The Energy Policy Acts of 2005 and 2007 established the EPA’s Renewable Fuel Standard initiative. These acts required the production of 36 billion gallons of biofuel by 2022. The mandate’s purpose was to reduce carbon emissions and decrease US dependence on OPEC oil. The main biofuel would be ethanol that is produced from corn. Ethanol was substituted for MBTE (Methyl Tertiary-Butyl Ether) as a gas additive. MTBE, that was previously mandated by the EPA, was found to be highly polluting and insidious to ground water and caused more problems than it solved (not atypical for the EPA). While ethanol does cause gasoline to burn cleaner, does the benefit justify the cost and is it actually making us less dependent on OPEC oil.
According to a study by Professor’s Pimental of Cornell and Patzek of U Ca., it certainly does not. One acre of corn yields 328 gallons of ethanol and there are 3 distillation steps required for a gallon of ethanol that contains 77,000 BTU’s (British Thermal Unit). A BTU has about the same amount of energy as a match head. In order to produce ethanol gasoline is used (which contains 116,000 BTU’s of energy). Overall, the cost to produce ethanol is 40% greater than gasoline. But wait isn’t a gallon of ethanol cheaper than a gallon of gasoline? The cost of a gallon of gasoline is about $3.44 nationwide and ethanol is $3.05. But wait, keep in mind ethanol has 1/3 less the BTU’s than gasoline and as a result, you will get poorer gas mileage. When the price of ethanol is adjusted for this, the cost is $4.02 (American Automobile Association website). In addition, the 3 distillation steps uses 98,000 BTU’s of gasoline for a net loss in energy of 28%, and up until January 1 of this year, the ethanol industry received subsidies of to $6 billion.
According to a study by Professor’s Pimental of Cornell and Patzek of U Ca., it certainly does not. One acre of corn yields 328 gallons of ethanol and there are 3 distillation steps required for a gallon of ethanol that contains 77,000 BTU’s (British Thermal Unit). A BTU has about the same amount of energy as a match head. In order to produce ethanol gasoline is used (which contains 116,000 BTU’s of energy). Overall, the cost to produce ethanol is 40% greater than gasoline. But wait isn’t a gallon of ethanol cheaper than a gallon of gasoline? The cost of a gallon of gasoline is about $3.44 nationwide and ethanol is $3.05. But wait, keep in mind ethanol has 1/3 less the BTU’s than gasoline and as a result, you will get poorer gas mileage. When the price of ethanol is adjusted for this, the cost is $4.02 (American Automobile Association website). In addition, the 3 distillation steps uses 98,000 BTU’s of gasoline for a net loss in energy of 28%, and up until January 1 of this year, the ethanol industry received subsidies of to $6 billion.
But wait, there’s more. What has happened to the price of corn as a result of this huge increase in demand? As can be evidenced by the chart to the left, it has increased by more than 300%. If I had to pick a grain that would have the most far reaching effect on the economy it would be corn. Why? According to an analyst on CNBC, there are over 3000 uses for corn worldwide; anything from high fructose corn syrup, which is ubiquitous in our food, to diapers.
We use corn to feed cows/steers. If the price of corn increases, it is passed on to the consumer in the form of higher prices. The price of steak just went up along with hamburger, milk, cheese, cream (wait the price of coffee in restaurants just increased). It doesn’t end there. Farmers are smart. If they see the price of corn increasing relative to other crops, they will plant more corn and less wheat, soy, barley, hops etc. As a result, the price of those crops will increase (chart at left). With the price of wheat increasing, all bakery products will increase. Pizza gets a double whammy as a result of both cheese and wheat increasing in price. The price of barley and hops went up, oh my God! The price of beer just increased (those rat b@$%ards), and the list goes on.
In 2005 for the first time, we heard the term agflation; i.e., inflation as a result of an increase in agricultural products, and it continues. In 2011, 37% of the corn crop went towards ethanol production.
Most everyone agrees that producing ethanol from corn is a bad idea. Why then do we still do it? The simple answer is that there are 39 states in the continental US that contribute to the commercial con crop. That is 78 votes in the Senate and numerous votes in the House of Representatives. They are not stupid. By voting against the mandate of producing ethanol from corn, that would lessen the amount of money that would flow to their constituents, and diminish their chances of re-election.
As a result of mandating the use of bio-fuels from corn, instead of making us less energy dependent on imported oil, we have become more dependent, increased our cost of living through inflation and actually increased the cost of energy.
Sounds like another good idea for term limits.
In 2005 for the first time, we heard the term agflation; i.e., inflation as a result of an increase in agricultural products, and it continues. In 2011, 37% of the corn crop went towards ethanol production.
Most everyone agrees that producing ethanol from corn is a bad idea. Why then do we still do it? The simple answer is that there are 39 states in the continental US that contribute to the commercial con crop. That is 78 votes in the Senate and numerous votes in the House of Representatives. They are not stupid. By voting against the mandate of producing ethanol from corn, that would lessen the amount of money that would flow to their constituents, and diminish their chances of re-election.
As a result of mandating the use of bio-fuels from corn, instead of making us less energy dependent on imported oil, we have become more dependent, increased our cost of living through inflation and actually increased the cost of energy.
Sounds like another good idea for term limits.
Now he tells us!
Al Gore says his support for corn-based ethanol subsidies while serving as vice president was a mistake that had more to do with his desire to cultivate farm votes in the 2000 presidential election than with what was good for the environment.
"It is not a good policy to have these massive subsidies for first-generation ethanol," Gore said at a green energy conference in Athens, Greece, according to Reuters. First generation refers to the most basic, energy-intensive process of converting corn to ethanol for use as a motor vehicle fuel additive.
"It is not a good policy to have these massive subsidies for first-generation ethanol," Gore said at a green energy conference in Athens, Greece, according to Reuters. First generation refers to the most basic, energy-intensive process of converting corn to ethanol for use as a motor vehicle fuel additive.
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