[AT] gasoline

Thu Dec 30 15:51:28 PST 2010

Right now, ethanol would fare quite well without the $0.45/gallon tax
incentive because of the gasoline price to corn price ratio.  The producers
would still make good money with today's prices.  However, that isn't always
the case.  If gas drops back to $2.00/gallon and corn stays up, they won't
make money.

Subsidies are there for 2 reasons - either to drive overproduction to keep
costs low (which is why we subsidize food and crude oil) or to help develop
new technologies.   In this case it is there to develop the technology.
Without the incentives no business would invest in the research it would
take to make ethanol profitable unless it had some likelihood of making
money.   30 years ago it did take more energy to produce ethanol than what
it created.  Because of the subsidized research, that is no longer true.

The oxygenated fuel mandate did not come from the ethanol lobby.  Remember
MTBE?   It was supposed to be the miracle chemical that would oxygenate the
gasoline. Since it was made from crude oil, it was what the oil industry
wanted to use.  Unfortunately it will permanently contaminate and poison our
groundwater so it was eventually banned.

-----Original Message-----
From: at-bounces at lists.antique-tractor.com
[mailto:at-bounces at lists.antique-tractor.com] On Behalf Of Phil Vorwerk
Sent: Thursday, December 30, 2010 5:13 PM
To: 'Antique tractor email discussion group'
Subject: Re: [AT] gasoline

I don't like to cite studies for the very reason that you mention - too
often the studies that are published are only published if they support the
"cause" of the people that commissioned the study, much like statistics can
be shaped to support just about any point a person would care to make.  It
can look pretty obvious when the American Petroleum Institute comes out with
a study that is negative towards ethanol that someone has an axe to grind,
but I do wonder if  many of the other studies that you are thinking of also
didn't have their own axes to grind.  Unfortunately, I don't think a
government study can even be counted on to be neutral, considering the
politically charged nature of the ethanol debate.

I really would like to see how ethanol would fare without any subsidies.
You're right - there are probably some benefits from by products that are
really hard to account for on the positive side of ethanol.  A free market
is really good at properly allocating resources, and rooting out bad
concepts and products.  But an elimination of subsidies would also have to
include the elimination of the government mandate that all gasoline will
contain 10% ethanol - that is also, in effect, a subsidy.

I could build really bad, inefficient cars at a really high price, for
example, and still make a lot of money without a direct price support.  All
I would need to do convince the government that 10% of all the cars sold in
the US would have to be one of my cars, just like the ethanol producers have
managed to do.  Everyone that wanted to sell cars in the US would have to
have a 10% mix of my cars in their sales.

Get rid of the subsidy, get rid of the mandate, and see how ethanol fares.
That would be more telling than any study, pro or con.

Phil

-----Original Message-----
From: at-bounces at lists.antique-tractor.com
[mailto:at-bounces at lists.antique-tractor.com] On Behalf Of Guy Fay
Sent: Thursday, December 30, 2010 4:17 PM
To: 'Antique tractor email discussion group'
Subject: Re: [AT] gasoline

The problem with the below analysis-
The farmers grow the corn anyway, true- and after the ethanol process, the
brewers grain is fed to cattle. The total energy analysis should take into
account the further use of the grains, plus the other byproducts- CO2, etc.
The studies that have been done show a positive gain. In fact, there's
really only one study I've seen that shows a negative, funded by the
American Petroleum Institute, done quite a few years ago with a older
process, lower corn yields, and not including byproducts. It was done at
UC-Berkeley, and it cited constantly by everybody opposed to corn based
ethanol.

I saw an interview with the author of that study, who thinks it is silly to
use the study to oppose ethanol. He pointed out the gallons of fuel to
produce a gallon of gasoline is far WORSE than to produce a gallon of
ethanol. The refining process is very energy intensive, as is
transportation. Not something you're going to hear on talk show radio.

Most of the ethanol subsidies are not paid to farmers, but to the blenders-
i.e. the oil companies. The ethanol industry is actually talking about
eliminating the subsidies themselves to remove the negative politics.

If you're going to do an apples to apples comparison, you have to look at
the true costs on the other side. Corn ethanol isn't the total solution, or
even a long term solution, but works pretty well at the moment.

-----Original Message-----
From: at-bounces at lists.antique-tractor.com
[mailto:at-bounces at lists.antique-tractor.com] On Behalf Of Phil Vorwerk
Sent: Thursday, December 30, 2010 3:27 PM
To: 'Antique tractor email discussion group'
Subject: Re: [AT] gasoline

OK, but stop and think about it (and these are rough numbers)

10% Ethanol means 90% is still fossil fuel, right?  Now factor in lower fuel
economy (I've observed anywhere from 2% to 7% lower fuel economy when I've
been on trips where I've alternated between pure fossil fuel and ethanol
blends, but this has been probably 7-10 years ago, since now everything is
blended).  This means that if you burn 10 gallons of ethanol blend, you've
only really "replaced" .3 to .8 gallons of fossil fuel.

Now consider that a tremendous amount of energy is consumed to produce the
corn (someone had earlier pointed out that $5.00/gal fuel would have a much
higher impact on food & commodity prices than the extra demand created by
using corn to make ethanol).  Energy is also consumed to take the corn and
produce ethanol.  A friend of mine is the controller at the ethanol plant in
Lake Crystal, MN, and we've had this discussion many times.  I've asked him
point blank if he can honestly tell me that on net any energy is created,
when you factor in what it takes to grow the corn.  He won't address it; he
always comes back with "that's not a valid premise, because the farmers will
grow the corn anyway, so we're just taking something that already exists and
turning it into energy."  That told me everything I need to know.

Bottom line, little to energy is created, it may even be a negative energy
producer when you consider the resources that are used to build the ethanol
plants.  It also creates incentive to tile and plow up every square inch of
land possible, which certainly doesn't help conservation.

Farmers need to make money; I have no problem with that, just like I have no
problem with car dealers or other businesses making money from me.  We are
all interdependent.  But please stop with the argument that ethanol is an
alternative, renewable energy source.  It is a farm subsidy, and exists
along with other farm subsidies.  I am NOT railing against farm subsidies by
pointing this out either.  But please, call it what it is - a farm subsidy,
not an alternative energy source, not a way to keep our money in the US, and
not a way to help the environment.

I'm not looking to flame an argument, and I hope I didn't state this in a
way that offends anyone that depends on ethanol to make their living - they
are only responding to the market, and I mean no disrespect to anyone that
is raising all the corn they can because it's good business for them.  But I
honestly hope that we can get away from corn based ethanol soon, because I
don't believe it accomplishes the goals that its proponents claim, and is
only counter productive to helping us move on to actual energy solutions.

Off the soap box, and I'll shut up now.

Phil Vorwerk
Rainy Courtland, MN

-----Original Message-----
From: at-bounces at lists.antique-tractor.com
[mailto:at-bounces at lists.antique-tractor.com] On Behalf Of mpnc282 at juno.com
Sent: Thursday, December 30, 2010 12:34 PM
To: at at lists.antique-tractor.com
Subject: Re: [AT] gasoline

Lower MPG's, yes, but at least the $$ are kept state side, and we're not
having to kiss OPEC's a$$, and send money to countries that hate us. Mike M

---------- Original Message ----------
From: Dave Rotigel <rotigel at me.com>
To: Antique tractor email discussion group <at at lists.antique-tractor.com>
Subject: Re: [AT] gasoline
Date: Wed, 29 Dec 2010 22:08:25 -0500

Kinda makes you wonder why we don't drill for our own oil instead of putting
the hard working US farmers on a tax subsidized welfare program called
"ethanol" which simply lowers everyone's mpg's!
 Dave

On Dec 28, 2010, at 5:29 PM, Richard Fink Sr wrote:

> Hi all how about some gas costs state side. Here it just hit $3.19 was
$3.09 
> sunday. All grades now have at least 10% ethnol in it.
> R Fink 
_______________________________________________
AT mailing list
http://www.antique-tractor.com/mailman/listinfo/at
____________________________________________________________
Mortgage Rates Hit 2.99%
If you owe under $729k you probably qualify for Gov't Refi Programs
http://thirdpartyoffers.juno.com/TGL3131/4d1cd0ba931c4903874st06duc
_______________________________________________
AT mailing list
http://www.antique-tractor.com/mailman/listinfo/at

_______________________________________________
AT mailing list
http://www.antique-tractor.com/mailman/listinfo/at

_______________________________________________
AT mailing list
http://www.antique-tractor.com/mailman/listinfo/at

_______________________________________________
AT mailing list
http://www.antique-tractor.com/mailman/listinfo/at