I wonder if the politicians in Mississippi know how to read or listen, as the news of the hundreds of millions wasted on so-called renewable energy by the Obama administration doesn't seemed to have reached the deep south, with Mississippi throwing around $75 million in low interest loans for the building of cellulosic biofuels plant in the state.
They also have offered up $155 million in tax incentives to get the boondoggle going. What a criminal waste of the taxpayer's money. And yes it is taxpayers money because they're the ones that will have to pay for it when it crashes and burns.
The company confisgating the state loan is named Virdia, which just changed its name from HCL Cleantech. They take natural matter such as woodchips and other plant matter and convert it into sugar, which is then converted into ethanol.
Virdia CEO Philippe Lavielle admits the amount of money offered by the state, along with $10 million in venture debt and another $20 million in venture capital equity isn't enough to build a viable plant that can successfully operate at a commercial level and compete against corn-based ethanol. He confessed concerning the money that "it takes more than that. It takes a chemical firm that will want to build it to have access to sugars for their own conversion processes."
According to Lavielle, the costs of building a commerical plant which would produce about 500,000 tons of sugar on an annual basis is $380 million. That could supply a 25-million-gallon ethanol plant, according to the CEO.
Another negative factor and complication to the success of such a plant would be the need for it to be located close to a chemical plant or a paper mill so it could be able to tap into the power infrastructure serving those businesses, and in the case of the paper mill, to be able to use the existing equipment for handling wood. Lavielle says it'll take up to three years for a plant like that to be built.
Historically capital requirements and projections are almost without exception much higher and take a lot longer to reach the expected goals.
To be able to compete with the scammy and damaging corn-based ethanol, Lavielle says corn would have to remain at a price of over $4 a bushel. While corn prices in the United States are higher now because of droughts in Argentina and Brazil which are expected to generate more exports for U.S. corn, that's a temporary situation, and corn could easily plummet below the $4 mark very rapidly.
Add to this the cost factors associated with cellulosic, which includes the requirement of having a wood production facility very close or the cost of shipping wood and plant matter to the facility soars.
Looking at the overall picture, ethanol, no matter what the form, is a waste of valuable time and money.
New discoveries of oil and gas shale, along with the technology to extract it from the rock, has changed the entire energy game in the United States, which now has enough energy to last possibly for centuries.
The known reserves already are estimated to last for well over a century in the United States, and there are many areas where it is unknown as to how much there actually is in America, let alone across the world. That's the future of American energy independence, not these idiotic and irresponsible projects that are truly nothing more than a scam. Ethanol, whether produced by corn, wood chips or plant material, is nothing more than that.
The people of Mississippi should be outraged over this travesty, but they're surely drinking the kool aide of jobs being created, even though not too long afterwards when the company declares bankruptcy, they'll all be lost.
Wednesday, March 7, 2012
Saturday, March 12, 2011
Bill to Stop U.S. Ethanol Credit Needs to Pass
The bill to stop the outrageous tax credit for the destructive production of corn ethanol needs be supported and passed, which will save taxpayers $6 billion a year and get us out of a policy which is as damaging to the environment as any there is.
Congressional opponents of the $6-billion-a-year blenders credit see eliminating it as a no-brainer, while stalwart advocates are likely to put up a fight
WASHINGTON—It turns out Sens. Ben Cardin and Tom Coburn have more in common than six-letter last names that begin with the letter "C."
The Maryland Democrat and Oklahoma Republican have drawn a substantially higher number of cheers than jeers for introducing bipartisan legislation this week to repeal a tax credit on corn ethanol that could save taxpayers roughly $6 billion per year.
Both senators refer to the blenders tax credit as costly and ineffective in a joint statement. What's officially known as the Volumetric Ethanol Excise Tax Credit, or VEETC, pays 45 cents for each blended gallon.
Coburn, a conservative long known as a fiscal watchdog, labeled the ethanol tax credit as "bad economic policy, bad energy policy and bad environmental policy."
"The $6 billion we waste every year on corporate welfare should instead stay in taxpayers' pockets where it can be used to spur innovation, stimulate growth and create jobs," the conservative Oklahoman said Wednesday.
"I'm hopeful my colleagues on both sides of the aisle will take a stand against business-as-usual special interest giveaways and eliminate this wasteful and harmful subsidy."
Source
Congressional opponents of the $6-billion-a-year blenders credit see eliminating it as a no-brainer, while stalwart advocates are likely to put up a fight
WASHINGTON—It turns out Sens. Ben Cardin and Tom Coburn have more in common than six-letter last names that begin with the letter "C."
The Maryland Democrat and Oklahoma Republican have drawn a substantially higher number of cheers than jeers for introducing bipartisan legislation this week to repeal a tax credit on corn ethanol that could save taxpayers roughly $6 billion per year.
Both senators refer to the blenders tax credit as costly and ineffective in a joint statement. What's officially known as the Volumetric Ethanol Excise Tax Credit, or VEETC, pays 45 cents for each blended gallon.
Coburn, a conservative long known as a fiscal watchdog, labeled the ethanol tax credit as "bad economic policy, bad energy policy and bad environmental policy."
"The $6 billion we waste every year on corporate welfare should instead stay in taxpayers' pockets where it can be used to spur innovation, stimulate growth and create jobs," the conservative Oklahoman said Wednesday.
"I'm hopeful my colleagues on both sides of the aisle will take a stand against business-as-usual special interest giveaways and eliminate this wasteful and harmful subsidy."
Source
Friday, March 4, 2011
Get Rid of Ethanol Subsidies, Save the World
America's farmers are closely eyeing commodity prices to help them decide what crops they should plant in their fields.
For American farmers, the options look great economically. Soybean futures are fetching 44 percent more than last year; wheat futures now get 69 percent more than a year ago and corn futures are up a full 92 percent.
But for buyers, especially in countries like China, India, Tunisia, Philippines, Egypt, Jordan, Indonesia and Pakistan where food is a full third or more of consumptive income, this spike in food prices is an economic crisis.
Many factors contribute to the world's food emergency. The most severe come from natural causes: drought in Argentina, China and Russia; floods in Australia, Canada and Pakistan.
But there is a set of man-made policies that is having a particularly pernicious impact on marginal world food prices while simultaneously costing the U.S. treasury more than $5 billion annually.
These are our policies to support the production and use of ethanol, a corn-based fuel. Congress provides a subsidy for every gallon of gasoline blended with ethanol. Congress also mandates its use.
It is true that ethanol provides a cleaner and environmentally safer octane boost than its alternatives. But it remains highly debatable whether it offers any net energy savings or any net environmental benefit.
Indeed, by the time one factors in all the petroleum-based inputs that go into ethanol's production and distribution (fertilizer, tilling, harvesting and shipping), David Pimentel at Cornell University estimates that it takes 1.3 gallons of oil to produce one gallon of ethanol.
And even if it takes, as some contend, a little less than a gallon of oil to produce a gallon of ethanol, that claim that ethanol provides environmental benefits becomes more questionable when one considers the water consumption, the fertilizer-laden run-off and pollution inherent in its production and distribution.
In the meantime, however, ethanol's mandated and subsidized use has tilted farmer's planting decisions towards corn. More and more corn is going to ethanol production. And consequently, less and less of what could be food supply is going to address the increasing world demand for food.
Ethanol is an inefficient substitute for petroleum. Subsidizing it not only costs the U.S. taxpayer over $5 billion each year, but it artificially incentivizes converting what could be food production into inefficient energy production at a time when the world is facing a most serious food crisis.
Getting rid of our nation's ethanol subsidy would help improve our country's balance sheet. But more importantly, it would eliminate an artificial price distortion contributing to a global food emergency.
Source
For American farmers, the options look great economically. Soybean futures are fetching 44 percent more than last year; wheat futures now get 69 percent more than a year ago and corn futures are up a full 92 percent.
But for buyers, especially in countries like China, India, Tunisia, Philippines, Egypt, Jordan, Indonesia and Pakistan where food is a full third or more of consumptive income, this spike in food prices is an economic crisis.
Many factors contribute to the world's food emergency. The most severe come from natural causes: drought in Argentina, China and Russia; floods in Australia, Canada and Pakistan.
But there is a set of man-made policies that is having a particularly pernicious impact on marginal world food prices while simultaneously costing the U.S. treasury more than $5 billion annually.
These are our policies to support the production and use of ethanol, a corn-based fuel. Congress provides a subsidy for every gallon of gasoline blended with ethanol. Congress also mandates its use.
It is true that ethanol provides a cleaner and environmentally safer octane boost than its alternatives. But it remains highly debatable whether it offers any net energy savings or any net environmental benefit.
Indeed, by the time one factors in all the petroleum-based inputs that go into ethanol's production and distribution (fertilizer, tilling, harvesting and shipping), David Pimentel at Cornell University estimates that it takes 1.3 gallons of oil to produce one gallon of ethanol.
And even if it takes, as some contend, a little less than a gallon of oil to produce a gallon of ethanol, that claim that ethanol provides environmental benefits becomes more questionable when one considers the water consumption, the fertilizer-laden run-off and pollution inherent in its production and distribution.
In the meantime, however, ethanol's mandated and subsidized use has tilted farmer's planting decisions towards corn. More and more corn is going to ethanol production. And consequently, less and less of what could be food supply is going to address the increasing world demand for food.
Ethanol is an inefficient substitute for petroleum. Subsidizing it not only costs the U.S. taxpayer over $5 billion each year, but it artificially incentivizes converting what could be food production into inefficient energy production at a time when the world is facing a most serious food crisis.
Getting rid of our nation's ethanol subsidy would help improve our country's balance sheet. But more importantly, it would eliminate an artificial price distortion contributing to a global food emergency.
Source
Thursday, February 24, 2011
Grassley Rightly Say Cut Budget and Ethanol Subsidies
Cutting the deficit is more important than protecting the ethanol industry if it comes to that, says Sen. Chuck Grassley, long the biofuel industry's most powerful ally in Congress.
Grassley said Tuesday that he would vote for a deficit-cutting bill even it includes two House-passed provisions that are intended to slow the ethanol industry's growth.
"As significant as it is to me because I'm a great ethanol fan, if in fact those things were in the bill to cut the deficit ... I'd have to bite the bullet," Grassley said.
A House-passed bill would cut federal spending by $60 billion this year. It includes a measure that would block the U.S. Environmental Protection Agency from increasing the amount of ethanol that can be added to gasoline from 10 percent to 15 percent. A second measure would bar subsidies for retrofitting service stations to sell higher amounts of ethanol.
Full Story
Grassley said Tuesday that he would vote for a deficit-cutting bill even it includes two House-passed provisions that are intended to slow the ethanol industry's growth.
"As significant as it is to me because I'm a great ethanol fan, if in fact those things were in the bill to cut the deficit ... I'd have to bite the bullet," Grassley said.
A House-passed bill would cut federal spending by $60 billion this year. It includes a measure that would block the U.S. Environmental Protection Agency from increasing the amount of ethanol that can be added to gasoline from 10 percent to 15 percent. A second measure would bar subsidies for retrofitting service stations to sell higher amounts of ethanol.
Full Story
Bill Clinton Says Ethanol Could Spark Riots
Former President Clinton added his voice to those with concerns about U.S. corn usage for ethanol production. In a major speech this morning to USDA’s Outlook Forum, Clinton warned that competition for food stock could impact food prices and spark food riots in developing countries.
Clinton, who now works on international development issues through his New York-based foundation, said that U.S. farmers need to be aware of the developing countries food needs as well as the domestic ethanol market. He acknowledged, however, the role of ethanol in reducing the U.S. dependence on imported fuels.
Clinton’s remarks drew immediate reaction from U.S. ethanol and corn production organizations. A statement from Growth Energy, a trade organization representing biofuel companies, noted, “We appreciate that President Clinton understands the important role American ethanol plays in reducing our dependence on foreign oil and strengthening our national security.
Full Story
Clinton, who now works on international development issues through his New York-based foundation, said that U.S. farmers need to be aware of the developing countries food needs as well as the domestic ethanol market. He acknowledged, however, the role of ethanol in reducing the U.S. dependence on imported fuels.
Clinton’s remarks drew immediate reaction from U.S. ethanol and corn production organizations. A statement from Growth Energy, a trade organization representing biofuel companies, noted, “We appreciate that President Clinton understands the important role American ethanol plays in reducing our dependence on foreign oil and strengthening our national security.
Full Story
Get Rid of Ethanol, To Consume 36 Percent of US Crop in 2011
Ethanol production is outstripping levels mandated by the government, increasing pressure on corn supplies, according to the Agriculture Department.
USDA’s chief economist, Joseph Glauber, said that that ethanol production is currently running at at more than 13.5 billion gallons on an annualized basis, well over the 12.6 billion gallons required this year by the federal renewable fuel standard. “Production margins for ethanol producers remain positive as many plants appear to have forward-priced their corn requirements below the recent market highs,” Glauber said at the USDA’s annual agricultural outlook conference.
Ethanol is likely to consume 5 billion bushels, or 36 percent, of this year’s crop.
Despite soaring corn prices and thin reserves, Agriculture Secretary Tom Vilsack told the conference there was “no reason for us to take the foot off the gas” when it comes to biofuels. “This is a great opportunity, because we can do it all. Those who suggest we cannot just simply are not betting on the American farmer and rancher.” He also pledged to aggressively push to increase U.S. ag exports.
Full Story
USDA’s chief economist, Joseph Glauber, said that that ethanol production is currently running at at more than 13.5 billion gallons on an annualized basis, well over the 12.6 billion gallons required this year by the federal renewable fuel standard. “Production margins for ethanol producers remain positive as many plants appear to have forward-priced their corn requirements below the recent market highs,” Glauber said at the USDA’s annual agricultural outlook conference.
Ethanol is likely to consume 5 billion bushels, or 36 percent, of this year’s crop.
Despite soaring corn prices and thin reserves, Agriculture Secretary Tom Vilsack told the conference there was “no reason for us to take the foot off the gas” when it comes to biofuels. “This is a great opportunity, because we can do it all. Those who suggest we cannot just simply are not betting on the American farmer and rancher.” He also pledged to aggressively push to increase U.S. ag exports.
Full Story
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