The US mandates using a lot of fuel to produce a little bit of fuel

Our failed community organizing president, Barack Obama (D), has struck hypocritically again, leaving confusion and added debt in his wake. Investors Business Daily sums up Obama's hypocrisy with the headline "Obama flies a 747 to Chicago to tout his fuel-saving plan."

Oh yeah, I'm sure he (read the sequestered US government meaning you, the struggling taxpayer) purchased some mythical carbon offsets to cover the price of the fuel and its carbon emissions before he babbled

You see, after years of talking about it, we're finally poised to take control of our energy future. We produce more oil than we have in 15 years. (In spite of his policies. ecf) We import less oil than we have in 20 years. (In spite of his policies. ecf) We've doubled the amount of renewable energy we generate from sources like wind and solar -- with tens of thousands of good jobs to show for it. (Not really. ecf)


We can support scientists who are designing new engines that are more energy efficient; developing cheaper batteries that go farther on a single charge; and devising new ways to fuel our cars and trucks with new sources of clean energy -- like advanced biofuels and natural gas -- so drivers can one day go coast-to-coast without using a drop of oil.

Not so amazingly, not a word about the Keystone Pipeline. Multi million dollar losing Solyndra? Oh, isn't that a cute new girl's name; after all Obama was talking biofuels for the future, not his past failures.

And speaking of " advanced biofuels" how is ethanol, the conversion of corn into biofuel thing, coming along?  Uhm, not so good.  Great idea--for Obama, the non scientist and economist--but bad idea for people who actually have to, you know, like, pay for their food. Peter Suderman of Reason Magazine explains.

Food price inflation is indeed complex, and there's no simple way to prevent it. But there is a single step that government could take that would almost certainly significantly arrest the rapid rise in the cost of food: end ethanol energy mandates.

There's very little question about whether or not ethanol subsidies and related mandates, which essentially pay farmers to grow fuel instead of food. Ethanol policy hits corn directly, but because corn is so integral to the rest of the food production process, a rise in the price of corn quickly results in a rise in the price of other farm commodities such as meat, poultry, dairy, and soy products. When the Congressional Budget Office looked at the impact of ethanol subsidies on overall food prices between April 2007 and April 2008, the nonpartisan scorekeeper found that 10-15 percent of the 5.1 percent rise in food prices, as measured by the Consumer Price Index, could be attributed to ethanol subsidies.

The CBO noted at the time that it was difficult to precisely estimate the impact of ethanol subsidies going forward. But in early 2011, corn prices spiked after a crop shortage, which many analysts expected to translate into higher food prices. And over the years, ethanol subsidies, along with a renewable fuel standard which pushes energy producers to include ethanol in their products, has resulted in what the Farm Foundation describes as a "persistent demand shock." Some 40 percent of the nation's annual corn crop is now redirected into ethanol production.

Congress allowed direct ethanol subsidies to end in 2011, but the renewables standard remains, and it's by far the bigger factor. Even modest changes in ethanol policy could have a big impact. Last summer, three farm economists at Purdue University estimated that even if we just partially relaxed the renewables standard, corn prices could drop by as much as 20 percent. (That could also help ease the impact of rising gas prices, another factor that Karlgaard names as hurting Walmart in his oped, by increasing fuel economy.)

It's not just American consumers who would benefit. It would also help stop the rise of food prices worldwide, which harms poor and developing nations. The global impact is big enough that last summer, the World Bank suggested that an immediate easing of the renewables mandate could prevent a world food crisis.

Higher food prices?  No problem.  Let them eat biofuels and let's move as Michelle Obama might say.

Meanwhile, American farmers who hitched their farmland to corny ethanol are not prospering but suffering from a surplus of the stuff according to a report in the New York Times. It seems that government planners, misplanned.

Nearly 10 percent of the nation's ethanol plants have stopped production over the past year, in part because the drought that has ravaged much of the nation's crops pushed commodity prices so high that ethanol has become too expensive to produce.

A dip in gasoline consumption has compounded the industry's problem by reducing the demand for ethanol.

The situation has left the fate of dozens of ethanol plants hanging in the balance and has unsettled communities that once prospered from this biofuel.


Congress set out to create an ethanol industry that would produce enough to make up 10 percent of every gallon of gas pumped into a car, but the lawmakers assumed that demand for fuel would grow. Instead, it has shrunk to 8.7 million barrels a day from 9.7 million in 2007, said Larry Goldstein, an economist and a director of the Energy Policy Research Foundation. And with corporate average fuel economy rules now in place to double the number of miles that the average car gets per gallon by 2025, "you know we're on a trend," he added.

As the gasoline market got smaller, so did the amount of ethanol it could absorb, because most service stations are set up to sell fuel with an ethanol content of only up to 10 percent. Owners' manuals of most cars call for fuel blends of no more than 10 percent ethanol. The industry calls this the "blend wall," and it has won Environmental Protection Agency approval for some cars to run on blends of up to 15 percent, but thus far that fuel has not caught on with consumers.

Millions of cars are "flex-fuel vehicles" and can run on blends of up to 85 percent, known as e85, but that fuel is not popular and is not even widely offered outside a few corn-producing states.

But the ethanol producers were encouraged to build because the federal government had mandated that refiners use their product, and it established a tax credit of 45 cents per gallon of ethanol. The tax credit was allowed to expire on Dec. 31, 2011, but not before it had stimulated construction of ethanol plants.

The value of ethanol has also sagged. Its price is created in part by the price of the gasoline it displaces, and gasoline prices have been relatively modest for the past few months.

Darn that Congress. And of course, farmers have to grow a lot of corn on a lot of land to produce a little ethanol, all of which, gasp...depletes the soil while using a lot of water. That may be fine when rain is plentiful but in the past few years, it hasn't been. And, irony of ironies, converting corn into ethanol requires using...fuel. Almost as much fuel that is created.

In a 2005 study, Cornell University researcher David Pimental factored in the energy needed to grow crops and convert them to biofuels and concluded that producing ethanol from corn required 29 percent more energy than ethanol is capable of generating. Pimental found similar problems with making biodiesel from soybeans.

Add another irony, biofuels, advanced or plain unadvanced, are a drag on, get this, fuel efficiency. Soooo, and this is funny in another context, such as the Obama alternative universe, diluting gasoline with advanced biofuels, requires...more gas.

Or, as researchers at the New England Complex Systems Institute sum up

Conversion of corn to ethanol in the US since 2005 has been a major cause of global food price increases during that time and has been shown to be ineffective in achieving US energy independence and reducing environmental impact. We make three key statements to enhance understanding and communication about ethanol production's impact on the food and fuel markets: (1) The amount of corn used to produce the ethanol in a gallon of regular gas would feed a person for a day, (2) The production of ethanol requires so much fossil fuel energy that its energy benefit is only about 20%, and (3) The cost of gas made with ethanol is actually higher per mile because ethanol reduces gasoline's energy per gallon.

But, photo and propaganda op finished, our community organizer president has left the building, off to another performance.

In a fuel hungry jet.