Technocrat

Ethanol Levels to Remain After EPA Ruling

zogger
Fri Aug 08 06:49:00 -0700 2008
Politics
manage

The governor of Texas tried to petition the EPA for a waiver to reduce the mandated levels of ethanol in the US gasoline market, to try and help hard hit livestock producers who are seeing fast feed price increases. The EPA ruled they can't prove substantial harm so the current levels will remain intact.

Current law authorizes EPA to waive the national RFS if the agency determines that the mandated biofuel volumes would cause “severe harm†to the economy or the environment. The agency recognizes that high commodity prices are having economic impacts, but EPA's extensive analysis of Texas' request found no compelling evidence that the RFS mandate is causing severe economic harm during the time period specified by Texas.

ed.z.: I agree, they are correect! We can get feed, there's plenty of corn out there, it's just been bid up superhigh. It is just a high price, it is not a supply problem, it is more involved than that and it starts to get wonky. I will try and translate knowing what I know. There isn't a lack of corn, that isn't causing the higher prices. Above the big packers-the guys who take the product from the growers and ranchers then get it going down the "food chain" to everyone else, are the big chain supermarket and restaurant buyers, they offer such and such and that's it, you want to sell product, you take what they offer or sit on your supply, which for all practical purposes is impossible, it can't be done, you can't just pile up beef and chicken and pork like you can a mountain of wheat and wait for better prices. That is where this disconnect comes from, they don't want to pass the increased prices to their end users-that's ya'all who eat- in the stores and restaurants, meaning below that level we get to try and absorb the production price increases and still remain even marginally profitable with being paid the same or even a little less than before. Think about it, how long can you stay in business running in the red?

Right now, it isn't happening, net loss time combined with the other price increases we have for production. None of the big chains wants to go first on raising prices to a decent level, they'd lose customers to the chains that didn't raise prices to a "fair and sustainable" level. This has serious longer term ramifications, you'll see a somewhat just moderate price increase at the stores for now, but down the road it will rise really fast as a lot of guys just go bust this year. It's not the EPA needs to look into this, we need to develop this alternative fuels industry ASAP and corn is just the first wave, and the corn farmers have responded, planted a ton more acres to meet supply just fine, and we all know "anything but corn" is coming next for ethanol, just be patient there it'll happen with some of the other crops and new techniques being developed, it is the commerce commission and the SEC and the DOJ on prices/speculation/cartels action. IMO anyway. They are allowing big price increases to those points in the food stack that don't have a problem with maintaining inventory or are involved with production, but the production part is stuck, you can't "raise prices" as a producer, upstream they'll just refuse to buy and know you HAVE to blink first because of biological reality. It costs hardly nothing to keep digital bits hanging around in a server, it costs plenty to keep live creatures "stored", either on the hoof or packaged in freezers. So, they have a legal way to severely price gouge for some huge short term profits, but it WILL hurt the end consumer eventually. And every single time something new like this comes out it always is pointing towards the swap around digital bits level where the main money is going for being able to manipulate reality. And they-someone they-is doing a jam up job pointing fingers at ethanol to try and kill it off now. Now who might that be? From my POV, it is disgusting the levels of manipulations going on, this is a rigged market deluxe.

Killing off Ethanol

OmniGeek
Fri Aug 08 10:17:17 -0700 2008
 manage

While I don't necessarily disagree with your arguments WRT the corn and livestock markets and unequal buyer/seller relationships, I'm a bit skeptical of ethanol as a fossil fuel replacement (at least, corn-based ethanol). Totally apart from the economic impact of burning a food crop, I seem to recall that the energy balance of corn-based ethanol is really lousy; depending on whose figures you believe, it's either just above or just below net energy break-even, when you count in all the energy inputs to its production (including fertilizer and pesticides as well as tractor/harvester/transport truck/distilling plant fuel).

Now, even if corn ethanol is slightly above energy break-even, it's still a poor use of arable land and other resources. (If it's below break-even, which I believe to be the case, then it's a real no-brainer.) I think the process would have to be considerably above energy break-even to be a good idea, even if it's not responsible for most of the corn price spike.

I'd be much more enthusiastic about an energy-positive fuel alcohol production system that didn't use food crops as a feedstock, and I hope we get on with developing one. The inequities and absurdities in the agricultural system (agri-industrial complex?) are real, and will still be there no matter what we do with corn-based ethanol; on this, I agree with the parent post.

Killing off Ethanol
Bhima
Fri Aug 08 10:54:41 -0700 2008
 manage

The point of adding ethanol to petrol is to replace older additives like tetra-ethel lead, MMT, and MTBE.  These EPA mandated blends increase available O2 and decrease emission of unburned fuel,  CO... thus reducing smog in areas where the blends are sold.  These are different blends than say, E85 which is supposed to be a BioFuel (to which your comments would be applicable)

corn

zogger
Fri Aug 08 16:57:07 -0700 2008
 manage

they are doing corn now because that is what the collective we in agriculture are setup to produce in MASS quantities the fastest easiest way. It is a transition step only, the fuel guys know this, the corn guys know this. I know I try to put up a ton of different biofuel stories showing how they are working hard on finding replacement crops, because that is the direction the industry is headed. Hmm, rough analogy right now, the transition in laptops from normal hard drives to solid state. it isn't all the way yet and the SSD are more expensive, but the push is to go for a better mobile system that works good enough and uses less power off your batteries. Same deal with corn, we know it isn't perfect and has some flaws, but right now it is the best we can do in any practical scale. Other places it is different, in brazil they use sugar cane for instance.

The bottom line is we have a zillion vehicles that need to burn liquid fuels. We don't have hydrogen fuel cell cars yet and pure electric or plugin hybrids with batteries are just starting to become available, and it will take 10-20 years before they are common enough to be able to get one used for a grand. Heck, even ten year old priuses are still high. So for now, it is liquid fuels, which means stay tied to the outrageous pure petroleum market, where we are importing 70% or better, or try to slide away into something we can produce domestically and sustainably. And like pointed out, right now it is going to low alcohol blends, 5-10%, most of it isn't being used near pure. Hopefully as the majors go into overdrive and produce a lot more fuel efficient cars and trucks, combined with domestic production of ethanol and biodiesel, we might be able to avoid a terrible energy crisis. The little mini crisis right now is *nothing* compared to if they decide to have an expanded war with iran and the straits of hormuz get closed. I would expect 20 to 50 bucks a gallon gas then with rationing. We'll be giving thanks on our knees for domestic biofuels production then, every drop of it. We need the infrastructure to get built and be up and running before it gets much worse, not wait until after it gets much worse.

I live on a farm, I am not terribly worried about us even if 15/16ths of our production gets borked, because we'll still be able to eat and live perfectly fine on that last fraction and still have some for very local bbarter, we'll still even have the means to make our own fuel to some extent, it's all of ya'all who don't have those options and live in the cities and suburbs I worry about. during the great depression 40% of the population still lived ion farms, now..1% or something silly like that. You have a Just In Time existence, it is fragile. Works quite well with all the chain intact and the timing running smooth, but it won't take much to make it collapse either. Your reality is pretty much based on both availability of liquid fuels and a moderate enough price of liquid fuels, and if either of those goes bonkers..well...toast, and right now that slice of bread is turning a little brown.... If both of them go bonkers, in a fast time frame, it is "well burnt toast and you only get to smell it, you can't touch it".

And that is why it is critical we develop the alternative liquid fuels industry now, even if it means we use corn for a few years and it isn't initially a hot deal. It will be eventually, same with solar PV and so on. The expression is, "snooze ya lose", you can't wait until a crisis hits to fix things, Katrina proved that..And even though we personally are being impacted right now, I don't care, i want a better long range fix, we already went through one nasty energy crisis and it sucks we have to do it again. I feel compelled to cut through a lot of the FUD that hits the news all the time like it is corn farmer versus stock rancher..that isn't the case, it is a misdirect gambit to have people NOT look where the price increases start and stop, and most of it is right in the middle of the very large scale electron shufflers guild, the same exact guys who took all the repackaged mortgage profits then "need" the tax payer bailouts when that bubble burst and they started getting losses. They just switched to something else to skim from. IMO of course, but that is as honest and close as I can call it now, there's a lot of sophisticated economic propaganda going out on the wires all the time and it involves a lot of high level government/industry..I'll call it "cooperative corruption", got no better words for it. Overlapping series of mass heists.

corn
OmniGeek
Fri Aug 08 19:14:58 -0700 2008
 manage

Hmmm, I hadn't thought through all the way to the setting-up-the-infrastructure aspect. Seems like a reasonable idea (and a necessary thing in the long run), and, I would agree, even enough to justify a lousy energy balance for early biofuels as an investment in a more diverse energy infrastructure. IF, that is, the corn-ethanol infrastructure doesn't turn into a white elephant with no useful progeny (jury out, fingers crossed).

The fragility of our two-food-shipments-away-from-famine urban system scares the p*** out of me when I think about it, I'll have you know. he higher you build the tower, the more damage it does when it falls over. Our social tower is quite tall and has many critical dependencies to keep it upright.

I've known several people who think and talk in the same paranoid-conspiracy-theory way you do here, and I'm beginning to seriously believe they're on the money. Especially in the current administration; they barely bother to TRY to lie plausibly any more...

 

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