Ethanol is (Still) a Rip Off

I hate to use the "authority" that is Wikipedia but it's Sunday and I'm lazy, leave me alone:

One GGE of ethanol is 1.5 gallons. This volume of ethanol has the same energy content as one US gallon of gasoline. This is because a gallon of ethanol has a lower heat value or energy content (76,100 BTU) when compared to a gallon of gasoline (114,100 BTU). A 2006 University of California Berkley study, after analyzing six separate studies, concluded that producing ethanol from corn uses much less petroleum than producing gasoline.

Ordinary consumers driving a "flex-fuel" vehicle may experience a drop (~15%) in fuel mileage when using 85% ethanol products (the compression ratio is fixed mechanically, and electronic sensors can only modify the timing of the spark and allow the electronic fuel injectors to provide more of the reduced energy-content fuel).

So what this means is that they are essentially diluting our good gas with corn (and you know what that does to your intestines, imagine what it does to your car) and ripping us off. Gas is no cheaper than when ethanol technology made its way to our gas tanks and, in fact, has surged on despite mandatory ethanol minimums. Of course, the goal never was cheaper gas for Americans. The corn mafia could give a rat's ass how many miles we get to the gallon. Washington certainly doesn't care and in fact would probably love to see our engines shredded in a shorter period of time so we're forced to buy new Fords even sooner than we would otherwise (American cars suck, people, how many times do I have to say this?) so Bernanke can tout his economy-saving prowess.

As an added bonus (sarcasm), corn prices are up (shock), further adding to the clusterfuck that is burning food for fuel. Yes ethanol is renewable in a way petroleum isn't but does that mean we should be burning food?

Ethanol futures gained for a second day in Chicago on concern that production costs will increase because of higher export demand for corn.

Futures advanced as corn rose to a three-week high, adding to speculation that distilleries will have to compete with foreign buyers to secure supply of the grain, which is used to make ethanol in the U.S. One bushel of corn makes about 2.75 gallons of the biofuel.

“Corn’s been up and that’s helping to support it,” said Will Babler, a broker at First Capitol Risk Management in Galena, Illinois.

But wait, what happens to our favorite High Fructose Gas Tank Syrup now that Congress is finally done paying refiners 45¢ a gallon to muddy up our fuel supply?

After 30 years of government largesse that would have made even Nancy Pelosi blush, Congress in December let expire the roughly $6 billion annual subsidy for corn ethanol. That's bad news for the big refiners that were paid 45¢ for each gallon of corn ethanol they blended into gasoline supplies. But it's good news for those worried about the "food-fuel dilemma" when the demand for corn to make ethanol has been raising the price of some foods.

Not so fast. It turns out that while the subsidies are gone, U.S. law still requires oil refiners to blend corn ethanol into fuel -- some 12.5 billion gallons this year and at least 15 billion gallons by 2015. That's still a small portion compared with the 133 billion gallons of gasoline that the U.S. Energy Information Administration estimates Americans will burn this year, but nonetheless enough to keep upward pressure on corn prices. That law needs to change, argues Jeremy Grantham -- who oversees nearly $100 billion at his Boston investment firm, is known for calling both the dotcom and housing bubbles and is an environmentalist to boot. "It [U.S. ethanol policy] is truly diabolical," he says. "The subsidy was decoration. The mandate is the villain here."

DAMN. You mean we're still stuck with corn in our gas tanks? With the government support gone, you can only imagine who is going to subsidize the refiners now.

Here's what's funny. As is, we have 10% ethanol in our gas. The government requires a minimum amount of this to be sold in each state, whether you drive a 1988 Toyota Tercel or a 2012 BMW. Good luck finding a station that actually sells real gasoline. Although anyone with an engine knows that ethanol gums up fuel injectors, there's nothing we can do if every station in town sells the bad stuff. Here's the funny part... if the mix is changed to 85/15 (which many of us have access to), we're warned that 15% ethanol "may cause damage" and could actually be a federal crime to use in engines that are not built to handle it. Really? 5% makes all that much more of a difference? At 10% it's all good but 5% more and it's suddenly an engine-destroying demon?

And don't even think about letting your car sit for more than 3 months with a tank full of corn gas.

Of all the insidious lobbying efforts going on right now in my hometown, I'd have to say this is the most disgusting, backwards and villainous of all.

Jr Deputy Accountant

Some say he’s half man half fish, others say he’s more of a seventy/thirty split. Either way he’s a fishy bastard.


AGW realist said...

Add to this the fact bad crop years spike energy prices thanks to the food-for-fuel mandate. It's all about defining who makes money and who pays, by force.

I'm pretty sure the last tank full of "premium" gasoline in my 1925 Ford lake racer had water in it. I had to re-time the car and spray ether into the carbs to get it started. Never had that problem before the ethanol mandate. I managed to find a gas station ten miles from the house that sells non-ethanol premium. That's where you'll find me.

I've driven all sorts of cars all over the world the past two years and I remain unimpressed by most foreign cars. The ones that do impress cost way too much. I'm not sure which American cars of which you speak, but mine don't suck. Granted, a considerable number of them were built before World War II.

Anonymous said...

You forgot to add the cost in American blood, gold and lost character that is the result of protecting our supply of middle east oil

W.C. Varones said...

You forgot to add the cost in American blood, gold...

Ha ha! Gold! That's a good one!

We pay in Bernanke Bucks. If we had to pay in actual gold for the wars we start, we would have run out of gold long before the last few wars.

Not that imperialist warmongers like Bush and Obama would quit starting wars just because we didn't need oil...