I listed these two articles in the morning reads, but I am so delighted over this that I had to make sure you did not miss this: Congress has apparently failed to extend the corn ethanol subsidy, a terrible energy idea that has subsidized the burning of food/corn for 30-years.

It is unclear whether this has simply lapsed, and has not been renewed yet or if the wasteful, engine damaging, negative-net-energy Corn Ethanol nightmare is finally over.

Here is the Detroit News:

The United States has ended a 30-year tax subsidy for corn-based ethanol that cost taxpayers $6 billion annually, and ended a tariff on imported Brazilian ethanol.

Congress adjourned for the year on Friday, failing to extend the tax break that’s drawn a wide variety of critics on Capitol Hill, including Sens. Tom Coburn, R-Okla., and Dianne Feinstein, D-Calif. Critics also have included environmentalists, frozen food producers, ranchers and others.

The policies have helped shift millions of tons of corn from feedlots, dinner tables and other products into gas tanks.

What this means is that the domain “ihatecornethanol.com” is now for sale . . .

>

Source:
Congress ends corn ethanol subsidy; Trade group expects industry to ‘survive’
David Shepardson
The Detroit News, December 24, 2011  
http://www.detroitnews.com/article/20111224/AUTO01/112240320/1148/rss25

30-year-old corn ethanol subsidy nixed by Washington
Dan Roth
Autoblog, Dec 27th 2011 11:31AM 
http://www.autoblog.com/2011/12/27/30-year-old-corn-ethanol-subsidy-nixed-by-washington/

Category: Energy, Politics, Really, really bad calls

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

48 Responses to “End of Corn Ethanol?”

  1. scecman says:

    Yes, the ethanol blenders credit is dead and will not be renewed (expires Dec 31). I work in the renewable fuels biz and the ethanol lobby finally came to its senses and realized there was no chance they were getting $6 bil in this political environment. After fighting it tooth & nail, they announced in late Nov that they were happy it wasnt being renewed and wanted to show how strong American grown fuel could be! The lobbyists for ethanol make politicians look honest…

  2. Chief Tomahawk says:

    This explains why gold is falling………. either that or with everyone buying the new Air Jordans, there’s a shortage of cash about………

  3. AGORACOM says:

    Ironically, my father and I were debating this very thing on Christmas Day. He was pro, I was against … link to this post now on the way to a crow eating Greek father :-)

    Happy New Year Barry.

    Regards,
    George

  4. Julia Chestnut says:

    I’m afraid it is almost certainly just a hiccup rather than a sound, rational policy choice. So, so many tariffs and exemptions, so many domestic lobbies, so many vested interests rely on that line of pork that it is almost unthinkable to me that the mere fact that it is profoundly wasteful, harmful, and stupid would be enough to sink it.

  5. dadidoc1 says:

    I don’t want to pop your balloon, but the renewable fuel standard mandates that ethanol be blended with gasoline. This is sort of a back door subsidy.

    ~~~

    BR: Nothing back door about it — its all front door !

  6. Greg0658 says:

    interesting piles of facts .. I jotted down some for Adam my Congressman when he comes to town early next year to chat with the Tparty-IL-GOPs to retain his seat post redistrict’g (<5 miles from corn&bean fields)
    $6B subsidy gone – tariffs on imports gone – requirement to blend at our pumps?

    I'm in favor of renewables replace'g oil & nuke … soooo I'm in favor of this R&D … but money doesn't grow on trees I hear … sooooo

    (I sometimes have to wonder who DC is agents for?) (just Brazil?)
    (oh heads up CME ICE – I thinks its war – and your in the crosshairs)

  7. rd says:

    Other than Ron Paul and Michelle Bachmann, we don’t have current Congresssmen running for President, especially on the Democratic side. With the Iowa caucus vote on Jan 3 before Congress can extend it, hopefully we will be done with this lunacy since there won’t be Congressmen on powerful committees trying to suck up to the corn farmers for another three years.

    Not extending the corn ethanol subsidies will also bring major environmental benefits as well as reducing the subsidy costs.

    Having the Iowa caucuses moved up to Jan 3 is turning out to have multiple silver linings. Namely that it may have helped kill corn ethanol subsidies as well as having the last two weeks of the desperate political babblings drowned out by two weeks of press coverage of the holidays, bowl games, college basketball, and NFL playoff runs. By the time the press starts to report on politicians again, most of them will have run up the white flag afte IA and NH.

  8. CentralIowaFarmer says:

    Now we can just get that idea of renewable fuels behind us, and concentrate on the positive net energy of keeping the straits of hormouz open, and fracking in ND, and sending our young sons and daughters to the middle east. Thank goodness all the great senators and environmentalists came to their senses and voted with the oil baron senators of the south, where they happen to have the oil rigs. (sarcasm/rant over)

    ALL of our food/fuel comes from the sun. AND, I’m against 95% of government subsidies. This WAS a useful tool to get the industry up and running, and I’m glad to see that it will be ending.

    Next step is to get “blender pumps” at each gas station, so that consumer has choice of percent of gasoline/percent of ethanol that s/he wants to put in their vehicle.

  9. Patrick Neid says:

    The upside of severe recessions!

    I still don’t believe it though. Monsters from the dark lagoon usually don’t die the first time you think they are dead.

  10. norkot2003 says:

    ………it takes 78,000 btu’s of energy to produce 1 gallon of corn ethanol…..that yields 74,000 btu’s of energy.

    As a relative of mine has said (he is the Chairman of a very, very large commodities company)–we view it as like Chairman Mao’s Great Leap Forward program of melting down pots and pans to make more pots and pans.

  11. carleric says:

    I can only hope the subsidy remains dead but never overestimate the intelligence of of government. I am pretty sure my congresswoman is distraught that her constinutents will be off the gravy train. I can only hope she stands aside.

  12. cfischer says:

    It’s sad that our idea of congressional success amounts to simply not renewing a previous terrible idea.

    Talk about a new normal.

  13. vboring says:

    With the ethanol mandate still in place, the function of the subsidy expiration will be a shift of cost from the federal budget to fuel consumers as higher ethanol prices lead to higher fuel costs. This disproportionately impacts rural folks with big trucks.

    Effectively, the Midwest loses a subsidy and gains a new fuel tax.

    If we are very lucky – this will make the ethanol mandate unpopular enough that it will go away too.

    The expiration of the federal renewable energy tax subsidy is much the same story. It shifts some of the costs of state renewable energy mandates onto the federal budget, helping to reduce the price penalty that folks in these states should be paying for their state-level decisions. It has yet to be seen whether this odd subsidy will follow corn ethanol down the drain.

    At the end of the day all this energy mandate nonsense is just ass-backwards broken carbon taxes.

  14. mark says:

    It’s dead but not because people came to their senses. There were some other major bribers donors either unhappy with the rise in corn prices or fighting over the same pot of money:

    http://www.nytimes.com/2011/07/08/business/energy-environment/corn-ethanol-subsidies-may-be-in-jeopardy.html?pagewanted=all

    Further undermining support for ethanol are food makers and livestock farmers, who say the industry’s huge demand for corn is driving up their own costs, and the oil industry, which has never been fond of a fuel that displaces some of the gasoline in cars and trucks.

    Don’t cry for the growers though. $45B over 30 yrs is a pittance. Other corn subsidies totaled $77B just since 1995:

    http://farm.ewg.org/progdetail.php?fips=00000&progcode=corn

  15. VennData says:

    Now raise the Federal gas tax a nickle a gallon -or liter? – and then again next year, and the next while keeping the payroll tax cut permenant and you’re on your way.

  16. Disinfectant says:

    I don’t know a lot about how this whole ethanol thing works, but the price of corn is up a little this week, so I’m guessing that not much has actually changed.

  17. Moss says:

    No wonder Senator Ben Nelson is retiring. He probably did more than any living person to promote that.

  18. DeDude says:

    There is a lot of BS out there about Corn ethanol being a net energy loser etc. When you actually look at the facts and count all benefits and draw-backs, the development of the ethanol fuel industry was a worthy goal. The reduction in pollution and energy dependence outweighs the minimal effect it had on food prices. However, we are past the time when it makes any sense to subsidize ethanol with government money or to protect it by locking out competition from the much more energy efficient sugar cane produced ethanol. The requirement of E10 in most of the country will ensure the continued benefits of ethanol let the market forces sort out the most effective way to get it. If ethanol can compete head to head with oil then E85 can (and will) be used in a lot of modern cars.

  19. DeDude says:

    “it takes 78,000 btu’s of energy to produce 1 gallon of corn ethanol…..that yields 74,000 btu’s of energy”

    The problem with this right wing narrative is that it presumes that the only benefits and energy use to be counted when a bushel of corn is turned into ethanol is the ethanol itself. However from that “ethanol” bushel of corn you also produce corn oil and the “mash” that is left is excellent feed for cattle (indeed it has higher nutrition than raw unfermented corn). So for an honest accounting you have to count the energy needed to make the corn oil (that also came out of the “ethanol corn”) and to produce the corn-based feed with the same nutritional value that the “mash” produced by the “ethanol corn”. There is a reason that so many farmers are producing their own ethanol from their corn and using it for transportation – if the right wing narrative of “net loss” was correct they would do it.

  20. Greg0658 says:

    reminder – the corn sludge product is still animal feed – tho milked of its sugar alcohol – thus less filling … sure any additional uses of a raw material drives up prices / can’t wait for all the molded plastic to start coming back from recycle’g efforts – then oil for our cars should drop
    ~~
    not sure which side Senator Ben is on with KeystonePL – I’m sure its back to work work work

  21. Greg0658 says:

    DeDude you beat me .. is the Brazil exemption to help import sugar cain sludge?
    http://en.wikipedia.org/wiki/Ethanol_fuel_in_Brazil
    (or to help pay for the 2016 Olympics)

    Miller & Budweiser they up today? or NFL season almost done ? wait baseball right around the corner

  22. [...] Is the era of subsidized corn ethanol finally over?  (Big Picture) [...]

  23. DeDude says:

    Greg0658;

    According to the Detroit news they ended a tariff on “imported Brazillian ethanol”. I am not sure if there was restrictions on sugar cain or sludge. It may not have been economically sound to transport those things long distance for processing (or maybe Brazil has restrictions on exporting the raw material and jobs). It was always clear that imported ethanol from Brazil would have been cheeper than domestic corn produced ethanol, I am not sure how big the difference is today.

  24. Stan Klein says:

    According to a report for the Chesapeake Bay Commission, corn ethanol yields about 30 gallons per acre. By comparison, a properly run algae plant should be able to produce 3000 to 5000 gallons per acre. You first squeeze oil out of the algae and then ferment the residue into ethanol.

    We need to mandate multifuel vehicles to take advantage of that technology. Other countries (such as Brazil) are doing it. BTW, the first multifuel vehicle in the US was the Ford Model-T. We would be much better off now if we had kept that technology going.

  25. theexpertisin says:

    Yes,BR, this was a terrible idea from the start. There have been many unintended consequences (ask the tortilla shops feeding the poor south of the border) which reasonable due diligence would have foreseen.

    Government subsidies for practically ALL alternative energy is really nothing more than political kickbacks to cronies (Solyndra, etc.) and red meat for the environmental greenies and assorted government salaried/compensated academics to keep ‘em on the Democratic bandwagon.

    While I’m at it, cut off all fossil fuel subsidies (especially the tax breaks) as well. Let the market decide what consumers want to buy to run their stuff, and at what price.

  26. johnnywalker says:

    Ethanol has a number of problems as a sustainable substitute for gasoline, as addressed in the article and comments. None of the comments, however, has addressed the use of ethanol as an additive to increase the octane number, and increase the combustion efficiency of gasoline. It is certainly less toxic and harmful to the environment than lead or MTBE, which were used in the past and are now outlawed.

  27. DeDude says:

    Stan @ 1:24;

    I think Denmark’s plan to go 100% renewable by 2050 (http://www.reuters.com/article/2011/11/25/us-denmark-energy-idUSTRE7AO15120111125) includes a fair amount of algae produced biomass. Algae produced energy also has the advantage of being carbon neutral since it takes CO2 from the air and use it to make the oil.

  28. dsawy says:

    1. Ethanol will continue in road gasoline due to the oxygenate mandate. We didn’t need MTBE in gasoline, and we don’t need ethanol, but the environmental lobby will continue to persist in their insistence that oxygenates are added to gasoline… because cars made before closed-loop electronic fuel injection systems became the norm might be burning a bit rich. As an oxygenate, ethanol is better than MTBE due to the extreme mobility of MTBE in soil, which has resulted in contaminated groundwater all over the US where there were any leaking gasoline tanks.

    2. Ethanol doesn’t require the blending credit to make money. From the perspective of the farmer, all that is necessary is the spread between corn prices and gasoline remain profitable for the ethanol producer to keep buying corn. The DDG by-product will remain attractive for feedlots as long as it remains cheap enough, and the (current) low price of natural gas helps this.

    3. The energy yields/costs of ethanol one sees bandied about the ‘net usually aren’t sourced, they’re usually some “conventional wisdom” that has been repeated and re-repeated from people who don’t know where the numbers came from. There are only a couple of studies (out of over a dozen now) that show “ethanol requires more energy than it produces” and these invariably go back to David Pimentel, Professor of Insect Ecology (last I looked) at Cornell. Pimentel used what can only be called bogus methodology in computing the energy inputs for the production of ethanol, which include such things as a) the food required to feed the farmer (and absent killing the farmer, this energy input doesn’t ever go away), and b) the energy required to produce the steel used in farm equipment (as tho the farmer bought his tractor and combine *just* to farm corn for ethanol, but never anything else…)

    For everyone else studying corn-based ethanol and using sound methodology, it comes up as a slightly positive net energy balance. It certainly isn’t about to end our dependence on imported oil, but if US auto engineers got their heads out of their asses, they could use the octane boost from ethanol to improve gasoline engine efficiency through higher compression ratios and gain much more from ethanol that just the total heat value of ethanol alone. Ferrari has shown this with a prototype that gets higher MPG on E-85 than on normal gasoline. But hoping that Detroit’s auto engineers will do some sound engineering is like wishing for unicorns that crap skittles to fly through the sky…

    The reason why corn-based ethanol took off was that back in the days of $2 corn, it was seen as a productive way to get rid of persistent, large crop surpluses that kept farmers on the dole via price supports, LDP, etc. For those who complain of the high prices of foodstuffs today, here’s a little exercise for you: Go look at the price of corn in August, 1973 – just before the Arab oil embargo started. Adjust that to today for inflation. Then look at the price of corn today. The US consumer is getting a pretty sweet deal on corn.

  29. The Window Washer says:

    dsawy, good comment. I remember the old days when about half the comments around here were like yours.

  30. DeDude says:

    dsawy, great comment, thank you. Maybe if we could get the official mpg numbers to reflect the mpg gotten with ethanol gasoline, then the auto engineers would get a move on the conversion. They usually don’t move until government give them a big kick in the a$$.

  31. johnnywalker says:

    dsawy:

    Your point #3 is well taken. The calculations of net energy yield are very dependent on assumptions about the input of energy, and there are solid studies indicating a positive net in energy, although the gain is small.

    With regard to compression ratio, I was under the impression that it was decreased in most auto lines when leaded gasoline was eliminated so that engines would work better on the unleaded fuel. I wasn’t aware of the Ferrari prototype, but imagine what would happen of they developed an engine to yield 10% more horsepower (and the same fuel economy) on E-85. I’ll bet E-85 sales would go up.

  32. to me, it’s curious..

    ‘hearing’ this..”…Further undermining support for ethanol are food makers and livestock farmers, who say the industry’s huge demand for corn is driving up their own costs,…” (snip from the NYTimes piece, clipped above)

    and, seeing this..”…The problem with this right wing narrative is that it presumes that the only benefits and energy use to be counted when a bushel of corn is turned into ethanol is the ethanol itself. However from that “ethanol” bushel of corn you also produce corn oil and the “mash” that is left is excellent feed for cattle (indeed it has higher nutrition than raw unfermented corn). So for an honest accounting you have to count the energy needed to make the corn oil (that also came out of the “ethanol corn”) and to produce the corn-based feed with the same nutritional value that the “mash” produced by the “ethanol corn”…” (from DeL, above)

    it’s pathetic..understanding, how far our frame of reference has been warped..

    maybe, We can ‘see’ this, through a different aperture..

    http://search.yippy.com/search?query=Industrial+Hemp+for+Fuel&tb=sitesearch-all&v%3Aproject=clusty

    http://search.yippy.com/search?query=Industrial+Hemp+by-products&tb=sitesearch-all&v%3Aproject=clusty

    http://search.yippy.com/search?input-form=clusty-simple&v%3Asources=webplus-ns-aaf&v%3Aproject=clusty&query=Corn+acidosis+kills+cattle

    http://medical-dictionary.thefreedictionary.com/aperture

  33. zero529 says:

    Followup to dsawy: Pimentel is also notorious for using data reflecting efficiencies from (literally) 30 years ago, which help him fit the results to his desired outcome. That said, using modern production values, you come out with just a 30% net energy gain over inputs for corn ethanol . . . compared to ~800% ROEI for sugar cane.

    Algae may be useful someday, but it’s nowhere near ready for prime time right now (yields are low, recovery is a royal pain, and then you still have to convert the resulting oils into something else that can be used in your engine, like biodiesel). Not to mention that many of the algae companies out there are focused on getting CO2 from flue gas (from fossil fuel-based power plants) because it’s hard to use atmospheric CO2 to get the high concentrations that drive high rates of productivity.

  34. mark says:

    @mark hoffer:

    Stop feeding corn to cattle? Grow hemp to make biofuels? What crazy idea is next? Subsidize the production of fruits and vegetables instead of corn and beef? Madness I say. Sheer madness!

  35. CentralIowaFarmer says:

    Thanks for the argument and supporting insight dsawy.

    And the USDA uses 2.7 gallons of ethanol / bushel of corn, so when I produced 190 bushels / acre of corn and that was over 1200 acres, that was approximately 615, 600 gallons of potential ethanol, as well as the ddgs (dried distillers grains) that could be fed to cattle.

    Raised potentially 513 gallons of ethanol / acre last year (2.7 x 190 = 513). I’m assuming that the algae is in a year-round system, while with ethanol via corn, you only get one shot / growing season.

    One problem that Brazil has with cane sugar to ethanol is that (sorry I can’t quote source) sugar cane cannot be stored as corn can. The sugar cane needs to go directly to the factory. In midwest US, corn is stored in elevators and farmer’s grain bins and shipped/trucked to ethanol plants as needed.

  36. gman says:

    Now if we would “use the free market” and allow importation of canadian medicine and arb out the difference and saw another 40 billion/yr!

  37. victor says:

    @DeDude: right on! (again) as you eloquently write it must be: “the right wing narrative “.

    “The sinister idea of converting food into fuel was definitively established as an economic line in U.S. foreign policy last March 26-07 and “…you will see how many people among the hungry masses will no longer consume corn”.( Fidel Castro, see full article at: http://www.granma.cu/ingles/) and brother Hugo Chavez chimes in “America takes corn away from the food chain of the poor to feed rich peoples’ automobiles”. Update: they were both given cancer by the Obama Administration for these heresies.

  38. ReadAmos says:

    Thank goodness the subsidy is dead, at least for now. Talk about politicians pandering to lobbies. Everyone needs to support Occupy Wall Street so we can clean house. Re-Elect NoBody.

  39. Futuredome says:

    lol, let the “free market” decide. How can a intellectual fantasy decide anything? Market statists like 2003 and “Ex” really expose themselves.

  40. jonhendry says:

    I think I might prefer if the tariff had been kept. It would be unfortunate if US companies wound up turning to Brazil, and ended up encouraging the destruction of more rainforest.

  41. Darkness says:

    Wow. Great news. If it sticks.

    If it does not, and the 10% requirement remains, that will push down the price of crude because the pump price will have to rise to cover the idiot corn requirement and that will put pressure on demand for gasoline.

  42. mathman says:

    problems with ethanol:

    http://www.fuel-testers.com/ethanol_problems_damage.html

    http://news.consumerreports.org/home/2009/06/ethanol-e10-e15-lobbying-group-growth-energy-opei-lawn-mower-engines.html

    Ethanol is corrosive to small engines and causes problems in car and truck engines too. What you gain in mileage and supposed efficiency (debatable) and environmental effects (don’t make me laugh) you lose in engine wear, parts replacement and actual damage.

  43. rktbrkr says:

    We need to support CNG as a motor fuel. It’s a much cleaner fuel that costs a fraction of what gas cum ethanol costs and there’s enough in NA to last us a long time. Burning it in base station electric plants with a 40% conversion ratio and then losing another 5% in line losses to recharge points is foolish when it can be used directly as a motor fuel. We need to support development of efficient natgas engines (follow Honda of course) and most importantly support a nationwide natgas distro network with refill points on interstates and economic home refill points (the natgas network already extends to most homes already). What long distance commuter wouldn’t love a motor fuel 80% cheaper than current gas prices – and one thats kinder and gentler to the engine.

    http://green.blogs.nytimes.com/2009/04/07/maker-of-natural-gas-fueling-systems-tanks/

    http://www.hybridcars.com/news/gm-exploring-natural-gas-engines-consumer-vehicles-30344.html

  44. DeDude says:

    E10 can cause problems for certain parts of certain old engines. That is why we should stick with E10 as the mandate and make ethanol free gas available with an extra $1/gallon tax on it for the small number of users who really need that product. It will take some time before all the old engines not designed to handle E10 are out of use so in the mean time use a tax to incentivise their retirement.

  45. victor says:

    As noted above by several people, MTBE as a gasoline additive is being phased out . But the mandates for UP TO 10% ethanol blends established in the Energy Policy Act of 2005 and the Energy Independence and Security Act of 2007 guarantee continued use of ethanol. By 2009, the ethanol market share in the U.S. gasoline supply reached almost 8% by volume. So, the US will continue to use ethanol, increasingly so from Brazil (sugar cane made) and less homegrown corn derived now that the tariffs and subsidies have ended, but the mandates are still in place.

  46. Greg0658 says:

    LOL “Hugo Chavez chimes in America takes corn away from the food chain of the poor …. were both given cancer by the” .. didn’t he have a deep well blow out too .. I swear the air had a yellow tinge and smell around here in those days
    (I’m sure it was only my imagination – its so vivid – it sees in color :-)

  47. [...] Hedge funds in aggregate r yield hogs & abhor volatility $$ End of Corn Ethanol? bit.ly/v599bC US ended a 30Yr subsidy 4 corn-based ethanol that cost $6B/yr & ended tariff Brazilian ethanol [...]