But if you think our Federal Government has wasted money in the past, you haven't seen nothing yet.
The Energy Crisis is going to produce all kinds of half-baked proposals, regulations, subsidies, research grants, tax credits and tax increases. The Federal Government will be asked to spend billions, check that, trillions of dollars on alternative energy.
Please don't take this wrong. I am entirely in favor of promoting alternative energy, but the government should not create mandates, direct subsidies to corporations, or make millionaires of people 'studying' how to solve the energy crisis.
Government should reward consumers who purchase economically viable technology in an effort to promote investment in multiple areas of technology rather than single areas of technology. Research and development expenses are a tax deductible expense. Investment in assets to produce such technology is depreciated. To encourage development, we have always chosen to allow accelerated depreciation for these assets.
Showing favoritism for one industry over another is problematic.
Currently, there are too many alternative energy options for the Federal Government to choose just one or two to support. Nuclear, clean coal, natural gas, hydrogen, corn ethanol, switchgrass ethanol, hydrogen fuel cells, electric cars, crossover cars, parallel battery technology, series battery technology, wind, solar, and many other alternative energy are just a few of the new technologies we will be asked to support through our tax dollars through government research grants, mandates or tax credits..
Understanding Government Support for Ethanol will help us understand the difficulty of the coming government decisions on alternative energy
How does the ethanol industry survive?
I don't understand how we can produce ethanol out of corn and create 1.67% more energy than we put into it. Regardless of the studies that show this evidence, it is hard to believe.
I don't understand how the ethanol industry believes that increasing the amount of corn diverted to ethanol wouldn't increase the price for livestock feedstock and other corn based foodstuffs.
If the cost of energy is the reason the Corn Growers Association say other food costs are going up, what is the reason corn has gone up from $2.25 per bushel in 2006 when the mandate was passed to $7.00 just last month. This is a 300% increase in the price of corn. How can that not have a dramatic effect on food prices? Is it because of energy costs? During the same period, the price of Crude oil only increased in price from $70 to $130, which is less than 100%.
Or is it because of ethanol production?
How can ethanol companies make money in a high priced energy market? If there is such an energy gain in ethanol, shouldn't the higher gasoline goes, the more money ethanol companies make? You would think that the more petroleum costs, the more money there would be in ethanol.
It should be noted that investors in ethanol has created many millionaires due to the government mandated usage of ethanol. The corn ethanol lobby has used a guaranteed mandate and investors in this technology have become very wealthy because of it. I find this to be very disturbing.
USDA studies indicate ethanol generates an energy surplus of 67%. This seems very suspicious. I would like to know more about this. What they are saying is this...
One bushel of corn generates 2.7 gallons of ethanol
One gallon of ethanol = .67 gallons of gasoline
One bushel of corn generates (2.7 *.67) = 1.8 gallons of gasoline (equiv)
If gas is $2.50 per gallon, one bushel of processed corn would produce $4.50 worth of gasoline (equiv).
My first question is what price does a bushel of corn need to cost in order to make ethanol cost effective on the open market without subsidies (ethanol is not taxed at the same rate as petroleum to the consumer and large corporations are paid to blend ethanol.)
It may be cost effective to produce ethanol in Iowa where they average 180 bushels per acre, but is it worthwhile to produce ethanol in South Dakota?
South Dakota averages 104 bushels per acre
One acre of corn in South Dakota can produce 280 gallons of ethanol
One acre of corn in South Dakota can produce 187 gallons of gas equivalent
One acre of corn can make $672 of ethanol (as of today ethanol trades for $2.44/gallon)
One acre of corn sells on the open market (as of today corn trades for $5.84/bushel--down from a high of $7.25) for $607/acre as an unprocessed commodity.
How are ethanol companies making money???
How much does it cost to transport, produce and ship ethanol??
Is it less than $65 for every acre of corn or 280 gallons of ethanol?
I don't see how ethanol plants can make money in this environment because the higher price of corn, the less money they make.
How much would gasoline have to go up for ethanol be profitable? And how low does corn have to go for ethanol to be profitable?
These are the questions I have about ethanol. Now imagine the Federal Government trying to throw billions of dollars at a multitude of alternative energy programs. We will make millionaires out of people researching these alternatives. But how will politicians in Washington be able to choose which one to fund or support?
This is going to create a massive spending bill and will have catastrophic long term effects on the US economy.
Currently, there are too many alternative energy options for the Federal Government to choose just one or two to support. Nuclear, clean coal, natural gas, hydrogen, corn ethanol, switchgrass ethanol, hydrogen fuel cells, electric cars, crossover cars, parallel battery technology, series battery technology, wind, solar, and many other alternative energy are just a few of the new technologies we will be asked to support through our tax dollars through government research grants, mandates or tax credits..
Understanding Government Support for Ethanol will help us understand the difficulty of the coming government decisions on alternative energy
How does the ethanol industry survive?
I don't understand how we can produce ethanol out of corn and create 1.67% more energy than we put into it. Regardless of the studies that show this evidence, it is hard to believe.
I don't understand how the ethanol industry believes that increasing the amount of corn diverted to ethanol wouldn't increase the price for livestock feedstock and other corn based foodstuffs.
If the cost of energy is the reason the Corn Growers Association say other food costs are going up, what is the reason corn has gone up from $2.25 per bushel in 2006 when the mandate was passed to $7.00 just last month. This is a 300% increase in the price of corn. How can that not have a dramatic effect on food prices? Is it because of energy costs? During the same period, the price of Crude oil only increased in price from $70 to $130, which is less than 100%.
Or is it because of ethanol production?
How can ethanol companies make money in a high priced energy market? If there is such an energy gain in ethanol, shouldn't the higher gasoline goes, the more money ethanol companies make? You would think that the more petroleum costs, the more money there would be in ethanol.
It should be noted that investors in ethanol has created many millionaires due to the government mandated usage of ethanol. The corn ethanol lobby has used a guaranteed mandate and investors in this technology have become very wealthy because of it. I find this to be very disturbing.
USDA studies indicate ethanol generates an energy surplus of 67%. This seems very suspicious. I would like to know more about this. What they are saying is this...
One bushel of corn generates 2.7 gallons of ethanol
One gallon of ethanol = .67 gallons of gasoline
One bushel of corn generates (2.7 *.67) = 1.8 gallons of gasoline (equiv)
If gas is $2.50 per gallon, one bushel of processed corn would produce $4.50 worth of gasoline (equiv).
My first question is what price does a bushel of corn need to cost in order to make ethanol cost effective on the open market without subsidies (ethanol is not taxed at the same rate as petroleum to the consumer and large corporations are paid to blend ethanol.)
It may be cost effective to produce ethanol in Iowa where they average 180 bushels per acre, but is it worthwhile to produce ethanol in South Dakota?
South Dakota averages 104 bushels per acre
One acre of corn in South Dakota can produce 280 gallons of ethanol
One acre of corn in South Dakota can produce 187 gallons of gas equivalent
One acre of corn can make $672 of ethanol (as of today ethanol trades for $2.44/gallon)
One acre of corn sells on the open market (as of today corn trades for $5.84/bushel--down from a high of $7.25) for $607/acre as an unprocessed commodity.
How are ethanol companies making money???
How much does it cost to transport, produce and ship ethanol??
Is it less than $65 for every acre of corn or 280 gallons of ethanol?
I don't see how ethanol plants can make money in this environment because the higher price of corn, the less money they make.
How much would gasoline have to go up for ethanol be profitable? And how low does corn have to go for ethanol to be profitable?
These are the questions I have about ethanol. Now imagine the Federal Government trying to throw billions of dollars at a multitude of alternative energy programs. We will make millionaires out of people researching these alternatives. But how will politicians in Washington be able to choose which one to fund or support?
This is going to create a massive spending bill and will have catastrophic long term effects on the US economy.
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