Ethanol: Not Economically Viable

Ken McCracken • October 3, 2007

Ethanol plants are facing bankruptcy due to rising corn prices and too-low ethanol prices.

Agriculture Commissioner Roger Johnson says plummeting ethanol prices and rising corn prices are causing problems in the ethanol industry.
There are reports that some U.S. ethanol companies that are on the brink of bankruptcy.

You know why this is happening? Because nobody wants ethanol. Most of these plants were planned and built during a time when the sale of ethanol was heavily subsidized. That subsidy created artificial demand for the product, which in turn ramped up demand for corn (thus driving the price of that crop higher). Now that subsidy has been dropped and a simple truth as emerged: Ethanol isn’t as good as gasoline.
Even when ethanol is $0.10 – $0.60/gallon cheaper than regular gasoline it still doesn’t get a lot of buyers because it makes engines less efficient. That loss of gas mileage means the fuel ends up being more expensive than gasoline in terms of real cost even given ethanol’s often cheaper price.
I suspect politicians will likely try to solve this by just mandating the sale of ethanol at our pumps.

Tags: Domestic Issues, North Dakota News, Politics

http://Array Gloria M.

To all who made a comment here.

I agree with Fred Carter that this ethanol business is a losing battle. Energy can not be created. I will ad to his comment not to forget the cost of labor and personal transportation of the workers from home to the plants, every day for months and months, also the cost of insurance and cost to build and maintain such plants will actually make ethanol much more expensive then anyone can imagine. Only answer at the moment is nuclear, solar and wind power.
http://www.indymedia.org/en/index.shtml Angry Vertebrate

…makes engines less efficient. — Rob

Ethanol can make internal combustion engines more efficient since it allows an engine to run with a higher compression ratio (thereby improving thermodynamic efficiency). Miles/gallon measures make Ethanol look bad since it has a lower energy density per gallon than gasoline.

But making ethanol from corn is daft. Sugar cane works far better. This is why Ethanol has been a success in Brazil?
http://SayAnythingBlog.com The_Whistler_ofnd

Regarding the topic of this post it’s interesting that the blame goes to “rising corn prices” and “falling ethanol prices.”

The rising corn prices are due to a shortage in corn due to ethanol production. And falling ethanol prices being presumably since the market’s producing enough to satisfy the mandates.

Those two factors exactly show just how ethanol is not economically viable.
carrick

Fred Carter:

Net energy extracted minus used equal zero
or less then inputed. Ask any technologist and you will be amazed and shocked at the final outcome.

True, except the solar energy is free. You end up making about 25% more energy that is used to produce it. [refs on request]

If you want to talk inefficiency, compare that to refining petroleum to gasoline. You’re used energy doing it, and when you’ve burned the gasoline, that energy is lost. Not so with replenishable energy sources…
http://SayAnythingBlog.com The_Whistler_ofnd

I think the next fuel will be liquefied coal.

That is unless they solve the technological problems of getting oil from shale.

Or it could be something completely different.
carrick

Bat One:

Say, aren’t those people who are lauding the Brazilians for their ethanol production some of the same folks who were positively heartbroken at the loss of the rain forests that were cut and burned to plant all that sugar cane?

That’s hype circulated by various groups, such as environmental we’re-destroying-the-planet wackos and anti-biofuel-zealot types, but it’s flat wrong.

The regions where ethanol production in Brazil’s grasslands, the cerrado. Since there is a moratorium on using crops grown in deforrested regions for biofuels, there is little direct effect of biofuels on deforrestation.

Number one cause for deforestation? Clearing land for cattle ranches accounts for more than 60% of the total. 30% of the remainder is subsistence farming. Soy bean production is about 1%. See this for details.
http://SayAnythingBlog.com The_Whistler_ofnd

I’ve burnt a 10% ethanol blend in my vehicles since it was called gasohol. I haven’t noticed a drop in mileage (or increase when burning straight gasoline).

That’s hardly scientific but I think that in low percentage blends it’s a positive.

But then again I do live in a farm area.

Just don’t mandate the use or make me pay extra and it will work out. I realize of course that there has been a subsidy all along, but I can’t be blamed for that.
carrick

kbiel:

And I mean that literally. In the past few years since ethanol has replaced MTBE, air quality in my area has not increased in the slightest.

Ethanol as an additive allows engines to burn their gasoline fuel more efficiently than pure gasoline, which in turn reduces the amount of hydrocarbons and other particulates produced by a gasoline engine.

This is especially true in start/stop traffic, it will have little or no effect on the highway in typical driving scenarios for modern vehicles….

Anyway, it does the same thing that MTBE did, so you wouldn’t expect to see an improvement in the switch between the additives. MTBE was banned because too many a-holes were dumping it on the ground (to kill fire ants and whatever), resulting in MTBE getting into the water table.

However see the Wiki entry on MTBE. Plenty of “fuel” for you ethanol haters there…
carrick

Gregory, the real problem with foreign oil is the amount of power it has given dictators and tyrants both in the Middle East and Russi, and how much of that foreign oil money ends up in the hands of those funding world-wide terrorism.

The route to ending terrorism is to cut their funding off. The only way to do that is to remove our dependence on Middle East oil, world wide.
http://SayAnythingBlog.com The_Whistler_ofnd

Gloria, get the government out of the way and the market will settle all of those problems with ethanol. Either it creates more energy or it doesn’t.

The problem is the government interfering.

Solar power has yet to become very economically viable either.

The one you left out was coal which is very plentiful AND it’s plentiful in the US.
Bat One

Say, aren’t those people who are lauding the Brazilians for their ethanol production some of the same folks who were positively heartbroken at the loss of the rain forests that were cut and burned to plant all that sugar cane?
http://crypto-corinthian.blogspot.com/ T-Rex

OOps, I mangled the spelling on that web site.
Should be http://www.combateffective.us/

Things are kind of slow over there right now, which is why I am over here trying to stir up some trouble

TRex
carrick

Regarding what I’ve read, you can expect about a 1-2% reduction in road mpg using E10 gasoline and a small advantage in city traffic. In other words, it’s a wash in terms of efficiency.

Whistler: That is unless they solve the technological problems of getting oil from shale.

If they do that, we are talking about a 1000-years or so before we run out. Long before that, we will have bioengineered bacteria (that e.g. get their energy from sunlight) that can convert organic material to oil.

Not only would this be a GOOD THING[tm], it would be a great moment of schadenfreude as we get to laugh at the end-of-worlder lefties who keep hoping for a collapse of technology.
carrick

Robert108, I happen to agree with you there. As has been brought up in the past, we aren’t going to run out of oil anytime soon. What will happen instead is, as the better grades get tapped out, it will get progressively more difficult to refine.

At some point, there will be a break-even where it will be cheaper to use an alternative fuel, and the market will naturally adjust to the best solution (may not be ethanol though!).
robert108

DD/Carrick: If you design an engine to run efficiently on ethanol(very high compression, supercharging), it won’t run on gasoline. It’s a matter of very extensive retooling to use ethanol efficiently, with the extensive overhead cost. With the cars we have now, ethanol carries a heavy penalty in gas mileage.
carrick

DocDave:

Everything I’ve read and/or experienced is that ethanol in fuel is less efficient, at least in mpg.

By “more efficiently” I meant “more completely,” meaning less tailpipe emissions. It oxygenates the gasoline, allowing it to burn more completely when the engine is operating at non-ideal conditions (e.g., when accelerating).

Just where did you drum up that data

Classy.
http://SayAnythingBlog.com The_Whistler_ofnd

But making ethanol from corn is daft. Sugar cane works far better. This is why Ethanol has been a success in Brazil?

That’s true but when you’re talking about ethanol in the US you’re talking corn. We don’t have the sugar cane to do what Brazil does.

And apparently you can’t make it from sugar beets which is a huge crop where I’m at.
http://SayAnythingBlog.com The_Whistler_ofnd

The only answer “at the moment” is to dump the enviros and pump our own oil. Maybe solar and wind might be viable in 100 years or so…Nuclear can start replacing coal for electricity whenever we get started on it.

Nuclear power for electricity. Domestic oil and liquefied coal for cars.

That would make us energy independent which ethanol or wind will never do.
gregory

Remember, ethanol is be sold as a way to “reduce our dependance on foreign oil”. Gasoline is just one of THOUSANDS of products that are made from oil. Reducing our dependance on oil is a myth, but I like the idea of domestic oil. If cheaper, cleaner, and just as efficent fuel is developed, americans will buy it, and PRIVATE companies will sell it. I don’t really care what is in my tank as long as it works. However I am opposed to burning FOOD. Then there is the enviromental angle. Any alternative fuel will require a new infrastructure to produce and distribute. I don’t see the Sierra Club and the likes, who are currently advocating the tearing down of hydroelectric dams, supporting the construction of ethanol or hydrogen refineries and new pipelines to transport it. They want to ban your SUV, boat, dirt bike regardless. Plus greedy Big Oil is not going to be replaced with caring Big Government Ethanol. The government is not a fuel company and I don’t want energy sources forced on me based on who helps them keep their seats in congress, which is their ONLY concern…re-election. If and when ethanol, or any other alternative, becomes profitable, guess who is going want to “take those profits away”. To do what? Develop another alternative fuel. The grass is always greener on the other side, but it’s just as hard to cut.
http://SayAnythingBlog.com The_Whistler_ofnd

Of course you could blame that on ethanol production, because they are likely buying up all of the corn being processed at the mills.

Right, which means the rising corn prices are part of the economic viability of the ethanol industry. If they bid up the price and can’t make money at the higher prices they created then they can’t make it.
Fred Carter

Energy can not be created out of corn for free. Imagine the energy used to:
Clear the fields, planting, irrigating, sawing, mawing, collecting, transporting,
boiling, fermenting, distilling, pumping,
transporting again, distributing etc.
Net energy extracted minus used equal zero
or less then inputed. Ask any technologist
and you will be amazed and shocked at the final outcome.
robert108

Brazil has had an ethanol fuel system out of necessity, not any enviro reasons. Until just recently, they had no oil. Now, however, they have started developing a deep water oil field off the Atlantic coast of their country, which is why they now have cheap ethanol to export. They know gasoline is a better motor fuel.
robert108

If you were to take 1/10th of what we are spending in Iraq and throw it at new energy technology, the viable replacement would be found in a year.

Ahh, the popular leftie myth of redistribution. In fact, if we removed all the restrictive taxes and regulations from the energy industry, we could put the terrorists out of business in a few years. We would be developing our own oil resources(still the best energy source, by far), and just the fact that we were doing that would radically change the worldwide energy market.
You really don’t know much about economics, ews.
carrick

Gloria, that argument doesn’t wash. You can’t create energy, but you can utilize free energy from the sun…
http://rmjacobsen.squarespace.com/ Roy Jacobsen

{Oil} is the source of most of the conflicts in the world today.

Ummmm, OK. So what was the source of the world’s conflicts before we started messing about with oil? Coal? Wood?

THE source of the world’s conflicts is human nature.

If there were no oil, if someone invented cheap, portable, and clean Mr. Fusion devices and gave them away for free, we’d find something else to fight over.

If we were all the same religion, someone would invent a new one and some people would rally around the new one, some around the old one, and we’d fight it out.

If we were all the same shade of green, we’d find some other reason to hate each other.

By the way, if it were so damned easy to find a replacement for oil, if it could be developed and commercialized for 1/10th of the cost of the Iraq war and within a year, don’t you think that BP or Exxon would be working their asses off trying to be the ones to develop it? Don’t you think they’re already trying to be the first to market with something like that? They’re not stupid.
robert108

Only answer at the moment is nuclear, solar and wind power.

Nope. The only answer “at the moment” is to dump the enviros and pump our own oil. Maybe solar and wind might be viable in 100 years or so…Nuclear can start replacing coal for electricity whenever we get started on it.
carrick

Whistler:

The rising corn prices are due to a shortage in corn due to ethanol production

Is that really true? I’ve heard we have a glut in corn production, with more corn than we have the capacity to process….

Of course you could blame that on ethanol production, because they are likely buying up all of the corn being processed at the mills.
http://crypto-corinthian.blogspot.com/ T-Rex

While it has not panned out as a primary fuel, it still makes a decent additive. (And if you can’t sell all of it for motor vehicle use – it is much better to drink than gasoline – in moderation, of course.)

While I am on this subject, this is talking only about corn ethanol. Some other plant may someday show promise for producing motor fuel, and we should continue with some research in those directions – just to insure we don’t pass by any good ideas.

OTOH, we are spending (not the govenment, but the nation as a whole) more on alternative fuels and energy sources and methods, than we are spending in Iraq, so thanks EWS48 for showing us what you don’t know.

TRex
PS – I also write at:
http://www.combateffectice.us
Where dissent is encouraged
But the amoral liberal collective appeasement mindset is not
http://ewebsmith.com/ ews48

And the oil and gas companies are going to make sure that it stays that way.

Oil as a primary fuel source has been around for over 100 years. It’s an antiquated source of energy with harmful effects that are undebatable. It is the source of most of the conflicts in the world today. It’s well past time to move on.

If you were to take 1/10th of what we are spending in Iraq and throw it at new energy technology, the viable replacement would be found in a year. As it was implemented, the source of conflict in the Middle East would dry up. Al Queada’s and other terrorist organizations’ money wells would vanish.

There would be a new rash of IPOs boosting the U.S. economy and keeping the rich happy and providing more jobs. The FRB would get to loan more money to start ups reducing its support of foreign conflict. Smog would begin to dissipate. People would begin to live better lives. The U.S. would start to be looked up to again as the leader in technology. The value of the dollar would go up.

This would happen long before we are out of Iraq.
redwolf

OH …LOOK AT ME IN MY CORNMOBILE….CHEWIN ON AN EAR ,SITTIN BEHIND THE WHEEL…..
kbiel

I suspect politicians will likely try to solve this by just mandating the sale of ethanol at our pumps.

Um, they’ve already done this. If you live in an non-attainment area as determined by the EPA, then the gas stations must sell gasoline with a smog reducing agent. Until recently, there were only two chemicals certified by the EPA to reduce emissions, MTBE and ethanol. Now, since MTBE has been found in higher levels than expected in the water supply of non-attainment areas (surprise!), only ethanol may be used. Hence, those of us in the Dallas area (and other metropolitan areas) can only by gas with 10% ethanol.
imagine

Wired magazine has a great article on ethanol. I learned a lot that I did not know. There is plenty wrong with corn ethanol as far as yield and cost…however sawgrass and other grasses on very close to becoming cost effective….
kbiel

Carrick:

Ethanol as an additive allows engines to burn their gasoline fuel more efficiently than pure gasoline

If that is true, then why does gas mileage suffer when gas is blended with ethanol? How is that helping emissions?
robert108

You know why this is happening? Because nobody wants ethanol.

That’s the simple truth, Rob; nobody wants it because it’s a lousy motor fuel. No demand means any supply is excessive, and therefore the price will always be low, or nonexistent. It’s econ 101. No matter how many taxpayer dollars are wasted on it, nothing will happen. Why would we use ethanol when we have gasoline?
robert108

Is that really true? I’ve heard we have a glut in corn production, with more corn than we have the capacity to process….

Even so, Carrick, the combination of subsidies and govt mandates gives the market a false demand signal, which keeps prices up(the classic reason for price supports in agriculture).
http://crypto-corinthian.blogspot.com/ T-Rex

Good to know there is, at least, some interest in this topic. While I may not agree with some of the posters here, at least they are thinking.

Now, too bad I can’t stay up at night to engage this more effectively (shift worker)
kbiel

While it has not panned out as a primary fuel, it still makes a decent additive.

Well, not exactly. Ethanol has less energy density than gasoline and is more volatile. That means you have to burn more of it and more unburnt fuel escapes into the atmosphere to create smog and ozone. So, I fail to see just how it makes things better. (And I mean that literally. In the past few years since ethanol has replaced MTBE, air quality in my area has not increased in the slightest.)

We’d be better off mandating that all new cars have turbochargers installed. At least turbochargers are proven to improve fuel efficiency without any unwanted side-effects.
docdave

Ethanol as an additive allows engines to burn their gasoline fuel more efficiently than pure gasoline

Just where did you drum up that data? Everything I’ve read and/or experienced is that ethanol in fuel is less efficient, at least in mpg.
http://sayanythingblog.com robport

Going way up to the top of the thread…

Ummmm, OK. So what was the source of the world’s conflicts before we started messing about with oil? Coal? Wood?

Salt, actually. And before/during that, water.

SayAnythingBlog.com

Ethanol: Not Economically Viable

Create a SAB Readerblog

Recent Comments