[extropy-chat] cheap alcohol

[Mike Lorrey]

--- Robert Lindauer <robgobblin at aol.com> wrote:

> Eugen Leitl wrote:
> 
> >Bioethanol for fuel is an awful idea. It only looks
> >good when compared to biodiesel: 
> >
> >    http://www.mda.state.mn.us/ethanol/balance.html
> >
> >Biodiesel/oil crop is a stupid idea on its own.
> >Smarter is to use whole biomass in caloric burn/source
> >of synfuel and synthetic precursors.
> >  
> >
> Why is ethanol such a bad idea?

If it is grown on land that requires irrigation water that could
otherwise be used in generating hydropower, and fertilized by
fertilizers synthesized from petroleum, and sprayed with pesticides
also produced with chemicals and energy from petroleum or other energy
sources, and then distilled with energy also coming from other energy
sources, the conversion efficiency of corn or other plants into ethanol
produces less energy than is put into it, or so little surplus that its
good for little else other than local use. Expending energy
transporting it across the globe or across the country would surely put
it into deficit efficiency.

It also contributes to habitat destruction, by artificially inflating
the amount of farmland put into productive use rather than allowed to
return to wild.

US domestic ethanol prices are subsidized by tax dollars. Otherwise
they'd be about $3.50/gallon or more. The only reason they are lower
today than gasoline (besides being subsidized by tax dollars) is that
ethanol produced today was grown with petroleum fertilizers and
pesticides produced when oil was $40/bbl.

Brazilian ethanol is subsidized by the environment, in that much of it
is grown via the modern slash and burn practices in the Amazon basin,
cutting down the rain forest for sugar beet plantations that are good
for a few years, then abandoned for newly cut areas. The price
differential between Brazilian and US ethanol demonstrates, at least
partly, the price difference between renewable and non-renewable
resources. US ethanol hews more closely to renewables, but still needs
to get off its addiction to petroleum pesticides and fertilizers to
produce a truly accurate picture of a renewable resource economically.

The history of Brazilian ethanol production is one of $10 billion
annually in industry subsidies up until 1987, a rate of subsidy that
one economist with extensive Brazilian experience says it nearly
bankrupted the country at one point. Since then legal requirements of
all gasoline containing 25% ethanol create an automatic market for
ethanol.

The real enemies of Brazilian output, though, are not US farmers, it is
Caribbean sugar makers who enjoy special pricing in Europe:

"EU REACTION
http://www.tradeobservatory.org/headlines.cfm?refID=73586
Challenged to reduce sugar subsidies, the European Union has proposed
lowering subsidies for European farmers as well as the price of sugar
imports from former colonies. The African, Pacific and Caribbean sugar
producers have warned it could cost them $800 million in lost income
annually. European farmers have taken to the streets in protest.

''You now have the African, Caribbean and Pacific former colonies
screaming bloody murder because they are going to get hammered. They
are going to lose the European market,'' said R. Dennis Olson, an
agricultural economist at the Institute for Agriculture and Trade
Policy in Minneapolis."

When it comes down to the bottom line, though, the fact is that price
is king in the market. If the US adopted a similar 25% ethanol content
policy to gasoline, you'd see Brazilian ethanol prices rise
significantly (since the US is the biggest car market in the world) as
ethanol there was shifted to exports, you'd see far more rainforest
burning, and you'd see world oil prices come down as US autos suddenly
consumed 25% less oil-derived gasoline. You might see gas prices drop
below ethanol prices again, at which point refiners should be given
free reign to vary ethanol content with market variations.

http://www.ethanol-gec.org/information/Brazilian_Ethanol_3-1-05.ppt
(this seems to be an exception to the rule that power point
presentations don't convey useful info)

2004 ethanol production in Brazil was 15 million kiloliters (about 94
million barrels or 3.96 billion gallons, thank you Frink Server Pages).
US production was 11.5 million kl, which is 2.3% of US gasoline
production. If the US suddenly bought all Brazilian production, it
would still only amount to an additional 3% of gasoline content.
Current Brazilian exports are 2.2 million kl. Brazil is expected to up
production by 1 million kl in 2005.

Most automobiles in production and sale in the US are built capable of
burning a 10% blend of ethanol with gasoline according to mfr specs, if
they are not built to FFV standards (Flexible Fuel Vehicle). So, US
cars could easily take an increase in blending from 2.3% up to 5%
without problem, while soaking up global ethanol exports in toto.

Brazil has the capability to increase its cane production 100 fold ( if
it exploits all arable land  (good-bye wild habitat, hello
tree-huggers), to 320 million hectares, but only projects increasing to
a maximum of 90 million hectares. If all that went to exports, that
would be about 1500 million kl. If all that went to the US, we'd be
able to have a 25% blend of ethanol in our gasoline easily(assuming
zero growth in gas consumption). This would likely kill of US ethanol
production if the Brazilians are capable of keeping their production
costs down.

The problem here in the US isn't the market, its the government. The
EPA is fixated on bribes from the MTBE makers. Here in NH, we've been
complaining and suing over MTBE spoiling our well water for a decade,
but the EPA won't budge and let us switch to ethanol blended gasoline
for pollution reduction. NH has a slight smog problem in the southern
tier due to blow-over from MA, NY, and PA and Ohio coal plants,
consequently we have to pay for smog reduction additives to our gas.
When ethanol was more expensive than gas, it was a problem, now it may
be a good idea.

Dumping US corn-produced ethanol is also a good idea. Sugar cane is 6-7
times more efficient than corn is, it turns out, though I'm sure that
being at the equator helps some as well.

On the plus side, nobody cares if their gasohol was produced with bt 
and round-up ready corn.... if only Monsanto could put those genes in
sugar cane..... ;)



Mike Lorrey
Vice-Chair, 2nd District, Libertarian Party of NH
Founder, Constitution Park Foundation:
http://constitutionpark.blogspot.com
Personal/political blog: http://intlib.blogspot.com


		
__________________________________ 
Yahoo! Mail - PC Magazine Editors' Choice 2005 
http://mail.yahoo.com