Domestic Fuel

The claim that 112,000 jobs would be lost seems somewhat exaggerated. Ethanol production is not labor intensive. The typical 100 million gallon per year ethanol plant hires fewer than 50 people. The current production of 12 billion gallons of ethanol could be accomplished by 120 plants hiring fewer than 6,000 people. A reduction of 38% in that workforce would be approximately 2,280 people. Would the loss of 1 job put 48 other people out of work? Pilgrim’s Pride has reduced its workforce from about 55,000 to 41,000 since it began struggling with higher feed costs. Did those 14,000 job cuts result in the elimination of 672,000 other jobs?

The $5.4 billion tax credit represents $900,000 for each of the 6,000 people needed to produce 12 billion gallons of ethanol. It represents $48,000 per person for each of the total 112,000 people who would lose their jobs according to the study. That is not a one-time credit that creates a lasting job but is given each and every year. This seems to be a terribly expensive way to create jobs. The elimination of the tax credit would mean that big oil companies would be paying $5.4 billion more in taxes every year that could replace an equal amount of the tax burden now shouldered by low and middle income taxpayers. The additional spending by those taxpayers is likely to provide a greater economic contribution than would additional profits for big oil companies and dividends for their stockholders.

Currently, the credit is being kept by the blender rather than shared with the producer who is break-even at best, so it’s difficult to determine what happen if the tariff and tax break were reduced or eliminated, especially given the mandate and Brazil’s inability to meet its own ethanol demand now.

The lost jobs number does seem unrealistic.

The ethanol industry claims that ethanol is significantly reducing our dependence on foreign oil. Annual U.S. corn ethanol production is currently about 12 billion gallons and is projected to increase to 15 billion gallons. Ethanol produces about two-thirds as many miles-per gallon as gasoline; therefore, 15 billion gallons of ethanol can effectively replace only 10 billion gallons of gasoline.

Ethanol production consumes significant amounts of energy. This includes the fossil fuels used to produce fertilizer, power farm equipment, and process corn into ethanol. Estimates of the actual amount of energy contained in corn ethanol compared to the energy used to produce it generally range from less than 1 to 1 to as high as 1.67 to 1. Even at the higher 1.67 to 1 ratio, 9 billion gallons of the 15 billion gallons of ethanol to be produced would be required to replace the energy used in production. The remaining 6 billion gallons of ethanol could effectively replace about 4 billion gallons of gasoline or about 3.3% of the estimated 120 billion gallons of gasoline used annually in the U.S.

The oil reserves in Alaska’s Arctic National Wildlife Refuge (ANWR) are estimated at 4.3 billion barrels or more. While this amount of oil is insignificant in comparison to our overall energy consumption, it dwarfs the amount of energy gained by converting massive amounts of food into ethanol. Each barrel of oil yields about 19 gallons of gasoline, 9 gallons of diesel fuel and several gallons of heating oil, jet fuel and other petroleum products. The 81 billion gallons of gasoline produced from 4.3 billion barrels of oil would replace the energy gained from producing 15 billion gallons of corn ethanol per year for 20 years. Some estimates of the ANWR oil reserves are as high as 16 billion barrels or enough gasoline to replace the energy gained from ethanol production for almost 75 years.

Some experts estimate that the world has one billion hungry people. The 280 billion pounds of corn needed to produce 15 billion gallons of ethanol equals 280 pounds of corn per person for one billion people. U.S. chicken producers can convert less than two pounds of feed into a pound of chicken. The 280 billion pounds of corn could be used to produce 140 pounds of chicken per person for one billion people. Are we willing to let one billion people go hungry while we use such massive amounts of food to make an insignificant high-priced addition to our fuel supply?

We should also consider that the materials necessary to make nitrogen, phosphorus and potash fertilizers are in limited supplies. Some experts claim that high quality phosphate, a large portion of which is strip mined in Florida could be in short supply within 20 years or so. We already import about 85% of the potash we use from Canada. Is running out of fertilizer or importing it from other countries better for us in the long run than importing oil?

I agree that there will always be hungry people in the world and I certainly do not think that the U.S. should try to take on the entire burden of feeding all of them. Also, I am not totally opposed to corn and/or cellulosic ethanol.

An argument that can be made in favor of ethanol is that while it may not be a great creator of energy, it does convert other forms of energy used to produce it such as natural gas into a liquid form that can be dispensed through our established channels and used in our current engines at least to some extent.

I don’t believe that we should in any way try to tie the cost of our military to the need to keep shipping lanes open for oil. Our military is needed because there are people who would like to destroy us and we must be prepared to defend ourselves. I am an old man now who was an officer in the U.S. Army for four years at a time when it was very unpopular to be in uniform. We need a lot of good people who are prepared to do terrible things to those who would destroy us.

My major opposition to ethanol is that the U.S. Government seems to think that ethanol can supply a major portion of our energy needs and I don’t believe that it can. We need to use our own oil, nuclear power, wind, solar, conservation, some ethanol, and whatever else we can come up with to make our country independent and strong.

[...] the ethanol industry for what he calls a “highly inflated jobs study” released earlier this week. Greene claims the industry’s jobs numbers are “way off” because they use both [...]

Don’t forget that the bankers, the Monsasnto’s, and the universtities want to play down the FACT that the incentive is no longer needd. The technology has been in place sind 1988 to fractionate at reduction of cost $0.70 per gallon. The proven patents are available at USPTO.gov listed under Langhauser.

The “cookie cutters” waste 30% of the food value of the corn!!!

Avoid that waste, folllow up wioth proven lignocellulosic technology and sell 4 (four) gallons of ethnanol from every bushel of corn received into the plant. Finnish a product that is sought after on the Pacific Rim to feed the masses!!!

Check me out —–give me a call—-you can find me on the web!!!

[...] criticizes the ethanol industry for what he calls a “highly inflated jobs study” released earlier this week. Greene claims the industry’s jobs numbers are “way off” because they use both inflated jobs [...]

Ethanol is great. I run a combination of it and regular gasoline in my Dodge Caravan. Right now it is .70 less a gallon than regular where I fill up. My mileage overall is about the same as straight gas – believe it or not. As for subsidies, the oil industry has been getting their’s since John D Rockefeller set up Standard Oil. This country needs all the energy diversity it can get.