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President Obama's administration fears losing key swing states if it drops corn farmer-friendly quotas

It's a painful memory etched into many chapters of American history -- selling the farm.  But amid a record-setting drought many farmers fear that may be precisely what will happen.  But unlike past farm failures, this one may come not solely from nature, but from the government's decision to artificially inflate corn prices by mandating corn ethanol production.

I. Corn Ethanol - Pork 101

It's hard to understand why corn ethanol fuel in the U.S. has stuck around for as long as it has.

Unlike a handful of nations (i.e. Brazil), the U.S. lacks the resources to supply all its fuel needs with sugary food-crop ethanol.  Thus, unlike those nations U.S. automakers have been largely unable to sell pure-ethanol vehicles to consumers.  That's a game killer for corn ethanol, as it means that consumers pay more at the pump using ethanol than they would using gas as mixed-fuel engines lack the fuel efficiency advantages of pure ethanol engines.

Corn ethanol handouts
The federal government has funneled billions in handouts to the corn lobby. [Image Source: AP]

Then there's the economics -- corn is a food crop, so using it as a fuel source drives up prices on everything from snack foods (corn syrup) to beef (cows eat corn feed).  Finally, there's the environmental issue.  One of the big goals of the alternative fuels movement is to reduce emissions of carbon and noxious (nitrogen or sulfur containing) gases.  But studies have shown corn ethanol actually leads to higher emissions than gas.

Corn ethanol's strange status in the U.S. perhaps began when corn producers seized on the experimental fuel as a means of bumping the billions they already received in government subsidies even higher.  During the Bush and Obama administrations, the corn lobby opened its checkbooks to many members of Congress, and in exchange reaped a multiplier in the form of billions of grants and subsidies for corn ethanol -- all on taxpayers' dime.

Perhaps most significantly, the federal corn supporters authorized the EPA to mandate all fuel sold to contain a certain percentage of ethanol -- in essence forcing all Americans to pay for corn ethanol, even if it was bad for their cars and not something they wanted.

II. Quota Remains Last Major Handout to King Corn

As part of the government's embrace of corn ethanol, the Energy Independence and Security Act of 2007 (EISA) -- passed by Congress and signed into law by President George W. Bush -- mandated a series of ever-increasing production targets to be regulated by the U.S. Environmental Protection Agency (EPA) (a slightly ironic duty consider there was strong evidence corn ethanol harmed the environment).  The idea among corn producers who backed the bill leaning on the candidates they "funded" was ostensibly that this would force future Congresses to commit to ever-increasing subsidies.

But after the recession, public backlash against wanton government spending led to Congress cutting corn ethanol's subsidies.  But Congress did not bother to overturn the EPA's emissions targets.

Cattle farmers
Cattle farmers fear they could go under if corn prices stay artificially high. [Image Source: Texas Vox]

While cutting the subsidy, but leaving the quota might seem like adding insult to injury, corn producers were actually happy (mostly) that the quota remained.  The quota created higher artificial demand, driving up prices.  That artificially elevated demand has helped the corn industry weather the recent droughts, as corn prices have risen 60 percent.  

But while that may have saved big corn's profits in a year which otherwise would have been disastrous, the damage has essentially been passed along to livestock producers.  

Mike Deering, a spokesman for the National Cattlemen's Beef Association, says his organization has pleaded with the EPA to temporarily cut targets to alleviate already drought elevated corn prices made even higher by artificial ethanol demand.  He comments to ABC News, "Our ears are open and the line of communications is open, [but] we do not have any definitive news at this point and time."

III. Trading Higher Food Prices for Votes

Perhaps this is a case of reaping what you sow, but amid pleas from livestock farmers there's not a drop of relief in sight.  The issue lies with how the EISA is structured.

While the EPA has the power to temporarily reduce production quotas, it must receive that request from states or ethanol refiners.  An ethanol trade group -- the Renewable Fuels Association -- said it "wouldn't be surprised" to see such a request, but none has come yet.  The issue is that corn demand actually helps corn farmers, refiners, and corn-producing states.

Currently about a third of corn is used to make ethanol, another third goes to livestock feed, and the remaining third is sent for human consumption either as a vegetable or in various food additives (corn syrup, corn starch, etc.).

The cattle industry warns, "The drought-induced reductions in the corn supply means that the mandated utilization of corn for renewable fuels will so reduce the supply of corn and increase its price that livestock and poultry producers will be forced to reduce the size of their herds and flocks, causing some to go out of business and jobs to be lost."

One problem is that supporting corn ethanol has held the key to Presidents Bush and Obama wining crucial swing-state battlegrounds.  

In 2008 President Obama won three of the four largest corn producing state -- Iowa, Minnesota, and Illinois.  He also won other swing states with large corn growing regions, including Michigan, Ohio, and Wisconsin.  Support of ethanol earned President Obama and other regional politicians key support -- both financial and in votes.  Unsurprisingly politicians in these regions and the President are key supporters of corn ethanol.

Electoral college 2008
Corn ethanol supporters were key to President Obama winning battleground states in 2008.
[Image Source: Wikimedia Commons]

Meanwhile the states who are hurt the most by the quotas -- livestock states like Texas -- are regions where President Obama holds little hope of winning electoral votes.

Of course, there is a risk that supporting government inflation of corn prices could backfire.  Outside of corn producing states who directly benefit from higher corn prices, voters in other swing states might look to punish President Obama and the backers of big corn if failing livestock and higher food corn prices could drive up costs of meat and many dry foods.

For now, though, the quota stands.

Source: ABC

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corn ethanol
By Argon18 on 8/3/2012 7:18:37 PM , Rating: 5
corn ethanol is a financial, environmental, and automotive disaster. takes more energy to make than what it contains, and corn is one of the absolute most pesticide and fertilizer intensive crops. it's irresponsible and it's disgusting.

RE: corn ethanol
By m51 on 8/3/2012 7:56:54 PM , Rating: 5
The intensive tilling involved also causes a very high top soil erosion rate which means a rapid loss rate of viable farm lands. We're trading our ability to grow food in the future for quick profits for ConAgra and ADM today. It's also depleting the fresh water tables from the enormous fresh water demands exceeding supplies.

It's an impressive bit of political lobbying that even though everyone is aware of the costs to the tax payers in the 10's of billions of dollars a year and zero benefits that nobody is able to get rid of it.

They are old masters at the political game though. The check for the slush funds that funded Nixon's Watergate break in was provided by none other than the CEO of ADM at the time.

RE: corn ethanol
By dgingerich on 8/3/12, Rating: 0
RE: corn ethanol
By Ringold on 8/3/2012 8:52:50 PM , Rating: 4
The birth rate is a whole different issue. Economists don't talk about it much, but demographics pretty much means economists don't know how Japan, for example, can survive as a nation. Similar problem for Russia. Europe as a whole will be saved only by looking more like North Africa, as native Europeans typically have rock-bottom fertility rates, offset only by immigration.

Economies can handle a stable population level, but like deflation, economies, much like nature, tends to fall apart in a shrinking world.

Heck, it's not hard either to extrapolate when the last South Korean or Japanese baby will be born. You've been bit by the extreme leftist bug that's been around since the 60s that instills this idea that humanity is plague upon the universe and should remove itself from existence.

Besides, your facts must be wrong somewhere, because somehow the number of acres under the plow this year was the highest since the 40s.

RE: corn ethanol
By Jeffk464 on 8/3/12, Rating: -1
RE: corn ethanol
By Ringold on 8/3/2012 9:06:49 PM , Rating: 4
That's a hold-over from Malthusian thought, a school of economic thought dead and abandoned by all but Marxists for at least 2 centuries.

We're scarcely constrained by resources as it is. People are hungry due to government failure, not a lack of food; there's more then enough to go around, but corrupt autocrats are more interested in lining their own pockets and that of their camel-humping clan then improving the lot of their nations. More and more 'resources' consumed are in services, technology and media, areas essentially unlimited in nature. And recycling technology advances, year in and year out. Meanwhile, more and more iron, copper and other reserves are found, existing mines keep going, and ways to exploit aging mines further are devised.

Even in agriculture, the green revolution has scarcely touched Africa. There's been, compared to Europe and North and South America, almost no research on how to optimize yields there, given local soils and weather. Very little advanced seed used, very little GM seed. Africa could, very easily, by just deploying best practices and a little more technology, quadruple their yields.

The next frontier is starting to open up as well, as SpaceX proves on an almost monthly basis. People aren't laughing at commercial space any more, so by one famous estimate we might be 50 years from a space elevator now. With a thousand years or more of easily accessible nuclear fuel, then if we haven't moved past this little planet then its no ones fault but our own.

No, the only places we are resource-constrained are in areas where we place artificial limits on ourselves. Europe has high natural gas prices, but several countries ban fracking entirely, for example.

RE: corn ethanol
By Jeffk464 on 8/3/12, Rating: -1
RE: corn ethanol
By Ammohunt on 8/3/2012 9:56:27 PM , Rating: 2
Tell that to the dry land farmers that settled the area on the edge of the pawnee national grasslands where i live. Its a green oasis in an otherwise semi-arid desert.

RE: corn ethanol
By Ringold on 8/4/2012 6:27:00 PM , Rating: 5
Also tell that to Brazil. Most people did, thought Brazil's soil largely too acidic or otherwise lacking to be arable.

Surprise! Brazil applied a little research, a little elbow grease, and now Brazil is an agricultural king-pin.

Obviously desert will never be easily productive farmland, of course. No one would suggest so. But that's only a portion of North Africa. Zimbabwe, before losing is fraking mind, was the breadbasket of Africa. Now it's reduced to subsistence farming, at best. It could very easily be a massive exporter, as could almost all of its neighbors.

I'm sorry, but there's zero evidence of Malthusian resource limitations being anywhere close around the world. Even the most dire shortage, water, is one largely government-created; governments tend to massively underprice the cost of water, leading to wasteful usage, damaging ways of getting it, and disregard for reclamation. Food, again, is a governance problem. Other raw material prices are up this decade, but its remarkable not in how much they've risen but in how little they have considering 2 BILLION people are working on joining a global middle class.

RE: corn ethanol
By Paj on 8/6/12, Rating: -1
RE: corn ethanol
By spamreader1 on 8/6/2012 9:38:54 AM , Rating: 1
You're on to something there. On the research on optimizing yields in Africa, there has been quite a bit. The major problem with common staple crop yields in Africa is the climate. They have 2 seasons, wet and dry. The crops that produce so well for climates outside the tropics don't produce very well at all in most of these regions.

The research needs to focus more on what does grow well in that area and how it can be safely brought to larger scale. (Water is already at a premium so contamination of that resource would be disasterous.)

RE: corn ethanol
By Jeffk464 on 8/3/2012 9:03:58 PM , Rating: 1
If you study your history you will understand that during good time societies have exploded population wise and then hit with things like droughts or like Europe's Little Ice Age you have a large die off of population. Being global has helped a little with this problem as you can move grains from one area doing well to another area in drought but as you stretch resources more you might not be able to cope. China used to be plagued by this problem and Africa still is.

RE: corn ethanol
By Ringold on 8/3/2012 9:11:00 PM , Rating: 2
Yes, that was true, but if you study history and draw logical inferences, you'll notice the connection between the ancient pre-historical world, ancient China, and modern Africa. And what is that? Zero innovation and technological advance.

Malthusian economic theory perfectly describes a world, but only one with zero productivity growth, and one that ignores the demographic trend where, as people become wealthier, they seem to realize they don't need a whole herd of babies to support them (both because they're better off themselves and because 3/4 wont die), and fertility rates tend towards ~2. In short, Malthus doesn't describe the real world at all, only the world prior to the Enlightenment, basically.

RE: corn ethanol
By Jeffk464 on 8/3/12, Rating: 0
RE: corn ethanol
By knutjb on 8/3/2012 10:37:13 PM , Rating: 3
You are making the same mistake Malthus made. You are ignoring improvements in crop yields and the manpower required to produce it. There are machines that plant seeds without the need for tilling. Our problem is Obama wants E15. The corn used for ethanol is the same variety used for animal feed. The world has not had a food supply problem, starvation is linked to war as the primary cause.

RE: corn ethanol
By espaghetti on 8/3/12, Rating: 0
RE: corn ethanol
By FaaR on 8/4/2012 8:22:38 AM , Rating: 1
You were doing fine until you started gibbering about "lazy and stupid people", fascist.

RE: corn ethanol
By Stiggalicious on 8/5/2012 4:30:44 PM , Rating: 1
Not knocking your arguments, I do agree with you, but I must mention that most corn plating nowadays is done without tilling or digging. They simply insert the seeds straight into the ground at the proper height. This helps tremendously to reduce/eliminate topsoil erosion and drastically reduce water consumption.

RE: corn ethanol
By TSS on 8/3/2012 8:13:46 PM , Rating: 2
Growing anything for fuel is just downright insane. Even if there's litteraly nothing to grow on a piece of land you can use it for a structure or just return it to nature. To take nutrients from the soil and burn them is just....

Well let's just say everybody who lived and died before say 1945 is turning in their grave. How rare it is and how foolishly we use it. Not to mention what we do to the soil to sustain this level of production.

RE: corn ethanol
By lennylim on 8/3/2012 8:27:43 PM , Rating: 1
> Growing anything for fuel is just downright insane

You mean, like firewood?

Actually, it may make sense in some situations. For example, switchgrass :

RE: corn ethanol
By Ringold on 8/3/2012 8:53:55 PM , Rating: 3
Sure, it might in some situations, but the politicians aren't pushing that, now are they? They're pushing corn.

RE: corn ethanol
By Jeffk464 on 8/3/2012 8:54:33 PM , Rating: 3
Sugar cane to ethanol is actually productive.

RE: corn ethanol
By Stevethewalrus on 8/3/2012 9:17:48 PM , Rating: 1
Ya, but it can't really be grown in the U.S.

RE: corn ethanol
By Jeffk464 on 8/3/2012 9:26:12 PM , Rating: 1
Speak for yourself howlie. :)

RE: corn ethanol
By Solandri on 8/4/2012 2:06:22 PM , Rating: 2
Sugar beets, however, can.

Also, the only reason sugar cane and sugar beets are preferable is because they're storing solar energy in relatively short sugar molecules. Most plants take the extra step of converting the sugars to cellulose (virtually all plant matter) - a bunch of sugar molecules glued together to form a longer molecule. If we can figure out a cost-effective way to break those molecules apart back into the shorter sugar molecules*, then any plant matter can be converted to alcohol fuels - including the waste 2x4s from demolishing old buildings.

* That's what the bacteria in termite guts do. The termites eat wood, the bacteria break the long chains into shorter sugars, and the termites digest the sugars.

RE: corn ethanol
By The0ne on 8/6/2012 4:26:38 PM , Rating: 2
My Family grows sugar cane all the time here in San Diego. For small scale I know it's viable. For mass scale, i've no idea :D

RE: corn ethanol
By knutjb on 8/3/2012 10:07:30 PM , Rating: 2
Actually, it may make sense in some situations. For example, switchgrass
Great choice of vaporware. That is the stuff the EPA is fining companies for not using. Does it matter that you can't buy it anywhere?

RE: corn ethanol
By knutjb on 8/3/2012 10:09:40 PM , Rating: 2
Actually, it may make sense in some situations. For example, switchgrass :
Oh yeah the fantasy fuel the EPA is fining companies for not buying even though you cannot buy it commercially.

RE: corn ethanol
By knutjb on 8/3/2012 10:11:40 PM , Rating: 2
Sorry for the dbl post. TW connection issues.

RE: corn ethanol
By SpartanJet on 8/4/12, Rating: -1
RE: corn ethanol
By Ringold on 8/4/2012 6:30:46 PM , Rating: 2
It links to decent sources, including the WSJ.

RE: corn ethanol
By knutjb on 8/5/2012 5:00:07 PM , Rating: 4
I simply grab the first one off the search engine because I had heard the same coverage on several different sourced radio news stories. So if you love your blinders try this:

As to your BS comments; those on the left vandalized Chick-fil-A in their protests:

I picked a source that seams closer to your beliefs. You very rarely find conservatives committing violence to prove their point and those who do are quickly condemned for doing so. I never saw a story where Tea Party events, no I'm not a member, committed violence or even left a mess behind.

Unfortunately we see violence and intimidation becoming increasingly common from those on the left, again. Those who do use violence are rarely condemned and usually touted in an idyllic way like the Occupy movement. Back to the future, i.e. 60s-70s Ah the good ol days...

RE: corn ethanol
By Rukkian on 8/6/12, Rating: 0
RE: corn ethanol
By TSS on 8/5/2012 8:56:32 AM , Rating: 2
Yeah like firewood. Go tell everybody who has central heating now to turn it off and resort to firewood for heat. Let's see how long those trees last. After that you can convert all ICE cars to steam engines to aggrivate the problem. And convert all houses in the world back to wood instead of concrete. Trees only work as a renewable source now because demand for trees per person is really low.

I'll repeat, growing anything for fuel is insane. The food chain is a closed cycle. You break that cycle when you start burning stuff. No matter is lost but it is transformed, and the products of using crops as fuel cannot be used by life to recycle back into the food chain to support other life. On a small scale, this doesn't matter. On a national or planetary scale, it certainly matters.

Look at it from another way: the land right now is already overfarmed. Brazil is the only one who manages to pull it off and they've cut down 1/4th of the entire rain forest since 1970. They took out an area the size of greece *last year*, the lowest it's been in decades.

Now look at the US. Alot of land is already in poor shape from overfarming, using oil based fertilizers to boost production for export. They're great for turning land that's already arid into farmable land, but they've also been used on fertile land to increase production and overfarm it for export. That makes fertile land arid. So far i've heard great things about solar, wind, nuclear, electric, fusion and whatnot. I haven't heard a peep about replacing oil based fertilizers or what it would do to crop production.

But then again like Jim Rogers says, the average farmer age in the US is 58, with similar numbers across the world. Nobody gives a damn about farming anymore.

RE: corn ethanol
By Jeffk464 on 8/3/2012 8:53:59 PM , Rating: 2
Can we stop with the corn based ethanol already. Nobody but the corn lobby thinks its a good idea. The oil companies don't like it, the environmentalists don't like it, and it just doesn't make energy sense. Brazil can do it with sugar cane because the energy in to energy out is like 1:7 for corn its like 1:1.7 If they ever come up with a good way to turn the corn stocks into ethanol then I'll change my mind.

PS - it also raises the cost of grain exports to places like africa where they already can't afford to eat.

RE: corn ethanol
By Ringold on 8/3/2012 8:58:28 PM , Rating: 3
Environmentalists DID love it, and thats how we got in this mess. The left, being bleeding hearts and naive, jumped in bed and combined forces with the oldest, most savvy and brutal lobby that's probably ever existed in the country, the farm lobby. Once they did that, the farmers took the reigns and used the extra influence the way they wanted. Traditionally conservative farmers and greens on the same side of an issue? A politically unstoppable force.

Environmentalists must know now what it feels like to be used for a one night stand and told to GTFO the next morning without so much as a cup of coffee. At least they would if they were paying attention, they tend to forget their own mistakes and failures almost as soon as they happen.

RE: corn ethanol
By Jeffk464 on 8/3/2012 9:08:34 PM , Rating: 2
I agree 100%, you have to remember a lot of environmentalist aren't that well informed. Like global warming and other issues you really need to go with the research/scientists. Basically consider the source whether its just some 21 year old hippie college chick or Rush Limbaugh.

RE: corn ethanol
By PaFromFL on 8/4/2012 8:22:40 AM , Rating: 2
For the three cars I've tested on long trips, the gas mileage dropped by about 10% when using E10 vs pure gasoline. When you factor in the oil used for ethanol production and transportation, E10 actually increases our consumption of oil. It's time to ban the use of ethanol in fuel and starting sending corn lobbyists and their bosses to Guantanamo, as lessons to other greedy pigs.

RE: corn ethanol
By MethylONE on 8/4/12, Rating: -1
tired of politics on dailytech
By bjacobson on 8/3/2012 9:09:01 PM , Rating: 1
seriously tired of the partisan politics on dailytech. It's so slanted I might as well be on CNN as well to even out the slants.

Would prefer cool-headed, low blood pressure reporting.

RE: tired of politics on dailytech
By espaghetti on 8/3/2012 9:30:53 PM , Rating: 3
So, President Bush and President Obama are in the same party?

RE: tired of politics on dailytech
By thurston2 on 8/3/2012 10:24:45 PM , Rating: 5

By espaghetti on 8/4/2012 9:53:02 PM , Rating: 5
Finally! People are waking up!

By MethylONE on 8/4/2012 4:22:28 PM , Rating: 5

RE: tired of politics on dailytech
By Jeffk464 on 8/5/2012 7:42:11 PM , Rating: 3
Yup they are both in the "Corporatocracy" party of America. No matter who you vote in Wall Street is absolutely pulling the strings.

RE: tired of politics on dailytech
By FITCamaro on 8/6/2012 12:42:37 PM , Rating: 1
You say this but you hate President Bush and love President Obama.

By jeffkro on 8/6/2012 4:58:35 PM , Rating: 2
I don't hate bush, I think he was a puppet

RE: tired of politics on dailytech
By Motoman on 8/4/12, Rating: -1
Hey Cattle Farmers!
By quiksilvr on 8/4/12, Rating: 0
RE: Hey Cattle Farmers!
By Rugar on 8/4/2012 2:22:27 PM , Rating: 2
Eh... just out of curiosity... which terrestrial grasses produce any significant amount of Omega-3s? Certainly there are some crops (flax, chia, or rapeseed) that contain decent levels of alpha-linolenic, but none of these are grasses. They are all seed crops.

I can agree with the notion that free-range cattle produce a completely different product than feedlot cattle and subjectively I can agree with you that the product is better. But unless you know something I don't about grasses, your argument is blatantly false.

RE: Hey Cattle Farmers!
By Jeffk464 on 8/5/2012 12:49:01 AM , Rating: 2
I have seen studies that say the same thing, that grass fed cattle have a much healthier fat profile. Buffalo also have a much healthier fat profile, I don't know why they are not more of an option.

RE: Hey Cattle Farmers!
By Jeffk464 on 8/5/2012 12:40:06 AM , Rating: 2
Stop eating the red meat that is unhealthy because of corn feed. I have cut back probably 90%, even make spaghetti with ground turkey or chicken now. People need to start learning to vote with their wallets, its really the only vote that counts in this country.

RE: Hey Cattle Farmers!
By Jeffk464 on 8/5/2012 12:45:14 AM , Rating: 2
Oh forgot, also switched from hamburger fast food, to places like subway, quiznos, baja fresh, etc. I also majorly cut back on drinking any corn syrup sweetened beverages, easiest thing in the world is swap ice tea for soda.

Added benefit of dropping 13 lbs in about 4 months.

RE: Hey Cattle Farmers!
By Gungel on 8/5/2012 8:47:35 AM , Rating: 2
Chicken and turkey contains to much antibiotics, hormones and what not. And none fermented soy (tofu) is even worse, it inhibits the absorption of minerals. So be careful with your red meat replacement choices. I reduced my red meat intake to 4 servings a month and grass fed only like buffalo, venison, etc.

RE: Hey Cattle Farmers!
By jeffkro on 8/5/2012 9:14:14 AM , Rating: 2
I know, basically no matter what you do it feels like the food industry is attempting to poison you.

RE: Hey Cattle Farmers!
By Reclaimer77 on 8/5/2012 11:24:33 AM , Rating: 2
We get more and more sedentary and inactive and yet life expectancy goes up and up.

I doubt we're being poisoned lol. Maybe the food industry isn't perfect, but it's better than going back to times of mass famine, food-borne illness and contamination being common place, etc etc.

We have a bunch of people now who've watched Food Inc., the most one-sided documentary since the last Michael Moore flick, and think they have it all figured out. The food industry is doing the only thing they can to meet the demand placed on them. Going "all organic" simply isn't sustainable on THIS planet. We would need one with a lot more farmland, and way less people.

RE: Hey Cattle Farmers!
By Jeffk464 on 8/5/2012 7:38:04 PM , Rating: 2
"yet life expectancy goes up and up"

I have seen predictions that the current generation will be the first generation to reverse that trend due to obesity. But I think the reason life span has been going up has more to do with modern medicine then it has to do with the general health of the population. Medicine has just been able to squeeze more years out of people than what they would have in the past. How many elderly people do you know going in for stints, blood pressure meds, etc.

RE: Hey Cattle Farmers!
By Jeffk464 on 8/5/2012 7:46:57 PM , Rating: 2
By the way I agree with you that we probably need to use current methods to get the needed quantities. I just don't think all the hormones, chemicals, and pesticides don't come at a health cost. To think they are not involved in a percentage of the populations cancer's and other diseases seems unrealistic.

Jason do a little research
By knutjb on 8/3/2012 10:28:47 PM , Rating: 5
Unlike a handful of nations (i.e. Brazil), the U.S. lacks the resources to supply all its fuel needs with sugary food-crop ethanol.
Brazil is NOT energy independent from ethanol. They are energy independent because of off-shore oil drilling. To continue with energy independence we DO have the resources but the current Administration is greatly limiting access to resources located on Federal lands and off-shore locations. They have pulled previously approved leases for little or no reason.

RE: Jason do a little research
By NovoRei on 8/4/2012 12:01:14 PM , Rating: 3
They have pulled drilling leases because there's not enough manpower and technology to develop the rigs.

And we are not energy independent in ethanol neither in oil. We export low quality oil and import high quality oil to refine gasoline. We are expected to be oil auto-sufficient when the new rigs start production around 5 years from now.

RE: Jason do a little research
By Azethoth on 8/5/2012 3:48:38 PM , Rating: 1
On the one hand what you say is true in the sense that they are not using 100% ethanol for everything and do not produce enough to do so, but on the other hand one could look up the nuanced truth:

tl;dr: Brazil's vehicle market is over 94% flex-fuel. At a minimum they use E20 - E25 (20-25% anhydrous ethanol blended with gasoline), or best case E100 (100% hydrous ethanol) in the same flex-fuel capable vehicle.

To me that is a whole lot of energy independence right there. As in 25% or so of their fuel grown locally with the other 75% coming from other sources like the ample offshore oil drilling you pointed out.

RE: Jason do a little research
By knutjb on 8/5/2012 5:38:03 PM , Rating: 2
Try this:

If Brazil didn't have oil production they would not be energy independent. They are the 6th largest consumer of oil in the world.

Alcohol is an ok fuel. It has some good attributes but does have a number of problems. The biggest is its low energy density compared to other fuels. NG 17.2:1, Gas 14.7:, Ethanol 9:1, Methanol 6:1. Also it absorbs water all too well. Which is why so many, including myself, are having to repair cars, lawn equipment, boats, and other gas powered engines because of the water absorption and fuel system corrosion problems. It is not a magic bullet.

Unfortunately the current administration is using Ethanol as a major ideological tool. By going from E10 to E15 they will force older cars off the road from fuel system failures. They ignored manufacturers who pointed this out. In a sense they will force you to buy a new, politically correct car by destroying your old one simply by changing fuel blends. I'm sure the vegan side of their party was glad to here this story too.

How would you expect a free market to work
By iowafarmer on 8/5/2012 1:55:14 AM , Rating: 2
Please post a link to the subsidies corn producers are receiving for growing corn.

Please post a link to the subsidies ethanol producers are receiving. The blenders credit was allowed to expire and was generally collected by big oil anyway as they were the blenders!

You might also post a link to the subsidies big oil receives. What was Iraq all about?

The distillers are producing on average about 2.8 gallon of ethanol from a bushel of corn. You can find the futures price of corn, ethanol and RBOB here:

You can find the price of Distillers Grains, a by product of ethanol production, here:

It is my understanding that ethanol producers are still able to source corn and distill it to sell ethanol and distillers grains at a profit.

I wish you would show me where the ethanol mandate requires ethanol distillers to produce ethanol at a loss.

Ethanol is a fuel additive. An oxygenate and octane booster. Refiners are able to produce a lower grade gasoline and enhance it with ethanol. Ethanol is required to be used as an oxygenate to clean exhaust omissions in many areas.

There are acre after drought impacted acre of corn that has more value as silage than as field corn. Silage is cattle feed. I guess the large cattle producers haven't figured out a way to to transport the silage to the big feedlots in the South and West. Sounds like it should be a good deal for cattle producers in the drought impacted midwest with the ability to source silage locally.

If a few less cattle are produced maybe the demand for the remaining cattle will go up along with the price and the cattle producers will again be making money. I thought that was the way a free market worked.

Be careful what you wish for, there are a number of studies that indicate ethanol is keeping the price of fuel at the pump lower than it would be if we needed 10% more oil and refining capacity.

It is humorous that anyone would think editorial that quotes editorial for supporting evidence has any value.

RE: How would you expect a free market to work
By knutjb on 8/6/2012 3:21:18 AM , Rating: 2
I'll start with
Be careful what you wish for, there are a number of studies that indicate ethanol is keeping the price of fuel at the pump lower than it would be if we needed 10% more oil and refining capacity.
Because of ethanol I lose 10-15% in mpg so that is an empty argument for me.
You might also post a link to the subsidies big oil receives. What was Iraq all about?
Of major businesses "Big Oil" receives the smallest. I would rather get rid of all the subsidies. As for Iraq, your proof? Nothing but conspiracy theory hearsay? Iraqi oil is a tired, non-existent punching bag. The closest link to oil and Iraq would be to stabilize production. Farm subsidies. Oil subsidies.

Oil gets about 6% mostly in deductions. About 38% of farmers get subsidies. Oil gets about $5B per year vs $10B for farmers.

I wish you would show me where the ethanol mandate requires ethanol distillers to produce ethanol at a loss.
If the business can stand on its own I would expect them to make a profit.

Ethanol is a fuel additive. An oxygenate and octane booster. Refiners are able to produce a lower grade gasoline and enhance it with ethanol. Ethanol is required to be used as an oxygenate to clean exhaust omissions in many areas.
Ethanol replaced the far more effective and more hazardous MTBE. The problem wit ethanol is it has a 9:1 fuel air ratio vs gas at 14.7. MTBE didn't hurt mpg, ethanol does that and harms older vehicles and boats. Much of the emissions difference between with/without is quite small. Most cars 2000 up are inherently very low or better emissions without ethanol. So gaining that nth degree becomes very expensive. We have 18 different summer blends that significantly run up costs with negligible real world impact.

I have read a number of differing opinions of how much energy is required to produce ethanol and at best it is a zero sum game. The best real world numbers showed more energy is used to create ethanol than what ethanol provides.

Personally I would rather have a steak and better mpg than get scammed by the politicians and feel good environmentalist every time I fill up.

RE: How would you expect a free market to work
By iowafarmer on 8/6/2012 9:42:54 AM , Rating: 2
Your environmental working group link is interesting. Clinking through to the list of subsidies for individual crops shows they are using estimated, made up numbers for the last 3 years. So maybe recently they inadvertently entered a couple of numbers multiple times to pad their estimate.

The direct payment is an odd payment. It is paid based on farm history and is payed regardless of whether a farmer plants an acer to crop or not. I don't really understand the direct payment. In the last 5 year farm program the direct payment schedule reduced the direct payment to farmers each year. We will see if the direct payment continues in the next 5 year farm program, the current program is about to expire. So the estimated EWG numbers for the last 3 years do not seem to compute.

It could be argued that the crop insurance subsidy promotes crop production by providing a safety net for corn, soybean, wheat etc producers. I think the idea was to replace what seemed to be annual disaster program monies with the multi peril crop insurance subsidy.

Through the years the EWG seems to think government loans to farmers are somehow farm subsidies rather than loans.

By WalksTheWalk on 8/6/2012 10:49:50 AM , Rating: 2
I'll try to ignore your posting name and the bias it implies in your posting.

I live in Minnesota I'm well aware of the ethanol subsidy program. It was a $6B a year federal program and was cut by the feds for a better deal: the Renewable Fuel Standard (RFS), which this article in indirectly about. The corn lobby traded a direct subsidy for the Federal Government's agreement to mandate E10-E15 for every state. This means an automatic boost to the ethanol producers larger than the previous $6B subsidy. This is just a subsidy by another name.

You also indicate that ag producers get a subsidy for growing, so that's one more subsidy in the pockets of the Feds. We can debate the rationality of it, but it's still a substantial subsidy.

The fact is, ethanol makes horrible economic sense because it artificially raises the price of corn along with raising the production for corn, pushing out the production of other foods for given acreage. The high price also raises the price of meats that rely on corn feed. It at least as bad for the environment as gasoline and wouldn't stand a chance in a subsidy free market all things being equal. Study after study shows that ethanol is a bad idea on multiple levels.

By iowafarmer on 8/6/2012 1:34:03 PM , Rating: 2
Actually I selected my user name so you would know I have a dog in the race and that I am interested in seeing accurate information used in the discussion of issues that affect me a family farmer.

I don't see where in my post I pointed to a connection in the government program to a farmers decision to add corn or any other particular crop acres to his crop mix. The direct payment is like a payment to get farmers to report planted acres, farming practices, be eligible for government loans and the big one conservation compliance. The reality is a farmer makes decisions based on market forces. From my perspective ethanol is a market force. I do elect to use 89 octane e-10 in my 90 three quarter ton pickup with about 150K miles and also my 04 car closing in on 250K miles. I have had no fuel related issues with either vehicle, but that's just my own experience. In Iowa I could use 87 octane fuel without ethanol.

As far as multi peril insurance is concerned. I would be enrolled for catastrophic coverage, which is basically no insurance, automatically. Or I pay the premium for the coverage I elect based on my 10 year APH. Premiums can get a little pricy. The premium I pay for the coverage I elect is subsidized by the government.

As far as the RFS is concerned I don't see where the government is subsidizing ethanol producers in any way. I'm also not sure you will see e15 pumps in service stations any time soon. I do think the government is looking at a possible tax (I mean fine) on fuel suppliers when they are unable to meet the ethanol from cellulosic sources quota in the RFS. As I understand it the ethanol component from corn is just about maxed out today. The e15 issue is a pretty gray area for me. I guess you must feel we'll soon be seeing e15 pumps.

As far as Cattle Farmers are concerned, many of my best friends are cattle producers. Ruminate animals can max out the feed value of Distillers Grains. Cattle producers were happy to feed their cattle distillers grains when it was almost given away as a waste product from ethanol production distilled from corn. Now there are some cattle producers that want to eliminate a demand source for corn in the middle of a production cycle. Some cattle producers are wanting to change the rules. If the rule is changed it will affect thousands of rule following farmers with market prices that are likely to be well below cost of production. Choose your poison. If you are going to change the rules give producers warning and do it in the winter so a farmer has a chance to adjust his production decisions for next marketing year.

My cattle producing friends are family farmers and produce their own feed. They are calling their insurance adjusters and will likely collect an insurance payment based on their 10 yr corn APH and elected crop insurance coverage on their drought damaged corn. Once the insurance adjuster determines their corn yield per acre they plan to chop the corn for silage to feed their cattle.

By Nfarce on 8/6/2012 10:48:22 AM , Rating: 1
As for Iraq, your proof? Nothing but conspiracy theory hearsay? Iraqi oil is a tired, non-existent punching bag. The closest link to oil and Iraq would be to stabilize production.

I am also sick and tired of that mindless "Iraq war for oil" nonsensical tripe. Contrary to popular emotion-driven belief, the US imports the vast majority of its oil not from the Middle East, but from Canada and South America combined (to the tune of 60% compared to Iraq's whopping 4.7% contribution that we could easily more than make up for here on our own soil if the politicians and environmentalists weren't in the way).

Time to end the subsidies
By woody1 on 8/4/2012 2:54:35 PM , Rating: 1
I have two thoughts about this:

1. I find it ironic that the overwhelmingly conservative, right-wing mid-western farm folks are ok with government hand-outs, as long as they're on the receiving end.

2. Ethanol subsidies/mandates make no sense as an energy policy.

My hope is that after the elections, both parties will have the will to stop the subsidies and fuel mandates.

RE: Time to end the subsidies
By espaghetti on 8/4/2012 9:56:27 PM , Rating: 2
By WalksTheWalk on 8/6/2012 10:56:32 AM , Rating: 2
This is the problem in that many people are not consistent with their politics when it benefits them. Throw a subsidy at people and the vast majority will jump on it and fight to maintain it if you try to take it away. Politics relies on this because subsidies in general do not make sound policy. It benefits political policy, but not economic policy.

Something nobody ever seems to mention...
By HoosierEngineer5 on 8/4/2012 12:03:23 PM , Rating: 2
Subsidizing marginal farmers increases the quantity of food available, driving down the price. But, you need to have a way to use up the excess. Then, when you have years where yields are down, you still have capacity to supply the need, by eliminating the artificial demand. I haven't seen numbers to show whether the reduction in food prices due to excess production is equivalent to the price of the subsidies. Anybody seen it?

Unfortunately, I don't know if our government has the will to take advantage of the situation. The solution is obvious.

I believe everybody understands that having adequate food sources is quite important. We certainly don't want to start importing food in the same way we import oil.

By 96suzuki on 8/6/2012 10:40:12 PM , Rating: 2
I believe everybody understands that having adequate food sources is quite important. We certainly don't want to start importing food in the same way we import oil.

Very well said!!!!

By cruisin3style on 8/4/2012 5:20:32 PM , Rating: 2
if there was no politics or religion.

By AliShawkat on 8/4/2012 8:09:14 PM , Rating: 2
You might as well say if there were no humans then. We are competitive creatures.

Everyone is wrong
By Carney on 8/6/2012 4:32:42 PM , Rating: 2
As Ronald Reagan said, it's not what folks don't know, it's what they "know" that isn't so.

On ethanol, everyone's parroting the same sets of truthy factoids they have been spoon-fed from trusted media outlets and think tanks. It's no accident. Ethanol has been subjected to an incredible bombardment of expensive propaganda, with tested memes targeted at both the right ("it's socialism!") and the left ("it's not green!") and both ("it's corporate welfare!").

And no wonder - as even the anti-ethanol Wall Street Journal was forced to admit when it published a Merrill Lynch study, ethanol prevented oil from rising even higher during the 2008 oil price spike, saving Americans (and costing OPEC) more than $100 billion. Well worth it, then, for the foreign regime-run oil cartel to respond with a massive lie and FUD campaign. Focus group memes via high priced PR firms and political consulting firms, then feed the lies into this think tank, which then feeds it to various media outlets and politicians, and then it becomes conventional wisdom.

Among the nonsense and proven falsehoods are:

"Ethanol reduces food supplies and starves kids!"

Complete nonsense. Even while ethanol corn production has gone up dramatically, food corn production IS UP AS WELL. Scary sounding stats like 40% of our corn crop being "diverted" to ethanol carefully ignore the reality that the overall total of corn produced is higher, enabling more food corn to be produced than ever. Less than half our farmland is even cultivated, and only a fraction of that is used for ethanol. Per acre crop yields rise constantly, up more than 17% since 2003 alone.

Yes, sometimes commodity prices go up and down in the market, due to the business cycle and weather conditions and such. Instead of panicking and commiting suicide by destroying the biggest and most impotrant alternative to jihad juice, we should THINK about the long run and realize that corn prices (as well as those of other ag commidities) will come back down again, and meanwhile it's incredibly stupid to choose to be a helpless captive market of OPEC.

"Ethanol takes more energy to make than it yields!"

If that were true the market retail cost of ethanol would be way out of reach. Instead it's within the ballpark of gasoline even when subsidies are removed and adjusted for mileage, not eyebrow-raising when its high octane, higher than premium gsoline, is taken into account.

The energy return on investment for ethanol is studied to death, and has been overwhelmingly proven to be positive, about 25-30%. The most prestitigious peer-reviewed scientific journal in the world is Science (along with Nature), and in 2006 it published a comprhensive review of the ENTIRE existing body of peer-reviewed research on the subject. The conclusion was inescapable - again, 30%. And in the MUCH more geo-strategically important measure of oil (not all energy, just oil) in vs ethanol out, you get at least ten and even 20 units of ethanol per unit of oil needed to make it.

"Ethanol costs us a fortune!"

Wrong. Total government intervention for ethanol, including tax breaks, totaled less than $10 billion yer year at most. Meanwhile OPEC took oil from $10 a barrel in 1999 to $140 in 2008, and since we must import 5 billion barrels a year that means we went from spending $50 billion a year to $700 billion, a NEW, foreign-imposed "tax" of $650 billion on the USA, or more than $8,000 per family of 4 when average income is about $45K, and after-tax income is $35K. Any wonder why big-ticket items such as cars and houses saw their sales dry up, and why the auto, real estate, and financial industries collapsed, taking the economy with them? And you're still whining about the piddly less than $10 billion we spent on ethanol, which saved us more than $100 billion in oil?

RE: Everyone is wrong
By 96suzuki on 8/6/2012 10:35:54 PM , Rating: 2
Lets see.... I'm OK everyone else is not OK...

As Ronald Reagan said, it's not what folks don't know, it's what they "know" that isn't so.

Its more like... As Ronald Reagan said, it's not what folks don't know, it's what we don't want them to "know".

Ethanol reduces food supplies and starves kids!

OK I agree while it doesn't starve kids it has hurt the live stock farmers and in return gets passed on to us and has raised the prices of just about every product on the market. You would be surprised how many products are made from corn. One of the big goals of the alternative fuels movement is to reduce emissions of carbon and noxious (nitrogen or sulfur containing) gases. But studies have shown corn ethanol actually leads to higher emissions than gas.

Ethanol takes more energy to make than it yields!

"1 acre of corn yields 7,110 pounds of corn to process 328 gallons of Ethanol. However, planting, growing and harvesting that much corn requires about 140 gallons of fossil fuels and costs $347 per acre. "
Doesnt look so good to me....

With only 2/3 the energy of gasoline, ethanol costs more per mile, Example:

The energy of ethanol relative to gasoline
A. 76,000 = BTU of energy in a gallon of ethanol
B. 116,090 = BTU of energy in a gallon of gasoline
C. .655 = 2/3 = GGE of energy in a gallon of ethanol. A / B. (GGE =energy in a gal. of gas)
D. 1.53 = Gallons of ethanol with the energy of 1 gallon of gasoline. D = B / A.

Ethanol Fails to Lower Gas Prices, Study Finds

In fact Ethanol increases the foreign oil dependency due to the fact that it decreases fuel economy in return we use more gasoline by filling up more often.

E10 (also called “gasohol”) is a blend of 10% ethanol and 90% gasoline sold in many parts of the country. All auto manufacturers approve the use of blends of 10% ethanol or less in their gasoline vehicles. However, vehicles will typically go 3–4% fewer miles per gallon on E10 than on straight gasoline. And of course with a higher ethanol content the less fuel economy you get.

Ethanol costs us a fortune!

Corn ethanol's strange status in the U.S. perhaps began when corn producers seized on the experimental fuel as a means of bumping the billions they already received in government subsidies even higher. During the Bush and Obama administrations, the corn lobby opened its checkbooks to many members of Congress, and in exchange reaped a multiplier in the form of billions of grants and subsidies for corn ethanol -- all on taxpayers' dime .

If you don't think that's a fortune...You must be very rich....

By DockScience on 8/5/2012 7:00:42 PM , Rating: 2
Old data, currently closer to 1/2 of US corn goes for ethanol.

RE: 1/3?
By Carney on 8/6/2012 4:33:52 PM , Rating: 1
Irrelevant because the supply of corn for food has not gone down. Ag is not a zero sum game. There's huge unused slack capacity in the ag sector.

BOTH Parties...
By mmatis on 8/4/2012 8:25:01 AM , Rating: 2
are sucking corn duck, so there will be NO disadvantage to legislators or the Chimp in Chief should they NOT cut the quotas.

We are NOT voting our way out of this mess.

By F00L1SH on 8/4/2012 4:06:25 PM , Rating: 2
This article would be better if it stuck to using state's whose presidential politics are dominated by rural issues to draw it's conclusions about the effect of reducing corn subsidies on the upcoming election. Michigan's and Ohio's presidential-level voting histories are far more substantially determined by urban issues rather than rural ones. No presidential candidate is losing Michigan because they didn't bribe, at best, 32,000 voting age corn farmers (# farms X 2).

That's about one third of one percent of the state's population. Ohio is a little more swingy of a swing state with slightly more corn farmers (at best about 56,000) but that's still just half of one percent of the population.

Why did I known
By idiot77 on 8/5/2012 1:04:01 AM , Rating: 2
Jason Mick wrote this 3 words into the title?

Then the first comment amounted to Kool Aid drinking. DT!!!

So glad Anand had enough sense to make you your own little distorted world.

By FITCamaro on 8/5/2012 8:59:09 PM , Rating: 1
Given many leftists desire to see us stop eating red meat because "its bad for you", I don't see them caring too much if red meat prices skyrocket. They're already risen substantially.

RE: Heh
By Carney on 8/6/2012 4:38:16 PM , Rating: 1
Cattle farmers are being stampeded and panicked over a cliff, fleeing imaginary threats.

The reality is, ethanol is not a threat to food or feed supplies or prices, and oil does massive damage to our economy that hurts everyone, farmers included.

Employment Prevention Agency
By 96suzuki on 8/6/2012 8:22:15 AM , Rating: 2
The cattle industry warns, "The drought-induced reductions in the corn supply means that the mandated utilization of corn for renewable fuels will so reduce the supply of corn and increase its price that livestock and poultry producers will be forced to reduce the size of their herds and flocks, causing some to go out of business and jobs to be lost."

Way to go EPA!!!!!!!
The EPA just wont be happy until they ruin this great Country...

We need a president with balls to shut them down before its too late. But I don't see this happening. The entire government is way too corrupt to actually do something that will benefit this country rather than their pockets....

"We can't expect users to use common sense. That would eliminate the need for all sorts of legislation, committees, oversight and lawyers." -- Christopher Jennings

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