Even though Archer Danels Midland Company (ADM) reported extraordinary profits for the economic climate they're operating in, those very profits caused consternation among many industry watchers, and even resulted in JP Morgan downgrading them from their suspicions.
Ethanol has been a huge downward pull on the company, as low gas prices and demand make it a disastrous sector to be operating in; and there's no quick way to get out of it. That's what happens when huge companies like Archer Daniels Midland Company suck from the government teat and then get sour milk. This is going to be the story of ethanol and companies trying to exploit taxpayer financed loopholes that give them tax credits that prop up and create an otherwise non-existent market.
Clueless Archer Daniels Midland Co CEO Patricia Woertz said during a conference call that the company didn't foresee "the depth of this current economic crisis or the decline in gasoline demand.” Strange, even a general bystander saw that the economic pressure would cause consumers to stop driving and traveling as much. That comment doesn't make much sense.
As far as the drag that ethanol had on Archer Daniel Midland Company profits, losses from ethanol, and to a smaller degree from other bioproducts came to a huge $111 million just for the three months ending in December.
Also during the call, the third-largest U.S. ethanol producer, Archer Daniels Midland Co., siad that the ethanol business is "challenging." Duh! Ethanol isn't just challenging, it's ignorant and needs to be dropped as a taxpayer subsidized socialist project it is.
What this shows is that any something happens in the economy to slow it down, ethanol will hit companies hard, along with its workers and investors, and cause everyone pain. All that because the government has blocked oil companies from drilling the hundreds of billions of barrels of proven oil reserves under U.S. land or coastlines.
We need to forget the misguided and criminal renewable fuels standard and forget this waste of time and billions of dollars on pursuing a pipe dream just so the government and its sycophants can say they're doing something about the alleged energy crisis that only exists because of government regulations creating it.
So far ethanol production capacity has plunged by 21 percent, that much being shut down in the U.S. as the numbers don't make sense. Ethanol capacity has fallen from 12.9 billion to 10.2 billion.
The response of Archer Daniels Midland Company to the disaster? They're going to make more ethanol facilities, as they're close to finishing two more ethanol plants in Cedar Rapids, Iowa and Columbus, Nebraska. What a waste of investors' money.
According to Archer Daniels Midland Company Chief Executive Patricia Woertz, profits for the company came for the most part from their agricultural services division, surging by $143 million for the quarter.
Even so, most of those profits came from successful hedging that locked in crop prices, giving them a big edge over their competitors who didn't fare nearly as well. The problem of course is there was some luck involved with those successful commodity futures hedges, and it isn't something that is reproducible going forward.
One successful element that can be reproduced for the ethanol company is the huge fee increases it charged for shipping grains overseas. That is the only bright spot for the immediate future that gives credence to the otherwise dubious profit gains of 24 percent, which was very suspect considering the rest of Archer Daniels Midland Company competitors did so poorly.
Analysts were not so kind with Archer Daniels Midland Company Chief Executive Patricia Woertz when she refused to identify where the profits specifically came from, with some even saying investors should be wary when they aren't allowed to look under the hood to see what makes it work.
That's another way of saying that there was a lot of luck involved, as when asked a number of times, Woertz refused to let it be known what made the company so profitable in such terrible conditions.
Again, if it was something reproducible, it would have been quickly identified by Woertz, as it would have been a competitive advantage which would have caused Archer Daniels Midland Company stock to surge ahead of its competitors.
So while ethanol pulled down ADM stocks, what evidently looks like a lucky timing of some hedging gave the company some good numbers. That unrepeatable situation has the ADM Corporation looking good, even though ADM stock quotes are not looking as good as you would expect in these circumstances.
ADM will probably be under more pressure from the tremendous numbers just because they revealed an unusual circumstance that obviously wasn't related to operational skill and productivity. That means that the guidance given that profits will be under pressure going foward for Archer Daniels Midland will be accurate, and the downward pressure of embracing the failing ethanol industry, as well as fairly long term economic slowdown will start to affect the grain company like any other.
This profit performance was an anamoly, and Archer Daniels Midland Company and Patricia Woertz know it. This is why any ADM news going forward won't be in line with what just happened with the company. It makes you think it would have been better to have underperformed so the obvious anamoly wouldn't have been so obvious and glaring.
Now the ADM stock will be under further pressure, assuming they won't be able to repeat the lucky hedging, or increase shipping fees at the rate they have been. Put that together with ethanol pummeling the company profits, and there isn't really any good news for ADM in the near or mid future.
Showing posts with label Ethanol Challenges. Show all posts
Showing posts with label Ethanol Challenges. Show all posts
Wednesday, February 4, 2009
Saturday, January 17, 2009
Ethanol Problems Continue to Pressure Abandoning the Industry
Ethanol is becoming an increasingly controversial fuel source and problem, as the taxpayer subsidy is the only reason it can even be seriously considered as an alternative to regular gasoline.
The effect of ethanol on small engines has been a disaster, and yet proponents continue to ignore that and push for even higher levels of the mix in order to try to save the propped-up industry.
So far the basic standard has been E10, but even at that level it's harmful to owners of equipment with small engines,
With the cold weather this year, snowmobile owners have had a great opportunity to enjoy the outdoors, but the harm done by ethynol to small engines have brought them to the repair shop more often than not. Repair shop workers have said they're filled with machines waiting to be fixed because of the damage done from ethanol-ruined engines.
Other products used that are always are ruined in the repair shops at this time are snowblowers and chainsaws. Fears are the bad gas will cause even more harm in the biofuel disaster, and end up not only hurting equipment, but people as well. The danger is very real.
In the summer months all the usual power equipment we use like ATVs, lawnmowers and boats, among others, have the same survival challenge, as the engines face the same problems of their winter counterparts.
Along with starting and running problems, ethanol can also eat away at parts of the engine, effectively destroying them.
The two major problems beyond that, are the environment and food prices, which are impacted negatively from ethanol, especially corn-based ethanol. But even cellulosic ethanol won't be any better, and it'll be much more expensive, raising food prices even higher.
A recent study said oil would have to go to a price level of $233 a barrel in order for ethanol to break even.
The ethanol hoax and scam needs to be ended and put to rest. There are already numerous uprising against the misguided plan, and petitions are being signed and recommendations being made to stop the folly.
One politician even recently said that the reason we have to keep going with ethanol is because we've spent so much money on it already. That's plain nuts! You don't keep spending money in order to justify bad policies. It makes no sense at all.
Other than catering to the rich farm lobby, there's nothing good in pursuing the ethanol fiasco. The idea that jobs are being created is a fantasy. Sure you can get the loans and put construction workers together to build a plant. But like they're finding out, it's been a cruel joke on those that were given false hopes; especially the rural areas.
Outdoor equipment companies rightly assert that ethanol backers don't give an honest account fo the dangers and problems consumers will and do experience from the harmful effects of the biofuel.
Even if this weren't difficult times, ethanol would be a complete disaster, but when include the extensive damage to the equipment of people, potential bodily harm, cost of repairs, environmental inputs and higher costs of food, it's cruel to destroy people's lives continuing on with the harmful ethanol initiative.
What's the best way to protect your equipment? Don't put ethanol in them in the first place. All you'll get are more problems and headaches, along with potentially dangerous situations.
The effect of ethanol on small engines has been a disaster, and yet proponents continue to ignore that and push for even higher levels of the mix in order to try to save the propped-up industry.
So far the basic standard has been E10, but even at that level it's harmful to owners of equipment with small engines,
With the cold weather this year, snowmobile owners have had a great opportunity to enjoy the outdoors, but the harm done by ethynol to small engines have brought them to the repair shop more often than not. Repair shop workers have said they're filled with machines waiting to be fixed because of the damage done from ethanol-ruined engines.
Other products used that are always are ruined in the repair shops at this time are snowblowers and chainsaws. Fears are the bad gas will cause even more harm in the biofuel disaster, and end up not only hurting equipment, but people as well. The danger is very real.
In the summer months all the usual power equipment we use like ATVs, lawnmowers and boats, among others, have the same survival challenge, as the engines face the same problems of their winter counterparts.
Along with starting and running problems, ethanol can also eat away at parts of the engine, effectively destroying them.
The two major problems beyond that, are the environment and food prices, which are impacted negatively from ethanol, especially corn-based ethanol. But even cellulosic ethanol won't be any better, and it'll be much more expensive, raising food prices even higher.
A recent study said oil would have to go to a price level of $233 a barrel in order for ethanol to break even.
The ethanol hoax and scam needs to be ended and put to rest. There are already numerous uprising against the misguided plan, and petitions are being signed and recommendations being made to stop the folly.
One politician even recently said that the reason we have to keep going with ethanol is because we've spent so much money on it already. That's plain nuts! You don't keep spending money in order to justify bad policies. It makes no sense at all.
Other than catering to the rich farm lobby, there's nothing good in pursuing the ethanol fiasco. The idea that jobs are being created is a fantasy. Sure you can get the loans and put construction workers together to build a plant. But like they're finding out, it's been a cruel joke on those that were given false hopes; especially the rural areas.
Outdoor equipment companies rightly assert that ethanol backers don't give an honest account fo the dangers and problems consumers will and do experience from the harmful effects of the biofuel.
Even if this weren't difficult times, ethanol would be a complete disaster, but when include the extensive damage to the equipment of people, potential bodily harm, cost of repairs, environmental inputs and higher costs of food, it's cruel to destroy people's lives continuing on with the harmful ethanol initiative.
What's the best way to protect your equipment? Don't put ethanol in them in the first place. All you'll get are more problems and headaches, along with potentially dangerous situations.
Friday, October 10, 2008
Weak Economy Exposes Ethanol Subsidy Debacle
Towns across America ran hard to partake in another government scheme to buy votes through offering subsidies for the production of ethanol.
Many buildings and plans are now sitting empty and idle, while a growing number are declaring bankruptcy, or are already in the process.
While mainstream media is in love with the industry, and refuses to point out the horrid effects the misguided effort has or will produce, that doesn't stop the realities of it from happening.
Many goofy liberals even tout it as patriotic. In reality it's not patriotic, it's idiotic. Not only that, even though it's increasingly apparent that it's a terrible idea and will have more negative impacts than positive, it's now becoming close to being embraced as a religion by liberals, and they are clinging to it like it's their god, rather than the folly it is.
The weak global and U.S. economy has exposed the weakness of the debacle, and that's the reason so many ethanol projects are shuttering their doors.
The reason it's faltering is that people couldn't care less about it, and are starting to understand the extraordinary costs related to forcing upon them.
A large number of these attempts have partly come from taxpayer money as well as subsidies, and that has in many cases been money thrown down the drain. It's past time for the government to be involved with this stupidity and let the market decide what type of fuel and energy they want to use.
For now, in America we have billions of barrels of oil available for use. We need to drill and retrieve that for our fuel before we do more stupid things that not only cost poor people around the world from soaring food costs, but the damage the pursuit is doing to the environment.
What's worse about all this is many small towns joined the bandwagon, hoping it would produce some jobs for the communities. Now they have empty buildings and ruined dreams as the fantasy of ethanol being some type of savior to the community has come crashing to the ground.
Yet in the midst of the government-induced economic crisis we're now in, they still hold to devastating and disastrous ideas that interfere in markets and destroy the lives of unsuspecting people.
Related Stories:
U.S. Ethanol Subsidies to Keep Food Prices High Everywhere
More Reasons to Drop the Ethanol Nonsense
Ethanol no more than Heavily Subsidized Cash Crop Supported by Powerful Lobby
Corn Farmers in Denial over Taking Responsibility for High Cost of Food
Is U.S. Government Responding Quickly Enough to the Ethanol Disaster?
Tensions Continue Building as Ethanol Continues to Cause Increase in Corn, Food Prices
Many buildings and plans are now sitting empty and idle, while a growing number are declaring bankruptcy, or are already in the process.
While mainstream media is in love with the industry, and refuses to point out the horrid effects the misguided effort has or will produce, that doesn't stop the realities of it from happening.
Many goofy liberals even tout it as patriotic. In reality it's not patriotic, it's idiotic. Not only that, even though it's increasingly apparent that it's a terrible idea and will have more negative impacts than positive, it's now becoming close to being embraced as a religion by liberals, and they are clinging to it like it's their god, rather than the folly it is.
The weak global and U.S. economy has exposed the weakness of the debacle, and that's the reason so many ethanol projects are shuttering their doors.
The reason it's faltering is that people couldn't care less about it, and are starting to understand the extraordinary costs related to forcing upon them.
A large number of these attempts have partly come from taxpayer money as well as subsidies, and that has in many cases been money thrown down the drain. It's past time for the government to be involved with this stupidity and let the market decide what type of fuel and energy they want to use.
For now, in America we have billions of barrels of oil available for use. We need to drill and retrieve that for our fuel before we do more stupid things that not only cost poor people around the world from soaring food costs, but the damage the pursuit is doing to the environment.
What's worse about all this is many small towns joined the bandwagon, hoping it would produce some jobs for the communities. Now they have empty buildings and ruined dreams as the fantasy of ethanol being some type of savior to the community has come crashing to the ground.
Yet in the midst of the government-induced economic crisis we're now in, they still hold to devastating and disastrous ideas that interfere in markets and destroy the lives of unsuspecting people.
Related Stories:
U.S. Ethanol Subsidies to Keep Food Prices High Everywhere
More Reasons to Drop the Ethanol Nonsense
Ethanol no more than Heavily Subsidized Cash Crop Supported by Powerful Lobby
Corn Farmers in Denial over Taking Responsibility for High Cost of Food
Is U.S. Government Responding Quickly Enough to the Ethanol Disaster?
Tensions Continue Building as Ethanol Continues to Cause Increase in Corn, Food Prices
Thursday, August 21, 2008
More Reasons to Free us from the Ethanol Devil
The growing number of reasons to drop ethanol and its government subsidies continues to reveal the utter stupidity of pursuing ethanol as a significant source of renewable fuel.
As people continue to deconstruct the arguments made in favor of ethanol, it's getting clearer and clearer it's an initiative pushed by special interest groups who created fear of foreign energy dependency at the cost of sanity.
While we obviously need to look at real alternatives in the years ahead, we are far from being in some type of serious trouble, as the billions of barrels of oil under American soil, as well as under its oceans attest to.
Environmentalists and opportunist have created this false problem by panicking people into believing we're on the cusp of a worldwide disaster, when in reality there's enough oil to last for decades ... if not longer.
Recent discoveries in Brazilian waters, along with the huge oil deposits in the Canadian oil sands are also proof of the need to slow down and take into account all the effects and unintended consequences that always accompany decisions that are motivated by fear and political expediency.
As people continue to deconstruct the arguments made in favor of ethanol, it's getting clearer and clearer it's an initiative pushed by special interest groups who created fear of foreign energy dependency at the cost of sanity.
While we obviously need to look at real alternatives in the years ahead, we are far from being in some type of serious trouble, as the billions of barrels of oil under American soil, as well as under its oceans attest to.
Environmentalists and opportunist have created this false problem by panicking people into believing we're on the cusp of a worldwide disaster, when in reality there's enough oil to last for decades ... if not longer.
Recent discoveries in Brazilian waters, along with the huge oil deposits in the Canadian oil sands are also proof of the need to slow down and take into account all the effects and unintended consequences that always accompany decisions that are motivated by fear and political expediency.
Wednesday, August 20, 2008
U.S. Ethanol Subsidies to Keep Food Prices High Everywhere
The outrageous subsidy for corn-based ethanol in the U.S. continues to batter consumers across the world, as even though other commodities have been dropping, food prices are expected to stay the same, and in a number of cases - rise.
For retail food prices in the U.S., they have been growing at a 6 percent rate this year, in contrast to the regular inflation rate at about 2 percent.
With irresponsible politicians and ongoing ignoring of stories like this by the mainstream media, the cost of food items related to corn price increases like chicken, beef and pork are projected to continue rising for the immediate future. The majority of that related to the misguided and terrible idea of subsidizing big corporate corn farmers so it can look like the government is doing something related to energy.
The disaster will continue until the story is continually reported on and the reality of the consequences understood by the public.
The next meat to be affected will be chicken, which so far producers haven't passed on the higher feed costs to consumers, but Bill Roenigk, senior vice president of the National Chicken Council said that's all about to change.
"From a consumer standpoint, more and more of these feed costs are going to be passed on and that means higher prices at the supermarket," said Roenigk.
All this because of the usual pressure from special interest groups with an agenda, as well as a government that continues to pass themselves off as the big daddy of the universe. Until this attitude is reined in, Americans and people around the world will continue to suffer from the continual rise in food prices.
Just like we need to drill for the billions of barrels of oil on American soil or it's coastlines, so we need to stop this outrageous subsidy that is helping no one but the huge corporate corn farmers in America, as well as some landowners cashing in on rising farmland prices.
For retail food prices in the U.S., they have been growing at a 6 percent rate this year, in contrast to the regular inflation rate at about 2 percent.
With irresponsible politicians and ongoing ignoring of stories like this by the mainstream media, the cost of food items related to corn price increases like chicken, beef and pork are projected to continue rising for the immediate future. The majority of that related to the misguided and terrible idea of subsidizing big corporate corn farmers so it can look like the government is doing something related to energy.
The disaster will continue until the story is continually reported on and the reality of the consequences understood by the public.
The next meat to be affected will be chicken, which so far producers haven't passed on the higher feed costs to consumers, but Bill Roenigk, senior vice president of the National Chicken Council said that's all about to change.
"From a consumer standpoint, more and more of these feed costs are going to be passed on and that means higher prices at the supermarket," said Roenigk.
All this because of the usual pressure from special interest groups with an agenda, as well as a government that continues to pass themselves off as the big daddy of the universe. Until this attitude is reined in, Americans and people around the world will continue to suffer from the continual rise in food prices.
Just like we need to drill for the billions of barrels of oil on American soil or it's coastlines, so we need to stop this outrageous subsidy that is helping no one but the huge corporate corn farmers in America, as well as some landowners cashing in on rising farmland prices.
Tuesday, August 19, 2008
Battle over Ethanol Continues: Resistance Grows
Cellulosic Ethanol turning into fight
Is Ethanol a Boon or Drain on Our Economy?
Big Horn Basin Ethanol puts brakes on new plant
Minus microphones, ethanol critics still have their say
Texas Gov Calls Ethanol Mandate a 'Scam'
Ethanol blend petrol not much healthier
Ethanol producers say they didn't cause spike
What are the future of biofuels?
Is Ethanol a Boon or Drain on Our Economy?
Big Horn Basin Ethanol puts brakes on new plant
Minus microphones, ethanol critics still have their say
Texas Gov Calls Ethanol Mandate a 'Scam'
Ethanol blend petrol not much healthier
Ethanol producers say they didn't cause spike
What are the future of biofuels?
Tuesday, August 5, 2008
Archer Daniels Midland Co. Acknowledges Slowdown in Agricultural Products, Especially Ethanol-related
Archer Daniels Midland (ADM) is the third-largest ethanol producer in the U.S., and the slowing demand for corn-based ethanol has had a significant impact on the company's performance for the quarter. A number of producers have stopped or closed expansion plans in response to the falling demand. Corn prices have also responded accordingly, falling to four-month low of $5.3625 a bushel today.
John Rice, executive vice-president commercial and production, attempting to shore up the company's stock said he believes the price and demand pressures are largely limited to North America, citing Asian sales are continuing to grow; although he was thinking in terms of meat there rather than ethanol-related consumption.
But he also acknowledged the drop in demand for palm oil was also having a significant effect on the margins of the company.
Rice added concerning the growing push to offer waivers for the ethanol mandate as something he's not too worried about. "We're already blending over the mandate right now, so even if there is a waiver (from the federal mandate) we don't see ethanol demand slowing down," said Rice.
If this was only connected to waivers, I may agree with Rice, but there is a growing resistance to the subsidizing and encouragement of corn-based ethanol, and if it continues to grow, like it seems it will, we could see some significant changes in direction for that commodity. That could have adverse effects on ADM. Ethanol Fix of course hopes that happens, as it's doing much more harm than good.
As far as the share price of ADM, it has plummeted by 40 percent since May, as commodity price concerns continue to hammer the profits and growth of the company.
Profits in the fourth quarter fell by 61 percent for the company, as market demand for their products continued to fall.
Share price also missed analysts' expectations by a large margin, reaching only 58 cents a share, while analysts were looking for 67 cents a share. Net income came in at $372 million for the quarter ending June 30.
Revenue for the quarter did rise by $21.8 billion, with about 90 percent of that attributed to higher commodity prices and increased volumes.
John Rice, executive vice-president commercial and production, attempting to shore up the company's stock said he believes the price and demand pressures are largely limited to North America, citing Asian sales are continuing to grow; although he was thinking in terms of meat there rather than ethanol-related consumption.
But he also acknowledged the drop in demand for palm oil was also having a significant effect on the margins of the company.
Rice added concerning the growing push to offer waivers for the ethanol mandate as something he's not too worried about. "We're already blending over the mandate right now, so even if there is a waiver (from the federal mandate) we don't see ethanol demand slowing down," said Rice.
If this was only connected to waivers, I may agree with Rice, but there is a growing resistance to the subsidizing and encouragement of corn-based ethanol, and if it continues to grow, like it seems it will, we could see some significant changes in direction for that commodity. That could have adverse effects on ADM. Ethanol Fix of course hopes that happens, as it's doing much more harm than good.
As far as the share price of ADM, it has plummeted by 40 percent since May, as commodity price concerns continue to hammer the profits and growth of the company.
Profits in the fourth quarter fell by 61 percent for the company, as market demand for their products continued to fall.
Share price also missed analysts' expectations by a large margin, reaching only 58 cents a share, while analysts were looking for 67 cents a share. Net income came in at $372 million for the quarter ending June 30.
Revenue for the quarter did rise by $21.8 billion, with about 90 percent of that attributed to higher commodity prices and increased volumes.
Sunday, July 20, 2008
Ethanol no more than Heavily Subsidized Cash Crop Supported by Powerful Lobby
So said one writer recently, and I think he's right.
While the usual proliferation of polls - that can no longer be trusted - have been recently thrown out as evidence the American people are behind the corn-based ethanol fiasco, it's only because of the way the poll is worded, as well as marketing campaigns from the dubious, but powerful corn lobby.
The rise in food prices directly related to the overgrowing and overuse of corn, has resulted in less acreage for other crops, and higher costs of seed as well. Some places in the world have dramatic food shortages as a result of this politically motivated, misguided policy.
Another less-than-honest reality is the performance of ethanol, which is far less productive than regular gasoline, and takes much more to make up the lower mileage difference ethanol gets.
As Bob Sommer, writing for Midwest Voices said, "... as long as every politician, Republican or Democrat, who sets foot in Iowa or Nebraska or any corn-producing state thinks the way to solve the energy and climate crises—and get elected in the bargain—is to drink the ethanol Kool-Aid, our future will look dim indeed."
Many of the polls I've seen in support of ethanol have come from ethanol-backed coalitions that have financial stakes in the continued tax-payer subsidy of the alternative fuel. Here's one as an example.
Thursday, May 1, 2008
Corn Farmers in Denial over Taking Responsibility for High Cost of Food
In an extremely pathetic assertion, the president of the National Corn Growers Association, Rick Tolman, said this about rising food prices: "bottom line, there's been a very clever marketing disinformation campaign directed at bio fuels for those with deep pockets."
Here's this organization representing huge, corporate farmers, who are subsidized by taxpayer dollars saying other companies with a lot of money are spreading disinformation.
All these big corporate farmers are fighting is losing the tax dollars they're getting to grow corn that is causing a lot of pain in the pocketbook of consumers who don't only pay for it with their taxes, but worse, through higher food prices.
Corn-based ethanol is a debacle that needs to be stopped now. The assertion that cellulosic ethanol is going to be the answer is also smoke in the wind. Not only is it years away in coming, if it ever does, but it's also far more expensive than corn-based ethanol is.
What was thought to be a slam dunk by politicians, subsidy-loving corporate farmers and environmentalists, is now becoming a destructive power against human beings. It simply needs to be stopped and dropped right now!
Here's this organization representing huge, corporate farmers, who are subsidized by taxpayer dollars saying other companies with a lot of money are spreading disinformation.
All these big corporate farmers are fighting is losing the tax dollars they're getting to grow corn that is causing a lot of pain in the pocketbook of consumers who don't only pay for it with their taxes, but worse, through higher food prices.
Corn-based ethanol is a debacle that needs to be stopped now. The assertion that cellulosic ethanol is going to be the answer is also smoke in the wind. Not only is it years away in coming, if it ever does, but it's also far more expensive than corn-based ethanol is.
What was thought to be a slam dunk by politicians, subsidy-loving corporate farmers and environmentalists, is now becoming a destructive power against human beings. It simply needs to be stopped and dropped right now!
Friday, April 25, 2008
Texas Governor Rick Perry Seeks U.S. Ethanol Cutback Waiver
Calling the ethanol mandate of the federal government "misguided," Texas Governor Rick Perry solicited the government for a waiver on the renewable fuel standard. He's asking for it to be cut in half for Texas.
"We're diversifying our state's energy portfolio at a rapid rate, but this misguided mandate is significantly affecting Texans' family food bill," Perry said.
He added: "The artificial demand for grain-derived ethanol is devastating the livestock industry in Texas and needlessly creating a negative impact on our state's otherwise strong economy while driving up food prices around the world."
This is what almost always happens when the government enters into the marketplace. Think of the term "good intentions," and then add "unintended consequences."
These are already destroying lives of people across the world, and riots are ensuing and the government of Haiti has already fallen in response to the fallout.
"We're diversifying our state's energy portfolio at a rapid rate, but this misguided mandate is significantly affecting Texans' family food bill," Perry said.
He added: "The artificial demand for grain-derived ethanol is devastating the livestock industry in Texas and needlessly creating a negative impact on our state's otherwise strong economy while driving up food prices around the world."
This is what almost always happens when the government enters into the marketplace. Think of the term "good intentions," and then add "unintended consequences."
These are already destroying lives of people across the world, and riots are ensuing and the government of Haiti has already fallen in response to the fallout.
Sunday, April 20, 2008
Is U.S. Government Responding Quickly Enough to the Ethanol Disaster?
U.S. Energy Secretary Samuel Bodman has finally commented on the ethanol disaster resulting from the corn subsidy's given to farmers to grow it.
He said the U.S. would be "moving away gradually" from corn-based ethanol development, although there is really no alternative, as far as ethanol goes as a biofuel, because cellulosic ethanol is still far too complicated and costly to be a viable alternative.
"The reason that cellulosic fuels like ethanol are not on the market in large volumes is not because we don't know how to make it in commercial quantities," Bodman said. "The production process at present is too complex and too costly, but I am confident that we can find the way forward."
The continuing discovery of oil, along with the new way oil may be produced, offers a much better future for energy than ethanol, or any other option at this time.
Wednesday, April 16, 2008
Tensions Continue Building as Ethanol Continues to Cause Increase in Corn, Food Prices
The misguided policy of artificially creating a legal level of ethanol biofuel use is reeking havoc across the world as food and meat prices continue to soar in response to the unintended consequences.
That's always the problem when fear and torment are used as tools to push through policies built upon personal agendas.
As Paul Haugens, vice-president for Newedge Trading said, "The food-versus-fuel battle is going to get bigger and it's a political year in the United States so I don't see anyone making any changes (to ethanol policy)."
Listening to the irresponsible comments by U.S. Agriculture Secretary Ed Schafer Tuesday confirms Haugens is right, as schafer said, "energy is the big issue as we look at those food prices."
No it's not! The subsidizing of growing corn for the pet ethanol project is by far the major reason for the increase in food prices across the world.
The impact of this policy is being called "a crime against humanity" by Jean Ziegler, UN Special Rapporteur for the Right to Food; basing his assertion on the huge increase in food prices across the world.
Riots and protests are spreading globally, and the Haitian government was toppled last week because of when riots move senators in the country to fire the prime minister. It's going to get worse.
This foolish policy needs to be dropped now, as the growing number of oil discoveries show the hoax of Peak Oil is just that. There's no huge rush to get these things pushed through, as billions of barrels of oil have been discovered by Brazil, and new reserves in an area adjacent to the Canadian Sands could hold billions more. This doesn't include the billions awaiting to be taken out of the oil shales in the U.S.
Unfortunately, millions will suffer because of the newest government sponsorship of biofuels which are dubious at best, and deadly at worst.
Friday, April 11, 2008
Ethanol News Weekend Roundup
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Ethanol Being Blamed for Global Food Riots
New York Times columnist praised by Pulitzer board for 'clarity of vision' didn't foresee global food shortages that resulted from the realities of his vision.
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Article off the mark about ethanol
I haven't found one peer-reviewed scientific journal says that corn ethanol is a source of green energy. The only scientist I can imagine saying ethanol is just fine is the one who works for an ethanol company.
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'Closed-Loop' Ethanol Plant Plans On Hold
Plans for Dakota County, Nebraska's multi-million dollar "closed-loop" ethanol plant are "on hold".
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Germany cancels plans to add ethanol to petrol
Amid growing fears that biofuel farming is harming the environment and driving up world food prices, Germany cancelled on Friday plans to mix more ethanol made from plants with petrol.
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Ethanol is an environmental white elephant
I've read with interest the recent articles in the Times Union about ethanol. I was disappointed that you did not point out one fact that should raise much skepticism about the use of this product as a fuel: It produces about twice the carbon dioxide as simply burning the gasoline it replaces.
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Ethanol pollution in Gulf of Mexico
While the search for alternative fuels is in full swing in many countries in order to reduce dependency on pollution causing conventional fuels an ironic situation is emerging where the rush in the United States to produce corn-based ethanol as an alternative fuel will likely worsen pollution in the Gulf of Mexico and expand the annual ‘dead zone.’
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Ethanol Being Blamed for Global Food Riots
New York Times columnist praised by Pulitzer board for 'clarity of vision' didn't foresee global food shortages that resulted from the realities of his vision.
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Article off the mark about ethanol
I haven't found one peer-reviewed scientific journal says that corn ethanol is a source of green energy. The only scientist I can imagine saying ethanol is just fine is the one who works for an ethanol company.
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'Closed-Loop' Ethanol Plant Plans On Hold
Plans for Dakota County, Nebraska's multi-million dollar "closed-loop" ethanol plant are "on hold".
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Germany cancels plans to add ethanol to petrol
Amid growing fears that biofuel farming is harming the environment and driving up world food prices, Germany cancelled on Friday plans to mix more ethanol made from plants with petrol.
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Ethanol is an environmental white elephant
I've read with interest the recent articles in the Times Union about ethanol. I was disappointed that you did not point out one fact that should raise much skepticism about the use of this product as a fuel: It produces about twice the carbon dioxide as simply burning the gasoline it replaces.
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Ethanol pollution in Gulf of Mexico
While the search for alternative fuels is in full swing in many countries in order to reduce dependency on pollution causing conventional fuels an ironic situation is emerging where the rush in the United States to produce corn-based ethanol as an alternative fuel will likely worsen pollution in the Gulf of Mexico and expand the annual ‘dead zone.’
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Wednesday, April 9, 2008
Taxpayers Fork Out $82 Million to Range Fuels Inc. for Another Dubious Ethanol Project
More of our tax dollars are being wasted on another government-sponsored hope for utopia, as Range Fuels received $76 million from the U.S. Department of Energy, and another $6 million from the state of Georgia to help build its commercial cellulosic ethanol plant close to Soperton, Ga.
Some even have the nerve to call it "private funding." My question is: Where did the state of Georgia and the U.S. Department of Energy get their money from? So let's call it what it is: taxpayer funded.
Now the true private sector has also gotten involved, as Series B round of financing led by Passport Capital has landed another $130 million for the project.
All of this for an increasingly controversial, unproven source of bio-fuel, which is viewed by a growing number of people as causing more harm than good.
Concerning cellulosic ethanol, Range Fuels asserts its K2 process can use woody biomass for its source of ethanol, which uses 75 percent less water than corn-based ethanol. They also claim the K2 process yields far more ethanol per ton of biomass than biochemical processes.
They also say they will be able to produce ethanol at a cost far below the almost $2 per gallon it's currently produced for with corn ethanol production costs, as well as enzymatic processes.
Of course anyone can assert something in order to justify tax dollars being wasted on them.
The truth is the existing ethanol fiasco is already being discovered that it isn't worth the consequences and costs. This is why the government and others are desperately searching for an alternative before their failure is made open to the public.
Some even have the nerve to call it "private funding." My question is: Where did the state of Georgia and the U.S. Department of Energy get their money from? So let's call it what it is: taxpayer funded.
Now the true private sector has also gotten involved, as Series B round of financing led by Passport Capital has landed another $130 million for the project.
All of this for an increasingly controversial, unproven source of bio-fuel, which is viewed by a growing number of people as causing more harm than good.
Concerning cellulosic ethanol, Range Fuels asserts its K2 process can use woody biomass for its source of ethanol, which uses 75 percent less water than corn-based ethanol. They also claim the K2 process yields far more ethanol per ton of biomass than biochemical processes.
They also say they will be able to produce ethanol at a cost far below the almost $2 per gallon it's currently produced for with corn ethanol production costs, as well as enzymatic processes.
Of course anyone can assert something in order to justify tax dollars being wasted on them.
The truth is the existing ethanol fiasco is already being discovered that it isn't worth the consequences and costs. This is why the government and others are desperately searching for an alternative before their failure is made open to the public.
Friday, April 4, 2008
Keeping up with Ethanol: News Around the Web
More on the high cost of Ethanol
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Germany backs off biofuel plan
Germany's environment minister on Friday scrapped a plan to double the amount of ethanol that can be mixed into gasoline, saying that too many cars would be unable to cope with the change.
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Downside of ethanol
As spring is here, we will soon see public service announcements on when to mow the grass and when to fill our vehicle gas tanks to reduce the pollutant ozone in our atmosphere.
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Ethanol’s Unsexy Dilemma
Ethanol contains less energy than gasoline, meaning a car filled with ethanol gets fewer miles per gallon. Accounting for this energy difference, at the time of publishing, E85 was retailing for a nationwide average of $3.56 a gallon compared with $3.28 for regular gasoline, according to the Automobile Association of America.
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Pacific Ethanol reports on losses, plans for 2008
The net loss for the company's fourth quarter of 2007 was $14.7 million, up from $3.1 million the previous year, the company reported. The loss came despite sales growing from $80 million in the fourth quarter of 2006 to $130 million during the same quarter of 2007.
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Times Writers Group: Ethanol, not the greenest option
"It takes more energy to make than it produces!" "It's driving up food prices!" "It's government meddling in the market!" "Those crazy environmentalists want to force us all to buy ethanol!"
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Against the grain: What are they thinking?
All that glitters is not gold. And all that grows is not green.
That is the belated realization about grain ethanol -- in fact, about any ethanol whose feedstock is grown on cropland. Joe Romm has done a good job posting on this issue, including his report on the recent studies featured in Science magazine. I'd like to weigh in with a few additional points.
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Kernel of ethanol's problems
Ethanol producers looked for a great year as the price of gasoline rose, making it more profitable to produce. But, despite rising sales, Pacific Ethanol Inc. lost $14.4 million last year due to high prices for corn, low prices for ethanol and losses on derivatives.Higher corn yields, higher ethanol yields?
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Germany backs off biofuel plan
Germany's environment minister on Friday scrapped a plan to double the amount of ethanol that can be mixed into gasoline, saying that too many cars would be unable to cope with the change.
=====
Downside of ethanol
As spring is here, we will soon see public service announcements on when to mow the grass and when to fill our vehicle gas tanks to reduce the pollutant ozone in our atmosphere.
=====
Ethanol’s Unsexy Dilemma
Ethanol contains less energy than gasoline, meaning a car filled with ethanol gets fewer miles per gallon. Accounting for this energy difference, at the time of publishing, E85 was retailing for a nationwide average of $3.56 a gallon compared with $3.28 for regular gasoline, according to the Automobile Association of America.
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Pacific Ethanol reports on losses, plans for 2008
The net loss for the company's fourth quarter of 2007 was $14.7 million, up from $3.1 million the previous year, the company reported. The loss came despite sales growing from $80 million in the fourth quarter of 2006 to $130 million during the same quarter of 2007.
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Times Writers Group: Ethanol, not the greenest option
"It takes more energy to make than it produces!" "It's driving up food prices!" "It's government meddling in the market!" "Those crazy environmentalists want to force us all to buy ethanol!"
=====
Against the grain: What are they thinking?
All that glitters is not gold. And all that grows is not green.
That is the belated realization about grain ethanol -- in fact, about any ethanol whose feedstock is grown on cropland. Joe Romm has done a good job posting on this issue, including his report on the recent studies featured in Science magazine. I'd like to weigh in with a few additional points.
=====
Kernel of ethanol's problems
Ethanol producers looked for a great year as the price of gasoline rose, making it more profitable to produce. But, despite rising sales, Pacific Ethanol Inc. lost $14.4 million last year due to high prices for corn, low prices for ethanol and losses on derivatives.Higher corn yields, higher ethanol yields?
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Wednesday, April 2, 2008
The High Cost of Ethanol
Here's an excellent article on exposing the high cost of the government ethanol policy which may end up being one of the greatest mistakes in U.S. history.
As the writer says, "An unholy alliance of environmentalists, agribusiness, biofuel corporations and politicians" has been promoting the fuel as the answer to the alleged environmental problems which it will supposedly be the answer to.
The usual denial of the "unintended consequences is wreaking havoc on the economy, food production and, perhaps most ironically, the environment."
I've said it before on Ethanol Fix, that this is no longer related to science or environmental realities, rather it's being embraced as a religion that requires faith rather than objectivity.
Some of the huge problems related to ethanol:
Increased food prices
Subsidized Corn takes away acres from other crops, increasing those prices
Increased feed prices
Increased meat prices
Employee Layoffs
Plant Closings
Distribution Centers Closing
Pressure on water supply
Ethanol less productive than gasoline as fuel
Hurts environment
Hurts third world
Deforestation across the world
Destruction of wetlands
Destruction of grasslands
Destruction of species
Displacement of small farmers and indigienous peoples
Loss of habitats that store carbon
Razing of rain forests
Michael Grunwald, in the latest issue of Time magazine said it this way:
"Deforestation accounts for 20 percent of all current carbon emissions. So unless the world can eliminate emissions from all other sources — cars, power plants, factories, even flatulent cows — it needs to reduce deforestation or risk an environmental catastrophe. That means limiting the expansion of agriculture, a daunting task as the world's population keeps expanding. And saving forests is probably an impossibility so long as vast expanses of cropland are used to grow modest amounts of fuel. The biofuels boom, in short, is one that could haunt the planet for generations — and it's only getting started."
The so-called environmentalists are in reality backing and promoting the destruction of not only the environment, but more importantly: human beings.
As the writer says, "An unholy alliance of environmentalists, agribusiness, biofuel corporations and politicians" has been promoting the fuel as the answer to the alleged environmental problems which it will supposedly be the answer to.
The usual denial of the "unintended consequences is wreaking havoc on the economy, food production and, perhaps most ironically, the environment."
I've said it before on Ethanol Fix, that this is no longer related to science or environmental realities, rather it's being embraced as a religion that requires faith rather than objectivity.
Some of the huge problems related to ethanol:
Increased food prices
Subsidized Corn takes away acres from other crops, increasing those prices
Increased feed prices
Increased meat prices
Employee Layoffs
Plant Closings
Distribution Centers Closing
Pressure on water supply
Ethanol less productive than gasoline as fuel
Hurts environment
Hurts third world
Deforestation across the world
Destruction of wetlands
Destruction of grasslands
Destruction of species
Displacement of small farmers and indigienous peoples
Loss of habitats that store carbon
Razing of rain forests
Michael Grunwald, in the latest issue of Time magazine said it this way:
"Deforestation accounts for 20 percent of all current carbon emissions. So unless the world can eliminate emissions from all other sources — cars, power plants, factories, even flatulent cows — it needs to reduce deforestation or risk an environmental catastrophe. That means limiting the expansion of agriculture, a daunting task as the world's population keeps expanding. And saving forests is probably an impossibility so long as vast expanses of cropland are used to grow modest amounts of fuel. The biofuels boom, in short, is one that could haunt the planet for generations — and it's only getting started."
The so-called environmentalists are in reality backing and promoting the destruction of not only the environment, but more importantly: human beings.
Tuesday, April 1, 2008
Ethanol Plant Planned for Albany with $350 Million Price Tag
Plans for a new ethanol plant is in the works for Port of Albany, which will cost as much as $350 million.
Developing the plant, which will be situated on 18 acres on the west bank of the Hudson River, will be Albany Renewable Energy LLC.
The company said the ethanol plant will be able to produce up to 110 million gallons of fuel yearly.
The project is awaiting permits from the state Department of Environmental Conservation before construction will be allowed to start. That will take anywhere from 6 to 12 months said officials from the company.
It's expected to be operational by the end of 2009.
Wednesday, March 26, 2008
Is Ethanol Overrated? I think so!
Ethanol has two major factors to consider when looking at the overall industry.
One is to see it as a pure investment play, and no matter what you feel about how the industry has emerged, and some of the negative impacts it's already producing, it's still a legitimate business to you.
Second, is the way the industry has come about; whether it's really producing much benefit, is a true alternative fuel, and if in reality it can survive over the long haul.
To honestly study the industry, one must cut through a lot of misinformation and punditry to reach the facts; especially with proponents of the alternative fuel, who have close to a religious affiliation with it, to the point where to attack it is similar to attacking someone's true religious beliefs.
To me, we have to be willing to look at all aspects and sides of the industry to get a true picture of its long-term possibility as an investment, as well as if it has real possibilities in its present form to be both fuel and cost efficient.
The fact that it has to be subsidized with tax dollars to even be an industry, and mandated by law, shows the public in general doesn't care one way or the other if it is successful or used for fuel in the way proposed. It's obviously been used as a fuel additive for some time.
Now that it's causing major disruptions in the agriculture industry, and generating a lot of food inflation, people are already starting to question if it's worth the effort and cost; and rightly so.
It's the key source of inflation at the grocery store, and is having that impact all over the world. In other words, it's the poor people that will suffer again because of the unintended consequences that always come from government initiated programs like this.
Not only is there the artificial demand generated by the law to grow more corn to feed the ethanol beast, but it is causing wheat growers to move more corn into their fields, which is causing the price of wheat to rise because of a lower supply.
So, the idea is to look at these two sides of the issue as we go forward. Someone may invest in ethanol without necessarily believing it does any good - and even may cause more harm than any potential benefit - yet still make money because of the way the whole industry is set up.
At the same time, we can put it under the microscope and find out if it really is worth the time and effort to pursue. I personally think in the long term this is going to be another government program eventually dropped after billions of dollars are spent and lost because of someone bypassing the facts and turning it into a cause.
One is to see it as a pure investment play, and no matter what you feel about how the industry has emerged, and some of the negative impacts it's already producing, it's still a legitimate business to you.
Second, is the way the industry has come about; whether it's really producing much benefit, is a true alternative fuel, and if in reality it can survive over the long haul.
To honestly study the industry, one must cut through a lot of misinformation and punditry to reach the facts; especially with proponents of the alternative fuel, who have close to a religious affiliation with it, to the point where to attack it is similar to attacking someone's true religious beliefs.
To me, we have to be willing to look at all aspects and sides of the industry to get a true picture of its long-term possibility as an investment, as well as if it has real possibilities in its present form to be both fuel and cost efficient.
The fact that it has to be subsidized with tax dollars to even be an industry, and mandated by law, shows the public in general doesn't care one way or the other if it is successful or used for fuel in the way proposed. It's obviously been used as a fuel additive for some time.
Now that it's causing major disruptions in the agriculture industry, and generating a lot of food inflation, people are already starting to question if it's worth the effort and cost; and rightly so.
It's the key source of inflation at the grocery store, and is having that impact all over the world. In other words, it's the poor people that will suffer again because of the unintended consequences that always come from government initiated programs like this.
Not only is there the artificial demand generated by the law to grow more corn to feed the ethanol beast, but it is causing wheat growers to move more corn into their fields, which is causing the price of wheat to rise because of a lower supply.
So, the idea is to look at these two sides of the issue as we go forward. Someone may invest in ethanol without necessarily believing it does any good - and even may cause more harm than any potential benefit - yet still make money because of the way the whole industry is set up.
At the same time, we can put it under the microscope and find out if it really is worth the time and effort to pursue. I personally think in the long term this is going to be another government program eventually dropped after billions of dollars are spent and lost because of someone bypassing the facts and turning it into a cause.
Tuesday, March 25, 2008
Ethanex - Kansas Ethanol Company - says will File for Bankruptcy
Saying they weren't able to secure interim financing to continue operations, Ethanex Energy (OTC BB: EHTE.OB) says it has plans to file for bankruptcy.
In a federal filing on March 24, the company stated they had ceased operating, and they now have a skeleton staff of three.
This effectively ends an agreement where they were going to buy an ethanol plant in Nebraska for $50 million, which is owned by Midwest Renewable Energy.
Ethanex needed $1.5 million in short-term financing to continue operating.
In a federal filing on March 24, the company stated they had ceased operating, and they now have a skeleton staff of three.
This effectively ends an agreement where they were going to buy an ethanol plant in Nebraska for $50 million, which is owned by Midwest Renewable Energy.
Ethanex needed $1.5 million in short-term financing to continue operating.
Saturday, March 22, 2008
Ethanol Continues to Victimize Consumers through Higher Grain Costs
The taxpayer subsidies included with producing ethanol continue to take their toll on consumers, as higher grain costs are impacting the prices of a number of goods; including cereal.
An AP report said: "The cost of grain has affected a number of companies, especially those that make cereals. Grain prices have skyrocketed largely due to demand for corn used to make the alternative fuel ethanol."
Company officials for General Mills (NYSE: GIS) said it was their highly successful marketing of over several product categories that helped them fend off the high grain cost directly connected to enthanol production. They were able to successfully raise their prices this quarter without a loss of sales generated.
I wonder how long it'll last before consumers rebel in this slowing economy?
One writer asks if it makes sense to increase consumer prices over producing ethanol, "which is a suspect alternative fuel that's being used to fight a suspect phenomenon, global warming. Legislators, together with environmentalists, have created global inflation, to fight a problem that some scientists don't think exists. Does that make sense?"
That's the question that needs to be answered. The religious-like devotion to ethanol by corn farmers, some environmentalists and politicians will make it a battle to find the real truth to the ethanol equation.
When people turn it into a "religous" fervor, it's hard to separate fact from fiction, as the emotions run high concerning the "green" god.
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