Burning Corn

Livestock farmers still seeking pause in ethanol production

 Excerpt:

Livestock farmers and ranchers seeing their feed costs rise because of the worst drought in a quarter-century are demanding that the Environmental Protection Agency waive production requirements for corn-based ethanol.

The Obama administration sees no need for a waiver, siding with corn growers — many of them in presidential election battleground states Iowa and Ohio — who continue to support the mandate.

"If not now, when?" Randy Spronk, a Minnesota pork farmer, said of the EPA's authority to defer the ethanol production requirement when it threatens to severely harm the economy of a state or region. "Everyone should feel the pain of rationing."

Spronk, who is president-elect of the National Pork Producers Council, said livestock producers will have to reduce their herds and flocks because feed is becoming scarce and too expensive. Cattlemen and chicken farmers have the same concern.

"We do support the American ethanol industry," said Kristina Butts, executive director of legislative affairs at the National Cattlemen's Beef Association. "All we are asking for is that competition for that bushel of corn be on a level playing field."

The government, she said, "is picking the ethanol industry to be the winner to get that bushel of corn."

The Renewable Fuel Standard, enacted in 2005 and then significantly expanded in 2007, requires that 13.2 billion gallons of corn starch-derived biofuel be produced in 2012. The intent was to reduce both greenhouse gas emissions blamed for climate change and dependence on foreign oil.

Comment: Image source.  The answer is simple - end ethanol subsidies and let the free market reign and determine the most efficient use of corn. Another little known use of corn is to burn in a furnace

Congress Ends Taxpayer Funding Of Ethanol Subsidies

Overcharged

  Excerpt:

 .... two of the most wasteful subsidies ever to clutter the Internal Revenue Code went out with the old year. Congress declined to renew either the 45-cent-per-gallon tax credit for corn-based ethanol or the 54-cent-per-gallon tariff on imported ethanol, so both expired Dec. 31. Taxpayers will no longer have shell out roughly $6 billion per year for a program that badly distorted the global grain market, artificially raised the cost of agricultural land and did almost nothing to curb greenhouse gas emissions. A federal law requiring the use of 36 billion gallons of ethanol for fuel by 2022 still props up the industry, but the tax credit’s expiration is a victory for common sense just the same.

Comment: Image source: Congress Actually Ends Taxpayer Funding Of Ethanol Subsidies. Subsidies skew the free market and introduce inefficiencies. Other examples: the $7,500 electric vehicle tax credit (mentioned in the Wash Post editorial) that brought the Volt to the market; cash for clunkers, mortgage interest rate deductions, public transportation subsidies, etc.

Chevy-Dealing Congressman: “There Is No Market” For The Volt

Chevy-Dealing Congressman: “There Is No Market” For The Volt

Excerpt:

I’m a Chevrolet dealer… we have a Chevy Volt on the lot, it’s been there now for four weeks. We’ve had one person come in to look at it, just to see what it actually looks like… Here’s a car that costs $45,763. I can stock that car for probably a year and then have to sell it at some ridiculous price. By the way, I just received some additional information from Chevrolet: in addition to the $7,500 [federal] tax credit, Pennsylvania is going to throw another $3,500 to anybody foolish enough to buy one of these cars, somehow giving them $11,000 of taxpayer money to buy this Volt.

When you look at this, it makes absolutely no sense. I can stock a Chevy Cruze, which is about a $17,500 car and turns every 30 to 40 days out of inventory… or I can have a Volt, which never turns and creates nothing for me on the lot except interest costs… So a lot of these things that we’re seeing going on have a tremendous economic impact on people who are being asked to stock them and sell them. There is no market for this car. I do have some friends who have sold them, and they’re mostly to people who have an academic interest in it, or municipalities who are asking to buy these cars.

Comment: The Volt is the post child for what's wrong with government intervention in the marketplace. Ethanol subsidies would be another

The "Law of Unintended Consequences" and food riots in the North Africa/Middle East

America and the Middle East Food Riots

Excerpts:

Today there is a global food shortage and sky-rocketing prices. This has become the underlying factor in the riots in Tunisia, Algeria and Egypt, where up to 56% of a person's income is dedicated to the acquisition of food. These riots are now leading to the upheaval of governments and the very real possibility of the ascendancy of the radical elements into control.


While bad weather in various parts of the world is an element of the accelerating food prices there are two other factors directly related to the United States and its policies.


First, because of the enormous deficts run up by Obama administration and the Democrat controlled Congress, the Federal Reserve has had to effectively print trillions of dollars which have flooded the global market. Commodities are priced in dollars, consequently emerging markets throughout the world, and the food sector in particular, are suffering from rapidly rising inflation.


The CRB food index is up an incredible 36% over last year. Raw materials are up 23%. Since 2009 the dollar has declined by over 13% against the Japanese Yen and 25% against the Canadian dollar.

....

An example of this inflation is in the price of wheat. The January 2011 futures price is $335.00 per metric ton, last year at this time it was $157.00 per metric ton an increase of 113%. Not all of this increase is due to the inflationary impact of the dollar, but when global yields are down due to weather factors this foolish US monetary policy has made matters needlessly worse.


The second factor in the overall global food situation is the American decision to, in essence, burn food in its cars, a policy championed by the environmentalists since the 1990's. In 2010 the United States produced 13.1 Billion bushels of corn, of that amount 4.2 billion bushels went into ethanol (33% of total production). That represents in 2011, a year in which global stocks are down nearly 8%, over 14% of all corn grown in the world being used in the most inefficient manner possible-American gas tanks.


Thus the futures price of corn per bushel in January 2011 is $6.51 as compared to $3.84 in January 2010 an increase of nearly 70%. While the price spike is in part due to lower yields, had the corn destined for ethanol been put back into the overall corn stocks, the net effect would have been to offset this lower crop and the global market would have maintained the 2010 price level despite the inflationary impact of the dollar.

Comment: Interesing read. Hadn't thought about the connection!

On the SOTU speech

George Will: Uncle Sam in the driver's seat

Excerpts:

The word "entitlements" was absent from his nearly 7,000-word State of the Union address - a $183 million speech that meandered for 61 minutes as the nation's debt grew $3 million a minute. He exhorted listeners to "win the future" by remembering the past.

On May 10, 1869, at Promontory Summit, in the Utah Territory, a golden spike was driven to celebrate the joining of the Union Pacific and Central Pacific railroads. In the 1960s, the United States sent men to the moon. Obama said: Today's government should take more control of the nation's resources so it can do innovative things akin to building the transcontinental railroad and exploring space.

The nation heard: You should trust the government whose recent innovations include the ethanol debacle that, four days before the State of the Union, the government expanded. And you should surrender more resources to the government whose recent innovations include the wild proliferation of subprime mortgages.

...

The day after Obama told the nation that the key to prosperity is creativity defined by this government and propelled by more government spending ("investment"), the Congressional Budget Office said that this year's budget gap is widening to $1.5 trillion, making the national debt 70 percent of gross domestic product, up from 40 percent in 2008.

...

[On the Volt and Nissan Leaf]

The government already offers $7,500 tax incentives for people who buy electric cars such as the $32,780 Nissan Leaf and, more to the point, General Motors' $41,000 Chevrolet Volt. As The Post's Peter Whoriskey reported, these prices are "well above" those of "comparably sized cars with gasoline engines that can cost about $20,000."

Obama's goal of getting 1 million such cars on America's roads by 2015 cannot be met unless innovative government rigs the market. Introduced in 2008, the $7,500 bribe was limited to the first 250,000 cars. Under Obama's stimulus, it was expanded to 200,000 per manufacturer.

Peggy Noonan: An Unserious Speech Misses the Mark

Excerpts:

The speech was more than half over before the president got around to the spending crisis. He signaled no interest in making cuts, which suggested that he continues not to comprehend America's central anxiety about government spending: that it will crush our children, constrict the economy in which they operate, make America poorer, lower its standing in the world, and do in the American dream. Americans are alarmed about this not because they're cheap and selfish but because they care about the country they will leave behind when they are gone.

President Obama's answer is to "freeze" a small portion of government spending at current levels for five years. This is a reasonable part of a package, but it's not a package and it's not a cut. Sen. Tom Coburn of Oklahoma, who called it "sad," told a local radio station the savings offered "won't even pay the interest on the debt we're about to accumulate" in the next two years. The president was trying to "hoodwink" the American people, Mr. Coburn said: "The federal government is twice the size it was 10 years ago. It's 27% bigger than it was two years ago." Cuts, not a freeze, are needed—it's a matter of "urgency."

...

He too often in making a case puts the focus on himself. George H.W. Bush, always afraid of sounding egotistical, took the I's out of his speeches. We called his edits "I-ectomies." Mr. Obama always seems to put the I in. He does "I implants."

Humor, that leavening, subtle uniter, was insufficiently present. Humor is denigrated by serious people, but serious people often miss the obvious. The president made one humorous reference, to smoked salmon. It emerged as the biggest word in the NPR word cloud of responses. That's because it was the most memorable thing in the speech. The president made a semi-humorous reference to TSA pat-downs, but his government is in charge of and insists on the invasive new procedures, to which the president has never been and will never be subjected. So it's not funny coming from him. The audience sort of chuckled, but only because many are brutes who don't understand that it is an unacceptable violation to have your genital areas patted against your will by strangers.

I actually hate writing this. I wanted to write "A Serious Man Seizes the Center." But he was not serious and he didn't seize the center, he went straight for the mush. Maybe at the end of the day he thinks that's what centrism is.

Comments: Why I cannot watch or listen to Obama (I did read his SOTU!): He never really says anything. Just "mush".

Another view of the Obama Tax compromise

Testing the tax compromise

Excerpts:

First, the Bush tax cuts. If they expire in total, everybody agrees the country is in for a heap of hurt. Therefore, up or down, should we let the tax cuts expire? A two-part question, middle class [sic] and filthy rich. There is virtually unanimous consent on the so-called middle class tax cut so keep it, don't let it expire. The so-called millionaire's tax cut? No consensus so let it expire and judge the consequences when the new congress is seated. If necessary, and I think it will be necessary, reinstate it.

Second, extending unemployment insurance. This is obviously a contradiction in terms. Any insurance element to unemployment payments has long since been blown away. Unemployment payments are popular but contrary to sound fiscal policy. Scott Brown, you are half right when you insist on using existing monies to pay for this. ... When I was unemployed and my benefits ran out, I became much more aggressive (and successful) in job hunting.

Third, payroll tax reduction. As I understand this, it is a 2% reduction in the Social Security tax payment for the worker. (I would save $2,200 a year. The total cost to the deficit - $120,000,000,000) Does this mean that we are finally doing away with the fiction that Social Security has a trust fund and a guaranteed funding stream? I think it does. Social Security can now be recognized as the massive welfare program that it actually is, an entitlement in urgent need of reform. Do not cut Social Security funding arbitrarily at this time.

Comment: More ... read the whole thing (mentions Ethanol funding which I oppose. I haven't completely sorted through the proposal. Since my income is less than $ 250K, it would be easy to say "tax the very rich (you know people not like me!)" I am concerned about the reduction of the funding for social security. Hey that program is underfunded as it is. The unemployment insurance: This phrase is accurate: "obviously a contradiction in terms. Any insurance element to unemployment payments has long since been blown away". Yet I feel for those who are unemployed.

Spreading the tax pain around

Comment: Two articles on taxes.

The five dumbest parts of the U.S. tax code

The List:

1. Ethanol credits: Ethanol was pitched as a kind of energy panacea back when President George W. Bush signed the Energy Policy Act of 2005, mandating an increase in the use of the corn-derived biofuel. Generous credits doled out to manufacturers and producers accelerated industry’s initial embrace of ethanol, but the skeptics have gained the upper hand in this argument. Ethanol production has been fingered as one of the culprits in the spike in food prices a couple of years ago (tariffs kept the United States from using sugarcane-based ethanol from Latin America), and it turns out that making the stuff consumes a lot of the nonrenewable fuel its use was supposed to conserve. Nonetheless, alcohol-fuel credits will burn through some $12 billion between 2007 and next year.
   
2. Exemption for inherited stock-gains: Say, like Forrest Gump’s buddy Lieutenant Dan, you had the foresight to buy Apple stock when it went public in 1980 at $22 a share. If you died last week when the stock was at $230.90 a share, whoever inherited it wouldn’t have to pay capital gains on the increase, even if they turned around and sold it on the way to your funeral. To economists, this makes no sense, because if you’d sold that stock the day before your death, you would have had to pay capital gains. Tax planners even encourage elderly investors not to sell stock solely for the tax benefit it confers to their heirs.
   
   This exemption isn’t chump change; it’s predicted to total about $280 billion between 2011 and 2015. Proponents of the exemption counter with that the estate tax takes care of these windfalls; in reality, though, the estate-tax exemption is large enough that it misses a lot of these capital gains.
   
3. Mortgage-interest deduction: This one is almost universally decried by economists. The bigger the homeowner’s mortgage, the bigger the deduction. This has the effect both of tacitly encouraging people to buy as much (or more) house than they can possibly afford, and it rewards McMansion owners far more richly than it does those who own more modest abodes. The wealthy get a windfall, while renters, whose median income is half that of homeowners, according to 2007 Census Bureau data, aren’t even invited to the party. From a macro standpoint, economists also fret that the deduction leads people to invest more heavily in housing than they otherwise would at the expense of other sectors of the economy.
   
4. Exemption on employer-provided health insurance: This one is not without its share of controversy, as evident by the term “Cadillac plans” and the intensely heated rhetoric around the health care reform bill. Why would anyone want to tax what we have collectively come to think of as a national right?
   
   For starters, there’s a ton of cash at stake. This exemption is the largest by far in the federal tax code. According to White House budget projections, it’s going to cost the government more than a trillion dollars between 2011 and 2015 alone. (While the new health care plan does call for taxing some employer-provided insurance, it doesn’t kick in until 2018 and won’t apply to all plans.)
   
5. Municipal-bond-interest exclusion: Unlike the mortgage interest or health care plan exemptions, the big cheerleaders of this loophole are state and local governments. Groups like the Government Finance Officers Association hate the idea of letting the federal government tax municipal bonds, and so far their view has prevailed. Unfortunately, the perception of big savings is a shell game that benefits bondholders more than the local municipality, while the federal government takes it on the chin.
   

Comments (on just one of these): The Federal government should eliminate the employer-provided health insurance exemption. And the provide every American a $ 5000 credit (really amount to be determined!) to buy one's own health insurance. It would level the playing field and make the system more efficient. Of course Obamacare cancels this idea!

For Top Earners, Tax Bite Is Likely to Be Worst

Excerpt:

A January study by the nonpartisan Tax Policy Center provides the worst-case scenario. It found that to reduce the federal budget deficit to a sustainable 3% of gross domestic product, the government would have to find an average of about half a trillion dollars each year in new revenue (or spending cuts). That's roughly how much the federal government spends now on the giant Medicare program.

To cover that amount through tax increases on the top two brackets—roughly, families with more than $209,000 in taxable income—top rates would have to go from the current 33% and 35% to 72.4% and 76.8%, the study found.

Comments: Check out the chart with this article. The net of it is that "the rich" are already paying a lot of taxes. The top 10% of wage earners are paying 73% of the taxes. It will be hard to squeeze them more. A V.A.T. tax just buries taxes into all products and services ... raising prices and in effect just devalues the purchasing power of the dollar.

Ethanol makes little economic sense

The Ethanol Bubble Pops in Iowa

Excerpt:

In September, ethanol giant VeraSun Energy opened a refinery on the outskirts of this eastern Iowa community. Among the largest biofuels facilities in the country, the Dyersville plant could process 39 million bushels of corn and produce 110 million gallons of ethanol annually. VeraSun boasted the plant could run 24 hours a day, seven days a week to meet the demand for home-grown energy.

But the only thing happening 24-7 at the Dyersville plant these days is nothing at all. Its doors are shut and corn deliveries are turned away. Touring the facility recently, I saw dozens of rail cars sitting idle. They've been there through the long, bleak winter. Two months after Dyersville opened, VeraSun filed for bankruptcy, closing many of its 14 plants and laying off hundreds of employees. VeraSun lost $476 million in the third quarter last year.

A town of 4,000, Dyersville is best known as the location of the 1989 film "Field of Dreams." In the film, a voice urges Kevin Costner to create a baseball diamond in a cornfield and the ghosts of baseball past emerge from the ether to play ball. Audiences suspended disbelief as they were charmed by a story that blurred the lines between fantasy and reality.

That's pretty much the story of ethanol. Consumers were asked to suspend disbelief as policy makers blurred the lines between economic reality and a business model built on fantasies of a better environment and energy independence through ethanol. Notwithstanding federal subsidies and mandates that force-feed the biofuel to the driving public, ethanol is proving to be a bust.

Comment: Last paragraph is key!

Cars designed in DC won't sell

Bridge Loan to Nowhere - Congress and business 'viability' rarely mix.

Excerpts:

All three restructuring plans are heavy on promises to build the "green" cars that a Democratic Congress wants built. GM promises 15 hybrid models by 2012 and 37 miles per gallon on average for its cars. Chrysler commits to putting flex-fuel engines, which can run on ethanol or gasoline, in half of its cars. Ford promises to save 16 billion gallons of gas by using "advanced technology" and to invest $14 billion to improve fuel efficiency.

...
This is not a bailout that Congress is debating. It is a federal takeover. We don't mean that in the sense that the feds will own the companies on paper, although that can't be ruled out. What Congress wants to own is their business plan, and Detroit seems prepared to oblige.

...
The core problem is that the companies can't pay their creditors in fuel-economy standards. Two economists testified that the ultimate cost of this bailout would certainly be much, much higher than $34 billion. Mark Zandi of economy.com put the number at up to $125 billion -- and he supports the bailout. NYU's Edward Altman said the company proposals were "doomed to fail." He proposed a prepackaged bankruptcy for GM and Chrysler, with the government providing the debtor-in-possession financing if necessary. His point, which ought to be sobering, was that outside of bankruptcy there is no way to make these taxpayer loans senior to existing secured debt -- meaning the government might never get paid back if the companies go bankrupt later.

...
The car makers' request for a bridge loan, by contrast, looks like a $34 billion bridge to nowhere. It has already morphed into an opportunity for political extortion -- and we don't even have a bill yet. When, in a couple years, costs have not come down as expected because of political pressure to keep the unions happy and the green cars aren't selling -- because they were designed in Washington, not for consumers -- the companies will be back for more money.

The bailout commitment, in other words, is effectively open-ended, no matter what anyone says. And with the feds so invested in the companies, it will only be a short step for Congress to begin to coerce consumers to buy the cars that Washington prefers. Mr. Friedman, the concerned scientist, is already planning for that day. He said Friday that we'll eventually have to impose a "fee" (read: tax) on cars that "pollute too much" or use "too much gas."

This fairy tale, in other words, does not end happily ever after. A bankruptcy, prepackaged or otherwise, keeps looking better.

Comment: What Washington gives ... it takes away.

Hostage to the planet's saviors

The Biofuel Follies

Excerpt:

ANWR's 10.4 billion barrels of oil have become hostage to the planet's saviors (e.g., John McCain, Hillary Clinton, Barack Obama), who block drilling in even a tiny patch of ANWR. You could fit Massachusetts, New Jersey, Rhode Island, Connecticut and Delaware into ANWR's frozen desolation; the "footprint" of the drilling operation would be one sixth the size of Washington's Dulles airport.

Clinton has an alternative to drilling: Oil should be released from the Strategic Petroleum Reserve—which exists to protect the nation against major interruptions of supply—as "a signal to the market." A signal of what? Readiness to release more? All 698 million barrels? Then what?

....
James and Stephen Eaves, writing in Regulation quarterly, note that if the entire U.S. corn crop were turned into ethanol— it might have to be to meet the goal of 35 billion gallons of biofuels by 2017—it would displace 3.5 percent of gasoline use, just slightly more than would be displaced if drivers properly inflated their tires. And because the United States produces 40 percent of the world's corn supply and 70 percent of global corn exports, turning corn into fuel will damage the world's poor at a time when rising demand will require a tripling of world food production by 2050.


Comment: George Will eviscerates McCain too!

---

Super Tuesday: Time for bed but early on, Huckabee has surprising victories.

"Father Al, I have polluted!"

Bono confesses sins to 'father' Al Gore

Excerpt:

Having climate campaigner Al Gore round to your house is to open yourself to a self-flagellating guilt trip, Irish rock star Bono confessed Thursday.
Sharing a stage with the former US vice president at the annual gathering of world movers and shakers in the Swiss ski resort of Davos, the U2 frontman joked that their friendship was a source of pressure on the domestic front.

"He's been round my house and it's like... here's the recycler Al, you know... I've got a posh car, but it runs on ethanol Al," Bono said.

Acknowledging that a career in rock music was not always conducive to a green lifestyle, Bono compared a conversation with Gore to an act of religious contrition.

"It's like being with an Irish priest. You start to confess your sins," he said. "Father Al, I am not just a noise polluter, I am a noise-polluting, diesel-soaking, gulfstream-flying rock star.

"I'm going to kick the habit. I'm trying father Al, but oil has been very good for me -- those convoys of articulated lorries, petrochemical products, hair gel."


Comment: At least Bono understands that Al is the High Priest of the Global Warming religion!

Can government deliver something for nothing?

Hillary and Say's Law

Excerpt:

"But this stimulus shouldn't be paid for," Hillary Clinton said to Tim Russert in a recent interview, when he reminded her that she'd omitted a price tag somewhere. Shouldn't be?

Say hello to that old ghost from the past we thought banished by Ronald Reagan in the 1980s. It's called "Keynesian Economics."

Ironically, even the brilliant John Maynard Keynes disowned it. After meeting with a group of Washington "Keynesians" in 1944, he said he was the only non-Keynesian in the room. His brainchild, government spending to stimulate demand, had been converted from its originally intended limited application to an all-purpose economic panacea by politicians, academics and journalists.

The fundamental principle of the Keynesians, one that Lord Keynes would have scoffed at, is that government can deliver something for nothing. To be sure, government does transfer income and wealth to favored constituencies, such as rice farmers or ethanol producers, from people who pay taxes. Washington calls that economic stimulus. The costless "stimulus" Sen. Clinton had in mind would be broader, although tilted toward low-income earners. The intent is to pump up consumer demand by showering "tax rebates" on people with a "greater propensity to spend."


Comment: Italized for emphasis!

Say's Law

Summary:

There can be no demand without supply. A central element of Say's Law is that recession does not occur because of failure in demand or lack of money. The more goods (for which there is demand) that are produced, the more those goods (supply) can constitute a demand for other goods. For this reason, prosperity should be increased by stimulating production, not consumption. In Say's view, creation of more money simply results in inflation; more money demanding the same quantity of goods does not represent an increase in real demand.

Comment: Government needs to get out of the way and free the markets with less regulation! Sending checks to citizens (there's a part of me that wants it for myself!), will just create more consumption, not more production. Since much of what is consumed is produced overseas, it will not even help U.S. factories!

The delusions of 'Energy Independence.'

5 Myths About Breaking Our Foreign Oil Habit

5 Myths:

1. Energy independence will reduce or eliminate terrorism.
   
2. A big push for alternative fuels will break our oil addiction.
   
3. Energy independence will let America choke off the flow of money to nasty countries.
   
4. Energy independence will mean reform in the Muslim world.
   
5. Energy independence will mean a more secure U.S. energy supply.
   

Excerpt: ... we're woven in with the rest of the world -- and going to stay that way. Today, in addition to gasoline imports, the United States is buying crude oil from Angola, jet fuel from South Korea, natural gas from Trinidad, coal from Colombia and uranium from Australia. Those imports show that the global energy market is just that: global. Anyone who argues that the United States will be more secure by going it alone on energy hasn't done the homework.

Comment: Good article. Additionally the sad fact is that alternative fuels are less cost effective than oil (for example ethanol!). Forthcoming book: Gusher of Lies: The Dangerous Delusions of Energy Independence

Ethanol actually costs more

Ethanol actually proves more costly than gasoline

Excerpt:

Ethanol actually proves more costly than gasoline


As your excellent article "Clouds hover in ethanol skies" in Sunday's Tribune points out, ethanol is less expensive per gallon and emits fewer pollutants than gasoline per gallon. This sounds good; however, per mile driven, ethanol actually costs more and is responsible for more greenhouse gases than gasoline.



The SUV referenced in your article gets 14 mpg on gasoline, but only 10 mpg on E85. Thus, it requires 40 percent more E85 than gasoline to drive the same distance.


For example, each 70 miles driven would require 5 gallons of gasoline versus 7 gallons of E85. Using the $2.67 per gallon for gasoline and $2.09 for E85 referenced in your article, the five gallons of gasoline would cost $13.35, whereas the seven gallons of E85 would cost $14.63 (i.e. 9.6 percent more per mile driven).


Since fossil fuels are currently being used in the production of U.S. corn ethanol, the production and use of one gallon of ethanol emits 16.2 pounds of greenhouse gases compared to 20.4 pounds for gasoline, according to the article "Green Dreams" in the October 2007 National Geographic (p.44).


This also sounds good, but for the SUV example above, the five gallons of gasoline would result in 102 pounds of greenhouse gases, whereas the seven gallons of E85 would result in 117.81 pounds of greenhouse gases (i.e. 15.5 percent more per mile driven).


This, along with the other concerns pointed out in your article, makes one wonder if it is a good idea to ramp up the U.S. production of ethanol unless production methods for corn ethanol can be found that significantly reduce greenhouse gas emissions or alternate fuel crops such as switchgrass are used to produce most of the ethanol.


Comment: Bad government policy! See also: E85 Boondoggle of the Day: MO Gov’s Tax Creditfest

HT: Truth about cars

Congressional underachievers

George Will: The gift of doing very little

Excerpt:

Consider Congress's agreeably meager record:


It raised the hourly minimum wage from $5.15 to $5.85 — less than the $7 entry wage at McDonald's — thereby increasing the wages of less than 0.5 percent of the workforce. Rebuffing George W. Bush, who advocates halting farm subsidies to those with adjusted gross incomes of more than $200,000, the Senate also rejected — more bipartisanship — a cap at $750,000. This, in spite of the fact that farm income has soared to record levels, partly because Congress shares the president's loopy enthusiasm for ethanol and wants more corn and other agricultural matter turned into fuel.


Although Congress trembles for the future of the planet, it was unwilling to eliminate the 54-cent-a-gallon tariff on Brazilian ethanol. But our polymath Congress continued designing automobiles to make them less safe (smaller) and more expensive. It did this by mandating new fuel efficiency — a 35-mpg fleet average by 2020 — lest the automotive industry design cars people want. And Congress mandated a 12-year phaseout of incandescent light bulbs.

Comment: They did temporarily patch the AMT (doesn't impact me, but needed to be resolved). See earlier CFG posting: Bluto strikes again

Ethanol, schmethanol

Ethanol, schmethanol: Everyone seems to think that ethanol is a good way to make cars greener. Everyone is wrong

Excerpt:

SOMETIMES you do things simply because you know how to. People have known how to make ethanol since the dawn of civilisation, if not before. Take some sugary liquid. Add yeast. Wait. They have also known for a thousand years how to get that ethanol out of the formerly sugary liquid and into a more or less pure form. You heat it up, catch the vapour that emanates, and cool that vapour down until it liquefies.

The result burns. And when Henry Ford was experimenting with car engines a century ago, he tried ethanol out as a fuel. But he rejected it—and for good reason. The amount of heat you get from burning a litre of ethanol is a third less than that from a litre of petrol. What is more, it absorbs water from the atmosphere. Unless it is mixed with some other fuel, such as petrol, the result is corrosion that can wreck an engine's seals in a couple of years. So why is ethanol suddenly back in fashion? That is the question many biotechnologists in America have recently asked themselves.

The obvious answer is that, being derived from plants, ethanol is “green”. The carbon dioxide produced by burning it was recently in the atmosphere. Putting that CO2 back into the air can therefore have no adverse effect on the climate. But although that is true, the real reason ethanol has become the preferred green substitute for petrol is that people know how to make it—that, and the subsidies now available to America's maize farmers to produce the necessary feedstock. Yet such things do not stop ethanol from being a lousy fuel. To solve that, the biotechnologists argue, you need to make a better fuel that is equally green. Which is what they are trying to do.

------------------- [Read full article!] -------------------

Ethanol's inherent flaws:

1. Less energy than gasoline
   
2. Engine corrosion
   
3. Water absorption
   

Summary: "the political rush to back ethanol, just because it is green and people have heard of it, is a mistake."

Comment: Good read! More from NYTimes below:

Ethanol’s Boom Stalling as Glut Depresses Price

Business
Ethanol’s Boom Stalling as Glut Depresses Price
By CLIFFORD KRAUSS
Published: September 30, 2007
An oversupply of ethanol is suddenly plaguing farmers, in part because distribution of the fuel has not kept pace with new distilleries.

Comment: Image from The Truth About Cars

Bio-Fuels Boondoggle

Bio-Fuels Boondoggle Backfires, Badly

Excerpt:

A new study that concludes that rainforests absorb more CO2 than can be saved by clearing the land for biofuel crops. Razing rainforests for bio-fuels? Surely not! Uh-huh. U.S. and European government legislation mandating huge increases in ethanol consumption is already amping-up ethanol production in developing countries


Comment: Answers: Small cars! Think Europe (where the cost of fuel (because of taxes) is high enough to encourage: less driving, smaller cars, public transit)! Also small diesels would be better than ethanol fueled vehicles.

Earlier Cold Fusion Guy comments on Ethanol

Image is of rain forest clearing in Indonesia

Gorged on politics?

Charles Colson: Promises, Promises

Excerpt:

The campaign is all some people can think about. Everywhere I go, people seem almost frantic to know who I'm for and who I think will win. When I say, "It's too early to tell," they're crestfallen, as if desperate to attach themselves to a candidate.
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Perhaps, after this exhausting, multimillion-dollar presidential campaign, Americans may be so gorged on politics that we will finally say "enough!" Then we, like our neighbors to the south, will reject the promises of political messiahs in favor of building up the crumbling cultural infrastructure: our families, our churches, and our communities.



Comments: I am following the 2008 elections from a distance: not watching debates on TV. Like the "Youtube" debate - wasn't that a stupid idea!

These issues are forefront in my mind:

1. Security: Protection of our country and our interests. I know the phrase "global war on terrorism" has fallen out of favor, but the danger is real no matter what one would call it. I call it "The Long Struggle Against Islamofascism". (A book to be published next month. Order it from Amazon!)
   
2. Fiscal responsibility: A sane tax policy. Fix the AMT mess!
   
3. Social Security and Medicare reform (in the fiscal responsibiliy vein of thought!)
   
4. Immigration reform: Our de-facto immigration policy is to do nothing about the 12-20 Million illegal immigrants.
   
5. Infrastructure funding: The Federal Highways need fixing too! Let's skip the so called "Bridge to No-Where" (Alaska) and adequately fund our highways and bridges.
   
6. Iraq: A plan to wrap things up in Iraq. There is no way we will just "pull out" no matter who is elected. But we have to have a phase out plan.
   
7. Heath care: I'm opposed to a universal, single-payer, government run health care system. But reform is needed throttle health care cost increases enable more to be insured. Tort reform would be a part of this.
   
8. Energy: Policies that promote energy independence. I doubt that Ethanol is a long term solution. Anything that encourages people to buy smaller cars (tax credit?) would be positive.
   

Things I don't care about:

1. Hillary's cleavage
   
2. John Edward's "blackness" (his wife raised the issue!)
   
3. The candidate's wives. Or in the case of Hillary - Bill!
   

Aggravating the gasoline supply

Ethanol focus forces oil industry to cut expansion

Excerpt:

A push from Congress and the White House for huge increases in biofuels, such as ethanol, is prompting the oil industry to scale back its plans for refinery expansions. That could keep gasoline prices high, possibly for years to come.

With President Bush calling for a 20 percent drop in gasoline use and the Senate now debating legislation for huge increases in ethanol production, oil companies see growing uncertainty about future gasoline demand and little need to expand refineries or build new ones.

Oil industry executives no longer believe there will be the demand for gasoline over the next decade to warrant the billions of dollars in refinery expansions - as much as 10 percent increase in new refining capacity - they anticipated as recently as a year ago.

Comment: Illustrates the law of unintended consequences!

Pork inflation ... in China

Rise in China’s Pork Prices Signals End to Cheap Output

Business / World Business
Rise in China’s Pork Prices Signals End to Cheap Output
By KEITH BRADSHER
Published: June 8, 2007
Rising prices are causing Chinese companies to raise prices for exports, particularly on one critical commodity: pork.

Excerpt:

From pork spare ribs and mu shu pork to char siu bao — barbecued pork buns — pork is a staple of the Chinese diet. So in this Year of the Pig, an acute shortage of pork has been national news, as butchers raise prices almost daily and politicians scramble to respond.

Steep increases for pork loins and bacon are the most tangible sign that after a decade in which prices have fluctuated but not moved significantly upward, inflation is creeping back into China. In response to this pressure at home, Chinese companies are starting to raise prices for exports, removing what has been a brake on inflation in the West.

....

The crisis over pork prices in China, like the jolt many Americans feel when gasoline prices jump, offers one example of how prices can suddenly soar. The Chinese government is struggling to cope — including deliberating whether to sell a snuffling, smelly strategic reserve of hundreds of thousands of live pigs kept at special subsidized farms for precisely the shortage the country is now facing.

Chinese officials offer several reasons for the high pig prices. The cost of animal feed has risen by one-quarter in the last year, partly because more corn is being made into ethanol and partly because more prosperous workers are eating more meat, which requires more animal feed.

Comment: I found it interesting that China has a "strategic reserve" of hogs! Also the ethanol link!