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The rollback of a $1/gallon federal tax credit on biofuels threatens to sink many small biodiesel producers across the country.  (Source: Alibaba)
Without the $1/gallon federal tax credit, the biodiesel industry no longer appears commercially viable

While most are hoping that the U.S. can transition to electric vehicles and vehicles running on sustainable biofuels, this last year has made it clear that the process will be no walk in the park.  Recent studies showed that, in their current form, hydrogen cars emit more carbon over their lifecycle than gas cars.  And early consumer electric vehicles, like the BMW Mini E, while low emissions, have suffered from a variety of temperature related woes.

Now the biofuels sector has become the latest green transportation field to suffer disappointment in 2009.  The year started off rocky with the European Union in March unveiling import-killing tariffs on biodiesel and other biofuel.  Then, as the U.S. recovered from the recession, diesel prices dropped 18 percent off their highs, making it harder to justify the high costs of biodiesel.

Now another nail has been placed in the commercial biofuel industry' coffin -- the government $1/gallon federal tax credit will expire this Friday.  And for many businesses in the industry, it may be the last; amid a frustrating market, many biodiesel makers across the U.S. say they will likely call it quits and cease production when the credit ends.

The largest biodiesel refinery, located in Houston, Tex. has already shut down.  Another large refinery, located in Hoquiam, Wash. has been shut down as well, following a December explosion. 

However, it's not just big businesses that are cutting biofuel production and jobs.  Small businesses are also suffering.  Dwight Francis of Valliant, Okla. launched a new biodiesel venture earlier this year when the local timber economy tanked.  He was producing 12,000 gallons of biodiesel fuel per week by mid-year, and his business was viable, thanks to the $1/gallon tax credit.  Now with the credit gone, he says he's shutting down the promising startup.

He bemoans, "By the time you buy the feedstock and the chemicals to produce the fuel, you have more money in it than you get for the fuel without the tax credit.  We won't be producing any without the tax credit."

Congress and the U.S. Environmental Protections Agency have set the ambitious benchmark of producing 36 billion gallons of home-grown biofuel a year by 2022, reducing dependence on volatile foreign oil.  The prospects of achieving that goal now look bleak, according to government officials.  States Robert McCormick, principal engineer at the Department of Energy's National Renewable Energy Laboratory, "You could say the entire biofuels industry has had a rough year."

Despite these setbacks both optimism and debate on biofuels remains high.  Many liken the departure from traditional gas combustion to EVs, fuel cell vehicles, and biofuel vehicles to be similar to other past modern technological breakthroughs such as the computer, internet, airplane, and railroad.  These past innovations only reached consumers thanks to massive subsidies and investment of both money and land from the U.S. federal government.  Many argue that similar investments are needed to allow the alternative energy transportation industry to reach viability.  The real question, many say, is which candidate(s) is/are best to invest in (EVs, fuel cells, and/or biofuels) and when and how much should be invested.


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just goes to show
By FITCamaro on 1/4/2010 10:44:40 AM , Rating: 5
Our government doesn't want internal combustion engines. They're fully committed to making electric the only option no matter how impractical.

This doesn't mean I'm for the credit, just against not providing this credit while still giving hybrid and electric buyers credits. Not to mention massive subsidies for solar and wind.




RE: just goes to show
By 67STANG on 1/4/2010 11:12:31 AM , Rating: 1
I believe they say "necessity is the mother of invention". That being the case, perhaps the increased leaning towards EV's will lead to innovative battery technologies. Which of course would also filter down to every other device that runs on batteries.

Don't get me wrong, I don't think there's anything wrong with green subsidies-- to a point. It's a matter of balance between allowing for interim solutions while not veering off course for a more permanent solution. The same goes for solar and wind-- until we have a viable fusion option.


RE: just goes to show
By AEvangel on 1/4/2010 11:33:05 AM , Rating: 4
quote:
Don't get me wrong, I don't think there's anything wrong with green subsidies


There are tons of things wrong with Green or any other kind of subsidy. The distort the market and create demand for items that are not needed nor practical.

While I'm not for this tax credit it made ALLOT more sense then Ethanol subsidies or even subsidies for Electric cars, since the first is more damaging to the environment then bio-diesel and the the latter doesn't while some studies show is as bad lacks the infrastructure and technology to work at this time.

Bio-diesel was a really the only practical way at this time of lessening our dependence on oil based vehicles if you truly believe that is needed at this time.

Plus our Government and it's leaders are not going to support something that you can grow and create on your own since that would mean they have less means of taxing and control you. Which is something that bio-diesel provides.


RE: just goes to show
By Iaiken on 1/4/2010 11:43:56 AM , Rating: 1
quote:
There are tons of things wrong with Green or any other kind of subsidy. The distort the market and create demand for items that are not needed nor practical.


You mean... like marketing?


RE: just goes to show
By AEvangel on 1/4/2010 12:11:35 PM , Rating: 5
quote:
You mean... like marketing?


No cause I don't have to pay for Marketing, unless I choose to buy a product.

Subsidies don't give me a choice since they take my money with the threat of force and then give it to others.


RE: just goes to show
By adiposity on 1/4/2010 2:41:55 PM , Rating: 1
quote:
No cause I don't have to pay for Marketing, unless I choose to buy a product.


So, you don't really care about market distortion unless you have to pay for it?

I understand the aversion to helping pay for a technology to be viable, against your will. But, if you were truly opposed to market distortion, you would recognize that marketing, collusion, branding, etc. can be as bad as (or worse than) subsidies at creating market distortion.

So which is it? You don't like market distortion or you just don't want to pay the taxes? I mean, I understand both, but don't pretend to be so concerned about the "market" when all you care about is being taxed.

-Dan

-Dan


RE: just goes to show
By Solandri on 1/4/2010 4:00:45 PM , Rating: 3
Marketing exists in the same feedback loop as regular sales. If your product sucks, you can have the best marketing and it will still tank in the market.

Political subsidies exist outside this feedback loop. The product can suck, and politicians can keep approving the subsidy because they're enamored by the product or refuse to see the evidence that it sucks.


RE: just goes to show
By rcc on 1/4/2010 4:51:25 PM , Rating: 4
Or get a nice kickback from one or more of the companies involved.

Oops, my cynical side slipped out again.


RE: just goes to show
By adiposity on 1/4/10, Rating: 0
RE: just goes to show
By afkrotch on 1/4/2010 10:46:09 PM , Rating: 2
Ya, look at Apple to see that.


RE: just goes to show
By Boze on 1/5/2010 7:41:32 AM , Rating: 1
I hate Apple as a company, and I'm not overly fond of Steve Jobs, but they don't make crap.

They make average, extremely overpriced computers, MP3 players, and telephones.


RE: just goes to show
By adiposity on 1/4/2010 5:42:32 PM , Rating: 1
quote:
Marketing exists in the same feedback loop as regular sales. If your product sucks, you can have the best marketing and it will still tank in the market.


You are quite an optimist. You don't think sales can make crappy products sell?

-Dan


RE: just goes to show
By seamonkey79 on 1/4/2010 6:06:45 PM , Rating: 5
The difference is that if I get suckered into purchasing a crappy product... *I* got suckered into it. For the salesperson to come to me, tell me to give them money, and here, take this, is a completely different story, and that's what tax + subsidy equals.


RE: just goes to show
By BansheeX on 1/4/10, Rating: 0
RE: just goes to show
By Ringold on 1/4/2010 5:55:56 PM , Rating: 1
quote:
you would recognize that marketing, collusion, branding, etc. can be as bad as (or worse than) subsidies at creating market distortion.


Of all the random things to get upset about..

On the other hand, without some degree of marketing, how would you, for example, be alerted to the existence of a new product? Studiously walking every isle in every store in a shopping mall/strip mall looking for new items? Visiting a website to find what movies are playing -- but names only, because trailers are marketing in themselves?

Wish I had less things to worry about such that I could get on the internets and go off about marketing. :P


RE: just goes to show
By adiposity on 1/5/2010 1:18:34 PM , Rating: 1
I'm not against marketing. I was just saying, market purists are one thing: people who hate taxes are another.

In a perfect capitalist world, the market would select the best choice for a product (combination of quality, price, availability, efficiency, etc.).

The poster I replied to implied that subsidies are bad because they distort the market, but then basically accepted market distortion as ok, as long as his taxes don't get raised. He cares less about the principle than his tax rate. The principle is just an excuse, which will likely be discarded as soon as it's convenient.


RE: just goes to show
By satinspiral on 1/5/10, Rating: 0
RE: just goes to show
By Jaybus on 1/4/2010 1:30:16 PM , Rating: 3
Bio-diesel is simply too expensive. A government subsidy doesn't make it cheaper. Who do you think pays the subsidy? It's a pyramid scheme. It makes the bio-diesel competitive (sort of) so long as only a few use it and the subsidy is paid by the vast majority that do not. Scale it up so that the majority of people use bio-diesel, then guess what? Everybody pays the subsidy and it costs the same as if there were no subsidy to begin with.

Perhaps if the price of petroleum diesel goes up enough bio-diesel will become competitive. If so, people will start companies again to produce it. Not a problem. As stated in the article, it only takes a few months to get bio-diesel production up to speed. It doesn't really deserve to be subsidized.


RE: just goes to show
By lelias2k on 1/4/2010 2:54:33 PM , Rating: 3
Anything produced in small scale is expensive. And when you're competing with the biggest companies in the world (oil companies) you may need a hand.

Pay attention to this website for a little while and you will see that most users only talk about how stupid any green tech is because it costs too much.

Most of them forget that they're using a sub-$1000 computer due to the $5000+ computers of the 80s.

I know, I know, computers weren't subsidized, but they weren't competing against one of the biggest industries in the world either.

And while some may argue the oil companies are investing in renewable energy, including biodiesel, their business is still focused on gasoline.

Maybe if they added a $0.1 tax to gasoline to subsidize American biodiesel companies... oh wait, I forgot, we don't want to pay for anything...


RE: just goes to show
By rcc on 1/4/2010 4:56:03 PM , Rating: 2
quote:
Maybe if they added a $0.1 tax to gasoline to subsidize American biodiesel companies... oh wait, I forgot, we don't want to pay for anything...


While you're at it, could we tax the fuel oil used for heating in cold regions and apply it to air conditioners?? Cuz you know, you can always put more on, but there is only so much you can take off.


RE: just goes to show
By lelias2k on 1/5/2010 10:34:49 AM , Rating: 1
Better yet, provide better tax incentives so people replace their HVAC from 30 years ago for something that is 10x more efficient...

http://www.energystar.gov/index.cfm?c=heat_cool.pr...


RE: just goes to show
By rcc on 1/5/2010 3:54:35 PM , Rating: 2
WOOOOOOOOOOSH


RE: just goes to show
By Cerin218 on 1/5/2010 10:43:40 AM , Rating: 4
How much tax is on a gallon of gas? I pay 27.1 cents in Minnesota on top of the 18.4 cents Federal. So 45 cents total. At what point will you be satisfied to stop taking money? Why is it I only hear people ask how we get more money, not how to control spending. Biodiesel is not necessary. We have plenty of oil in this country if people would quit whining about it and start using it. Simply put, "green" technology is not mature enough to actually use. Where will I plug my electric car in at work? If I live some where the temp doesn't kill the battery in the first place. 60 miles on a charge and 3 hrs to charge? How is that realistic? I am not using a computer thats 1k because 20 years ago it was 5K, it's because the cost to produce that computer has dropped due to changes in manufacturing and technology. It's a great idea to start looking green, but realistically the technology is in it's infancy and is not currently scalable. Or does stupid things like use our food supply as an energy source.

So keep looking for your tax increase. ANd while you are at it, do a little research and understand how much money you pay now in taxes. I don't understand why people are always so quick to say tax more so we can spend more. Yes if it makes sense, but when a product costs more to produce then it does to consume, that's just bad economics. I'll give you a quarter for every dollar you give me and we'll see how long till your broke.


RE: just goes to show
By ArcliteHawaii on 1/5/2010 6:29:52 PM , Rating: 1
It isn't about "taking money". There should be a floor on gas prices to provide stability for other start up alternatives like electric and others. It would also promote conservation and innovation in high mileage cars. When gasoline prices hit $8 per gallon we as a nation are going to be in extreme pain. Shouldn't the USA be preparing for that now? Other nations like Japan and Germany have had these in place for decades, and as a result, have much higher fuel economy averages than we do (I think Japan is double mpg on average than the US). It has also spurned innovation. Is it any wonder that the best and best selling hybrids are coming out of Japan? Is it any wonder that the best diesel vehicles come out of Germany? Is it any wonder that the only US car company to survive the collapse last year was Ford who didn't put all of its eggs in the SUV basket ( by basically realizing gas prices could get very high very quickly)?


RE: just goes to show
By hashish2020 on 1/5/2010 11:57:35 PM , Rating: 1
And the taxes you pay on petroleum product is nothing compared to the market subsidies of an artificially strong dollar, CIA funded revolutions, wars in a part of the world that was just flat desert that noone wanted until oil spurted up...if you think oil itself is not subject to government subsidies than I think you have blinders on.


RE: just goes to show
By lelias2k on 1/14/2010 2:07:03 PM , Rating: 1
I'm originally from Brazil, so don't talk to me about taxes, because you have no idea what it is to pay taxes in order of 50% or more of the price of pretty much anything.

You can dream as much as you want about trying to control spending, but there are two factors that make that almost impossible: We're dealing with humans, and most of those who are responsible for spending do so in areas where they are not experts. This won't change for at least a few generations more, and only if we revamp our education system.

quote:
I am not using a computer thats 1k because 20 years ago it was 5K, it's because the cost to produce that computer has dropped due to changes in manufacturing and technology.


Duh, that was partially the point of the comment. The other half is that if people didn't buy those 5k computer the industry wouldn't have survived long enough to be able to produce today's computers at these prices.

quote:
It's a great idea to start looking green, but realistically the technology is in it's infancy and is not currently scalable.


And that's why somebody has to invest in it. Other governments are investing in it. Why can't we?

And we have to be happy for those who have the vision (and the money) to buy these "pieces of crap," just as we should thank the ones who bought those 5k computers. But instead all you hear is people whining and making fun of them.

Oh well, I guess we are the smart ones, right?


RE: just goes to show
By xmichaelx on 1/4/10, Rating: 0
RE: just goes to show
By afkrotch on 1/4/10, Rating: 0
RE: just goes to show
By JediJeb on 1/5/2010 5:53:19 PM , Rating: 2
That would be great if they will give the money cut from the subsidies back to the tax payers so we can use it to pay for the higher price gasoline ourselves. But you and I both know that they will just use it somewhere else and we will be left paying the same taxes and more for our fuel.


RE: just goes to show
By jimbojimbo on 1/6/2010 5:19:43 PM , Rating: 2
It'll never happen because the oil moguls will just start pumping more oil to keep the prices at their sweet spot, just below where bio-diesel would work.


RE: just goes to show
By gamerk2 on 1/4/2010 3:14:03 PM , Rating: 1
There are tons of things wrong with Green or any other kind of subsidy. The distort the market and create demand for items that are not needed nor practical.

Like food? Our farming industry is built around subsidies. Without them, farming isn't profitable. Of course, less farms = less food = higher prices for everybody. :D


RE: just goes to show
By corduroygt on 1/5/2010 11:59:11 AM , Rating: 2
Without the farm subsidy, you'd have more of the money you've earned going into your pocket instead of the government's, which means you'd have more money to buy the more expensive food.


RE: just goes to show
By JediJeb on 1/5/2010 5:56:10 PM , Rating: 2
The money would most likely just go to some other pet project and we would be left with higher priced food and no money to pay for it.


RE: just goes to show
By ArcliteHawaii on 1/5/2010 6:14:20 PM , Rating: 2
The market usually works, but not always. It isn't going to work in this case. It will take 20 or more years to convert a gasoline based transport infrastructure to something else. But gas prices will become intolerably high well before that. It makes sense for the gov't to use subsidies to encourage these fledgling industries so they can more quickly achieve economies of scale so we don't end up with a lag between not having enough gasoline and having something else.

However, on the specific case of biodiesel, it's probably a good idea to let it die. THe world currently uses six times more oil calories than the amount of calories grown from food worldwide. Meaning that even if all the food on earth were converted to fuel that we'd only have 15% of what we need. It's simply impossible to grow enough fuel to satisfy demand, barring some kind of exponential increase in the amount of fuel per acre. I fully support the research, but as an industry it currently cannot be scaled to cover even a reasonable fraction of what is needed.


RE: just goes to show
By hashish2020 on 1/5/2010 11:54:25 PM , Rating: 2
...so there is no such thing as a market externality and humans consume rationally?

The libertarian capitalism I see all over DailyTech has more in common with communist revolutionary idealists than the real world and empiricism


RE: just goes to show
By funyun on 1/4/2010 11:30:51 AM , Rating: 3
Battery research is already a fore front technology. Who doesn't have an electronic device in their pocket that they wish would last longer?

There is no need to dump public money in it.

People assume that if the .gov puts money into a program it will come true. If people knew how much money put into these programs went no where, they wouldn't be so hot to scream for .gov intervention all the time.


RE: just goes to show
By Torment on 1/4/2010 11:49:09 AM , Rating: 3
That's the case with *all* new research. And there is good reason for the government to put money into research, in one way or another. The market isn't an all-knowing, benevolent god. The reality is, most new technology had its genesis in publicly funded research.


RE: just goes to show
By mikefarinha on 1/4/10, Rating: 0
RE: just goes to show
By Bateluer on 1/4/2010 1:38:25 PM , Rating: 4
Google 'NASA' or 'DARPA'.


RE: just goes to show
By afkrotch on 1/4/2010 11:14:58 PM , Rating: 2
Might want to google ARPA-E (energy), HAARPA (homeland security), and IARPA (intelligence). Like DARPA, but centered around their respective fields.

There's tons of government spending for research. Not just the US, but other nations as well.


RE: just goes to show
By bhieb on 1/4/2010 1:54:35 PM , Rating: 2
quote:
And there is good reason for the government to put money into research


Key word there is research. Tax funding of research is fine by me, but subsidizing immature tech because it fits a political agenda is not OK. Continue to research and perfect it, fine, then bring it to market when it can compete on it's own.


RE: just goes to show
By Torment on 1/4/2010 4:30:40 PM , Rating: 2
The goal, though, is to marriage the benefits of the market with funding for research (ie, the market, provided subsidies, will work to develop a tech not is not yet financially viable). I think the real problem is in funding specific technology (eg Corn ethanol), as this largely abates the benefit of the market--that the problem will be attacked by many minds, and failures will be weeded out by market failure.


RE: just goes to show
By Schrag4 on 1/4/2010 2:29:50 PM , Rating: 5
quote:
The market isn't an all-knowing, benevolent god.


I suppose you're going to tell me that our elected officials are the gods we should be following without questioning. Or should I say official (not pluralized).

Do we really need to explain what the market is and why it's (just about) always better at determining how things should be priced when compared to a handful of corrupt politicians?


RE: just goes to show
By Torment on 1/4/10, Rating: -1
RE: just goes to show
By rcc on 1/4/2010 5:02:04 PM , Rating: 4
Hmmm,ammo bin ran dry again, eh?


RE: just goes to show
By Cerin218 on 1/5/2010 10:48:52 AM , Rating: 1
Obviously it's beyond you if you connect mortgage backed securities to Rush Limbaugh. Sounds like you don't really understand how the housing market crashed. You should read more and post less.


RE: just goes to show
By hashish2020 on 1/6/2010 12:00:44 AM , Rating: 2
We can vote the politicians out. Rich people give their money to their stupid, indolent kids, who then weigh on the true middle class. I think we should show everybody "Keeping up the the Kardassians(sp--like I care)" who thinks that we live in a meritocracy...


RE: just goes to show
By Screwballl on 1/5/2010 1:57:08 PM , Rating: 2
The real problem is that the entire fuel, battery and automotive industry has shut down and bought out most of the patents for magnet based motors/engines that have proven to work very well to power up to a normal "full size" consumer truck (without towing or heavy loads). There has already been proven magnetic motors powering cars since the 60s, yet they get shut down and silenced by big oil and automakers.

I know a local retired guy that lives by my brother in law in a small town in FL that bought a 1990 Geo Metro and made a magnet motor... if I was not 6'5" and could fit, I would have taken a ride. But I saw under the hood and there is no question that there is no external power source, and it still has the alternator and battery for 12V stuff like radio and lights and the usual stuff. Just no need for sensors, emissions or the extra computer related/controlled stuff (he took out the lights in the dash for those items).


RE: just goes to show
By therealnickdanger on 1/4/2010 11:25:13 AM , Rating: 5
As carbon-based life-forms, we should pay a carbon tax. Exhaling CO2 should be taxed. Your carbon-releasing decaying body should be taxed. Life itself should be taxed. Carbon is the worst evil we have ever faced. We have to act now, no matter the cost. We need to stop greedy Big Oil before they melt all the ice caps, drown the polar bears, and destroy our coastal cities. The only answer is to print more money hand over fist, to spend our way out with less efficient technology. It's time to level the playing field. The time for talk is over. No more politics as usual. Change is here.


RE: just goes to show
By AEvangel on 1/4/2010 11:38:30 AM , Rating: 2
LoL....so true...we hafta for the Polar Bears!!!


RE: just goes to show
By Cerin218 on 1/5/2010 10:50:24 AM , Rating: 2
Yeah polar bears!! They are way more cuter then kids anyway.


RE: just goes to show
By kattanna on 1/4/2010 11:42:30 AM , Rating: 2
dont forget about the UK's drowning puppy


RE: just goes to show
By mcnabney on 1/4/10, Rating: -1
RE: just goes to show
By corduroygt on 1/4/2010 12:10:15 PM , Rating: 4
I don't know how much education you had, but obviously you didn't study or failed the topic of sarcasm.


RE: just goes to show
By therealnickdanger on 1/4/2010 1:01:05 PM , Rating: 2
Me fail English? That's unpossible!


RE: just goes to show
By Schrag4 on 1/4/2010 2:26:15 PM , Rating: 5
quote:
All that carbon that is in you and in your food was pulled out of the air by a plant some time in the recent past. That is called the carbon cycle...


All that carbon that's released when we drive our ICE cards or burn coal to generate electricity was pulled out of the air by a plant some time in the distant past. If I'm not mistaken, carbon levels used to be many times what they are today, long before humans were ever around. We're not coming up with 'new' carbon these days...


RE: just goes to show
By Cerin218 on 1/5/2010 10:52:54 AM , Rating: 2
What?! Energy is not created or destroyed, it only changes form? Who follows that kind of thinking?


RE: just goes to show
By rcc on 1/4/2010 5:06:04 PM , Rating: 3
quote:
Whether that is a problem we should worry about is up to our elected officials.


NO!@!!!!! Absoflippin'lutely not. You people just don't get it. We worry about it and tell the GD politians what to do about it, no the other way round. This is classis sheep stuff.... lead me, guide me, tell me what color undies to wear.

Bleech.


RE: just goes to show
By rcc on 1/4/2010 5:06:57 PM , Rating: 2
no=not

sorry, I was frothing at that point.


RE: just goes to show
By rcc on 1/5/2010 3:53:15 PM , Rating: 2
eek, ok classis = classic

: (


RE: just goes to show
By Motoman on 1/4/2010 11:55:27 AM , Rating: 2
Agreed. Biodiesel makes a lot more sense than electric does, at the very least at this point in time anyway. The government is picking EV over biodiesel for us by continuing tax credits for one but eliminating incentives for the other.

Cutting off the biodiesel industry while propping up the EV industry is, at best, a highly dubious action.


RE: just goes to show
By Oregonian2 on 1/4/2010 12:29:57 PM , Rating: 2
How many dollars have been collected for the electric incentive, and how many dollars actually collected for the biodiesel one? :-)

I think the biodiesel credit is something that industry revolves around. I think the EV one helps some, but probably makes comparatively little difference in the product being made -- mostly just makes more be sold (as opposed to the 100%/0% sales sort of difference with bio-fuel).

The volt would still sell w/o any incentive at all. The biodiesel would probably sell pretty close to none at all w/o the incentive.


RE: just goes to show
By Emma on 1/5/2010 12:08:26 AM , Rating: 2
You can have both! It acutally makes sense to use biomass fuels to generate electricity in efficent turbines and charge our electric vehicles with this energy. This is the best way of utilising the most energy from biomass.

So yes, support biofuels where it makes sense, and support the EV industry also.


RE: just goes to show
By knutjb on 1/5/2010 12:24:44 AM , Rating: 2
Does it produce carbon? Whoops sorry can't have it. Only non-carbon producing energy is Ok. Carbon is the cause of climate change, just ask Al Gore.


RE: just goes to show
By Emma on 1/5/2010 11:44:00 PM , Rating: 2
This is a poor comment. This paints Al Gore as an environmental zealot, when in reality he is generally a supporter of biomass sourced energy. Please read up on the issue before posting an ill-informed comment that does nothing to help this discussion.


By Connoisseur on 1/4/2010 10:55:16 AM , Rating: 2
I feel like there's an interesting argument to be made here on both ends. On one hand, these companies would not have been viable in a free market economy (on account of the tax credit) so there's an argument against government spending.

On the other hand, if you are a believer in sustainable/renewable living, then products like biofuels should be explored. If we let free market forces take full effect, isn't it true that biofuels wouldn't really have been an option until the price of traditional fuels hit a tipping point. By then, the rising price of fuel would already hit the consumer in the wallet and it would STILL take an extensive period of development to get biofuels up to similar prices (assuming development from scratch) so this market will end up costing consumers a lot.

I hope my points were clear. I'm running on 3 hours of sleep. Basically, I'm not personally a full free market believer. I believe free market is a reactionary force rather than a proactive force. Now that might be fine for most situations, but in other situations people may end up suffering in the short term until the market adjusts...I guess in this case, it all depends on how people feel about the whole renewable resources movement...




By funyun on 1/4/2010 11:21:10 AM , Rating: 1
The free market is neither reactionary nor proactive. It is whatever the people want it to be. The only real requirement is that the business makes money.

In this case, biofuels were only worthwhile with the subsidies, without them, they are not profitable. Biofuels will become an option when either they are cheaper than gas, or gas becomes more expensive then bio.

I see what your concern is, that gas will go out the door too fast for bio to fill the gap.

The problem is that gas prices are volatile do to politics much more than they are to actual demand/supply. Thats why the market for bio did not takeoff even with the subsidies.

Since politics can change on a whim, changing your entire fuel source is a gamble on politics not market forces, which are hard to impossible to predict.


By AEvangel on 1/4/2010 11:37:22 AM , Rating: 3
quote:
The free market is neither reactionary nor proactive.


Um, yes it is, not that we have a free market right now, but a true free market is completely reactionary and proactive.

Competition is at the heart of free market and Competition at it's core requires competitors to be able to react to the market as well as proactive to keep ahead of other competitors.


By HotFoot on 1/4/2010 12:42:41 PM , Rating: 5
I think it makes sense - thinking of the subsidy as a research investment. The question is, what's the best bang for the buck? Is the subsidy an efficient way to go?

The other question I have is about financial leverage. If the government spending $1/gallon keeps another $2 or $3 circulating within the domestic economy rather than going overseas, it might very well end up being a cost-neutral program. Given that the subsidy had propped up a fledgeling industry that may very well turn into a major one not needing subsidies down the road, I think it would probably have been better to slowly scale back the subsidy rather than kill it outright.


By Kurz on 1/4/2010 7:08:39 PM , Rating: 3
I rather see Bio-Diesel than Corn-Based Ethanol.
Still the cost to the public is small compared to the crazy spending the government does.


By knutjb on 1/5/2010 12:21:34 AM , Rating: 3
Please tell me what industry became free standing and a long term success through government handouts?

It would be easy enough to stop the money going offshore by using our own resources first. Instead we are frozen by the droning Hippocrates who don't want oil at any cost, or anything else.

Use wind or solar but you can't run the power lines.

No carbon, but no nuke.

Hydrogen outputs more carbon than it saves, of course, without Nuke plants hydrogen is a waste of time.

Can't do coal gasification for synthetic diesel or jet fuel because it's coal, even if its cleaner than petroleum sourced fuel and IS economically viable with oil over $40 a barrel. That is until environmentalist tie any progress up in court for decades.

Stop all carbon emissions now and replace it with green renewable energy now! Ok, what viable green power do you propose? Remember it must be commercially viable without subsidies and can be made available to all.

That's what I thought man is the center of all that is killing this planet. Get rid of man and all will be good. Yet another non-viable solution.

More diatribe with no solution is all that green energy provides.


Impacted food prices
By glennforum on 1/4/2010 12:22:37 PM , Rating: 2
The only thing this has accomplished is to double food prices in the world.




RE: Impacted food prices
By marvdmartian on 1/4/2010 1:44:59 PM , Rating: 2
Not true. It has also forced the waste of taxpayer dollars. Not just in the tax credits that were offered, but in the forced usage of alternative fuels by government entities.

Department of Defense (DoD) stateside has been mandated by the Congress to use as much alternative fuel as they can, in order to decrease the dependance on foreign oil imports. Doesn't matter that E85 gives about 2/3 the mileage that unleaded gasoline does, or that bio-diesel has consistant problems at low temperatures (which pretty much includes most of CONUS during the winter months), DoD is forced to purchase and use these fuels. No matter the cost, no matter if it causes higher maintenance costs, or lower mileage per gallon.

Government at it's finest.....finest money wasting ways!


RE: Impacted food prices
By sinful on 1/4/2010 9:23:43 PM , Rating: 1
quote:
Department of Defense (DoD) stateside has been mandated by the Congress to use as much alternative fuel as they can, in order to decrease the dependance on foreign oil imports. Doesn't matter that E85 gives about 2/3 the mileage that unleaded gasoline does,


So, in other words, if given the choice of
A) Reducing foreign oil consumption by 85%, almost completely breaking us away from buying oil from Iran, Saudia Arabia, while dumping all that money into the hands of farmers ....at the price of a higher cost at the pump, OR

B) Being completely owned by OPEC and shipping your money out of the country (only to read about what new world wonder they're building in Dubai this week)...all for the savings of a hundred bucks/year ....

you would absolutely chose option "B" everytime? Really?!

IMHO, you complain about government corruption, etc, but it sounds like your "buyoff" cost is a LOT lower than that of congress.

Amazing.


RE: Impacted food prices
By Cerin218 on 1/5/2010 11:01:11 AM , Rating: 2
You act like there is not oil to be had anywhere in the US. If we would use our own, we wouldn't have to use theirs.


RE: Impacted food prices
By sinful on 1/5/2010 2:28:27 PM , Rating: 2
quote:
You act like there is not oil to be had anywhere in the US. If we would use our own, we wouldn't have to use theirs.


Uh, right, let's do the math:

US Oil Consumption: 20M barrels/day
US Oil Production : 5M barrels/day
Estimated extra Oil Production if we opened ANWR: 1.4M barrels/day

So, even if we "Drill Baby Drill", we'd be producing less than 30% of what we need.

The only way to "use our own and not use theirs" is if we magically reduced our oil consumption by like 75%.

Man, if only there was a fuel that was something like 85% Ethanol or something....


RE: Impacted food prices
By AEvangel on 1/4/2010 1:47:02 PM , Rating: 2
quote:
The only thing this has accomplished is to double food prices in the world.


Incorrect, you obviously have very little knowledge in what they use to make most Bio-Diesel.

Ethanol is the real culprit in raising in food prices, that and High Fructose Corn syrup


RE: Impacted food prices
By glennforum on 1/4/2010 6:05:16 PM , Rating: 2
You are absolutely correct. I grouped BioDiesel in with Ethanol production. Thanks for the heads up.


RE: Impacted food prices
By JediJeb on 1/5/2010 6:43:16 PM , Rating: 2
I wish I knew where the money of the food price increase actually went.

Demand for cereal grains is up, from both food and feed consumption and biofuel use, but the price actually paid to the farmers is still the same. In the 1970's corn sold in the range of $2-$3.5 per bushel, today a farmer still gets the same price. Some are lucky to contract some at close to $4 per bushel if it is a dry year and production is lower, but all in all they make the same now per bushel as then. The problem is the price of their fuel, land, labor and equipment has not remained the same. In 1970 you could buy good cropland for $1000 per acre on the high end, now it is selling for upwards of $4000 per acre. Fuel was $0.35 per gallon now it is $2.60 per gallon. A tractor sold for $5000 now one the same size sells for $40,000. A good job on a farm then paid a little over $1 per hour, try hireing someone for that hard work now for less than $10 per hour.

Prices are rising for a fact, yet it seems it never trickles down to the bottom to the farmers. People like to talk about the corn last summer that was $8 per bushel but talking to some farmers this weekend I found that hardly any got that price, in fact most who were fordward looking enough to contract for that price ended up getting almost nothing because a law allowed the purchasers cancel the contracts if the price fell a certain amount. It wasn't in the contracts but was instead a law in place to protect risky investors like the biodiesel and ethanol producers. ( It was in the newest issue of Progressive Farmer Magazine but it is at my parents house so I can't get the exact reference ) It works that if the buyer files bankruptcy they don't have to pay the farmer as a creditor and the farmer ends up having to sell that corn on the market as current prices. Another article was about farm profitability being down 50% from last year because of the fall in prices also.

What it really seems to me is that both ends of the food supply chain are getting screwed, the consumer and the producer, with someone in the middle raking in all the money.


Are electric cars really clean???
By The1nOnlyAL on 1/4/2010 11:02:58 AM , Rating: 2
It's been a while since I had an electronics or science class, but I think I recall learning at one time that electric motors emit ozone... Ozone is generally considered to be air pollution, particularly when it's in the lower part of our atmosphere.

So, I am wondering if electric cars are really that much better than a biofuel?




RE: Are electric cars really clean???
By amanojaku on 1/4/2010 11:18:56 AM , Rating: 3
Yes and no. Electric motors come in brushed and brushless variants. Brushless motors, which I'm guessing is what's in a car, produce no ozone to my knowledge. Brushed motors do, but are not likely to be seen in cars due to the low reliability, efficiency, etc...

Ozone contributes to at most 7% of the global warming potential, while CO2 contributes as little as 9% and as much as 26%. So ozone has quite a bit of headroom before it's on the level of CO2. CO2 has nothing on H20 (36%-72%), the greenhouse gas with the largest GWP.

You need electricity to power the car, however, and that comes from a power plant. The plant could burn coal to produce electricity, which is why studies show similar results in pollution when switching to EV's.


RE: Are electric cars really clean???
By AEvangel on 1/4/10, Rating: 0
RE: Are electric cars really clean???
By Iaiken on 1/4/2010 12:34:13 PM , Rating: 1
quote:
You forgot to add in THEORY...


No, the world's current warming trend is scientific fact... The ice caps ARE melting, glaciers ARE retreating, Greenland is actually going to be green soon. That's not what is up for debate...

In Canada's great white north and there are glaciers that were hundreds of thousands of years old when I first saw them as a child and several of had disappeared before my last visit to Banff and Yoho national parks this previous year. Other glaciers in the parks have had their terminus moved significantly up the mountains when only twenty years ago they reached all the way to the valleys below. Surveying has shown that glacial area of these parks have decreased by about 35% that average glacial volume has decreased by around 50%.

In Africa, the ice cap of Mt. Kilimanjaro was over 10,000 years old. It has lost 80% of it's volume and aproximately the same amount of are since it was first surveyed in the early 1900's. 60% of that melt occurred since a detailed NASA satellite/ground survey conducted in the early 90's.

The theories people ARE debating are as follows:

- that we are the cause of global warming
or
- global warming is a natural occurring phenomenon
or
- global warming is natural, but we are speeding it up

These theories all require significantly different action on our part as it is not something that we can simply ignore.

So the first question that needs answering are thus:

- Are we the cause?
- Can we do anything to stop/slow it?
- Which areas will be affected and how?
- What can we do to adapt to it in affected areas?

What's more, this isn't some problem that will affect only far away lands.

A significant source of humanities fresh drinking water is going to disappear by 2030 as glaciers melt and drain into the ocean. Areas such as those surrounding the Sierra Nevada's are already feeling the crunch as the snow pack is almost completely gone. Reservoirs are depleting and the region has been left to the mercy of infrequent rainfall. Cities like Las Vegas, Los Angeles and San Diego already have full blown water crisis's on their hands and are entering their 4th consecutive year of drought conditions.


By AEvangel on 1/4/2010 1:43:30 PM , Rating: 4
quote:
No, the world's current warming trend is scientific fact... The ice caps ARE melting, glaciers ARE retreating, Greenland is actually going to be green soon. That's not what is up for debate...


Once again I could link to you TONS of websites and studies that say they are not melting but growing and that in the last ten years temperatures have actually dropped on a Global average. It all depends on whose study of what you believe.

quote:
In Canada's great white north and there are glaciers that were hundreds of thousands of years old when I first saw them as a child and several of had disappeared before my last visit to Banff and Yoho national parks this previous year.


This is anecdotal evidence at best, I could once again show you historical evidence that less then 20k years ago all of Canada was covered in ice.

quote:
A significant source of humanities fresh drinking water is going to disappear by 2030 as glaciers melt and drain into the ocean.


While I don't like alarmist statements like the one you make here I do however agree that fresh drinking water is a much larger problem then Climate change is at this time.


By Kurz on 1/4/2010 7:18:24 PM , Rating: 2
Nat Gas
By pityme on 1/4/2010 12:41:43 PM , Rating: 2
The real answer is to convert more of the trucks, trains, and even cars to Nat Gas powered. Less pollution than oil or diesel, a path to self sufficiency, and even less expensive. Unfortunately, Obama has been told to believe that Natural Gas is an evil fuel. It is the short term answer and when the CO2 scrubbing technology for nat gas matures, this will very very clearly be the answer for the next 20 - 30 years. Hopefully, battery/capacitor/fusion tech will be mature and competive by this time. Currently, electric does not make sense. I cannot wait until the battery users modify their cars with big surround sound speakers and crank up the music. Lots of e cars stalled on the road. Maybe invest in towing companies.




RE: Nat Gas
By Connoisseur on 1/4/2010 3:10:29 PM , Rating: 1
Okay seriously I keep hearing about how natural gas is cleaner than petroleum. From Wikipedia.:

quote:
"Natural gas is often described as the cleanest fossil fuel, producing less carbon dioxide per joule delivered than either coal or oil.[11], and far fewer pollutants than other fossil fuels. However, in absolute terms it does contribute substantially to global carbon emissions, and this contribution is projected to grow. According to the IPCC Fourth Assessment Report (Working Group III Report, Chapter 4), in 2004 natural gas produced about 5,300 Mt/yr of CO2 emissions, while coal and oil produced 10,600 and 10,200 respectively (Figure 4.4); but by 2030, according to an updated version of the SRES B2 emissions scenario, natural gas would be the source of 11,000 Mt/yr, with coal and oil now 8,400 and 17,200 respectively.[22] (Total global emissions for 2004 were estimated at over 27,200 Mt.) In addition, natural gas itself is a greenhouse gas (methane) far more potent than carbon dioxide when released into the atmosphere, although released in much smaller quantities. Natural gas is mainly composed of methane, which has a radiative forcing twenty times greater than carbon dioxide. This means a ton of methane in the atmosphere traps in as much radiation as 20 tons of carbon dioxide. Carbon dioxide still receives the lion's share of attention over greenhouse gases because it is released in much larger amounts."


Doesn't really strike me that natural gas is a real alternative. It's just replacing one greenhouse gas with another, much more potent greenhouse gas. Now, bear in mind that I got this from wikipedia. Please correct me if some misinformation is posted on there.


RE: Nat Gas
By knutjb on 1/4/2010 11:52:04 PM , Rating: 2
You are placing more credibility on co2 as a problem than those of us in the real world. It apparently escapes you that to move to a practical clean energy will take decades and a real replacement of our current fuels requires a real alternative which doesn't currently exist. The government cannot make it happen because of committees and politics. The free market works best and the article proves my point:
quote:
He was producing 12,000 gallons of biodiesel fuel per week by mid-year, and his business was viable, thanks to the $1/gallon tax credit.
So in reality it was never viable in the first place without government corporate welfare. All of which, both large and small, must end.

I'm all for research in new sources. Just because it works in a lab doesn't mean it can stand on it's own without subsidies. If it can't stand on it's own it's not a replacement.

I think the only government agency that might be able to find a solution is DARPA but I don't see that happening anytime soon. Why DARPA, they have something politicians don't have, imagination, along with the marked absence of lobbyists.


This is most unfortunate
By moenkopi on 1/4/2010 3:42:26 PM , Rating: 2
I love the idea of Biodiesel coming from algae and consider that to be the future. There is alot of potential in that area and it is an amazing way of both carbon mitigation and creating a sustainable fuel. VW diesels are super efficient, diesels have a stoichiometric efficiency of %43 and so they are an imperative solution to any energy efficiency initiative.




By chunkymonster on 1/5/2010 10:24:09 AM , Rating: 2
I agree. Algae, soy, switchgrass, peanuts, and hemp would all be excellent and sustainable sources of bio-diesel.


Level the paying field
By shouldbworking on 1/5/2010 11:27:24 AM , Rating: 1
I love it when people complain about biodiesel subsidies but ignore the fact that for the last 100 plus years, the petroluem industry has been subsidized by the US and other governments around the world far more heavily than biofuels ever were. We could have produced biodiesel for every truck in America for what we spent securing the oil fields in Iraq in the last decade.

If we want a truly level playing field, we would have to end all coal and gas subsidies today and fund things like biodiesel and alternative energy for 100 years.




RE: Level the paying field
By owyheewine on 1/5/2010 11:55:30 AM , Rating: 2
The so called subsidies were and are reduced taxes, usually by increased deductions (depletion allowances for instance). Taxes are not government money. They are people's money that government confiscates.
Subsidies are direct payments based on political whims.
The big difference is that fossil fuels produce usable energy that is several times more than the energy required for production. Biofuels are mostly negative energy producers, subsidy or no subsidy. Touchy feely wishes never trump thermdynamics.


By the goat on 1/4/2010 1:00:27 PM , Rating: 2
quote:
his business was viable, thanks to the $1/gallon tax credit. Now with the credit gone, he says he's shutting down the promising startup.


If the business can't survive without the tax credit then it was never really viable.




By joedu on 1/4/2010 9:14:02 PM , Rating: 2
Why is Toyota's Jim Lentz not mentioning used oil and PAG (Plasma arc gasification) oil production in this video.

http://oilused.com/About




Opportunity
By Frallan on 1/5/2010 3:55:49 AM , Rating: 2
I would say that this is a wonderful opportunity for the State. How about taxing all non-renewable fuel $1/gallon it would benefit all as well as reduce the usage of the non-renwable fuel.

My $0.02
/F




Drill baby drill
By owyheewine on 1/5/2010 10:08:46 AM , Rating: 2
Maybe we should try something wild and crazy like letting the market find the best solution. The answer is of course to utilize nature's own source of stored solar energy, fossil fuels.
Anyone with even a fuzzy understanding of thormodynamics should know instinctively that all of these "renewable, sustainable" energy sources are nothing more than ways to extract money from people's wallets to pay for the wishful ideas of the scientifically ignorant left.




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