True cost of ethanol
wolfmotherbrot
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Hi If you add up the cost of seed, fertilizer, tilling, planting, harvesting, and farm subsidies, what is the true cost of ethanol per gallon compared with gasoline???
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Byron
A Summary of Major Studies -- Authors and Date NEV (Btu)
Shapouri (1995) - USDA +20,436 (HHV)
Lorenz and Morris (1995) Institute for Local Self-Reliance +30,589 (HHV)
Agri. and Agri-Food, CAN (1999) +29,826 (LHV)
Wang (1999) – Argonne National Laboratory +22,500 (LHV)
Pimentel (2001) - Cornell University -33,562 (LHV)
Shapouri Update (2002) – USDA +21,105 (HHV)
Kim and Dale (2002) - Michigan St +23,866 to +35,463 (LHV)
Shapouri (2004) – USDA +30,258 (LHV)
If gas is $2 a gallon, E85 should be $1.40 to break even in a FFV.
The ethanol boom is spreading money around the heartland like so much fertilizer. Billions of dollars in new government subsidies have touched off a flurry of private investment at biofuel operations across the Midwest. Tired towns where opportunity has slipped away for decades now see their salvation in the giant distilleries that turn corn into alcohol for the gas tank. Almost every rural hamlet has a plant in its sights, or so it seems.
Yet the benefits of ethanol fall unevenly, and some longtime rural interests stand to lose ground even as corn farmers and many others gain.
http://www.kansascity.com/mld/kansascity/news/breaking_news/15884440.htm
McCain said in November 2003. "Yet thanks to agricultural subsidies and ethanol producer subsidies, it is now a very big business - tens of billions of dollars that have enriched a handful of corporate interests - primarily one big corporation, ADM. Ethanol does nothing to reduce fuel consumption, nothing to increase our energy independence, nothing to improve air quality."
"I support ethanol and I think it is a vital, a vital alternative energy source not only because of our dependency on foreign oil but its greenhouse gas reduction effects," he said in an August speech in Grinnell, Iowa, as reported by the Associated Press.
I read stuff like this and am simultaneously amused and pissed off. Why do we even waste time voting if we have no clue what these politicians actually stand for? This is a fundamental problem in our system that dwarfs the significance of the ethanol issue.
http://money.cnn.com/magazines/fortune/fortune_archive/2006/11/13/8393132/index.- htm?postversion=2006103112
I would write more but I got to go plant a few bushels of corn and soybean in the backyard :shades: And some people thought ethanol was a fad...............
Mexico is in the grip of the worst tortilla crisis in its modern history. Dramatically rising international corn prices, spurred by demand for the grain-based fuel ethanol, have led to expensive tortillas. That, in turn, has led to lower sales for vendors such as Rosales and angry protests by consumers.
The uproar is exposing this country's outsize dependence on tortillas in its diet -- especially among the poor -- and testing the acumen of the new president, Felipe Calderón. It is also raising questions about the powerful businesses that dominate the Mexican corn market and are suspected by some lawmakers and regulators of unfair speculation and monopoly practices.
Tortilla prices have tripled or quadrupled in some parts of Mexico since last summer. On Jan. 18, Calderón announced an agreement with business leaders capping tortilla prices at 78 cents per kilogram, or 2.2 pounds, less than half the highest reported prices. The president's move was a throwback to a previous era when Mexico controlled prices -- the government subsidized tortillas until 1999, at which point cheap corn imports were rising under the NAFTA trade agreement. It was also a surprise given his carefully crafted image as an avowed supporter of free trade.
ethanol causing starvation
The actual conclusion of the study was: "Corn ethanol, while a not achieving significant GHG savings compared to gasoline, can be seen as a stepping stone to ethanol produced from cellulose."
We just had two ethanol plants go online in my state within the last few months. One plant is getting their energy/steam from the local power plant. That plant is basically using waste heat from the coal plant. The other plant is burning coal which is cheap but not the most emission friendly fuel around.
The MIT study talks about using natural gas. So it appears they did not count the extra efficiency of the cogeneration process being used in the Blue Flint Plant.
http://www.redtrailenergyllc.com/index.php
http://www.blueflintethanol.com/
http://www.blueflintethanol.com/data/upfiles/project/UsingWasteHeat.pdf
PS
As you have noted these new ethanol plants are coal fired as natural gas ia in short supply in the corn belt.
http://www.planetark.com/dailynewsstory.cfm/newsid/40573/story.htm
Talk of 30 billion gallons a year is a bit optimistic. High corn prices will likely limit yearly production to 7 - 10 billion gallons a year. Cellulose and switch grass are promising but lets not bet the farm yet.
Until they nail down the exact technology for producing ethanol from cellulose, I do not think we can assume there will or won't be a big need for infrastructure change. Many corn based plants will continue to run.
There appears to be plenty of natural gas here and for now the price is moderate. The price for gas is very unpredictable whereas coal prices are fairly stable.
If you read through all the EPA documents on ethanol as an additive you will find the EPA recommends against ethanol or any other oxygenate additive. My contention is without all this government corporate welfare there would not be all these corn ethanol plants being built for no good reason. The net benefit in cutting foreign oil is negligible or a possible loss.
EPA says NO to Ethanol as an additive
"The MTBE Blue Ribbon Panel was created by a Charter from the Clean Air Act Advisory Committee to provide independent advice and counsel to the Environmental Protection Agency on policy issues associated with the use of MTBE and other oxygenates in gasoline."
http://www.epa.gov/oar/caaac/mtbe.html
"Ethanol An effective fuel-blending component, made from domestic grain and potentially from recycled biomass, that provides high octane, carbon monoxide emission benefits, and
appears to contribute to reduction of the use of aromatics with related toxics and other air quality benefits......"
http://www.epa.gov/otaq/consumer/fuels/oxypanel/r99021.pdf
There are good reasons for building (some ethanol plants) such as jobs in the Midwest and higher income for farmers.
"Five years ago, a United States General Accounting Office (USGAO) report showed that ethanol had received $11.6 billion in tax incentives since 1968, while the oil industry had received over $150 billion in tax benefit over the same period."
http://www.drivingethanol.org/userdocs/Real_Cost_of_Oil_Aug_05.pdf
In order to grow the ethanol industry we will need give them subsidies. Having said that, I think we should also reduce the subsidies within a few years with a complete phase out in 5 to 10 years.
I am in favor of producing enough ethanol (corn based) for an E10 mix. When we can get ethanol from algae or cellulose we can see about doing more E85.
http://www.eia.doe.gov/kids/history/timelines/ethanol.html
For example, in 2002 the EIA predicted that oil production in Mexico would hit 4.6 million barrels a day. They never even reached 4 MMbbl/d.
" Oil production (crude oil and natural gas liquids) in Canada and Mexico is forecast to grow through 2010, while US production is forecast in high and low economic growth cases to be somewhat lower than 2000. Canadian oil output is expected to reach 3.7 MMbbl/d, Mexican oil production is projected at around 4.6 MMbbl/d, and US oil production is forecast at 7.4-7.5 MMbbl/d."
http://www.eia.doe.gov/emeu/northamerica/engsupp.htm
Grow through 2010!!!! They stopped growing in 2004.
"Output falling in oil-rich Mexico, and politics gets the blame Pemex has no money to reverse the slide in its production"
"Production at Cantarell fell 13.5 percent last year, and it will fall an additional 15 percent this year, Reyes Heroles said recently. The decline at Cantarell pushed down Pemex's output to 3.26 million barrels a day last year from its peak of 3.4 million barrels in 2004."
http://www.iht.com/articles/2007/03/09/business/pemex.php
China became a net importer of oil around 1993, this is post 1980. Indonesia became a net importer around 2004. Britain is or soon will be a net importer of oil. Mexico will be a net importer in 5, 10, 15 years ????? It all depends on who's prediction you want to believe. Things have changed since 1980.
There are alternatives, but they are expensive (deep sea drilling, oil sands). High oil prices allow alternatives like ethanol to become viable.
"During most of this period Saudi Arabia acted as the swing producer cutting its production to stem the free falling prices. In August of 1985, the Saudis tired of this role. They linked their oil prices to the spot market for crude and by early 1986 increased production from 2 MMBPD to 5 MMBPD. Crude oil prices plummeted below $10 per barrel by mid-1986."
http://www.wtrg.com/prices.htm
It is unlikely that oil prices will ever drop to $10/ barrel. Market fundamentals suggest the price will average over $50/ barrel for the long term. This makes ethanol competitive.
Technology is better now then in the 1980s. Scientists understand the reactions better. Our knowledge of enzymes is also better. Computers are helping improve manufacturing and process control. The internet has allowed for more timely information and hopefully better decision making.
Some plants as I mentioned are using waste heat or coal. Some of the natural gas plants could be in trouble if the price of NG goes up. The coal plants will have a competitive advantage.
Sometimes we have to do something even if it is not perfect. And sometimes you fall a few times learning to walk. People are looking for energy security in this post 9/11 world. Ethanol will help even though it is not the only or the final solution.
I am somewhat puzzled why fellow Americans seem to have no trouble buying cheap goods from China, but get all bent out of shape if a fellow American farmer makes a few dollars from selling corn or soybeans.
Do people like all the crowding in the East and West coasts? The farm belt has been losing population for decades. If we create jobs in the farm belt it will reduce the crowding in other areas. We are closing schools and small towns are disappearing in some areas. An ethanol plant nearby is a wonderful thing. Thirty plus good paying jobs is just the ticket to create stability. We got a lot of repatriates back when the two ethanol plants recently started. And that was a good thing.
I would like to hear from the average family farmer how well he is doing. Not the mega farmers with 1000s of acres employing 100s of illegal aliens.
One solution to that is to use the algae created in lakes and reservoirs downstream as feedstock for biodiesel. Removing the nutrients will reduce or eliminate the “dead zone” in the gulf.
“From what I am reading, and does not get reported, is that corn and soybean farmers go broke on a regular basis.”
If you are reading the story....that means it IS getting reported. Farmers going broke, that is true of every type of farm or business for that matter.
“It costs more to grow corn than they are getting in return.”
No. At $3 to $4 a bushel most farmers will make a profit.
The production costs for a bushel of corn ranged from an average of $1.19 per bushel for those farmers in the lowest quartile to $3.67 per bushel for corn farmers in the highest quartile, ranked by production costs per bushel. http://www.ers.usda.gov/catalog/CatalogByTopicID.asp?SON=TRUE&SBY=DATE&PDT=2&ARC- =C&TID=454
“I would like to hear from the average family farmer how well he is doing. Not the mega farmers with 1000s of acres employing 100s of illegal aliens.”
Are you saying that a high corn price is bad for the smaller corn farmer? Maybe you should ask them or read some of the farm magazines or local papers. A higher price per bushel is exactly what the small farmer needs to stay in business.
That all depends. What did it cost him to get that higher price for corn? Did he have to pay a higher price for seed, fertilizer, fuel and equipment. Having dived into farming during the late 1970s I am aware of the costs to get a bushel of corn out of the field. I would not even consider planting corn on my property again for a lousy 4 bucks a bushel. I was losing money with close to $3 corn in 1979. My failure to make a living at farming was more a result of the failed presidency of Jimmy Carter and his high interest rates. However it is not practical for a small family farmer to raise corn for ethanol. I am sure you are not interested in the small farmer. I grew to admire the family farmers around me in middle MN. They worked hard to keep their 160 acres and support their families. It was an uphill battle. I do not see ethanol as a plus for the little farmer. Only the huge outfits are able to survive. They are all slaves to ADM and Verasun. I'll just keep my land in native pasture until it is gobbled up by the suburbs. No hassles and worth more leased as pasture than for raising corn.
The following numbers were from an article in foreign affairs. The numbers seem reasonable.
"With oil at $30 a barrel, producing ethanol would no longer be profitable unless corn sold for less than $2 a bushel, and that would spell a return to the bad old days of low prices for U.S."
"If oil reaches $80 per barrel, ethanol producers could afford to pay well over $5 per bushel for corn."
"On the other hand, if oil prices hover around $55-$60, ethanol producers could pay from $3.65 to $4.54 for a bushel of corn and manage to make a normal 12 percent profit."
http://www.foreignaffairs.org/20070501faessay86305-p10/c-ford-runge-benjamin-sen- auer/how-biofuels-could-starve-the-poor.html
It will be interesting to see how much ethanol production we end up with. The fact that Iowa may need to import corn in the future is funny or sad depending on your perspective. The food versus fuel debate is also heating up. Yet, when I see the news coming out of the NY Auto Show it is all about horsepower.
500 hp AMG
420 hp BMW
400 hp Lexus
"engineers pumped up" the Lucerne Super with 292-hp
LaCrosse Super gets 300-hp engine
Tribeca up 11-hp jump and 32-lb-ft torque
292 hp STS
295 hp H3
Source: Autoweek
Apparently the demand for fuel and ethanol is going to stay strong. Manufacturers are not letting up when it comes to increasing hp. And as we all know, more hp equals less mpg.
I am very aware of the size of farms in ND. Most though are guys that farm several other properties on a split of the crop. It does not pay to own a $100k+ combine for 160 acres. Where my farm is in central MN, there are hundreds of family dairy farms under 200 acres. Most do share crop extra land to feed their livestock.
I listened to an interesting take today on the ethanol vs food debate. The caller was concerned that we would look even worse in the eyes of the third World countries we help feed, when we tell them "no more corn, we are going to use it in our vehicles".
It has already impacted the Mexican tortilla industry. That is a staple for 90 million poor Mexicans. Not only do we use more oil than any other country now we are going to burn up the food to feed our cars. Mexico is either number one or two for selling us oil. That has caused the prices of fuel in Mexico to rise. It is no wonder they are flooding in to get better jobs. Our insatiable thirst for fuel has raised their cost of living without raising their income.
I see so many negatives and so few positive aspects to ethanol. No one here has shed any light onto what good is it.
Now the Union of Concerned Scientists are opposed to ethanol as fuel.
Ethanols dirty secrets
The ethanol boom does seem to be out of control. I am in favor of a few plants, but the current build rate is too fast. Yet... our fuel use just won't quit. Even with gasoline priced near $2.80, gasoline consumption set a record.
http://www.greencarcongress.com/2007/04/us_gasoline_con.html#more
Did you know that your 160 acres would be worth about $2,648,448,000 in Tokyo? ($380 sq ft*43560*160) Location, location, location
Land in central MN is not worth a whole lot more than it was in 1976 when I bought it. Thankfully I have done better on other locations. I think I will just keep it a while longer. It may end up a suburb of Minneapolis someday. Only a 145 mile commute.
In Missouri, the former state conservation official was horrified by news that a thirsty ethanol plant might rise up near his home in southwestern Missouri. The plant would draw 1.3 million gallons of water from the ground every day to produce the corn-based fuel.
Then there’s the 400,000 gallons per day of contaminated water from the plant — water that would be sprayed on land around the plant by irrigation equipment and then seep back into the ground.
The ethanol industry says it takes about 3 gallons of water on average to produce a gallon of ethanol and that recycling and other water-saving innovations will reduce that amount.
Sometimes that consumption is understated: In Minnesota, one of the few states that require reporting of water use, a state study in 2005 found that ethanol plants used an average of 4.5 gallons for every gallon of ethanol.
The water drawn for ethanol is a cost borne by communities — or whole regions — and a price sometimes ignored in the planning stages for new plants, experts say.
Ethanol wastes water
Ethanol production consumes 6 units of energy for every 1 unit it produces
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One gallon of ethanol has only 2/3 of the energy of a gallon of gas. So to accurately compare stats (pollution, cost at the pump, etc) you have to compare 1.3 gallons of ethanol to 1 gallon of gas. For those of you curious about the results of this comparison: the pollution factor is the SAME, and ethanol costs more at the pump (not counting all the money you already paid in farm subsidies and ethanol "research").
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Somehow, putting the National Corn Growers Association in charge of ethanol research seems a wee bit like putting the fox in charge of the Hen House, no?
Don't fall for the ethanol propaganda. Continue to be smart about your driving. Drive less, keep your tires inflated properly and your motor in good condition, get a hybrid car, use public transit. Ethanol is a giant quagmire, not a solution.
For those of you with some cash in Southern Cali, check this one out as an option. I love it!
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Meanwhile, demand has been rising relentlessly, providing little respite to the nation’s aging energy infrastructure. Even as consumers complain loudly about high prices, they show no signs of scaling back. Gasoline consumption reached 9.66 million barrels a day in the first week of July, the second-highest level on record.
Meanwhile, refiners have been scrambling to meet a raft of environmental regulations, phase out toxic additives, add ethanol to the fuel mix and introduce new ultralow sulfur standards for gasoline and diesel. Industry insiders attribute much of the fragility of refining operations to the difficulty of making these cleaner fuels.
Refining problems
His reply to my questions makes for interesting reading. Check it out on today's entry on my blog, the Alternate Route
I can send him follow up questions as they come up, but it's a good start to try and get some of the emotion out of this debate.
He has pointed out the positive aspects to the Corn growing states. He left out the overwhelming negatives to all the non corn growing states. My two main issues are the mandate costs those far from the source of ethanol more for ethanol laced gas. It is killing the Gulf of Mexico.
You can attach comments like that to the blog too
consumers union identified the real reason that the Ethanol Scam has increased fuel imports: It has enabled automakers to produce & sell LOTS more monster SUVs which are E85-capable and which all get abysmal mpg, while achieving a CAFE "credit" for each one sold, as if each one sold actually got >30 mpg!
Looking forward to all your comments!
Corn prices are too high. Caused by drought?
Ethanol prices are too low because it only has 2/3 the BTU value of gasoline.
The plants will not make enough money so the free economy has killed them.
Smart towns are against the plants which will consume their water.
Water is in ever shorter supply.
The aquifer that lies under the Great Plains is dropping 1.75 feet per year and had 185 feet depth in 1990. It took 200 million years to fill. It is essentially irreplaceable, like oil is.
Good that ethanol is not cost effective to produce because it would use up all of our water.
The Gulf dead zone existed long before ethanol and will persist either way.
I support saving America's water for food.
I support raising the price of exported food comparable to the cost rise of imported energy for Americans. That makes water very valuable.
Right now in Atlanta, if you are caught using water outdoors, you will have your municipal water shut off.
The drought we are experiencing in the SE US is very serious.
Even up in the midwest, the corn crop is weakened by the severe lack of rain this year.
The new 4 cyl cars that are most efficient need 5 years of use to pay back the energy consumed to produce them. Any new vehicle getting less than 22 mpg will never make back it's cost in energy to manufacture, until the one it replaces is no longer functional, negating the argument entirely.
Why the worship of 300 and up HP vehicles? Some of us have plentiful resouces and want to spend them regardless of the environmental impact. It's a free country.
Australia is outlawing LCD and Plasma TV's due to their high energy consumption, combined with the need for larger screen sizes.
Rush To Judgment
Eggs, milk(costs more than a gallon of gasoline), and other groceries are up 33% while the Govt lies to us and says inflation is up 2%!!
Throw the bums out!!
Govt says inflation is up 2%!!! What a joke!!!
PS - my flat screen TV went down in price over the past year rather than up, so you have to take all products/services into account.
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Why whine about politics?
Just the facts, mam. Just the facts!!
My gut feeling is that we'll ultimately end up with electric vehicles that get charged either from the grid, or from solar cells or wind generation at our homes. Any other form of energy is going to come from a resource that will be depleted over time (coal, hydrogen, etc.) and/or be too cost prohibitive to produce. To my mind solar power is the only power source we have that will pay positive dividends down the road; let's face it, when we run out of solar power, the LAST thing we're going to be worried about is driving somewhere!
Agreed, well stated. It isn't just crops and farmlands that can be utilized to grow corn for ethanol, I have seen new types of farms where the growths are stacked vertically in rows to produce cellulistic type ethanol in small confined spaces. Your right, ethanol is small piece to the over all puzzle for our complete independence on oil. Ethanol is good till the next decade until some other form of efficient technology is introduced to maybe replace the combustion engine.
The ethanol lobby is claiming that mixing a higher percentage blend of ethanol actually increases mileage. Read the article and Alternate Route's take at:
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