Most stations sell E-85 for about 20% less than unleaded. Like I said, There is a shortage of ethanol, right now; but prices will probably fall precipitously before the end of the year.

By the way, that Stanford computer program sounds a lot like the computer program that predicted that a 5% ethanol blend would cause more pollutiion (ozone) in L.A. It turns out, the result was just the opposite. We’ll just have to see, but I have a funny feeling about this guy. I keep flashing on Patzek.

Ron, I’ve enjoyed chatting with you, but I’m wearing out. Have a Good’un.

Even your claim “every place ethanol has been introduced the air quality has improved, markedly” is disputed. Check out this recent study, for example.

But, let’s assume ethanol does yield an improvement in air quality. Then why should the country be denying itself cheaper supplies from Brazil? (By the way, 2.5% + $0.54/gallon more than “just offsets” the VEETC, by 10-15%.)

Finally, if “pork, and poultry are doing just fine”, why did the National Chicken Council, the National Turkey Federation and the National Pork Producers Council (not to mention the National Cattlemen’s Beef Association and the American Meat Institute) send a letter to Secretary of Agriculture Mike Johanns on 18 January 2007 expressing concerns over the ethanol industry’s sudden growth? Even if poultry farms in the Midwest tap into DDGs sources, that option is not available to poultry farms (especially egg producers) located outside the Midwest.

TJLT, Every place ethanol has been introduced the air quality has improved, markedly.

Ethanol is very much energy positive. Follow me on this one. It takes less than ten gallons of fuel to grow one acre of corn. Figure 450 gallons of ethanol. In the newer plants the syrup is burned through “fluidized bed gassificatio” to drive the process. The Char is processed to make anhydrous fertilizer, which is used to grow the next acre of corn.

How much fossil fuel have we used?

We are using about 450,000 Barrels of Ethanol/day at present. This is getting close to 5% of our gasoline usage. We’ll probably be getting around 7% by the end of the year.

The U.S. is a pretty big place. The whole country has Never gone into drought at one time. We have, however, had some really nasty hurricanes in the gulf, haven’t we?

Even with today’s shortages (due to the mandates you mentioned) ethanol is still cheaper than gasoline. It Will Get a Whole Lot Cheaper in a year, or so as a result of an enormous amount of capacity that is now under construction coming on-line.

Pork, and Poultry are doing just fine, thank you; and, the price of corn will come down over the next few months.

tjlt, if you’re not in the petroleum business this is working very much to your advantage. Believe me, without some help from somewhere that Oil Oligopoly is going to eat you alive, starting pretty danged soon. Peace.

And good luck to those ethanol producers who are experimenting with new formulations of DDGs. Whether they would even be engaging in such experiments in the absence of the existing subsidies is the question. Yes, $50/barrel opened up a new world, but to come back to my original point, I don’t see the industry — which has been living off of subsidies for almost 29 years — saying, “Right, now we don’t need the subsidy. Please, Congress, repeal it ASAP!”

You mention Brazil’s capacity to “power virtually every car and truck in the U.S. without chopping down a single tree”, but did I hear you say “so let’s eliminate the 2.5% + $0.54/gallon tariff on Brazilian ethanol”? Was that meant to be implicit in your remarks?

I agree with you that our kids will look back some day and say, “What were they thinking?” … but in the opposite sense to what I think you mean.

Here is one indicator: I subscribe to daily Google alerts that find articles and blogs containing the words “ethanol” and “subsidies” (which is how I came upon this blog). A year ago, the majority of editorials and articles were hyping ethanol, extolling it as the “green bullet” or the “silver bullet” — the answer to all the nation’s farm, rural development, energy, driving, national security, etc. problems. Nowadays, the editorials are running at least 3:1 on the critical or sceptical side.

Let’s agree to write back to each other in a year and compare notes.

Ethanol usage is not only subsidized it is mandated. You keep ignoring the mandate which is what really drives the market.

You can cheerlead all you want but as currently produced ethanol is.

1. Bad for the environment

2. Energy negative

3. Unable to replace even a fraction of US oil consumption

4. One drought or crop failure away from implosion

5. Bad for the consumer. They get to buy more expensive fuel that gets fewer miles per gallon. They get to pay more for their food.

6. Bad for other sectors of the Ag economy, especially pork and poultry production.

Brazil is considered and ethanol sucess story. Around 70 % of the original ethanol plants there went bankrupt in the process of building the ethanol market there.

Many of the farmers investing in the current ethanol plant building boom are going to face bad financial problems when these plants start to go bankrupt.

The ongoing cheerleading for ethanol production is going to be partially responsible for this financial train wreck when it occurs.

Perhaps, just as important, is the fact that they are using anaerobic digestion to convert livestock manure to methane, and, sometimes, electricity. This is, really, a pretty big thing. A cow produces well over a hundred dollars/yr in electricity (net.)

The DOE figures we have enough unused, AVAILABLE, biomass in the U.S. to produce almost 100% of our transportation fuels. Every time we walk through one door, another opens up. And, all this ignores the fact that Brazil has enough arable land lying fallow that they could power virtually every car and truck in the U.S. without chopping down a single tree.

Ron, when the price of oil went over $50.00 it opened up a whole new world. Metabolix was up 17% today on news that they are partnering with ADM to produce a hundred million tons, or some such, of Bio Plastics. This may not be a pure Hayek/Bastiat world, but you may as well just relax and learn to enjoy it. Buy some DE, and DD, stir in some ADM, and FWLT, stick a little Metabolix umbrella in it and dream about what you’re going to do with your Next Fortune.