Corn!

The problem doesn't appear to be in the growing - I was surprised to learn when I read this article a few weeks ago that one company controls the vast majority of the corn meal market in Mexico.

OOOOOOPS. Make that one bushel of corn weighs 56 pounds. Recalculate. Dennis

How do you feel about letting the market run it, Dave? Right now, the ethanol business is living off of several federal subsidies.

Now that Archer Daniels Midland controls only around 20% of corn ethanol production (down from 40+% just a decade or so ago), I feel a lot better about corn ethanol. There are 112 distillation plants in the US now, according to one estimate, and most are owned by small farm cooperatives. I don't mind a bit of subsidy to help get that off the ground, but how long is the subsidy supposed to last?

-- Ed Huntress

Some is being made from beets. The most efficient source right now is sugar cane. They even burn the bagesse for distillation fuel. Brazil runs it all pretty darned well, with net energy production something more than twice what we're getting from corn

But we're stuck with corn and some beets until the cellulosic process reaches commercial viability.

-- Ed Huntress

If ADM can't corner the ethanol market, then tortillas may be the next best thing. ADM recently bought a stake in Gruma, which controls over 70% of the corn meal market in Mexico. (See my other post in this thread.)

Ned Simmons

No doubt they'll corner everything they can. An article I read last week (_The Economist_?) is where I got the 40%/20% figures. Apparently the capital cost for making corn ethanol is pretty reasonable, which has allowed a lot of small players to get in. Also, the distribution costs apparently favor local, widely distributed distillation operations.

I consider all of that good news, because I've followed ADM for the last three decades, and I consider them to be the scum of the earth. They don't care a damn about farmers, oil independence, or the USA. And they have the lobbyists to get what they want, as they've proven time and time again.

-- Ed Huntress

How does that make them different than any other business, or even our government?

They're just worse. They do business largely by manipulating taxes and subsidies.

-- Ed Huntress

================= It is exactly this that is killing the "free" market, because it is now impossible to tell what anything actually costs.

In the case of farm subsidies or tax breaks on ethenol/gasoline, it is not too hard to compute, but for oil and "free trade" it is impossible to more than roughly estimate.

For example, most refineries in the United States have some sort of tax cap, tax increment financing district, or some other mechanism that limits their local property taxes. They have special federal tax treatments, and the Federal government indirectly expends enormous sums of money on military operations to protect their operations/profits such as ground wars and naval escorts.

I am sure that if the typical American could clearly see how much cheap oil and cheap goods are actually costing them, particularly when the costs of "E-Z" financing are included (even when they pay cash), there would be drastic changes in consumption patterns/levels.

Unka George (George McDuffee) ============================= ...and at the end of the fight is a tombstone white with the name of the late deceased, and the epitaph drear: ?A Fool lies here, who tried to hustle the East.?

Rudyard Kipling The Naulahka, ch. 5, heading (1892).

OK, that makes them worse than most businesses, but not the government. :)

Free trade? And where is that supposed to exist?

Figuring out the direct and indirect subsidies on anything in today's globalized economy is impossible. At least, it's subject to so much disagreement and variation among countries that it could never be fully resolved. It really makes it tough to say anything conclusive about one country's "fairness" versus another.

That is to say, I agree with what you're saying.

-- Ed Huntress

Like the trillions spent in Iraq to keep the oil flowing?

that's something i've been wondering. they say biodiesel etc. uses more energy to manufacture than it produces. i've wondered if when they calculate the comparison price to oil/gasoline do they include at least SOME part of the cost of a standing military/this war, to make a fair comparison. "trillions", i would've assumed it was "billions" but that's still a lot.

b.w.

Trillions? Got a cite for that?

=============== While I am not the one that suggested trillions of dollars, it is doubtful that any authoritative and inclusive citation exists, if for no other reason that this is an ongoing and open-ended operation, the consequences of which are not yet known, and there is disagreement as to which expenses should be included.

It is clearly an enormous amount of money that the US government does *NOT* have, so at the least we must add in the "E-Z" credit card finance charges.

"Opportunity Cost," that is the money the economy will lose because investment was diverted from infrastructure maintenance/improvement and basic/applied research are also very significant, and may be critical in areas such as public health.

Another significant but somewhat arbitrary factor is "Good Will," which the US government continues to dissipate at an alarming rate. The US government's reputation in other countries for honesty and "fair dealing" has also been seriously impaired, and in the final analysis this may be the highest cost of all.

Thus the consequential costs are several times the direct cost of beans, boots and bullets, and the total is well into the trillions Although the exact amount will most likely never be determined, it will never the less have to be paid.

Unka George (George McDuffee) ============================= ...and at the end of the fight is a tombstone white with the name of the late deceased, and the epitaph drear: ?A Fool lies here, who tried to hustle the East.?

Rudyard Kipling The Naulahka, ch. 5, heading (1892).

========== Again a spine problem in Congress.

There is no reason a law cannot be enacted prohibiting any one person or corporation from owning/controlling more than 5% of domestic ethanol production and/or banning vertical integration.

Don't hold your breath...

Unka George (George McDuffee) ============================= ...and at the end of the fight is a tombstone white with the name of the late deceased, and the epitaph drear: ?A Fool lies here, who tried to hustle the East.?

Rudyard Kipling The Naulahka, ch. 5, heading (1892).

And, "they" would be wrong. Biodiesel requires less energy to produce than ethanol. If "they" said that ethanol requires more energy to make than it produces, they'd still be wrong.

Come on, now, Unka George, by now you should know that a favorite tactic of the wingnuts is to demand a cite, secure in the knowledge that, in the off chance you can find one, they can produce an official lie that contradicts it.

A staggering cost which is substantially being ignored is the cost of caring for those wounded as a result of this mis-begotten war. A particularly egregious example which appeared in the news a couple weeks ago revolves around a young professor of economics who did a study attempting to approximate these costs. She was quickly attacked by minions of the Pentagon who demanded to know where she got her numbers. She replied that they'd come from the VA website. Now these numbers were over double what the Pentagon had claimed. It seems that the Pentagon counted only those wounded in direct combat. The VA counted those maimed for any reason. In other words, if the lead vehicle of a convoy hit an IED, those wounded in the blast would be counted. If the driver of another vehicle, trying to get away, lost control and flipped it, his injured passengers would not be counted by the Pentagon, but the VA, recognizing that they were equally in need of and entitled to care, included them in their figures.

Shortly thereafter, the VA figures were revised to match the Pentagon figures.

And there is what goes beyond the costs covered by official fudging and obfuscation. There are the costs borne by a disabled soldier's aging parents in caring for their son or daughter. There is the lost income due to a partially disabled one's inability to be fully employed (along with the consequent lost tax revenue...). There is the cost to the employer in accommodating the disability.

The list is endless...

Jerry

"Never trust an accountant whose computer was built by Magic Chef."

Yeah. It's tough to get honest energy audits on any of the alternative fuels, but most sources (including the DOE) say that biodiesel is the best of the lot in terms of net energy. There is still controversy over corn-based ethanol, but the preponderance of sources now seem to agree that there's a net positive of more than 20% with present technology.

-- Ed Huntress