Corn Based Ethanol?
- Thread starter sailsmen
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FordNut
Contributing Member
I think gas should cost $5 to $6 a gallon, maybe even more. Then it gets expensive enough to make conservation important. For example, in drought-ridden areas people will not conserve water unless it hits them in the pocketbook in the form of high rates or fines.
And the ethanol idea is not good economically or environmentally. It does cost more to make it than it is worth if it weren't for the government subsidies. Which are taxes. And then we pay tax again at the pump. It takes more energy to produce the ethanol than you can get out of burning the ethanol. And all the fertilizer runoff from growing corn to produce the ethanol is having a huge negative impact on the environment. Corn has higher ethanol yield than switchgrass or any other waste materials, so corn will probably always be the number 1 feedstock, unless a big push for sugar cane crops gets underway. But guess what, if so many farms are being used to produce fuel whether it's cane, corn, switchgrass, whatever... Where are food crops going to be grown? And by who, since the farmers can make a lot more money for their crops by growing fuel feedstocks? Watch and see, we're about to convert an alleged energy crisis to a worldwide food crisis. And I did say ALLEGED energy crisis. How many of you go to a gas station and see "no gas" signs?
And the ethanol idea is not good economically or environmentally. It does cost more to make it than it is worth if it weren't for the government subsidies. Which are taxes. And then we pay tax again at the pump. It takes more energy to produce the ethanol than you can get out of burning the ethanol. And all the fertilizer runoff from growing corn to produce the ethanol is having a huge negative impact on the environment. Corn has higher ethanol yield than switchgrass or any other waste materials, so corn will probably always be the number 1 feedstock, unless a big push for sugar cane crops gets underway. But guess what, if so many farms are being used to produce fuel whether it's cane, corn, switchgrass, whatever... Where are food crops going to be grown? And by who, since the farmers can make a lot more money for their crops by growing fuel feedstocks? Watch and see, we're about to convert an alleged energy crisis to a worldwide food crisis. And I did say ALLEGED energy crisis. How many of you go to a gas station and see "no gas" signs?
sailsmen
Supporting Member
Government makes more money off a gallon of gas then the oil company, refinery and distributor combined.
The price of gas adjusted for inflation is the same as it was in 1981 the last time there was a large price increase.
The oil business is a boom bust business the 20 year net income is the same as the 20 year average for all US Industries.
"16 of the last 20 years, the return on investment for oil companies has been below the average of the S&P industrials." WSJ Nov 2005.
A new refinery was just shot down by the gov't. It's now going to be built overseas for 40% less. The gov't will not allow current refineries to be expanded or old ones to be reopened.
Many a person and company has gone bust in the oil business.
For the IGNORANT the Gov't owns the land/seabeds where the oil is located. The GOV'T DECIDES WHAT LAND/SEABEDS will be OPEN to EXPLORATION. THEREFORE THE GOV'T CONTROLS THE SUPPLY!
You point out number of airports. I believe the delays are occurring at the airports providing commercial scheduled flights. Denver opened in 1995 and Austin just opened. It is for the gov't to decide where new airports should be built and new runways. We cannot even get new runways.
I have neve heard of platforms in the Gulf being shut because we could not compete with OPEC.
The price of gas adjusted for inflation is the same as it was in 1981 the last time there was a large price increase.
The oil business is a boom bust business the 20 year net income is the same as the 20 year average for all US Industries.
"16 of the last 20 years, the return on investment for oil companies has been below the average of the S&P industrials." WSJ Nov 2005.
A new refinery was just shot down by the gov't. It's now going to be built overseas for 40% less. The gov't will not allow current refineries to be expanded or old ones to be reopened.
Many a person and company has gone bust in the oil business.
For the IGNORANT the Gov't owns the land/seabeds where the oil is located. The GOV'T DECIDES WHAT LAND/SEABEDS will be OPEN to EXPLORATION. THEREFORE THE GOV'T CONTROLS THE SUPPLY!
You point out number of airports. I believe the delays are occurring at the airports providing commercial scheduled flights. Denver opened in 1995 and Austin just opened. It is for the gov't to decide where new airports should be built and new runways. We cannot even get new runways.
I have neve heard of platforms in the Gulf being shut because we could not compete with OPEC.
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The delays occur because people won't fly out of smaller airports, IE Cleveland to L.A., as opposed to Akron to Orange Co., and at about half the price. Larger airports are overloaded, while smaller commercial airports sit idle.
Gulf platforms were shut down in the 80's under the guise of cheaper crude from overseas, that can only be OPEC, (Org. of Petroleum Exporting Countries) believe it or not.
Also in the 80's the refineries in Westlake were closed due to lower cost refineries in the middle east. Many refinery workers then went to BMAC for work as depot level maint. Techs.
As for your IGNORANT, remark our government owns no seabottom after the 3 mile limit. Our government is in big oils pocket, to do what it says, I think you have it backwards. Our government is terribly in debt, and big oil makes record profits every quarter.
5166 commercial airports in the U.S.
duhtroll
If it weren't for my horse...
Simply not true. First of all, most of the cost is the price of crude, and if the oil company "produces" its own crude you're way, way off. If they don't and only refine it, the taxes would be higher than the refining costs, but that's misleading. By "making money" you're implying a profit. The taxes from gas pay for lots of different things, like the roads we drive on.
Also, the taxes are not all the same "government" as you have lumped them all together. There's federal, state, local, and sales taxes, and they all have their purposes.
http://money.cnn.com/2008/03/13/news/economy/gas_gallon/index.htm?cnn=yes
http://auto.howstuffworks.com/gas-price1.htm
Just like every other product, there are other costs involved than just raw materials-->maufacturer-->distributor-->consumer.
Which refineries? Where?
http://www.signonsandiego.com/news/business/20070615-1058-usa-refineries-law.html (it's a Reuters article)
Quote from the article:
While there have been refinery expansions every year for more than a decade, the industry has not taken up Congress' offer to build a new refinery
As for the "many a person," they are the ones who tried to compete with Exxon Mobil, Chevron, BP, and Texaco. They were stepped on and forced out.
You're equating drilling sites with refineries, and while having them close together is a good thing for costs, they are not necessarily the same.
The supply bottlenecks at the number of refineries we have operating, which has been the choice of the oil companies.
THEY limited THEIR OWN production.
No, if they closed them it was to limit supply so prices would go up.
And it worked.
New airports don't matter. New runways don't matter. We need a new air traffic control system or all the new runways and planes are meaningless. Ours is very outdated and understaffed.
FordNut
Contributing Member
That's a pile of crap.
I travel 50% of the time, cross-country. All of the major airlines operate on the hub and spoke model. It has very little to do with the passengers, as they have no choices but to take what the airlines offer. I COULD go through a smaller airport but it costs almost twice as much for airfare.
FordNut
Contributing Member
...and there we have it. I guess it's the NIMBY's that are causing the problem.
Reopening old refineries is not an option, their designs are inefficient and unsafe. New refineries are needed in order to ensure reliable supply. But supply hasn't been a problem lately, as I haven't seen any stations with "Sorry, No Gas" signs.
Record profits is a misnomer. Profit margin is what is important. And oil companies have reasonable profit margins when compared with other industries. It's just that they are so big, the numbers sound astronomical. Break the big oil companies up into 10 companies and any one of them would have profits which would not attract any attention at all.
FordNut
Contributing Member
It is still being worked on. There is a 10 year study going on to get it developed. It's a ways off from reality.
FordNut
Contributing Member
John,
Get the facts straight.
Brazil imports 2 million bbl/day of oil.
Brazil's new car sales for 2007 consisted of 85% flex fuel, 15% gasoline only cars. They still have a lot of gas-burners on the road.
Gasoline in brazil costs over $5/gallon. Ethanol is about half that price, and that's partly because of government subsidies. Higher prices here would drive conservation.
I'm not saying ethanol is bad, but using the world's food supply to make it is a bad idea. Now that the government subsidies incentivize farmers to grow corn for ethanol, we have a shortage of wheat and for the first time EVER we are importing wheat. I suppose the fix for that is government subsidies for wheat farming? That amounts to another tax.
Mike Poore
Crabmonster
If I may, let's toss in another variable; diesel fuel.
The clean burn Diesel technology is just at the brink, while diesel fuel prices exceed the cost of the 93 octane fuel Marauders dearly love. Even if the MPG difference is taken into account, diesel is still the most expensive fuel, nowadays. Why is that, you ask? Me too. The answer seemed to be simply a distribution problem because there appear to be many more gasoline powered vehicles sucking up available product. Actually, that's not the case at all, and there's more diesel fuel being used in the US than gasoline, most of it in industrial applications.
It's the same old answer, supply and demand.
There are two major differences in refining; CATALYTIC cracking and HYDROCRACKING. Most US refiners use the catalytic method which produces nearly 50% Gasoline and about 15% Diesel, while Europe and most of the rest of the world, use Hydrocracking which produce about 25% Gasoline and 25% Diesel fuel from a barrel of crude oil. Interestingly, even though they produce far less gasoline, Europe produces too much for their own consumption, and they export the surplus to the US; which is about 1/8th of the gas we consume.
Here's the real conundrum; if the newly certified clean burn diesel car sales take off as predicted, the added strain on the already stretched supply will cause the price of diesel fuel to skyrocket. Which will in turn, drastically increase the cost of electricity and most importantly, the cost of getting products to the market place.
What we need is a sound energy policy, something our politicians are loathe to tackle. I'm amazed that the Democrat presidential hopefuls haven't taken the current administration to task for their abysmal failure on this front.
BTW, most of my data came from Csaba Csere's THE STEARING COLUMN, Car & Driver, April '08 issue.
The clean burn Diesel technology is just at the brink, while diesel fuel prices exceed the cost of the 93 octane fuel Marauders dearly love. Even if the MPG difference is taken into account, diesel is still the most expensive fuel, nowadays. Why is that, you ask? Me too. The answer seemed to be simply a distribution problem because there appear to be many more gasoline powered vehicles sucking up available product. Actually, that's not the case at all, and there's more diesel fuel being used in the US than gasoline, most of it in industrial applications.
It's the same old answer, supply and demand.
There are two major differences in refining; CATALYTIC cracking and HYDROCRACKING. Most US refiners use the catalytic method which produces nearly 50% Gasoline and about 15% Diesel, while Europe and most of the rest of the world, use Hydrocracking which produce about 25% Gasoline and 25% Diesel fuel from a barrel of crude oil. Interestingly, even though they produce far less gasoline, Europe produces too much for their own consumption, and they export the surplus to the US; which is about 1/8th of the gas we consume.
Here's the real conundrum; if the newly certified clean burn diesel car sales take off as predicted, the added strain on the already stretched supply will cause the price of diesel fuel to skyrocket. Which will in turn, drastically increase the cost of electricity and most importantly, the cost of getting products to the market place.
What we need is a sound energy policy, something our politicians are loathe to tackle. I'm amazed that the Democrat presidential hopefuls haven't taken the current administration to task for their abysmal failure on this front.
BTW, most of my data came from Csaba Csere's THE STEARING COLUMN, Car & Driver, April '08 issue.
Correct me if I am wrong...
But if memory serves... The closing of all those oil wells was a long term strategy by President Reagan.
He was concerned about an "all out" war with Russia.
(potentially the middle east)
His intention was to continue buying middle eastern oil cause it was cheap and we are rich. (we could afford it) While simutaniously protecting our reserves.
IE cant fight/win a war w/o oil.
This gave birth to the storage program. (Remember how Clinton opened that account to lower gas prices?)
It worked out to the advantage of some and the dismay of others. All the little oil farmers with 2,3 wells got shut down and had to go get real jobs. The giants tightened the grip and enjoyed the profits generated by eliminating the costs associated with domestic competition and drilling. Also the big oil companies began a long term plan to buy out the small drillers. Who were eager to sell.
But who cares? None of this jabber changes anything.
But if memory serves... The closing of all those oil wells was a long term strategy by President Reagan.
He was concerned about an "all out" war with Russia.
(potentially the middle east)
His intention was to continue buying middle eastern oil cause it was cheap and we are rich. (we could afford it) While simutaniously protecting our reserves.
IE cant fight/win a war w/o oil.
This gave birth to the storage program. (Remember how Clinton opened that account to lower gas prices?)
It worked out to the advantage of some and the dismay of others. All the little oil farmers with 2,3 wells got shut down and had to go get real jobs. The giants tightened the grip and enjoyed the profits generated by eliminating the costs associated with domestic competition and drilling. Also the big oil companies began a long term plan to buy out the small drillers. Who were eager to sell.
But who cares? None of this jabber changes anything.
duhtroll
If it weren't for my horse...
I'm saying if oil companies want the land, they have to pay top dollar to pry it away from the rich folks that own it. They won't, because they would rather whine to the government in the hopes of getting it for free or reduced price.
Reopening old refineries would mean not having to purchase land. Even if they start from the ground up, I'll wager it's still cheaper than new for this reason (because of the legal fight every time someone wants to rezone or open anything new).
It's easy to blame the NIMBYs, but are you going to volunteer to live there? Is anyone here?
Thought not.
Of course they don't post "no gas" signs. The oil companies open the spigot just enough to keep prices high, while low enough supply to fuel the panic.
And I'm all for breaking them up into smaller companies that have to compete against each other. Right now it's not a competitive market, and THAT is most of the problem. Consolidation has destroyed any real opportunity for competition.
The profit margin argument also doesn't seem to generate much sympathy from nearly every other business that has had to take a hit and/or raise their own prices (and taking another hit) because of fuel costs.
I'd be interested to see some real data on these profit margins over the last 20 years. Care to post any? I've heard this argument from a lot of people and never once seen the charts...
The bottom line is the oil companies can afford to do whatever they want to, whenever they want to.
But of course that means investing some of their profits into something other than their own asses. I don't see that happening.
Reopening old refineries would mean not having to purchase land. Even if they start from the ground up, I'll wager it's still cheaper than new for this reason (because of the legal fight every time someone wants to rezone or open anything new).
It's easy to blame the NIMBYs, but are you going to volunteer to live there? Is anyone here?
Thought not.
Of course they don't post "no gas" signs. The oil companies open the spigot just enough to keep prices high, while low enough supply to fuel the panic.
And I'm all for breaking them up into smaller companies that have to compete against each other. Right now it's not a competitive market, and THAT is most of the problem. Consolidation has destroyed any real opportunity for competition.
The profit margin argument also doesn't seem to generate much sympathy from nearly every other business that has had to take a hit and/or raise their own prices (and taking another hit) because of fuel costs.
I'd be interested to see some real data on these profit margins over the last 20 years. Care to post any? I've heard this argument from a lot of people and never once seen the charts...
The bottom line is the oil companies can afford to do whatever they want to, whenever they want to.
But of course that means investing some of their profits into something other than their own asses. I don't see that happening.
FordNut
Contributing Member
Exxon-Mobil profit margin 11%
Pfizer profit margin 19%
Microsoft profit margin 29%
Readily available at yahoo finance.
Gotta please the investors/shareholders, are they satisfied with 11%
And one of the reasons the shutdown refineries are simply abandoned is it costs too much to disassemble/scrap them. That would have to be done prior to rebuilding new refineries on the same site. It costs more to demolish the old than build the new.
Pfizer profit margin 19%
Microsoft profit margin 29%
Readily available at yahoo finance.
Gotta please the investors/shareholders, are they satisfied with 11%
And one of the reasons the shutdown refineries are simply abandoned is it costs too much to disassemble/scrap them. That would have to be done prior to rebuilding new refineries on the same site. It costs more to demolish the old than build the new.
FordNut
Contributing Member
How about a different approach to gasoline conservation and ethanol promotion... Carbon tax: since petroleum products pollute more, they could be taxed at a higher rate but even ethanol produces some pollution so it could be taxed but at a lower rate. Immediately institute a $1.50/gallon tax on gasoline and $0.50 on ethanol. Then the price of gas is adjusted to be more in line with the rest of the world and it's high enough to encourage conservation. At the same time, the ethanol market could develop on its own without subsidies due to economic factors (helped by the lower tax). The tax revenues could be used to fast-track development of the cellulose-path to ethanol production, environmental issues, general fund, highway projects, mass transit, etc...
Breadfan
Capital Area Marauder Member
Going "Green" isn't just a VERY ANNOYING tag line anymore, when you consider ethanol it's now becoming a costly fad with little to know positive impact.
By the way this also affected other things, the subsidies and profits of corn for ethanol production cause a hop shortage and therefore more expensive beer.
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duhtroll
If it weren't for my horse...
The farmers that I know disagree. I don't see any of them buying multi million dollar mansions or flying around private jets like the oil execs do.
The area where I work has the richest soil in the country. If there is a huge profit being made by subsidies then I'm sure I would have heard or seen something of the effects by now. I bargain the teaching contract and salaries for that county every year for the past 12 years. If the farmers were doing so well I wouldn't ever have to fight for a better teaching salary.
Besides, the "ethanol is a scam" theory doesn't hold water when you compare "big corn" to "big oil" (is there a big corn?) :lol:
Again I say, follow the money. Wherever the money is piling up, you have your culprit. If farmers were rolling in billions upon billions of dollars in profits I'd say you might have something.
The area where I work has the richest soil in the country. If there is a huge profit being made by subsidies then I'm sure I would have heard or seen something of the effects by now. I bargain the teaching contract and salaries for that county every year for the past 12 years. If the farmers were doing so well I wouldn't ever have to fight for a better teaching salary.
Besides, the "ethanol is a scam" theory doesn't hold water when you compare "big corn" to "big oil" (is there a big corn?) :lol:
Again I say, follow the money. Wherever the money is piling up, you have your culprit. If farmers were rolling in billions upon billions of dollars in profits I'd say you might have something.
duhtroll
If it weren't for my horse...
So, by comparing them to a drug company and the Root of all Evil, you are saying oil companies are OK?
That's like saying "honey, I know I screwed my secretary and embezzled 14 million dollars from the company, but it's not like I barbecued the neighbors or anything."
That's like saying "honey, I know I screwed my secretary and embezzled 14 million dollars from the company, but it's not like I barbecued the neighbors or anything."
SC Cheesehead
'God Speed Blues Brother'
Brian,
Right on target! Compare the oil industry's average profit margin against other industries and you will, indeed see figures that aren't too impressive.
".....many companies smaller than Exxon Mobil "earn" more, depending on what measure is used.</NITF>
<NITF>Most financial institutions, such as commercial banks, are routinely more profitable than Exxon Mobil was in its third quarter. For example, Exxon Mobil's gross margin of 9.8 cents of profit for every dollar of revenue pales in comparison to Citigroup Inc.'s 15.7 cents in 2004. By percentage of total revenue, banking is consistently the most profitable industry in America, followed closely by the drug industry.</NITF>
<NITF>Altria Group, the maker of Marlboro and other cigarettes, made 22 cents for every dollar of revenue in 2004, and pharmaceutical company Merck made 25.3 cents for every dollar of revenue in 2004.</NITF>
<NITF>By other measures, such as profit per employee, return on invested capital and free cash flow, Exxon Mobil is nowhere near a standout."
(REF:http://www.washingtonpost.com/wp-dyn/content/article/2005/10/27/AR2005102702399.html)
SCCH</NITF>
Breadfan
Capital Area Marauder Member
If corn based ethanol is only a temporary stepping stone to a better solution in farm waste (husks, stalks, etc), then why push it to the market so hard? Why subsidize and pressure it into the market if it's only a stepping stone? Would it not be best to keep the stepping stone in the lab, devote the subsidy money to research and find a better solution that will hold it's own in a free market? Seems like a waste of time to subsidize and push an inefficient product knowing you plan to replace it later on anyway.