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"Dirty" corn ethanol could soon be on the chopping block

Tom Buis, CEO of Growth Energy -- a pro-corn ethanol lobby -- cheered a recent Supreme Court victory over automakers and petroleum lobbyists who looked to block the sale of E15 blends.  He comments, "Now that the final word has been issued, I hope that oil companies will begin to work with biofuel producers to help bring new blends into the marketplace that allow for consumer choice and savings."

Bob Dinneen, president of the Renewable Fuels Association (RFA) -- another top corn ethanol lobbying group -- echoes these sentiments.  Even as automakers warn of dire engine damage, he comments, "This is another example of oil companies unnecessarily scaring people, and it’s just flat-out wrong."

I. Corn Ethanol -- Good News or Bad?

But basic science suggests there may be more to it than that.  In order to handle higher ethanol blends, engine and fuel system parts made of rubber, plastic, metal, and other materials in engines must be coated with special sealants to prevent permeation of ethanol and degradation.  Older vehicles do not have that sealant -- so Mr. Dinneen appears to be basing his perspective on the fact that newer vehicles do, and thus will not be affected.

But aside from the engine life issue, there's other major concerns about corn ethanol.  First, after years of government subsidies for the use of corn as a sweetener, the commercial food industry is deeply dependent on corn syrup -- and by proxy corn crops.  Corn ethanol and corn syrup both compete for the same crop -- the most sugary breeds of corn.  And even when corn ethanol producers ferment with lower sugar feed corn, they still raise prices of livestock feed, bumping meat prices higher.  As a result, the corn ethanol industry has been shown to elevate food prices in multiple ways, according to experts.

E15
The issues with corn ethanol run far deeper than engine damage. [Image Source: Digital Trends]

Further, while ethanol is more efficient (per cost) in single-mode engines, in dual-mode engines (using blends), it's been shown that the customer gets less fuel economy when using various blends than if they went all ethanol or all gas.  In many cases this makes blended fuels more effective on a per-mile basis than gas.  Ethanol proponents insist the market will adjust, but it's yet to be seen if that actually happens.

Lastly, there are questions over whether corn ethanol is greenwashing.  When only emissions at the pipe are considered corn ethanol appears to cut emissions.  But when the entire life cycle -- from plough to pipe -- is considered, it appears that corn ethanol actually increases emissions (unlike a number of alternative biofuels).  Further, some have claimed the entire production process of ethanol has a net loss of energy, meaning that the industry uses more fuel to grow, harvest, and ship corn ethanol than it gets out.

But for all the criticism, the fact remains that ethanol increases are currently the law of the land.  The U.S. Environmental Protection Agency (EPA) proposed this year raising blending targets 16.5 billion gallons, up 8.5 percent from a year ago.  By 2022 production will double.  If those targets remain in place, it will be virtually impossible for refiners to sell anything but E15.  Refiners obtain a certain amount of credits for blending in ethanol; and if they don't blend enough they face stiff fines.

In fact, under the current rollout, it would be unsurprising to see E20 or E25 mixtures being forced into service to keep pace with the doubling of production quotas.

Many new vehicles -- including those from Chrysler Group LLC, Toyota Motor Corp. (TYO:7203), Nissan Motor Comp., Ltd. (TYO:7201), Bayerische Motoren Werke AG (BMW), and Volkswagen AG (ETR:VOW) still do not support E15; using E15 in them will void your warranty, according to the automakers, regardless of what the federal policy mandates.  But this situation may worsen in years ahead, as even automakers like Ford Motor Comp. (F) who support E15 do not support E20 or E25 in most of their models (some "E85" capable vehicles are sold, but they remain a minority).

In other words, even if your vehicle can use E15 without damage, you may be in the same position Chrysler, Toyota, Nissan, BMW, and Volkswagen owners are in today, just down the road.  When higher blends arrive, you may be just a fillup away from voiding your warranty.

II. Is it Time to Reform or Roll Back the Energy Act of 2007?

Amidst that backdrop, there is some growing momentum in Washington D.C. to roll back the 2007 Energy Act, which was signed by President George W. Bush.  Rep. Fred Upton (R-Mich.) chairman of the Energy and Commerce Committee is quoted by The Detroit News as saying that a bill to reform that 2007 law is incoming, with the aim of passing it by the end of this year.

Much of the debate in the House currently centers on whether the best option is to kill the original law altogether, or whether it'd be better to modify it in some regard scaling back targets.  Rep. Joe Barton (R-Texas) proposed killing it, but his colleague Rep. Ed Whitfield (R-Kentucky) is fighting to simply rework it, commenting, "We want is an RFS (renewable fuel standard) that can work for everyone involved, be it farmers, renewable fuel producers, refiners, and automakers. And most importantly, we want a policy that benefits the American driving public."

These stands represent largely who the representatives received their money from.  Rep. Barton is funded/sponsored by the likes of Pickens Comp., and Exxon Mobil Corp. (XOM) [source].  Rep. Whitfield is funded/sponsored by Koch Industries, who owns ethanol plants, and Caterpillar Inc. (CAT) who makes machinery used harvest corn [source].

The big question is what will happen if a repeal or reworking makes it to the Senate floor.  The Democratic controlled Senate has shown very little interest in trimming back corn ethanol blending targets.  The blame cannot be pinned solely on Democrats; both Senators from both parties have been more heavily funded by "big corn" than their House colleagues.  That said, the Democrats are leading the push to protect corn ethanol at present, with the likes of 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) fighting rollbacks.
 
corn profits
Big corn has won over politicians with via its friend "bill". [Image Source: Agriculture.com]
 
In fact these Senators proposed increasing ethanol quotas via the trickily worded Biofuels Expansion Act of 2011.  Thus it remains to be seen whether an effort to scale back targets can survive, amidst heavy lobbying from the corn industry (even as the other side lobbies hard as well).

Meanwhile the E15 mass rollout creeps closer.  Currently only a handful of stations in the Midwest carry the blend, as most refiners have not yet started its mass production.  But with the Supreme Court refusing to hear appeals on the standard, it seems just a matter of time before E15 is pouring out the pump across the nation -- even if that fuel damages your older vehicle, RV, boat, or motorcycle.

Sources: Growth Energy, The Detroit News



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RE: Stupid
By MadMan007 on 7/2/2013 1:15:45 AM , Rating: 5
If you want to figure out what's wrong with the way Washington works, 99% of the time you simply have to follow the money. Campaign finance and lobbying are ruining this country because representatives listen to their few large donors instead of objectively analyzing issues. And it's going to continue to get *way* worse thanks to the Citizens United ruling killing any chance at real campaign finance reform.


RE: Stupid
By FITCamaro on 7/2/2013 7:25:11 AM , Rating: 3
Yes. Because those interests pay people to go vote for someone.

The true problem of American politics is people who are too damn lazy to go learn anything about a candidate other than what they see on TV ads. Only about 5-10% of people bother to go vote in primaries which is how you get a candidate on the ballot in the first place. And then people whine and moan about there being no good candidates.

I have no problem with interests spending money to promote someone that agrees with their interests. It's our job as citizens to decide if those interests align with our own and whatever they want to do is constitutional and wise or not. Corporations and other "special interests" don't get to vote. So don't try to tell me they elect politicians. People do. If the people are too stupid, lazy, or ignorant to see through the BS the candidate with the help of an interest group is selling then that is their fault.

“An enlightened people will never suffer what was established for their security to be perverted to an act of tyranny.”
~ George Nicholas - Virginia Ratification Convention 1788


RE: Stupid
By lagomorpha on 7/2/2013 7:53:31 AM , Rating: 2
quote:
The true problem of American politics is people who are too damn lazy to go learn anything about a candidate other than what they see on TV ads.


What's the solution, only let people with a certain education level vote? Or just accept that the US's education level is so bad that we've passed the point of no return to have an effective democracy?


RE: Stupid
By BRB29 on 7/2/2013 8:40:20 AM , Rating: 2
quote:
What's the solution, only let people with a certain education level vote? Or just accept that the US's education level is so bad that we've passed the point of no return to have an effective democracy?


What are you basing this on? We're not on the top or the middle. We're just above average in education level.

What point of no return are you talking about? Our colleges/universities are world renowned and attract massive amounts of international students each year. Our public schools(K-12) are bad in some and good in others.

Voting doesn't need all that much brain or education. It takes effort, time, common sense and some damn research. Anybody out of high school can read and decide for themselves. Somehow, most of us are allergic to reading and research. No wonder why fast food is so popular and any place with bright colorful banners seems to attract people like flies.


RE: Stupid
By FITCamaro on 7/2/2013 9:27:28 AM , Rating: 2
Exactly. You don't have to be highly intelligent to vote. You need to be able to read and use common sense. Part of the problem is it isn't so common anymore.


RE: Stupid
By Ammohunt on 7/2/2013 12:55:54 PM , Rating: 2
The problem i see is that most people are apolitical or apathetic to the entire process. People tell me all the time they don't vote so that somehow absolves them of any responsibility of bad government(something this entire nation is suffering from currently).

They used to teach civics and detailed American history in school which both are a requirement in my mind to make an informed vote. Voting now is based on social issues not the the longevity or best interests of the country. Think i give a rats ass about abortion,gay marriage or green energy when we have 15-20% unemployment and our economy is in the dumper? Academic theory is not the way to run a country our current president has proven that without a doubt.

The current ignorant generation (20 to 30 somethings) better get it together if they want to enjoy a standard of living their parents enjoyed or else they better relearn subsistence farming otherwise they are going to be real hungry in the near future.


RE: Stupid
By superstition on 7/3/2013 10:42:50 AM , Rating: 2
quote:
Think i give a rats ass about abortion,gay marriage or green energy when we have 15-20% unemployment and our economy is in the dumper?

Civil rights aren't academic, unless you're not the one being denied them.

There are a lot of reasons for voter apathy.
quote:
Academic theory is not the way to run a country our current president has proven that without a doubt.

Anti-intellectualism may seem nice, but it carries a steep price. The Soviet Union tried placing people lacking the necessary scientific background in high-level planning/management positions and it resulted in famine and the like.

And, Stalin may have been a very intelligent bank robber, criminal gang leader, and so on... but that didn't make him very good at managing the arts. Russia went from perhaps the most vibrant artistic ferment in the world to being a place of "Socialist Realism" -- a drab lifeless pose rather than a reflection of real living.

"Academic theory" underpins everything. People should have a rational factual basis for their beliefs and behaviors.

Also, the attempt to make a dichotomy between Obama and Bush in this regard fails because neither of them are particularly rational when the big picture is taken into account. Both are craven marionettes for the 1%.
quote:
They used to teach civics and detailed American history in school which both are a requirement in my mind to make an informed vote.

Unless something has changed in the public schools that I haven't heard about, civics is still being taught and tested. That doesn't mean people are going to be any less apathetic and ignorant.

We learned, for instance, quite a bit about the Trail of Tears, but do you think the vast majority of students truly understood the ramifications of that learning? Highly unlikely.
quote:
The current ignorant generation (20 to 30 somethings) better get it together

It's easy to blame "those kids", which every older generation does -- while conveniently ignoring the structural basis for the problems. That structural basis is put into place and maintained to a large degree by those in power: those who are generally older than 20 to 30.


RE: Stupid
By FITCamaro on 7/2/13, Rating: 0
RE: Stupid
By BRB29 on 7/2/2013 9:40:55 AM , Rating: 2
quote:
And getting rid of the Department of Education and letting states/cities/towns best decide how to educate their kids would go a long way.


Education is primarily a State and local responsibility in the United States. It is States and communities, as well as public and private organizations of all kinds, that establish schools and colleges, develop curricula, and determine requirements for enrollment and graduation. The structure of education finance in America reflects this predominant State and local role. Of an estimated $1.15 trillion being spent nationwide on education at all levels for school year 2011-2012, a substantial majority will come from State, local, and private sources. This is especially true at the elementary and secondary level, where about 87.7 percent of the funds will come from non-Federal sources.

The Department of Education collects data and kind of set the minimum standard. Their biggest role is helping fund the poor areas. Since education budget is based on property taxes, the poor areas will barely have any money. One local community is only going to care for their school district and not their neighbors. That is when the Dept of Education steps in to subsidize some of that difference and try to give those poor kids a more equal chance of education.


RE: Stupid
By Rukkian on 7/2/2013 10:50:25 AM , Rating: 2
quote:
The Department of Education collects data and kind of set the minimum standard. Their biggest role is helping fund the poor areas. Since education budget is based on property taxes, the poor areas will barely have any money. One local community is only going to care for their school district and not their neighbors. That is when the Dept of Education steps in to subsidize some of that difference and try to give those poor kids a more equal chance of education.


Why is that the federal governments job? Shouldn't that come from the individual state? Every state has poor and rich areas. Some spend more of their budget on education and care about it, others do not. My taxes should not fund not only the schools in my state, but the schools in some other state that doesn't think funding their schools is important.

I think this is one of the fundamental flaws in how the federal government has gotten too big and out of control.


RE: Stupid
By BRB29 on 7/2/2013 11:29:35 AM , Rating: 2
quote:
Why is that the federal governments job? Shouldn't that come from the individual state? Every state has poor and rich areas. Some spend more of their budget on education and care about it, others do not. My taxes should not fund not only the schools in my state, but the schools in some other state that doesn't think funding their schools is important.

Ask your state. The Dept of Ed was formed because some of our states does not think education is important. On the state level, counties/cities don't really share their education funds because everyone wants what's best for their kids/communities.

The Dept of Ed actually has very little control over education regs and policies. Its main job right now is helping the underfunded schools. The standards of teaching are state regulations.

quote:
I think this is one of the fundamental flaws in how the federal government has gotten too big and out of control.

Suggest a better way to give everyone an adequate education so they have an opportunity in the job market. Our biggest problem is the huge disparity between the poor and wealthy areas. The states isn't doing much about it. The federal government can't overstep a state government's function. All they can do is subsidize some of the cost of the really poor schools.

For example, Florida is supposed to spend all of its lottery money in education. I would be surprised if just half of it gets there.


RE: Stupid
By Rukkian on 7/2/2013 1:51:00 PM , Rating: 1
Shouldnt that be a problem for the local government of Florida? I live in a state that spends alot on education, but still has room to improve. It is not my problem that another state doesn't have their shit together and should not be a problem for the federal government either in my opinion.

Get rid of the Dept of Education (amoung other departments) to actually make the federal government smaller, and let the states figure out how to educate (or not) their people.


RE: Stupid
By FITCamaro on 7/2/2013 11:38:35 AM , Rating: 1
And states can't apportion money properly themselves for poor areas? If a state has clear bias then fine residents can sue for whatever reason they think the state isn't being fair. But unfairness doesn't mean that the federal government gets to step in and manage things unconstitutionally.

And the Department of Education does a lot more than just collect information. They tell schools what they should teach and aggressively push things like Common Core.


RE: Stupid
By BRB29 on 7/2/2013 1:21:27 PM , Rating: 2
quote:
And the Department of Education does a lot more than just collect information. They tell schools what they should teach and aggressively push things like Common Core.

Yep, just like i can tell anyone to do anything. That doesn't mean much of anything when education is a state function and the state decides whatever they want. If the Dept of Ed is so powerful, it would be able to tell states to distribute funds properly because that's the biggest problem.

quote:
And states can't apportion money properly themselves for poor areas? If a state has clear bias then fine residents can sue for whatever reason they think the state isn't being fair. But unfairness doesn't mean that the federal government gets to step in and manage things unconstitutionally.

State laws says property tax in that area pays for that area's schools. It varies by states but it is usually by county or city.
I don't see anything unconstitutional about helping. What part of the constitution did they break?

Rich areas where people pay $30k+ a per household in property taxes is going to get a lot more for education than a place with only $500 per household in property taxes. Please tell me a better system or how you can make 50 individual states change their mind. Teachers/student ratios are a wide swing between rich and poor districts also.

Overall, they are doing a lot more good than harm. They should continue to exist until the states actually decide to properly fund education. But no state would want to do that now because if they properly fund it that means they have to use more of their money while other states don't have to. So blame the collective of local politicians that decide to not take care of their own.

Why doesn't people rise up and force the states change? because overall, there are more voters that are adequately satisfied with their kids' education than those that are not. Since poor people don't usually like to vote, their voice is mostly unheard. The solution for most people who wants their kids to have a good education is to move to a good school district or send them to a reputable charter/private school.


RE: Stupid
By ClownPuncher on 7/2/2013 11:50:32 AM , Rating: 1
Everyone needs representation, even the parasites.


RE: Stupid
By superstition on 7/3/2013 10:48:43 AM , Rating: 2
Like Greenspan and the crooked 1%ers that he worked for?

quote:
Via Ryan Grim and Matthew Yglesias, some seriously disturbing Fed transcripts. Basically, back in 2004 staff members presented data seriously suggesting a housing bubble; not only were the data disregarded, Greenspan wanted no hint of the discussion made public:

"We run the risk, by laying out the pros and cons of a particular argument, of inducing people to join in on the debate, and in this regard it is possible to lose control of a process that only we fully understand."


Translation: There is a housing bubble building and those in the know had better keep it quiet so they can make a quick buck. Insider information, duh.


RE: Stupid
By ClownPuncher on 7/3/2013 11:38:10 AM , Rating: 2
He'll hang himself someday.


RE: Stupid
By BRB29 on 7/2/2013 8:33:36 AM , Rating: 2
quote:
Only about 5-10% of people bother to go vote in primaries which is how you get a candidate on the ballot in the first place. And then people whine and moan about there being no good candidates.

from the Center for the Study of the American Electorate, put 2012 voter turnout at 57.5% of all eligible voters, compared to 62.3% who voted in 2008 and 60.4% who cast ballots in 2004. In 2000, the turnout rate was 54.2%.
The group estimated 126 million people voted in the election, where President Barack Obama defeated GOP nominee Mitt Romney. That means 93 million eligible citizens did not cast ballots.

Read more: http://www.abc15.com/dpp/news/national/election-re...

It's your State officials that gets appointed with less than 10% of votes.

Here's an example.
http://electionresults.sos.iowa.gov/resultsSW.aspx...
http://electionresults.sos.iowa.gov/resultsSW.aspx...

Every year, I see these Senators and Representatives gets voted in with just a few thousand votes. Police chiefs and the likes are voted into office with only a few hundred. The state elections that gets significant votes are the ones during the same time period as the Presidential election, during a crisis, or people are fed up with the current situation/leadership. By that time, it is too late as you don't have an effective leader in place.

What does all that tell you? The vast majority of people only complain and willing to do participate in their local government when it hits them in the face. Even when they participated, they believe what the radio and TV ads say instead of researching the correct information.

Guess what happened? You got what you deserved, the economy you keep crying about is still far from our glory days, and our politicians act like a bunch of school girls in high school. It's like watching jersey shore right now with lies, finger pointing, racism, mob mentality, blames, etc...


RE: Stupid
By FITCamaro on 7/2/2013 9:23:13 AM , Rating: 2
Uh that's for the general election. Not the primaries.


RE: Stupid
By Dr of crap on 7/2/2013 12:17:45 PM , Rating: 3
IF we had more than TWO parties, then we might have a chance. As it stands now there is NO way to honestly get "good" people elected.
When the choice is always the same what's the point of even having an election?
More figer pointing that the other side is wrong and this side is right - no thank you.

AND giving money to politicians to influence votes is NOT right, not in any way. Sorry you still think that is ok.


RE: Stupid
By superstition on 7/3/2013 11:11:02 AM , Rating: 2
quote:
The true problem of American politics is people who are too damn busy and geographically isolated

Fixed it for you.
quote:
And then people whine and moan about there being no good candidates.

For good reason. Voter apathy comes from many factors, including many quite reasonable ones. People can't pull their bootstraps and magically correct some very big structural impediments to better governance, such as the fact that the US is very large geographically. That simple fact alone helps to explain why people are so apathetic.

Washington is highly isolated from much of the country. Broke, debt-ridden, tired people do not have the will or the means to go to Washington regularly to lobby. They don't have the luxury of hiring an army of bribers and the like.
quote:
I have no problem with interests spending money to promote someone that agrees with their interests.

Why should "interests" promote anything? Why shouldn't it be people instead?

Corporations are not people. They are organizations. They are artificial entities. Acting as if their behaviors are equivalent to those of people is delusional. Corporations don't get sick. They don't die. They don't break their arms. They don't have kids that cry all night. Et cetera. Corporations are not people, and there is a very long list of what that is.

quote:
Corporations and other "special interests" don't get to vote. So don't try to tell me they elect politicians. People do.

That's a very superficial and naive take on our system. The fact is that corporations have a great deal of power, power that is not the same as individuals' power. Many of the factors that make corporations different from people empower them.

Moreover, very rich people play a huge role. Yes, they are "people", but they use corporations, politicians, and regular people to get what they want. As Carlin said, "more for themselves and less for everybody else".

Taibbi talked about how roughly the same "donors" bankrolled Obama and McCain in 2008. If that's your idea of choice, and you think voters are whiny for noticing, then you must be named Hobson.


RE: Stupid
By retrospooty on 7/2/2013 7:42:43 AM , Rating: 3
"What would I do? I'd shut it down and give the money back to the shareholders." -- Michael Dell, after being asked what to do with Apple Computer in 1997














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