Ethanol Industry Could Use Some Stimulation These Days or, One Good Effect of the Economic Downturn

Nick Gillespie | February 12, 2009

Hit & Run regular and serial novelist Alan Vanneman points to this New York Times sob story about the ethanol industry, which has been hit hard by low oil prices, low demand for gas, and our national malaise:

As recently as last summer, plants that make ethanol from corn were sprouting across the Midwest. But now, with motorists driving less in the economic downturn, the industry is burdened with excess capacity, and plants are shutting down virtually every week....

"The ethanol industry is on its back despite the billions of dollars they have gotten in taxpayer assistance, and a guaranteed market," said Amy Myers Jaffe, an energy analyst at Rice University....

In an effort to reduce the country's dependence on foreign oil and to lower the greenhouse gas emissions that contribute to global warming, Congress mandated a doubling of corn ethanol use, to 15 billion gallons a year by 2015. Congress also mandated, by 2022, the use of an additional 21 billion gallons of ethanol and other biofuels produced from materials collectively known as biomass. The potential materials include corn stubble, wood chips and straw.

More here.

Development of large-scale new-generation ethanol is not working and mandated corn ethanol use is a really terrible idea that helped spike food prices worldwide last year. Even environmentalists who once pushed for corn-based ethanol have rethought their position. Watch Reason.tv's "Silly Senator, Corn Is For Food" for a comprehensive catalogue of the problems with corn-based ethanol:

Comments

|2.12.09 @ 11:03AM|#

But now, with motorists driving less in the economic downturn, the industry is burdened with excess capacity, and plants are shutting down virtually every week....

Whenever I see a parasite dying of starvation, I smile.

:-)

|2.12.09 @ 11:05AM|#

Development of large-scale new-generation ethanol is not working and mandated corn ethanol use is a really terrible idea that helped spike food prices worldwide last year. Even environmentalists who once pushed for corn-based ethanol have rethought their position.

This is so. But is there any hope that the existing ethanol mandates will be repealed?

|2.12.09 @ 11:14AM|#

Its almost like you're trying to tell us that centrally planned and state subsidized industries and socio-economic engineering are failing, even after decades of regulatory mandates and billions of support?

That's unpossible!

|2.12.09 @ 11:17AM|#

Ethanol creates more pollution than gas, is 1/3 less effiecient use3s more crude oil than it makes 23 gallons for every 20 gallons of ethanol produced. rots rubber in cars. a 10% mix destroys fuel milage in certian cars, not all. my xterra get 19-20 on gas 14-15 on 10% blend and can not run on that e-80 crap. actually the owners manul says to never use any ethonol blend. but i have no choice, as alll gas here is bleneded. it costs more and i travel less because of it. and god only knows what it is doing to the engine

|2.12.09 @ 11:17AM|#

This is not how it was supposed to be when Congress mandated in 2007 that refiners blend increasing amounts of ethanol into the country's transportation fuel supply.


I'm having a really hard time getting my head around this, y'know?

Vines & Cattle|2.12.09 @ 11:20AM|#

This is so. But is there any hope that the existing ethanol mandates will be repealed?

Of course they will. Then new mandates will be written subsidizing ethanol from things like wood or switchgrass.

Oh the fun unintended consequences we'll have then!

|2.12.09 @ 11:21AM|#

Best use of ethanol is bourbon! Alcohol has a long history of safe use in western society.

Tyler|2.12.09 @ 11:39AM|#

"Best use of ethanol is bourbon! Alcohol has a long history of safe use in western society."

Not as safe as MJ or LSD. But good point, I could use some good whiskey.

I'd probably enjoy those other, safer substances more often and not rot my liver... but you know that whole Prohibition thing makes them artificially expensive and dangerous to acquire...

PC|2.12.09 @ 11:55AM|#

Such a small price to pay to inflate food prices and kill poor people. So what is your solution for overpopulation smart guys?

|2.12.09 @ 12:00PM|#

So what is your solution for overpopulation smart guys?
_______________________________________
EDUCATION! the more educated you are, generally spaeking the less children you have. for the first time in history, most of the civilized world has birth rates approaching negative replacement. in the US among middle+ class women the avg number of children is less than 2. which is a population contraction. much of europe is in the same boat. the uneducated peoples in the world and poor are the ones who are growing the pop. anyone with a brain sees that execedding the replacement rate is not a good thing.

|2.12.09 @ 12:08PM|#

So what is your solution for overpopulation smart guys?

Lunar colonization, martian and venusion transformation, large scale space stations.

|2.12.09 @ 12:11PM|#

Not as safe as MJ or LSD. But good point, I could use some good whiskey.

Nonsense, then why are they illegal if they are good for us. The government has a right and in fact an obligation to make anything not good for us illegal.

Shannon Love|2.12.09 @ 12:22PM|#

Few policies reveal the inability of government to process complex technological and economic information as does the entire corn-ethanol debacle.

Politics isn't about reality, its about popularity. Make something popular by appealing to the misunderstandings of non-specialist and bang you've got a technological and economic monstrosity. You don't have to experiment or prove something works before going at it whole hog.

|2.12.09 @ 12:23PM|#

My lovely Juanita, why do you torment me so?

I just wanna talk to you
And my broken heart just has no use
And I, I guess promises are better
left unsaid, yeah
Everytime you try to tell me
You say the words that I'm the only
But I'm the one who's crawling on the ground,
When you say love makes the world go 'round, yeah
You say love makes the world go 'round
Everytime you try to tell me
I don't care you're not the only
Don't you know I'm coming back around
Cuz I say love makes the world go 'round, yeah
Cuz I say love makes the world go 'round

|2.12.09 @ 12:24PM|#

Won't someone think of the multi-billion dollar agri-business corn farmers? Think of the executive bonuses. The bonuses! :::sob:::

Ben|2.12.09 @ 12:47PM|#

Can you make fuel out of hemp, similar to how they make ethanol out of corn?

|2.12.09 @ 12:54PM|#

Can you make fuel out of hemp, similar to how they make ethanol out of corn?
_________________________________________
http://carscoop.blogspot.com/2008/07/lotus-eco-elise-concept-with-hemp-body.html

Actually it is better, the hemp oil can be refined to be burned in cars. also the celluose in the plant is better to make bio fuel from than corn or switchgrass. With the fibers and the oils, you can build all non metal parts of the car, aka hemp body panels interior etc. one english car already has this, and it is great looking its the eco elise

The renewable materials that have been incorporated into the Eco Elis project include hemp (industrial cannabis) that's used on the car's composite body panels, spoiler and seats, eco wool for the upholstery and sisal for the carpet. Cleaner manufacturing processes have been achieved by utilizing the latest water based paint technology. As for renewable energy generation, the Eco Elise's hemp hard top incorporates a set of solar panels that provide power for the car's electrical systems

|2.12.09 @ 1:10PM|#

Does the hemp car produce exhaust, and is that exhaust beneficial? Say for easing pain or giving me the munchies?

|2.12.09 @ 1:19PM|#

What the hell is a "guaranteed market"? If markets were a sure thing, then every boy and his dog would be billionaires.

Taktix®|2.12.09 @ 2:30PM|#

...a guaranteed market," said Amy Myers Jaffe...

Anyone who makes this statement is either trying to sign you up for a pyramid scheme or is simply a complete economic idiot...

Kolohe|2.12.09 @ 3:14PM|#

Y'all are taking the 'guaranteed market' statement out of context.

She's saying the ethanol producers have a guaranteed market *because* of government action, in the same way that Northrup Grumman has a guaranteed market for aircraft carriers.

|2.12.09 @ 4:47PM|#

mandated corn ethanol use is a really terrible idea that helped spike food prices worldwide last year.

True, but commodities speculation was also a huge factor.
Corn ethanol use is unlikely to have a large lasting effect on corn prices, because farmers will respond to the price signals by planting more corn.

It will however, increase the amount of land devoted to farming, which environmentalists ought to be concerned about.

Butthead|2.12.09 @ 10:25PM|#

Huh huh. Stimulation. Huh huh.