Fahrer

I just read in the news that the US Senate voted to end subsidies for the ethanol industry. Also, the House reported moved to end support for blending equipment.

This, hopefully, will bring and end to ethanol in my gasoline!

Skibum

More likely we'll just have to pay that much more....

Domer911

Nothing wrong with a little ethanol in the gas...CA drivers have been at almost 5% for about a decade.

I do agree, however, that the subsidy was one of the worst and most ridiculous wastes of taxpayer money ever. Ever. God Bless Sen Coburn!

Minok

Ending the subsidy is something welcomed. If its worth doing it would stand on its own economically.

Then there is the general debate about turning 'food' into 'motor fuel'.. which drives up food prices in some ways.

The support to get the industry off the ground has been there long enough... its sink or swim time.

Domer911

ironically, there's a law already in place REQUIRING that refiners account for a portion of their production in renewables. Ethanol is the easiest and most likely renewable out there. So whether or not it can stand on its own economically is academic. The government is forcing the issue.

At the same time it was SUBSIDIZING the cost of the ethanol for producers. That's stupid. A good analogy is your local municipality PAYING you for observing the posted speed limit. Under law they require you to adhere to it, and pay you to do so at the same time. stupid. wasteful. US government.

purrybonker

Actually, I think ethanol arises firstly out of a desire to control the consumption/use of MBTE (methyl butyl something or other)- an oxygenator which has nasty environmental downsides. It's an emissions thing. I think California banned it and screwed up the works.

So ethanol comes down the pike as a replacement oxygenator to MBTE in gasoline and low and behold it also appears to be a salve to the green-folk who want to see visible reductions in the consumption of fossil fuels plus it's based on bio-mass/renewables like corn.

So... GWB and the boys go all in. Ethanol solves the MBTE problem and gives a good enviro-profile. Ethanol plants get subsidies up the yingyang. Corn gets planted ad nausea. Ethanol plants show to be non-viable except for subsidies - standard BS when government gets involved. Bad move for some PR on the part of GWB. Negative side effects are considerable - both in replacement crop loss and bio-mass price inflation. No one visibily cares that more fossil fuels get burned to produce the ethanol than the energy value of the ethanol produced (tractors and combines and ****e)

Lesson learned? Not likely.

The end to it a bad thing if the subsidies are indeed withdrawn? Absolutely.

dasams

The blend rate has been capped at 10% but the ethanol industry is lobbying their butts off to get it increased to 15%. As of last Oct, the EPA has agreed for late model cars. This is bad news. dave

dasams

Back in the 90's, the oil/auto industry had data that suggested that blending oxygenates into gasoline reduced harmful emissions and it's use was mandated. While that may have been true for older cars, it is not for newer cars. When MTBE was banned, the corn ethanol industry was born.

By this point, it was well known that oxygenates do not reduce harmful emissions so the ethanol industry shifted gears and promoted energy independence resulting in Energy Policy Act of 2005. That law required billions of gallons of ethanol to be blended into gasoline. The Energy Independence and Security Act of 2007 extended the requirement to 36b gallons by 2022. Most will be ethanol.

With today's economics, ethanol production is significantly more expensive than gasoline. However, since the refiners must blend biofuels into their petro gasoline, they will have to pay market prices for ethanol. In the absence of the subsidies, the cost of ethanol is likely to go up which will show up at the pump. A related issue is the proposal to reduce tariffs on ethanol imports which should increase supply and hold down prices. dave

sjfehr

Ethanol is actually quite effective as an octane booster, that's why it's so popular and unavoidable. I agree that the ethanol subsidy is ridiculous, but small % of ethanol in our gas is not. What really grinds me is not that lead was outlawed as an additive (I'm fine with that), but that MTBE was effectively banned simply because of the risk that some if it would leach into the ground from gasoline spills or leaky underground fuel tanks. It's not even toxic, just tastes bad. And probably should have been dealt with in better ways, like double-walled bulk fuel storage tanks and catching runoff from filling stations to remove not just the MTBE but the actual truly toxic stuff.

FYI, if you hear anyone talking about how we should adopt biofuels to replace gasoline for environmental reasons, punch them: it takes more energy to create a gallon of ethanol or biodiesel from North American crops than you get from burning it. They may stammer and come up with reports that dispute, and try to claim it has a 0-5% net energy return, but seriously, if the argument is whether ethanol is a net loss or just really really inefficient, it's NOT the solution to our energy problems. Now, we get most of that energy from coal, so we're effectively trading coal for oil with ethanol, which is a good thing if you favor energy independence, but it's not terribly effective environmentally and has a much larger carbon footprint.

kosmo

this debate cant be had w/o being political.
subsidies are dumb. Get rid of oil subsidies too.

dasams

It wasn't banned because of the risk of a leak into the ground, it was banned because it did. There are hundreds (thousands?) of water wells that are closed because of it. And double wall tanks have been required for about 10 yrs.
I've always used 15% as the value: it takes 85 BTU's of OPEC oil to produce 100 BTU's of corn ethanol. Not a good deal IMO. Research is continuing and someday the values will be reversed. As an example, it takes about 15 BTU's of oil to make 100 BTU's of ethanol from sugarcane. Lucky for Brazil they have the sun to do the heavy lifting. dave

sjfehr

It depends which study you go by, and what crops you assume. Most of the studies that conclude any positive energy return only do so because they neglect much of the energy involved in ethanol production and distribution. The more thorough ones are pretty damning about corn, switchgrass, and other common ethanol sources as being net energy losses. Sugarcane is the only real exception, and it's not commercially viable anywhere in North America. And brings up other issues unto itself- ask a Brazilian about cane ethanol and you're likely to get an earful.

MTBE is a relatively harmless tracer. Typical California; instead of solving the real problem (stopping fuel from leaking into the environment and water table), they attacked one of the symptoms. But, I suppose ignorance is bliss- who cares if filling station overflow is still being washed into stormdrains so long as nobody notices when they turn on the tap?