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Corn Ethanol
How much energy independence from corn ethanol?
  The US Dept. of Agriculture (USDA) is extremely pro-ethanol. But they're honest most of the time, and just say nothing if there's bad news. But look hard and you can find the answer. Here's what they said to Congress in Jan 2007. See for yourself: small pdf.
In 2006, ethanol production on an energy content basis was equivalent to only 1.5 percent of U.S. crude oil imports.  —USDA Chief Economist
But there's still a small trick. He only counted oil. The problem is that making ethanol uses a lot of natural gas and extra gas use increases imports. So ethanol makes us only 1.1% more energy independent (counting oil and gas).
But we're just getting started right? Wrong. In 2006 we made 5 billion gallons, and the USDA told us, in Mar 2007, that by 2017, corn ethanol will pretty much level off at 12 billion gallons (take a look). That gets us to 2.8% energy independent. In 2006, ethanol cost us an extra $7.3 billion in subsidies and at the pump.
That's the good news. Now check on Ethanol & Climate.
  Not even a huge new Texas field would make us independent
Suppose we found a huge oil field in Texas and it produced so much we could stop importing oil. Would we be energy independent? The military would be. But you and I would be right where we are now. Here's why.
Say, with our newly discovered oil, the world price of oil went down to $40, but then something happens in the Middle East and the world oil price goes to $100. All our oil is local, and local costs didn't change, so our oil companies keep selling to us for $40/barrel, right?
You gotta be kidding. An oil company can sell to you for $40 or some foreigner for $100; what's it going to do? Oil companies don't even stop to think about that one. What happens when they start selling all their oil to foreigners for $100/barrel. Big shortages here in the US. Then our prices go up. And up. And up. Until we offer to pay $100. Then those oil companies sell to us, same as to the foreigners. Even if we have all our own oil, the oil companies will still make us pay the world price of oil. We will never be independent of that price.  And it's the price that matters.
OK, but what if we have our own ethanol?
The price of ethanol tracks the price of gasoline quite closely. Over the last 25 years wholesale ethanol has average 57¢ more than wholesale gasoline (USDA) and that difference equals the average ethanol subsidy. The price of gasoline tracks the world price of oil. On top of that, if we had enough ethanol to be "independent" and the price of ethanol were $2.00/gallon here with the world price of oil at $100/barrel. Our nice little ethanol producers like multinational ADM would sell their ethanol on the world market, and cause a shortage at home. Same story all over again.
Isn't it better to pay our ethanol producers and farmers?
Sure, but how much is this costing, and isn't there a cheaper way? And couldn't we find a way that did something for global warming? Corn ethanol costs about the same as gasoline per gallon (a little more), but 1.53 gallons are needed to replace a gallon of gasoline. So when gas is $2.00 we pay $3.00 for the same energy ethanol. That's on top of the 51¢/gallon subsidy. So to save a gallon of gas costs us more than $1.75 extra on top of the normal price of gas (and more when gas prices are over $2.00).
But even that's an underestimate, because making ethanol uses imorted natural gas (and a little oil) which makes us more energy dependent.
There are other ways to save gas that are much cheaper. Not using a gallon of gas saves two or three dollars instead of costing an extra $1.75, and it reduces greenhouse gases 8 times more than replacing the gas with ethanol. According to the American Academy of Sciences, some auto efficiency measures could be implemented for less than the cost of he gas saved.

http://zfacts.com/p/350.html | 01/18/12 07:17 GMT
Modified: Mon, 23 Apr 2007 22:32:35 GMT
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