Let’s start with a lie, albeit most likely the lowest level of lie, everyone is lying about ethanol.  It has gotten so that the lies are pervasive, even such that John Stossel at Fox News is making quotes and suggesting that ethanol is a huge political boondoggle. Admired bloggers like Robert Rapier have allowed emotional prejudices and technical biases to discredit their commentary.

One such silliness is that Americans subsidize ethanol at the cost of $1.76 a gallon.  Gee, at 900,000 barrels a day or 37,800,000 gallons a day times 365 days times 1.76 gets to nearly $25 billion a year.  I think we’d notice that much more than the silliness we see floating out there now.  Anti ethanol is looking a lot like those incredible global warming scare tactic studies.


Ethanol Molecule in 3D from Wikipedia. Click image for the largest view.

Actually the main cash matter is the ‘blender’s tax credit’ to the folks who mix up gasoline products for weather blends, EPA regulations, fuel additives and ethanol.  Those businesses range from family owned to big oil run operations.  The tax credit offsets their tax bill.  That permits the profit to be used for other stuff, like lower prices, dealing with the improvements for mandated fuel mixes, ethanol and additives.  That tax credit makes its way to you as a lower price and better product.  It’s a lot of money, almost $19 million per day, most of which shows up as a lower price to you.

On the other hand, 900,000 barrels of gasoline at this writing is $2.42 a gallon wholesale sourced from crude oil saving (900,000 x .75 BTU correction x 42 gallons x $2.42) over $68 million in imported gasoline costs every day. That’s better than 3.5 to 1 on the tax loss to benefit the economy for the blender to consumer part of the market alone.  This crude and gasoline displacement drives down the price of crude oil.  Maybe not a lot, but as U.S. ethanol closes in on 1 million barrels a day, that million barrels adds to the whole energy supply market keeping the next crude oil price run up further away.  What’s that worth?  – Likely many more months before the crude market skyrockets off again and very likely not as high as it would go or for as long without ethanol.

Beyond that ethanol-gasoline mixes offer the combustion engine a benefit.  The ethanol combustion byproducts are high temperature steam and CO2.  The steam has a cleaning effect on the inside of the combustion chamber and the exhaust and catalytic converter.   Your car lasts longer and needs less pollution control maintenance.  But the chemistry of ethanol and its ability to absorb water bedevils those with cheap engines.

Looked at with some sense, ethanol is looking better than the news and naysayers would have you believe.

That’s just for today. The future has some potential of great interest. Right now the U.S. corn growers with more than 30 years invested have gotten us here.  The production level is finally high enough that a bit of the production (about a million barrels per month) is going for export, offsetting the imported oil bill and adding to the pressure on oil prices.  The use of ethanol for combustion engines across the planet could displace as much as 7 million barrels a day of oil production destined for gasoline at an E-10 rate.

Further out in time ethanol fuel cells should get practical.  A fuel cell would use the ethanol so the energy available for work could be 4 to 5 times higher than burned in a combustion engine.  It would take many years, but a widespread adoption of ethanol fuel cells and increased production would be worth the energized work of about 30 million barrels of daily oil production.  Are those incentives looking better now?

But the corn based ethanol industry is planting the seeds of its own demise.  While much of what’s been lightly covered here is lost in the popular press and blogosphere, it’s definitely not lost on the ethanol and other biofuel production researchers and investors. You want to damage research into alternative fuels, destroy the base that corn ethanol has built.  It would be better to expand the blender’s tax credit to include other biofuels than kill it.

In fact it’s easy to project a development of an energy industry based on major increases in efficiency such as fuel cells and major increases in supply sourced from for example, micro and macro algae. Its actually hard to imagine after a decades passing how agriculture will compete with aquaculture production.  One sees lots of basic research and development into ethanol production and the feedstock sources, but essentially nothing on corn based ethanol production.  That’s a strong hint about the future.

People say the darnedest things.  One learns to expect that.  It’s gotten so that the press and media is looking for viewers and will strive for the numbers, to hell with getting the story right or complete enough for sound analysis.  Most bloggers work at attracting people by the emotions, so they too are far from competent advisers on how consumers should build expectations.

That makes researchers, businesses and investors the ones to watch.  They’re not satisfactory sources, much information is proprietary and near sightedness tends to keep secrecy highly valued.  But there is over 80 million barrels worth of oil energy market out there take, and to ignore ethanol, set it back or choose not to incentivize or keep breakthroughs secret keeps the potential ‘pie’ smaller than it could be.

So, while the whirl of mis and dis information about the alcohols swirls about the world of media and the Internet, keep in mind the theoretical raw numbers.  Today’s daily energy of 80 million barrels of oil could be replaced with fuel cell technology powered by less than 20 million barrels of ethanol.  The U.S. 25% share of today is already nearly 20% covered.

For all the lies, this page included, a truth remains, as the energy and fuel demands of the future need addressed, humanity will figure something out – and the ethanol industry will certainly be involved in a major way.  The alcohol methanol has an advantage for fuel cells, butanol has an advantage for combustion engines, yet standardizing on one fuel, ethanol – is an advantage as well.


Comments

50 Comments so far

  1. jerry t on December 28, 2010 9:54 AM

    In the long term corn based ethanol is not the way to go. You need a source that does not fight with food and animal feed and something that can be produced/harvested day in and day out.
    The aquaculture algae seems to make more long term sense.

    PS – Keep up the good work. I may not agree with everything you say, but your blog is the best source out there for truthful information.

  2. Russ on December 28, 2010 10:11 AM

    This commercial advertisement was provided by a PR man for the ethanol industry.

    Best Regards

  3. Al Fin on December 28, 2010 10:41 AM

    Nice presentation. Ethanol from maize has a long, solid history. Its modern day refinement into multiple product lines (and the use of cobs and fodder to provide its own energy) should be instructive to industry and commerce as a whole.

    Although maize ethanol has been an incredibly important industry economically, and will not be replaced by advanced biofuels for some time, it will be replaced eventually. Changing technologies and economics will demand it.

    In general, mandates and incentives which distort the market are more destructive than constructive. Unfortunately, we have very few markets left which are not completely distorted by outside interference. The larger government grows, the more distorted and unworkable markets become.

  4. A Look At The Ethanol Lies | New Energy and Fuel | World Media Information on December 28, 2010 11:37 AM

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  5. Aureon on December 28, 2010 1:55 PM

    Ethanol vs Conventional Fuels

    Ethanol subsidies are Not an issue for me. They pay for themselves several times over. The issue is that we pay 10-12 times higher subsidies to Big Oil than we do to biofuels. And our “foreign oil investment tax credit” provides an incentive to develop foreign sources of oil, rather than our own domestic sources. This is entrenched-obsolete-failing energy policy, that’s costing us between 40 and 50 billion a year, and that’s reflected in record breaking, multi-billion dollar oil company profits.

    We also pay for foreign oil with debt instruments created by the Federal Reserve, a private corporation. And then we pay perpetual interest on this imported oil and fuel, as long as we run a trade deficit. This entrenched energy policy is the main reason why we’re going hundreds of billions in the hole every year buying foreign oil. The beneficiaries are Big Oil and the Fed. Because oil companies get higher profits, taking advantage of this foreign oil tax credit, and because the Federal Reserve collects part of our tax returns to pay for interest on our Trade Deficit, which is folded into the National Debt.

    And by the way, coal is subsidized and so is natural gas and others. Getting rid of the ethanol blender subsidy won’t “level the playing field”. Phasing-out gov. subsidies on dirty fossil fuels will. Once you get rid of subsidies on fossil fuels, you’ll get a better idea of their true cost, not to mention the environmental damage they do.

    Domestic ethanol deserves the credit. It’s a bright spot of economic stimulus; it generates 3 levels of tax revenue; it employs 400,000 workers and growing; it neutralizes carcinogenic toxins in unburned gasoline residues – like the killer benzene; and yes, it puts downward pressure on oil and fuel prices.

    Gasoline consumption in the United States has dropped 8% over the past few years while ethanol production and blending has risen dramatically. The installation of ethanol blender pumps offering mid-level blends, E-20 and E-30 for example, have resulted in a 500% increase in the sale of ethanol over E-85. That’s where the “sweet spot” of most engines is, in that range. And high compression, direct injection, turbo charged, downsized engines are coming. They get better mileage on ethanol than they get on gasoline, due to ethanol’s 30% higher octane and faster vaporization rate. Ethanol burns faster and cleaner. These engines get diesel-like power in a smaller, lighter package that costs $4,000 to $5,000 less up front, using fuel that is $1 gallon cheaper than diesel.

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  7. Russ on December 28, 2010 2:53 PM

    Aueron managed to get in almost all of the ethanol lobby’s talking points!

    The ‘statistics’ quoted are a great misdirection play – not much accuracy unfortunately.

    Mostly fairy tales but good job remembering them.

    The failed ethanol industry does not need to keep it’s greedy paws in the tax payers pockets.

    Already it has gone on too long and there is no sign of the technology ever becoming able to even start to stand on it’s own.

  8. Aureon on December 28, 2010 5:55 PM

    Rus – You’re entitled to your opinion on ethanol, however, your response has no substance. You don’t like what I posted, but you don’t present any kind of meaningful proof to back-up your position with facts. I would be happy to debate you, and we’ll see who knows what.

  9. Brian Westenhaus on December 28, 2010 7:13 PM

    Whoa! No personal responses directed to others. Everyone is welcome here, including a bunch of youngsters. Free speech about myself, what I write, what you think, correct me, add to the depth, most anything on topic. But no getting after other folks. And no freeloading advertising. We’re on a major server, covered by all the search engines and page views are in the tens of thousands per day, so watch yourself. The only tool I have is an ‘orrible one. Akismet.

  10. Brian Westenhaus on December 28, 2010 7:23 PM

    Edited both Rus and Aureon, clean now. No more, please. I do not have time for this and won’t be exchanging email addresses either. If you have to get into it – find a forum somewhere.

    BW

  11. World Spinner on December 28, 2010 10:39 PM

    A Look At The Ethanol Lies | New Energy and Fuel…

    Here at World Spinner we are debating the same thing……

  12. Russ on December 29, 2010 4:52 AM

    Offering to debate a topic such as this with me seems a bit strange but –

    Anyone wishing to debate the subject should contact Robert Rapier – mentioned in the article.

    He does understand the topic in detail, knows the players and all the tall tales told.

  13. J.P. Katigbak on January 2, 2011 9:37 AM

    Attn.: Please beware of the unecessary blame games, will you? Better understand the potentials behind the biofuels technologies – that is why ordinary people around the globe, such as me, need a better outlook on 2nd. generation biofuels that have yet to come into fruition in a few years time.

    Take care of of yourselves, and please don’t get involved in too much politics or petty ideological blame games over the viability of the biofuels sector, UNDERSTAND?! Thank you very much.

  14. Robert Rapier on January 2, 2011 9:41 PM

    Admired bloggers like Robert Rapier have allowed emotional prejudices and technical biases to discredit their commentary.

    The irony is that you didn’t give any actual examples. Yet in the post you linked to, I documented the RFA telling actual lies in order to further their agenda.

    Let’s look at a couple of your own claims:

    “Those businesses range from family owned to big oil run operations.”

    Those operations are almost universally Big Oil. Their isn’t much range; most of the fuel blended is done by Big Oil, and Big Oil gets the tax credit. Further, they have said they don’t need it:

    http://www.consumerenergyreport.com/2010/09/15/exxonmobil-says-no-to-subsidies/

    Then there’s this:

    “The production level is finally high enough that a bit of the production (about a million barrels per month) is going for export, offsetting the imported oil bill and adding to the pressure on oil prices.”

    You really want to defend that? You earlier claimed that ethanol is offsetting oil imports. Yet ethanol that is exported actually increased our oil imports, because it took oil to grow and transport the corn, and then transport the ethanol to the port and then across the ocean. So taxpayer-subsidized ethanol exports actually increase our oil dependence – at taxpayer expense. Exported ethanol is truly one of the stupidest things we are spending our tax dollars on.

    Robert Rapier

  15. Brian Westenhaus on January 3, 2011 1:26 AM

    Welcome Mr. Rapier,

    Four petroleum depots within 125 miles of here are small firms and get the benders credit. Almost all of which is used in price cuts to station owners. Get to know a few or better still, get an idea who, besides ‘Big Oil’ is in the oil business.

    Yes . . . American ethanol is producing close to a million barrels a day and exports are about a million barrels a month. Its a terrific value add to oil and natural gas that’s exported for hard currency that offsets in a small way what oil imports cost. Soon it will be two million barrels a month as consumers in other countries have figured out that ethanol is a good extender and octane booster, especially where compression ratios are higher and engines are more efficient.

    Calm down. You’re an engineer – cost out the methane for fertilizer, what petroleum products farmers use to grow and prepare a crop for sale and what ethanol producers use for distillation. This isn’t rocket science. High school kids in the Midwest have better info than you, the academics or the Renewable Fuels Association do.

    Here are a few facts to start your own due diligence. Anhydrous ammonia is applied at about 150 pounds per acre (It takes less than a pound of NH3 to produce that bushel of corn). NH3 at the Gulf Coast in 2009 was about $230 a ton, less than $18 an acre, less than 12 cents a bushel of corn – made with world price natural gas by the way. Farmers have less than 20 gallons of diesel in a corn acre – many less than half that – less than $60 – less than 5 cents a bushel. A small percentage of the farmers might get a quarter gallon of propane invested in drying, many less than a tenth, many none at all – worst case, maybe 40 cents a bushel. The ethanol from a bushel is worth about $6.00. Do the math.

    The ethanol producers recycle their process heat. But you’re gonna need lots, and I mean LOTS of natural gas for distillation plus trucks and railroads to use gallons of diesel per mile instead of miles per gallon to price up to those silly numbers you like.

    The anti ethanol crowd has No Credibility. The associations and lobbyists are just as full of bull.

    Young man, I am very disappointed with your work. Comments like “So taxpayer-subsidized ethanol exports actually increase our oil dependence – at taxpayer expense.” is a falsehood, plain as day.

    But that’s OK. I and other responsible folks need a foil to counter, and you’ll do just fine for a while longer, if you so choose. Thanks for stopping by.

    BW

  16. Robert Rapier on January 3, 2011 5:14 PM

    “Four petroleum depots within 125 miles of here are small firms and get the benders credit. Almost all of which is used in price cuts to station owners.”

    Please name them, and the amount of fuel they sell. What you will find is that this is used as a cover to justify the credit, when in fact as I said the vast bulk goes to the oil companies. That is a fact, which you try to obscure with anecdotal evidence about little Mom and Pop firms.

    Further, I don’t care if it is used in a price cut to station owners. That price cut came out of tax dollars. I would rather not have the government taking tax dollars from all taxpayers just to give back a small price cut to drivers. I don’t believe we should subsidize consumption. That’s a waste of tax dollars.

    “Its a terrific value add to oil and natural gas that’s exported for hard currency that offsets in a small way what oil imports cost.”

    It’s a terrible value. Taxpayer enable the process, and get what in return? The hard currency is collected by the ethanol producers. If you cost that out, you will see that no way could the industry afford to do it if it wasn’t being subsidized. In that case, we have subsidies flowing right out of the country in exchange for ethanol producers having a small incremental market.

    As I have documented, Iowa uses little of their own ethanol. What they export has to be back-filled with oil. Any way you slice it, exported ethanol increases oil imports. That isn’t rocket science.

    “Here are a few facts to start your own due diligence.”

    I have the facts. The USDA publishes the surveys on a fairly regular basis. That isn’t anecdotal evidence; those are based on documented usages. So I don’t need you to give me the numbers; I already have the official source.

    “The ethanol producers recycle their process heat.”

    As does every pretty much every industry that deals with chemicals or petroleum. That also isn’t rocket science.

    “…price up to those silly numbers you like.”

    Examples please of my use of silly numbers.

    “The anti ethanol crowd has No Credibility. The associations and lobbyists are just as full of bull.”

    Again, please give me examples as blatant as the RFA’s lying press release that I documented.

    “Young man, I am very disappointed with your work.”

    Not nearly as disappointed as I am in someone who has now twice questioned my credibility without giving any actual examples of where I am wrong.

    “Comments like “So taxpayer-subsidized ethanol exports actually increase our oil dependence – at taxpayer expense.” is a falsehood, plain as day.”

    No, if you believe that is a falsehood, you simply fail at logic. Any ethanol that ends up in Saudi Arabia required oil to get there – in several places of the supply chain. If it hadn’t ended up in Saudi Arabia, then that oil wouldn’t have been used. Because it wasn’t used domestically, it had to be back-filled with gasoline. The economics of that won’t pencil at all unless taxpayers are funding it – which completely defeats the reason for the subsidy in the first place.

    So I fail to see how you can’t understand that exported ethanol increases oil imports. I have to ask something based on your “failure” to get this. Are you a vested ethanol interest? If so, could you please explain your relationship so I can better understand? I can perfectly understand these comments coming from an ethanol lobbyist – and in that case I understand that they will never “get it” because it isn’t in their interest to get it. But I am not clear whether that is the case with you – although your comments would imply to me that it is. But I would appreciate you taking met through the rationale that exporting ethanol doesn’t increase oil imports – with something other than a claim that it doesn’t.

    If that ethanol was used domestically – and preferably close to the source – it can actually displace oil imports. But no way if it is exported. As I documented here, this is what we should be doing:

    http://www.consumerenergyreport.com/2010/08/30/e85-case-study-iowa/

    “I and other responsible folks need a foil to counter…”

    It isn’t responsible to suggest that ethanol exports don’t increase our oil imports. That is an indisputable fact.

    Happy to debate this with you at any time. But the debate will be fact-based. Claims will be documented with credible references. Anecdotal evidence is off the table.

    RR

  17. JPK on January 4, 2011 12:20 AM

    It is not easy to do the math in evaluating the merits – and viability – of the biofuels sector, but it is important not to undermine the efforts of people who have the vision and creativity to create these fuels.

    That will come into fruition once the development of a new generation of biofuels is successful. So be patient and, please, keep informed of the latest updates in the biofuel and biochemical sectors.

    It’s time to stop those agonizing blame games because it will foolish continue that anytime soon. And better be careful with the spelling, too.

    Time to stay focus well on the biofuel and biochemical sectors around the globe – and watch more closely on the latest developments.

    Thank you very much.

  18. RAS on January 5, 2011 6:23 PM

    Well said Brain. I’m giving you an official “Ataboy.”

    Don’t forget there is about 150,000 btu left in the distillers grains after the ethanol is made from the bushel of corn. It’s worth about $1.55 FOB the plant and contains 100% of the protein, oil, fiber etc that was in the original corn kernel.

    Keep up the good work Brain, but don’t expect to change the anti-ethanol crowd, they don’t want to let something like the truth get in the way of a perfectly good agenda or vested interest or storyline or fund raiser or fill in the blank_______.

  19. Aureon on January 6, 2011 2:22 PM

    Speak the Truth About Ethanol

    Brian Westenhaus has a much more compelling argument than Mr. Rapier. However, Rapier does make some good points regarding Localization. Iowa should use more of its own home-grown fuel. Its own ethanol mandate failed in its State Legislature. Mr. Rapier makes the claim that Iowa is not using enough of its own ethanol – But to what extent? Just how much Iowa ethanol IS being consumed in Iowa? 6%… 7%… 8%? Where are you’re actual numbers to back-up your claim? And in your opinion, what percentage of ethanol should Iowa consume?

    Mr. Rapier – How ‘bout if we run all the tractors and harvesters and long haul trucks in Iowa on domestic LNG, biodiesel, and hydrous ethanol? Would you be satisfied then?

    Let’s get this clear. I’m not attacking your character. I’m disputing your claims. What’s missing from your concept of ethanol is sound economics. Yes, at this point in time, corn farmers are in love with their diesel tractors. But some of them make their own biodiesel, and some of them put hydrous ethanol vaporizers on the air intake. Now hybrid electric tractors are coming to market. And LNG long haul trucks running on domestic natural gas are also here. There is currently a very strong biodiesel movement in Iowa. For Iowa farmers and truckers, the shift is to biodiesel, not ethanol. You can not prove beyond a shadow of a doubt, just how much petroleum based fuel is being consumed for corn growing and ethanol in Iowa, without a comprehensive, up to date study.

    Here’s where your economics are incorrect: Whatever amount of petroleum that is used to produce corn, that same fuel produces three other co-products. The corn protein, from which distillers grains livestock feed is made is the big one. You must know that, but you omit this from your rhetoric. Ethanol byproduct distillers grains are fed to animals to produce dairy products, meat, fish and eggs. Last time I checked, that was food – Not fuel. Did you credit the ethanol component with the food component?

    Are you aware that Greenshift corn oil extraction is sweeping the ethanol industry? Green Plains, for example is converting all their ethanol refineries to extract crude corn oil from the byproducts. This is another co-product used to make biodiesel for local farmers and truckers. It comes out of the same kernel of corn that you claim went all to ethanol. A 100 mgy ethanol plant performing corn extraction produces about 5 mgy of biodiesel feedstock for local consumption. Within the decade, all corn ethanol refineries will have corn oil extraction bolted-on.

    The other resource coming off the same field that grew the corn is the cobs, leaves, and husks, also known as “light stover”. Only 25% is taken. The rest is left in the field to preserve the soil. Poet Ethanol’s Jeff Broin, the leading producer of ethanol in the world, has a successful pilot plant up and running – converting light stover into cellulosic ethanol. A 20 mgy commercial plant is funded and going into production in 2012. This technology will be replicated across the industry, and it too, will be bolted-on to existing corn ethanol refineries. We have 87 million acres of feed corn, and light stover is now a vast domestic resource.

    So you will need to correct your math. You’re way off on the amount of petroleum that goes into producing and shipping corn used for ethanol.

    You make the false conjecture – that exporting ethanol consumes more petroleum than the ethanol being shipped. It’s evident that you haven’t measured this accurately. Obviously, it takes some petroleum to produce and ship ethanol, but what is the ratio? What fraction of a gallon of petroleum does it take to produce and ship a gallon of ethanol, or to export a gallon of ethanol? That’s what we would need to know. And the fact is – nobody knows that, without an up-to-date comprehensive study. So it looks like you are the one making claims, without hard evidence to back it up.

    Ethanol producers are exporting their surplus because of the blend wall. And to fix that, we need to mandate that all new vehicles sold in the U.S. are flexi-fueled. It only costs about $150 per vehicle. Then why are automakers fighting it? Are they in bed with big oil too? Wait ‘til oil goes over $200 a barrel, and then you’ll see how important domestic ethanol is.

    The other false claim you make is that exported ethanol is riding on the blender’s subsidy. It’s not. Unblended exported ethanol is not subject to the credit and not being funded by the American Taxpayer.

    You may say that some exported ethanol IS blended and subject to the credit. And that’s where I would agree with you – That we should Not allow the credit for blending ethanol with gasoline for export. ‘Same with the way biodiesel was being splash-blended for the $1 a gallon credit and then dumped on the European market. A blender’s credit should be allowed only on domestically consumed biofuel.

    You say that Big Oil doesn’t need the blender’s credit. That’s a false front. They’re the ones who pressed for it in the beginning… That is, until blender pumps came along, and blender pumps threaten Big Oil. If you don’t think so:

    In September 2008, the American Petroleum Institute and the National Petrochemical and Refiner’s Association filed suit in US District Court to overturn the North Carolina Blending Act. North Carolina passed a law that requires refiners to make an unblended gasoline product available to distributors or retailers. The purpose of this law is to allow retailers to blend their own fuel and capture the ethanol blending subsidy for themselves. Part of this credit would be used to finance blender pumps, and part of it would be passed on to consumers in lower fuel prices.

    Reference:

    http://www.biofuelsdigest.com/blog2/2009/12/30/north-carolina-drops-ethanol-tax-exemption-effective-january-1st-2010/

    The American Petroleum Institute also sued Tennessee over the same issue, a similar state law in Tennessee that would require refiners and suppliers of gasoline and diesel to sell unblended fuels, so retailers could blend their own and take the credit.

    Reference:

    http://ethanolproducer.com/article.jsp?article_id=6231

    The real reason Big Oil is against the blender’s credit is not because they don’t need it, as Exxon-Mobil claims and then Rapier claims on their coat-tails. It’s because Big Oil doesn’t want the rug pulled out from under them by Retailers installing their own blender pumps. That is already setting up a localized supply system, where ethanol is shipped directly to Retailer blender pumps, bypassing the middle man blender – Big Oil. This makes E-20, E-30, and E-85 cheaper and more competitive against conventional gasoline. One station reported that sales of ethanol went up 500%, after blender pumps were installed. Of course this took market share away from sales of regular gasoline – the product of oil companies.

    Mr. Rapier complains about ethanol subsidies, which pay for themselves many times over, and he says that we should not “subsidize consumption”. Then why are we still subsidizing the mature petroleum industry, with subsidies that are 10-12 times higher than the ethanol blender’s credit? We need to put some of those funds into a network of blender pumps. And we need to make engines that are optimized not just for gasoline, but also for ethanol. That’s what energy independent Brazil is doing, and they’re way ahead of us. They don’t have our entrenched energy policy that favors Big Oil and Imported Oil.

    Ethanol is a work in progress. So was the computer. One computer used to take up a whole room. Now you can hold one in the palm of your hand. Likewise we can look forward to more efficient ethanol production, new uses for the fuel, and advanced ethanol optimized engine technology.

  20. Brian Westenhaus on January 6, 2011 6:48 PM

    Dear Mr. Rapier and All,

    I won’t be naming innocent third party fuel blenders to our discussion. One is a small firm owned by three brothers that still send hand drawn bills each month. I will add a fifth though, it’s a multistate agricultural cooperative that owns oil & gas wells, refinery interests, and ethanol and fertilizer facilities, rail spurs, biodiesel and livestock feed plants plus heaven knows what else. They’re not Big Oil either. Mr. Rapier has simply jumped to a conclusion and remains in error. This blog isn’t about assisting his blog though or the visitors over there. I haven’t visited R-Squared in more than three years myself. But it’s still over on the blog roll as I assume about a third or fourth or so of what’s on site still has value.

    Discernment is up to the reader. Every judgment made is a self-test. For our own sake, lets go . . .

    At the risk of stirring Mr. Rapier again, ethanol is a great value add. Your humble writer has had some economics training that leavens so much of what’s reviewed here. I encourage Mr. Rapier to ask his acquaintances and check on me, we have friends in common. The goal here is for visitors to come away with useful information to use in the future that hopefully will enrich humanity.

    On that point, the idea to try to match and compare energy units of some kind like ethanol vs. the petroleum inputs is a giant waste. Even as the price of ethanol has minor support via tax treatment, and so, does most everything else. Thus generally, using the money involved instead is a market-tested reality founded means to compare petroleum vs. ethanol. Obviously, all the petroleum used in producing ethanol is priced in. Using energy inputs is an instant disqualifier, it’s the most popular way to lie without lying – but without decades of life experience or the collegiate training – a person is likely to fall victim. Then a thanks is due to Mr. Rapier for the example to encourage us all to keep learning.

    So. If one has a sense of the short list of agronomy, plant sciences, genetics, weather, farming practices, farm capitalization and economics in growing fuel (yes as a fuel, the carbohydrates are animal energy fuels – including humans) one can come away with some general numbers. At the flood plains of the Mississippi in southeast Missouri the petroleum to ethanol result could be more than 1 petroleum dollar to 8 ethanol dollars. Now as noted, there is a wealth of variables, some controllable and others not, which can radically collapse that.

    By the time one migrates to mid central North Dakota the ratio could get below 1 to 2. The growing season is shorter, the soil types less advantageous and other conditions diminish the potential. But its still profitable and a petroleum value add.

    Until the price of corn collapses – and it will someday – corn based ethanol will still be a value add, just in smaller and fewer areas.

    For Mr. Rapier and everyone else’s benefit, the USDA is a political animal. Much of the work there is of great value, but over the years, much has misled vast amounts of capital and political policy. Everyone has heard the phrase garbage in = garbage out, so those of you with some statistics experience know, the USDA many times has trouble getting a handle on pronouncements that can live on as facts over time. On simple matters like production, crop yields, grain sales and other research the USDA is without doubt a high quality service. But as the statistical research deepens the opinions, bias and prejudices get enrolled into the source choices and methodology and some research has an intended audience that is looking for data that is useful yet the results get kidnapped for ‘facts’ in unrelated uses other than the original request. Also keep in mind there is an industry competing to sell science insight as well.

    So, I’m not checking Mr. Rapier’s ‘facts and sources’. Statistical and survey constructions are not facts. They are synthesized assessments. Many are assessments made to fit the original data or facts or the request for political reasons. You can quote me now “Pfft, I know better.”

    Let’s see, what else does Mr. Rapier deserve a response to? Ah, I am vested in: oil and gas, ethanol, wind, other biofuels and nuclear. I want to get, and very badly in fact, vested in aquaculture, thorium fueled nuclear, fusion, air reaction batteries, and direct ethanol fuel cells.

    Time to wind this up. Ethanol, oil and gas, wind and some other energy and fuel components of the economy are realities, products and services for sale. They’re profitable, beneficial and worthwhile. Reality doesn’t lie. Revoke the tax code and they’ll all still stand for better or worse. Case made.

    Gail Tverberg over at http://ourfiniteworld.com/ (shameless plug) and I walked through an information center up on the API’s oil sands trip. As we walked by the visual of the bitumen molecule I asked, what looks to be missing? We gazed on a huge, mostly carbon atom based molecule. What’s not there in happy quantity is hydrogen.

    Ethanol is the economically standing, market proven contemporaneous path to gather hydrogen and hook it to carbon, a process driven with solar energy. I’ll happily grant corn isn’t the best choice, but its what America has and makes good use of. It provides use for capital, management and labor for profit, careers and jobs in markets of domestic consumption, and international export. Millions are getting spent looking for ways and trying to do better. Billions are invested with income taxes getting paid. The path to cheaper ethanol is getting built. Anywhere anything will grow can be a food vs. fuel contest.

    And Mr. Rapier chooses to argue the reality. Fine. He’s a self-chosen public figure. I won’t be suggesting he’s not smart, he is. Nor cast doubt on his intelligence, he is very intelligent, but his intellectual provenance has gone astray. With friends in common I wish him well and look forward to meeting someday.

    Ideas in mind though are market positions in a way. For us to buy low and sell high there has to be a sell low and buy high fella on the other side.

    Mr. Rapier and his co-believers are in part, what the rest of us need. It’s a good thing they’re smart or I’d feel guilty.

    BW

  21. Robert Rapier on January 6, 2011 7:35 PM

    “Mr. Rapier has simply jumped to a conclusion and remains in error.”

    My contention is that Big Oil collects the vast majority of the VEETC. Your anecdotal evidence does nothing to dispute that. It is very different to claim someone is in error than to show they are in error, and so far you haven’t picked a single claim of mine and shown it to be wrong.

    “I haven’t visited R-Squared in more than three years myself.”

    I am speechless then that you could characterize one of my essays as lies, and accuse me of using silly numbers. If you don’t read what I write, don’t comment on what you don’t read.

    RR

  22. Robert Rapier on January 6, 2011 7:37 PM

    “So you will need to correct your math. You’re way off on the amount of petroleum that goes into producing and shipping corn used for ethanol.”

    And you need to check what I actually said against what you are arguing against. Your post is full of arguments against things I never actually said.

    I have a post up on my blog on this now, if you wish to come argue your points.

    RR

  23. Brian Westenhaus on January 6, 2011 9:58 PM

    Ah. An Ah HA! for Mr. Rapier. I don’t visit R-Squared directly as I ‘miss’-stated. Guilty. But I do seem to read lot of what he’s written from email links and site links, ad-infinity. He’s an amazing success. But keeping him speechless lasted less than 2 minutes.

    I like this guy. Really. Anyway the 7:37 post refutes, I believe Aureon, above. Aureon can take care of himself quite well.

    OK. He’d like us all to come visit. See, I can’t escape. . . Just go ahead, keep in mind its for entertainment value only.

    http://www.consumerenergyreport.com/2011/01/06/ethanol-exports-increase-dependence-on-foreign-oil/

    I said with my comment:

    “Thanks, Mr. Rapier,
    For the opportunity to allow others to see how divergent our views are. Yes I regard almost everything written or said about ethanol as a lie, including for some, perhaps for more than a few people, all of what I have to say. But the reality remains. A reality older than mass produced Model ‘T’s. Ethanol works. Even corn fed ethanol production.

    Mr. Rapier is a popular guy. He’s an example with the renowned John Stossel. I’m OK with that, obviously, since he is. Stossel is a well regarded mass media purveyor and Mr Rapier is a well regarded blogosphere purveyor. Both clutching to a failed assumption thoroughly dis proven by reality. That he’s alarmed is a bit mystifying, though. And considering the post above as all about him, somewhat of a psychological warning sign, I would think, as it rather gives me the creeps.

    There comes a responsibility at the level he’s attained and I remain disappointed with both of them. I commend Mr. Rapier for responding, though. Everyone benefits from the discourse, no matter the preconceived opinions.

    There doesn’t seem to be any value in the post above, and that’s fine. Sometimes coming up with post materials is a desperate effort, as we both know. I will happily be Mr. Rapier’s foil. As this is his web page I leave the responsibility up to him to provide the link to the discussion on the site where I work. We’ll see if he is as forthright and honest with his visitors as we are . . .

    I have bowed respectfully to his points and managed to get his commentary out of the Akismet system, at least for a while.

    For those who don’t know what Akismet is, it removes comments from blogs that are usually advertising links, trick advertising, misdirects, off color language and most anything that would irritate a site admin that fits in the Akismet computer’s check. So if your comments aren’t coming up for days or not at all, well, you’ve made a serious comment mistake somewhere. I hope I’ve fixed up Mr. Rapier, if only for a while. That’s why all those days “After my reply lingered in moderation limbo for several days, it was finally published,” I just don’t sit at the computer checking the Akismet results. I was in D.C. as a guest of the American Petroleum Institute as well -Freed from the computer for 48 hours! I actually caught Mr. Rapier’s first and second comments as I do scan the hundreds of them that show up each day. The third and fourth loaded without my intervention.

    On the points. A debate point needs a base or foundation for the construct of the point being made. It nice to rely on silly numbers drawn from studies and such. Even the Wall Street Journal, now that Rupert Murdoch’s News Corp owns it as well as the Fox News Channel where Stossel now works, are attacking American ethanol.

    Keep these matters in mind – oil, gas, corn, ethanol, oats and even orange juice and metals are world traded commodities. You can learn the transport cost for a contract on the Chicago Mercantile website for closing a contract and taking delivery.

    With these points in mind re peruse Mr. Rapier’s thoughts above. Where does he make any sense? The main buyers of American ethanol doesn’t include Saudi Arabia that I recall. It does include developed economies seeking diversified energy resources and gasoline additives that are not environmentally toxic.

    I see just one point, albeit an error in perspective – being a noteworthy example isn’t a personal affront. I do offer that I may have accosted him personally in a mistake for which I humbly and abjectly apologize for.

    Yet Mr. Rapier is a public figure, this isn’t the first nor the last affront. It’s time for an intellectual provenance upgrade. Its also the last apology from me unless it really is personal and a mistake.

    Brian Westenhaus”

    Well there are other, better things to be doing . . .

    BW

  24. Robert Rapier on January 6, 2011 10:30 PM

    “Just go ahead, keep in mind its for entertainment value only.”

    Afraid readers might think for themselves?

    “As this is his web page I leave the responsibility up to him to provide the link to the discussion on the site where I work.”

    Uh, Brian, the essay itself links back to this one. I am not sure what else you want.

    Further, the above commentary seems as if it was meant for my blog? There has been no comment as such posted if that is what you intended.

    “Where does he make any sense? The main buyers of American ethanol doesn’t include Saudi Arabia that I recall.”

    All these words, and you still haven’t refuted a single point I have made. You haven’t even attempted to address a single point I have made. You characterize numbers as silly and give no examples. You are just offering a lot of “blah, blah, blah” where I am offering specifics.

    The issue is this: Ethanol that is produced in the U.S. and exported requires us to import more oil. You said this was false. The post clearly shows it is true. Whether Saudi is the main buyer is a Red Herring. What you could do is say “OK, I agree that this statement is true” instead of doing a lot of hand-waving.

    It is becoming apparent to me that perhaps you don’t even understand my arguments. Even this one is quite simple, and yet instead of conceding the truth, you attempt to dismiss it and throw out Red Herrings. But nowhere do you actually address it.

    So my request to you is that if you wish to dispute a point of mine, dispute it specifically and with data, not generically with just a lot of commentary.

    My last comment here. If you wish to discuss something, you know where I am. But we won’t talk each other to death. We will be specific and stay on point.

    RR

  25. Brian Westenhaus on January 7, 2011 12:44 AM

    Mr. Rapier and All,

    It’s a good thing Mr. Rapier has such a good Internet reputation, but its easy to see why I needed to solve the Akismet issue for him. Ya’ll can kick me now.

    Point by point, please reference from Mr. Rapier’s comment above.

    1. I don’t much care what Mr. Rapier’s visitors think now, care comes after they are exposed to more competent information -that might be of interest.
    2. It is Mr. Rapier’s web page, the comments do not, insofar as I’ve checked, connect to commenter’s web sites. I did check to see if email addresses pass through, which they do not. Or if author site links appear, which they do not as well. In text links do, thus a reference opportunity invitation was placed in the text as seen above. So, I posted my thoughts and copied and pasted them here. It seems not trusting Mr. Rapier was good judgment. The comment has not appeared. He can find it, release it, copy and paste it for himself from here or do whatever he likes including denying I posted a comment -anything at all. His site operation reputation isn’t my responsibility. He’s failed the integrity test.
    3. I don’t refute ‘points’, especially points without or out of the context. I passed debate class, but don’t remember the grade I received. The anti ethanol and the proponents all have no credible numbers that pattern with functioning reality. Grow up, most people see right through the foggy falseness or just don’t care, a cheaper fill up is better.
    4. Heavens!, points. I will not be suckered into looking at a few of Mr. Rapier’s trees when sound judgment and oversight requires observing the forest. When will he understand this?
    5. “No, son. America does not import more oil to make ethanol. Even the most die hard anti ethanol number is 1.4 ethanol to 1 of petroleum. We import less oil and raw gasoline because we make ethanol. That’s been settled for quite a while now. We gain economically when we export a gain. Real simple, son. OK?”
    6. “You’re right, finally. I don’t understand your arguments. I am concerned that you do, though.”
    7. Saudi as an ethanol buyer is Mr. Rapier’s red herring and it’s offensive to America’s ethanol customers to make false assertions.
    8. See #4 above.
    9. “I cannot honor your request, see #4 above again.”
    10. Thanks to Mr. Rapier for winding this up. It’s been quite a good example for my visitors on reason and wisdom overcoming the barrage of “facts” as some basis for judgment. Thank you, Mr. Rapier.

    I doubt we’ll have an opportunity to discuss anything in view of the comment management on Mr. Rapier’s site. By website management skills or emotionally driven intent your humble writer’s thoughts have no currency there.
    ***
    Having used Mr. Rapier as an example in the blogging arena we’ve been shown a light but visceral response. The apology has been delivered. But offering a hand out of the do do can’t be grasped. In wealth, managing a forest always trumps tending a tree. One can not help those who won’t help themselves.

    BW

  26. Robert Rapier on January 7, 2011 1:25 AM

    “So, I posted my thoughts and copied and pasted them here. It seems not trusting Mr. Rapier was good judgment. The comment has not appeared. He can find it, release it, copy and paste it for himself from here or do whatever he likes including denying I posted a comment -anything at all. His site operation reputation isn’t my responsibility. He’s failed the integrity test.”

    Brian, I can only assume that you are a liar, incompetent, or a troll. I get an e-mail of every comment that is made — and I got no e-mail of your comment. Comments also appear instantly — so you would have seen it right away had you actually posted it. Nothing is ever censored there except over the top personal attacks. I encourage free discussion over there. If you posted a comment, and it didn’t appear immediately, then you screwed it up. Go ahead readers. Check for yourself. Post a comment and watch it appear. Brian is making things up.

    Based on this exchange, I can see that one of us is lacking integrity. Why on earth do you think I would censor a comment of yours? Do you really think I am afraid of what you might say? Good Lord, man, are you ever full of yourself.

    “No, son. America does not import more oil to make ethanol. Even the most die hard anti ethanol number is 1.4 ethanol to 1 of petroleum.”

    Ah, the arrogant and ignorant combination. Always entertaining. That just proves that you don’t have the foggiest notion of what I am saying — and therefore it is not surprising that you dispute my arguments. You just don’t grasp them. That concerns me, because it is really a rather simple concept. Let’s go through it once more really slowly. Let’s say it is 1.4 ethanol to 1 petroleum. Now export that ethanol. Guess what? It didn’t displace any domestic gasoline, and you still needed the petroleum. Is that really that hard for you to grasp?

    “Saudi as an ethanol buyer is Mr. Rapier’s red herring and it’s offensive to America’s ethanol customers to make false assertions.”

    You don’t know much about our ethanol exports, do you? And yet you want to throw around accusations. From the Financial Times:

    “Government data last week showed 251m gallons in fuel ethanol exports in the nine months to September 30, more than double the 2009 total. The US became a net exporter this year.

    Actual export figures may be higher, as ethanol mixed with petrol before shipment is not counted in the data. Christoph Berg of consultants F.O. Licht in Hamburg estimated the fuel blends added more than 50 per cent to the US’s reported ethanol exports to Europe.

    The top reported destinations are: Canada at 75m gallons; the Netherlands, 58m gallons; the United Arab Emirates, 15m gallons; the UK, 10m gallons and Saudi Arabia, 170,000 gallons.”

    I won’t wait around for an apology for yet another accusations of “false assertions.” Nor will I continue to engage someone who is so insistent on 1). Throwing around ill-informed accusations; 2). Refusing to defend them.

    RR

  27. Sam Avro on January 7, 2011 2:27 AM

    Brian,

    After receiving a note from Robert about your comment failing to appear on our site I scrolled through the spam filter and found that yours was flagged just as Robert’s was over here on your blog.

    Comments normally appear immediately; but every once in a while a legit comment will not make it through the Akismet filter (as you well know from your own experiences here).

    I’m not here to recruit you to sign up to our forums (where the comments are based out of once allowed through the Akismet filter if submitted via the WordPress end of the site), but comments from registered members posted directly in the forums automatically bypass the spam filter.

    Sam Avro
    Editor
    Consumer Energy Report

  28. Robert Rapier on January 7, 2011 2:33 AM

    Sam, thanks for that clarification. I apologize to Brian for suggesting he made things up, but it doesn’t change the fact that his immediate reaction when his comments didn’t appear was to write “It seems not trusting Mr. Rapier was good judgment” and “He’s failed the integrity test.”

    Keep in mind that my comments were in limbo here for 2 days (which according to him meant I made a serious error) yet when his got caught (which presumably means he made a serious error) he starts calling me dishonest within the hour.

    RR

  29. Someone on January 7, 2011 2:35 AM

    Brian, I have not seen you dispute any of Robert’s facts or comments, with out providing any legitimate facts or sources against himm

    I read for ever to see if you would, but it’s clearly obvious now that you are only interested in trying to defame and slander Mr. Rapiers hard earned name and reputation. Mr. Rapier has made many comments to which he can back up with references and facts, every one of them even, so far as I can see.

    I have yet to see this be done by you.

  30. Fightin' over the Forests vs. Trees | New Energy and Fuel on January 7, 2011 5:56 PM

    [...] and widely circulated Robert Rapier, author of the R-Squared blog had left a comment on a week ago Tuesday’s post, December 28, 2010 in the spam file. I marked Mr. Rapier as ‘Not Spam’ and replied in the wee hours of Monday [...]

  31. Steve Zeigler on January 11, 2011 6:22 PM

    Hi. the EPA is currently not allowed to test E10 E5 or E15. It tests E0 and E85. Why? A waiver was granted in 1990 to prevent testing for MPG of E5, then E10 and now E15. Why does Ethanol need a waiver? Perhaps because those of us who went suddenly from E0 to E10 found a 10-20% drop in mpg! Many didn’t see it because the waiver allowed up to E5 without telling anyone. So our gas has gotten laced with up to E5 for decades, and each new E addition is not as bad as the original effects of E1->E5. And now it is hard for us to test it because it is hard to get/prove E0. Maybe we’re wrong. But if so, just allow the EPA to test E5, E10 and E15 and we’ll be quiet. But if we are right – you are hurting America. Big time.

  32. Ron Lamberty on January 11, 2011 9:05 PM

    From Robert Rapier: “Ah, the arrogant and ignorant combination. Always entertaining. That just proves that you don’t have the foggiest notion of what I am saying — and therefore it is not surprising that you dispute my arguments. You just don’t grasp them. That concerns me, because it is really a rather simple concept. Let’s go through it once more really slowly. Let’s say it is 1.4 ethanol to 1 petroleum. Now export that ethanol. Guess what? It didn’t displace any domestic gasoline, and you still needed the petroleum. Is that really that hard for you to grasp?”

    Not hard for me to grasp, Bob squared, but it’s at BEST an intentional mis-statement of facts. You know damn well it isn’t 1.4 gallons of ethanol to one gallon of PETROLEUM. It’s 1.4 units of energy to 1 unit of Energy. All kinds of energy – you’d think an “energy” guy would recognize that.

    But it doesn’t suit your purposes, I suppose, which is why anti-ethanol folks talk about ENERGY studies and carefully substitute the word OIL or PETROLEUM and act like they did it casually when confronted with that fact. True students of energy understand that the ethanol energy balance studies include all kinds of energy, not just oil. In fact, not much oil. I would just have to assume that in this case, since you are certainly not ignorant of the facts, you must be intentionally trying to mislead.

    Take your patron saint David Pimentel, for example (an Ivy League researcher who hates ethanol). The only actual OIL (as most of us ethanol guys and average Joes you’re try to mislead know it) used in his energy analysis is about 24 gallons of diesel fuel and 15 gallons of gasoline used to farm one hectare of corn – about 2 1/2 acres. The corn grown on 2 1/2 acres would make about 1100 gallons of ethanol. That’s 28 gallons of ethanol for every gallon of liquid fuel used.

    Now, because gas and diesel are negative energy balance fuels, I want to be accurate – so, to make that diesel fuel, you would need 87 gallons of oil, but that would also give you 23 more gallons of gas than you need, so the net amount of petroleum you would have to use is 64 gallons (not the 39 that Pimentel mentions). That means even if we export 1000 gallons of that ethanol, we still have more than enough left to offset about 150% of the petroleum we used to make it.

    And if you’re concerned about the export of ethanol causing us to import oil, how do you feel about the fact that we have exported as much petroleum in the last three weeks as we did ethanol all last year?

    The bottom line is that if we didn’t have ethanol, we wouldn’t need less oil, and oil wouldn’t be less expensive, and farmers wouldn’t grow more corn at lower prices, and the air would not be cleaner. None of those things would happen because the arguments against them aren’t true, and the people making those arguments are liars.

    Oh, and just because Al Gore is pandering to people who don’t like ethanol now rather than people who do, that doesn’t make him right. It just makes him a panderer.

  33. Robert Rapier on January 11, 2011 10:07 PM

    “Not hard for me to grasp, Bob squared, but it’s at BEST an intentional mis-statement of facts. You know damn well it isn’t 1.4 gallons of ethanol to one gallon of PETROLEUM. It’s 1.4 units of energy to 1 unit of Energy. All kinds of energy – you’d think an “energy” guy would recognize that.”

    Gosh, Ron, you would think if a guy was going to jump right into the middle of a conversation, he would at least have the courtesy of understanding context. The 1.4 was Brian’s example, not mine. I used his example to illustrate the point, but if you follow the context the number didn’t matter. So please save your insults about “energy guy” for an argument you have followed.

    “But it doesn’t suit your purposes, I suppose,…”

    So, another person who wants to tell me what my purpose is. Go ahead. Let’s hear it. Please tell me what my purpose is.

    “I would just have to assume that in this case, since you are certainly not ignorant of the facts, you must be intentionally trying to mislead.”

    Or you could once more be ignorant of context. Brian declared it an absolute falsehood that exporting ethanol causes us to import more oil. I was showing that he was wrong. If we want to discuss whether it is wise energy policy to export subsidized ethanol when the E85 market isn’t remotely tapped, that’s another topic worth discussing.

    If you want to take some time to understand context, I would be happy to discuss matters. But if you don’t, it’s a waste of time.

    RR

  34. Ron Lamberty on January 12, 2011 3:15 AM

    Here’s my understanding of the context: They were Brian’s numbers and your point, but whether you use his example or actual numbers, it’s a point that is wrong. With all of the other points you took issue with in Brian’s post, you didn’t correct his misstatement of “1.4 ethanol to 1 of PETROLEUM.” Instead, you used it to bolster your argument, even though you must have known that was inaccurate.
    As to your purpose, I assumed it was to continue to defend your own inaccurate statement, one that reminded me of Dr. Pimentel’s favorite, “We are importing oil to make ethanol.” Yours was a variation on that theme: “Ethanol that is produced in the U.S. and exported requires us to import more oil.”
    While I particularly object to the semantics of making a one-to-one-to-one equivalency between ethanol and energy and “oil”, the fact is that both of those over-simplified statements are not true.
    But let’s deal specifically with your statement that exporting ethanol requires us to import oil: For it to be true, gasoline and ethanol production and gasoline and ethanol use would have to be perfectly balanced and static. We would have to be actually reducing the amount of ethanol produced and used in gasoline, requiring us to use more oil to make the gas ethanol had been replacing.
    In one of your posts, you mention 251m gallons of ethanol exported through September. January 2010 ethanol production alone was 241m higher than January 2009. By the end of October, ethanol production was more than 2 BILLION gallons higher than the same period in 2009.
    If we’re importing more oil, it is to meet higher gasoline demand, not to make ethanol for export – or maybe it is to replace the 200 million gallons of gas we export every month.
    I will agree with your final point – that tapping the E85 market is a topic worth discussing – but it isn’t one you’ve mentioned here before.

  35. Robert Rapier on January 12, 2011 3:42 AM

    “With all of the other points you took issue with in Brian’s post, you didn’t correct his misstatement of “1.4 ethanol to 1 of PETROLEUM.””

    That’s simply because it didn’t matter. You are wrong: Ethanol that is exported does require higher oil imports. It is a simple fact, because it requires some oil to produce ethanol (the only way to refute the argument is to show that no oil is used in the production of ethanol), and when the ethanol is exported it isn’t displacing any domestic gasoline (which could more than offset the oil that was imported to produce the ethanol — had it been used domestically). It didn’t matter if the ratio was 1.4 or 5 to 1, the point remained.

    Brian also initially declared this false, but later had to concede that it was in fact true. He then just argued that in the big picture it was still worth doing. I don’t believe you have yet grasped the point. The idea is not that our oil imports are up because we are producing ethanol, which is more or less the position that you are arguing against (and perhaps more reflective of what Pimentel argued).

    I do think it’s a foolish waste of tax dollars to subsidize ethanol and then ship it out of the country. That defeats the entire purpose of the subsidies.

    As far as tapping into the E85 market, I have written lots on that. For instance:

    http://www.consumerenergyreport.com/2010/08/30/e85-case-study-iowa/

    http://www.consumerenergyreport.com/2010/07/30/thoughts-on-an-ethanol-pipeline/

    The bottom line is that my position on ethanol isn’t nearly as black and white as some people wish to portray it. I generally find that people who get worked up over what I write or say about ethanol don’t really have much of an idea what I say or write about ethanol. They just get snippets and form an opinion.

    Of course I should point out that I am not a lobbyist; just an engineer who is concerned about U.S. energy policy because I believe we are making mistakes that will put our children at an economic disadvantage.

    RR

  36. Ron Lamberty on January 12, 2011 11:11 AM

    RR: “You are wrong: Ethanol that is exported does require higher oil imports. It is a simple fact, because it requires some oil to produce ethanol (the only way to refute the argument is to show that no oil is used in the production of ethanol), and when the ethanol is exported it isn’t displacing any domestic gasoline (which could more than offset the oil that was imported to produce the ethanol — had it been used domestically).”

    Actually, the only way to refute my argument is to assume that every gallon of ethanol manufactured is then exported – that none of it adds to the fuel supply. But that would be a rather odd assumption, given the fact that you cited exports of only about 250 million gallons of 13 billion produced.

    Let’s simplify this: Let’s say I use 10000 gallons of petroleum a year, and we produce 4000 of it here and import 6000 gallons. If I take 64 gallons of that fuel and use it to make 1100 gallons of ethanol (those numbers from an earlier post), my fuel supply just increased to 11036 gallons. Unless I export every drop of the 1100 I made, why would I need to import any oil? Wouldn’t I, in fact, need less imported petroleum? You talk about the US being a net exporter of ethanol, so you surely understand that concept.

    If I exported the equivalent of what US exports the first 9 months of this year represent, my fuel supply would drop to 11008 gallons.

    Again, the only way you’re right is if you’re assuming that every gallon of ethanol is exported (which seems at least a tad intellectually dishonest). Otherwise, all of the other gallons of gasoline and diesel that we are using to make ethanol are making far more ethanol than we need to replace the gas and diesel we use to make ethanol for export.

    I understand your single gallon theory, I just want to make sure that people who read it understand that it doesn’t exist anywhere in the real world.

  37. Robert Rapier on January 12, 2011 11:30 AM

    “Actually, the only way to refute my argument is to assume that every gallon of ethanol manufactured is then exported – that none of it adds to the fuel supply.”

    Nope, that just indicates that you don’t understand my argument. You are arguing a different point. I suspect you know this though.

    “Let’s simplify this:”

    That’s not simplification, it is obfuscation. Here is the simplification: It takes some petroleum to make ethanol. The more ethanol we make, the more petroleum required. (It doesn’t have to be that way, but in the real world it is that way). If we use that ethanol domestically, it can offset the petroleum we used to make it and actually increase domestic fuel supplies (your point). If we export that ethanol, it does not (my point). It is just more petroleum we had to use with no domestic offsets. (Brian finally had an “A-ha” moment and understood this).

    Those are facts. The point of the exercise is two-fold. First, ethanol supporters who complain about soldiers fighting for oil — and then turn around and export ethanol — are hypocrites since that exported ethanol increases U.S. petroleum needs. Second, the taxpayer is getting nothing in return for subsidizing these exports. The winners are ethanol producers and countries receive a U.S.-taxpayer discount on their fuel purchases. Saudi must think it is pretty funny that U.S. taxpayers are subsidizing their ethanol purchases. If ethanol producers wish to export ethanol, they need to do it on their own dime, not on the backs of taxpayers.

    You are absolutely NOT listening to my argument. You are simply trying to talk past or talk over me in order to obfuscate the point. This may be by accident, but given that your job is to promote ethanol, it is likely by design.

    RR

  38. Mitch on January 12, 2011 12:05 PM

    More grain for the mill, with points Rapier isn’t gonna like much . . . http://illinoisfarmbureau.wordpress.com/2010/12/03/in-defense-of-ethanol/
    I see Rapier’s expertise as limiting his view. Really not worth the time to follow.

  39. Robert Rapier on January 12, 2011 12:44 PM

    “More grain for the mill, with points Rapier isn’t gonna like much…”

    The problem for you, Mitch, is that because you can’t be bothered to follow the discussion, you really don’t know what the discussion actually is. I would be willing to bet that you can’t accurately describe my position.

    So please, if you can’t be bothered to follow along, don’t bother me with links and suggest that I won’t like them much. How would you know if you won’t follow the discussion?

    RR

  40. Ron Lamberty on January 12, 2011 1:11 PM

    “Saudi must think it is pretty funny that U.S. taxpayers are subsidizing their ethanol purchases. If ethanol producers wish to export ethanol, they need to do it on their own dime, not on the backs of taxpayers.”

    Yeah, I bet they’re all rubbing their hands together and chortling the big evil laugh over one-quarter of a hundred-thousandth of the thirty five billion we’re sending them for oil every year. Take that ethanol tax credit away, and I’ll bet they don’t fight as hard as they did to make sure that the billions oil companies are paying in Saudi taxes can be deducted from US oil company profits to reduce the taxes the oil companies pay in the US. I hope you’re at least a little bit outraged that US taxpayers are subsidizing that huge export of our money, as worked up as you seem to be over the $76,000 discount the Saudis MIGHT be getting for sending a few hundred thousand of our dollars back by buying US ethanol.

  41. Robert Rapier on January 12, 2011 1:30 PM

    “I hope you’re at least a little bit outraged that US taxpayers are subsidizing that huge export of our money, as worked up as you seem to be over the $76,000 discount the Saudis MIGHT be getting for sending a few hundred thousand of our dollars back by buying US ethanol.”

    It’s the hypocrisy I get worked up over, Ron. But since you mention it, I abhor consumption subsidies. I have recommended that we get some of those subsidies back by increasing taxes on fossil fuels. Do you think farmers will get behind that one with me? Can you, if you are concerned that the fossil fuel industry is being subsidized? After all, what better way to get those subsidies back than to raise taxes on gasoline and diesel?

    Incidentally, if you still haven’t had the “A-ha” moment over my point about ethanol exports and petroleum imports, let’s consider the specific case of Saudi purchases. I don’t recall the exact number, but let’s use 100,000 gallons of exported ethanol to Saudi Arabia. Now, do you agree that there is oil that is embedded in those gallons of exported ethanol? Of course you do. No way to deny that. There are embedded gallons of oil that wouldn’t have otherwise be needed if that ethanol was not produced.

    Now, how many gallons of domestic fuel did those 100,000 gallons offset? Zero. So oil was needed to make the ethanol — while the ethanol offset no domestic fuel production. Hence, that exported ethanol increased our consumption of oil. That is very clear, and I am sure you get it. It is also a waste of tax dollars. What do I as a taxpayer receive for that subsidized ethanol that went to Saudi?

    RR

  42. Ron Lamberty on January 12, 2011 5:35 PM

    RR: “Incidentally, if you still haven’t had the “A-ha” moment over my point about ethanol exports and petroleum imports, let’s consider the specific case of Saudi purchases. I don’t recall the exact number, but let’s use 100,000 gallons of exported ethanol to Saudi Arabia. Now, do you agree that there is oil that is embedded in those gallons of exported ethanol? Of course you do. No way to deny that. There are embedded gallons of oil that wouldn’t have otherwise be needed if that ethanol was not produced.”

    Needed for what? Can’t I assume that the 100,000 gallons of ethanol was made with petroleum that was displaced by other ethanol? I would see this as just sending back some of the gallons we don’t need.

    I’ve understood the point you’ve been trying to make all along – I just won’t stipulate to your academic exercise on one specific gallon of ethanol, when the real world numbers are readily available and are very different.

    The production of ethanol in the US adds to the total number of gallons of fuel available, and replaces more gallons of gas and diesel fuel than are used to create it – by a very wide margin. So unless you are going to first give credit for ALL of the domestic gallons of gasoline that ethanol DOES replace, and until the number of gallons exported exceeds that number, you’re just talking theory.

    As to the question of subsidized ethanol going to Saudi, 1) I don’t know that to be a fact and 2) Did I say I thought it was a good idea?

  43. Steve Zeigler on January 19, 2011 1:41 AM

    Ethanol E10 supporters are assuming that E10 delivers an MPG based only on theoretic energy content, and wildly unscientific “tests” that do not verify their gas content. Unfortunately there is empirical data to suggest that the theoretic MPG is not even close to correct. What is known is that Ethanol changes the burn rate of gasoline, but how exactly? At E10 levels E10 may cause a double hump burn – first the lower temp Ethanol ignites in clumps, then the higher temp gasoline molecule varieties ignite. A double burn would be a disaster for MPG because the car’s timing would set for the initial hump, and the second (more powerful) gas burn would be mistimed to the piston travel. This would cause E10 mpg to drop from a theoretic 3.3% downgrade to a 12% to 20% drop in MPG – as is empirically observed by many – such as me.

    If only we had a scientific group who could get and verify E0 (e.g. mass spec) and E10, and compare them… We could call this “the EPA”. Except a waiver prevents the EPA from testing Ethanol E10.

    So drop the waiver and have the EPA test it.

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