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Why the EPA is backing off on ethanol requirements, and why that has Midwesterners upset

REUTERS/Jason Reed
Corn is dumped into a chute at the Lincolnway Energy ethanol-producing plant in the town of Nevada, Iowa.

WASHINGTON — Every good Midwesterner knows the secret to excellence, whether you’re raising prize-winning hogs or Big Ten basketball players: They have to be corn fed. So who can blame them if they want to same for America’s automobiles?

Well, this week, the Environmental Protection Agency wasn’t having any of it: On Monday, the agency announced long-awaited details of the Renewable Fuel Standard, the federal law that mandates the volume of biofuels, including corn-based ethanol, in the country’s energy supply.

The Renewable Fuel Standard is the reason why, when you go fill up your car, you might see a notice that your gas “may contain ethanol.” Blending ethanol into gasoline is one of the primary ways refining companies meet the federal standard.

And while the agency raised the amount of ethanol required in the nation’s energy supply compared to previous years, the new standard fell short of the total amount lawmakers envisioned for 2015 when they originally passed the law creating the standard in 2005.

To many in the country, the EPA’s move was good news — among the reasons for the lower target was reduced total consumption of fuel in the U.S. as a result of more efficient cars and other economic factors, as well as a reduced dependence on foreign oil, thanks to greater domestic production.

Not so much in the Midwest, where thousands of acres of cornfields feed the ethanol plants that produce a large percentage of the nation’s biofuel supply. Minnesota’s politicians and biofuel backers across the Midwest voiced their disappointment and concern after the announcement, casting it as a blow to the economy, the environment, and national security.

Once a beloved, bipartisan-touted energy solution, ethanol is increasingly on the ropes for federal support — but Minnesota and its neighbors are among the few, not many, protesting.

Ethanol policy: from a different era

In the mid-2000s, when the current foundation for biofuel policy was constructed, Midwesterners were hardly the only cheerleaders for ethanol. Then, the rationale for encouraging biofuel cultivation was clear. U.S. gasoline consumption was at its historical peak in 2004, with around 140 billion gallons consumed that year. Top exporters of oil were Russia, Saudi Arabia, and Venezuela, countries on whom leaders in the U.S. — which was buying nearly two-thirds of its oil abroad — did not want to be so dependent. And climate change was beginning to emerge as a major issue.

Considered to be cleaner than fossil fuels, ethanol was touted as an alternative to foreign oil that would be a boon to U.S. farmers, help the environment, and bolster the country’s geopolitical hand. That’s partly why lawmakers were initially bullish in forecasting steady growth in ethanol consumption over the next few decades — in addition to strong lobbying from corn growers and Midwestern politicians.

In 2007, when it devised the initial standards, Congress required that, by 2016, the U.S. guzzle 22 billion gallons of biofuels. At the time, gas consumption was at record highs and there was no reason to believe it would taper off.

But that growth didn’t quite materialize, thanks to two phenomena few predicted. For one, at the beginning of the Obama presidency, U.S. consumption of gas began to decline in a big way. By 2014, the country was using as much petroleum as it did in 1997, despite the economy nearly doubling in size. The increased fuel efficiency of cars, along with the Great Recession and its lingering effects, are believed to be the main culprits.

U.S. gasoline consumption, January 2000 – April 2014
Demand for gasoline in the U.S. peaked around 2007, just as lawmakers were setting the Renewable Fuel Standard, when the trend in consumption pointed to continuous yearly increases. But soon after, gas demand plummeted and has not returned to 2007 levels.
gas demand chart

At the same time, U.S. domestic oil production has increased since the tail end of the last decade, thanks to a major boom in hydraulic fracturing, or fracking, techniques. U.S. wells are projected to produce 9.3 million barrels of oil every day this year, up from 5 million in 2008. Since 2011, the U.S. has been a net exporter of oil and natural gas, and in 2015 was the world’s top oil and gas producer.

The EPA, though it was meant to abide by Congress’ initial requirements, made the decision that the robust standard lawmakers envisioned was simply unrealistic. The new mandate requires that 18 billion gallons of biofuel be used by American automobiles in 2016. That would make one out of every 10 gallons of gas consumed in the U.S. from biofuel. But it’s 4 billion gallons short of what Congress envisioned back in 2007.

But as states like North Dakota and Pennsylvania profited from the shale boom, much of the Midwest remains as tied to corn-based biofuel as before — if not more so. As of August 2015, Minnesota produced 1.2 billion gallons of ethanol annually, making it fourth in the nation in production, behind only Iowa, Nebraska, and Illinois. That’s an all-time high: In 2012, the state produced 800 million gallons of ethanol fewer.

Annual ethanol production capacity for top producers, August 2015
Midwestern states dominate ethanol production in the U.S., occupying the top 10 places in terms of production capacity.
Source: Renewable Fuels Association via Nebraska Energy Office

With crop prices slumping, however, farmers in Minnesota are finding growing corn to be increasingly a losing proposition. In February, MPR reported that that prices for bushels of corn had fallen by half in the last few years, and that Minnesota farmers have been losing as much as $300 on each acre of corn planted. Reduced demand for biofuel will mean reduced demand for the corn that is used to make it, which can only mean downward pressure on the crop’s price.

In states like Minnesota and Iowa, then, the biofuel mandate is as much an economic lifeline as ever. The ethanol industry supports many thousands of jobs and billions of dollars of economic output. And top agriculture companies operating in the Midwest have lobbied hard to keep the mandate intact: Biofuels industry groups spent a total of $158 million lobbying federal lawmakers from 2007 to 2013.

Because of that, biofuels have grown into perhaps the most untouchable regional issue in the country. Nearly every politician in the Midwest, regardless of party, supports a strong standard; in Iowa, where the industry is dominant, presidential candidates have historically been required to tout the program to have even a remote shot at that state’s first-in-the nation caucuses.

Ethanol’s critics

Outside the Midwest, ethanol isn’t always regarded as a panacea. With a relatively limited regional footprint, the fuel has come under fire from a diverse array of groups.

The oil and gas industry has lobbied heavily against the renewable fuel standard and biofuel subsidies, and advanced research critical of biofuels, as fossil fuel producers are wary of the growing biofuels sector cutting into their market share. Republican Sen. Bill Cassidy, who represents Louisiana, a stronghold of the oil industry, has introduced some of the strongest anti-biofuel legislation.

Many environmental groups have grown disillusioned, too, because of concerns that biofuels aren’t as green as they were meant to be. Some studies have suggested that the biofuel cultivation and consumption process as implemented can be very damaging to the environment — including contributing to climate change — and that changes need to be made before biofuels present a clearly superior option to fossil fuels.

Public polling on the ethanol issue is murky: The ag industry and the oil industry each sponsor polls that they use to validate their points of view. But fiscal hawks on both the right and left have recently attacked the renewable fuel standard for being a major government subsidy. Tellingly, presidential candidates this cycle are not falling in line to support ethanol. In October — and in Iowa of all places — Jeb Bush said, “We need to get to a point where there aren’t winners or losers based on subsidies or mandates.”

And in Congress, top lawmakers have taken aim at the ethanol component of the standards. Sen. Dianne Feinstein, D-California, and Sen. Pat Toomey, R-Pennsylvania, have introduced legislation to repeal the ethanol requirement in the renewable fuel standard, arguing the program will remain viable if other biofuels are prioritized.

Particularly, many see promise in what’s known as next-generation biofuel, especially cellulosic ethanol, which is made from parts of plants that are not edible. Environmentalists and others have grown increasingly concerned that the cultivation of corn and other edible crops for fuel, and not food, drives up food prices and harms availability.

Cellulosic ethanol is more desirable because it won’t create competition with food plants, explains Anu Ramaswami, who studies renewable energy at the University of Minnesota’s Humphrey School. “You don’t want to have competition with food,” she says. “The food price issue is something that, the more and more cellulosic ethanol is used, that angle will go away. The thing with cellulosic ethanol is that we need to scale it.”

Indeed, the RFS mandate only requires that 230 million gallons of cellulosic ethanol be used as fuel in 2016 — 0.12 percent of fuel consumed nationally. That number is expected to rise as the technology improves, and Ramaswami forecasts it will one day supplant traditional ethanol.

Minnesotans line up behind ethanol

Though a bill to reform the fuel standards would likely garner bipartisan support, it’s still considered virtually dead on arrival, given the staunch opposition from Minnesota and other Midwestern representatives.

When lawmakers like Arizona Republican Sen. Jeff Flake say that the Renewable Fuel Standard is a “lemon” and that “Congress can no longer justify a policy that props up the ethanol industry at the expense of taxpayers, consumers, the hungry, and the environment,” corn country representatives come rushing with an opposite set of talking points.

In statements to MinnPost, many Minnesota members of Congress touted ethanol as a critical asset in the American energy portfolio, one that will help fight pollution and climate change, boost the Minnesota and U.S. economies, and protect the country from foreign oil.

Sen. Amy Klobuchar has cast herself as a leading advocate for biofuels, and took partial credit for pushing the administration to boost the original standard it released in May. That announcement called for 17.4 billion gallons of biofuel in 2016, about 600 million gallons fewer than this week’s numbers.

“The Renewable Fuel Standard has helped create American jobs, drive innovation, and boost local economies across Minnesota and the country,” Klobuchar said. “I’ll continue to call on the administration to promote biofuels to the extent that Congress intended in the law.”

Sen. Al Franken, who serves on the Senate Energy Committee, said the government made the “wrong decision” and pledged to get the RFS “back on track.”

“I believe we’re on the cusp of a renewable energy revolution,” Franken said in a statement. “But this announcement sends the signal to our producers and to our ag communities that there’s no interest in making important energy investments. … While I’m glad they raised levels from what was proposed, these final numbers just don’t cut it.”

Representatives from Minnesota’s rural, corn-growing districts — Democratic and Republican alike — were predictably not pleased. Seventh District Rep. Collin Peterson, the top Democrat on the House Agriculture Committee, said that the rule was still disappointing, but “the administration deserves credit for listening to our concerns and now needs to immediately start work on the numbers and get the program back on track. … A strong biofuels industry is an essential component of the rural economy.”

In a statement, First District Rep. Tim Walz echoed Peterson in crediting the administration, but added “Homegrown energy from the heartland is critical to eliminating our dependence on foreign oil and to maintaining our national security. … I will continue to look for ways to move us toward a clean energy future.”

Sixth District Rep. Tom Emmer hammered the EPA in a statement, saying “When farm income is down by 38% – the lowest level in a decade – it is not the time for the EPA to be diluting a law that provides farmers with better access for their goods, allows consumers more choices at the pump, and leads to a cleaner, more affordable, domestic energy supply.”

Looking ahead

Even if the corn belt and the rest of the country are at odds on the importance, effect, and proper role of biofuels, most everyone agrees that the Renewable Fuel Standard program is in need of some major changes. When it released 2016 standards on Monday, the EPA also retroactively announced standards for 2015, and, confoundingly, 2014. Rep. Ed Whitfield, a Kentucky Republican who chairs the Energy and Power Subcommittee, told Politico that this was a clear sign the program needs to be fixed.

Given the situation, it’s unlikely Congress will take meaningful action to reform the program anytime soon,  so big decisions will continue to rest with the White House and the EPA — at least until 2017.

But ethanol’s cheerleaders in Minnesota and elsewhere may need to begin managing their expectations. “It has a place in the renewable fuels landscape,” Ramaswami says, “but it’s one piece of a larger puzzle, and it won’t be limitless.”

Correction: This article originally misstated total U.S. oil consumption in 2004.

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Comments (56)

RFS

The EPA willfully violated the law and then tried to reason it by saying it should be enough to promote growth. Sorry EPA but it isn't your job to decide how much is enough to promote growth and you are not equipped to decide that anyway. Is the EPA really concerned about pollution or is it really concerned about money it gets from big oil? It looks like it might be more concerned about the money since using ethanol reduces the amount of CO2 released to the atmosphere lowering our negative impact on climate change. Critics like to say how they don't like ethanol because they get lower mileage on their vehicles but always fail to understand that the lower cost of the fuel outweighs the lower mileage.

The EPA's Job

It is the EPA's job to decide how much ethanol goes into gasoline, based on standards in the Clean Air Act. It also has the authority to waive all or part of the requirements if following the requirements "would severely harm the economy or environment of a State, a region, or the United States," or if there is an inadequate domestic supply of ethanol. The EPA started its rule making process in June, and had a public hearing on the issue. It looks like they followed all of the laws they were required to follow.

Ethanol is also not as environmentally friendly as its proponents would have you believe. Yes, it burns cleaner, On the other hand, ethanol production requires the use of other fuel so that it takes about as much energy to produce a gallon of ethanol as it does to produce a gallon of gasoline. Production also uses up water, pumps fertilizers into the system, and diverts land from other uses (including conservation--previously uncultivated land is plowed up for ethanol production). The lower cost of the fuel does not outweigh the loss in mileage, so ethanol is ultimately more expensive for the consumer,

"Is the EPA really concerned about pollution or is it really concerned about money it gets from big oil?" I thought big oil hated the EPA, and was working to abolish it. Is that just an elaborate ruse?

No fuel is perfect, but...

"On the other hand, ethanol production requires the use of other fuel so that it takes about as much energy to produce a gallon of ethanol as it does to produce a gallon of gasoline."

Actually, the energy balance of production (yield in liquid fuel BTUs per BTU of fossil energy inputs) for ethanol is pretty good. Gasoline has an energy yield of 0.81, which means it takes more energy to produce a gallon of gas than the fuel delivers. Ethanol, on the other hand, has an energy yield of 1.87.

Sources: USDOE, USDA, University of Idaho, ASBAE

"Production also uses up water.."

Guess how much water it takes to make a gallon of gasoline? Especially when the gas is made from Tar Sands oil, as most of Minnesota fuel is.

"The lower cost of the fuel does not outweigh the loss in mileage, so ethanol is ultimately more expensive for the consumer"

Prices vary, but here in Minnesota that's usually not true. Our E85 prices, compared to regular unleaded, are among the lowest in the nation. We also have more E85 outlets than any other state, so it's easy to find.

Water Use

Sure,fossil fuel production also uses water, up to 6 gallons per gallon of gasoline. Refining ethanol uses far less water, under 3 gallons per gallon of ethanol. However, the corn grown to produce that ethanol has to be irrigated, and is typically irrigated from groundwater sources. Depending on where the corn is grown, irrigating enough of it to make a gallon of ethanol requires anywhere from 14 to 336 gallons of water, according to the USDA. This corn also requires fertilizer, which runs off into other water sources (ever hear of the "Dead Zone" in the Gulf of Mexico? Any guess as to where that comes from?).

Thank you for the correction on energy yields. I was probably looking at old figures.

You betcha

Here in Minnesota, only a small percentage of the corn crop is irrigated. As you note, that's not always the case elsewhere.

That's for Darn Sure

The problem is that there is not enough available farmland in areas that do not need irrigation for increasing demand. We are already looking at land that was turned over for conservation or that was used for other crops (soybeans, cotton) being planted with corn. There will also be increasing deforestation, especially if corn has to be imported from, say, Brazil.

I favor increased research in ethanol from other sources of biomass. Right now, those other sources are not as efficient and should not be regarded as a silver bullet, but it is an area worth looking into.

figures

Could you provide links to these figures so we can see that you aren't using old figures for those as well? 14-336 gallons is quite the spread. Doesn't seem to be too much accuracy in that. If we are going to include water that was used to grow the crop to create ethanol should we also include water that went towards the creation of the crude that is used to create gas?

Water Use

The figures are in a report issued by the DOE Argonne National Laboratory, and can be found here: https://greet.es.anl.gov/files/consumptive-water.

How much water goes into "creating" crude oil? I though that job was already done.

ok

So based on that water use from ethanol doesn't look nearly as bad as you have stated. The report states water use is improving rapidly and ethanol from cellulosic is already comparable to fuel from crude oil. Since the report was last done in 2011 that would mean these figures are outdated as they have changed since then. The main point of the opposition to the RFS is that it doesn't allow enough investment in advanced biofuels since the proposed targets for those are much lower than they should be.

As far as how much water goes into creating crude oil the job may have been done already but lets compare apples to apples.

OK

The figure for water use I cited included the water needed to grow the corn, not just to distill the ethanol.

EPA

The EPA is an environmental protection agency not an economic protection agency. They are mixing the two and acting beyond their responsibilities.

Biofuels have been shown to be more environmentally friendly than fossil fuels and are better for the earth and climate change.

Big oil lobbies and has spent quite a bit of money on the EPA trying to have them limit the expansion of biofuels and keep their market share. They also don't like regulation by the EPA but that has nothing to do with protecting their market share.

What Does the EPA Do?

The EPA is given explicit authority to waive the ethanol standards for economic reasons. Take a look at 42 USC 7545 (o)(7)(A):

The Administrator, in consultation with the Secretary of Agriculture and the Secretary of Energy, may waive the [ethanol] requirements . . . based on a determination by the Administrator . . . that implementation of the requirement would severely harm the economy or environment of a State, a region, or the United States; or based on a determination . . . that there is an inadequate domestic supply.

Like it or not, those determinations are the responsibilities of the EPA. Congress said so.

economic reasons

They are incorrect about them. More American made biofuels would be better for the economy than foreign oil.

A Fine Time to Bring That Up

There was opportunity for public comment on the proposed rules. Any disagreement about the EPA's duly authorized economic analysis could have been addressed then.

public comment

I have no doubt it was brought up to the EPA at all already although they chose differently rather than heed sound advice and facts.

Foreign oil

The USA is the top oil producing country in the world (Source: International Energy Agency).

https://en.wikipedia.org/wiki/List_of_countries_by_oil_production

Canada is #5.

The "foreign" boogeyman word doesn't really add to the debate.

False

Biofuels, especially corn ethanol, is much, much worse for the environment and climate change than oil. You won't see any legitimate environmental groups supporting this terrible product

try again

25by25 is just one of many environmental groups that support ethanol and many other biofuels. Pretty easy to put that to rest. The only ones that believe that biofuels are worse are the ones that work for or are paid by the oil industry.

Try Again

25by25 is sponsored by the corn production boards of three states (Illinois, Nebraska, Ohio), three agricultural equipment manufacturers, and two agricultural lenders.

Do you have anyone without such obvious biases?

Nope

By environmental groups, I mean groups that advocate for the environment. You have cited an industry group, and an especially dishonest one at that.

While ethanol is worse than oil, it really is a false choice between bad options. The focus should be on actual renewables and conservation. Fortunately, the EPA is coming around to the fact ethanol is just a horrible idea.

EPA

I have a VERY hard time thinking of the EPA as being in the back-pocket of your 'big-oil boogyman'.

boogyman

They spent millions trying to influence the EPA and on an ad campaign while the EPA was finalizing the RFS. The boogyman is real.

I "always" find

That E-85 needs to be 40 cents or more less per gallon than gasoline for the lower cost to make up for the poorer mileage. The figure is probably more like 50 cents but 40 cents is the usual figure cited by most of the articles and reports that I've read. If you've seen E-85 at $1.50 lately I'm in business.

Still not in business

I paid $1.90 per gallon for gasoline tonight passing up $1.85 E-85.

10% Ethanol Limit

Increasing the percentage of ethanol in gasoline above 10% will violate the design limits of many of the cars on the roads as well as small engines (lawn mowers, snow blowers, motor boats) due to its increased corrosivity. That should have been addressed in the article. Very disappointed in this rah rah for ethanol write-up. It is not in the normal Minnesotans best interest to violate the 10% ethanol blend wall. With gasoline consumption going down, ethanol blended into gasoline must go down with it.

Many of us can use higher blends

E15 fuel, which is now sold at 30+ stations in Minnesota, has been approved by the U.S. Environmental Protection Agency for all model year 2001 and newer passenger gasoline vehicles. That's most cars on the road today.

Also, there are the 400,000 flex fuel vehicles registered in the state that were designed to run on higher ethanol blends.

You're absolutely right about the small engines. That's why the higher ethanol blends are sold in separate nozzles from the regular gas with clear markings right on the pump.

small engines

While the EPA has not approved ethanol for use in small engines the renewable fuel and ethanol industries have said it is perfectly fine.

Not for Small Engines

The EPA is only interested in emissions, they don't care if you burn up your small engine. Higher levels of ethanol will burn up your engine and cause corrosion of parts.

myths

That's simply a myth. Ethanol does not cause corrosion of parts in small engines.

Nonsense

Even the 10 percent blend will eventually destroy small engines. The reason you can't send ethanol by pipeline is because its so corrosive.

more myths

Yet another myth repeated without looking at the facts. How do you suppose ethanol is made? Many pipes are used in the production of ethanol and other biofuels with no corrosion caused by them. I suppose you can't send it by rail either since it corrodes the tankers too? Gosh we've got to find some way to move this stuff.

Obfuscation

You know your ethanol talking points so I'm sure you know very well it can't go by pipeline. The pipes and tanks ethanol goes in are specially lined to prevent corrosion. That isn't economical for new pipelines and ethanol will destroy the existing ones. But, again, you know this.

The fact it can't go by pipeline is another reason ethanol is so bad for the environment - the tranportation impact is much higher.

Corrosion

My understanding of the problem for ethanol fuels and corrosion is that ethanol is HIGHLY hygroscopic. It really, REALLY wants to absorb moisture from its surroundings.

Pipes in refineries can be stainless steel or monel (and often are). Tank cars have special linings. Those type of solutions are probably too expensive for thousand-mile pipelines.

hygroscopic

Please note that fuel without ethanol in it is also hygroscopic and wants to absorb moisture from it's surroundings. I recall from my youth having to add supplements (such as heet) to my gas tank to counteract this while today no such things are necessary at all. Most modern engines including small engines have components that stand up to ethanol.

NO! You do not know what you are talking about

The problem there was CONDENSATION--as the moist air in the fuel tank cooled. Water is a polar molecule. Gasoline is not. Absent and additive the two WILL NOT MIX (form a solution). Water would find its way to low spots in the fuel lines, freeze, and block the flow. This is why you were told to keep you tank over 1/2 full in the winter. Less air = less condensation.

This is where HEET would come in--it is alcohol (methanol not ethanol). It has characteristics of both polar and non-polar molecular structure. It has two effects: 1) It induces the trace amounts of water to remain in solution, and 2) it acts as an antifreeze and greatly depresses the freezing point of this water. Thus, you car would not stall out in -20 weather. But it had NOTHING to do with gasoline 'absorbing' water.

Incidentally, in the bad old days, before ethylene glycol antifreeze, alcohols were used as antifreeze. They were problematic, however, in that their boiling points were BELOW 212F, and did not give the kind of boilover protections needed.

You are quite the ethanol booster. But you have still not addressed the #1 problem--the chemical fact the burning a gallon of ethanol only generates 76K BTU vs !!$K for gasoline.

#1 problem

I do know what I am talking about. I was not comparing water to gasoline at all.

How many BTU is generated doesn't seem to be a problem for most vehicles. The fact is ethanol makes fuel less expensive while lowering greenhouse gasses and reducing our need for foreign oil. The reduction in mileage due to the reduced BTU is compensated by the lower cost of the fuel in the majority of vehicles so the amount of BTU generated is not the #1 problem after all.

Ethanol

You are correct...mostly. It does not destroy small engine 'parts'. What it DOES do is destroy older plastic and rubber fuel lines. (this is why you have all-steel fuel lines in your car today). Ethanol-blend fuel has detroyed for me personally 1980's versions of both a chainsaw and weedwhacker, when I failed to drain the fuel and run dry after use.

Incidentally, I just bought a new STIHL chainsaw, and they STILL recommend draining fuel and running it dry if you are gonna store it more than 30 days.

The subsidized ethanol

The subsidized ethanol industry is better corn growing policy than environmental policy.

Gasohol

The renewable fuel standard changes are intended to maintain the same concentration of ethanol in gasohol - currently 10% - indexed to falling transportation fuel use. This is an absolute not a relative decline.
Benefits of using corn ethanol as a motor fuel additive are real, but focused in the geographic and economic communities which grow and process corn. Corn ethanol raises the de facto cost of transport fuel to the nation, and at best is an energy wash - depending upon what effects are included or excluded.
No politician in corn country can speak to this truth without risk of ejection from office. Energy benefit has been suspect for 2 decades: Pimintel 2003 from Cornell.
Boosterism can shout out science. Cost/benefit analysis is very different if one includes or excludes subsidies, and lateral effects of farming. We no longer have the problem for which oxygenates were originally intended: carbon monoxide levels in winter in large cities.
The lower cost of gasohol is due to a subsidy which we all pay from other tax sources. Shell game?
We as a political community have great difficulty discussing science, in this and other areas. -Bruce Parker

Not subsidized

Ethanol subsidies ended years ago.

Subsidies

But the mandate didn't. Corporate cronyism. Rent-seeking. Using government to force people to buy what they otherwise would not.

Odd numbers

"U.S. oil consumption was at its historical peak in 2004, with more than 140 billion barrels consumed that year". The entire world used about 80.1M/barrels per day in 2004 (US Energy Information Administration) and the US 20M/barrels per day . That comes to 29.2 Billion barrels used by the entire world (and 7.3 Billion used by the US) for the year. The 140 billion barrel/year number for the US in this article isn't even close. Were any of the numbers in this article verified?

Correct — the numbers did not

Correct — the numbers did not make sense. We had conflated gallons and barrels, and not properly distinguished between oil and gasoline.

The article has been corrected. Thanks for your input! 

Ethanol...

...is also corporate-crony welfare.

Three big problems:

1) It ain't NEARLY as green as its cheerleaders would have you believe
2) Econ 101--any industry that requires a mandate, subsidy, or import tariff to survive is the very definition of an economic waste.

And finally...3) the REAL problem--basic chemistry/physics: Ethanol has something like 76,000 BTU / gallon when burned. Gasoline has 114,000. You have to burn 1.5 gallons of ethanol to provide the same motive force as one gallon of gasoline. Remember than when you pull up to that wonderful E-85 pump.

I want someone to tell me when ethanol fuel finally saves you any money, or solves some particular problem.

"I want someone to tell me

"I want someone to tell me when ethanol fuel finally saves you any money, or solves some particular problem."

It does and it has. The particular problem was dependence on foreign oil. Home grown biofuels solves that problem and also reduces the amount of CO2 released into the atmosphere causing climate change.

False again

Ethanol is actually produces more CO2 and worsens climate change. Again, if you looked at what actual environmentalists are saying (as opposed to industry shills) you would understand just how bad a product ethanol actually is.

http://minnesota.cbslocal.com/2014/12/17/u-of-m-study-finds-ethanol-wors...

CO2

http://farmprogress.com/story-study-suggests-biofuels-potential-reduce-g...

The link to the study that suggests less CO2 is produced by biofuels is included with this link. Other studies have also shown that currently our use of ethanol has reduced the amount of CO2 released to the atmosphere by many tons.

http://farmprogress.com/story-epa-finalizes-higher-renewable-fuel-levels...

Please keep in mind that we're talking about more than just ethanol here. We are talking about all biofuels.

Ethanol

Don't you think that there may be something to the "environmental impacts" of ethanol production (i.e. corn production)? Look at the graph above, the state leading in Ethanol (corn) production is IOWA. Now Iowa just happens to be the state where the drainage authorities are being sued by municipalities for nitrogen pollution in the water. Hmmm, doesn't take a rocket scientist to tie corn production to the land application of nitrogen, that then ends up in the waters of the state. The most limiting factor in corn production is adequate nitrogen. However, it appears producers think more is better, obviously the corn is not utilizing all the nitrogen they are applying as what is polluting the waters in Iowa IS from land applied nitrogen for ethanol (aka corn) production. Ethanol production does have very negative environmental impacts.

no

You can't tie corn production to ethanol production quite that easily. Nor does correlation equal causation. Corn production is driven mainly by other factors such as commodity prices (ethanol has not been shown to affect those) rather than ethanol production so even without ethanol you would still have very nearly exactly the same amount of corn production so to blame nitrate pollution on ethanol is simply false. Also, lets wait until the lawsuit in Iowa plays out before making conclusions.

Supply/Demand

That is just silly...you cannot repeal supply/demand. You cannot bring an additional 5 billion bushels of price-inelastic demand into a 11-13B bushel market and not have a major effect on the price. Corn may 'only' be in the $3-4 / bushel range right now, but that is still double what it was B4 RFSII. And it was $8 not that long ago--a fact that has placed a great deal of hardship on your farm brethren in the protein-production industries.

I have not problem with using ethanol to make motor fuel, as long as the market is calling for it. God heavens, man, just let the markets work. Don't try to enrich yourself at everyone else's expense.

(PS--economist call this 'concentrated benefits--dispersed costs')

demand

It's also silly to state that ethanol is the reason for more rowcrop pollution. You might think it is silly but the fact is that farmers would still raise corn for many other reasons. Mainly commodity prices but also due to the farm bill promoting row crops of which corn brings the highest price. Even with all the demand for corn don't forget we still have a surplus of it. We didn't get $8 corn from ethanol and we don't have $4 corn from it either. There are more reasons ethanol is just a minor player of those right now. Farmers don't get that much of a premium selling to the local ethanol plants. The sellers to those still remain extremely local and not widespread. This is good discussion but let's not get off track though. The focus is on the RFS and biofuels.

Price of Corn

Corn is a fungible commodity. Global price determined by global supply demand with innumerable local variations due to local supply/demand/transportation issues--called local 'basis'

If there is one thing I know, I know about supply/demand/price for corn, beans, and soymeal--both locally and the Board of Trade. I traded grain for a living, and handled price-risk hedging programs for one of MN S&P500 food companies.

If you think the 5+billion bushels of price-inelastic demand for corn (right at 40% of our total production in a VERY good year) that arises from the EPA mandate is 'minor', I am not gonna convince you otherwise, but once again, you have no idea what you are talking about.

PS--you are correct--farmers get little or no 'premium' when they sell to an ethanol plant. But if they get $3.70 for their corn--regardless of where it goes--vs the $2.25 they might get WITHOUT the ethanol demand, then the overall system has DEFINITELY amounted to a premium. In our instance, they would rather sell to my company because they knew they would be paid. A lotta guys got stiffed by ethanol producers that went bankrupt.

The focus is ABSOLUTELY the RFS and biofuels. It is crony capitalism and bad policy in multiple dimensions.

demand/price

Not one person/study anywhere that has not been discredited has shown that corn prices are affected by ethanol production.

In addition to this it is a complete myth that corn is the number 1 crop in the U.S. Blaming our problems on corn is just plain silly.
http://gizmodo.com/by-2080-corn-wont-be-america-s-top-crop-1746221627
http://io9.com/how-america-s-most-useless-crop-also-became-its-most-co-1...

You're killing me here. If

You're killing me here.

If the data in the article you quote is anywhere close to correct (which it is not) your author is either VERY BAD at research, or VERY BAD at math, or both To wit:

The Premise: That GRASS (lawns) not corn is the #1 crop in the US. Leave aside the definition of lawn as 'crop', which is not. If 50,000 square miles is indeed the number, then multiplying that times 640 acres per square mile give you only about 32,000,000 acres of grass. This is barely more than 1/3 the total for corn (90+ million acres), soybeans (83 million) or wheat (56 million)--[all figures per USDA WASDE Report -Dec 2015, which is the BIBLE in this business).

Once again...YOU don't know what you are talking about. You take any convenient talking point thrown out there by any rummy who happens to agree with you, and link to it as though it is incontrovertible fact--which it is NOT, as clearly demonstrated above.

You are about 1/2 correct about price studies. It is just about impossible to 'prove' the effect of a single factor either way. As they say...all the economists in world laid end-to-end would not reach a conclusion. You pay enough money, and you can find one that will defend your position. For more money you can find one who will attack you opponent's position. Per Mark Twain..."Lies, d@mned lies, and statistics."

The price of ANY commodity is affected by a host of factors. For corn, it can be the weather. Livestock demand. It can something as far away as a bad crop year for Russian and Ukrainian wheat. It is HIGHLY CORRELATED to the price of crude oil. You think THAT has anything to do with ethanol? Darned right it does.

Once again, you need only to look at the before/after (ethanol) equilibrium prices for corn to see that SOMETHING surely changed. You cannot repeal the laws of supply/demand/price. You cannot introduce a new 40+% chunk of price-inelastic demand into the market for a commodity, and expect otherwise. To prove otherwise is an extraordinary claim, demanding extraordinary proof, of which there is none. Your claim fails for lack of proof.

Let me ask you two final questions:

1) If ethanol-derived demand has no effect on the price of corn, they why is it that the Corn Growers and Renewable Fuels Association are the two most vocal cheerleaders for legislation/EPA rules that will force consumers to buy even more of something they do not want (via an increase in the blend-rate and the mandate)
2) If the mandate went away tomorrow, how much ethanol would we be blending, and what would be the new equilibrium price of corn? (I can answer that for you...a lot less...and $1-2.00 lower).

killing you

My original point still is correct. It is not correct to tie pollution from corn production to ethanol or other biofuels (the RFS is about all biofuels) since farmers would still be growing nearly the same amount of corn regardless of ethanol due to a variety of reasons (mostly the farm bill).

As to your questions, I am not any part of those organizations so can only speculate that it's because they both know it's a better fuel and benefits the environment among other reasons. Even though those are what you call the most vocal does not mean there are not other organizations that do not support it.

As far as your second question, I am not able to give you an answer since I cannot tell you what goes on in other dimensions and neither can you even though you tried to make a number up. Your attempt at making a number up simply makes zero sense.

Aside from that I'd also appreciate it if you could refrain from the personal attacks which are prohibited by MinnPOST posting guidelines and not accuse me of "Once again...YOU don't know what you are talking about".

Water use

How much water is used in fracking?
That has to be considered when comparing water use between oil & corn. The unscientific term is fracking uses "lots" of water. There is a big concern about the proper disposal/storage of waste water from fracking. The chemicals used in fracking are much nastier than the chemical in the water that runs off of farm fields