Uh, dumb , we grow corn here, too.
If we completely wean ourselves off Saudi oil, and then sit back and allow a revolution against the Saudis, all still breaks loose.
Our economy is irrevocably tied to the countries that do buy a lot of Saudi oil, like the EU. As it is now, Saudi Arabia is only like our fourth- or fifth-biggest foreign supplier.
We can grow enough to replace like 10% of the fuel supply, which would be enough to wean us off Saudi oil, though I think doing so accomplishes basically none of the benefits you think it would.
Hey blowtorch, they were talking about replacing corn based ethanol with more effiecient sugar cane based ethanol from Brazil.
Go finger a scissors or something.
Once again, its not an all or nothing situation. As a short term supplement, Brazilian Ethanol is fine. I'm 26, in my lifetime i'll be shocked if i'm don't grow 400 bushel corn. The way the advances in GMO seed is coming along, Corn evenually will be only a couple of feet tall, less fuel to raise it (less trash to get rid of) etc....
On a level playing field, no one beats the American Farmer.
"It would be more expensive, but we could."
The US has enough oil reserves to be self-sufficient in oil?
The ONLY hope for energy indepedence (fuel for transport consumes 70% of US oil) is an extremely aggressive, Apollo-like program to push transport fuel conservation to the limits, as fast as possible.
What if $500B - $1T wasted on the phony Repug Iraq war had been put into oil conservation?
Convert oil-fired heating to electrical heating (requires more nuclear plants and/or clean coal-fired plants, the coal industry refuses to upgrade/build clean plants, and their money keeps Congress off their backs).
The Repugs will never put conservation as the #1 priority as that would hurt the oilco profits. "what the oilcos want, the oilcos get"
U.S. Lawmakers Push Sugar As Fuel Source
By FREDERIC J. FROMMER
The Associated Press
Sunday, June 18, 2006; 3:23 PM
WASHINGTON -- With the market for corn-based ethanol booming, lawmakers from sugar-producing U.S. states are hoping that beet and cane growers can soon jump onto the renewable fuel bandwagon.
They cite the model of Brazil, which produces ethanol made from sugar cane. But critics, pointing out that sugar is much cheaper in Brazil than in the United States, question whether the economics of sugar-based ethanol would work in America.
The U.S. Department of Agriculture is expected to issue a long-awaited study around July 1 on the viability of converting sugar into ethanol.
Keith Collins, the USDA's chief economist, said that the soaring demand for ethanol and Brazil's successful track record make it worth discussing sugar-based ethanol in the United States.
"At some point in the future it may be worthy of commercial development," he said. "Technologically, it's possible. The question is: is it economically feasible?"
Collins noted that besides cheaper sugar, Brazil has higher yields per acre because of better climate and investment in more-productive strains of sugar cane.
"So, obviously, we can look at the technology of conversion, and learn some things from them about that," Collins said. "But it's a little hard for us just to look at Brazil and conclude that their structure of production would be our structure of production. We can't conclude that."
Sugar in the U.S. is made from two sources: beets in some northern and western states, and cane in a few southern states, including Hawaii. Minnesota is the largest producer of sugar produced from beets, while Florida leads in sugar from cane, according to the American Sugar Alliance, a trade group.
There is skepticism among some sugar growers that ethanol is a viable end product for their crop.
"If I was going to guess, I would say the economics are not going to be there," said Steve Williams, president of the American Sugar Beet Growers Association, who farms about 700 acres of sugar beets in Fisher, Minnesota. "The food value is better for sugar than for ethanol."
But backers see room for growth in the ethanol area, especially if oil prices remain high.
"It would be absurd in 10 years if we're doing 60 billion gallons of ethanol, and the only crop in America that's not participating is sugar," said Sen. Norm Coleman, a Minnesota Republican and one of Congress' leading champions of sugar-based ethanol.
Coleman is backing legislation that would encourage the use of renewable fuels, including the 100 million-gallon mandate for sugar-based ethanol.
Jack Roney, an economist with the American Sugar Alliance, agreed that the government would need to step in to stimulate a sugar-to-ethanol industry.
"It would take a combination of consumption mandates to ensure that the demand would be there, and conceivably some production incentives to use sugar ethanol," he said.
"The way that the Brazilians established their program is through 30 years of government intervention in energy and agriculture markets, to ensure there would be adequate demand and supplies."
___
Fred Frommer can be reached at ffrommer(at)ap.org
© 2006 The Associated Press
Brazil isn't held to the same standards as american farmers are, not only on GMO crops but they don't pay technology fees, enviroment standards, etc...
Even playing field the american farmer would blow the brazilian corn producer out of the water.
Let's assume:
1. Corn is as efficient as sugar cane in producing ethanol. The reading that I have done is that it is still much less productive at converting mass into fuel, but let's roll with this for simplicity's sake.
2. Ethanol has as much energy in it per volume as gasoline. I seem to remember it is a bit less, but again, simplicity.
From the wikipedia article on ethanol in brazil, we can pull out the following information:
Amount of sugar crop acreage allocated to Ethanol in 2003-2004:
8789 square miles.
45,000 km2, of which half is used for ethanol, and converted into square miles)
This square area produces:
88 Million barrels of ethanol per year
(cubic meters converted to liters at 1000 liters per cubic meter, converted to gallons at .256 liters per gallon, converted to barrels at 42 gallons per barrel of petroleum)
Directly converting this to gasoline would yield 88 million barrels of gasoline per year using our simplified assumptions.
The US uses 3,321,500,000 barrels of gasoline per year per ( http://www.eia.doe.gov/emeu/aer/ep/ep_frame.html )
3.3Bn divided by 88M= 37.75 (the number of times larger that US gasoline consumption is than Brazil's consumption)
37.75 times 8789 square miles is 331,521 square miles.
Assume we can find 50% of that figure in unused crop land, that leaves us with 160,500 square miles of NEW crop land that would be need to completely replace gasoline with ethanol at current usage rates.
Factor in the fact that Ethanol has less energy per unit of mass, and that square mileage will go up. Subs ute a less efficient crop of corn, and that square mileage will go up.
According to the CIA factbook the united states has only 87,000 square miles of irrigated land now.
Where would we get the water to irrigate the HUNDREDS OF THOUSANDS OF SQUARE MILES of crop land that fully replacing gasoline with ethanol will take, ASSUMING we can find the arable land?
Saying "let's just replace our gasoline powered cars with ethanol" doesn't make it viable as a realistic solution.
Rolling forward a bit:
Yes, we will have to start driving less and buying more efficient vehicles. This will reduce the square mileage needed.
Our population is also growing, as is the economy. This will increase demand for fuel. This will offset gains from efficiency somewhat, if not a lot.
Yes, agricultural production will become more efficient, again reducing the square mileage issue. But not by enough of a conceivable factor to replace gasoline as it stands.
Biodiesel will face the same problems of water and arable land. Keep in mind that the figure given was just for gasoline, and not for diesel. Replacing oil-diesel with biodeisel will require a similar ramp up in devoted area to crops.
One good factor that the wikipedia article pointed out is that a good chunk of the waste mass from producing ethanol can be used to produce electricity beyond what the refining process uses.
I am not saying that ethanol is stupid.
Ethanol is certainly part of what I consider part of an energy solution that takes a longer term view. I am all for ramping up usage of this renewable source of energy.
I simply wanted to point out the scale of the problem we are trying to address
First of all, I was talking about ethanol prices and your lack of 3rd grade math skills.Yes, let's just stay enslaved to the Saudi's.
But, since you brought it up, we are "enslaved" to the Saudi's to the tune of 7% of domestic product supplied. Canada, Mexico, and Venezuela are each bigger suppliers of crude and product than Saudi Arabia.
http://api-ec.api.org/filelibrary/Bac-Mar06.xls
xray, I think you vastly overestimate the amount of reserves available domestically. If we did tap into them it would help some, yes, but not to the degree you probably think. "Drop in the bucket" is how I'd put it... the US consumes about 20 million barrels a day of oil products, Alaska might offer 500 MBPD (M = 1 thousand) or maybe optimistically 1 MMBPD (MM = 1 million). Canadian oil sands production is more of a long term solution than Canadian drilling, which is why we see money being poured into production projects in Alberta.
You just don't get it, do you exstatic? Corn is an inefficient ethanol feedstock. You can make ethanol out of any carbohydrate that can undergo enzyme conversion to fermentable sugar. That means we could make ethanol out of potatoes or juniper berries if we really wanted to - but that doesn't make it economically sound.
As a supplement to an overall ethanol industry, corn makes sense where economies of scale, economies of scope, synergies or technical efficiencies exist - but as the feedstock for the entire domestic ethanol industry (which the corn lobby has done a fantastic job of ensuring), it makes no sense whatsoever (as shown by math that is obviously over your head).
April 10, 2006
With Big Boost From Sugar Cane, Brazil Is Satisfying Its Fuel Needs
By <http://topics.nytimes.com/top/reference/timestopics/people/r/larry_rohter/index.html?inline=nyt-per>LARRY ROHTER
PIRACICABA, <http://topics.nytimes.com/top/news/international/countriesandterritories/brazil/index.html?inline=nyt-geo>Brazil
* At the dawn of the automobile age, Henry Ford predicted that "ethyl alcohol is the fuel of the future." With petroleum about $65 a barrel, President Bush has now embraced that view, too. But Brazil is already there.
This country expects to become energy self-sufficient this year, meeting its growing demand for fuel by increasing production from petroleum and ethanol. Already the use of ethanol, derived in Brazil from sugar cane, is so widespread that some gas stations have two sets of pumps, marked A for alcohol and G for gas.
In his State of the Union address in January, Mr. Bush backed financing for "cutting-edge methods of producing ethanol, not just from corn but wood chips and stalks or switch grass" with the goal of making ethanol compe ive in six years.
But Brazil's path has taken 30 years of effort, required several billion dollars in incentives and involved many missteps. While not always easy, it provides clues to the real challenges facing the United States' ambitions.
Brazilian officials and scientists say that, in their country at least, the main barriers to the broader use of ethanol today come from outside. Brazil's ethanol yields nearly eight times as much energy as corn-based options, according to scientific data. Yet heavy import duties on the Brazilian product have limited its entry into the United States and Europe.
Brazilian officials and scientists say sugar cane yields are likely to increase because of recent research.
"Renewable fuel has been a fantastic solution for us," Brazil's minister of agriculture, Roberto Rodrigues, said in a recent interview in Săo Paulo, the capital of Săo Paulo State, which accounts for 60 percent of sugar production in Brazil. "And it offers a way out of the fossil fuel trap for others as well."
Here, where Brazil has cultivated sugar cane since the 16th century, green fields of cane, stalks rippling gently in the tropical breeze, stretch to the horizon, producing a crop that is destined to be consumed not just as candy and soft drinks but also in the tanks of millions of cars.
The use of ethanol in Brazil was greatly accelerated in the last three years with the introduction of "flex fuel" engines, designed to run on ethanol, gasoline or any mixture of the two. (The gasoline sold in Brazil contains about 25 percent alcohol, a practice that has accelerated Brazil's shift from imported oil.)
But Brazilian officials and business executives say the ethanol industry would develop even faster if the United States did not levy a tax of 54 cents a gallon on all imports of Brazilian cane-based ethanol.
With demand for ethanol soaring in Brazil, sugar producers recognize that it is unrealistic to think of exports to the United States now. But Brazilian leaders complain that Washington's restrictions have inhibited foreign investment, particularly by Americans.
As a result, ethanol development has been led by Brazilian companies with limited capital. But with oil prices soaring, the four international giants that control much of the world's agribusiness * Archer Daniels Midland, Bunge and Born, Cargill and Louis Dreyfuss * have recently begun showing interest.
Brazil says those and other outsiders are welcome. Aware that the United States and other industrialized countries are reluctant to trade their longstanding dependence on oil for a new dependence on renewable fuels, government and industry officials say they are willing to share technology with those interested in following Brazil's example.
"We are not interested in becoming the Saudi Arabia of ethanol," said Eduardo Carvalho, director of the National Sugarcane Agro-Industry Union, a producer's group. "It's not our strategy because it doesn't produce results. As a large producer and user, I need to have other big buyers and sellers in the international market if ethanol is to become a commodity, which is our real goal."
The ethanol boom in Brazil, which took off at the start of the decade after a long slump, is not the first. The government introduced its original "Pro-Alcohol" program in 1975, after the first global energy crisis, and by the mid-1980's, more than three quarters of the 800,000 cars made in Brazil each year could run on cane-based ethanol.
But when sugar prices rose sharply in 1989, mill owners stopped making cane available for processing into alcohol, preferring to profit from the hard currency that premium international markets were paying.
Brazilian motorists were left in the lurch, as were the automakers who had retooled their production lines to make alcohol-powered cars. Ethanol fell into discredit, for economic rather than technical reasons.
Consumers' su ions remained high through the 1990's and were overcome only in 2003, when automakers, beginning with Volkswagen, introduced the "flex fuel" motor in Brazil. Those engines gave consumers the autonomy to buy the cheapest fuel, freeing them from any potential shortages in ethanol's supply. Also, ethanol-only engines can be slower to start when cold, a problem the flex fuel owners can bypass.
"Motorists liked the flex-fuel system from the start because it permits them free choice and puts them in control," said Vicente Lourenço, technical director at General Motors do Brasil.
Today, less than three years after the technology was introduced, more than 70 percent of the automobiles sold in Brazil, expected to reach 1.1 million this year, have flex fuel engines, which have entered the market generally without price increases.
"The rate at which this technology has been adopted is remarkable, the fastest I have ever seen in the motor sector, faster even than the airbag, automatic transmission or electric windows," said Barry Engle, president of Ford do Brasil. "From the consumer standpoint, it's wonderful, because you get flexibility and you don't have to pay for it."
Yet the ethanol boom has also brought the prospect of distortions that may not be as easy to resolve. The expansion of sugar production, for example, has come largely at the expense of pasture land, leading to worries that the grazing of cattle, another booming export product, could be shifted to the Amazon, encouraging greater deforestation.
Industry and government officials say such concerns are unwarranted. Sugar cane's expanding frontier is, they argue, an environmental plus, because it is putting largely abandoned or degraded pasture land back into production. And of course, ethanol burns far cleaner that fossil fuels.
Human rights and worker advocacy groups also complain that the boom has led to more hardships for the peasants who cut sugar cane.
"You used to have to cut 4 tons a day, but now they want 8 or 10, and if you can't make the quota, you'll be fired," said Silvio Donizetti Palvequeres, president of the farmworkers union in Ribeirăo Preto, an important cane area north of here. "We have to work a lot harder than we did 10 years ago, and the working conditions continue to be tough."
Producers say that problem will be eliminated in the next decade by greater mechanization. A much more serious long-term worry, they say, is Brazil's lack of infrastructure, particularly its limited and poorly maintained highways.
Ethanol can be made through the fermentation of many natural substances, but sugar cane offers advantages over others, like corn. For each unit of energy expended to turn cane into ethanol, 8.3 times as much energy is created, compared with a maximum of 1.3 times for corn, according to scientists at the Center for Sugarcane Technology here and other Brazilian research ins utes.
"There's no reason why we shouldn't be able to improve that ratio to 10 to 1," said Suani Teixeira Coelho, director of the National Center for Biomass at the University of Săo Paulo. "It's no miracle. Our energy balance is so favorable not just because we have high yields, but also because we don't use any fossil fuels to process the cane, which is not the case with corn."
Brazilian producers estimate that they have an edge over gasoline as long as oil prices do not drop below $30 a barrel. But they have already embarked on technical improvements that promise to lift yields and cut costs even more.
In the past, the residue left when cane stalks are compressed to squeeze out juice was discarded. Today, Brazilian sugar mills use that residue to generate the electricity to process cane into ethanol, and use other byproducts to fertilize the fields where cane is planted.
Some mills are now producing so much electricity that they sell their excess to the national grid. In addition, Brazilian scientists, with money from Săo Paulo State, have mapped the sugar cane genome. That opens the prospect of planting genetically modified sugar, if the government allows, that could be made into ethanol even more efficiently.
"There is so much biological potential yet to be developed, including varieties of cane that are resistant to pesticides and pests and even drought," said Tadeu Andrade, director of the Center for Sugarcane Technology. "We've already had several qualitative leaps without that, and we are convinced there is no ceiling on productivity, at least theoretically."
Yes it is.
It is also, as I posted above not a realistic replacement for gasoline in the US due to the simple fact that we use so much of it. This is simple physics.
Should we develop ethanol production? Certainly. It is cleaner and renewable.
Should we hinge our hope on continuing our vehicular lifestyle on ethanol? Nope.
My point in illustrating the impossibility of ethanol replacing gasoline and maintaining the status quo is that we will have to do one of the below possible options:
Drive smaller cars.
Large cars are energetically inefficient for transporting one person.
Drive less.
Mass transit will replace some level of vehicle usage.
Live closer to work and other services.
Telecommuting to whatever extent is possible.
We will be unable to continue increasing both the size and number of personal vehicles on the road. Simple physics and economics dictate this. Cheap oil is gone, never to return. You will see some fluctuation in oil prices, but oil energy relative to people’s ability to buy it will become more and more expensive.
Cities will become denser and less suburbanized. This density will contribute to making mass transit economically viable even if energy costs stay the same, which they won’t. Another factor that will make mass transit more economically viable, is again simple physics, mass transit is cheaper in terms of energy per person/mile. In this case money=energy.
BINGO!
Maybe it's time to invest some of that hard-earned cash in corn...
Twincities"Ethanol plants need a lot of corn and a lot of water, and Minnesota has a lot of both. But even the land of lakes and cornfields has its limits.
Suddenly, so many new ethanol plants are planned in Minnesota that a once-unthinkable debate has begun: Will there be enough corn to go around?
Investors plan to quadruple the size of Minnesota's ethanol industry within just a few years, according to permit data from the Minnesota Pollution Control Agency. If they do, they'd devour more than half of Minnesota's 1.2 billion-bushel corn crop."
snip
"In Iowa, the effect is even more dramatic. There, some 55 ethanol plants are open or proposed, and "if all these plants are built, it would use virtually all the Iowa corn crop," said Iowa State University economist Bob Wisner."
June 25, 2006
The Energy Challenge
Ethanol Bonanza Is Reshaping Sleepy Cow Towns in Heartland
This article was reported by Alexei Barrionuevo, Simon Romero and Michael Janofsky and written by Mr. Barrionuevo.
Dozens of factories that turn corn into the gasoline subs ute ethanol are sprouting up across the nation, from Tennessee to Kansas, and California, often in places hundreds of miles away from where corn is grown.
Once considered the green dream of the environmentally sensitive, ethanol has become the province of agricultural giants that have long pressed for its use as fuel, as well as newcomers seeking to cash in on a bonanza.
The modern-day gold rush is driven by a number of factors: generous government subsidies, surging demand for ethanol as a gasoline supplement, a potent blend of farm-state politics and the prospect of generating more than a 100 percent profit in less than two years.
The rush is taking place despite concerns that large-scale diversion of agricultural resources to fuel could result in price increases for food for people and livestock, as well as the transformation of vast preserved areas into farmland.
Even in the small town of Hereford, in the middle of the Texas Panhandle's cattle country and hundreds of miles from the agricultural heartland, two companies are rushing to build plants to turn corn into fuel.
As a result, Hereford has become a flashpoint in the ethanol boom that is helping to reshape part of rural America's economic base.
Despite continuing doubts about whether the fuel provides a genuine energy saving, at least 39 new ethanol plants are expected to be completed over the next 9 to 12 months, projects that will push the United States past Brazil as the world's largest ethanol producer.
The new plants will produce 1.4 billion gallons a year, a 30 percent increase over current production of 4.6 billion gallons, according to Dan Basse, president of AgResources, an economic forecasting firm in Chicago. By 2008, analysts predict, ethanol output could reach 8 billion gallons a year.
For all its allure, though, there are hidden risks to the boom. Even as struggling local communities herald the expansion of this ethanol-industrial complex and politicians promote its use as a way to decrease America's energy dependence on foreign oil, the ethanol phenomenon is creating some unexpected jitters in crucial corners of farm country.
A few agricultural economists and food industry executives are quietly worrying that ethanol, at its current pace of development, could strain food supplies, raise costs for the livestock industry and force the use of marginal farmland in the search for ever more acres to plant corn.
"This is a bit like a gold rush," warned Warren R. Staley, the chief executive of Cargill, the multinational agricultural company based in Minnesota. "There are unintended consequences of this euphoria to expand ethanol production at this pace that people are not considering."
Mr. Staley has his own reasons to worry, because Cargill has a stake in keeping the price of corn low enough to supply its vast interests in processed food and livestock.
But many energy experts are also questioning the benefits of ethanol to the nation's fuel supply. While it is a renewable, domestically produced fuel that reduces gasoline pollution, large amounts of oil or natural gas go into making ethanol from corn, leaving its net contribution to reducing the use of fossil fuels much in doubt.
As one of the hottest investments around, however, few in farm country want to hear any complaints these days about the risks associated with ethanol. Archer Daniels Midland, the politically connected agricultural processing company in Decatur, Ill., and the industry leader that has been a longstanding champion of transforming corn into a fuel blend, has enjoyed a doubling in its stock price and profits in the last year.
One ethanol producer has already sold shares to the public and two more are planning to do so. And the get-rich-quick atmosphere has drawn in a range of investors, including small farm cooperatives, hedge funds and even Bill Gates.
For all the interest in ethanol, however, it is doubtful whether it can serve as the energy savior President Bush has identified. He has called for biofuels * which account for just 3 percent of total gasoline usage * to replace roughly 1.6 million barrels a day of oil imported from the Persian Gulf.
New Jobs, New Life
To fill that gap with corn-based ethanol alone, agricultural experts say that production would have to rise to more than 50 billion gallons a year; at least half the nation's farmland would need to be used to grow corn for fuel. But that isn't stopping out-of-the-way towns looking for ways to pump life into local economies wracked by population loss, farm consolidation and low prices from treating the rush into ethanol as a godsend.
"These projects are bringing 100 new jobs to our town," said Don pton, Hereford's director of economic development and a former football coach at the high school. "It's not as if Dell computer's going to be setting up shop here. We'd be nuts to turn something like this down."
That the United States is using corn, among the more expensive crops to grow and harvest, to help meet the country's fuel needs is a testament to the politics underlying ethanol's 30-year rise to prominence. Brazilian farmers produce ethanol from sugar at a cost roughly 30 percent less.
But in America's farm belt, politicians have backed the ethanol movement as a way to promote the use of corn, the nation's most plentiful and heavily subsidized crop. Those generous government subsidies have kept corn prices artificially low * at about $2 a bushel * and encouraged flat-out production by farmers, leading to large surpluses symbolized by golden corn piles towering next to grain silos in Iowa and Illinois.
While farmers are seeing little of the huge profits ethanol refiners like Archer Daniels Midland are banking, many farmers are investing in ethanol plants through cooperatives or simply benefiting from the rising demand for corn. With Iowa home to the nation's first presidential caucuses every four years, just about every candidate who visits the state pays obeisance to ethanol.
"There is zero daylight" between Democrats and Republicans in the region, said Ken Cook, president of Environmental Working Group, a nonprofit research policy group in Washington, and a veteran observer of agricultural politics. "All in bents and challengers in Midwestern farm country are by definition ethanolics."
The ethanol explosion began in the 1970's and 1980's, when ADM's chief executive, Dwayne O. Andreas, was a generous campaign contributor and well-known figure in the halls of Congress who helped push the idea of transforming corn into fuel.
Ethanol can be produced from a number of agricultural feed stocks, including corn and sugar cane, and someday, wheat and straw. But given the glut in corn, the early strategy of Mr. Andreas was to drum up interest in ethanol on the state level among corn farmers and persuade Washington to provide generous tax incentives. But in 1990, when Congress mandated the use of a supplement in gasoline to help limit emissions, ADM lost out to the oil industry, which won the right to use the cheaper methyl tertiary butyl ether, or MTBE, derived from natural gas, to fill the 10 percent fuel requirement.
Past Scandal
Adding to its woes, ADM was marred by scandal in 1996 when several company executives, including one of the sons of Mr. Andreas, were convicted of conspiracy to fix lysine markets. The company was fined $100 million. Since then, ADM's direct political clout in Washington may have waned a bit but it still pursues its policy preferences through a series of trade organizations, notably the Renewable Fuels Association.
Some 14 months ago the company hired Shannon Herzfeld, a leading lobbyist for the pharmaceutical industry. But she is not a registered lobbyist for ADM and said in an interview that the company was maintaining its long-held policy that it does not lobby Congress directly.
"Nobody is deferential to ADM," contended Ms. Herzfeld, who says she spends little time on Capitol Hill.
But ADM has not lost interest in promoting ethanol among farm organizations, politicians and the news media. It is by far the biggest beneficiary of more than $2 billion in government subsidies the ethanol industry receives each year, via a 51-cent-a-gallon tax credit given to refiners and blenders that mix ethanol into their gasoline. ADM will earn an estimated $1.3 billion from ethanol alone in the 2007 fiscal year, up from $556 million this year, said David Driscoll, a food manufacturing analyst at Citigroup.
[And the company may be concerned by the recent statement by Energy Secretary Samuel W. Bodman, who suggested that if prices remain high, lawmakers should consider ending the ethanol subsidy when it expires in 2010. "The question needs to be thought about," he said on Friday.]
ADM has huge production facilities that dwarf those of its compe ors. With seven big plants, the company controls 1.1 billion gallons of ethanol production, or about 24 percent of the country's capacity. ADM can make more than four times what VeraSun, ADM's closest ethanol rival, can produce.
Last year, spurred by soaring energy prices, the ethanol lobby broke through in its long campaign to win acceptance outside the corn belt, inserting a provision in the Energy Policy Act of 2005 that calls for the use of 5 billion gallons a year of ethanol by 2007, growing to at least 7.5 billion gallons in 2012. The industry is now expected to produce about 6 billion gallons next year.
The phased removal of MTBE from gasoline, a result of concerns that the chemical contaminates groundwater and can lead to potential health problems, hastened the changeover. Now, government officials are also pushing for increasing use of an 85-percent ethanol blend, called E85, which requires automakers to modify their engines and fuel injection systems.
In the ultimate nod to ADM's successful efforts, Mr. Bodman announced the new initiatives in February at the company's headquarters in Illinois.
"It's been 30 years since we got a call from the White House asking for the agriculture industry, ADM in particular, to take a serious look at the possibilities of building facilities to produce alternative sources of energy for our fuel supply in the United States," said G. Allen Andreas, ADM's chairman and Dwayne Andreas' nephew.
Now, ADM is betting even more of its future on ethanol, embracing a shift from food processing to energy production as its focus. In April, it hired Patricia A. Woertz, a former executive from the oil giant Chevron, as the company's new chief executive.
While ADM has pushed ethanol, rivals like Cargill have been more skeptical. To Mr. Staley, ethanol is overpromoted as a solution to the nation's energy challenges, and the growth in production, if unchecked, has the potential to ravage America's livestock industry and harm the nation's reliability as an exporter of corn and its byproducts.
Threat to Food Production
"Unless we have huge increases in productivity, we will have a huge problem with food production," Mr. Staley said. "And the world will have to make choices."
Last year corn production topped 11 billion bushels * second only to 2004's record harvest. But many analysts doubt whether the scientists and farmers can keep up with the ethanol merchants.
"By the middle of 2007, there will be a food fight between the livestock industry and this biofuels or ethanol industry," Mr. Basse, the economic forecaster, said. "As the corn price reaches up above $3 a bushel, the livestock industry will be forced to raise prices or reduce their herds. At that point the U.S. consumer will start to see rising food prices or food inflation."
If that occurs, the battleground is likely to shift to some 35 million acres of land set aside under a 1985 program for conservation and to help prevent overproduction. Farmers are paid an annual subsidy averaging $48 an acre not to raise crops on the land. But the profit lure of ethanol could be great enough to push the acreage, much of it considered marginal, back into production.
Mr. Staley fears that could distract farmers from the traditional primary goal of agriculture, raising food for people and animals. "We have to look at the hierarchy of value for agricultural land use," he said in a May speech in Washington. "Food first, then feed" for livestock, "and last fuel."
And even Cargill is hedging its bets. It recently announced plans to nearly double its American ethanol capacity to 220 million gallons a year. Meanwhile, the flood of ethanol plant announcements is making the American livestock industry nervous about corn production. "I think we can keep up, assuming we get normal weather," said Greg Doud, the chief economist at the National Cattlemen's Beef Association. "But what happens when Mother Nature crosses us up and we get a bad corn year?"
Beyond improving corn yields, the greatest hope for ethanol lies with refining technology that can produce the fuel from more efficient renewable resources, like a form of fuel called cellulosic ethanol from straw, switchgrass or even agricultural waste. While still years away, cellulosic ethanol could help overcome the concerns inherent in relying almost exclusively on corn to make ethanol and make the advance toward E85 that much quicker.
"The cost of the alternative * of staying addicted to oil and filling our atmosphere with greenhouse gases, and keeping other countries beholden to high gasoline prices * is unacceptable," said Nathanael Greene, senior policy analyst at the Natural Resources Defense Council in New York. "We have to struggle through the challenges of growing and producing biofuels in the right way."
But the current incentives to make ethanol from corn are too attractive for producers and investors to worry about the future. With oil prices at $70 a barrel sharply lifting the prices paid for ethanol, the average processing plant is earning a net profit of more than $5 a bushel on the corn it is buying for about $2 a bushel, Mr. Basse said. And that is before the 51-cent-a-gallon tax credit given to refiners and blenders that incorporate ethanol into their gasoline.
"It is truly yellow gold," Mr. Basse said.
Alexei Barrionuevo reported from Chicago for this article, Simon Romero from Hereford, Tex., and Michael Janofsky from Washington.
June 29, 2006
Ford Shifts Its Focus Away From Hybrid Vehicles
By MICHELINE MAYNARD and JEREMY W. PETERS
DETROIT, June 29 — The Ford Motor Company, which has prided itself as the leading innovator of hybrid vehicles among American car companies, said today that it would not meet a previously announced goal to build 250,000 gas-electric vehicles by the end of the decade.
Instead, Ford said it would place a greater emphasis on developing vehicles that can run on fuels other than gasoline, like E85, a mix of ethanol and gasoline.
( aka flex cars, flex engines, which enable Brazil to move to sugar ethanol)
Hybrid vehicles will still be in the company's lineup, but they are more likely to be cars than trucks or sport utility vehicles, officials at the company said.
The move represents an increasing focus among American automakers on ethanol, a fuel derived from grain alcohol, as a gasoline subs ute.
In September, the automaker's chief executive, William Clay Ford Jr., announced the ambitious hybrid goal as part of a marketing campaign that touted the company's green credentials.
In an interview today, Mr. Ford acknowledged he was likely to face criticism for backing off the company's hybrid vehicle goal.
"This is in no way a lack of commitment to hybrids," Mr. Ford said. "It's an expansion of our commitment to other technologies."
Mr. Ford, known for his lifelong interest in environmental causes, went on: "The goal all along is a sustainability goal. It is not a hybrid goal."
Last fall, when Ford set its hybrid goal, it was acting in the face of growing hybrid sales by Japanese companies, particularly Toyota.
But in his message to employees on Wednesday, Mr. Ford wrote, "What I didn't foresee at the time was how rapidly other technologies would evolve."
Nonetheless, Ford was the first American auto company to sell a hybrid vehicle, the small Escape sport utility vehicle. It has been the most aggressive of Detroit's automakers to pursue and sell hybrid technology, vowing to offer a full range of hybrid vehicles by the end of this decade.
General Motors plans to introduce hybrid models later this year, while Chrysler plans some for later this decade.
All three Detroit companies trail Toyota, which sold more than 100,000 Prius hybrid cars last year and is about to introduce a hybrid version of the Camry, the nation's best-selling car. Honda also sells hybrid versions of its Civic and Accord, and it is developing a new, lower-cost hybrid vehicle that will go on sale later this decade.
Mr. Ford said in his message to employees that instead of focusing so heavily on hybrids, the company instead plans to double the number of vehicles it makes that run on ethanol and other more environmentally friendly fuels like bio-diesel.
"Our strategy going forward is not to wed ourselves to a single technology, but to manage a more flexible approach to meet our goals for customer needs, environmental impact and shareholder interests," he wrote.
Environmentalists have questioned the motives of the automakers pushing for E85. Car companies receive a credit for each vehicle they produce that is capable of running on ethanol or a similar bio-fuel.
But Mr. Ford noted today that there are also credits to the buyers of hybrid vehicles. "It's not a credit-driven thing," he said. "We get credit either way."
More important, he said, was to spend money on technologies that could lessen the country's dependence on oil. "We need to keep a hand in everything so that when a break comes, we can move fast," he said.
Micheline Maynard reported from Detroit for this article, and Jeremy W. Peters from New York.
If Ford is doing it, you can be rest assured it's a bad idea.
The ultimate goal for almost all american car companies is bankruptcy and debt restructuring of employee pensions and benefits. So your right, if FORD is doing it, it's a bad idea.If Ford is doing it, you can be rest assured it's a bad idea.
I think you give Ford way too much credit, Dan... Ford has the Dubya Bush of Corporate Management Teams... probably well intentioned, just not smart enough to fully understand what they are doing.
I heard on the radio last Saturday, cant think of the guys name, but he is the
Automotive guy on KTSA and he was talking about there were some companies
now selling some kind of chip that that can go into the cars computer so it
could use E85. I didn't catch all of it, because I was in and out the car so fast.
It just caught my ear. Anyone heard of that?
I haven't heard that one, but it sounds su iously like the magic carburetors that claim to one's milage from 18 mpg to 125 mpg
Was talking to my mechanic the other day and he says the main difference between a regular engine and the E85 engines is the material the seals in the gas line are made out of; 20% or more ethanol will dissolve the conventional engines' seals, but gasoline doesn't
Doesn't scale up to national solution, but funny anyway. After the grease has poisoned Americans vascular systems (trans fats, etc), it at least serves some useful purpose.
=================
Grease Guzzlers
These Folks Fuel Their Diesel Cars With Cooking Oil. Slick, Huh?
By Allan Lengel
Washington Post Staff Writer
Saturday, July 1, 2006; B01
In these days of eye-popping gas prices, Mike Leahy gets fuel for his Volkswagen Beetle at the Barking Dog, a popular Bethesda pub. Shane Sellers fuels up at a Chinese restaurant in Frederick. And Ben Tonken heads to a Tex-Mex eatery in the District.
"There's a bit of a smell when you get out," said Leahy, a D.C. lawyer. "A slight french fry smell. I kind of like it; it's kind of sweet. It smells better than diesel."
Welcome to the world of greasel -- the shorthand some use for grease and diesel. Leahy and the others are among a tiny but growing band of environmentalists and thrifty consumers who are turning to restaurants for free, used vegetable oil to fuel their diesel-engine cars.
With a little filtration and a car conversion kit, oil that once fried potatoes, egg rolls or tortilla chips is ready for its second act: air pollution fighter.
Sure, saving the world would be nice. But these folks don't really expect to. Most seem to be getting their hands greasy more to prove a point: There are alternatives to fossil fuels, and vegetable oil, according to studies, burns cleaner than diesel fuel. What's more, it can save money.
As for performance, drivers say there's virtually no difference. Wear and tear on the engine is the same, as is acceleration. So is gas mileage: about 40 to 55 miles per gallon, depending on the vehicle.
( hmm, not "gas mileage" but "diesel/greasal mileage" )
When Sellers, 31, bought an $800 conversion kit two years ago, "it had nothing to do with fuel prices; it was just a decision on having some sort of independence and challenging the use of fossil fuels," said the adjunct professor of art at Frederick Community College.
But with gas prices skyrocketing, he's saving $80 to $100 a month. Sellers is already on his second grease car, a 2002 VW Golf hatchback. He installed the conversion kit himself, but those who lack the mechanical chops pay an average of $900 to have it done. Installation in trucks can cost as much as $2,500.
Sellers's car still uses diesel when it has to. But once the engine and the vegetable oil warm up, he flips a switch to convert to vegetable oil, which is stored in a separate fuel tank. He burns through about 30 gallons a month, mostly canola oil.
The concept of vegetable oil as fuel is more back-to-the-future than leading edge. In 1900, an engineer named Rudolf Diesel used peanut oil to demonstrate his new high-compression engine at the World Exposition in Paris. Historians say he hoped that small-scale farmers would be able to "grow" their own fuel. But petroleum-based fuels soon became plentiful and cheap and wound up the fuel of choice.
More than 100 years after the world's fair, the "greasers," as some enthusiasts call themselves, are once again piquing the public's curiosity.
About a half-dozen times a day, as businessman Ben Tonken's silver 2002 VW Jetta station wagon idles at a red light, fellow motorists pepper him with questions after spotting the car's "powered by vegetable oil" decal.
"Some people laugh," said Tonken, 32, of Rockville, as he drove in Northwest Washington. "That's unfortunate. They're the nonbelievers."
Jim Hickey, 46, of New Market also gets his share of wisecracks as he drives his 1984 Volvo equipped with a VW diesel engine. He fuels his car with canola oil that has fried tempura shrimp, vegetables and chicken at The Orchard, his whole-foods restaurant in Frederick.
"It smells more like a chicken barbecue," Hickey said. "Everyone laughs about it." And some ask: "How's the tempura taxi running?"
Jokes aside, the idea is catching on, said Lee Briante, a spokesman for Greasecar in Amherst, Mass., one of the largest manufacturers of conversion kits.
The company has gone from selling about 20 kits a month in 2000 to as many as 100 a week this year, he said. In its six years of existence, the company has sold 3,000 kits nationwide, including 50 in Virginia, 30 in Maryland and 10 in the District.
"In general, we see a direct relationship with fuel prices to sales," Briante said. "Over the last two years, I'd say more folks just can't afford to run their vehicles."
There is no official count of the number of U.S. vehicles fueled by pure vegetable oil. Briante and Charles Anderson, owner of Golden Fuel Systems of Springfield, Mo. , another leading manufacturer of conversion kits, guess that there are 8,000 to 10,000.
Still, Jonathan Overly, executive director of the East Tennessee Clean Fuels Coalition, sees limited growth ahead. "It's really going to be your green community," he said. And people must be determined enough to collect used oil from restaurants.
"There's a whole lot of individuals who don't want to do that," Overly said.
Leahy, a lawyer for a wildlife conservation group, noted that the resources are finite. "I don't think there's enough used cooking oil to fuel the masses," he said.
A more practical option, Overly and others said, is biodiesel, a more sophisticated formulation that combines plant or animal fats and some form of alcohol, such as methanol. It burns cleaner than conventional diesel fuel and requires no conversion kit for the diesel engine.
Some municipalities, including Falls Church, use biodiesel to run fleets of trucks or buses. About 75 million gallons were produced in the United States last year.
Another popular alternative, ethanol fuel, is a mix of fermented corn sugar and gasoline that can be used in regular car engines. Last year, nearly 4 billion gallons were produced across the country.
Still, the "greasers" remain true to their low-tech fuel. And for now at least, getting grease is a cinch. Most restaurants have to pay to dispose of it, so they're happy to give it away.
One recent evening, Leahy pulled up to the Barking Dog in downtown Bethesda to pick up his fuel, which he would take home to filter.
As kickball players filed through the front door for a night of beer and frivolity, owner John McManus brought out a five-gallon pickle pail for Leahy. The pickles were long gone; soy oil sloshed to the brim.
"I wish everyone would do it," McManus said.
Staff researcher Karl Evanzz contributed to this report.
© 2006 The Washington Post Company
WP column: The False Hope of Biofuels
For Energy and Environmental Reasons, Ethanol Will Never Replace Gasoline
By James Jordan and James Powell
Sunday, July 2, 2006; Page B07
(The writers are research professors in Maglev Research Center at Polytechnic University of New York.)Biofuels such as ethanol made from corn, sugar cane, switchgrass and other crops are being touted as a "green" solution for a large part of America's transportation problem. Auto manufacturers, Midwest corn farmers and politicians are excited about ethanol. Initially, we, too, were excited about biofuels: no net carbon dioxide emissions, reduction of oil imports. Who wouldn't be enthusiastic?
But as we've looked at biofuels more closely, we've concluded that they're not a practical long-term solution to our need for transport fuels. Even if all of the 300 million acres (500,000 square miles) of currently harvested U.S. cropland produced ethanol, it wouldn't supply all of the gasoline and diesel fuel we now burn for transport, and it would supply only about half of the needs for the year 2025. And the effects on land and agriculture would be devastating.
It's difficult to understand how advocates of biofuels can believe they are a real solution to kicking our oil addiction. Agriculture Department studies of ethanol production from corn -- the present U.S. process for ethanol fuel -- find that an acre of corn yields about 139 bushels. At an average of about 2.5 gallons per bushel, the acre then will yield about 350 gallons of ethanol. But the fuel value of ethanol is only about two-thirds that of gasoline -- 1.5 gallons of ethanol in the tank equals 1 gallon of gasoline in terms of energy output.
Moreover, it takes a lot of input energy to produce ethanol: for fertilizer, harvesting, transport, corn processing, etc. After subtracting this input, the net positive energy available is less than half of the figure cited above. Some researchers even claim that the net energy of ethanol is actually negative when all inputs are included -- it takes more energy to make ethanol than one gets out of it...
Washington Post
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