The ethanol bust

[Lone_Star_Dem]

Source: Fortune

The ethanol boom is running out of gas as corn prices spike.

NEW YORK (Fortune) -- Cargill announces it's scrapping plans for a $200 million ethanol plant near Topeka, Kan. A judge approves the bankruptcy sale of an unfinished ethanol plant in Canton, Ill.. And that was just Tuesday.

Indeed, plans for as many as 50 new ethanol plants have been shelved in recent months, as Wall Street pulls back from the sector, says Paul Ho, a Credit Suisse investment banker specializing in alternative energy. Financing for new ethanol plants, Ho says, "has been shut down."

How can the ethanol industry be slumping only two months after Congress passed an energy bill most experts consider a biofuels boon? The answer is runaway corn prices.

Spurred by an ethanol plant construction binge, corn prices have gone stratospheric, soaring from below $2 a bushel in 2006 to over $5.25 a bushel today. As a result, it's become difficult for ethanol plants to make a healthy profit, even with oil at $100 a barrel.

Read more: http://money.cnn.com/2008/02/27/magazines/fortune/ethanol.fortune/index.htm?postversion=2008022809

[rurallib]

1. I have been heating with corn for 4 years now

what was once a very cheap alternative is getting pricier. But I always figured this was only a phase. Corn based ethanol is way too expensive to produce.

[Taverner]

20. Switchgrass

Honestly I think the future of ethanol is in switchgrass

[ChairmanAgnostic]

22. that shit

grows everywhere, anywhere, in drought, in water, in spring, summer and fall. AND it has a high energy content that can be converted rather easily, and even more efficiently in the future.

You are right.

[L0oniX]

2. It takes water to grow corn and we need it for food crops and drinking water.

Water, food, shelter ....basic needs. It will come down to that eventually when we run out of oil. Conservation and agriculture are the future.

[Demeter]

4. Not to Mention Topsoil Depletion and Resulting World-Wide Famine

You'd think that after 50 or more years of education, SOME concept of ecology would have sunk in somewhere along the line....

Or even of energy efficiency being much more immediate and lasting a source of fuel than any other...

Or talking to a real scientist/engineer/comsumer/non-Chicago economist....

OR ANY LOGICAL THING THAT A RATIONAL BUSINESS-LIKE PROFESSIONAL WOULD DO!!!!

[jwirr]

13. How true but that agriculture is going to have to be based on the

real needs of the people. If it comes to 60 people driving their hybrid cars to work or 60+ people riding to work in a bus/train run on some alternative fuel then we will see if we are willing to survive with the common good as our rutter (sp?).

[truedelphi]

21. I agree, but I do think that all this is

Something that should sort itself out over time.

Biomass will be the new thing and it means that all the "trash" from agriculture can be made into fuel. Eventually corn will go back into the food table rather than the gas pump.

[Robbien]

3. Companies probably took the Fed credit money for setting up ethanol plants

and are now using the excuse of high corn prices to get out of actual using that money for the purpose it was given.

Of course they have no plans to pay the Feds back and the Bush Admin will probably just look the other way.

[robinlynne]

27. especially since Jeb is the ehad of the ethanol association...

[izquierdista]

5. Binge and purge capitalism

The 'invisible hand' of the free market guides economic development about as well as a tin can tied to a bumper steers a car.

Ethanol (and butanol) are viable replacement fuels for gasoline in cars, it just has to be planned in such a way that (1) food needs come first and (2) the energy balance for the overall process is a plus, not a negative. Even using corn stover in the fermentation, the overall process is barely breakeven. Better to promote switchgrass and other inputs into the ethanol fermentation process rather than use food grade inputs.

[denverbill]

6. Which in turn will cause corn prices to fall.

I really don't get using corn in the first place. Why not find land that can't support food crops and grow some plant there that can be used to produce alcohol? Or why not use corn stalks and cobs instead of kernels? Or sugar cane? Or switch grass? Why the fixation on corn?

[12string]

10. another alternative

hemp grows most anywhere.Hemp oil is a completely renewable resource for #2 diesel and emits 97 percent less hydrocarbons.Now you know why pot is illegal.

[BadgerKid]

18. And the fibers

...good for clothing, sacks, etc. The cotton industry would cringe.

[SammyWinstonJack]

32. It also replenishes the soil with nutrients and nitrogen, controls erosion

of the topsoil and produces lots of oxygen. It is cultivated virtually everywhere in the World except the U.S. :banghead:

[pokercat999]

33. Dupont hated it because it makes better fibers and rope than

nylon. Problem: People would not buy nylon, solution; buy congress and get them to outlaw hemp.

[The Croquist]

34. That's not why hemp is illegal!

Hemp is illegal because it was a risk to alcohol producers. It predates the huge growth in the oil industry.

The Croquist
Moonshiner (using corn and sugar)

[Tesha]

15. Archer Daniels Midland couldn't make money on it if your suggestion was followed.

ADM owns most of the Congresscritters from the farm belt.

Tesha

[Javaman]

17. the ethanol giants made their money, now it's time to move on to the next

tactic of greed.

[4_TN_TITANS]

31. Why the focus on corn?

Mid West Republican voters, who's crop is worth a whole lot more now.

[hedgehog]

35. According to my husband, ethanol from corn is a big deal right now because

so much American corn is genetically modified. When the European Union banned GMO corn, it closed off a market and a new one had to be found right quick to save Monsanto, Archer Midland Daniels, Cargill etc.

[DCKit]

36. The bacteria and enzymes required to convert cellulose to ethanol...

are becoming available, but none of those processes yet efficient and affordable. When it does become more affordable to turn household and agricultural waste into liquid fuel, it'll be huge. Your grass clippings, garbage and sewage will be worth $$$.

The conversion of corn to ethanol requires 1 unit of energy to every 1.3 units of energy derived and I'm not convinced that all the inputs - fuel, fertilizer production/transport/manufacture, etc..., and certainly not the added food cost to consumers or depletion of agricultural land - are being considered or there would be no need for subsidies. Both corn and ethanol producers enjoy outrageous government subsidies for doing exactly that which moonshiners have always been prosecuted. Go figure. I guess the moonshiners lobby isn't as rich or developed as the corn lobby.

Not only does hemp provide the associated products and benefits discussed below, but hemp oil is a direct replacement for diesel (and tasty/healthy too!!) and requires little, if any, water, herbicides or pesticides as well as no processing beyond pressing the oil from the seeds and removing excess water. I guess the real drawback to hemp is the shameful 300-500 gallons of fuel/acre and additional raw material it provides for manufacturing. :sarcasm:

The legalization of hemp would be the death knell of the DEA - unless they decided to ramp up enforcement against actual, dangerous drugs like cocaine, meth and heroin and the organizations that import and distribute them. Currently, 95% of the "marijuana" seized by the DEA is actually wild hemp, a.k.a. "ditch weed". Without benefit of current laws enabling enforcement actions against that stubborn, intractable, incorrigible bitch, Mother Nature, the DEA would either have to begin engaging in actual drug enforcement, or face budget, equipment and staffing cutbacks. Whatever would we do without them?

The War on Drugs was a precursor to the War on Terra and it's exactly the same formula - tell people over and over again what they need to fear, until it catches on, then use that manufactured fear to grow rich and powerful off the resulting expansion of gubmint and private contracts. Yet another Republicon wet dream brought to life.

[gasperc]

7. the sick irony

peak oil, peak corn, peak wheat, peak uranium, peak gluttony

we have to do all at once, conserve more, drive less, DEMAND more fuel efficiency, diversify the energy supply, solar likely a key component

[comtec]

8. arent there about a dozen other ways to make ethonol cheaper anyway?

that are not as damaging?
IE Peanut oil, peanuts replenish the soil as they grow!
Hemp oil, Hemp (industrial of course) is basically a weed, it's grown ANYWHERE with LITTLE encouragement!
We would also get useful fibers out of it... right.. common sense, none of THAT in government!
What about just making moon shine?
IIRC moonshine, aside from being VERY high/pure octane for fuel, is also made out of... anything!
Since you aren't making it to drink, I'd imagine flavor isn't that important.
There must be a way of making moonshine that isn't as dirty as running a fine for however long it is.

Also in ... um... a science magazine (ill have to look it up) they said that a enzyme found in the "guts" of termites makes bio diesel made out of ANY plant matter very feasible!

What about designing more energy efficient vehicles?
Cars that use a flywheel for energy storage/production? Surely some kind of crank/recharge system could be set up.

The REAL problem is that long-term solutions are not seen as profitable!

[Lone_Star_Dem]

11. Switchgrass is a perennial and has a huge biomass output

It will grow in poor soils and a myriad of climate conditions.

My property is covered in it and once it's established it just keeps coming back no matter how bad the drought and scorching summer heat or how cold the winter. Try that with corn or even hemp for that matter. Both of which are annual crops which increases their overhead due to replanting requirements.

[ozone_man]

24. A good switchgrass article.

Explains with numbers how to make complete conversion from gasoline to ethanol derived from switchgrass for the U.S..

http://www.harvestcleanenergy.org/enews/enews_0505/enews_0505_Cellulosic_Ethanol.htm

"The key to producing enough ethanol is switchgrass," says Greene. Switchgrass shows great potential for improving yields, offers environmental benefits and can be grown in diverse areas across the country. Current average yields are five dry tons per acre. Crop experts have concluded standard breeding techniques, applied progressively and consistently, could more than double the yield of switchgrass. Yield improvements predicted by the report of 12.4 dry tons per acre are in keeping with results from breeding programs with crops such as corn and other grasses. The innovations discussed have a net effect of reducing the total land required to grow switchgrass to an estimated 114 million acres. Sufficient switchgrass could be grown on this acreage to produce 165 billion gallons of ethanol by 2050, which is equivalent to 108 billion gallons of gasoline. The next logical question is how do we integrate switchgrass production into our agricultural systems. The answer lies with the ability to produce animal protein from switchgrass. "If we have cost-effective agricultural policy, farmers will rethink what they plant," says Lynch "For example, we are using 70 million acres to grow soybeans for animal feed. You can grow more animal feed protein per acre with switchgrass. If there were a demand for biomass feedstocks to produce ethanol and other biofuels, farmers would be able to increase their profits by growing one crop producing two high value products."

[Lone_Star_Dem]

26. That is an excellent article

I made it about 1/2 of the way through it and bookmarked to read it later when I have more time.

Thank you for that link.

[Heywood J]

12. This?

http://www.jgi.doe.gov/News/news_11_21_07.html

[8 track mind]

14. yep

I am presently building a still to make my own ethanol and i refuse to use corn. (if any freepers are lurking, yes i have a permit from the BATF) Ethanol can be made out of so much more, heck i plan on using black strap molasses (sp) for my first run.

I am just thankful that this at least has people talking and thinking for the future. Ethanol isn't the end all be all solution for our energy woes, but i think its a step in the right direction. I am hoping it will ignite our ingenuity. I'm hoping a lot more people will wake up and see the oil companies for who they really are and they damage they have done environmentally, socially, and politically.

[L0oniX]

9. How about we use pot for bio fuel? At least we could get some pleasure from it.

[high density]

16. It's time to end those subsidies and go after energy policy that makes sense

It's ridiculous that it has gone on for this long. Ethanol from corn is creating more problems than it is solving.

[Friday]

19. Hemp is good

I want one of these;

http://www.hempcar.org/indexOLD.html

[Canuckistanian]

23. And why are corn prices spiking?

Because there's a lot of speculation about using corn for ethanol.

They're the victims of their own game.

But there may be a good side to this. The high corn prices may bring back the Mexican corn industry.

[otherlander]

25. Using corn for fuel

is a scam that makes corn scarcer, and makes food unaffordable. If people would stop buying vehicles that were twice as big as they needed, and if we had a decent railway system in America, then we might actually get somewhere.

[Nihil]

30. "If"?

Remember you are talking about the inhabitants of a nation
that has had George W. Bush serve TWO terms as president ...

I don't think much of the chances of your "if"s.

[Tashca]

28. Going on since at least fall

The shelving of new ethanol plants started happening shortly after corn hit $4.00. There are several bankruptcies out there. Most inefficient or poorly run plants. Smaller ethanol plants haven't been making money for awhile now.

You can say that this huge price increase in corn is mostly speculation.....but I'm not completely sure about that.
I've watched as wheat prices hit all time high prices on world markets the last few weeks. There was a short crop of wheat in many countries this past year as well as rice.

Corn prices and wheat prices have always as long as I remember moved in tandem. They are both usable feed stocks and one goes up the market shifts to the other until it goes higher....the reverse is true also. It's very rare you see one high or low without the other doing the same. The world food stocks are not in the best of shape...

I suspect there will be a huge increase of fragile acres brought into production all over the world in the next year...

[Muttocracy]

29. and corn takes tons of nitrogen fertilizer...

...produced by using... fossil fuels!