The Assertion: The state and federal government should continue subsidizing ethanol

Ethanol's promise as America's path to energy self-sufficiency once seemed strong. But in recent years, that attraction has been tempered. Even supporters of ethanol, such as former Vice President Al Gore, have rethought their position.

U.S. taxpayers support the industry with some $6 billion in federal money annually. Now Congress may curtail that funding.

Yet Minnesota relies on ethanol production as an industry and many still see it as a way to wean the nation from oil.

During the week of May 23, MPR's Insight Now debate will look at whether the nation should financially support ethanol.

Monday - Opening statement

Pro:

Chris Thorne - Growth Energy

When you are looking for a filling station to tank up, it may appear that there is healthy competition: a Cenex across the street from an ExxonMobil, just up from a Tesoro.

But you really have no choice at all. American motorists are a captive market – captive to oil. Your choice in motor fuel already made for you by the time you pull up to the pump: gasoline derived from oil, two-thirds of which is foreign.

As long as oil controls the market, then federal and state tax policy should support alternative fuels. And today, the only commercially-viable alternative to oil we have is domestic ethanol.

The tax policy in support of ethanol, known by some as the “blender’s tax credit,” serves as an incentive paid to the oil companies to carry ethanol – a competitor’s product – in their market delivery system. Right now, there is no alternative infrastructure in place to deliver ethanol free of gasoline. That should change.

At Growth Energy, we were for tax reform before tax reform was cool. Last year, we proposed redirecting the blender’s tax credit away from the oil companies and instead use a portion of those funds to encourage the installation of Flex Fuel pumps – pumps that give Flex Fuel drivers a choice of ethanol blends.

Flex Fuel pumps work. When consumers have a choice, they choose higher ethanol blends. In North Dakota, where state programs encouraged the installation of Flex Fuel pumps, ethanol sales more than doubled in a single year. By putting more Flex Fuel pumps in the ground, and more Flex Fuel vehicles on the road (as major U.S. automakers have committed to doing), we can eventually put ethanol tax policy on a glide path to zero, because ethanol will be able to compete against oil on a level playing field without government interference or assistance.

Once access to the market is reformed, ethanol can beat oil for market share. Ethanol is more affordable, lowers fuel prices, and in the case of cellulosic ethanol can reduce emissions by up to 67 percent compared to conventional gasoline. Meanwhile, oil is getting costlier, dirtier and riskier to extract.

Also, ethanol creates jobs here in the U.S. by reducing our balance of payments to overseas countries for their oil. The more money we keep in the U.S. economy, the creates U.S. jobs. As long as American motorists are a market held captive by oil, tax policies must remain that support access to the market.

Monday - Opening statements

Con:

Rolf Westgard - energy analyst and educator

The Republican Congress and President Obama continue to haggle over spending cuts in the federal budget. One of its most tempting cost targets is the $6 billion subsidy for the 12.6 billion gallons of corn ethanol for 2011, mandated by the 2007 Energy Independence and Security Act (or EISA). Producing this ethanol will use 5 billion corn bushels, 40 percent of our total crop. That takes more than 30 million prime crop acres for about 7 percent of our gasoline supply.

A University of Minnesota study led by Professor Sangwon Suh recently estimated that in the U.S. an average of 162 gallons of water are consumed to produce a gallon of ethanol from corn. Drier states with more irrigation use more water, with Kansas and Nebraska requiring 500 water gallons per ethanol gallon. Much of that water is drawn from the Ogallala Aquifer.

Also this November, The European Environmental Policy Institute reported that the EU Renewable Energy Directive for bioethanol is leading to twice as many “GHG emissions than meeting the same need through fossil fuel use.” This is primarily the result of indirect land use change which will cause an additional annual release of “between 44 and 77 million tonnes of CO2e” in this decade.

A 2008 study by Germany’s Max Planck Institute and California’s Scripps Institute reported that the nitrogen fertilizers required by biofuel crops were releasing “enough nitrous oxide to cause climate warming instead of cooling.” The study was led by Nobel chemist Paul Crutzen. Some of that nitrogen ends up in the Mississippi River, fostering the growth of algae. The algae dies, depleting oxygen, creating those dead zones in the Delta and the Gulf of Mexico.

Producing ethanol from non-food crops like switch grass or corn stover has promise, but EISA's 2010 mandate for 100 million gallons of cellulosic ethanol had to be reduced to 6.5 million gallons. There is no production facility anywhere for cellulosic ethanol. Therefore the 2011 mandate for 250 million cellulosic gallons will also fail. Scooping up corn stover, the leaves and stalks, to make ethanol exposes the soil to erosion from wind and water. It also denies the soil enrichment from the decaying stover. And every ton of corn stover contains approximately ten pounds of nitrogen, two pounds of phosphorous, and forty five pounds of potassium for the soil.

Subsidies make sense when they support research into effective renewable energy technologies. But thirty years of subsidies have not made food for fuel competitive or useful. World population increases by seventy million annually, but there is no increase in arable land. Now hundreds of millions of personal cars and trucks have a seat at the dinner table by consuming biofuels made from the fruit of the plant.

The best way to get energy from corn is to eat it.

Here's an opportunity for those budget-cutters in Washington.

Supporting alternative fuels is nice, but it needs to make economic and moral sense. We subsidize ethanol which then leads to a corn shortage and HURTS the people that can not afford the increase (the most).

And $6 billion could create far more jobs if used for infrastructure.

If you want alternative fuel why are we not converting our cars to natural gas which is far more pollution friendly and supplies are dramatically more available in the US than oil .... some definite questions on your stance on this ...

Did we not learn anything about market manipulation from the housing bubble? If we don't let market prices find their correct level we fail to make informed choices. $5 gas and $4 gas send very different messages to users of gasoline, makers of cars, makers of buses, growers of corn and taxpayers. End the subsidy for ethanol and end the subsidy for oil. The paternalistic attitude that we could not handle or solve the matter without the wise central planners needs to end.

A few points of clarification. To fully understand this complex issue, we need to understand ethanol fuels and the vehicles that canuse them.

First, most cars and trucks on the road today can use -- and are using -- a blend of 90% gasoline and 10% ethanol called E10. Minnesota has manadated E10 statewide for more than a decade. Recently, the EPA granted a waiver for newer vehicles to use gasoline with a 15% ethanol blend (E15), but that fuel is not being sold anywhere in MN, to the best of my knowledge.

The "flex fuel pumps" that Mr. Thorne mentions can be either E85 pumps, that distribute the 85% ethanol and 15% gasoline blend fuel, or "blender pumps," that can distribute E85 AND other mid-range ethanol blends such as E30 or E50. These fuels are ONLY for flex fuel vehicles.

Minnesota has 360+ E85 outlets, more than any other state. We also have 70 blender pumps. mostly in southwestern MN. There are at least 225,000 flex fuel vehicles registered in the state.

So, we are not talking about replacing all gasoline with ethanol fuels. Still, E85 produces less tailpipe emissions than gasoline, and unlike gas, it is largely renewable.

Does anyone have the numbers for the actual cost of production for ethanol? Perhaps the subsidy - if there is to be any - should be based on the price at the pump. Once you get past a certain point the subsidy is automatically reduced or phased out.

One local gas station that advertises E85 has a flashing sign that ALWAYS shows a fifty cent difference between regular gas and E85.

It is my understanding that E85 delivers fewer miles per gallon. Since I do not drive a flex fuel vehicle it is hard to tell what the effect is.

I am a bit disappointed to hear that alternate feed stock has not yet been proven to work on a higher volume of production.

On the farm side of the equation there seem to be winners and losers as well. Those who produce the corn for ethanol production and are co-op participants win, those that feed their cows with corn lose.

Ethanol producers have invested a lot of money in production facilities and now employ a substantial number of people.

Without knowing at what point these facilities are profitable it is hard to know if subsidies are still needed. To further complicate matters, the profitability of the producers depends entirely on what they pay for the corn as was shown a few years ago when a lot of them went broke as a result of corn price fluctuation.

Re: the "food vs. fuel" debate, it should be noted that corn exports from the US have increased during the past few years, not declined. Furthermore, the corn grown in our fields is not intended for direct human consumption. That corn is used for a number of products (corn oil, corn sweeteners, corn starch, livestock feed and ethanol). Here in Minnesta (where corn irrigation is rare, BTW) most of the ethanol plants produce both fuel-grade ethanol and dried distiller's grains, a high-protein animal feed they sell as a co-product.

So in many cases, it's not "food vs. fuel," its food AND fuel. Can petroleum make the same claim?

@Eduardm: You are correct that a flex fuel vehicle will get less MPG on E85 compared to gasoline. How much difereence varies widely, depending on age and condition of vehicle, driving conditions, etc. The EPA has some estimates, but many FFV owners I know report better MPG than the EPA numbers.

This is due to the physics of the fuel. Just as gasolone has fewer BTUs than diesel, E85 has less than gasoline. It sould be noted that FFVs in the US are optimized toward gasoline use, not E85. A lot of engineering types believe that with a few tweeks, our FFVs could get better miles per gallon on E85.

I would like to know how much water and natural gas is consumed to remove fuel from the Alberta Tar Sands, send it here via pipeline and process it into gasoline at the Flint Hills refinery for the MN market. Most of our petroleum fuels now is imported from Alberta, including diesel and aviation fuel.

What type of subsidies and tax breaks are involved with oil production and refining? What are the environmental trade-offs with oil-based fuels? Does Alberta Oil Sand fuel have a larger carbon footprint than sweet Texas crude?

Once we know the "true cost" of our gasoline, can we determine if ethanol subsidies are a good deal or not.

I understand people don't like government intervention like subsidies in industries like ethanol but at what cost are people willing to accept a move towards more clean renewable energy.

$6 billion is a lot of money but its actually a small percentage of what the U.S. gov't gives to oil companies who are recording record profits and damaging our environment.

By redirecting the blenders credit to produce additional ethanol infrastructure makes sense as America tries to break its 90% gasoline mandate of which 60% is imported.

Let's keep that money in America to produce more jobs and improve our energy security through the additional usage of clean domestic fuels.

>>>I would like to know how much water and natural gas is consumed to remove fuel from the Alberta Tar Sands, send it here via pipeline and process it into gasoline at the Flint Hills refinery for the MN market.<<

It's a tiny fraction per BTU produced versus the water used to produce BTUs from corn ethanol.

Mr. Westgard has exaggerated the quantity of corn used for ethanol production. First of all, the raw material used for corn ethanol fermentation is the starch contained in the kernels of maize (not consumer-purchased corn).

Secondly, he omits mention of the primary byproduct of corn ethanol production - which is a food. The rest of the kernel is used to make a high protein livestock feed that is healthier than starchy corn. Out of each ton of maize used, 600 lbs. of feed (30% of the starting quantity) is produced.

Most of the ethanol now in use is the mandatory blend portion used to oxygenate gasoline. It is a clean alternative to the toxic oil-based MTBEs used before. Until we have alternative feedstock conversion to ethanol, we will have to continue to use maize. Corn cob conversion to ethanol in the Corn Belt is one of the most advanced cellulosic systems under development.

As Mr. Thorne correctly observes, consumers currently have no choices at the pump. That's un-American and part of the reason President Bush asserted that we are "addicted to oil." Providing alternative fuels is partially a feedstock challenge, but it is also a infrastructure problem requiring new delivery pipes, pumps, and vehicles (FFVs). Without the existing industry we have no economic basis for building that infrastructure (to "prime the pump" so to speak).

If Growth Energy says it makes sense to redirect ethanol subsidies to building long lasting infrastructure, I believe them. What I don't believe is that it fair to cut alternative fuel subsidies when oil (a hundred year old immensely profitable industry) still receives theirs!

@Jackfarms I agree that we need more jobs and that existing jobs should remain or be repatriated to the maximum extend possible.

Please explain the 'blenders credit' if you have any knowledge of this. Who is getting this credit and what is it supposed to support?

Is this intended to pay for the actual cost of mixing the fuels together? Pumping two fuels into one tank, stirring it a bit and calling it blended does not sound like something that would cost $0.50 per gallon.

On the flip side, who would be hurt if this credit was no longer available, the oil producers, the ethanol producers or the farmers?

Can you cite some sources on your response to my question on water/energy use of Alberta Tar Sand petroluem, Rolf?

@Eduardm

Here is one definition of the "blender's credit" from the website of a POET, an ethanol developer:

"Volumetric Ethanol Excise Tax Credit (VEETC) - Commonly referred to as the "blender's credit," VEETC was created as part of the American Jobs Creation Act of 2004. VEETC provides oil companies with an economic incentive to blend ethanol with gasoline. The tax credit totals 45 cents per gallon on pure ethanol, 4.5 cents per gallon for E10. VEETC is currently authorized through December 31, 2010."

Many of you already know me, but for full disclosure, I'm the communications director for the American Lung Association in Minnesota, which recognizes E85 as a "clean air choice."

So we have not significantly impacted our dependence on foreign oil, the enviornmental benefits are marginal at best and we are stalling other energy development by keeping gas prices a little lower...so what is the moral argument for taking money from our kids (cause we cetainly are paying for it) to do this?

How do I tell my five kids that we are reducing the nothing that we are leaving them to less than nothing because corn growers had a great lobby?

I have as much respect for farmers as I do trial lawyers, politicians and drug companies.

One very troubling factor about ethanol production is the depletion of the water table. Water is a precious resource and should not be sacrificed for this misplaced agenda.

Additionally, let's not forget that almost 1/3 of the ethanol production industry in Minnesota has been fined for breaking pollution laws.

I find a trend in these comments to equate ethanol with corn ethanol; to ignore the potential for advanced ethanol to be produced from agricultural and food processing residues and energy crops.

Corn ethanol is meeting a current need. As we see, as prices for corn go up, corn ethanol biorefineries shut down. The market is having some influence on this debate.

Logically, investment should be going into research into alternatives to corn ethanol so that these biorefineries can diversify to stay in business using less expensive sustainable feedstocks.

In a nutshell, we need to commercialize what nature does in termites and cows digestive systems. We need to work on ways to assure Mr. Johansen's 5 children and others around the world that they will have sustainable (economically, environmentally and socially) fuels to power their lives. That is worth some government investment, whether enhanced by funds now used as blenders credits to help create and maintain a market or with other government incentives for development of optimized flex fuel vehicles (that have no mileage penalty with use of higher ethanol blends in gasoline optimized engines) which will create a consumer market--or by funding research into pilot and demonstration facilities to prove new technologies that use our resources (water, power, fertilizer, etc.) more efficiently.

Corn stover and switchgrass are not the only alternatives being investigated. See more details here or copy and paste this address into your browser: www.AdvancedBiofuelsUSA.org.

@Joanne,
There is no need to commit a "we" to solving these problems. If you let the markets work instead of interfering with subsidies -on ethanol, oil, vehicles, highways, mass transit, and the rest - then the problems can be correctly be identified and the solutions provided. The amount of land being used for ethanol raw material production, be it switchgrass, corn or any other, is being increased by the subsidy system. The amount of fuel being used is increased by subsidizing transportation through increased highway building. The cost of food is being increased by eating up land close to metropolitan areas for suburban sprawl, subsidized by low energy prices and free highways.

We are stuck like the lady who swallowed the fly, applying solution after solution. We still have the small fly in our stomach but are contemplating bigger and bigger farm animals to eat (subsidies, wars, pollution). And while our good intentions drive us down we line the pockets of the well connected.

This has been an interesting read.

I think we are in such a bad position because Our Govt Direction for many years has been throw money at the problem and it will go away...it has only compounded the problems.

I have spent over 30 years trying to find away to end Subsidies. It appears the only Businesses the don't get it are The Small Business Faction which used to be the Back Bone of Our Country.

Everything on Earth is such a delicate balance and Water For Gold will be our path if we don't work towards the understanding our world is changing forever more. We are in Transition. Time to really look at the figures Water Verses Return. Productibility verses Return.

I was directly involved with the Ethanol beginning without realizing the true costs of production. We seem to always have great intentions and later discover we weren't as
informed as we should be.

I personally don't think any oil co should get any money at all. Corn on the the other hand directly affects the farmers income. They are making money on their corn and that's not been the case for a very long time.

Put money into serious Renewable Energy and get us off Oil. Create Jobs Here in creating a new industry....Renewable can include Micro-Hydro, Hydrogen, Wind, Solar, Algae, & more. We just need to move & faster in that direction.

There has never been a "real answer" but now is the time to balance the "true return" against "conservation" ... conservation should come first.

Tar sand, ethanol, fracking all use water to produce their product....I believe a bad investment because of the ultimate cost & environmental damage.

I agree with Chris Thorne and commend Growth Energy for the outstanding job they are doing giving Americans more choices at the pump.

We need an infrastructure now to support providing alternative renewal choices. Let's encourage the oil companies to join with us as we're all in this together to help reduce foreign oil dependency, clean-up the air, and improve our economic growth at home.

Thank you,
mac@epg.us.com
Cedar Rapids, IA

@justacoolcat:

We pretty much discovered the water table issue here in Minnesota (in one plant in Granite Falls), hopefully, the lessons learned are preventing problems elsewhere.

Ethanol plants, like any other industry, need to operate within state and federal air quality guidelines. In fairness, it should be noted that Minnesota's two oil refineries are no stranger to air pollution violations and fines.

That said, the ethanol industry should take whatever steps needed to reduce emissions at its facilities.

There is a role for ethanol as an oxygenate replacement for MTBE. But that doesn't require 40 million prime crop acres, huge amounts of water, and petroleum based pesticides and fertilizers.
And I used accurate numbers for the amount of corn needed to produce a gallon of ethanol. You get about 2.6 gallons from a bushel of corn. That's right around $3 of raw corn per ethanol gallon,not counting large transportation expenses, running the distillery, and diesel powered trucks or trains to get the stuff to remote terminals, etc. The byproduct animal feed is worth about 20-25 cents per gallon. Result, lots of bankruptcies.

(For the uninitiated - MTBE is a chemical compound used as a component in fuel for gasoline engines. It helps prevent engine knock replaced the additive that contained lead. - M. Caputo)

@justacoolcat:

Hi there. You ask a good question about water and energy use. Today's ethanol plants are striving to reduce energy and water use because it will help meet targets for GHG reductions set by policy (in the Renewable Fuel Standard), and also because it makes financial sense.

Some plants are capturing methane gas from landfills, and are using "energy centers" that recycle steam and other energy at the plant. Water use has also gone steadily down; in fact, it takes far more water to produce a single apple than it does a gallon of ethanol.

Here's a terrific tip sheet from the Department of Energy that covers GHG emissions, Btu conversion, etc., comparing ethanol to gasoline. In every case, you'll see ethanol is a winner:
http://growthenergy.org/images/reports/biofuel_myths_facts.pdf

What's better is that this data is three years old; innovations in farming and at the ethanol plant have us already outpacing these numbers.

The fact that Grassley of Iowa and Amy Klobuchar have caved and are supporting a reduction of the subsidies tells the whole story.

Also, I'll be covering the 'food v. fuel' myth in tomorrow's post. One fact to remember: right now we are predicted to have a 900 million bushel surplus of corn this year. That's the corn left over after we meet all demand for animal feed, industrial alcohol, export and ethanol. And the Yellow No. 2 corn that goes into ethanol isn't grown for human consumption; it is grown as animal feed.

More than 90 percent of the arable land in the U.S. goes to animal feed. The sweet corn we eat amounts to a fraction of the total corn harvest. The vast majority goes to animal feed.

In the hope of reaching out to as broad a group as possible, Minnnesota Public Radio News has sent a series of questions to sources in our Public Insight Network. These are folks with a interest in alternative fuels or have a background in energy, the environment or energy-related businesses.

We posed a few questions to them on government support of ethanol. We’ll share some of the responses in our debate thread.
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Among those who responded was:
Carlos Gutierrez- A Plymouth mortgage broker who studied agricultural economics in school.

Q: How would you measure whether government should support development of ethanol - or any other alternative fuel, for that matter?
A: The cost to the consumer and to the environment should be the measure. At this time, after many years, corn ethanol is still marginal from an energy balance, and environmental impact.
It is profitable for corn farmers and ethanol producers.

Q: How should we balance the need for alternative energy... with the need to have alternative energy industries that are self-sustaining?
A: I agree that government should play a role in starting promising industries, as it did with corn ethanol. Now it should stop subsidizing corn ethanol and direct help to other sources of ethanol such as sawgrass, wood chips, algae, sea weed, etc.

Q: What more should we know about ethanol development and government support of that alternative fuel?
A: Sugar cane is a much more efficient and a less expensive source of ethanol than corn. Imports of ethanol should now be allowed without tariffs.

Actually what Sens. Grassley and Klobuchar are both endorsing is exactly what ethanol supporters said last year: reform market access, and we can do away with the subsidies (which go to oil companies anyway). Both Grassley and Klobuchar have introduced legislation that resembles our Fueling Freedom proposal:
http://growthenergy.org/ethanol-issues-policy/fueling-freedom-plan/

For Mr. Gutierrez's point about sugarcane ethanol: If we have an open market, then yes we can do away with all tariffs, even on foreign energy sources like Brazilian ethanol. When Congress passed the Energy Independence and Security Act of 2007, lawmakers intended to encourage domestic sources of energy -- and reduce our reliance on foreign energy. My thought is that, right now, the one thing we should be exporting from Brazil is their commitment to energy independence.

The other issue about ethanol tax policy is that the current VEETC doesn't distinguish between corn ethanol and cellulosic ethanol. Technically he is incorrect in saying the government subsidizes corn ethanol. What the current policy does is serve as an incentive for oil blenders to blend ethanol -- whether that ethanol be from corn or from cellulosic biomass.

If we adopt Fueling Freedom and open the market, we will open private market investment into cellulosic, which will encourage the development of those feedstocks such as wood chips, sawgrass, etc. One thing to keep in mind, however, is that with corn ethanol you get both a renewable fuel and an animal feed at the end.

Minnesota Public Radio News has a vast number of sources in our Public Insight Network and we decided to reach out to a few of them with some questions on government support of ethanol.
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Among those who responded was:
John Reay- A retired computer programmer from Minneapolis.

Q: How should we balance the need for alternative energy... with the need to have alternative energy industries that are self-sustaining?
A: The real question ought to be how to conserve the energy we use to benefit our society. In a true economic sense, the higher the price of fuel, the more efficiently it will be used. We already see that housing in the exurbs and distant suburbs are no longer economical for folks who have to commute long distances to work.

For decades, we have had the opportunity to create local, decentralized, community based electrical grids using generation from natural gas. This, of course, flies in the face of big utility companies who want centralized generation to be profitable (and powerful in the political sense of state influence).

Q: What more should we know about ethanol development and government support of that alternative fuel?
A: The experiment has been tried and failed. Time to move on to other 'alternatives'. If this country believes that innovation, invention and technological advancements will propel the solution to our future needs, then by all means, continue that search.

If, however, technology is not the savior, then efficiency is the preferred choice.

We are at a point in our global environment where population is challenging most commodity resources, not only oil. As a natural progression, when the resources are no longer adequate, society must change to lower the resource requirements - efficiency, deprivation, and, ultimately, a lower population globally.

Cellulosic ethanol is still a pipe dream.

Another myth is that Brazil's sugar cane ethanol is 8 times more efficient than our corn ethanol. The price of Brazil ethanol is close to ours.

Removing the tariff won't bring in a flood of Brazil ethanol, even though they lower costs with what is essentially slave labor.

I filled up on expensive foreign oil at lunch today? Is the subsidy doing what people claim it is going to do - regardless of whether those goals are worthy or not? Based on my wallet, our defense budget and commodity prices I would say the answer is NO. The subsidy dies for lack of effectiveness.

Minnesota Public Radio News’ Public Insight Network gives us another voice on the government support of ethanol ( responding to these questions).
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Melanie Shirley- A marketing consultant from St. Paul who has a passion for renewable energy.

Q: How would you measure whether government should support development of ethanol - or any other alternative fuel, for that matter?
A: I've studied the ethanol subsidies and I believe that government should not fund an industry that is never going to sustain itself. The tariffs keep us from importing affordable ethanol and the process used to create ethanol uses more energy than the ethanol ends up creating. It has become a complete mess of regulations and subsidies that no longer work.

Q: How should we balance the need for alternative energy... with the need to have alternative energy industries that are self-sustaining?
A: Alternative energy industries will not self sustain until a market exists. But when you look at the way we created the ethanol industry and the failure of this program, it makes it difficult to justify creating artificial markets for alternative energy. Yet I really support alternative energy. We need to incent business to find alternative energy solutions that make sense for our economy, our communities and creates jobs.

Some critics of ethanol are quick to label the fuel "a failure." I should point out that E85 sales in March set a new record for that month - 1.8 million sold in Minnesota. Sales of mid-level ethanol blends also reached record levels.

Another source from Minnesota Public Radio News’ Public Insight Network.
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Michael Martin- Who lives in Tracy and works for Backup Power Source, a battery backup and solar, wind, and alternative energy designer, manufacturer, and seller in Slayton.

Q: How would you measure whether government should support development of ethanol - or any other alternative fuel, for that matter?
A: Number 1. Environmental Impact
Number 2. Economic impact (would ending ethanol hurt or help more than continuing it?)
Number 3. Societal Impact--What would the alternative fuel additives do to the environment.

I think that we need to move away from fossil fuels, and ethanol subsidies are a half-step in that direction. The faster we can transition to electric vehicles and hybrid, plug-in electric technologies the better. US-produced Natural gas holds huge potential as another step towards eliminating the burning of oil for transportation.

Q: How should we balance the need for alternative energy... with the need to have alternative energy industries that are self-sustaining?
A: We should be going toward self sustaining alternative energy, but the cost of doing nothing, and the cost of environmental damage of fossil fuel burning should be factored in before we start talking about the self-sufficiency of any alternative energy. Also, oil and coal get subsidies--we saw that in the latest national budget debates.

Q: What more should we know about ethanol development and government support of that alternative fuel?
A: Corn-based ethanol works great when there is a surplus of cheap corn. Cellulosic ethanol technology holds promise to bolster the profitability of the overall industry. Ethanol is a great boon to rural Minnesota farmers and communities, and phasing out subsidies would hurt farmers. A long term solution should include Ethanol production as a part of the solution

Good, sensible comments from Mr. Martin! When people concerned with energy and the environment attack each other, i.e. solar vs. wind, natural gas vs. biofuels, electric vs. everyone, the only side that wins is "the status quo."

I, for one, do not believe that continuing our addiction to oil is good for our health, our environment, our pocketbooks or our national security. Ethanol may not be THE answer, but it's certainly ONE answer.

Mr. Westgard is confused as to how much corn is needed to make a given quantity of ethanol:

He stated: "12.6 billion gallons of corn ethanol for 2011"..would require "40 percent of our total crop". This is far off from the data that is currently available on USDA site and Ethanal Renewable Fuels site. In 2010 we produced 13.2 billion gallons of ethanol and when you take into account the Coproducts produced from the recovered protein from the corn, it is more like 25% of the corn crop was used.

Also, be advised most of the corn crop goes to feed cattle and pigs ..not people.

Westgard offers some studies which offer some entirely novel estimates on N2O emissions that are about 3 to 5 times the rate used by the IPCC. Such a dramatic proposed change in N2O emissions deserves a thorough review before being considered demonstrated and valid.

But most important of all is the fact that since the CoProducts produced by the Ethanol production substitute at about 1.27 to 1 ratio for corn, soybeans and soybean meal (Argonne National Laboratory) it would seem there is NO FEED CROP LOSS AT ALL and therefore what is the basis for indirect land use change??

The answer is: There is no basis for indirect land use change based upon displacement of feed grains. Given the substitution ratio of the ethanol coproducts is equal to or greater than one ... there is no reduction in feed grains and no land use driven indirect land use changes.

Ethanol by adding to the supply of automobile fuel is driving down the price of oil/gas about 15%, according to Francisco Blanch, Chief Commodities Strategist, Merrill-Lynch (quoted in Wall Street Journal May, 2008). We are making considerably more ethanol now than we were in 2007-2008 time frame. So 15 percent is a conservative figure.

A 15 percent reduction of the price of gas in 2010 was worth about $72 billion (yes, with a "B"). THat comes to about 12 times the $6 billion cost of the Blenders Credit ($.45 per gallon of ethanol blended). Is this a 'bad' deal. I don't think so. Lose $6 Billion in tax revenues and we save $72 Billion in gasoline costs.

Oh, let's not forget the oil NOT imported. 13.2 billion gallons of ethanol translates into 388 million barrels of oil when you consider the yield of gasoline from crude oil is about .81 gal of gas from 1.00 gal of crude (Argonne National Laboratory). IF you use $78 as the average crude oil price per barrel for 2010 that comes to over $30 Billion that wasn't sent out of the country to foreign sources. That was also $30 billion that was NOT SUBTRACTED from our economic output to arrive at a LOWER GDP. And @ the average price paid for ethanol in 2010 that comes to approximately $33 Billion added to our GDP for domestically produced fuel. The total impact on our GDP was to increase it about $63 Billion.

Why keep the Blenders Credit, because the ethanol fuel industry is still only about 15 years old (since we got serious about making ethanol in industrial quantities). Their are significant market, pricing and cost unknowns to this business. In the last couple of years when gasoline went through it's perennial dip in prices a number of ethanol producers had a tough time making a profit. Some went into bankruptcy and receivership. Keep in mind the vast majority of the investment in plant and equipment in this industry took place in the last 10-12 years. The Ethanol producers are still writing off very large capital investments. This makes it tough to handle dips in revenue (like when oil drops in price each year).

Investors want to make money. Speculators like to gamble. Businessmen abhor risk. We need private sector investment to keep the Ethanol industry investing in new more efficient technologies (e.g. Combined Heat and Power, Biomass Integrated Combined Cycle PRocess heat). Private investors are NOT going to invest hundreds of millions of dollars to go into bankruptcy or to make a few cents on their invested dollar. Investors want returns commensurate with the risks asssumed.

We need the Blender Credit to provide a cushion to encourage private investors to commit to investing in a risky new industry (where estimating costs and revenues is still fraught with risk of error). Having the Blender's Credit is necessary to protect ethanol producers from the perrenial price dips in gasoline - which affect the price charged for ethanol - and insure continued investment in the fuel ethanol business.

We need a healthy starch based fuel ethanol industry to facilitate and accelerate the realization of commercilly viable cellulosic ethanol. With a healthy, profitable starch based ethanol industry in place once the technical problems of producing cellulosic ethanol are solved the ethanol producers already in business will be able to bring cellulosic ethanol to industrial volumes of production - which is necessary to make cellulosic ethanol commercially viable - much more quickly than building a cellulosic ethanol industry from 'scratch'. Having an ethanol industry in place to rapidly bring cellulosic ethanol to commercial scale production would accelerate the introduction of cellulosic ethanol by at least 10 to 14 years.

Interesting to note that former Minnesota Governor, and current GOP presidential candidate, Tim Pawlenty said in Iowa today that ethanol subsidies should be phased out.

Two thoughts come to mind:
1) Talking about cutting subsidies for ethanol in Iowa might play into Pawlenty's early drive to speak hard truths.

2) After reading the comments this morning, I wonder, however, if he means doing away with subsidies and replacing them with loan guarantees for building ethanol infrastructure as Sen. Klobuchar and Franken have supported.

I'm having a hard time understanding this concept of blending. The government has to pay the oil companies, otherwise they will shut out ethanol?

It seems to me that the government can mandate the blending of ethanol simply by requiring the oil companies to provide the blend, as has been done in Minnesota and other states.

I don't see the need to once again support oil companies who are making enough money as it is. If we added this 6 billion to the other 4 billion in tax brakes we are basically donating 10 billion a year to oil companies who then turn around and charge $4.00 at the gas pump (and higher in the future).

Can one be in favor of the farmers and ethanol workers while being against subsidizing the oil companies?

Continuing another subsidy to the oil companies seems hard to justify.

@Eduardm: Government mandates work well for E10, which can be used by most newer vehicles. However, we have already reached or passed the "blend wall," the point that we are making more ethanol than we can blend for most non-flex fuel vehicles.

There is no mandate for E85 and mid-blend ethanol fuels in Minnesota or anywhere else. Those with flex fuel vehicles who can use the fuel have the choice to use either E85 or gasoline.

Naturally, I prefer that they choose E85,

Michael: I also looked at a transcript of Pawlenty's speech in Iowa. I thought his repeated comments about "hard truths" was a not-to-subtle dig at the current President and his party. But what do I know? I'll leave the political pundantry to the experts. (g)

Re: Mr. Gutierrez's answer to the question: "How would you measure whether government should support development of ethanol - or any other alternative fuel, for that matter?"

"At this time, after many years, corn ethanol is still marginal from an energy balance, and environmental impact.

Actually, any industrial process yields 'marginal' results, meaning you can't make something from nothing. Every process of modifying an energy store from one form to another costs energy to pull off. Making gasoline from oil gives a yield of .81 gals of gas from every 1 gallon of crude oil used.

It is true, Sugar cane ethanol is more productive but now ethanol from Brazil is no cheaper than domestically produced ethanol which by the way produces high protein feed supplements for cattle and pigs. ..And dare I ask can you grow sugar cane in Kansas?

BTW, part of the reason for sugar cane's high GHG reduction numbers is the fact that they use bagasse as a fuel source for making ethanol. This can be done making corn ethanol yielding MUCH HIGHER Net Energy vs Fossil fuel inputs and higher GHG reduction numbers when using biomass for process heat.

See University of Minnesota research (Morey) 120% GHG reduction for Corn ethanol using corn stover for process heat and Combined Cycle Architecture.

Mr. Guiterrez also said ethanol '..is profitable for corn farmers and ethanol producers."

Check my comment above: the Excise tax credit 'costs' $.45 per gallon of ethanol blended, and ethanol lowers the price of gas at least 15% so we save in 2010 about $72 BILLION in cheaper gas. THe savings in gas were about 12 times the cost of foregone revenues in the Blenders Credit. The consumer profits wonderfully from the support of ethanol.

Our GDP is increased about $60 Billion each year thanks to less imported oil and making the replacement fuel domestically. Again, we as Americans gain in a stronger economy and reduced vulnerability to oil supply disruptions.

I would like to pose a question...

Since corn ethanol production also produces a high protein feed supplement for cattle and pigs (Distillers Grains and Solubles) and since this DDGS substitutes (i.e. replaces) feed grains such as corn, soybeans and soybean meal at a ratio of about 1 to 1.27 (meaning one pount of DDGS replaces 1.27 pounds of the mentioned feed grains)(I said that backwards before, above) how is it there can be any Indirect Land Use Changes for corn ethanol when the coproduct replaces more (by weight) of the competing feed products than it weighs?

Mr. Westgard states: "A University of Minnesota study led by Professor Sangwon Suh recently estimated that in the U.S. an average of 162 gallons of water are consumed to produce a gallon of ethanol from corn. Drier states with more irrigation use more water, with Kansas and Nebraska requiring 500 water gallons per ethanol gallon. Much of that water is drawn from the Ogallala Aquifer."

The reader should understand that only about 15% of the corn crop, either for ethanol or for cattle (which is by far the majority of it), requires irrigation. Most of the corn is rain fed. Also, note that almost all the water that is mentioned (162 gallons) is 'consumed' in the raising of the corn. And almost all of that water goes back into the atmosphere via transpiration.

I had a 2000 Ford Ranger for a while. It was a flex fuel vehicle and the local gas station had e85 so I began filling up with that.

The e85 was cheaper and at the time it was thought to be cleaner.

I immediately noticed that gas mileage dropped substantially. I went from ~16 to ~12mpg.

The price difference wasn't enough to make up for the loss in range. It turned out to be cheaper in actual cost per mile to drive with plain old gas than ethanol. I haven't used it since.

I understand that sometimes new technologies need subsidies to help them to compete with the other available competition, but I think ethanol's time has passed.

It's been heavily subsidized for decades and still isn't performing. It's time to cut the cord.

$3 worth of raw corn and you end up with $2.70 worth of ethanol and a little DDG animal feed. In the process you use lots of diesel, natural gas, and in some cases plenty of coal. This is a great business?

Melanie Shirley- answered the following question:

"Q: How would you measure whether government should support development of ethanol - or any other alternative fuel, for that matter?"

A: "I've studied the ethanol subsidies and I believe that government should not fund an industry that is never going to sustain itself. The tariffs keep us from importing affordable ethanol and the process used to create ethanol uses more energy than the ethanol ends up creating."

Let this be understood, there is not one actual scientific, empirically based study of ethanol production that has NOT concluded that ethanol from corn yields a Net Energy GAIN. That is, they all have shown that you get more energy in the ethanol fuel than in fossil fuel used to make it.

Michael Wang, Argonne National Laboratory - Dept. of Energy,
Hossein Shappouri, US Dept. of Agriculture
Dale & Kim, Michigan State University
Farrell et al, University of California, Berkeley (meta analysis of several studies)

...all have concluded ethanol from corn yields a Net Energy Gain. When you compare this to the alternative .... well is there is NO OTHER CURRENTLY AVAILABLE RENEWABLE FUEL SOURCE that offers a comparable Net Energy Gain. (sugar cane ethanol cannot be grown in the Central U.S.)

Note, while sugar cane ethanol provides higher Net Energy Gains it cannot be grown in Central United States. We can (and should) grow it in parts of Louisiana and south Texas and Florida.

We should import ethanol from Brazil and add it to all we can make domestically - if it would not take ethanol away from Brazilians. It makes no sense to the planet if we burn sugar cane ethanol and Brazil burns more oil because of it.

By the way, Brazilian sugar cane ethanol now costs about the same as domestically produced corn based ethanol.

Corn Ethanol using biomass for process fuel as they do with sugar cane ethanol (bagasse) would yield 121% GHG emissions reduction vs gasoline when using corn stover for process fuel. (see University of MInnesota Research, Morey)

The latest data on the Ethanol industry from the USDA shows a Net Energy Balance (Gain) of 1.9 to 1 up to 2.3 to 1.

@Bill_USA. How do we know that the 15% saving is passed on to motorists and is not padding the profits of the oil companies?

From an article I read last week, it appears that the profits certainly do not go to the gas station operators.

Melanie Shirley go to the studies from Cornell and UC Berkeley which show net energy LOSS from the production of corn ethanol. Even the ones that are positive for ethanol show a marginal gain.

Minnesota Public Radio News’ Public Insight Network has thousands of Minnesotans who are knowledgeable in different areas. We reached out to those with a connection to energy and biofuels and posed some questions on government support of ethanol.
----------------------
Among those who responded was:
Rich Huelskamp- A consultant on energy efficiency and renewable technologies. The Red Wing resident has served on boards such as the Minnesota Renewable Energy Society and Minnesota’s Energy Education Association.

Q: How would you measure whether government should support development of ethanol - or any other alternative fuel, for that matter?
A: The larger picture is the measuring stick. Right now, renewable energy sources of solar, wind and biomass is so small compared to the use of non-renewables that it is so unfair due to the greater subsidies to support crude, coal, and nuclear.

Q: How should we balance the need for alternative energy... with the need to have alternative energy industries that are self-sustaining?
A: When the non renewable energy industries lose their subsidizies, the renewable energy industries will be in balance. If the non renewable energy industry collapses like the banking and housing industries, folks will figure out that they (non-renewables) are unsustainable. Then a neighbor will step up and start producing and selling renewable based energy fuels for transportation and heating at a lower price to their neighbors and in addition provide local jobs.

Q: What more should we know about ethanol development and government support of that alternative fuel?
A: Citizens need to seriously support renewables now. A large percent of the public does not understand the world of energy and how dire this situation is. They need to grasp how difficult it will be for their children to economically survive energy, water and food production in the future. Digging deeper in the gulf or further into the Arctic or processing tar sand/shale holding oil/gas is unsustainable. It's costs are subsidized/averaged with the easy crude of the Middle east. The pubic is not understanding that drilling deeper and in colder environments is a representation of the back side of the production "peak oil" curve.

Re Ethanol's efficiency in an Internal Combustion Engine:

E85 in a low compression engine as we all have get's about 20% less fuel economy. Ethnanol has a much higher octane than gasoline (115 vs 92-93 for high test gas). But if you do not take advantage of that higher octane you lose efficiency.

Almost all ethanol that we use is in the form of a 10% blend. The mileage loss is LESS THAN what the Heating Value of ethanol would predict because of the gains from added octane. A very thorough study by the Coordinating Research Council showed 10% ethanol reduced fuel efficiency by approx. 2.2%: http://www.crcao.com/reports/recentstudies2006/E-67%20Final%20Report.pdf

NOTe this is LESS THAN what the Heat Value of Ethanol (relative to gasoline) would have predicted. (HV would predict a 3.5% loss in fuel efficiency. The CRC study confirmed fuel economy decrement was 63% of what the Heat Value would predict. This may not sound like much but applied to 13 billion gallons of ethanol it mounts up.

BUT, what can be accomplished if you take full advantage of ethanol's high octane property...

Three MIT scientists designed an engine that gets 30% better gas mileage while using only 5% ethanol (and 95% gasoline). The engine uses turbo-charging and direct injection to take full advantage of ethanol's high octane property. It's called Ethanol enabled direct injection engine and Ford motor company formed a company to develop it with these three scientiest. see
http://www.ethanolboost.com/ Ethanol Boosting Systems.

30% better gas mileage means a 23% reduction in fuel consumption. If every car on the road was equipped with this engine we would achieve a 23% reduction in total fuel consumption using a volume of ethanol equal to 5% of the fuel supply. IN 2010 ethanol supplied 9.5% of our fuel supply. The marginal cost of this engine is $1,000 to $1,500. That is, you get fuel consumption improvement comparable to a hybrid car at about one fourth the cost.

additionally re the fuel efficiency of ethanol and how it depends upon if you take advantage of ethanol's high octane properties.

Honda sells two Flex Fuel Vehicles in Brazil (only) that get comparable mpg on ethanol as when using gasoline.
see Honda FFVs http://e85.whipnet.net/flex.cars/honda.ffv.html

Eduardm;

This is not a matter of passing a cost savings per se on to customers Ed. This is the result of increased supply of a commodity as it acts on the price of that commodity. It is called the Price Elasticity of Demand(in this case of Gasoline/Oil).

The Price Elasticity (of Demand or Supply) is a measure of how much the Demand or Supply is affected by or affects the price of a commodity. In this case Blanch is talking about an increase in supply driving down the price of oil/gasoline.

Check out the link below http://renewablefuelsassociation.cmail1.com/ViewEmail/y/F96A4BB9FD9C9EB8

.....and click on "a new analysis by Merrill Lynch Commodity Strategist Francisco Blanch," this will take you to the Merrill Lynch report.

The ML report says: "“retail gasoline prices would be $21/bbl higher, on average, without the incremental biofuel supply.”"

Actually, if you compare a $21 increase to $87.62 (Qtr IV, 2007) that comes to $108.62. $21 would be a 19% reduction from $108.62. But I used the lower figure as I think Blanch used 15% in the interview published in WSJ.

It's gratifying to see this spirited,civil, and intelligent discussion.

Rolf W.

Here are some real studies of Net Energy Balance and GHG emissions reductions for corn Ethanol....

Net Energy Balance (1.5 - 1.76 to 1), GHG Reduction 48% to 55%
http://digitalcommons.unl.edu/cgi/viewcontent.cgi?article=1000&context=ncesrpub University of Nebraska study, Journal of Industrial Ecology (Yale)

Net Energy Balance (1.76 to 1) (they use term 'Net Energy' (= 1/NEB)
http://ethanol.org/pdf/contentmgmt/MSU_Ethanol_Energy_Balance.pdf Kim & Dale, Michigan State University.

net Enrgy Balance (1.9 to 1) to (2.3 to 1)
http://www.usda.gov/oce/reports/energy/2008Ethanol_June_final.pdf USDA 2008 Energy Balance for Corn Ethanol Industry.

Minnnesota Public Radio News continues to hear from people who work in energy industries (including ethanol) and from those who have used ethanol as a product. They come through MPR’s Public Insight Network and have responded to a few questions we posed on government support of ethanol. We’ll share some of the responses in our debate thread.
-------------------
Among those who responded was:
Peter Melby - A Benson resident works as technician at a locally-owned cooperative ethanol facility.

Q: How would you measure whether government should support development of ethanol - or any other alternative fuel, for that matter?
A: The major portion of the current ethanol subsidies go to the blender, not the producer. We as a producer, only get the subsidy for the E85 that we sell directly to refueling stations. This is a very small part of our business as most of our product goes out as E98, which is just denatured ethanol.

Q: How should we balance the need for alternative energy... with the need to have alternative energy industries that are self-sustaining?
A: I'm certain that corn-starch based ethanol production will be self sustaining in the near future. At our plant, we are actively pursuing and investing in any technology that will make us more energy efficient. I'm also convinced that within ten years or so, cellulosic ethanol production will have advanced from the pilot plant stage and into full production.

Q: What more should we know about ethanol development and government support of that alternative fuel?
A: We, as an ethanol producer, are required to purchase straight-run gasoline to blend with our 99.5 percent pure ethanol (to denature it, or make it undrinkable), just so we can legally ship it to the blender of record who then adds it to their gasoline stocks to produce the E10 blend that is sold.

Why can't we bypass the step that requires us to 'denature' our product? This will save us the expense and hassle of purchasing the gasoline and blending it into our product, which is required solely to make it legal to transport.

Corn-based ethanol has a reputation, especially in the press, as using the whole kernel of corn to product the liquid fuel. This is far from the truth as only a portion of the corn starch is converted to the fermentable sugars that the yeast converts to ethanol. The remainder of the corn is processed into byproducts like DDGS (dried distillers grains w/soluble) which is a high protein animal feed stock (almost 3 times the protein value of shelled corn).

The press needs to provide the full picture of ethanol production so that the public has the correct information for which to base an opinion.

Here’s another comment from MPR’s Public Insight Network.
---------------------
Robert MacMurdo - He’s a Minneapolis resident who said he once used ethanol but stopped because it lowers his mileage.

Q: How would you measure whether government should support development of ethanol - or any other alternative fuel, for that matter?
A: Government is the last place to look to subsidize the development of an alternate fuel, as soon as the government becomes involved it becomes political. Fuel as an energy for transportation will best be solved by the industries most closely related to transportation. Oil, gas, rail and automotive rely on a dependable fuel supply and their R&D investments should have some measure of tax credit for their research.

Q: How should we balance the need for alternative energy... with the need to have alternative energy industries that are self-sustaining?
A: Any alternative energy industry would prove its value by becoming a stable and sustainable industry, it would develop a product that fits a market and would supply that market and its customers with reliable and dependable energy.

Q: What more should we know about ethanol development and government support of that alternative fuel?
A: Government's involvement in ethanol is a prime example of why government should not meddle in the markets. In physics there is the well known Heisenberg uncertainty principle and although it relates to the measurement of certain physical properties in quantum mechanics it stipulates that trying to measure on property affects the measurement of a second property. My corollary for government is similar, the more government tries to influence the market the more it contributes to the inequity in the market.

One point about mileage: most cars today are designed to use low-compression gasoline engines. Gasoline is a low-octane fuel; ethanol, which is 113 octane, is added to increase octane, and in some cases, increases horsepower.

The Society of Automotive Engineers found that high-compression engines, which capture the better qualities of high-octane fuels such as mid- and high-level blends of ethanol, do not see the mileage loss associated with burning E85 in a gasoline engine.

You can read about that study here: http://papers.sae.org/2010-01-0619

And, it should be noted that Delphi, which makes fuel pumps for GM and other automakers, has been producing fuel pumps capable of running E20 for years: http://am.delphi.com/news/pressReleases/pr_2011_02_04_001/

What many people don't know is that ethanol has been around since the Model T, and was routinely used to enhance low-octane conventional gasoline, and even replaced oil as a domestic source for motor fuel during our World Wars. It shouldn't be a surprise to anybody to read that oil companies knowingly replaced ethanol with lead - one of the deadliest known toxins to man - as an octane enhancer. You can read the very well-reported (though long) story about that here: http://www.thenation.com/article/secret-history-lead?page=full

Tuesday - Rebuttal

Rolf Westgard - energy analyst and educator

The reason a number of small ethanol producers and two of the largest (Verasun Energy and Pacific Ethanol) are bankrupt is simple. Production of ethanol from corn doesn’t make economic sense. The business only survives with those large taxpayer subsidies.

With corn currently at $7.60/bushel, it takes about $3.00 worth of raw corn to make a gallon of ethanol. Yesterday’s wholesale price (according to the Chicago Board of Trade) for a finished gallon of ethanol was $2.70, making it clear why we need all those subsidies.

Our folly here is in attempting to replicate nature by trying to do what nature does best. Oil comes from the gradual cooking of biomass(ocean algae) into hydrocarbon fuel.

A University of Utah study showed that nature needed one hundred tons of algae to make one gallon of oil. But nature had millions of years worth of prolific algae to produce those trillions of barrels of oil beneath the ocean bottom. So trying to use just this year’s corn crop to make an oil substitute doesn’t work very well.

Our one year world hydrocarbon usage equals about 400 years of carbon from world biomass growth.

The Laws of Chemistry and Nature are difficult to repeat.

Westgard’s Monday Opening Statement

Tuesday - Rebuttal

Chris Thorne - Growth Energy

There is probably not a more inaccurate myth than the ‘food v. fuel’ debate over the use of Yellow No. 2 corn for producing ethanol. Grain is still the most abundant and affordable feedstock for ethanol. Between innovations on the farm and technological developments in the ethanol lab, we are growing more corn per acre – and getting more ethanol and animal feed from each bushel.

America’s farmers are the most productive in the world; in 1974 farmers yielded an average 74 bushels an acre of corn, but last year averaged 159 bushels per acre. Seed companies project we will more than double our yield again.

And distilling ethanol from corn only removes the starch. What’s left behind are all the proteins, oils and fiber, which is sold as a highly-nutritious animal feed that can displace a greater volume of field corn and lower feed costs. In all, more than a third of all corn that goes into ethanol production returns to the food chain in the form of distillers grains.

When grocery prices go up, it is not because of ethanol. Oil play a far greater role in driving up grocery costs, due to the energy-intensive jobs of processing, packaging and marketing groceries. In fact, those costs add up to 85 cents of every dollar spent in the grocery store; the farmer gets 15 cents, and of that, corn costs amount to less than 3 cents.

Simply put? Food v. fuel is a myth that should be put to rest.

Thorne's Monday Opening Statement

Agree with Rolf when he says "It's gratifying to see this spirited,civil, and intelligent discussion." It sure is.

However, I disagree with his assertion that producing ethanol from corn makes no economic sense. Many of the ethanol plants in Minnesota are farmer-owned coops. A few years ago, there was a big boom in ethanol production, and a lot of out-of-state investers jumped in to make a quick buck. Verasun rode this wave and took big risks (ala Wall Street) on the price of corn. When the bubble burst, VeraSun went bust almost as fast it it rose.

Meanwhile, the locally owned and operated ethanol facilities continued to produce fuel, while those looking for a quick buck left in droves. Good riddance, I say.

I think that we can all agree that petroleum is a finite natural resource that is being consumed much faster than it is being replenished.

"I think that we can all agree that petroleum is a finite natural resource that is being consumed much faster than it is being replenished. "

and the sun is using up its fuel far faster than it can be replenished and will eventually collapse ....


sheesh the WHEN (it is going to run out) is far more important than the chicken little ideology ....

It's not just packaged products that are rising. It's basic cereal grains like corn and soybeans. When we need all that corn for ethanol, wheat and soybean acreage are displaced for corn.

Corn, wheat and soybeans have essentially doubled in price in the past few years. When you take 40 percent of the corn crop for gas tanks, that is what happens.

And guess who feeds on the feed corn - chicken,pigs, cattle, etc. And guess who feeds on them. Thats why the producers of those animals are up in arms about ethanol subsidies,

"Many of the ethanol plants in Minnesota are farmer-owned coops"

Well, actually, the big ones are still commercial ... look at GEVO

and Legally, most of these Minnesota plants are incorporated as Limited Liability Companies (LLCs), and not formally as cooperatives under MN state legal codes

thirdly the cost of corn per bushel has increased 1.22 OVER the price it would have without ethanol producers -- based on the 2007 report from one of the left leaning organizations (Minnesota 2020).

This cost translates into a 46 percent increase in cost (of corn products) to the consumer ...

For what? ... and that does not count the increase in costs of other food products as acreage that used to grow other crops get shifted to corn production [734 thousand acres per MN 2020 own 2007 report] ...

This is a good thing we should spend PUBLIC money on? I don't think so!

Here's an interesting take from the CEO of Genencor, a biotech company. When asked if the $1.01 per gallon tax credit for cellulosic ethanol is a must have, CEO Tjerk de Ruiter said:

"From our point of view, as long as (the federal government creates) a mandate, the $1.01 a gallon [tax credit] will help, but we could live without it. Ultimately we did not include that in our plan."

Take the $1 away and see what happens to the cellulosic ethanol myth.

Ethanol makes terrific economic sense. First, we can lower the balance of payments with nations that are either unstable or opposed to U.S. values and interests (the Truman National Security Project has an insightful report on this: http://www.trumanproject.org/files/papers/Oil_Addiction_-_Fueling_Our_Enemies_FINAL.pdf).

Second, ethanol creates U.S. jobs, particularly in rural counties where outmigration of young, educated families is a major problem. Ethanol plants produce good-paying jobs that keep our young people at home instead of finding them heading to Denver, Chicago and the Twin Cities looking for work.

Third, by creating a sustainable, steady market for grain, ethanol is absorbing the surplus corn. That in turn is reducing the counter cyclical payments that USDA would otherwise be paying to farmers when market prices go below the cost of production.

Fourth, those two examples of bankruptcies aren't genuinely reflective of the rest of the industry. VeraSun went bankrupt because they went long on corn when corn was high, so when corn prices collapsed after the commodity bubble of 2008, they were still stuck with high corn prices.

If you want to read more about the 2008 commodity bubble and what caused it (think Goldman Sachs and rampant Wall Street speculation...), I recommend this well-reported Harper's story: http://www.growthenergy.org/images/reports/HarpersMagazine-2010-07-0083022-TheFoodBubble.pdf

Here was the brief, brief mention of ethanol in a TV report on a speech by Republican presidential candidate Newt Gingrich.

In Sioux City, Iowa Gingrich is quoted as saying: "If my choice is Iran or Iowa, I prefer money in Iowa. If my choice is Saudi Arabia or South Dakota, I prefer money in South Dakota."

This was his response on a question about his support for Midwest ethanol production.

I wonder if we got just one level down whether Gingrich and Tim Pawlenty would be more in agreement than these quotes might lead you to believe.

Hi Rolf. Cellulosic ethanol is not a myth. POET's Project Liberty plant is very real:
http://www.poet.com/innovation/cellulosic/projectliberty/index.asp

Market entry into an established industry that provides the lifesblood of most global enterprises is like trying to changeout a bus' fuel supply while maintaining a speed of 55mph. But it MUST be done because the status quo is clearly not sustainable - it's destroying political stability in many parts of the world; it's environmentally leading to dirtier sources of fuel and higher atmospheric GHG content (39% higher than pre-industrial levels), and economically it is resulting in massive transfer of wealth to nations rich in reserves. We have to find sustainable solutions to refuel the bus.

Are subsidies necessary? There needs to be mechanisms that take into account the negative impacts of the status quo and provides the sticks and carrots necessary to promote needed change. Subsidies are crude and based on old realities. Perhaps a carbon tax, feed-in tariff system, or cap-and-trade make more sense. Whatever the "fix" it had better be stable because potential investors require predictable returns.

The across the board cut-all-subsidies approach promoted by some comments is monumentally unfair to emerging projects that are the incubators for change. We need more RD&D for the long term sustainability of energy systems for our children. Otherwise they will be left with no options when the bus runs out of fossil fuel.

What do we get for $6 billion a year? Still dependent on foreign oil. It is a wealth transfer scam. I could maybe live with it if we were paying for it as it happens but since we are asking our kids and grandchildren to pay for it we continue to practice taxation without representation.

Energy independence begins at home, Matt. What steps have you taken to break your personal addiction to oil, foreign or domestic?

Some additional info:

The federal government added its 2000th subsidy program for individuals, businesses, state and local governments in 2010.
Subsidy programs rose more than 20 percent during the 90's and 40 percent thus far during the 2000's.

The impact of ethanol production on U.S. and Regional Gasoline Markets for the period 2000 to 2010 was evaluated by economists the Center for Agricultural and Rural Development at Iowa State University. The results of the study, released last week, show that blending ethanol with gasoline had a dramatic effect on lowering fuel prices, with the Midwest region receiving the most benefit.

Thanks,
mac@epg.us.com
Cedar Rapids, IA

Minnnesota Public Radio News sent out a series of questions on government support of ethanol. We targeted sources in our Public Insight Network who had some background in ethanol, energy and related fields.

Among those who responded was:
Mark Quade - A resident of Shoreview who retired as a chemical engineer after 36 years with 3M

Q: How would you measure whether government should support development of ethanol - or any other alternative fuel, for that matter?
A: The government should perhaps only support ethanol production if the resultant BTU's of transportation fuel energy derived from an acre of ethanol cropland in a given time period (perhaps one year), is greater than the transportation fuel energy which would be produced by an acre of the current, most efficient solar panels or solar collectors employed at the same geographical location for the same time period.

Q: How should we balance the need for alternative energy... with the need to have alternative energy industries that are self-sustaining?
A: As oil becomes increasing scarce, oil coal and natural gas industries will be replaced with alternative energy industries. If we desire to have low cost transportation energy as fossil fuel prices increase, the government needs to spend more tax money promoting science education and basic research energy oriented laboratory and pilot plant projects.

MIT is working on making an artificial leaf that can use solar energy to convert water into oxygen and hydrogen. In the lab, in small scale, it is efficient in converting sunlight into energy as compared to a plant using photosynthesis to convert sunlight into cellulose or downstream oil, coal or natural gas.

This is the kind of research we need to subsidize. If we are going to subsidize plant photosynthesis technology, lets subsidize algae, which convert sunlight to energy more efficiently than corn or switchgrass.

Q: What more should we know about ethanol development and government support of that alternative fuel?
A: Ethanol has high anti knock characteristics as compared to gasoline when used in internal combustion engines. As such, it is more efficient (produces high mpg), when it is used in internal combustion engines having a very high compression ratio. Current multi-fuel use engines manufactured by the US auto industry are made as low compression engines, thus enabling them to use both gasoline or high ethanol containing blends of gasoline. If we are going to use ethanol, we should be using it in higher compression ratio engines, thus using it more efficiently to provide higher mpg ratings as compared to what is available in current produced automobiles.

If we are going to support agricultural-based alternative fuels, it may be more efficient to grow soybeans and convert this to diesel fuel as diesel engines due to their high compression ratios, which are more efficient as compared to either gasoline or ethanol using engines. An analysis of which produces the highest mpg per acre of crop production might be calculated (i.e.-. does an acre of soybean derived diesel fuel used in a diesel engine provide more miles of semi-truck movement as compared to an acre of corn derived ethanol fuel used in an optimum compression ratio built ethanol using engine). Artificial fertilizer costs per acre would have to be part of the analysis.

http://www.sustainablebusiness.com/index.cfm/go/news.display/id/22129 An artificial leaf, 10 times more efficient as compared to plant photosynthesis in conversion of sunlight to energy (uses sunlight and new catalyst system to convert water to oxygen and hydrogen) recently developed by a chemist at MIT, might be the long term answer to our energy needs ? The hydrogen produced in this way could be used to power our transportation needs using current fuel cell technology. I believe tax monies currently used to subsidize biomass farming and fuel industries should instead be directed towards more basic research in this area and subsequent scale up engineering activities. We need to subsidize manufacture of large acreage acres of such artificial leaves along with the needed hydrogen storage methods and distribution facilities to best lower our dependence on fossil fuels and decrease global warming.

Roff Westgard on the con side of supporting ethanol makes all the same miscalculations and slight of hand diversions that most ethanol critics make. Instead of talking about ethanol, he talks about corn production. He talks about ILUC which as a theory is interesting, but recent comparisons of empirical data against computer projections has demonstrated the inaccuracy of the theory. See http://www.theindependent.com/articles/2011/05/22/news/ag/13384646.txt or here http://www.sciencedirect.com/science/article/pii/S0961953411002418 He talks about environmental damage from chemical nitrogen fertilizers (as if tar sand oil extraction, deep water drilling, golf courses or urban sewage systems do no environmental damage). Advances in agriculture are being made every day and now that they are making some money, maybe farmers can afford to implement them. Biobloger is right, he should account for the co-products of ethanol.

Lets take a look at Mr Westgard’s arguments. He has raised a very important issue as to farm irrigation. The emerging term being used is water-energy nexus. Irrigated corn (or wheat) will be grown without a reliable crop alternative. Biofuels may provide a viable and profitable alternative that does not require irrigation. Water rights and irrigation has been a long standing issue in the west, with or without ethanol production. The link he provides does not bring up the study, so we don’t know how the data was gathered or what assumptions are made. We can be almost 100% certain that it did not back out the value of the ethanol co-products. That would be 17 pounds per bushel times a feed improvement factor (reduced rations per pound of weight gain) of at least 1.3 = 43%. So 163 gallons minus 3 gallons used in production times 57% = 93 plus the 3 gallons = 96 gallons on average. (The study summary does note that Minnesota only uses about 19 gallons of water (or 12 if co-products are accounted for). If we were to look closely at California where the greatest irrigation is done but the least ethanol is made and if some of the western plains states were to switch back to wheat production or other crops, this figure would be drastically reduced. (By the way, based on his figures, it takes about 9 gallons of water to produce your quarter pound hamburger. This can be lowered by 20% if the cattle are feed ethanol co-products.)

So Mr. Westgard wants to know how much water is used in oil production from tar sands. Based on CERA 18 data from http://www2.cera.com/event/details/1,2244,11366,00.html
An average of 48 gallons of water is used for a gallon of refined gasoline and as high as 80 gallons. This may seem a bit better than ethanol, but in the parlance of the water-energy nexus discussions, water is both used and consumed. 'Used water' might be taken from a river and then returned to the river but possibly with added elements. Disposal of thin stillage would be an example of this. Consumed means gone or rendered into another unusable form. Evaporation is generally considered as ‘consumed’, but as someone on this discussion pointed out, it does return as rain. If the water is taken from an aquifer, the rain may not replenish that aquifer. This issue is part of the discussion of the water-energy nexus.

Water is most definitely consumed by tar sand oil production, it is a decision made by the oil companies. Ethanol producers, on the other hand buy corn as a commodity and have no control over what the farmer decides. There is a relation between the ethanol producer and the farmer and there are areas of potential improvement in both farming and ethanol production. This cannot be said of the oil industry. It is in decline needing to exploit ever more difficult and costly resources. The EROI for ethanol is generally accepted to be 1:2. The EROI for tar sand oil is 1: 1.5. In all respects biofuels are getting better and oil production is getting worse.

But what about the fact that gasoline has 50% more BTU/gallon? Well, what about the fact that ethanol is capable of getting at least a 50% better thermal efficiency than gasoline? E100 and conventional gasoline can achieve the same milage. Blend a maximum of 30% gasoline as an additive to ethanol (E70) and the same high thermal efficiencies are possible. This results in a 15% increase in milage with the E70 blend. Based on recent price spreads, this would result in about a 35% reduction in fuel costs when used in a flex-fuel vehicle optimized for ethanol. Some in between efficiency increases are possible when E30 – E40 blends are used in tweaked legacy vehicles.

That brings us to Chris Thorne’s point, WE NEED FULL RANGE BLENDER PUMPS for ethanol to have fair access to the market. Oil got its infrastructure support during and after WWII. It is now time to get an ethanol infrastructure in place with a little government support. We also need incentives for automakers to produce flex-fuel vehicles that are actually true flex-fuel and that are optimized to run on both gasoline or ethanol. Automakers know how to do this today, they just need to know the fuel will be available. Ethanol will be competitive and we will all be better for it. We just need to build the distribution infrastructure.

ELIMINATE THE IMPORT TARIFF? Right now the US exports ethanol to Brazil. Brazil will have a short fall in ethanol for about two more years. Now may be a good time to eliminate this tariff with conditions. The RFS mandates use of ‘advanced biofuels’ and cellulosic ethanol without concern about its origins. Sugar cane ethanol presently qualifies as an advanced biofuel. To establish confidence in long term markets for US developers of advanced and cellulosic ethanol, The RFS should be changed to include only FULLY domestically produced products. In addition, it should be linked with the build out of the retail infrastructure. This could include a provision that under any circumstances; that if the Brazilians want to build, brand and sell their product at stations with full blending pumps, they can.

What to do about VEETC? An immediate reduction in rate and a short term for total elimination is appropriate linked to infrastructure development. The VEETC subsidies should shift to installation of full range blender pumps. Tax credits will probably not work as small retailers find it difficult to obtain loans. Out right grants is one approach. Another could be a direct government low interest loan fashioned after the government student loans. There should be a grace period for payments of say four years like student loans. Placement of these loans could be administrated through the equipment suppliers like student loan placement is administrated through the college institution .

Mark Quade wrote: "If we are going to support agricultural-based alternative fuels, it may be more efficient to grow soybeans and convert this to diesel fuel as diesel engines due to their high compression ratios, which are more efficient as compared to either gasoline or ethanol using engines."

By state manadate, we are already blending soy-based fuel into all #2 diesel sold in the state. Right now the blend is 5% (B5), in May 2012 that moves up to 10% (B10) eventually reaching 20% (B20) in 2015. MN was the first state in USA to do this, several others have since followed our lead.

However, switching the majority of passenger and light-duty vehicles from gasoline to diesel is another matter. There are a few diesels vehicles out there (like the VW Jetta TDI)if you look for them.

Enough about biodiesel...back to talking about ethanol.

@robert_moffit "Energy independence begins at home"

Come on Bob, every dollar spent towards Ethanol is one less dollar spent towards solar and upgrades on our electrical transmission system. If we are going to be investing in renewable resources for fuel then solar should get every single penny. If you, in my opinion wrongfully, think ethanol is good for the environment just imagine the benefits of solar. Aren't electrical cars the way of the future? Why would you want to burn any fuel? Burning doesn't sound very good for the lungs to me.

justacoolcat: Vehicle emissions is the single largest source of air pollution in Minnesota, says the MPCA. We have an alternative to gasoline that burns cleaner and can be used in nearly a quarter million cars and trucks on MN roads right now. How can we NOT support this?

Make no mistake, I like solar, and we are part of the Drive Electric Minnesota group building the infrastructure for electric vehicles (solar is in the mix). But the immediate issue is transportation fuel, and the vehicles we use. E85 is a step toward a cleaner future.

There are lots of people in MN working hard on solar. They have our support and when possible, our help. But there is so much more to this issue than rebuilding the grid and sticking some PV pannels on your roof.

"...every dollar spent towards Ethanol is one less dollar spent towards solar and upgrades on our electrical transmission system."

That makes no sense at all. You might as well say the same about every dollar spent of corn dogs at the State Fair.

Mr. Westgard states: "The reason a number of small ethanol producers and two of the largest (Verasun Energy and Pacific Ethanol) are bankrupt is simple. Production of ethanol from corn doesn’t make economic sense. The business only survives with those large taxpayer subsidies."

Actually, Pacific Ethanol is undergoing reorganization and is planning to reopen formerly closed ethanol operations.
(http://www.brighterenergy.org/11862/news/bioenergy/pacific-ethanol-restructures-with-hope-of-reopening-idled-plants/ pacific ethanol restructuring)

At the risk of boring many readers I will point out that starting a new industry (the ethanol fuel industry is really only about 14-16 years old) is a very expensive undertaking. MOst of the plant and equipment in the ethanol fuel industry is less than 8-10 yrs old. As a result, ethanol producers have very large write-offs on huge investments in plant and equipment. This makes such operations vulnerable to price declines for their product.


From July 2008 to Dec 2008 oil declined in price 70%. This made it difficult for many ethanol producers to make ends meet given they had very large fixed cost write-offs of massive investments in new plant and equipment. I don't know how many went into bankruptcy but there are over 100 ethanol producers in the U.S. so as a percentage I would say it probably wasn't very much different than the bankruptcy rate for any other industry over the last few years due to the worst economic decline since the Great Depression.

But it is not surprising that a new industry should need public support due to high start up costs, large investments in new plant and equipment. OF course, the oil industry as most people realize gets public support and this is an industry that is over 100 years old.

There is much more that can be done to make ethanol more efficient and increase it's GHG emissions reduction numbers - e.g. Combined Heat and Power and Biomass Integrated Combined Cycle - either of which dramatically improves Energy Balance and GHG reduction numbers for ethanol. But this requires additional investments.

Businessmen are not gamblers. They are risk averse. And any new industry has not only high investments but also more risk involved in estimating costs and profits. No investor is going to risk millions or hundreds of millions just to break even or make a few percent on his investment. THat is why we need to provide a cushion to protect the private investors from price fluctuations and encourage private sector investment in the ethanol industry.

We need a strong starch based ethanol industry to facilitate the introduction of cellulosic ethanol when the technical challenges of that feed-stock source have been solved. ONce the technical problems are beaten, cellulosic ethanol still won't be profitable until it's produced on an industrial scale. Having a healthy ethanol industry in place will accelerate the realization of cellulosic ethanol as a commericially viable product by 10 to 15 years as opposed to building a cellulosic ethanol capability from 'scratch'.

At the risk of being rather obvious I feel compelled to remind people about the price of gas and the expectations for the price of gas in the next few years.

The price of gas is already impacting our efforts to recover from the economic disaster of 2008. Given the expected continuation of political uncertainty in the mid-East along with the inexorable rapid economic growth in China and India and other economies in the developing world I do not know any economist or market analyst who does not expect oil and gas prices to keep rising - and at a rather good 'clip'.

Now what this means for our economy is low-growth high unemployment conditions. Or you might say interminable recession. If we do not do something to mitigate price increases in oil RIGHT AWAY - that is in LESS THAN 20 years we will not have much money left over to invest in solar power, wind power, electric cars or for that matter electric tooth brushes.

Ethanol currently supplies almost 10% of our fuel for cars and trucks. If we are smart and incentivize the manufacture of the MIT designed Ethanol enabled Direct Injection engine (see: http://www.ethanolboost.com/ ) which gets 30% BETTER miles per gallon than the standard ICE engine - while using 5% ethanol at a marginal cost of $1,000 to $1,500 by increasing ethanol availability with many more blenders pumps we MIGHT be able to mitigate oil price rises through reductions in fuel consumption in the near term (that is in less thn 20 years). If we do not do that - making it a realistic business proposition for auto manufacturers to make this engine we are not going to minimize the increasing price of oil except by the old standby - minimizing fuel consumption through dramatic declines in economic activity - or by having a depression.

We need ethanol to limit the rise in oil prices so we can still afford to invest in other green technologies such as wind and solar and electric cars.

Bill, Pacific Ethanol stock was once $30/share. Today you can buy bushel baskets of it for 38 cents.

We are BORROWING 40 cents of every "free federal dollar", and therefore should end ALL subsidies and "tax expenditures". Every new purchase, for every public fleet, should be natural gas powered. Every new license for a taxi, should require that the taxi be electric. Licensing of all vehicles should be based on axle weight, and be steeply progressive.

How many gallons of Saudi Arabia crude does it take to produce one gallon of ethanol?

How many metric tons of irreplaceable top soil is lost each year?

How many of gallons of toxic chemicals find their way into rivers, lakes, and eco-systems each year?

The real cost of ethanol has never been researched completely.

The direct ethanol subsidies is just the tip of the billions of dollars given to farmers as a payoff, or the spoiled brats will return to more dishonorable farming practices.

Ethanol production, whether in the US or Brazil, is completely unsustainable in current form.

And by the way...I help work a farm.

I'm a bit surprised that no one is identifying the full extent of subsidy going towards ethanol. There is the direct subsidy, which this discussion is (mostly, sorta) discussing. There is also the subsidy to grow corn.

When we hear that the corn grown in the US is an inedible variety, that's because we are subsidizing the production of inedible corn. (For the record, that subsidy IS replacing food with fuel. If we didn't subsidize that inedible stuff that goes to feed animals, and make high-fructose corn syrup, and to make ethanol, we'd use that land for food, or for nature. All of which we make because we don't know what to do with the excess production derived from subsidizing something we don't have use for - namely inedible corn and inedible soy beans.)

So, my question isn't how much are we subsidizing ethanol, but rather, what is the TOTAL direct subsidy to the ethanol production business that includes the raw materials (corn) as well as the production.

I am (relatively) OK with helping alternatives out over the hump of development, especially as we're still subsidizing fossil fuel production, but the corn-based style of ethanol hasn't proven its net benefit (either on the economics-defined analysis nor when including externalized costs, see Patrick's list immediately above). Other cellulosic ethanol options are more palatable.

And I must second all the comments about using less fuel of all sorts. Clearly the thing to encourage is more dense, transit-accessible development and insulation for our homes. Possibly simply by refusing too subsidize oil or any form of transportation (i.e. highways or buses) so that the true cost of our choices is visible.

Wednesday - Rebuttal

Chris Thorne - Growth Energy

During the last oil spike, in 2008, Vice Admiral Dennis McGinn testified before the U.S. Senate that our nation’s addiction to foreign oil was enriching countries and groups hostile to the United States. Former CIA Director Jim Woolsey has said that our addiction to foreign oil means an ultra-violent fundamentalist sect, the Wahhabis, get $7-8 billion of the $160 billion we send Saudi Arabia each year for oil – money that is used to teach small children to hate America.

Forty percent of all the oil we import into this nation comes from countries that are considered “unstable or dangerous” according to the U.S. State Department.

It is time we turned away from the oil fields of the Mideast, and turned instead to the farm field of the Midwest for our nation’s energy future.

Between the 1 billion tons of biomass that can be converted to cellulosic ethanol every year, and the continually rising yields in grain harvests, the United States has the capacity to produce enough renewable fuel domestically to end our nation’s reliance on foreign oil.

As it stands, our nation controls only 3 percent of the world’s oil reserves, yet we consume 25 percent. Princeton University researchers have calculated that U.S. taxpayers have paid $7.2 trillion over the last 30 years to protect oil shipping routes, ultimately leading to the creation of U.S. Central Command and the 5th Naval Group.

As then-Secretary of State James Baker said of the 1991 Persian Gulf War, it’s about “oil, oil, oil.”

We do have alternatives. But we need to reform the tax policy – and open the market so consumers can choose those alternatives at the pump. Ultimately, it will save consumers money, taxpayers money, and strengthen national security.

Thorne's previous statements
Monday's Opening Statement

Tuesday's Rebuttal

Wednesday - Rebuttal

Rolf Westgard - energy analyst and educator

An important motive for ethanol subsidies is a reduction in greenhouse gases and other pollutants from burning fossil fuels. But several university studies are negative for ethanol. Princeton (Searchinger, et al) concluded that “corn based ethanol, rather than producing a 20% savings, nearly doubles green house gas (GHG) emissions over 30 years compared to gasoline and raises ghg emissions for 167 years.”

Minnesota (Farigone, et al) agreed, reporting “many biofuels actually emit more green house gases than the fossil fuels they aim to replace.”

Adding oxygenates like MTBE and ethanol reduces carbon monoxide(CO) emission and volatile organic compounds(VOC) from the tailpipe. But there is in increase in nitrous oxide output and VOC emissions from combustion. Ethanol also makes gasoline more volatile which the refinery has to balance by reducing low cost butane, adding to costs.

And it isn’t just sweet corn that is human food. Feed corn goes to chickens, pigs, and cattle, and it’s people who eat them. Corn’s price has more than doubled within the past few years. This belies the notion that there is a surplus. As soybean and wheat land is diverted to corn, those prices rise, contributing to the present worldwide increase in cereal grain prices.


Westgard's previous statements
Monday’s Opening Statement

Tuesday’s Rebuttal

@robert_moffitt You asked what I have done to reduce my dependence on foreign oil...nothing. I do not live in fear of protectionist catch phrases. Oil from Saudi Arabia or oil from Texas makes no difference to me. But when the slogan ethanol supporters trot out as reasoning for the subsidies does not get met by the subsidies it is a prima facie rejection of the argument.

Matt said "You asked what I have done to reduce my dependence on foreign oil...nothing."

One of the reasons we are "over an oil barrel" today is that too many Americans --myself included--can say the same thing. Yes, I drive a fuel efficient vehicle, and my work vehicles run only on E85, but I can and should do better.

Pogo was right. We have seen the enemy, and he is us. But we are not helpless or stupid. We can make changes, and help shape this debate, one household at a time.

Being over an oil barrel is a foreign policy choice not a trade problem. Paying farmers today with money borrowed (without so much as a hint of a plan to pay it back) from our children does not solve the non-existent problem. They are willing sellers and we are willing buyers. The only problem is we often like to point guns at people without considering the consequences - again this is a foreign policy problem not an economic problem.

Our dependence on foreign oil, mostly from Canada Mexico and Venezuela, is a problem. But you could plant corn from Minnesota to California and you couldn't make enough ethanol to matter. And you would use lots of fossil fuels to produce it.

"That makes no sense at all. You might as well say the same about every dollar spent of corn dogs at the State Fair"

My apologies, I thought it was clear I meant in the context of government subsidies. I'm unaware of how much government money goes towards corn dogs at the State Fair.

And speaking of making no sense: "Some critics of ethanol are quick to label the fuel "a failure." I should point out that E85 sales in March set a new record for that month "

By this logic the very thing you're saying is bad, (foreign) oil, becomes a success.

I suppose I should clarify, government subsidies = government energy subsidies within the context of this conversation, for those that are willfully distracted; like my old friend Bob.

I should probably also disclose, this is practically an age old arguement between the two of us.