which fuels are the best for us to use. At this point, we can't afford to wait.
Again they are two different things, its like asking if a shark is superior to a tree.
In broader conceptual terms, I don't see the difference. Both result in lower taxes being paid by the taxpayer.
In reality a credit doesn't reduce tax liability it more like getting a check from the government and using it to pay down your taxes. You see you get the whole tax credit regardless of what your tax liability is. Say your company makes no profit and therefore incurs not tax liability but you get a $5,000,000 tax credit. Well guess what? You get a $5,000,000 check from the government.
Tax deductions and tax write offs reduce taxable income. If it is more than enough to reduce your tax liability to $0.00 then you don't get anything extra back.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
http://www.eia.doe.gov/oiaf/servicerpt/subsidy/introduction.html
"There is no universally accepted definition of what constitutes a subsidy.....
Energy subsidies may be either "direct" or "indirect." Direct subsidies include (a) payments from the Government directly to producers or consumers and (b) tax expenditures. Tax expenditures are provisions in the tax code that reduce the Federal tax liability of qualifying firms or individuals who have undertaken particular actions. Energy-related examples include tax credits for certain kinds of activity (e.g., drilling coalbed methane wells) or favorable treatment of capital recovery (e.g., percentage depletion for independent oil producers). When such payments or tax expenditures are made exclusively to recipients engaged in energy production or consumption, they are considered direct energy subsidies."
I'm talking about a broader point as to whether any of these are inherently undesirable. And to that I would say that tax credits and deductions can be perfectly fine, since they require the recipient to have done something to earn them.
If we get ethanol infrastructure that otherwise may have not been built, which helps to offset oil imports, then those can be a worthwhile tradeoff. That's particularly true if the resulting investment creates other benefits such as employment and a broader tax base. If the credit returns taxes in another form, its true cost may not be anywhere near $0.51, and may actually produce a net profit to the treasury over the long run.
You know I never thought about it much. It has been there all my tax paying days. I used to write off interest on cars and credit cards also. I soon paid them all off when that deduction was eliminated.
How about business expense write offs? I would think those are needed to keep people in some businesses. All businesses do not have the same percentage of expense. A company like Microsoft is mostly profit, where a grocery store is running very close to the edge.
If the ethanol producers were taking normal deductions I don't believe we would be having this discussion. Just another business. It seems that is what it should be for fairness to all competing businesses.
In much the same way, I suspect that if the mortgage deduction went away people would actually try harder to "own" their homes. I've always written off mortgage interest and have personally benefited from the policy. That doesn't mean it makes sense.
TO REDUCE BOTH EMISSIONS & CONSUMPTION.
So naturally, I've been attacked by those that support technologies that don't actually deliver both.
Ethanol is the hot topic right now. It alone is obviously not a complete solution. But combined with hybrid technology, you do actually have a genuine way of fulfilling both goals. All the number-crunching I've been seeing lately doesn't address this. That's clearly not objective.
Diesel has the same problem, both goals are not achieved. Soon, that will be a different story. But supporters have been disingenuous. All along I've been saying the hardware required to clean up the emissions will increase cost and reduce efficiency. And finally, I have proof of that. This article published yesterday clearly states a $600 to $800 cost along with an economy drop. Filters & Absorbers are not free. And the engine power required to push the exhaust through them requires a sacrifice.
So in the end, the ultimate decision-maker is real-world data. You can argue "what if" scenarios all you want. But that doesn't accomplish much. It's those that share their actual experiences that make a difference.
JOHN
I'll repeat this only because I fundamentally have it memorized:
A German 6 cylinder fuel injected gasoline engine with every current anti pollution and economy and power trick "commercially" available can be put in a Luxury Performance Sedan and attain "average" fuel consumption of 26MPG and acceleration from 0 - 100kph (62MPH) of 7.1 seconds in a large luxury car equipped with every power option imaginable and a 6 speed automatic transmission. The cost is, in dollars, about $50,000. This car requires premium unleaded gasoline.
The exact same car with a German 6 cylinder diesel engine (rated TODAY to exceed European ULEV version 4 standards and soon to meet version 5 standards) will attain a mileage improvement of 20% (although some tests have shown higher percentages) and a performance improvement of .1 second. The vehicle's sound footprint, compared to the gasoline version, is smaller, its pollution footprint, ditto and its predicted reliability higher and longer.
It uses fuel that costs less than premium gasoline.
It has an MSRP that is ABOUT $1,000 less than its gasoline fraternal twin.
50% of the manufacturer's global production of nearly 900,000 cars is already diesel.
Every year, since about 1990, this compression engine (and its bigger and smaller brothers) has been improved in power, reliability, efficiency, cleanliness and quietness. It just keeps getting better and better, that is.
It's rivals, too, continue to get better in all the desirable ways we performance drivers want.
It continues to get cleaner and more economical, too.
What Chrysler, Ford and GM can and cannot do may be newsworthy.
What can be done and actually is being done elsewhere leaves the American mfgr's behind, apparently.
It is, unfortunately, the way that it is.
The future of diesel may be entirely in the hands of marketing -- i.e., the product is not relevant.
Yet, with a product that is, apparently unable to become the "hot rod" and high performance choice (in every aspect of the word), the winning choice (like Audi's at least in its Sebring and LeMans entries AND then with Mercedes bringing the latest and greatest blu tech entries to the table (in 2007),) well what can the Americans do?
The product, may be relevant after all, that is.
Dodge ought to be able to go to Mercedes and get some love -- some technology, some instant tang!
More's the pity.
Of some relevance #1
Of some relevance #2
:shades:
Oh, almost forgot, this technology if adopted and used our upcoming clean diesel and/or even biodiesel, will reduce consumption and decrease pollution.
Simultaneously, it will also increase the performance of the vehicles it is placed in -- that is they will have more "urge to merge." :surprise:
That is not a real big price hit on a 3/4 ton PU truck. Currently the difference between a gas heavy duty PU and diesel is $5500 to $7000. That does not slow down the sales as DCX posted their diesel accounts for 80% of the heavy duty PU trucks. If you need the power and don't want to get 6 MPG you buy a diesel PU truck.
What does all the added emissions for a hybrid cost. Toyota charges about $2000 to replace the catalytic convertor in a Prius II. If you have followed the increase in emissions equipment it has taken its toll on mileage with all engines. Your Prius would probably get 65 MPG combined if it were not for all the SULEV crap. And still be very clean burning. Most of the advances since the 1970s is in the fuel.
Now how does this relate to the E85 scam of which you are a proponent? And what exactly does it have to do with hybrids. Are they building a hybrid flex fuel vehicle?
There is no rock solid evidence that Corn ethanol produces more energy than the fossil energy that it takes to produce & transport it. Every glowing study is by an entity that has something to gain by corn ethanol being produced. I am not against spending money to develop an ethanol plant that uses waste biomass. I am upset with wasting money on a product that every one that is involved knows is just a way for them to make money. NO substantiable evidence that it has saved one drop of fossil fuel, cleaned any air or cut Green house gas. I do know for a fact that it increased pollution and ice fog in Fairbanks when it was mandated as an oxygenate in the 1980s. Alaska got a special exemption as a result.
Mark,
If Congress was truly serious about cutting our dependence of foreign oil and global warming, they would do everything in their power to push diesel. From the smallest Smart fortwo to the largest SUV. Instead they play games with a do nothing product, corn ethanol, that in FACT increases our use of foreign oil and global warming.
Your implication that Audi, BMW or Mercedes will share their technology with competitors for use in non-luxury vehicles is very difficult to accept.
Why would they do that?
And where's the proof that a vehicle which cost less than half the price would actually offer a savings?
JOHN
Talking about not remembering the goals. Geez!
That would do nothing to reduce smog-related emissions. In fact, it would do precisely the opposite... increase them!
JOHN
This is the disingenuous type of post I've been referring to.
The hybrid price *ALREADY* includes that!
The diesels do not, yet supporters pretend the clean emissions later won't add to the price. I pointed out that it would. I also pointed out the efficiency reduction.
That's where the real-world data is absolutely vital. It reveals objectivity, since you can draw your own conclusions rather than being fed propaganda.
The same holds true for ethanol. Seeing MPG results from a vehicle delivering a reduction in smog-related emissions will speak for itself.
JOHN
Since I have been clearly speaking out against it in favor of E10 & E20 instead, I wonder who the heck you are asking this.
.
> And what exactly does it have to do with hybrids.
Obviously, you didn't read the very post you just responded to. Note the "combined with hybrid technology" reference in the original message.
.
> Are they building a hybrid flex fuel vehicle?
Again, not paying attention.
I have over 116,500 miles of E10 use already in my hybrid.
And yes, higher blend support for has been announced for future hybrids.
That is my point. Hybrids are already over priced for what you get. Unless you are totally into PZEV, which is a lovely thought. Just not practical for everyone.
The same holds true for ethanol. Seeing MPG results from a vehicle delivering a reduction in smog-related emissions will speak for itself.
Not if more fossil fuel is burnt in the process of growing and distilling and transporting the ethanol. I am wondering how gungho you would be if ADM built one of the new coal fired ethanol plants in your backyard. That is the direction ethanol production is headed. Coal is 1/6th the cost of natural gas fired stills. Sure they pollute a little bit more but what the hey.
You keep saying it will reduce smog related emissions. Where is the unbiased study that agrees with you? I imagine the corn growers and ADM agree. The studies by independent universities have a different take on corn ethanol.
From the University of California Santa Barbara:
Depending on the ethanol/gasoline blend, ethanol may raise levels of nitrogen oxides produced as gasoline emissions. Because of its lower energy content relative to gasoline, ethanol also reduces mileage per gallon. Corn-based ethanol production is energy intensive, and in some instances uses nearly as much energy to produce (including the energy needed for farming and making fertilizers) than it supplies
So ethanol blends may add to the dreaded NoX. Hmmmmm you did not mention that...
The Brazilian "Prooalcool" program to promote the use of fuel ethanol in motor vehicles has attracted worldwide attention as a successful alternative fuel program. Despite the availability of a large and inexpensive biomass resource, however, this program still depends on massive government subsidies for its viability.
The high cost of producing ethanol (compared to hydrocarbon fuels) remains the primary barrier to widespread use. The limited NOx reductions are also a concern.
"The price of crude oil now is about $75 per barrel and Evans said he expects the price to eventually hit $90 or $100 per barrel."
http://www.detnews.com/apps/pbcs.dll/article?AID=/20060708/AUTO01/607080359/1148-
Other news related to the price of ethanol and E85 include the recent announcement by Shell Canada that their cost for expansion have increased by a few billion.
"LABOUR shortages and soaring equipment costs have raised a question mark over the future of one of northern Alberta's biggest oil sands projects, controlled by Royal Dutch Shell."
http://www.theaustralian.news.com.au/story/0,20867,19720229-36375,00.html
Energyintel is reporting "dry wells offshore Kazakhstan", "Kazakhstan is facing a struggle to achieve its target.... five years behind the initial schedule"
Opec will likely slow expansion projects and lower production if prices drop.
Demand does not appear to be falling off either. Demand in the US was up 1.4% from last year.
My money is on $60+ bbl oil.
On the bright side, we will be getting a new ethanol plant in ND. This would be the fifth planned. The new plant will use lignite coal, corn and either barley or wheat. The big advantage to using lignite is stable prices, as compared to natual gas. And, we have lots of lignite coal in ND - about 800 years worth at current production levels.
The plant will be closer to west coast markets, it is on a rail line and water is plentiful (Missouri River). The only issue I see is that the oil boom has made it hard to find workers in that part of the state. I hear stories of people making $25 to $30 per hour driving trucks. The pre-boom wage was probably more like $10-12 per hour. These jobs will disappear if oil prices drop to $40 a bbl. Marginal wells will shut down and expansion projects (drilling and oil sands) will start to diminsh. When this happens prices will rise again. E85 and E10 are still a safe long term bet.
http://www.grandforks.com/mld/grandforks/news/state/14991406.htm
I did suggest that Dodge "might" or "ought" to be able to go to Mercedes and ask for some shopping rights in the Blu-tech store.
My point was to note that the American mfgr's have not "innovated" and not invented clean, quiet, efficient, odor free, powerful and low cost 4, 6 & 8 cylinder passenger car suitable engines (light diesel) -- and to imply that I think they should crank up the R&D there, even if it meant a slightly lower investment in FFV's.
The politics of CAFE and the technicality that permits an FFV vehicle to claim higher MPG's when it is actually 30% lower in MPG's (when E85 is used) may make my suggestion harder to adopt.
When the Europeans AND our own EPA have discovered the pleasures, economies and lower pollution and costs of operation of high performance diesel vehicles -- well, I just lament our apparent slowness to adopt.
I had the absolute thrill of driving an Audi A4 quattro 2.5TDI as Audi's guest in Austria a couple of years ago -- only the S4 pushed my performance buttons harder.
I think we need all the alternatives -- but I especially think for the near term, diesel [vehicles/fuel] offers more of what we rail on about here than FFV/E85 [vehicles/fuel].
More MPG's, lower TCO, more performance, lower greenhouse emissions and reduced need for Middle Eastern oil.
Diesel, as we have seen successfully implemented by at least the three mfgrs I mentioned -- buys us time and increases the performance for those with that lust; and, the side effects, so to speak, are more benign than the current alternatives (that could actually be quickly brought on line.)
If Dodge (Chryco) could put one of the excellent Blutech engines in the Dodge Charger or Chrysler/300"D" or -- well you get the idea.