Ethanol DeathWatch Map
Regular readers know I am no fan of ethanol -- over-subsidized gasoline substitute that has helped to drive food inflation aggressively higher (and, it gunks up my engines!)
With the price of Oil down $18 over the past week -- off 12% from the $147 high -- perhaps its time to pull out the BioFuels/Ethanol DeathWatch Map.
Its a terrific Google Maps Mashup (via GigaOm) that shows the various biofuel plants that are having "hiccups."
click for more info
The author notes that this is a "a work in progress" You can add new notices or extra information in the comments.
>
Previously:
The Costanza Energy Policy: 25 Ways to Drive Oil to $150 (May 29, 2008)
http://bigpicture.typepad.com/comments/2008/05/how-to-drive-oi.html
Source:
Maps: Biofuels Deathwatch
Craig Rubens
Earth2Tech, January 9th, 2008 at 12:00 am
http://earth2tech.com/2008/01/09/earth2tech-maps-biofuels-deathwatch/
Friday, July 18, 2008 | 11:00 AM | Permalink
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Excellent!
I look forward to the day when these dark satanic mills go up in flames, to liberate our food supply.
Smash the ethanol bandits!
Posted by: Jim Haygood | Jul 18, 2008 11:30:40 AM
Relief at last !!
Those poor folks in the SW US and Mexico can again afford their tortillas.
;)
--Ken
Posted by: Ken M. | Jul 18, 2008 11:34:32 AM
Ethanol is a fuel, pure and simple. While it may raise food prices (in the short term), it lowers gasoline prices, because the two fuels are near-substitute goods. And corn (if that is the feedstock at issue) is hardly a difficult crop to grow; if you want more, it will be there, for there is no shortage of acreage.
So it's not so clear that the consumer, on average, has less money in his or her pocket, even given the supposed evil of subsidization (meaning tax policy?).
Posted by: Don | Jul 18, 2008 11:48:04 AM
Good riddance to this policy. There are better ways of reducing pollution and turning corn into ethanol was energy and water intensive, so this never made sense except to the producers.
Demand destruction contining to eat away at oil prices. (Where are the $200 calls now???) This stock rally will have legs as long as oil continues to head south. Then we will probably see rotation back from financials into energy again.
BR - any idea where the floor is going to be in oil from a TA perspective? $100 or higher? That number when we get there might be a limiting factor for the bear market rally, another being resistance at XLF 25, SPX 1300.
Posted by: leftback | Jul 18, 2008 12:10:31 PM
Why does everybody assume we have to decide on a single source of fuel for energy? A little bit of ethanol is a good thing, if only for the US jobs it creates, but it's not a replacement. Only ethanol is a bad thing.
We need more wind, solar, nuclear, coal, oil, thermal, bio-fuel, hydrogen, etc...
btw, love your site.
Posted by: Dan | Jul 18, 2008 12:11:04 PM
Amazing that one of the few products that we can export for foreign exchange is instead burned on the highway.
Posted by: Mike in NOLa | Jul 18, 2008 12:23:16 PM
Don, I would strongly disagree with your statement that gasoline and ethanol are near substitutes, and that ethanol has reduced gasoline prices.
An E-10 mix of ethanol in the Northeast does not provide the same mileage in a typical car or truck as 10 gallons of straight gasoline. As Barry mentioned, it gums things up both when a transition to ethanol is made as well as afterwards, when problems with water separation come to play.
With E-10, a typical car is probably going as many miles as it would on 9.5 gallons of normal gasoline and that is probably generous.
If you are a boat owner and can only buy E-10, the costs of this can go sky-high. Small engines are killed when they are filled with gas from a small can sitting for over a month with E-10 in it. E-10 is a nightmare that needs to end.
Posted by: wnsrfr | Jul 18, 2008 12:23:39 PM
this is a textbook example of malinvestment.
we should understand how this came about.
Posted by: Mark E Hoffer | Jul 18, 2008 12:33:06 PM
It does not 'gum up your engine'. Flat period... it does not. An engine burning an ethanol blend will be cleaner than one burning straight petroleum. It has been used in some states for decades now - show me the statistical proof of problems. It also removes water from the gas tank (people uesd to actually pay extra $$$ for cans of 'Heet').
As for driving up the price of corn - that's a tougher question. Speculation certainly did drive it up, particularly uninformed speculation such as that the early summer floods would drastically reduce the crop. At least that higher corn price stays totally inside the US.
~~~
BR: That not what Evinrude Motors says:
"Many Boat Owners, in recent years, have unknowingly used gas, blended with too high (unsafe) levels of ethanol alcohol. Running on gas with over 10 % alcohol in a marine engine will cause performance problems, and can also cause permanent damage to your marine motor.
Understanding the dangers and effects of alcohol gas, in addition to following all the necessary marine fuel system precautions, is now necessary to avoid any problems with E10 gasoline.
There has been much controversy, misinformation and confusion since the recent (2006) increased distribution of ethanol gasoline in the United States."
http://www.evinrude-parts.com/boat_ethanol_danger_precaution.html
Posted by: wally | Jul 18, 2008 12:38:22 PM
Mike in NOLa, all the points you make are valid. Here is why I say "near substitute":
1. Both fuels (gas and ethanol) are liquids that can be burned in spark ignition internal combustion engines.
2. Their BTU heat content on a per volume basis, while plainly not the same, are not wildly different.
I am also a boat owner, and know some of the problems with E-10 (especially on fuel lines and certain gas tanks as well). But from an engineering standpoint, they are not that big. They are painful when using equipment not designed for E-10 (or in the future, up to E-90), but the newer products are better.
The really nice thing about ethanol is it can be made from just about any fruit or grain (it is chemically the same stuff as moonshine). In addition, technologies are now being developed to turn cellulose into ethanol as well (that's the plant stalks, tree bark, sawmill dust, corn husks and so on, that is not anybody's food unless you are a termite).
So I hate to see a fuel with such a long history, and maybe a great future, be buried by the usual "it can't be done" crowd.
Posted by: Don | Jul 18, 2008 12:44:47 PM
I don't understand the "ethanol creates food inflation" theory. U.S. corn goes 60% livestock feed, 30% ethanol, 5% starch (used in plastics) and 5% sweeteners (the evil High Fructose Corn Syrup in Coke, etc.) No one eats #2 Field Corn except livestock, the producers which do not set their prices. Corn does not compete with other food crops such as vegetables (i.e California, growers which have had their water supplies cut 30% to divert to cities, mostly for lawns) or rice (try finding a rice field in the corn belt). I have no idea if ethanol is feasible or not, but ethanol does not create food inflation any more than the prohibiting of short stock sales will save financial companies from their own poor business decisions.
~~~
BR: By livestock, do you mean cattle and chicken . . . ?
Posted by: Russell | Jul 18, 2008 12:50:13 PM
Hey Don,
What are the exact costs to grow corn? Ask a farmer about filling the tank on the tractor and buying seed and fertilizer and all the other stuff needed to grow corn and see if Ethanol still makes sense as engine fuel. Corn takes a heavy toil on the soil too in terms of nutrients, but we Americans don't worry too much about that, yet...
Posted by: lurker | Jul 18, 2008 12:50:31 PM
I recall Gates (as in Bill) taking a pretty good bath on one of these...but he has plenty so it's all relative.
Leave it to our gov't to actively push a food source as a fuel source. Worked out pretty good for the Comm. traders and a few I-banks though.
You can have demand destruction with oil but when it is a food stuff.....well....people can die.
Ciao
MS
Posted by: michael schumacher | Jul 18, 2008 12:53:07 PM
Whenever my wife and I use gas with ethanol, it definitely affects the performance of our Subaru Outback. The "Check Engine" light often comes on and our "cruise control" light blinks on and off incessantly until we pour fuel injector cleaner in there followed by gas without ethanol. Coincidence? I think not.
Posted by: Jeff | Jul 18, 2008 12:59:42 PM
lurker, there are a lot of variables in your question. But if it takes about $3 to grow one bushel of corn, and the ethanol plant can make about 2.5 gallons of ethanol per bushel(these numbers are not that far off, I think), you can see the cost is about $1.20 per gallon of ethanol.
Posted by: Don | Jul 18, 2008 1:02:39 PM
I frequently leave my car sit for several days without running and can tell you that the thing has quite a bit of trouble with ethanol breakdown - every sign is the same as water in the tank.
Also, I attended a talk by the CEO of Briggs and Stratton and without going too far on the tangent, mentioned that ethanol is a problem with their small engines; one that has significant impact on engine performance and life.
Nothing like running highly solvent and unstable/degradable "biofuels" made from usable food stocks through our engines instead of biofuels in the form of petroleum.
Posted by: sbmke | Jul 18, 2008 1:23:52 PM
Lurker, University of Illinois budget for 2009 has cost of production to produce 200 bushels per acre of corn, excluding land, at $500 per acre.
Posted by: Russell | Jul 18, 2008 1:25:42 PM
thanks Don and Russell. excluding the land is a long-term mistake but I would still argue, probably incorrectly I guess, that is makes no economic sense to grow food for fuel. Should be growing and eating soybeans instead. I like tofu a lot. anyway, thanks for being civil with me and for posting thoughtful responses. best.
Posted by: lurker | Jul 18, 2008 2:10:50 PM
http://www.runet.edu/~wkovarik/papers/fuel.html
Did you know that one of the biggest booster of alcohol fuel in the U.S. was Henry Ford? The fact that petroleum producers got a distribution system in place early is the reason we mostly use gasoline today rather than alcohol.
Posted by: wally | Jul 18, 2008 2:14:16 PM
Good post. Arkansas produces about half the rice in the USA. Lots of soybeans too. But many of those farmers are switching over to corn due to the high price. That's the free market responding. More supply will help bring down corn, but wheat, rice and soybeans likely go up. Remember the rice shortages earlier this year? But why is the cost of corn going up so much? Because of stupid policy.
http://www.msnbc.msn.com/id/19502744/
Posted by: Robert | Jul 18, 2008 2:17:33 PM
Ethanol's deal-killing drawback is that its EROEI (Energy Return on Energy Invested) is basically flat. It takes about as much petroleum-based energy to plow the corn fields, produce and apply the fertilizer, harvest the corn, truck it to the ethanol plant, distill and pump the mash, and dispose of the waste stream, as one obtains in ethanol energy on the output end.
Energy-wise, the ethanol industry resembles an "Ozark do-nothing" -- a linkage toy where you crank the handle round and round ... and nothing happens.
Without government subsidies bought with campaign contribution bribes, the ethanol industry would not exist. As such, the entire industry represents a monumental malinvestment. Add it to other boneheaded malinvestments -- too much housing, too much retail space, too large a military sector -- and one day you wake up and say, damn, when did we become a banana republic?
Posted by: Jim Haygood | Jul 18, 2008 2:29:01 PM
I saw a segment on CNBC and checked with the ethanol plant 20 miles from here.
Locally they take corn, squeeze out 10% into liquid ethanol. The sludge or dry pulp is still a feed stock of which 40% of the remaining 90% is shipped as feed stock. I'm sure they are attempting to improve that.
The increase in food prices comes from a larger market for grains, yes. The ethanol factories are struggling with that too.
But just think ... how does the corn get planted? Petro. How does the corn get picked? Petro. How does the feed get to the chicken farm? Petro. How do the chickens get to Tyson? Petro. How do the the packaged chickens get to the grocery store? Petro. How do the employees get to the store to stock the shelves? Petro.
Posted by: Greg0658 | Jul 18, 2008 2:41:13 PM
As far as water usage, our local plant had a hearing on that. Studies came out that rainfall and the ground soak water table this rural plant sits over, has plenty to spare.
Also it sits next to a river. In a more perfect world we would print enough money to install a river filtration system so in dryer times the corn in the fields would not be starved, and the fish would get abit cleaner living enviroment too.
I have trouble understanding why we can't print enough money to handle every task. Oh ya, thats right, wasteful human desires.
Posted by: Greg0658 | Jul 18, 2008 2:59:56 PM
"I don't understand the "ethanol creates food inflation" theory."
A theory? Not quite as per this entry in Naked Capitalism blog.
"Biofuels have forced global food prices up by 75% - far more than previously estimated - according to a confidential World Bank report obtained by the Guardian.
The damning unpublished assessment is based on the most detailed analysis of the crisis so far, carried out by an internationally-respected economist at global financial body.
The figure emphatically contradicts the US government's claims that plant-derived fuels contribute less than 3% to food-price rises."
There is nothing theoretical in a 75% increase, unless you're paying your bills with theoretical dollars.
Posted by: Francois | Jul 18, 2008 3:07:07 PM
and
I'm not doing that crappy job.
Wolf pack institution.
Posted by: Greg0658 | Jul 18, 2008 3:07:39 PM
