We can only hope:
Has the federal government's appetite for ethanol ended? A bipartisan group of Senators signed a letter today calling for an end to subsidies and tariffs designed to protect and enhance domestic production of ethanol, which has been until recently the darling of the alternative-energy movement.
The letter in question notes that historically, our government has helped a product compete in one of three ways: subsidize it, protect it from competition or require its use. "We understand that ethanol may be the only product receiving all three forms of support from the US government at this time."
It's long past time for those efforts to cease. Converting food to fuel not only doesn't work as a replacement for gasoline, it expands starvation by artificially inflating corn prices and making it more difficult to purchase.
Amen.
Comments
There are so many things wrong with extracting ethyl alcohol from corn for fuel that it is even more incredible that no one has been talking about this huge increase ($31 Billion) in subsidy payments that will result from the new 15% ethanol blending requirement with gasoline.
In 2006, we blended about 5 billion gallons of corn ethanol, resulting in subsidies totaled $7.0 billion. That's $1.45 per gallon of ethanol (and $2.21 per gal of gas replaced). Now Obamgov is requiring 69 billion gallons of ethanol in 2011. Un-G-D-Believable!
Ethanol is not economically viable nor is it energy efficient. The fact is that it takes far more energy to create one gallon of Ethanol than the one gallon of Ethanol contains. One gallon of Ethanol contains 83,000 Btu
William:
Now I wouldn't spout stats without giving you the source, so if you go to my post and cloick the phrase "we blended about . . . " the world will open information on direct subsidies, premiums paid at the pump and social costs.
As for the fools who opened businesses dependent upon government subsidies, they should have known the risk of selling that which has no market to support the cost of sales. Since oil prices have dropped 31 ethanol plants closed (look this one stat up by yourself because it came from my memory) but our conservartive governor keeps encouraging more new ones in Indiana.
You might be interested in my blog post entitled "Corn Ethanol's Sordid History" here.
"Since oil prices have dropped 31 ethanol plants closed (look this one stat up by yourself because it came from my memory) "
Actually it is much higher, 60% of all ethanol plants as of beginning of 2010 had filed for bankruptcy. Another 20% were about struggling to find a buyer.
I did look at the links and I found the sources after following the links a bit suspect. The idea that agriculture paid support to farmers for growing corn subsidizes ethanol is a good tid-bit. As the price of oil goes up, the price of corn goes up because low priced corn "becomes" more competitive (not competitive) with oil. This means the agriculture paid support to farmers for growing corn decreases. In a round about way, ethanol demand for corn may actually decrease overall dollars paid to farmers because the demand went up. Don't get me wrong, there is some subsidy here, but if there were not ethanol producers trying to convince public/politicians that ethanol was reducing "oil imports" and "being green" the price for corn would fall resulting in higher price support payments.
In addition infrastructure costs for plants should not be used to determine the cost subsidy per gallon in the year they are given, but amortorized over the plants life and total gallons produce. The problem with amortorizing is that most of the plants have filed for bankruptcy which means it is doubtful they will produce another gallon of ethanol which would make the method used correct.
The link proposes that the cost to produce ethanol is rather cheap and therefore say it costs more to capture the 51 cent credit. I disagree with this. First corn at $4 a bushel means that the raw material alone (corn) will result prior to any labor, infrastructure cost, transportation cost, etc to be a minimum of $2 per gallon of ethanol. You can only get between 1.5 and 2 gallons of ethanol from a bushel of corn. When you add in the fixed costs, you add much more. Producers like to point out the "Scrap" or "Waste" product from the production of ethanol is sold as feed for cattle. The problem is that you can only use so much of this material and if you have more than can be sold, it depresses prices (Corn) and other feed stocks.
When the price of ethanol and gasoline are the same per gallon, few gallons of ethanol are sold. Even 10% blended ethanol reduces gas milage by 3 to 4%, which means when gas is $2.90 a gallon, means ethanol blended gas should cost about $2.79 a gallon.
We both agree that ethanol is not competitive, increases the cost of energy, food, probably reduces the pollution at the point of consumption in the car, but increases the pollution at the point of manufacturing the ethanol.
The links you provide ended at Zfacts.com. Zfacts does not provide links to government legislation or government stats. If they do I have not found them. This does not mean to say their facts are not good, but rather what they have written needs to be taken with a grain of salt.
I just finished selling the last of my corn harvest yesterday. I declined again to take the federal payment, unlike Stutzman. Stutzman says his family leases land to farm and therefore must take the federal payment. This is not true, all you need to do is not fill out the federal form. If you do not fill out the form and do not provide a SSN on the form, they won't pay you, simple as pie.
your website
"The subsidies in place are designed to equalize the prices of the fuels to ensure that ethanol is used. Without subsidy, the consumer would not buy non-competitively priced E85 ethanol over gasoline ... and without subsidy, the oil companies would have no incentive to blend gasoline with 10% ethanol (except in markets influenced by government interference, such as when gas prices pushed over $4.00 per gallon)." Absolutely correct. This is 100% bad for the economy. It artificially prices fuel and therefore distorts the economy. When the ability to support this artificial economy becomes too much, the bubble bursts causing grief to all. We saw it in housing, healthcare (medicare, medicaid), Retirement (Social Security) to name a few.