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Corn farmers say "let the profits trickle down", while other farmers say quotas will kill jobs

There's a growing debate about what is put inside your fuel pump.  At the heart of the debate is a two-carbon alcohol -- ethanol.  This little fuel is creating a huge debate, which has divided the farming industry and raised perennial questions regarding the cancerous influence of special interest on the U.S. federal government.

I. Big Corn Makes Friends

When it comes to corn ethanol the message from Congress is clear: cut down on the ethanol production.  But the U.S. Environmental Protection Agency (EPA) is still waffling on whether to keep its strict quotas, or to "temporarily" relax them, after the worst drought in decades hit parts of the U.S.

With the drought hurting corn yields, farmers have been forced to compete with ethanol producers and the food industry for an insufficient supply.  Some farmers have, in their desperation, turned to feeding their cows candy, as cast-off bulk sprinkles are cheaper than the traditional corn feed.

The EPA's holds a tight grip on the amount of corn going into ethanol, thanks to its ability to regulate fuel in the U.S.  Under The Energy Policy Act of 2005 (often referred to as the Renewable Fuel Standard), which passed under President George W. Bush, fuel blenders are required to incorporate a certain amount of ethanol into gasoline blends at the pump, with the amount being bumped a little bit each year.

pumping fuel
The U.S. government mandates ethanol be blended into gasoline, to create artificial demand for corn. [Image Source: Nation Corn Growers Assoc.]

Studies have suggested that going from the corn-field to fuel pump corn ethanol is an energy negative process, consuming more energy than it produces, and offering up higher life-cycle carbon emissions that standard gasoline.  Further, automakers say gasoline-ethanol blends can harm traditional engines and deliver worse gas mileage than pure gasoline.  So the compelling question has long been why did the U.S. jump so deep into corn ethanol, and in doing so "accidentally" drive food and livestock feed prices upward.

In Congress' case, it appeared to be largely special interests.  Senators and representatives from corn farming-heavy districts/states accepted funding from farmers to help them get elected, and in turn pushed for the seemingly illogical ethanol blending requirements, which create artificial demand, driving corn prices up.  They also for some time passed billions in subsidies along to big corn farmers.

As recently as last year some senators -- Senators Tom Harkin (D-Iowa); Tim Johnson (D-South Dakota); Amy Klobuchar (D/"Farmer-Labor Party"- Minnesota); and Al Franken (D/"Farmer-Labor Party"-Minnesota) -- proposed increasing ethanol quotas via the trickily worded Biofuels Expansion Act of 2011.

II. Drought, Spending Cuts Threaten Corn Special Interests

But the ethanol special interests saw their grasp on Congress weakening last year amid the partisan rancor regarding the budget.  In a battle by each side to preserve their special interests, corn found themselves too short on the special interests pecking order to convince Congress at large to continue to vote for bloated subsidies.

In the aftermath, the subsidies were slashed, and then eliminated altogether.  Republicans in Congress also banded together to block the EPA's plan to increase ethanol blending to 15 percent nationwide, although the EPA found a way to sneak around that restriction.

But even the EPA -- who seemed firm on its ethanol commitment -- has started to show signs of doubt after an entirely external, non-political influence hit -- the drought.  The record drought is essentially forcing the EPA's hand, by creating corn shortages and hence amplifying corn ethanol's already undesirable price effects.

The EPA announced it would make its decision [PDF] about a potential waiver on blending requirements early next month.

Amid a record drought either the quota or jobs will be lost, say many farmers.
[Image Source: AP]

Eight state governors and 200 members of Congress have written a letter (on behalf of the slightly ironically named National Pork Producers Council) to the EPA pleading with it to relax blending rules via a waiver, at least for the rest of the year.  Delaware and Maryland's governors write that without a waiver the EPA would be creating "the loss of thousands jobs."

A number or researchers also signed a letter calling for a waiver.  Among them is John M. DeCicco and Ivette Perfecto from the University of Michigan School of Natural Resources and Environment.  They write, "The (Renewable Fuel Standard) diverts potential food crops to produce fuel, which drives up food price volatility and global food prices."

III. Big Corn Farmers Argue Higher Prices are Good for Everyone

Corn farmers are opposed to the idea, which would reduce the artificial demand that they currently enjoy.  The National Corn Growers Association essentially admits that it's acting out of greed, but making the argument that higher revenue from corn farmers stimulates the economy in a trickle-down effect.  They point out that corn farmers' revenue rose from $63B USD to $90B USD between 2007 and 2012.

They comment [PDF], "Higher feed prices are only one piece of a complicated economic puzzle... [a waiver would cause] severe harm to the economy."

corn profits
Big corn argues that its profits are worth more than whatever job savings might be realized by quota cuts. [Image Source:]

Before the drought corn prices had increased nearly four-fold from 2007 levels.  The fuel supply industry was set to (by EPA requirement) deliver 15.2 billion gallons of corn ethanol this year -- up from 5 billion gallons in 2007.

But the payday for big corn may soon be over.  After all, the Obama administration has a relatively substantial degree of control over the EPA -- a federal agency -- and it may be wary of refusing the waiver request, lest it trigger the predicted job loss and hurt the President' reelection prospects.

Sources: Detroit News, NPCC, Nation Corn Growers Assoc., EPA

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RE: Bad idea
By Mathos on 10/12/2012 5:50:07 PM , Rating: 3
Yeah, but then again sugar beets are also a food crop. I know this because I grew up in Michigan just about 60 miles south of Saginaw. Sugar beets is pretty much where Pioneer Sugar up north makes its consumer grade white sugar and brown sugar from.

It's pretty much, you need to cut out anything that could be a food crop from the ethanol production idea. Otherwise it has a major effect on food prices. Even sugar cane is a food crop, as it's used to make baking sugar and such in many area's.

What we need are either engines that can run on almost any fuel, or recycled oil fuels. Or true hybrid vehicles, with an IC engine for a generator that could run off of any fuel and an electric drive train for propulsion. Do away with the Lithium ION batteries for regular vehicles to keep price down, among other issues like energy density, charge time, and fire hazard. I swear to god if I ever won the lotto, that would be my new work, to convert my own vehicle into a true hybrid system. It's an old 1997 S-10 Blazer 4x4.

A lot of people don't realize something, Race cars don't run on Ethanol. They run on Methanol (methyl alcohol), which is basically distilled from wood or plant cellulose. Ethanol is sugar, or Grain alcohol. The difference being, you can drink Ethanol if it hasn't been denatured, by mixing it with Methanol or gasoline, and it's below a certain proof. For example, White lightning or Everclear are basically 180-190 proof 90-95% grain alcohol. You cannot drink Methanol, as it's a poison.

RE: Bad idea
By boeush on 10/12/2012 8:44:18 PM , Rating: 2
Problem is, methanol has an even lower energy density than ethanol (which already has a much lower energy density than gasoline.)

Ethanol as a fuel is viable, but only if it is made from non-food materials (like for instance, switchgrass or agricultural or wood waste.) Unlike corn ethanol, cellulosic ethanol makes long-term economic and environmental sense:

That's not to say that bioethanol is necessarily the best way toward fuels from biomass (as opposed to, e.g., biodiesel) -- but when most environmentalists support ethanol in fuels they have in mind the type that's not produced from food sources (not even from sugar cane.)

RE: Bad idea
By Mathos on 10/13/2012 1:34:02 AM , Rating: 2
True, but energy density numbers are misleading. Even in that wiki article it mentions that. The biggest advantage with methanol would be the fact it can be made from a lot of things, including synthesizing it from CO2 and hydrogen from Water.

RE: Bad idea
By Odysseus145 on 10/13/2012 4:51:40 PM , Rating: 1
There's also butanol, which has 3 carbons to ethanol's 2. It has an energy density nearly that of gasoline, would require no modification to most gasoline vehicles, and is produced by algae.

RE: Bad idea
By jimhsu on 10/14/2012 5:21:24 PM , Rating: 2
If I recall, I did an investigation into using E.Coli for a novel biobutanol reactor in my synbio class. The conclusion was essentially that while we have everything in place, there were engineering issues left to work out (i.e. survivability of the bacterium under high butanol concentrations). That was in 2009, so improvements have undoubtedly been made since then.

See Atsumi et al Metabolic Engineering 10 (2008) 305–311 for example.

RE: Bad idea
By FishTankX on 10/13/2012 10:17:24 AM , Rating: 3
There's a new engine coming out that runs on anything flammable, and doesn't need a transmission for most vehicles. It's called the cyclone engine.

Has the military on board, and a mediocre thermal efficency of ~25%. Would make a perfect serial hybrid engine. You could run it on coal dust if you had to.

RE: Bad idea
By Mathos on 10/13/2012 12:08:05 PM , Rating: 2
Yeah, but thats still better than the thermal efficiency of a regular ICE, though reading through the faq it's the mark II that equal to a regular gas engine. The mark V is supposedly on par or better than high end diesels. Looks like it'd be good for front wheel direct drive vehicles though. Granted on the mark V 850foot pounds of torque is a lot to through at the wheels without a transmission though.

RE: Bad idea
By Reclaimer77 on 10/13/2012 2:43:40 PM , Rating: 2
The ICE has a lot of room for improvements. I've been keeping an eye on this company and their amazing product. Unfortunately it seems to be run by idiots who are clearly not doing enough to bring this to the forefront. They should be offering aftermarket upgrade kits at the very least to generate buzz.

RE: Bad idea
By Ringold on 10/13/2012 6:28:02 PM , Rating: 1
On the one hand, according to their last press release, looks like they're trying to find someplace to set up some sort of manufacturing.

On the other hand, Google yielded me this:

RE: Bad idea
By Reclaimer77 on 10/13/2012 7:07:31 PM , Rating: 2

RE: Bad idea
By Reclaimer77 on 10/13/2012 7:09:02 PM , Rating: 2
Wait, that's from 1994. Hmmm

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