Any thoughts on this?
https://www.reuters.com/article/us-usa-e...s-idUSKBN1FE1KA
Seems like there is some case to be made for the notion that ethanol has always been primarily a farm subsidy in disguise and a way to keep arable land in agriculture.
Keeping arable land in agriculture could certainly be viewed as legitimate policy in the national interest, but I've always suspected that we'd be better off without the bio-fuel, diesel or gas.
Industry Resistance to Biofuels
- Thread starter CCI
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I guess this is a natural response to cheap oil prices. When the electorate indicates that they are worried about oil prices the government responds with theses programs. When the oil price goes down there is a reluctance to get rid of the programs because to causes distress to the farmers. The real problem is those 50 refineries are too small to compete. In China they are called teapot refineries. The world is a changing.
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Not to mention the bacteria that grow in your fuel tank if it sits for any amount of time. I am all for getting rid of it.
I just cannot sit by anymore and see so many who are ignorant about ethanol educate others with said ignorance.
First, this article better describes the problem. It is not the cost of mixing ethanol but the timing and the fact that this refinery did not own gas stations to mix at point of tank fillup.
https://www.google.com/amp/s/www.forbes....ankruptcy/amp//
Some other things to consider when we discuss ethanol....
The corn used for ethanol is creating a dual product. The "food" is not lost. The protein is removed and combined with feed stock. Which is what yellow corn was every really used for, feeding animals and corn syrup.
Try eating some of that corn...
So all the energy required to grow the corn would have been used to .... grow corn anyway.
So the articles saying it requires more oil to produce ethanol than we can make (which used farming production in their equations) are false.
Imagine removing approximately %10 of all gasoline from the current market. Currently oil refineries are maxed out. It would take at least a year to make up for it. Prices would go up quickly. I am just trying to highlight the effects of ethanol on gasoline prices in general. If no ethanol, prices would be higher across the board. Not nearly the amount as the "shock" example given since refineries would have been upping their capacity long ago.
Ethanol is not subsidised any more than the oil regineries are. Its called tax breaks and credits. Farmers and ethanol refineries don't get gubment checks in the mail.
YOU, however, are getting a tax break at the pump. Sales tax that is. The reason the ethanol blended prices are cheaper at the pump is (at least in my case) your states sales tax is reduced for it. Rather than complaining about it, enjoy it. If it was not for the sales tax decrease, prices would be about the same.
And yes I would put in the non ethanol for the 3% mileage increase.
"Ethanol mandated! Let the free market work!!!!"
I agree, let the free market work. Stop mandating oil based gasoline. There are ethanol prosucers here in Iowa who want to eliminate mandates...all of them.
Did you know it was illegal to put ethanol into your gas tank tears ago. The government mandated 100% oil based gasoline. Now they mandate 90% with acceptions for 15% and 85% ethanol.
By the way, ethanol is a cheap way to increase octane. Ever noticed how costly high octane is without ethanol? Like it or not, auto makers are increasing the compression in the engines to squeeze out more fuel mileage to meet the, like it or hate it, EPA regs. Octane requirements are going to go up.
Oh and don't get me started on the stupidity of "ethanol ruins engines and fuel systems" early 90's car? Would not touch ethanol. Today, not a problem.
Thank you for reading my rant. Lol
I mean no disrespect to the OP. Sorry...
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Biodiesel does reduce the fine particulates in the exhaust so would removing it help or hurt? I’m not sure enough bio component is in the mainstream sales to truly make a difference, but many mass transit carriers use it to decrease pollution in urban areas (if they use diesel at all).
Whether or not "keeping arable land in agriculture" is a good thing depends on why it is being done. Unfortunately in the U.S., this is code for keeping profit as high as possible. I don't know what the right-sized overall agricultural footprint for this country is, but it certainly is not an ever-expanding industry supporting huge corporate farming industries selling the bulk of their commodities overseas. That is what ruined the family farm and is what is driving agricultural subsidies today.
People need to wake up to the fact that our government and country is and always has been run by big business.
Thank you for reading my rant. Lol
I mean no disrespect to the OP. Sorry..
None taken, this is why I was asking and the reason I hang out as much as I do at BITOG. I don't know of too many other places one can find this level of education, intellect, life experience, diversity, appropriate social restraint, courtesy, and commitment to discussing important ideas, keeping it about the idea. Somehow what started out as talking about oil has evolved into quite a remarkable group of people who also happen to have really good sense of humor, and tend to keep their focus on the larger picture.
Greatly appreciate your perspective, and agree completely with the importance of countervailing evidence.
The one point I need to think about more is in the big picture what is the difference between a tax credit and a subsidy. I understand the technical difference, but it he widest sense, if government is running at a deficit anyhow, what is the net result of giving back money or just not charging it in the first place to produce the same result?
Agreed on looking deeply at the "why," and equally concerned about small farms.
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Originally Posted By: UberArchetype
People need to wake up to the fact that our government and country is and always has been run by big business.
Ethanol is a subsidy for farmers as it drives up the demand for corn and so the price too. True they would keep on farming but for lower crop prices without the biofuel mandate.
As far as sales tax in Illinois the re is a subsidy for the use of ethanol but it goes to the station selling the gas as they get a rebate for some of the sale tax. And Illinois also started charging a wholesale sales tax on ethanol too last year.
I think too the refinery capacity is so high because we are exporting more refined products.
Why record U.S. oil exports are poised for even more growth
Originally Posted By: SHOZ
Ethanol is a subsidy for farmers as it drives up the demand for corn and so the price too. True they would keep on farming but for lower crop prices without the biofuel mandate.
Originally Posted By: SHOZ
As far as sales tax in Illinois the re is a subsidy for the use of ethanol but it goes to the station selling the gas as they get a rebate for some of the sale tax. And Illinois also started charging a wholesale sales tax on ethanol too last year.
Originally Posted By: SHOZ
I think too the refinery capacity is so high because we are exporting more refined products.
Why record U.S. oil exports are poised for even more growth
Originally Posted By: CCI
None taken, this is why I was asking and the reason I hang out as much as I do at BITOG. I don't know of too many other places one can find this level of education, intellect, life experience, diversity, appropriate social restraint, courtesy, and commitment to discussing important ideas, keeping it about the idea. Somehow what started out as talking about oil has evolved into quite a remarkable group of people who also happen to have really good sense of humor, and tend to keep their focus on the larger picture.
Greatly appreciate your perspective, and agree completely with the importance of countervailing evidence.
Originally Posted By: CCI
The one point I need to think about more is in the big picture what is the difference between a tax credit and a subsidy. I understand the technical difference, but it he widest sense, if government is running at a deficit anyhow, what is the net result of giving back money or just not charging it in the first place to produce the same result?
A couple of comments.
We've used ethanol fuels in Minnesota going back to the 1980s. In 1986, 40% of gasoline sold in Minnesota was E10. It became mandated statewide in 1995. In other words, we've been using the stuff a long time.
That being said, it is a shame that certain industries (namely outdoor power equipment manufacturers) continue to blame ethanol for the the poor performance of many of their products, which we've all seen first hand. The reality is they continue to build cheap junk and use poor quality parts in their fueling systems, and then blame their problems on ethanol. Even the emissions ratings on some of the equipment show how throwaway many things are built - the amount of hours they are certified to meet emissions ratings are absurdly low.
Car makers have figured it out. Why can't OPE manufacturers get it right?
Now onto some of the other arguements:
The idea that we have not put more land into corn production is laughable. The idea that we'd just grow all this corn anyways is also laughable. Through 2003, less than 80 million acres were in corn production yearly. The last five years have averaged somewhere around 92.5 million acres. Add on top of that increases in yield from 130 bushels per acre in 2003 to over 170 bushels per acre average in 2017, and it easy to see that corn production continues to expand.
The same trends are visible for soybeans - just compressed into the last few years as biodiesel mandates have taken off.
The facts are that ethanol mandates have driven more land into corn production. Much of it was either marginal land for row crop production or land that previously did not generate high enough of a benefit to be in production. It is also evident in the transition away from many of the traditional livestock/milk production in this area - the livestock/milk farm disappears to be replaced by row crop farming. (I will grant that the economics of those crops are a factor at play here too).
Oil refineries are not "maxed out". Last 10 years, utilization is typically in the mid 80% range, peaking at 95%. And the reason they run that high is gasoline and finished product exports. As an example, gas exports from the US represent over 10% of us gasoline refining capacity the last year or so.
Check out the EIA on the topic: https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MGFEXUS1&f=M
In back in the early 2000's, yes, needing 10% more refining of oil product would have presented a problem. In the current environment, it doesn't, thanks to the recession in the late 2000's.
Most states do not give a gas tax break on Ethanol blended fuels. Iowa historically has, which is not a surprise given the corn lobby in the state.
The refinery that is filing for bankruptcy is doing so because it is an old, inefficient refinery that cannot compete well against other refineries on a cost basis. The blending issue is a smokescreen - they chose not to pay for the needed credits (that by the way - every other refiner has to deal with too).
Anyways, my personal opinion is that while I believe at one time, ethanol had a role to play, the need for mandates on usage has come to pass. Let the market decide what should be used.
MolaKule
Staff member
Originally Posted By: MNgopher
...Most states do not give a gas tax break on Ethanol blended fuels. Iowa historically has, which is not a surprise given the corn lobby in the state.
The refinery that is filing for bankruptcy is doing so because it is an old, inefficient refinery that cannot compete well against other refineries on a cost basis. The blending issue is a smokescreen - they chose not to pay for the needed credits (that by the way - every other refiner has to deal with too).
Anyways, my personal opinion is that while I believe at one time, ethanol had a role to play, the need for mandates on usage has come to pass. Let the market decide what should be used.
I personally do not like ethanol in the gas I buy .
But , then , I can not think of a government subsidy I do like . It is possible I may eventually think of one , latter .
As far as bio diesel , I know next to nothing about it .
I just wish that they'd do something with corn besides feeding it to cows and making fake sugar and mixing it with real food.
Originally Posted By: OneEyeJack
I just wish that they'd do something with corn besides feeding it to cows and making fake sugar and mixing it with real food.
US oil refining capacity.
Note that hurricane Harvey hit at the end of Sept.
Refineries were running at 95% capacity. Which is essentially maxed out.
https://www.eia.gov/dnav/pet/pet_pnp_unc_dcu_nus_m.htm
Originally Posted By: Iowegian
US oil refining capacity.
Note that hurricane Harvey hit at the end of Sept.
Refineries were running at 95% capacity. Which is essentially maxed out.
https://www.eia.gov/dnav/pet/pet_pnp_unc_dcu_nus_m.htm
Refineries were exporting over 700,000 barrels per day of gasoline around the time of the 95% capacity. That represents over 7% of the available capacity being exported. Refineries are NOT running at max capacity for US consumption.
Refiners didn't just stop refining the fuels we didn't use with the increase in biofuels like ethanol and soy based diesel. They found another market for it instead.
That is part of what makes the arguement that bio fuels save oil consumption a joke in the current energy climate. We still pump, refine, and distribute as much or more than we ever did. It's just being consumed elsewhere.
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