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Home Front Economy
A Texas Timeout on Biofuels
2008-05-25
The state of Texas is now in official opposition to the federal ethanol mandate. Governor Rick Perry has petitioned the Environmental Protection Agency for a one-year reprieve, and the reason is simple and increasingly familiar: Washington's ethanol obsession is hurting the state.

We all know that corn farmers everywhere love ethanol. Don't tell that to Texas cattle ranchers. Because of the mandate to add this biofuel to gasoline, ranchers are being forced into bidding wars with ethanol plants for the grains they feed their cattle. They don't appreciate being hammered on price because of a subsidy to corn growers. Thus, Governor Perry's petition.

The Governor's goal is to win a ruling from the EPA that suspends half the federal requirement that nine billion gallons of this product be added this year to the nation's fuel supply. Last week the EPA opened a 30-day public comment period on the Texas waiver request, the first step in what could lead to granting his request.

The most interesting thing revealed by this effort is that EPA holds the power to stand down from the ethanol fiasco. Congress gave EPA the authority to grant such waivers in the event the ethanol mandate had unforeseen consequences. Governor Perry argues that the mess in Texas qualifies.

By his calculation, if the mandate helps to push the price of corn to $8 a bushel (it's at nearly $6 now, up from $2 in 2004), it will cost the Texas economy nearly $3.6 billion this year. He says the dramatic spike in food prices may be due to a complex set of reasons, but the ethanol mandate is something that public officials can alter. The EPA has until late July to make a decision on the Texas petition.

Meanwhile, Congress merely throws more corn onto the ethanol bonfire. Under its 2005 mandates, Americans would be required to use 7.5 billion gallons of ethanol in 2012. But in December that was increased by 1.5 billion gallons and advanced to this year. Congress's target for 2022 is 36 billion gallons. They'll be growing corn on the Washington mall.

A countermovement has begun. Earlier this month, Texas Senator Kay Bailey Hutchinson called for a freeze in ethanol mandates and quickly got the support of two dozen of her Republican Senate colleagues, among them John McCain. Also, a provision in this week's farm bill would shave a tax credit given refiners who blend ethanol into gasoline to 45 cents per gallon from 51 cents.

A predictable backlash has set in against the Perry petition. Iowa Republican Senator Chuck Grassley and South Dakota Democrat Tim Johnson have written the EPA to defend ethanol as representing a small fraction of the rise in food prices. In line behind them are the Texas Corn Producers Association and the Texas Grain Sorghum Association.

Posted by:Fred

#18  # 10 Thealing Borgia6122, thank youse!

Please send money. Lots.
Er... heaps, send heaps.

H00t! LOL!
Posted by: RD   2008-05-25 16:25  

#17  Keep the mandate do away with the subsidy. The ethanol subsidy is endangering the real needs of peanut farmers every where.

Please send money. Lots.
Er... heaps, send heaps.
Posted by: George Smiley   2008-05-25 15:02  

#16  Thealing Borgia6122,

Zingula seems to be saying that using corn for ethanol isn't a problem since according to him we're only using surplus supplies (supplies are not strained, he says), but if we're only using surplus, then how does he explain the 3 to 4 fold increase in corn prices since corn ethanol started hitting its stride? If corn is amply available, the rules of supply and demand should apply, and there should be no reason why corn prices should have tripled - unless, of course, the market is being perverted by some other force. Government mandated ethanol production is that force.

I don't care a wit if Zingula and his corn farming friends may have ample supply, the fact of the matter is that corn is triple the cost of what it was only a couple of years ago, and it's causing significant problems for dairy, beef, poultry, hog and other livestock-centric farmers.

But in the end these high prices won't matter to the large-scale commercial farms, they'll be able to weather the storm, and may even benefit from it when their small, livestock-centric family farm neighbors sell out to them to avoid bankruptcy due to insane feed price.
Posted by: gb506   2008-05-25 14:42  

#15  #10 Don't bother us with your facts!
Posted by: g(r)omgoru   2008-05-25 12:54  

#14  No one has gotten cellulosic ethanol to work on a commercial scale. Until then I do like gasification which works with any material from plant, animal to coal.

It makes much more sense to import the finished ethanol than to import huge amount of cane. Better some dollars go to people who like to party and strip naked than those who want to kill us and think raping 9 year olds is a high form of worship. The lower Brazilian labor cost can also make better use of the waste materials.
Posted by: ed   2008-05-25 12:39  

#13  Sawgrass is a better source.

But importing cane from Bazil would make a ton of cheap ethanol much more readily available without impacting the corn supply.

Too bad the protectionists in Congress will not let that happen.
Posted by: OldSpook   2008-05-25 12:26  

#12  I find it difficult to believe that the "spent" grain provides the same level of feed quality that the unspent grain does.

Depends on your purpose. The distiller's grain is absent sugars and starches, but added yeast's nutrients. It's inferior in you want to fatten the animal. It's superior if you want the animal to build muscle mass. The distiller's grain is added as part of the animal's diet.
Posted by: ed   2008-05-25 12:06  

#11  Even though it's fallen out of fashion with the "in crowd", I like corn ethanol. If there ever is a shortage of food, there is a ready surplus supply that can be diverted for food use. I do object to the $.51/gallon ($1.30/bushell) Federal subsidy in addition to the regular farm subsidies. With corn prices that have tripled, one would think subsidies are no longer needed. But the subsidy, while decreased, is whatever the amount congress appropriates to buy off the agricultural constituency and lobby.
Posted by: ed   2008-05-25 11:54  

#10  Corn ethanol isnÂ’t the food villain, according to Curt Zingula, president of the Linn County (Ia) Farm Bureau.

ItÂ’s time to end the ethanol bashing. Too many reporters have resorted to spin and outright lies in order to make a crisis out of the foodversus-fuel conflict.
Take, for example, the ABC News report on world hunger in which its reporter claimed that ethanol has caused a shortage of corn and farmers have turned to feeding wheat to livestock. First of all, there is no shortage of corn. The United States will have a 1.28 billion bushel carry-over of corn when the 2008 crop is ready for harvest. Second, farmers have fed wheat to livestock since long before “ethanol” became a household word. Third, and the biggest embarrassment for ABC News, is that the co-product of corn ethanol is actually a high-protein livestock feed called distillers grain.
For some reason, the new agriculture and ethanol “experts” are failing to tell you that ethanol uses only the starch in a kernel of corn. The vitamins, minerals, protein, fiber and oil are then processed into feed for livestock.
That, of course, would be the same livestock we consume for food.
The New York Times also has resorted to spin.
Several years ago, the Times asserted that abundant, cheap grain was responsible for national obesity. This year, the Times expects readers to fear reduced grain surpluses and higher food costs. Unfortunately for the Times, 12 cents worth of corn in a box of cornflakes cannot accomplish runaway food costs.
Still, people will make the claim that using food for fuel is fundamentally flawed. Understanding the justification for doing so requires perspective.
Before ethanol became the replacement for petroleumÂ’s toxic MTBE as a requirement for urban clean-air standards, corn production was substantially greater than usage. In addition, seed companies report that rapidly improving genetics have the potential to produce another 800 million bushels of corn annually in just the next two years. That would be in addition to the 13 billion bushels we are producing.
Without ethanol, we would be buried under mountains of surplus corn.
Farmers have invested their own time and money to help create a renewable fuels industry that will provide a market for their bountiful production and at the same time help end embarrassing crop subsidies. However, the benefits of this industry are not limited to farmers.
Renewable fuels have created thousands of jobs and will pump billions of tax dollars into local, state and federal funds.
The other major consideration that ethanol “experts” fail to mention is that future ethanol is expected to be made primarily from perennial grasses followed by wood chips, corn, wheat straw and even garbage.
ThatÂ’s right, the tons of food Americans throw away every day, even in the face of world hunger, can be made into ethanol.
Finally, I would like to suggest the following concern for future headline news: The United States is now sending more than $2 billion a day (and growing) overseas to petroleum producing countries, most of whom hate us. That story is a crisis that doesnÂ’t need any spin.

Posted by: Thealing Borgia6122   2008-05-25 10:55  

#9  it is high time the US takes care of its own...limit exports of food and ALL food that was sold to the ME is diverted to biofuels...this would ensure a food and energy supply for the US..if there are no export presures prices will come down for the US
Posted by: Dan   2008-05-25 10:45  

#8  "The most interesting thing revealed by this effort is that EPA holds the power to stand down from the ethanol fiasco. Congress gave EPA the authority to grant such waivers..."

What are the odds of THAT happening? The Mariners have a better shot of being in the post season than the EPA shutting this down.
Posted by: USN,Ret. (from home)   2008-05-25 10:29  

#7  What motivates the government, now? It's is increasingly clear that it is not the voters.
Posted by: SR-71   2008-05-25 09:30  

#6  "Tepee Full Of Shit We All Gotta Move."


Ah! Someone else that has heard the story of Chief Bowels, no move. I can think of other things I'd like to feed the Congresscritters besides spent feed-corn.

But saying it here would get me sink trapped or worse...

So I will let you use your imagination.

First the traitors, then the enemy!
Posted by: Blinky Thunter4418   2008-05-25 07:16  

#5   I find it difficult to believe that the "spent" grain provides the same level of feed quality that the unspent grain does


Does it takes more "spent" feed-corn to equal any amount "unspent" feed-corn? [I suspect it does for cattle]

Congreesmenfuckingpersons deserve to be force fed "spent" corn till they all say, "Tepee Full Of Shit We All Gotta Move."
Posted by: RD   2008-05-25 07:05  

#4  ...but out here they're feeding the spent grain that comes out of local ethanol plants to livestock.

I find it difficult to believe that the "spent" grain provides the same level of feed quality that the unspent grain does.

There are many reasons to kill this misguided ethanol crap, this is just one of them.

Personally, I think we're not that far away from a pitchforks, hot tar and feathering episode. The Congress (both houses) gets more and more outrageous everyday.

Way past time to clean the place out.
Posted by: Blinky Thunter4418   2008-05-25 06:39  

#3  Perhaps Texas cattle are more particular but out here they're feeding the spent grain that comes out of local ethanol plants to livestock. The ethanol mandate is a bad thing but it should be killed for the right reasons.
Posted by: AzCat   2008-05-25 02:28  

#2  *correction* Higher corn prices mean higher milk and meat prices...
Posted by: www   2008-05-25 00:43  

#1  The county in Texas that I have a ranch on also has many dairies. Higher prices mean higher milk prices, and higher prices for anything that requires milk in the food processing of that product.

There are so many dairy farms and ranches in this county, a power plant is being built that will run off of the manure generated. Feed the milk and beef cattle the corn, send the resulting manure to the power plant, which can generate electricity for hybrid cars.
Posted by: www   2008-05-25 00:41  

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