USDA defends America’s fuel supply 5

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1. 

   onetwothree Posted 10:41 am
   27 May 2008

   Vinod Khosla 's heart is in the right placeYou know Vinod Khosla could do a lot of things with his many millions besides being bashed by people sitting on their computers with nowhere near the money to risk.
   I think he truly has an intrest in helping the world, weather you agree with his opinions on cellulosic ethanol/subsidies or not.
   It's soooo easy to take a negative view of all future technology, as you just can't lose an agument until something is proven out.

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2. 

   Biodiversivist Posted 12:53 pm
   27 May 2008

   So is mine. Does that make me immune to critique?You know Vinod Khosla could do a lot of things with his many millions besides being bashed by people sitting on their computers with nowhere near the money to risk
   I didn't bash Khosla. I offered a rational critique of his support of continued mandates for today's destructive biofuels (except palm apparently). As a percentage of net worth, I spend far more than he does every time I sit down here to write or design without compensation. He could lose 90% of his worth and still be in the top 1% of the wealthiest people on Earth. That's not an attack, that's a fact.
   I think he truly has an intrest in helping the world, weather you agree with his opinions on cellulosic ethanol/subsidies or not.
   So do I. But good intentions alone are not enough to make my ideas (or Khosla's) immune to critique.
   It's soooo easy to take a negative view of all future technology, as you just can't lose an agument until something is proven out.
   I certainly don't take a negative view of all new technology, including cellulosic. And you are right that one can't lose an argument until something is proven out. That's precisely why I remain agnostic on the subject of cellulosic. The debate over cellulosic will begin if and when it arrives on the market.
   If he or someone else can get cellulosic to work as advertised, I'm all for it. I just don't want the present support for today's food, carbon sink, and biodiversity devouring biofuels to continue.
   I do have a negative view of today's food based biofuels, which Khosla supports mandates for (except for palm) in hopes they will help bring his investments in cellulosic to fruition. It's instructive that he denies that today's fuels are environmentally destructive (except for palm). The means does not always justify the end. The question is, how long will we allow mandates for today's destructive fuels to continue?
   
   In the end, it all comes down to biodiversity. Poison Darts--Protecting the biodiversity of our world

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3. 

   JMG Posted 1:23 pm
   27 May 2008

   What risk?What has Khosla risked?
   Biod quoted where he said he would not have risked anything on cellulosic without having the risk shoved onto everyone else, though I'm sure he will gladly reap the "profits" should there be anything left over (with the subsidies not returned, natch).
   The bottom line is that Khosla has told us that he is only pursuing biofuels because he seeks to make his gargantuan fortune even bigger -- it's not a moral thing with him, he's not investing in biofuels out of a sense of noblesse oblige, he's simply another wealthy guy in a long string who devote their lives to the pursuit of even greater wealth, and who confuse the acquisition of wealth with intelligence.
   He's willing to rationalize (rationalize means "to  substitute a good reason for the real reason") increasing global poverty and hunger in his quest for biofuels "profits" (scare quotes to note that these "profits" do not occur without direct cash subsidies and the even more valuable indirect mandate subsidy, which makes people buy his output no matter how worthless), and he's perfectly willing to rationalize away published and peer-reviewed scientific analyses showing that biofuels are making catastrophic climate change more of a certainty, because those studies are inconvenient for his self-myth as the noble rich guy who saved humanity in its hour of need.
   JK Galbraith, in his book about the Crash of 29 and his great short book about financial bubbles, talked about how Americans see wealth as a sign that the owner is intelligent, and Galbraith, who probably knew as many really wealthy people as all of us here put together, knew that the opposite was more likely true.  People take the stupidest statements by Khosla as gospel simply because he speaks with the Voice of God, to wit, mammon.  But it's total bullshit.  Take away his subsidy and the mandate and ethanol and agro-diesel disappear from the scene faster than pet rocks.
   What is astonishing is how enviros who are normally expert at recognizing how financial interests bias the opinions of those with the interests (Patrick Moore on Nuclear Power anyone?  Singer and Michaels on climate change, anyone?) go into the tank on biofuels.  Enviros used to campaign to prevent rapacious developers from raping and destroying landscapes and neighborhoods with auto-sprawl ... now the enviros are the ones calling for subsidies aimed at keeping the dominance of the auto in place.  And conferring sainthood on ethanomaniacs like Khosla, who is laughing all the way to the bank as the sheep not only line up to be sheared, but post moral defenses of him for doing it.
   
   The 5% Project

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4. 

   askantik Posted 5:24 am
   28 May 2008

   An interesting subject...Never understood why turning food into fuel always created so much more controversy than turning a lot of food into a little food (also known as meat).  Using food that could be fed directly to people and using it to create something highly resource-intensive and inefficient to create a product that we can live without.  In fact, I'd venture out on a limb and say it's even easier to live without meat than it would be to live without fuel for our vehicles...  
   A moral issue on several fronts, as are most issues we face today.  That's what makes them such hurdles.

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5. 

   Ron Steenblik Posted 7:38 am
   28 May 2008

   And the ethanol gravy train keeps on chuggingGosh, BioD, that was a magnum opus! And thank you, JMG, for your response to 1-2-3.
   VK putting major money at risk? Let's look at that. As I explained in a comment I wrote in response to an interview with Khosla published on these pages on 22 April, there is not very much risk in Khosla's investments in ethanol. (Links to sources can be found in my original comment.)
   VK's best-known investment, Range Fuels (formerly Kergy Inc.) of Broomfield, Colorado, will be granted up to $76 million by the federal government for their plant being constructed in Soperton (Treutlen County), Georgia. So a large amount of the capital cost of the plant ($1.55 per annual gallon, based on the original proposal for 40 million gallons of ethanol per year and 9 million gallons per year of methanol) will have been underwritten by the federal government.
   In addition, according to an article in the Atlanta Constitution, Treutlen County offered tax abatements and a 97-acre tract in its industrial park worth $350,000. And the state's OneGeorgia Authority, which uses tobacco settlement money for rural economic development, was (in February 2007) likely to approve a $6 million grant for Treutlen County to help Range Fuels buy production equipment. The company has also benefited from a 4 percent sales tax exemption for materials and equipment used to construct biofuel facilities.
   Now, let's look at the economic viability of the plant once it is operating. At the time construction commenced, Range Fuels could count on the price of ethanol being elevated by a combination of the 51¢ per gallon federal volumetric ethanol excise tax credit (VEETC), an import tariff of 2.5% plus 54¢ per gallon, and a renewable fuels standard that kept growing every year. In addition, because during Phase I the plant will produce only about 20 million gallons of ethanol and methanol per year, it would have qualified for the additional 10¢ per gallon small ethanol producer tax credit on the first 15 million gallons a year it produces.
   But Range Fuels was no doubt hoping Congress would increase the subsidies for its product even higher. Congress obliged, creating a new, $1.01 per gallon producer tax credit for each gallon of qualified cellulosic biofuel production, in the latest Farm Bill (SEC. 15321 -- CREDIT FOR PRODUCTION OF CELLULOSIC BIOFUEL: page 590 of H.R. 2419 [PDF], the Food, Conservation, and Energy Act of 2008).
   Unlike the the VEETC, which is paid to blenders (and benefits foreign producers), the cellulosic biofuel producer credit is available only for biofuel produced in the United States and used as a fuel in the United States. (Note to Tom Philpott: it would appear that the per-gallon amount is reduced by the VEETC and Small Ethanol Producer Credit as long as these remain available.) And cellulosic ethanol producers received a waiver from the 15 million gallons per year limit in respect of the small ethanol producer credit.
   Nice work if you can get it ...
   
   These are only my personal opinions.

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