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Much of the ethanol produced from the corn was exported overseas

When it comes to removing our dependence on foreign oil there are other options than using electricity or hydrogen to power cars. One of the options is using ethanol and other biofuels to replace some of the petroleum used in our gasoline. The big downside is that most of the ethanol produced in the U.S. today is made from corn.
 
Corn is an important food crop that is consumed by humans and used as feed for livestock and other animals. Scientific America reports that for every ten ears of corn grown in the U.S. today, only two are consumed by humans as food. The other ears are used for animal feed and ethanol production.
 
The numbers show that for the year spanning August 2010 to August 2011 the biofuel industry used more corn than farmers used for animal feed and residual demand. This is the first time more corn has been used for ethanol and shows a shifting balance that could spell trouble in the future. Over that year span, farmers used 5 billion bushels of corn and ethanol production used 5.05 billion bushels. Some of that corn did return to the food supply as animal feed and corn oil.
 
The fear is that the shift from food being the largest use for corn and fuel taking the top spot is a concern that could have significant impact on the world grain market. One of the reasons for the shift to ethanol use for corn is the government subsidies and the import tariffs on foreign ethanol. 
 
Steven Rattner said in a piece written for the NYT, “Because of the subsidy, ethanol became cheaper than gasoline, and so we sent 397 million gallons of ethanol overseas last year. America is simultaneously importing costly foreign oil and subsidizing the export of its equivalent.” 
 
That means much of the corn being used for fuel isn't making it into American fuel tanks so we still have to import more foreign oil to meet our fuel needs. Some in Congress are working hard to get the subsidies repealed and to lift the import tariff so that cheaper biofuels made from sugarcane can be imported from Brazil. There is also a lot of research going into making ethanol from other crops like switchgrass.
 
Rattner also wrote, "Even farm advocates like former Agriculture Secretary Dan Glickman agree that the [ethanol] situation must be fixed. Reports filtering out of the budget talks currently under way suggest that agriculture subsidies sit prominently on the chopping block. The time is ripe."

Source: Scientific American



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What the ****?
By Brandon Hill (blog) on 10/13/2011 1:09:43 PM , Rating: 5
quote:
“Because of the subsidy, ethanol became cheaper than gasoline, and so we sent 397 million gallons of ethanol overseas last year. America is simultaneously importing costly foreign oil and subsidizing the export of its equivalent.”


Double_Picard_Facepalm.jpg




RE: What the ****?
By Windogg on 10/13/2011 1:18:18 PM , Rating: 5
Ethanol was a dream come true for big business funded special interest groups. Archer Daniels Midland (ADM) made off like a bandit at the expense of the US taxpayer. Thankfully this gravy train is coming to an end.


RE: What the ****?
By ConcernedConsumer on 10/13/2011 1:25:45 PM , Rating: 2
Agreed, and hopefully the farmers will stop getting paid by the government to till under acres of crop! Maybe they could even start turning a profit for themselves!?


RE: What the ****?
By rikulus on 10/13/2011 1:49:39 PM , Rating: 3
While there was a time when farmers were paid not to produce on their land, that hasn't been the case since the 90's. US farmers have been producing at their maximum capacity for years now. (Which is to say, at the maximum level each farmer feels is appropriate if they want to grow organic or whatever, but the big corporate farms have been growing as much as they can.)


RE: What the ****?
By Natch on 10/13/2011 2:27:26 PM , Rating: 3
To go along with the end of corn for ethanol subsidies, we need to have some sort of guidance that says that farmers need to grow X percent of other-than-corn grain crops for every Y-percent of corn they grow.

A HUGE part of the spike in food prices has not only been the higher cost of corn for animal feed, but the fact that farmers are devoting more acreage to corn production. Less acres of wheat/oats/barley/etc means higher prices on those grains as well.

So not only were we paying for ethanol subsidies with our taxes, but we got a double whammy by paying more for EVERY grain crop....all the while the farmers were laughing all the way to the bank!


RE: What the ****?
By rcc on 10/13/2011 2:52:01 PM , Rating: 5
Just kill the subsidy. If it's not more profitable for the farmers to grow crops for ethanol, they won't do it.

Let ethanol stand on it's own merits. I doubt that it can, but .....


RE: What the ****?
By lelias2k on 10/17/2011 7:11:51 AM , Rating: 1
I have a better idea:

Kill the US$ 20-50 billion in annual subsidies we give to the oil companies, which are huge and highly profitable, and invest in alternative fuel research/production.

We seem to like to talk about every penny the government gives away to any industry but oil.


RE: What the ****?
By netminder69 on 10/17/2011 10:06:19 AM , Rating: 3
That's a lie presented by politicians who want to demagogue for votes. The government doesn't cut any subsidy checks for oil companies. There are no tax dollars flowing from the government to oil companies. If you went through the government's annual budget you would never find a line item in it for subsidies to oil companies (which you would find for ethanol and other things). The so called "subsidies" (which politicians later called "loopholes" when they were called out on it) are tax code deductions allowed for capital expenditures, of which the oil industry has more than most. This deduction is not special to the oil industry, it is a deduction available to any business that files taxes in the US. It's the business equivalent to you being able to itemize a job expense on your own taxes. It's not a matter of "ending subsidies" to them as much as it is wanting to change the tax code so one industry is excluded from something everyone else gets.


RE: What the ****?
By rcc on 10/17/2011 2:27:32 PM , Rating: 2
Don't know where you've been, but it gets talked, or typed, about ad nauseum


RE: What the ****?
By geddarkstorm on 10/13/2011 2:58:24 PM , Rating: 2
So true. The food price spike this past year has become ridiculous. Some staple items I get have doubled in price. It is getting worrisome. At least bread has held stable, here, so there is hope.


RE: What the ****?
By Hiravaxis on 10/14/2011 1:42:05 AM , Rating: 2
Farmers already get guidance from the marketplace.
It tells them what they should plant and in roughly what amounts.

But ethanol isn't the biggest contibutor to prices these days. It's the growing middle class in China and India. These guys want meat. And it takes about ten pounds of grain to get a pound of meat.

So maybe they should get rid of the subsidies, just don't expect your grocery bill to go down.


RE: What the ****?
By Spookster on 10/14/2011 6:35:41 PM , Rating: 2
quote:
But ethanol isn't the biggest contibutor to prices these days. It's the growing middle class in China and India. These guys want meat. And it takes about ten pounds of grain to get a pound of meat.



Interesting considering the majority of Indians are vegetarian and most of those who do eat meat do it rarely.


RE: What the ****?
By netminder69 on 10/17/2011 9:56:45 AM , Rating: 2
quote:
To go along with the end of corn for ethanol subsidies, we need to have some sort of guidance that says that farmers need to grow X percent of other-than-corn grain crops for every Y-percent of corn they grow.

A HUGE part of the spike in food prices has not only been the higher cost of corn for animal feed, but the fact that farmers are devoting more acreage to corn production. Less acres of wheat/oats/barley/etc means higher prices on those grains as well.


No need for such regulation. If you get rid of the incentives, the farmers will grow crops that will net them the best profit. If the prices for the non-corn grains are higher then they will grow them until the demand has been met by supply and the prices come down. Eventually it will end in an equilibrium with smaller fluctuations of supply/demand. The answer to one form of government intrusion int he market isn't to add another intrusion in it's place.


RE: What the ****?
By KoS on 10/13/2011 2:40:31 PM , Rating: 2
We still "pay" farmers to not use their land for food production. CRP is one program and there are others as well.

Heck we are going to pay farmers to allow hunting on their land...open fields initiative.


RE: What the ****?
By bupkus on 10/13/2011 2:10:36 PM , Rating: 2
quote:
Thankfully this gravy train is coming to an end.
How is this so?

The first thing I thought of while reading the article was how corn crops are subsidized. To hear ethanol is being exported for profit is a double screwing for the U.S. taxpayers.


RE: What the ****?
By ClownPuncher on 10/13/2011 2:02:49 PM , Rating: 3
Yea, who is driving this boat? Is that an iceberg?


RE: What the ****?
By MrBlastman on 10/13/2011 2:04:41 PM , Rating: 4
Ethanol has always been a sham. This just highlights another side effect of the shenanigans that have been performed.

Golly gee, lets turn food into fuel for our cars! Yeah, that makes great sense!

Last time I checked, food prices have been going through the roof at the grocery store. I estimate that I'm paying somewhere between 25 and 35 percent more than I was a few years ago on many items and they just keep appreciating. I don't even have to buy a can of corn to prove it (which has gone up quite a bit itself). These subsidies are a direct contributor to these price increases along with oil costs.

Hmm... Increase production in corn and decrease production in everything else. No, that won't raise prices at all, right? /sarcasm


RE: What the ****?
By Solandri on 10/13/2011 2:21:40 PM , Rating: 3
Ethanol itself isn't a sham. Brazil has a pretty successful ethanol program based on cane sugar.

It's corn ethanol that's a sham. It started with the government subsidizing corn production to create an oversupply, so we wouldn't have food shortages in case of drought or crop failure. What to do with the extra corn? Why not turn it into fuel? But since then it's taken on a life of its own.

Keep the corn crop subsidies for corn sold as food, eliminate them for corn turned into ethanol. Then we'll see just how well corn ethanol competes on its own merits. (My hunch is it'll fall flat on its face and be replaced by something much more ethanol-efficient like sugar beets.)


RE: What the ****?
By MrBlastman on 10/13/2011 2:51:48 PM , Rating: 2
Well right. Food-based ethanol was my whole point of why it has been a sham. Substitute the food for non-digestible materials and it changes slightly. Substitute the food for non-digestible materials that are not farmed solely for the merit of turning them into fuel and instead obtain them from waste products and it changes substantially.

As is, that is probably the only way that I'll be satisfied with ethanol. I've never been too keen on giving up farmland for fuel. People are getting more creative though and are finding ways to use garbage of various sorts instead and that is progress.

I think this is the key, too. Finding ways to make these liquid fuels (as I see no viable way to replace them anytime soon given power-production barriers such as resistance to nuclear power-plants or even localized, subterranean mini-nuke reactors--which very well might be the future) with a net-neutral impact to farmland or the food supply is imperative. Using carbon from our atmosphere and coupling it with hydrogen is a great thing, just do it in a way that doesn't cause living expenses to increase (algae-based fuels are a great idea).


RE: What the ****?
By Reclaimer77 on 10/13/2011 3:25:09 PM , Rating: 1
quote:
Ethanol itself isn't a sham.


It burns dirtier than gasoline and releases toxic chemicals into the air, is less efficient, and is harmful to most car engines. Also ethanol plants are far more harmful to the environment than oil refineries. That's not a sham?

Also just a footnote, we're not exactly using food for fuel. The type of corn used in ethanol production is unfit for consumption. Food prices are rising because of inflation and other factors mainly. Look how much milk has gone up in the past year for example, that's not made with corn obviously.


RE: What the ****?
By Reclaimer77 on 10/13/2011 3:29:42 PM , Rating: 2
Oh yeah silly me, the BIG one being transportation costs. Food has to be delivered to the stores obviously. When diesel fuel hit $4/gal food prices jumped up big time. And have never really gone back down.


RE: What the ****?
By TSS on 10/13/2011 8:43:57 PM , Rating: 3
Considering the economic outlook i'd worry more about inflation then gas prices. Inflation has been rising since december 2010. It's now as high as it was was in october 2007 (as well as octrober 2008, high point was in july 2008) and rising.

The big difference being the benchmark interest rate then was 5%, now it's been <0,25% for a long time. That interest rate controls other things, like the amount it costs to service the national debt. How much difference does that 5% make? Thanks to the US government it's easy to show:

In fiscal 2008, the amount of interest paid on the national debt was $451 billion
In fiscal 2011, the amount of interest paid on the national debt was $454 billion

In fiscal 2008, the national debt amounted to $10 trillion
In fiscal 2011, the national debt amounted to $14,8 trillion

So there are 2 options: raise interest rates to combat inflation again, and watch that $454 billion turn into a trillion at 5% interest rates (which still isn't enough because before the crisis it was still rising at those rates and your not printing less money),or don't raise the interest and watch inflation raise prices. Guess what will happen.

...well it's that or the trillion in national debt interest causes so much layoffs that prices will have to decrease which causes a deflationary spiral.

At this point it's dealer's choice really. Do you prefer massive inflation or massive deflation?


RE: What the ****?
By RU482 on 10/13/2011 3:37:27 PM , Rating: 2
just curious, how are ethanol plants more environmentally harmful than oil refineries?


RE: What the ****?
By inperfectdarkness on 10/13/2011 3:52:48 PM , Rating: 3
ok, now this is pretty much all bunk. all forms of combustion release "harmful chemicals" into the air. your current engine produces heaps of carbon monoxide. if you don't believe me, i'll invite you to leave your engine running in an enclosed garage while you sit inside.

less efficient is because there are no ethanol-only engines being produced. if you don't follow motorsports, you wouldn't have a clue about anything other than BS "testing" people do with flex-fuel vehicles.

"more harmful manufacturing"? really? care to show some proof of that? cracking plants pollute quite a bit. i'd love to see a shred of proof on this.

the only thing you are correct on is that increasing food prices are due to inflation; not lack of supply.


RE: What the ****?
By Reclaimer77 on 10/13/2011 4:49:03 PM , Rating: 2
Okay whatever lol

http://www.cbsnews.com/stories/2002/05/03/tech/mai...

quote:
your current engine produces heaps of carbon monoxide.


Umm I wouldn't say "heaps" because I have an ultra low emissions vehicle. But the point is ethanol combustion releases even MORE carbon monoxide and other carcinogens than gasoline. At best it's a tie, so again, how is that "better" for the environment. It's neither renewable NOR is it reliable.

quote:
less efficient is because there are no ethanol-only engines being produced.


Exactly, so that's not a valid argument. You can't have a comparison against something that does not even exist! Hello?

quote:
if you don't follow motorsports


Another stupid point because race cars have no emission requirements and have no mandated emissions control equipment. Plus they are tuned completely different than a street legal road car would be, not to mention weight a boatload less! Apples to oranges completely here.

Are you seriously supporting a fuel that requires 30% more energy to produce than it actually puts out though?


RE: What the ****?
By inperfectdarkness on 10/17/2011 1:39:06 PM , Rating: 2
again, where is ANY proof that ethanol require 30% MORE energy to produce than it generates when consumed? please, i'm all ears. last time i checked, ethanol was 80% efficient (compared to 30% efficient for hydrogen).

ethanol IS renewable. it's an annually renewable derivitive of solar energy (from whence all our energy comes, to be honest). even given a wash between pollutants between energy souces, the one that i can grow every year > the one that has a finite quantity available.

motorsports ARE applicable because that is where innovation is happening. of course you and i don't drive racecars; but a lot of what we do have in passenger cars was pioneered in racecars throughout history. (steering, suspension, valve design, etc).

ethanol ran in a dedicated internal-combustion engine can produce the same amount of HP as a larger displacement gasoline engine; because of its octane and burn capabilities. when you decide to start comparing fuel consumption vs. power output on DEDICATED engines, you'll easily see that the famed "30% less fuel economy" is a gigantic load of bunk.


RE: What the ****?
By idgarad on 10/13/2011 4:02:06 PM , Rating: 2
quote:
Look how much milk has gone up in the past year for example, that's not made with corn obviously.


Actually since the subsidy, plenty of farmers switched to sugar corn resulting in lower volumes of a wide variety of other crops. You forget there are only X number of acres of farmland in the USA (which can never increase at this point now). Given Y% of non-ethanol crops at a given cost. The subsidy drew farmers to decrease Y in favor of ethanol crops. This shorts supply and drives up prices on everything that used to be grown in that Y% of farm land. So yes, milk, beets, pumpkins, green beans, soy, water mellon, hell any crop that didn't have a price point that was beating the ethanol subsidy was at risk of a price increase due to farmers choosing to grow a more profitable, due to the subsidy, crop.


RE: What the ****?
By Reclaimer77 on 10/13/2011 5:01:54 PM , Rating: 2
My point wasn't that ethanol hasn't impacted food prices at all. But I maintain that the main factors is fuel costs, inflation, and speculating.


RE: What the ****?
By cjohnson2136 on 10/13/2011 4:54:02 PM , Rating: 2
Not saying I don't agree with you but they feed dairy cows that corn you are talking about. So that corn going up would raise milk prices in theory.


RE: What the ****?
By Reclaimer77 on 10/13/2011 5:35:52 PM , Rating: 2
quote:
Not saying I don't agree with you but they feed dairy cows that corn you are talking about. So that corn going up would raise milk prices in theory.


Well I'm reading that only about 1/3 of the corn used in ethanol is "feed grade". The rest would actually kill them because of the high starch grade and the fact that it has virtually no nutritional value.

Again, I'm totally against Ethanol fuel. But I believe it fails on it's own merits. The whole 'food for fuel' thing might grab headlines, but it's not exactly accurate.


RE: What the ****?
By cruisin3style on 10/13/2011 6:47:38 PM , Rating: 2
1/3 of 5.05 billion bushels = insignificant??


RE: What the ****?
By Reclaimer77 on 10/13/2011 6:54:20 PM , Rating: 2
Okay look, what do you want from me? Food prices are expected to continue to rise next year higher than the rate of inflation. How can you attribute that strictly to Ethanol? We have high inflation and high fuel prices. Hello? You should know that markets don't eat higher operating costs, they pass it on to the consumers.

I said Ethanol played a role in it, I'm NOT going to sit here all night and defend a fuel I hate. I'm just being realistic about the root causes of food prices.


RE: What the ****?
By sschulte on 10/13/2011 2:36:18 PM , Rating: 3
The author of the story laments that only 2 of every 10 ears of corn, 20%, is used as food because of ethanol use. I looked back to 1997, before ethanol production took off. In 1997, 16% of corn was used for human food. Why? Because the kind of corn that is used in ethanol isn't people food for the most part. It is a grain, fed mainly to cattle and other animals. A third of the corn that is used to make ethanol comes back out of the plant as distillers grains (DDGS) and is a high nutrient feed for livestock.


RE: What the ****?
By rcc on 10/13/2011 2:50:21 PM , Rating: 2
What's your point? If stock feed is converted to ethanol, that raises the price of feed, which raises the price of beef, chicken,etc.

Not to mention the farmers planting that type of corn in preference to crops that feed people.


RE: What the ****?
By inperfectdarkness on 10/13/2011 3:58:37 PM , Rating: 2
the point is that if 1/3 of the raw good is useable as feed; it's hardly a point of worrysome contention.

and if ethanol provides more lucrative return than food production--then the farmers SHOULD plant crops for ethanol. welcome to economics 101.


RE: What the ****?
By rcc on 10/13/2011 7:04:48 PM , Rating: 2
Yes, but it's only more lucrative because of the ethanol subsidies.


RE: What the ****?
By Chadder007 on 10/13/2011 4:37:59 PM , Rating: 2
OMG, WTF?

Also Ive tried non-ethanol gas multiple times. I have consistently got 3 miles to a gallon more per tank each time I have switched back. Ethanol needs to be dropped.


RE: What the ****?
By Hiravaxis on 10/14/2011 1:25:48 AM , Rating: 2
Farmer here.

It's not as if the usage of corn for ethanol went way up.

The corn simply wasn't fed to the cattle because of the incredbly high price of it. It was simply more profitable for the farmer to sell the corn and feed the cattle something else.

Ethanol is a part of the reason why the price is high. But the main reason Wall Street speculation.


RE: What the ****?
By Dr of crap on 10/14/2011 12:59:36 PM , Rating: 2
Thank you.

Have you all forgotten that a few years ago the investment bankers were ALLOWED to speculate in the futures market. That being oil, wheat, corn.... driving the price to whatever level makes them money. Yet again a good reason to kick them out of the futures market.

And yes I know that speculation is needed, but there was speculation in commodies markets before Goldman Sachs and it buddies got into it, and there was not hugh prices swings like there are now with no reason for the swings other than speculation made it happen!


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