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  The global nature of global warming

  As an observer of this blog for some time, and a new "poster," I would like to say that I enjoy the intelligent approach taken by most regarding the environment. However, I must disagree with your general assessment of ethanol, which really lacks a complete understanding of what we face as a nation, not to mention on a global scale.

  As I read your response to Brooke Coleman's defense of corn-ethanol, what immediately jumps out at me is the higher corn prices you cite. Let me first say that while corn acreage has increased in the short term, the trend has never been consistent, and it is not now at a historical high.

  According to the US Department of Agriculture, corn acreage planted in the U.S. in the 20th century peaked at 113 million acres in 1932. Since then it has trended down, and for the most part, fallen in a range of 70 to 95 million acres. In 2007, the total was 93.6 million acres or about 30% less acreage than the peak in 1932.

  Additionally, surplus corn, or carryout, this year is projected at 1.9 billion (not million) bushels, a 45% increase over 2006. The surplus this year exceeds the 20-year average and is the fifth highest level in the last two decades.

  The contention that the development of farmland for corn is destroying open space lands not used previously for farming is not true. The fact is land devoted to farming has been trending lower since 1932. All acreage under cultivation that year totaled 320.4 million acres compared to 278.1 million acres in 2007, or 13% less land used for farming this year.

  Corn production per acre has increased five fold since 1932, which explains how we get more corn. The USDA and several other agencies agree that 170 million bushels and more can be achieved in the next decade.

  Ok, this begs the obvious question. Why are corn prices so high? Actually, corn prices are not very high, but the sudden jump this past year is speculative in nature and not a result of actual market conditions. We've heard this before...in the oil markets. Speculation is rampant in the commodities, and corn speculation has increased ten-fold, based purely on the ethanol factor, while ignoring the fact that we have such a huge surplus.

  Your mention of how hungry the world is getting, and you're hopeful that other countries will grow grain to replace that being burned in American gas tanks is both uninformed and baseless. The numbers tell the story. Just check with the DOA.  

  On to ethanol. Henry Ford was the first to burn gasohol in his new engine, but in reality, the ethanol industry is in its infancy. As someone who has watched the technology advance in just three years, I have a hard time with those that close the book on ethanol because they do not see what's happening every day. Simply, the ethanol industry does not have the dollars to compete with Big Oil propaganda.

  Just a couple of examples: Panda Ethanol will open its Hereford, TX plant in early 2008, which is located in West Texas--the king of cattle manure. The piles of cattle manure are 30 feet high, and produce enough methane gas to dwarf a large refinery's contribution to "bad" emissions. Panda will use this manure to power its plant and virtually eliminate the need to burn natural gas to fuel the plant, plus solve a local environmental problem.

  POET, the country's largest ethanol producer is doubling the capacity of its Chancellor, SD plant, from 50 to 100 million gallons per year, without increasing fossil fuel use. They are building a solid-waste fuel boiler that will generate enough steam to produce more than half of the expanded plant's power needs. There is also much movement on water usage, which has been another criticism that has gained ground in recent months. Several plants have already reduced water consumption by 20 percent or more through recycling efforts. More efforts are on the way. But the fact is ethanol plants rank low on the industrial scale with respect to water usage.

  I could go on and on, but I would be sitting here all day, and I do have football to watch. My main point here is traditional production of ethanol is evolving daily. In the next ten years, it will be an industry that you won't recognize. Self criticism is very apparent in this industry. They understand that if they get up in the morning and put on a green suit, they need to "walk the talk."  The people I have met in this industry believe in what they are doing, beyond just making a profit. That's far better than the oil industry that still denies global warming even exists. (And please don't believe those BP commercials about "green"...BP has been one of the worst violators of the public trust regarding environmental hazards created intentionally and unintentionally to save a buck.)

  Yes I know, your bloggers write volumes about oil, but there is something that is never considered. You may have discussed this topic, and if I missed it I apologize. Much consideration should be given to the cost of oil. And I'm not talking about $90 per barrel. I'm talking somewhere in the $300 to $400 per barrel we the taxpayer is paying for oil. It's our defense budget. Our estimate of the Pentagon's budget attributable to keeping oil flowing around the world is somewhere around 75%. The first Iraq war was not really a defense of Kuwait, it was to make certain Saddam didn't invade Saudi Arabia and seize its oilfields. I'm still not certain about the current Iraq war, except to say that oil is without a doubt part of the equation, and I suspect a large part of the equation.

  I have written extensively on this subject and would be happy to forward other articles that go into more detail.

  It's easy to dismiss cellulosic ethanol as an unproven science, when in fact it is actually proven. It still needs to be proven commercially, but that is also close to a reality. Whether it's wood chips, corn  cobs, switchgrass or just plain old garbage, it is coming.

  I noticed you took issue with E85, and the lack of fuel savings and you cited your source for the prices you quote. That site is completely dependent upon voluntary submissions, and is not at all reflective of the true picture.

  E85 is a complicated product. First, it's at the mercy of those that sell gasoline traditionally. Many of these are wholesale jobbers that do not have restrictions placed on them by their suppliers--in many cases independent brands. These jobbers though set the profits for their retailers. Major oil company intimidation plays a major role in limiting the amount of E85 available today.

  Retailers that install E85 pumps are not necessarily in a position to keep the prices down. Yes, the wholesale ethanol price is lower than gasoline (Currently about 30 cents per gallon lower), and of course there is the 51 cents per gallon blending credit. And who gets the blending credit? That would be the wholesaler (small to mid-sized oil company), and it's not reflected in savings to the consumer. They try to keep the E85 price about 20-25% lower than gasoline.

  However, there are those that are selling E85 for much less, in some cases at $1.00 per gallon below unleaded regular. We recently did a survey to find out how E85 is priced, and we found that the majority of retailers are sticking to the 20-25% discount range, while the oil company swallows the blending credit, passing very little if any of it along.
  Adkins Energy is an ethanol producer in Lena, IL and sells about 2 million gallons per year into the local E85 market. They told me that "the problem today is that the blender's credit is not passed along to the consumer, which was the intention." As a result, Adkins tries to keep retailer margins under control, insisting that a 15 cents per gallon retail margin is necessary to get the best price for the ethanol it produces. The result in that local market has been E85 that was priced below $2.00 per gallon for much of 2007. In our survey we found E85 prices as mush as 63 cents per gallon higher than in Lena, IL.

  E85 is going to have a tough road ahead. However, consider that ethanol has displaced about 4.5 to 4.7 percent of gasoline sold in the U.S. this year, and saved consumers a lot of money in the process. I live in New Jersey, and we have almost 100% compliance on E10 as an unleaded regular grade blend. We reduced gasoline consumption by 10% in 2007, and we have had the lowest retail prices in the nation this year. I found that incredible because New Jersey never has the lowest price for anything.

  I won't get into details about the study you cite regarding emissions, headed by a Nobel Laureate, but it's based on computer models and not actual data, and funded in large part by Big Oil, as are other studies that skew the data to offer one message... "oil is good, ethanol is bad."

  Just one glance at the "fossil fuel" results, I have to laugh. I'm certain that the study did not include transport of the fuels, because in the U.S. we import better than 60% of our crude oil, which is shipped via tanker from Venezuela, Saudi Arabia, Nigeria, Algeria, Kuwait, and elsewhere. Most Canadian crude travels via pipeline. But the significant amount of crude oil that must travel the oceans of the world burn bunker fuel, a high sulfur dastardly concoction of heavy oil. And those tankers do not get very good mileage.

  Also I'm certain they never considered the actual cost of energy consumed to refine a barrel of oil. Ever wonder what the electric bill of a refinery might be? And how much coal is burned to produce that electricity? They never did. To suggest that ethanol's emissions contribution is worse than fossil fuel is naïve at best, and disingenuous at worst. Frankly, in E10 regions, air quality has improved dramatically. These are EPA findings, not computer modeling.

  Food prices rise because oil prices, or specifically diesel prices, rise. This is a fact. On every occasion where there has been "food inflation," without exception, our data has shown that oil prices have been the major factor.

  Finally, regarding your reference to consumers not clamoring for ethanol. First, oil companies control the price of E85 in most cases. There have even been lawsuits from oil companies to stop retailers from selling E85 at severe discounts to unleaded regular grade gasoline.  Typical consumers are not going to clamor for anything that is not cost effective. Frankly, I admire your ability to reduce the amount of gasoline you consume, and I agree that electric cars would be nirvana, except that the cost of pollution due to recharging batteries that in large part comes from electricity that is produced from coal offsets much of the gain. We need the perfect recharging battery.

  But ethanol offers a bridge to somewhere. It is far better than doing nothing at all. Reducing our dependence on foreign oil, especially from the Persian Gulf and perhaps Venezuela, is a critical necessity because our dependence is the No. 1 national security threat we face. If we do nothing, we are doomed to a presence militarily in the Middle East for decades to come, and we continue to support the very terrorism we claim to fight. Our presence also guarantees that the number of enemies we face will multiply.

  The biggest mistake Bush has made is telling everyone to go shopping instead of contributing to the effort to make us safe. I agree with you that the one sure way is to reduce oil consumption, and personal sacrifice is the way. Unfortunately, most Americans are spoiled, and don't want to make changes, until the next attack on America.

  But don't underestimate ethanol and how it can contribute to the ultimate goal. It's not a perfect solution, but it is part of the solution. And ethanol is not starving or polluting the world.  However, I'm certain that you and many of your bloggers have already developed conclusions about the viability of ethanol...I only hope you keep an open mind and once the pipeline of misinformation slows down, give it another look.

  Another Tom

  On The global nature of global warming posted 1 year, 11 months ago 70 Responses