Ethanol vote - Tuesday

[hot_rod]

The vote failed:

http://senate.gov/legislative/LIS/ro...n=1&vote=00089

From Rueters:
The defeat of Coburn’s amendment doesn’t necessarily mean that the 45-cent-a-gallon ethanol tax credit will be extended beyond its scheduled expiration.
Asked at a press conference today whether he supported the Coburn language and would consider bringing it up in the House, Speaker John Boehner didn’t rule out the idea.
“Clearly there’s a big debate here on Capitol Hill about what to do with ethanol, and I think that the ethanol credit is due to expire at the end of the year,” Boehner, an Ohio Republican, told reporters. “Some members will want to take action earlier. We’re going to consider the views of all of our members. But clearly, I think changes are on the way.”
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I didn't know it was going to expire at the end of the year.....

[CamaroSkooter]

I believe they should offer e85 in clearly marked locations (which they already do) but everything else should be completely ethanol free.

Newer cars can all handle a little ethanol in their system (to an extent), it's the older vehicles (like classic muscle cars) that have a serious problem with any amount of ethanol in the gasoline blend.

I'd prefer to keep my food prices down, too.

[knowitman]

Originally Posted by Brokinarrow

Meh, been using E15 in all my vehicles without issue so far. And as for the 'ethanol is stealing corn from our food supply' comment, I'm fairly sure that the corn used for ethanol is not the type used for human consumption. Could be wrong on that, don't feel like putting in the effort to research right now :P

While it is a different type of corn grown for ethanol production, it is taking up land that could be used for production of corn for human or livestock consumption which all eventually makes it way to the food supply.

[Skyblu]

I don't have an issue with it in my 2 newer cars but for my carb harley, suzuki dirtbike,atv,small engines and my 1984 chevy 350 I do, the ethanol ruins the carbs if you let them sit a month or more without use, it destroys the fuel pump on the older cars and trucks, and destroys the rubber fuel lines eventually. My harley doesn't run near as good on this crap as it did before they started putting the ethanol in the fuel, I don't get neat the mileage on it or the suzuki as I did before. We solved most of our issues by going to the local boat marina and getting fuel there because there's no ethanol in that fuel but it sure is expensive to use on a regular basis,but then again having to fix/rebuild carbs every few months gets to be bothersome too.

[hot_rod]

Virtually all of the politicians realize that this whole corn based ethanol approach is a failure.

But the process of repealing it just shows how poorly our political system works.

As part of this bill they added an attachment just titled "additional background"

a few choice lines:
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

While born of good intentions, federal subsidies for ethanol have failed to achieve their intended goals of energy independence, environmental benefits, and addressing grain surpluses.

The VEETC alone costs taxpayers approximately $6 billion annually; cumulative foregone federal tax revenue since its inception in 2005 reached $24 billion at the end of 2010; if left intact through 2011 (when it is scheduled to expire), it will have cost taxpayers $30.5 billion over its lifetime.

Ethanol burns at two-thirds the efficiency of gasoline (68 percent of the energy content of gasoline), ultimately increasing fuel consumption nationally as drivers and boaters are forced to burn more fuel to travel the same distances.

USDA estimates nearly 40 percent of last year’s corn crop will be used for ethanol production. Increases of corn used for fuel production puts pressure on corn prices, demand for cropland, and the price of animal feed. Those effects, in turn, have raised the price of many farm commodities (such as soybeans, meat, poultry, and dairy products) and, consequently, the retail price of food.

Auto and marine engine producers and consumers have long heralded engine damage caused by ethanol use. The demise of engines means the demand for more, ultimately causing increased demand for engines and, therefore, fuel consumption in the manufacturing supply chains involving engine production

In a recent GAO’s study on duplication in the federal government, it found the VEETC is duplicative, because it pays blenders to do something already required by law under the Renewable Fuels Standard (RFS).4

The effect is to encourage blenders to blend ethanol beyond what is mandated, resulting in a supply glut. For example, the ethanol industry is producing over 13.5 billion gallons annually, despite the Renewable Fuels Standard mandating only 12.6 billion gallons in 2011

The VEETC essentially pays oil companies $4.84 per gallon in excess of the Renewable Fuels Standard6
As a result, the U.S. is now a net exporter of ethanol. Through November of 2010, the U.S. exported 397 million gallons of ethanol. Exports have reached 917.7 million gallons since 20057

Exporting a fuel does not help our country achieve energy security…although it may help with Europe in this respect.

In fact, one could reasonable argue that exporting blended ethanol actually increases our dependence on foreign oil, because it requires oil to produce, resulting in a net loss of domestic oil.
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If your not sick enough and want to read all 13 pages of this "additional background" document it is available from the Senate site:

http://coburn.senate.gov/public/inde...arDisplay=2011

[buzzy56]

Just another instance where whenever the Government gets involved in anything they screw it up, And worse yet they always fail to correct the problem they just keep on trucking down the same old road doing the same old things and achieving the same old results.Failure !!!
If one had faith that our politicians would do things the morally correct way they will be sadly disappointed.Just look at the actions of the bozos in the news the last few years.You would think that they had been sipping ethanol by their actions .

[syr74]

Originally Posted by knowitman

While it is a different type of corn grown for ethanol production, it is taking up land that could be used for production of corn for human or livestock consumption which all eventually makes it way to the food supply.

Taking up land? Where? Currently the U.S. government pays to keep 32 million acres per year fallow. That is fifty thousand square miles for those doing the math. Prior to 2005 we were paying to keep 40 million acres per year fallow, that number was only limited after 2005 because of budgets cuts. To put that into perspective, prior to 2005 only 20 states were larger than the amount of land the United States was paying people not to grow food on every year. That doesn't include the huge swaths of land that aren't being compensated for being fallow which far exceed the numbers above.

There is no shortage here, rather there is a literally enormous excess in terms of production possibilities. If you're paying more for food it isn't because we are running out of land to grow that food on.

[DGthe3]

Originally Posted by knowitman

While it is a different type of corn grown for ethanol production, it is taking up land that could be used for production of corn for human or livestock consumption which all eventually makes it way to the food supply.

Once the sugar has been extracted from the corn for ethanol production its then used as animal feed, so its not really taking much from livestock.

It might be taking land which could be used to grow food for people, but if the farmers converted all their ethanol-corn crops to food-corn crops the price for corn would be so low that most farmers couldn't make a living off of it. There was a time not too long ago when farmers would be paid to not grow corn simply to keep the price higher. I'm sure that this is no longer needed due to the demand for corn ethanol though.

-------------------------------------------------

One other thing (this isn't specifically directed at anyone in this thread ... but it is a common criticism of corn based ethanol). For those that believe that ethanol is driving the price of corn up, take a look at these:

First is ethanol production

(source: http://www.earth-policy.org/datacent...ofuels_all.pdf)
You can see it has gone up substantially in the last 6 years

now, the price of corn

http://futures.tradingcharts.com/chart/CN/M

While both have been trending upwards, there is a massive spike in corn prices from 2008, then it dropped just as quick. Seems there was something else that did that too ... oil:

www.GasBuddy.com

Perhaps this is just a pure coincidence that corn prices & oil prices are correlated. To be sure, we could check it against other grains. They're all produced in much the same way, but only corn is used extensively for ethanol. So if its chart looks different than say wheat or soy then there is still a strong argument that ethanol is driving corn prices

So, looking at the prices of wheat, oats, and soybeans what do we see? They all fit pretty much the same pattern as both corn and oil. Crop prices are largely governed by the cost of the pesticides & fertilizers that are used, and those chemicals are almost always petroleum based.

[hot_rod]

The only thing we agree on is correlation and causation are two different things.

Demand drives price.

"USDA estimates nearly 40 percent of last year’s corn crop will be used for ethanol production"

Increase demand of most anything, what happens to price? duh...........hint it doesn't go down....

"Increases of corn used for fuel production puts pressure on corn prices, demand for cropland, and the price of animal feed. Those effects, in turn, have raised the price of many farm commodities (such as soybeans, meat, poultry, and dairy products) and, consequently, the retail price of food. "

"puts pressure.....have raised the price .." Showing other factors that have changed (I'll leave the word "correlate" out of this) does not disprove this fact.

Primary cost of virtually all crops grown in North America is cost of capital and seed cost not fertilizer and pesticide.

[hot_rod]

They tacked it on another bill and got it done!

http://www.senate.gov/legislative/LI...n=1&vote=00090

Next bill up prohibits the use of federal finds for ethanol blender pumps and storage facilities.

Might all just be symbolic voting, house has to agree and pass it and the pres can still veto it.

[Mikes SS]

why is it that we are all duped into believing something? the Ethanol was originally designed to be mixed with gas to reduce the oil consumption AND the price for a gallon of gas!! Like SYR74 said, farmers have for the past many years have been paid by the government to NOT grow corn, soybeans, wheat, etc. so prices stay competitive and worth growing. I would rather have farmeers growing corn for use rather than giving handouts for sitting around...jeee kinda sounds like our welfare system.as far as effects on our engines, I do agree that you should still have a choice to buy a regular gas and E15 and E85. I love that our Tahoe is E85 compatible because it is a hell of a lot cheaper but there is hardly any stations around in the south east. If E85 is less efficient, it is still cheaperin the long run, we only lose about 1-2 mpg using E85 and last I checked it was $1.30 cheaper for a gallon

[bmorecam]

With the positive there's always a negative. I rather dont eat corn anymore than having to rely on foreign oil.

I love my cornhol!

[syr74]

Originally Posted by hot_rod

The only thing we agree on is correlation and causation are two different things.

Demand drives price.

"USDA estimates nearly 40 percent of last year’s corn crop will be used for ethanol production"

Increase demand of most anything, what happens to price? duh...........hint it doesn't go down....

That is far to simple a descriptor of the affect of demand on cost in a free market (well, it's upposed to be) economic system. When looking at causation for a change in market price within a free market economy you always go to external forceds that are not ideal in a free market economy first.

In this case, that would be the enormous subsidies the US government spends trying to keep corn prices (and crop prices in general) artificially high and farming in general viable. Ironically, ethanol production could help eliminate the need for farm subsidies to a large extent, but the government is no doubt afraid to push too far forward with that particular alternative because the subsidies are so overly complicated and politically volatile that they don't know how to unentangle themselves from the same without causing an even bigger mess.

[hot_rod]

>>>>far to simple a descriptor

Agreed! I just wanted to bring in the supply & demand concept somewhere in this discussion.

Bear in mind, that this money (this specific subsidy) is for the blenders of ethanol not the farmers.