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Thursday, December 09, 2010



South Dakota needs to prepare for a "rollback" and the ultimate elimination of ethanol subsidies. As you say, ethanol subsidies make no economic sense outside of the direct benefit to "Ag States" and they're becoming increasingly unpopular outside of them.


This post contains blatantly false information. "It takes more energy to produce a gallon of ethanol than the gallon actually contains." That's a tired, old argument that was proven false years ago. Please, do some research before throwing out false claims. Read this, it's from the USDA: http://www.ethanol.org/pdf/contentmgmt/Net_Energy_Balance_of_Ethanol.pdf

If you didn't want to read the whole report, it shows clearly that ethanol's output/input ratio is 1.67. That was a couple of years ago. Ethanol plants have gotten even more efficient since, so I would think that number would go up.

Ethanol's a cleaner burning fuel, less CO2 emissions (you did get that right) less Benzine toxins than gasoline. And I don't know if I'm going to trust what you say is an "Australian Academic." What kind of academic? High school math teacher?


Regardless of whose numbers you use, the fact is ethanol does not appear to be able to stand on its own feet. I still say if the subsidy cannot be removed (it should be), at least get rid of the tariff on imported ethanol. I hope KB, your tongue is in your cheek when you say you support it.

Jon S

Notice that Chris cites ethanol industry numbers. Independent research has shown that ethanol is, at best, a marginal net gain in energy output. Also, there are multiple studies, for example from the University of Minnesota and Georgia Tech, that demonstrate that ethanol plays a significant role in starvation in the world. The IMF has concluded that western subsidies for ethanol are a significant contributor to rising food prices worldwide. Also, it is of note that Al Gore has recently stated that his past support for ethanol was a mistake. The results are in and, for the reasons Ken outlines, ethanol is not good for the environment. The best evidence that ethanol subsidies are about interest group payoffs rather than sound policy is the fact that our tariffs on imported ethanol remain very high. If we really want to clean the environment and become independent from foreign oil, then it seems we'd take ethanol from wherever we can get it. But, no, ethanol policy is intended to prop up the farm economy. That might be a good justification for the policy, but one should be clear that ethanol has little to no benefit either for the environment or energy independence and likely hurts the world's poor.

Michael (Constant Conservative)

Well stated, Ken. This issue is indeed leading to some strange bedfellows, but I'm glad to see it finally getting some time in the press.

It is not popular to bring up truthful data about ethanol and how efficient it is not--since we live in an ethanol-producing state, but we it is time to carefully disassemble the subsidy structure for ethanol before it comes down and hurts us all. If the industry is able to stand without subsidies, then we can have a further discussion on relative harm to the environment vis a vis gasoline, etc.

larry kurtz

There is no ethanol industry without an agrichemical industry: http://switchboard.nrdc.org/blogs/ngreene/hell_hath_no_fury_like_the_cor.html

Plan to plant something other than corn in the Spring...like ducks: http://madvilletimes.blogspot.com/2010/12/quack-if-you-like-prairie-potholes.html


Chris: my information may be wrong or not. It is certainly not blatantly false. Almost all of the studies are biased in one direction or another, but the best journals have pieces supporting my position.

The problem that biofuel supporters have is this: if biofuels are really cost effective, then wouldn't ethanol be cheap? Wouldn't the industry be able to stand on its own feet, as dugger says, and not depend on government subsidies for its very survival?

Donald Pay

You make a lot of snarky comments that aren't based in reality, or they are based in a very simplictic and incomplete understanding of reality. Let's examine one.

"The issue has made odd bedfellows of conservatives and environmentalists, who have united in opposing the subsidies. That's amusing, since it was the green lobby that gave us ethanol in the first place."

This statement is exceedingly simplistic, so much so that it can't even approach reality. We have to deal with "the green lobby," whatever that is. The first fact to understand is environmental groups never had the power to develop an industry from the bottom up. The people who developed the technologies, processes and business plans were based in engineering schools and biochem departments and in small companies and coops. Many environmentalists in the Midwest, however, saw the promise of ethanol to substitute a cleaner burning fuel in automobiles, which would help with smog issues in urban areas. In general Midwest environmental groups supported the start-up ethanol industry in seeking subsidies. However, Midwest environmentalists often were opposed in this by other environemntalists. In short, national environmental groups have been split on the issue of ethanol for decades.

The industry was going to develop from corn-based beginning because that's where the greatest understanding of the biochemistry was. Environmentalists have always recognized the draw backs of a corn-based ethanol industry. The goal was never to end at a corn-based industry, but to move toward cellulosic-based industry, and that is beginning to happen. I'm not sure that now is the right time to phase out subsidies for corn-based ethanol, because we probably want that industry to help lead us into the cellulosic future.

Donald Pay

A second discussion needs to occur over the point that environmentalists and conservatives being on the same side on an issue is novel. Historically, the early conservation movement and much of the early environmental regulatory structure was developed by people associated with the Republican Party. Environmentalists and conservatives have worked together on many issues over the years. Aldo Leopold was a notable conservative who is credited with restarting the modern environmental movement. In South Dakota the opposition to the Oahe Irrigation Project melded together liberals, environmentalists and conservatives. On air quality issues, market-based approaches (such as cap and trade) were developed by conservative or libertarian economists and later adopted by environmentalists. On issues involving forest roads and timber cutting, fiscal conservatives and environmentalists are usually on the same side. Some fiscal conservatives and environmentalists are on the same page in opposing subsidies to the coal, oil, and nuclear industries.


If we were to harvest sea pntals, not just algae, from areas of the oceans that are called dead zones, areas that produce so much vegetation that the decomposing vegetation cause death of all animal life, we would have hundreds of times more biofuels than all we currently manufacture,Blue-green algae have a special value in that they manufacture their own nitrate fertilizer, and enough to fertilize large volumes of other pntals. We need to harvest the algae along with the other plant matter.These masses of algae are a problem because they are not being harvested in appropriate volumes. We seem to have lost most or all of our baleen whales that at one time ate so much of it.


i definitely think water would be a good srocue, but I heard from somewhere that if we were to become dependent on water as fuel, then we would run out of water (don't know if this is true). BUT I believe the answer lies in variance. We should alternate between the different biofuels and other srocues particularly ethanols and electricity. I also really think that the US should invest more money into butanol. In my opinion, butanol is the closest alternative to gasoline.


Your on to something there. Chinese ofliicafs belive there is 260 million tones of the stuff in the race area. Bio fuel has been made from algae with success. I don't know how much bio fuel the chinese algae would make but it would have to be better than making it out of the crops of poor countries.

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