With little fanfare, the federal government will no longer subsidize ethanol in 2012. This subsidy has been a thorn in the sides of many, and now, it is no more. Read more
Cellulosic ethanol is a pipe dream. And yet, you and I are paying for that pipedream, and paying dearly. We’ve posted on this subject before, but here is a recap, as well as more information. Read more
All morning long, one of the lead stories in the morning news is that corn prices are going to rise due to smaller harvests, and from that, the price of virtually everything that uses corn, from cattle feed to Coke will see a price rise.
What you don’t see is many (or any) references to the effect that ethanol, or as I like to call it, boondoggelol, is a prime contributor to this small harvest. Apparently, government controlled mainstream media doesn’t think that is newsworthy. But is it?
I found an article that does put ethanol in the forefront of the problem. The key paragraph states:
“Corn is found in about a quarter of the products you buy at the grocery store and is widely used as animal feed. About 40% of the U.S. corn crop is used to create the fuel additive ethanol. And about 15% of it is exported to other countries.”
I didn’t see that on the Early Show this morning.
So not only does ethanol lower the energy content of gasoline, requiring you to use more, and ruin engines by absorbing water from the atmosphere, but it is responsible for raising the price of meat and other foods you need.
Nice system, huh? The government gets some marginal decrease in emissions, about 66 kilograms of CO2 per million BTUs for E10 vs. close to 71 for gasoline on the same scale, but it gets increased revenue from gas taxes on the increased fuel sales due to the lowered efficiency of gasohol. One has to wonder if the emissions gains mentioned above disappear due to the need to burn more fuel per mile. Dare I say that this will be yet another nail in the coffin of the U.S. economy, extending the Øbama recession?
I think it would be a safe bet that this corn harvest issue will be twisted into yet another “global warming” issue to deflect blame from their crackpot legislation and policies.
Don’t you miss a hard working press, critical of all administrations?
Enjoy your higher food prices.
Every Saturday in the Wall Street Journal there is a section called “The Weekend Interview”. Yesterday’s interviewee was C. Larry Pope, CEO of Smithfield Foods, Inc. The entire article is well worth the time it will take you to read it, particularly to get an understanding of how business works. But, let me give you a few excerpts to explain why it is increasingly more difficult for you “to bring home the bacon”. Read more
Yesterday, the EPA decided, over the objections of most automobile manufacturers, that it would “allow ” a mixture of 15% ethanol in all gasoline sold in the United States for all model year 2001 through 2006 cars. Last October it did the same for all model year 2007 and later. By now you know that the word “allow” in government speak means “mandate”. But, how we got here, as well as its consequences, is yet another example of what I will call, “bureaucratic blinders”. Read more
Yesterday, the Environmental Protection Agency issued its long awaited ruling on the amount of ethanol allowed in “gasoline”. Currently, the ethanol limit is 10%, but, as of yesterday, that limit has been raised to 15%.
How did we get here? Well, in March, 2009, ethanol producers due to an oversupply of ethanol asked the EPA to raise the limit to 15%.
An oversupply of ethanol has prompted a wave of bankruptcies and made the ethanol industry eager to expand its market. Ethanol producers are being squeezed as corn prices stay relatively high and as ethanol prices stay relatively low. Todd Alexander, a partner at Chadbourne & Parke LLP, estimates that some ethanol producers are losing up to 10 cents on every gallon of ethanol.
There was massive push back to the request from all automobile manufacturers, including GM, because ethanol dissolves some gaskets and rubbers within the fuel system, and can generally foul up your carburetor. Auto manufacturers, along with the manufacturers of virtually any other internal combustion engine, from boat engines to leaf blowers, were concerned that they would be left holding the bag for expensive repairs should you be lucky enough to own one of these machines that is still under warranty.
But, the EPA’s investigation of “big ethanol’s” request was complicated by none other than Congress.
Congress required fuel refiners to blend 36 billion gallons of biofuels, mostly ethanol, into auto fuel by 2022.
And, the EPA came to the conclusion that there was no way this requirement could be met unless “gasoline” contained 15% ethanol.
So, here is where we stand. E15 is now allowed for any automobiles with a model year of 2007 or later. Any vehicles older than that will still have to use E10 due to the potential damage to their fuel systems. And, how this will be implemented is anyone’s guess. Will a new pump suddenly materialize at every gas station pumping only E-15? And, if it did, why would anyone use E-15 given the reduced miles per gallon from E-15 compared to E-10?
Here’s one way to look at this last question.
A car that gets 25 miles per gallon on gasoline would get 24.1 mpg on E-10, and 23.7 on E-15.
I’m still having trouble reconciling the EPA’s rulings about ethanol (and the resulting lowering of mpg), with the Department of Transportation’s CAFE regulations requiring that by 2016 a manufacturer’s combined fleet average for all new cars and trucks must be 35 mpg, a significant increase in mpg from where we are today.
But, maybe that’s just me.