And Fuel Economy Will Continue to Deteriorate

The gas mileage your car gets will probably drop in the future. Is it that dastardly American auto industry's fault for making shoddy cars? Nope, it'll be your government's fault:

The U.S. government will eventually allow higher levels of ethanol to be blended into gasoline, Renewable Fuels Association President Bob Dinneen said on Tuesday.

Ethanol is currently approved to make up 10 percent of gasoline, but producers have lobbied the government to increase the blend level.

The science is pretty clear on what ethanol does to gas mileage. I can only shake my head at the stupidity.

Perspective on Corn Ethanol

Ever wonder how much corn we grow for fuel, not food? A lot.

The pending global food crisis is due, in part, to a rich twist of irony: One of the factors driving up the price of T-bone steak, a dozen eggs and a carton of milk is a perfectly edible vegetable, a staple of many diets - corn.

To add to the irony, we're growing more corn than ever before. We're just not eating it.

"The U.S. is now using more corn for production of ethanol than our entire crop in Canada," says Kurt Klein, a professor of agricultural economics at the University of Lethbridge. "It's huge."

And it is going to get bigger. In 2000, world production of ethanol totalled 20 billion litres. In 2007, world production climbed to 60 billion litres. In the month of January alone, six billion new litres of ethanol were produced in the U.S., Mr. Klein says.

God help us all if we have a sustained drought here in the corn belt.

(Cross posted at the BBA)

Corn Ethanol at a Long Term Competitive Disadvantage

From my post at the BBA:

The science and the processes behind cellulosic ethanol are still being worked out, but once that brand of ethanol production gets its feet, the corn based ethanol made in places like Wisconsin and Minnesota is going to be hard pressed to compete. To wit:

A new cellulosic ethanol plant that promises to produce renewable biofuel for less than $1 a gallon has a new partner.

ICM, a Kansas-based ethanol plant design, engineering and support firm, has a new agreement with Illinois-based Coskata, which made headlines when it announced it could produce next-generation ethanol made from waste, plant materials or other biomass, rather than corn, at a fraction of the cost, and with a fraction of the pollution and political fallout.

The southeast could stand to become this country's major ethanol producer. It offers a good climate for fast growing ethanol stocks like switch grass, and it likely has the land capacity to farm those stocks without seriously hampering food production. If we in the Midwest choose to prop up the production of corn ethanol legislatively now, we will likely continue to do so in the future and assure ourselves of higher fuel prices than other areas of the nation where cellulosic ethanol production may proliferate.

Ethanol and E. Coli

Ethanol production might be contributing to the increased number of beef recalls because of E. coli:

Studies from two universities show evidence that feeding cattle a byproduct of ethanol production known as distillers grains can increase their levels of a deadly form of E. coli bacteria.

In direct response to the findings, the U.S. Department of Agriculture scientists recently put 300 cattle on a diet of distillers grains and plans to test the cows regularly for the bacteria. Results of the test won't be known until later this year.

If the studies do show a link between distillers grains and E. coli, it is going to prove problematic for both industries.

Stock up on your tequila

Soon, a margarita is going to cost you an arm and a leg, because the blue agave is the latest victim of ethanol.

Mexican farmers are setting ablaze fields of blue agave, the cactus-like plant used to make the fiery spirit tequila, and resowing the land with corn as soaring U.S. ethanol demand pushes up prices.

The switch to corn will contribute to an expected scarcity of agave in coming years, with officials predicting that farmers will plant between 25 percent and 35 percent less agave this year to turn the land over to corn.

"Those growers are going after what pays best now," said Ismael Vicente Ramirez, head of agriculture at Mexico's Tequila Regulatory Council.

Hurrah to all the farmers who are cashing in on high corn prices created by the ethanol craze, but sooner or later people are going to figure out that corn based ethanol isn't the answer.

Additional
It's affecting the price of steak, too.

Ethanol myths

If you weren't following the Wisconsin blogosphere last year when many of us were writing continuously about the weaknesses of ethanol, then get yourself caught up with this column by John Stossel. Stossel does not have enough column inches in his syndicated column to get into detail, but he nicely outlines some of the various problems with ethanol.

Charlie Munger, my new hero

I like his bluntness here:

At Berkshire's recent annual meeting in Omaha, an investor asked CEO Warren Buffett for his thoughts on ethanol. Maybe because Buffett lives in corn country, he punted the politically delicate question to his right-hand man, vice chairman Charlie Munger.

Munger, never one to mince words, replied that it was silly for the government to plow billions of dollars into a making energy from a food staple, which might lead to higher prices of many foods.

"Running cars on corn is about the stupidest thing I ever heard of," Munger said. "Our government is under tremendous political pressure even though it makes no sense."

To which Buffett replied: "Well, Charlie, we'll be sneaking you out of Omaha tonight."

I recently wrote my first words ever that were sympathetic to ethanol, but those words came with a lot of caveats. And they in no way supported ethanol from corn. I think Munger hit the ball square on the sweet spot in Omaha.

Ethanol from carbon monoxide?

A company in New Zealand says they can do it.

New Zealand company LanzaTech, has announced it has secured US$3.5M in Series A funding, led by Khosla Ventures and supported by two existing New Zealand based investors. This funding will support further technology development, establishing a pilot plant, engineering work to prepare for commercial-scale ethanol production and positions the company to raise significant capital in the near future.

This technology could produce 50 billion gallons of ethanol from the world's steel mills alone, turning the liability of carbon emissions into valuable fuels worth over $50 billion per year at very low costs and adding substantial value to the steel industry. The technology will also be a key contributor to the cellulosic biofuels business as it can convert syngas produced through gasification into ethanol.

There is so much experimentation being done out there right now that it is hard to say what will be physically possible and what will be economically possible. This is an approach to ethanol that I could support...if it is economical and if the process is not an energy hog. I like the idea of finding ways to utilize both waste materials and wasted energy.

I recently had the opportunity to listen to a speech on biofuels by Jay Lehr of the Heartland Institute. My opinion of using corn as the feedstock for ethanol production remained unchanged-I still don't like it. If the science can advance enough to make the processes economical, I could get on board with using crop residue and some other types of biomass to make cellulosic ethanol, however. One attractive feature of cellulosic ethanol is that the production would create a byproduct that could be used to partially fuel the plant. I am not completely opposed to ethanol, just mandates of ethanol useage, heavily subsidized ethanol production, and energy inefficient ethanol production. Smart, economical ethanol could make me a fan.