administration and Democrats in Congress are facing resistance from the auto
industry about a controversial proposal that would force
consumers to use more ethanol in a bid to reduce fossil fuels consumption.
I. What's in the Bill?
The new bill, The Biofuels Expansion Act of 2011, has a number
of provisions, but among its most controversial are efforts to expand
government spending on ethanol and force ethanol on consumers.
Sponsored by Senators Tom Harkin (D-Iowa); Tim Johnson (D-South Dakota); Amy Klobuchar (D/"Farmer-Labor Party"-
Minnesota); and Al Franken (D/"Farmer-Labor
Party"-Minnesota), the bill could massively benefit corn farmers in the Midwest,
but may not be so rosy for the rest of the country.
Under its proposals, government spending on ethanol would leap from $50M USD in
2012 to $350M USD by 2016. The government would also provide loan
guarantees to construct new ethanol pipelines.
But most importantly, the bill would force 90 percent of automobiles sold by
2016 to capable of running on an E85 fuel blend -- fuel that is 85 percent
ethanol, and 15 percent gas.
II. The Good
There are some positives about the bill. The bill could promote the
growth of cellulosic ethanol research and production.
Cellulosic ethanol has few downsides other than the cost. It comes
from waste, is completely renewable, has a net harvest-to-pump reduction in
green house gases, nitrogen, and sulfur emissions.
And the bill could promote other non-corn biofuels such as algae, something the Navy has been actively dabbling in for
In our past discussions with alternative biofuel companies like Coskata, most
expressed that they didn't need subsidies to survive and eventually be
profitable, but that subsidies could accelerate the process.
III. The Bad
Unfortunately the bad here is substantial as well. The bill would push
for higher consumption of corn-based ethanol. That would be extremely
lucrative for corn farmers who long struggled to find new ways to sell the
massive amount of corn.
However, most economists agree that it would likely drive up food prices, at least
temporarily. An increase in the cost of corn meal, corn syrup, and
livestock corn-feed would create a cascading effect, the net result of which
would likely be higher prices at the super-market checkout.
Further, the auto industry would be forced to shoulder a $2B USD load in
upgrading their engines, much of which would be passed on to the consumer.
Today, thanks to federal and state legislation, most of the fuel you get at the
pump already is a 10 percent ethanol, 90 percent gasoline blend (E10).
Engines can tolerate E10, but it wears on them and is less energy dense
(so you get fewer miles per gallon of fuel).
E85, by contrast would break a normal engine. So automakers would have to
outfit their engines to be capable of running on such fuels. Of the major
automakers, GM is closest to this goal, having heavily invested in an ethanol push. By
contrast Ford, Chrysler, Toyota, Honda, and Hyundai/Kia have minimal
investments in E85 vehicles.
Consumers would likely be hit by a triple price increase. At the
supermarket they'd pay more for food; at the pump they'd pay more for fuel (as
ethanol, on average, currently costs more in mpg than gas); and they would pay
more when purchasing new fuels.
Ultimately this may cut new automotive sales, in turn leading to job loss.
Essentially all this lost wealth would be funneled mostly to farmers, with a
small cut going to researchers.
Further, corn ethanol has been scientifically shown to increase emissions.
Regardless of your opinion of more carbon dioxide being pumped into the
atmosphere, you probably would be slightly more concerned about the increase in
nitrogen and sulfur emissions that are harmful to human health, buildings,
animal, and plant life.
IV. The Ugly
mystery why four farming state Senators would support a corn-bill. It's
good for the constituents. But beyond that, it's good for their party.
The corn lobby has poured
millions per year into "convincing" politicians of
the "merits" of corn ethanol. That stream of funding has drawn
a degree of bipartisan support. Former President
George W. Bush (R) was a strong proponent of ethanol, even
backing measures to increase loans, government use, and blending at the pump.
Surprisingly, though, one of the staunchest opponents of the bill comes from a
farm state. Sen. James Inhofe (R-Oklahoma), the Environment and
Public Works Committee's top Republican, has led opposition to the bill.
Ironically the debate may be less about the merits of the bill and more a test
of the political muscle of various lobbyists.
Supporting the opposition are the food and oil lobbies, the latter of which has
been particularly active in recent years, funneling millions to federal political
candidates. The Alliance of Automobile Manufacturers, the trade
association representing General Motors Co., Ford Motor Co., Chrysler Group
LLC, Toyota Motor Corp. and eight others, has also thrown its weight behind the
opposition, concerned about the cost increase to upgrade the nation's vehicles.
V. What's Next
The bill was just debated by the Senate Energy Committee on Thursday. You
can find an audio recording of that debate here.
The bill will now move to a procedural vote by the Committee. If approved,
a Senator can then motion to have it brought to the floor.
While the bill likely will stall in the Republican-controlled House, it's
possible it could be approved in exchange for Democratic concessions during the
budget debates. And it’s also possible that the corn lobby might be able
to sweeten the deal with campaign contributions enough to change the minds of
enough House Republicans to pass the bill.
quote: They are omniscient and omnipotent
quote: US Govnt (via US taxpayers) pay corn farmers subsidies and corn prices go DOWN;
quote: And you want to talk about not being flexible on larger issues...Social Security is 20% of the budget. Medicare/Medicaid is another 20%. Military spending is another 20% or so. Making minor changes to any of these would make much more of a difference than eliminating the tiny fraction that the GOP is drooling over, without impacting quality of life in any noticeable way for anyone. Taking 2% from each of these would total to more than all the things the Republicans are attacking, combined.
quote: Poster above me obviously smokes to much weed because his short term memory is shot. He doesn't remember how Clinton had a balanced budget and Bush went on a crazy spending spree.
quote: Republicans spend money killing poor people in other countries and Dems spend money on social services for poor people in the US
quote: The Republicans couldn't balance a budget to save their lives (or our country), which is pathetic given their supposed fiscal responsibility.
quote: But go figure - it's not like they aren't on the take from lobbyists and part of shipping jobs overseas while overspending here
quote: If they came up with a budget that cut, say, $800 billion THIS YEAR and tried to cut just THIS YEAR's friggin' deficit in half, maybe they could toss in a few partisan bits and get away with it.
quote: They spent $1 trillion that month.
quote: You forgot a few things
quote: Today, thanks to federal and state legislation, most of the fuel you get at the pump already is a 10 percent ethanol, 90 percent gasoline blend (E10). Engines can tolerate E10, but it wears on them and is less energy dense (so you get fewer miles per gallon of fuel).
quote: Further, the production of corn ethanol is a net loss. That is it uses more energy (diesel from oil!) to produce than it generates.
quote: Welcome to the stupidity of corn ethanol. I thought everyone knew this stuff by now. These congressmen should be embarrassed to have pushed this! Republicans kill this now!
quote: Consumers would likely be hit by a triple price increase. At the supermarket they'd pay more for food; at the pump they'd pay more for fuel (as ethanol, on average, currently costs more in mpg than gas); and they would pay more when purchasing new fuels.
quote: Where does it exclusively say "corn"? Not to be too obtuse, but is there anything in the bill that prevents switch grass, etc.? I see only ethanol.
quote: And what's the Obama Administration's connection?
quote: And what's Inhofe's er, stated objection?
quote: , dependence of foreign oil is a direct threat to national security.
quote: Where does it exclusively say "corn"? Not to be too obtuse, but is there anything in the bill that prevents switch grass, etc.? I see only ethanol.
quote: I'm convinced the only reason they're so opposed to it this time is because the oil lobby which holds great sway over the party is pressing them harder as the spending and forced engine modifications have become more expansive.
quote: They would save the nation 10 times as much money as is given to Planned Parenthood if they took a minor pay cut.
quote: Well the blame starts with the public who continues to re-elect them. There is an easy solution to the problem, stop electing them. Problem is the American public does not know the power it actually has. Why do elections go to the biggest spender, because the public is so stupid they rely more on fancy commercials than actually doing a little research to decide who to vote for.
quote: We Americans have only ourselves to blame for letting the government get into the shape it is in currently. We allow classes like Civics to no longer be required as a class in high school so the younger generations have no idea what their role in government should be. We worry more about what we will do for fun on the weekends than taking part in the decisions that could one day take away all the freedoms we have in making those weekend plans. Everyone should read Orwell's book Animal Farm if you want to see a very accurate account of how we are letting our government take away our rights and giving them our full blessing as they do so.
quote: As long as U.S. politicians are forced to raise their own funding to run for election, the system will inherently reward corruption.
quote: People need to EDUCATE themselves NOW.
quote: I wish this was not true because the road it leads down is one I am afraid we will regret traveling in the future.
quote: Well the blame starts with the public who continues to re-elect them. There is an easy solution to the problem, stop electing them.
quote: How about we push biodiesel from hemp instead? More energy, cheaper, less emissions and easy to convert diesel engines to biodiesel.Another thing: we have 10% ethanol in our fuel already. Isn't that enough?
quote: Logic: But other countries don't use hemp with THC. The natural plant, Sativa, yields 0.3% THC, which has no effect if inhaled or injested. It can be grown anywhere and really cheap to make into biodiesel, which yields little to no sulfur in the atmosphere and yields very close energy output compared to diese-
quote: The "incomplete protein" thing is a myth.
quote: corn syrup, corn oil, and alcohol(both the drinkable kind and the industrial kind). As for taking it away from cattle feed, you can still feed cattle the corn that is left over from making alcohol, you lose sugars, but you are using it mostly for the proteins not the sugars anyhow when used as feed. The biggest market you will affect when using corn for fuel is the corn oil/corn syrup market. But since lately there has been a push to get away from High Fructose Corn Syrup used in foods that may not be as large of an affect as people imagine it will be.
quote: I also get fed up with everyone complaining about farmers getting subsidies yet those same people would scream bloody murder if they stopped the subsidies and let the price of food inflate to prices that would still allow most farmers to make a fair living.
quote: Someone elsewhere in the thread mentioned cutting this program instead of Planned Parenthood I say cut them both. If either is worthwhile then they will find private funding, let the free market drive it all.
quote: But if you all of a sudden remove corn syrup, and make the food companies use better things instead of using it as filler, what would happen to the price of food?
quote: The article misses the point and try to force an opinion(as most of jason articles).
quote: This isnt about corn ethanol, just ethanol. You cant develop the ethanol industry without a source of ethanol and for the moment its corn. In the future, it will not be corn. We just need to scale it.
quote: As for the "disadvantages", its pure prejudice. Ethanol has less specific energy, but cost less.
quote: Never 2B will be spent to develop a "new-engine".
quote: BTW, the development is already done at Brazil. Oh, and ethanol increase overall horsepower.
quote: The idea is to develop fuel sources that can fight with gasoline and thats ethanol, biodiesel and natural-gas.
quote: The vast majority of ethanol today IS from corn. So this bill will largely support corn ethanol. C'mon pal, put two and two together. Why do you think senators from leading CORN GROWING states are supporting this initiative??
quote: I've tested several ethanol vehicles and every time gotten worse fuel economy in terms of cost per gallon vs. a straight gas fill up. The fuel may be slightly cheaper per gallon, but it's much less energetic.
quote: How many ethanol vehicles have you driven? Or are you just writing because you think an ethanol vehicle might be neat?
quote: Ah yes, Brazil has found a way to magically provide more horsepower out of a less energetic fuel.
quote: So apparently you had your mind shut before you read the article because you didn't agree with the facts, eh??
quote: Of course at the short-term it will benefit corn, it's the main source for now. But if at any point a feasible alternative exist, it will "dethrone" corn.But why this bill is important? To make the consumption, the infrastructure, the market-share big enough so the companies will care for others sources beyond corn. If it continues small there's no problem producing ethanol from corn, "we" will charge a premium.And beyond corn farmers, pollution, there's a more important point. Independence from oil companies, from market fluctuation, from external crisis, diversify the energy matrix.
quote: Ethanol isn't cheap because it has not scaled yet. The bill try to somewhat address it. The general thumb-rule for E85 is the price of ethanol should be 75% of gasoline.
quote: If you really want to know, taken from Brazilian automotive websites:Citroen C4 2.0:Gasoline(E25) : 103kW / 6000RPMEthanol(E100) : 109kW / 6000RPMFord Focus 1.6:Ethanol: 116CVGas: 112CV CV=0,98HPetc...Every car with ethanol has higher HP because of higher equivalent octane and higher efficiency. This is true even if the same compression-ratio of gasoline is used(~10:1). The benefits are higher for ethanol ratio(~12:1).
quote: And we are not talking about biodiesel, hydrogen cells, nuclear cells, new kinds of engines, and 30 years from now techs that should be taken on consideration. Anyway, ethanol is a good energy source for mid-term.
quote: No. I just filter the text as every other reader. This process would be easier if the text was less biased. But then again, I think its like a sport game. If the referee was always right and fair there would be no fun.
quote: Requiring airbags, better crash testing etc. did not bankrupt car companies or make cars too expensive to sell
quote: Ever higher fuel economy standards, ever higher safety standards, ever higher emissions standards, and of course "hey now use a fuel that negatively impacts two of the three".
quote: Ironically the debate may be less about the merits of the bill and more a test of the political muscle of various lobbyists.
quote: Corporate Average Fuel Economy (CAFE) is the sales weighted average fuel economy, expressed in miles per gallon (mpg), of a manufacturer’s fleet of passenger cars or light trucks with a gross vehicle weight rating (GVWR) of 8,500 lbs. or less, manufactured for sale in the United States, for any given model year. Fuel economy is defined as the average mileage traveled by an automobile per gallon of gasoline (or equivalent amount of other fuel) consumed as measured in accordance with the testing and evaluation protocol set forth by the Environmental Protection Agency (EPA).