The Great Ethanol Scam

theodp writes "Over at BusinessWeek, Ed Wallace is creating quite a stir, reporting that not only is ethanol proving to be a dud as a fuel substitute, but there is increasing evidence that it is destroying engines in large numbers. Before lobbyists convince the government to increase the allowable amount of ethanol in fuel to 15%, Wallace suggests it's time to look at ethanol's effect on smog, fuel efficiency, global warming emissions, and food prices. Wallace concedes there will be some winners if the government moves the ethanol mandate to 15% — auto mechanics, for whom he says it will be the dawn of a new golden age."

Comments

Ethanol is just stupid

[cyberspittle]

Instead of using corn (worse than sugar cane), soy beans and bio diesel would be beter. I always thought that diesel engines get better mileage.

Re:Ethanol is just stupid

[gringofrijolero]

Yes, it is stupid. But it's very well connected politically. Like always, it's about bringing home the bacon. The farmers thought they had a winner.

Re:Ethanol is just stupid

[Hadlock]

Ethanol is a politician's dream agenda item. Especially if you are running for, or plan to run for president. Why? What state has the first presidential caucus, potentially the most important point in the presidential race*? I'll give you a hint: they grow corn
 
Ethanol is the great green hoax of politics. It's clearly not the best solution, but by god, it will help you hugely when it comes time to run for president. The price of corn has what? Almost doubled? Since we forced Americans to use 15% corn fuel (ethanol) in our gas for cars and trucks. Now that the flyover states are entitled to all this extra money coming their way, do you think any politician would ever dare take that away from them, effectively removing them forever from presidential candidacy. That's like admitting you're openly gay or like to club baby seals in political circles.
 
*selecting insane, hunting moose from a helicopter female governors as VPs exempted

Re:Ethanol is just stupid

[Ralph Spoilsport]

Isn't life wonderful when we just let the government do things? :

Umm, the American Ethanol Debacle is not a product of government, as much as it is a product of government corrupted by private interests, in this case the mid-western corn lobby.

Corn Ethanol in general is an OK fuel, if you use it within a short distance of where it was made. It's Energy Return On Energy Invested (EROEI) is so low that you end up burning up all your energy profit transporting it. IIRC, it has an EROEI of (at best) 1.5 to 2. Many studies show it has a negative EROEI. (Pimentel et al)

Other forms of ethanol require technologies that don't exist yet (algae etc.) or massive amounts of land to be cleared for energy crops (viz sugar, soybeans) that would better be used FEEDING PEOPLE rather than schlepping fat suburbanites in their SUVs three blocks to go pick up a pack of smokes and some beer.

Ethanol IS a scam.

And not even a very smart one.

RS

Re:Ethanol is just stupid

[prisoner-of-enigma]

Just because the government makes mistakes does not mean the free market doesn't, there's plenty of mistakes both of them make and I wish the anti-government types would realize just how many free market failurs there out out there.

The problem with your reasoning is that when a free-market entity produces an inferior product, service, or solution, it will eventually fail. This is actually a good thing, as it weeds out (most of) the idiots, making room for others with better ideas to flourish. There is no permanent winner, as even today's top of the heap must innovate and compete or risk being dethroned tomorrow. Even Microsoft, for all its seeming omnipotence and monopolistic behavior, would have failed long ago had it not finally gotten off its duff to address -- however imperfectly -- things like Linux, OS/2, WordPerfect, Lotus 1-2-3, and so forth. It's not perfect, and such "market evolutionary pressure" doesn't always happen quickly, but if left alone (i.e. free of government interference) it will always self-correct and product a superior situation.

Government, on the other hand, has no such failsafe. Inefficient, ineffective, insufficient programs are the norm, not the exception. Why? Government is the only state-sanctioned monopoly that can have no real competition, short of a voter revolution. If government fails to make its budget, it does not go bankrupt, it merely raises taxes until the numbers meet up again. Or prints money and waits for hyperinflation to effectively shrink a multi-trillion dollar debt while utterly destroying the life savings of its citizens. Or both, as we're eagerly doing today under Obamanomics. But short of going belly up entirely and leaving people in anarchy, government never has to worry about going out of business. It just has to worry about getting 51% of the voters to force the other 49% to pay more taxes to support them. And unlike a free market, government can legally use force to make you participate in their shoddy products and Ponzi schemes like Social Security. Free markets must convince you to voluntarily consume their products instead of a competitor's.

Re:Ethanol is just stupid

[10101001 10101001]

The problem with your reasoning is that when a free-market entity produces an inferior product, service, or solution, it will eventually fail.

People, good or bad, eventually die. Companies, good or bad, eventually bankrupt. Governments, good or bad, eventually collapse. In the mean time, murderers run free, inferior (potentially lethal) products reign, and corrupt governments loot the pulic. It is idealistic to believe that free markets are some magically solution to the ills of any field. People are not always rational, they lack perfect information, and even rationality (as part of game theory) isn't reasonable, at times, to one's own self-interest. Simply put, free markets can't exist with humans, and they don't really want them; they want a magical panacea that fulfills various contradictions. Such a thing obviously can't exist. But, mixed markets do at least approach the ideals of the vast majority of people. Not everyone truly understands the free market concept well enough to know that, though.

Re:Ethanol is just stupid

[HangingChad]

The problem with your reasoning is that when a free-market entity produces an inferior product, service, or solution, it will eventually fail.

Ironic you pick Microsoft as an example. The most non-competitive products in the IT world.

The problem with that argument is that what we have is not a free market. It's series of cartels. That's why we spend more than twice as much on health care as other industrialized countries and get treatment closer to the bottom of the scale. Because there are so many entrenched cartels in the health care industry. It's why we have the worst cellular service outside of Nigeria and why banks and credit card companies still run Washington.

New industries might start out competitive but once they get to a certain size, they start bending the rules in their own favor. Using unfair practices to freeze out competition, getting sweetheart legislation pushed through Congress, buying influence.

You free market preachers are just naive. The only free markets are also fair markets. And if you think what we have today is a fair market, you need to pass the bong. Government is the only entity that has the ability to groom a competitive marketplace. What we have today is what happens when government stops doing that job for 10 years. The rich get richer and there's no accountability for cheating. Economic collapse follows right after.

Inefficient government programs are the truism, not necessarily the reality. With some notable and widely publicized exceptions. But the fact you ignore is that without government, without a referee to control the game, our economic system has a very short lifespan. And yet you keep on with 30 year old economic theory in the face of economic meltdown while your 401K loses 65%. I don't think I want advice on government or managing markets from you.

Re:Ethanol is just stupid

[DrgnDancer]

And in fact when you look at the similarly government subsidized railroad systems in Europe, where the other factors you mention either don't exist or are mitigated by geography, they are largely successful. Free market purists always seem to portray Europe as some sort of example of the failure of limited socialism and mixed markets, but frankly I've never understood this. Germany, France and Britain are all lovely countries with economies just as strong (though obviously not as large) as the US. If I had to pick a place to be rich, I'd totally chose the US, that's true. If I had to pick a place to be poor or middle class though I'd probably pick one of the stronger European economies. Since the vast majority of us are not rich, why should we chose a system that clearly favors the people already most privileged?

Re:E85

[daemonburrito]

The ad hom aside, I've never met an "enviro wacko" who supported corn ethanol.

In fact, anyone who's given any thought to it at all, and subscribes to the wacko idea that our civilization can't handle environmental upheaval of the scale predicted by real scientists... is against the idea of using our topsoil to power our craptacular personal transport. No "enviro wacko" supports an energy infrastructure that damages topsoil that is already in trouble (guess what black gooey stuff is the raw material for organics re-introduced to soil overworked to sterility?) and probably makes the GHG problem worse. And what functional human being wants to use food resources to power Cadillac Escalades?

In other words, you can't blame those of us who think the biosphere of our planet is required for our continued survival (wacky, right?). However, feel free to blame jingoists who marketed this monstrosity as "energy security".

Re:Fuel vs Food

[chimpo13]

People don't starve to death because of lack of food in the world. Yes, that makes no sense. They starve because of lack of infrastructure to get them food.

Local failure means no easy to access food, but warlords and other people out for a buck, hold up food in ports to distribute it at a profit. Without the profit they want, they let it rot at the dock.

Still, the cartoon is good but misleading.

Re:Brazilian Ethanol [Re:Don't blame me]

[drinkypoo]

Brazil has been deforesting to grow food because already-cleared land has been converted to sugar cane production for Ethanol. The Amazon may already be past the point of collapse. Ethanol is a major source of ecological destruction in Brazil.

The big problem with corn is that most corn is grown continuously without crop rotation. That means that not only is it fertilized with oil (so any energy not coming from sunlight is coming from dino juice anyway, and it has a carbon debt) but it also destroys the soil. So it's all bad. Also, many people depend on that corn for food. Making corn fuel feedstocks raises the price of corn for food, because less food corn is produced.

IF you RTFA you'd see that it's not engines being ruined by ethanol, it's fuel pumps and pickup lines. Running alcohol requires a major refit, and many of those vehicles no longer even have their original engines.