The American Ethanol Scam
Think that buying The Secret was a ripoff? Check out this massive, multi-billion dollar scam:
While fringe sources pointed out ethanol’s economic problems years ago, the mainstream has finally figured it out. A very good article was recently published at Rolling Stone — Ethanol Hurts the Environment And Is One of America’s Biggest Political Boondoggles. I recommend you read it. With a Presidential election coming up the truth needs to be known.
The energy policy of the United States is not just an issue for US citizens. Jeff Goodell at Rolling Stone writes — “Our current ethanol production represents only 3.5 percent of our gasoline consumption — yet it consumes twenty percent of the entire U.S. corn crop, causing the price of corn to double in the last two years and raising the threat of hunger in the Third World.” In January The Washington Post published an article about the impact corn prices are having on Mexico’s poor. (President Bush wants US ethanol consumption increased 5x.)
Does any one other than corn farmers think this is a good idea?
Nope… and this is just one example of government renewable/green energy policy gone wrong. Thank the Democrats for making the environment such a pawn in politics.
Comment by Chris Beasley — July 31, 2007 @ 6:48 am
Ditto on that statement.
Anytime I hear a politician harping on any one topic, I just assume that he is lying or totally uninformed on the subject.
As Americans, we are almost jaded to the political misrepresentations that we are fed on a daily basis. Whether it be agendas or ignorance, the “we know best” attitude is slowly creating a country that would shame those who fought and died for this once great nation.
Comment by Terry Reeves — August 1, 2007 @ 8:05 am
[sigh]
So what’s the solution? Continue with out dependency on foreign oil? The problem is everyone wants a solution that will make everyone happy, which isn’t realistic.
Comment by FT — August 1, 2007 @ 10:20 am
The most damning evidence of Ethanol I read was actually in Consumer Reports back in the Spring. This is a completely non-political magazine, they’re just trying to help you save money.
In their tests the e-85 vehicles actually got lower gas mileage. So the gas was cheaper, the gas was cleaner, but they burnt more of it. So the end result was a wash. Additionally e85 engines are less reliable and need more upkeep. Which of course costs time, money, and energy.
To solve our energy problems…. if I were King. I would immediately open up Alaska for oil. I would auction off the rights for it and use the money raised from the auctions to be put into an irrevocable trust/foundation who’se only job is to protect the Alaskan environment. I can’t see how it is at all reasonable, in today’s society, to not drill in Alaska just because of an outside risk of something possibly going wrong and possibly having an affect on a few hundred or even a thousand acres out of millions. Same goes with ocean platform drilling.
Cars are actually not the leader spewers of pollution either, coal burning power plants are. So I would go Nuclear, build 250-300 nuclear plants and we could shut down every coal burning plant in the country, as well as every gas burning plant or oil burning plant. People get worried about nuclear but it is extremely safe. Far far far more people have been killed from coal plants & coal mining than have been killed by nuclear plants. Modern nuclear power is clean, safe, and efficient.
Then for cars, the future is electric, hybrid, and hydrogen. You cannot just make smaller/lighter cars with better fuel economy, people will die in auto accidents because their frame will be made from tin foil. However if you can plug your car into an outlet, charge a battery with clean Nuclear power, and run it for 300 miles. Thats good. Hybrids are good too, and perfecting Hydrogen would be the best. Of course with electric cars you have battery issues, big, heavy, quickly worn out, and potentially toxic batteries.
The issue with batteries is much like the issue with CFL Lightbulbs. Yes…they use much less electricity, but each one has a tiny bit of mercury in it and when they’re all thrown away, billions of them, that adds up to a lot of mercury… so what happens to all those car batteries that get thrown away from every hybrid or electric car every few years?
If I were King, that is what I’d do.
Comment by Chris Beasley — August 1, 2007 @ 11:04 am
Chris, batteries can be recycled very profitably. Especially big expensive ones. I don’t think ethanol is a long term answer, but don’t believe the business press. The articles they cite have all been disproven. I’m speaking of the ones that say it takes more energy to produce than it provides. Alaska oil is no solution, there ain’t nearly enough.
Ethanol works. I think Brazil proves it beyond a shadow of a doubt.
Here is the solution. Solar photvoltaic will be on price parity with coal in 5 years. That’ll produce the bulk of our power and electric vehicles will run at a fraction of the cost of liquid fuel. While I’ve always liked hydrogen, engineering issues which are not progressing fast enough will make it part of the future that never will be. Nuclear is fine, but as I said, in 5 years solar will beat everything on price alone.
Comment by Marc — August 1, 2007 @ 6:02 pm
One more thing. I like hybrids, but they are only a tempoaray solution. Two power-trains are an expensive waste. Compact-flourescent I like. Thesy are a good solution for the next 5 years. Yes even though they contain mercury, It is less mercury than what is produced to power and equivalent incandescent with coal. Long term we will be using LEDs. They follow Moore’s Law for the most part and will be our future lighting. They use about 1/5 the power of compact flourescent and 1/25 that of incandescent.
I’m not a tree hugger, but thankfully these environmentally friendly solutions will win out on pure economics alone.
Comment by Marc — August 1, 2007 @ 6:10 pm
So you’re saying Consumer Reports is biased in someway with it’s ethanol report? Come on now. They’re a very respected consumer advocacy magazine.
I’m bullish on Solar too, which is why I have like 8 solar panel stocks in my portfolio. But it won’t be enough, not in 5 years.
Also yes, the hybrid power trains are a problem, it is inefficient. I prefer the hybrids that don’t actually use 2 power trains. For instance the Saturn Vue (thinking about buying one for the wife). It is a hybrid but the electric motor is just used for support, and it only has the 1 power train. You don’t get as much of a mpg jump as with a full hybrid, but it runs smoother supposedly and has a better weight ratio.
Comment by Chris Beasley — August 2, 2007 @ 12:55 pm
Good points Chris. I’m sure you’ve done well with those solar stocks already. They’ve been on a tear this year. It’s just the beginning though. Solar is indeed on track to be at parity with coal in 5 years though. Probably sounds ridiculous to a lot of people now, but in a few years people will chock it up as common knowledge and write it off as something obvious. I bet if you polled most people on it today (especially Wall-streeters), they’d think the idea of a solar driven economy is a pipe dream. There’s no stopping it though, everything is in place. Technology + Economics = Revolution;)
Comment by Marc — August 2, 2007 @ 9:20 pm
Hey guys, great comments!
An article in a recent Smart Money magazine (WSJ publication) took a look at hybrid cars. From a financial standpoint, the extra $10,000 spent on the hybrid car didn’t really help with a $2,000 in fuel savings over the lifetime of the car.
From an environmental standpoint, take into consideration the additional pollution that goes in to the production of the batteries and other materials in hybrids, and it is a really bad deal. Heck, a lot of things that are getting rubber stamped friendly to the environment and just doing pollution outsourcing.
Comment by Andrew — August 2, 2007 @ 11:34 pm
You guys are going to love this article! This is from the UK’s Times, not sure if it counts as a tabloid or not.
“Walking does more than driving to cause global warming, a leading environmentalist has calculated.”
“Food production is now so energy-intensive that more carbon is emitted providing a person with enough calories to walk to the shops than a car would emit over the same distance. The climate could benefit if people avoided exercise, ate less and became couch potatoes. Provided, of course, they remembered to switch off the TV rather than leaving it on standby.”
“The sums were done by Chris Goodall, campaigning author of How to Live a Low-Carbon Life, based on the greenhouse gases created by intensive beef production. “Driving a typical UK car for 3 miles [4.8km] adds about 0.9 kg [2lb] of CO2 to the atmosphere,” he said, a calculation based on the Government’s official fuel emission figures. “If you walked instead, it would use about 180 calories. You’d need about 100g of beef to replace those calories, resulting in 3.6kg of emissions, or four times as much as driving.”
Other fun facts includes that organic cows are more destructive to the environment. Full article here: http://www.timesonline.co.uk/tol/news/uk/science/article2195538.ece
Comment by Andrew — August 6, 2007 @ 4:16 pm
On a side note to this. I do recall reading that bulk of the increases in corn prices and thus other grains as well was do more in part to the increased farming of livestock in places like China rather than ethanol production. Nice article Andrew, I think some of the points are somewhat satirical though. I think most environmentally mided folks are looking for ways to become more vegetarian, generallly speaking.
Comment by Marc — August 6, 2007 @ 10:27 pm
Fair point, either way, things need to be measured. “Green” has become a very powerful, multi-billion dollar movement. Its worth stopping for a minute and measuring the inputs and outputs. In a way, its kind have become the charity of the 21st century. Both are open for abuse.
Comment by Andrew — August 7, 2007 @ 9:50 pm