With oil prices plunging, and new discoveries occurring, it's time to take a fresh look at the ethanol boondoggle.

Whether or not the economics work out is one thing but I saw something that was completely wrong in that exec summary link.

In Alabama alone there are millions of acres of crop land that are left unused each year from crop subsidies and just lack of interest in farming. Rand you fly over the country a lot and there are a lot of irrigation systems in the desert west when it would be much easier to irrigate here and sell the corn.

Dennis

The real problem is sugar tariffs. Sugar is far more
effective at ethanol production and far cheaper, the
problem is the florida sugar industry has the bush's
in their pocket. Cheap sugar from the caribbean would
create wealth down there, lower energy prices here,
and be a win for everyone except Florida.

It would actually even be a win for a lot of Floridians (particularly those who care about restoring the Everglades). No one supports Big Sugar except Big Sugar and the politicians whom it bribes.

To me, Corn Ethanol is a placeholder to encourage infrastructure development. Cellusoic Ethanol is the real goal.

I'm with Mike.

The _historical_ goal of ethanol production has focused on producing something drinkable. We have more than 4000 years of experience with that. ;) But for the majority of the time the focus hasn't been on making near-pure ethanol that isn't intended for human consumption. And the short while we've had a chemical industry desiring near-pure ethanol hasn't been focused on the overall energy balance, but instead the purity. When you don't intend to drink it, there might be other unexplored routes from plant-to-fuel. I throw genetic engineering the darn plant into the mix also. Concerns about consuming GM material are lessened when 100% is intended for consumption by a refinery.

I seem to remember reading something about the prarie grass being an excellent solution for ethanol if you don't intend to drink the stuff. I don't know if I could cope with the historical irony though if the Great Plains get replanted with grass. My head might explode.

Alfred I saw a show about alternate energy recently, and prairie grass was the best candidate for ethanol production. The best tests are showing they can get 1074 gallons of ethanol per ace with the grass. Even if they get only half of that it's a huge amount. I guess the deal is they can use the entire plant, roots and all, there is no waste or chaff and stalk like with corn.

What about sugar beets? How far south will they grow? The prairie grass will grow 2 crops per year in the deep south from what I saw.

Rand you keep posting articles that are anti-ethanol. What's the answer if we don't "grow" our own fuel?

I'm not anti-ethanol. I'm anti-market-distorting subsidies (particularly when they enrich a few Americans at taxpayer expense, while impoverishing people in other countries because we won't buy their cheaper sugar).

Don't forget bio-diesel. I think without subsidies, bio-diesel would trump ethanol.

Definitely kill the marketing-distorting subsidies!

If sugar cane ethanol, corn ethanol, cellulose ethanol, bio-diesel can compete in the market, more power to them.

I'm claiming the pun is unintentional.

It seems to me there's also other logical ways to go:
-nuclear power
-continued domestic oil exploration and development (e.g. consider recent deep water discoveries in the gulf)
-continued improvement in the oil extraction in existing oil fields; it's amazing how this has progressed
-exploitation of the tar sands, such as those in Canada

And I have to admit a personal fondness that I think is still reasonable, although I might be blinded by emotional considerations, there is also:

-solar power satellites

(Note that if this last is viable, it gives us an excellent reason to be in space besides telecommunications and "science").

I'll even accept some marketing distorting subsidies for this last one. No I won't. That would be bad in the long run. But it would be cool.

Heres a nice rundown on different options:
http://www.teslamotors.com/blog1/?p=25

All the hydrocarbon-burning ICEs are basically a boondoggle, so is hydrogen hype.

so is hydrogen hype.

Tell me about it. With the bulk density of hydrogen you'd be lucky to get 50 miles to the tank. And don't even think about filling up before putting the car into long term parking at the airport. Without spending thousands on seals there'll be nothing left in the tank by the time you get back.

Rand, I'll buy all that you say and I agree. We should end the subsidies and let the costs stabilize at fair market values. No more tillable land with some fat cat collecting money to NOT grow anything. It's foolish.

As to the foreign countries, even if we paid more for their sugar, where's the proof that the money would get to the poor saps at the bottom of the food / sugar chain?

Kert:

Exactly. Play Martin's presentation and let's start asking and answering the right questions.

As to the foreign countries, even if we paid more for their sugar, where's the proof that the money would get to the poor saps at the bottom of the food / sugar chain?

It's not a question of paying more for their sugar. It would be paying them less than we pay our native producers, whereas currently, they get nothing at all, because we price them out of our market. And with the exception of Cuba, if there's more money coming into an island economy sugar workers are likely to see an economic benefit.

Rand, it would be interesting to hear your take on what Martin Eberhard has to say in the presentation link i posted above.

There was plenty of money in Papa Docs bank account and millions of poor and hungry still on the island, Rand. It can't just be laid at our feet that poor countries are poor just because of our policies.

There are many countries without Papa Docs and Castros for which this policy is economically devastating. And even if it weren't hurting them, it's robbing consumers, who are paying too much for sugar to support rich sugar farmers and lobbyists.

kert posted a link to tesla motors, and I found it fascinating. If we could make this switch over the next 15-20 years, it looks to me like we would cut our oil usage (at least for transportation purposes) in half, and even more if we produce electricity by other means. To me, this looks like the most realistic way to reduce our dependence on foreign oil and the resulting disproportionate affect the middle east has on our economy and our foreign policy decisions.

(Pay close attention to the arguments on why this is better, even though we are shifting the pollution and power generation away from the vehicle to the power plants.)

http://www.teslamotors.com

(Not a paid shill for the company, can't afford one of their first cars, but I'd probably invest if they were public...)