Demand for ethanol in Brazil is helping to increase sugar prices, according to a Bloomberg article sent to us by alert reader Erick Erickson of Holdrege, NE (Thanks, Erick!). Of course, it’s not entirely because of the demand for ethanol. Part of it has to do with the hurricanes here in the US that devastated sugar cane crops in Louisiana and Florida last year – and a big drought in Thailand. So … yeah, they’re making more ethanol in Brazil, but it’s basically the law of supply and demand here that is driving up sugar prices to a 24 year high. Basic Economics 101. So, relating that to the last post about increased ethanol production leading to world hunger … I would venture to say that it may (and hopefully will) increase the price for corn, but that is a good thing for farmers who – unlike most producers of goods – don’t set their own prices. They just have to take the best price they are offered at the market. The main reason for corn farmers to promote ethanol production and use is to increase demand for their product and ultimately the price they receive. It’s a bonus that ethanol is good for the environment too.
Ethanol and World Hunger
Will increased use of biofuels lead to more people starving in the world? That is apparently what some are saying now, according to a New York Times article. I have heard concerns about whether farmers can meet the demand for soybeans and corn generated by increased biodiesel and ethanol production, but this is the first I’ve heard that it could increase world hunger. I especially love this quote from the article, “We’re putting the supermarket in competition with the corner filling station for the output of the farm,’ said Lester R. Brown, an agriculture expert in Washington, D.C., and president of the Earth Policy Institute. Farms cannot feed all the world’s people and its motor vehicles as well, Mr. Brown said, and the result is that more people will go hungry.”
If you go to the actual article from the NY Times (link above), you will see a picture from Sioux Center, IA of a MOUNTAIN of corn. I could be wrong, but I think farmers can meet the demand without any more people going hungry. Give me a break. We produce enough food now to feed the world if it were not for the politics, corruption and logistics that keep it from getting to those who need it.
Farm Policy writer Keith Good has a great commentary on about the article you can read here on energy.agwired.com’s Mother blog AgWired.com.
Fuel Buffet?
Here’s an interesting article from Automotive News about what the future may hold for filling stations. It just conjures up a great visual…
If all the alternative-fuel vehicles at the Detroit auto show make it to the showroom, your local filling station could become the automotive equivalent of a soda fountain. There could be many flavors of fuel on tap.
The usual three grades of gasoline would be joined by:
E85 ethanol.
Low-sulfur diesel fuel.
Premium diesel with no sulfur and higher cetane (the diesel equivalent of octane).
Biodiesel.
Compressed natural gas.
Liquid hydrogen.
Gaseous hydrogen.
Nice analogy – soda fountain, buffet … why not? This is America. Freedom of fuel choice for all.
Reduce Dependence on “Terror-promoting Foreign Oil”
Reducing dependence on “expensive, polluting, terror-promoting foreign oil” is the goal of New York Governor George Pataki’s comprehensive energy plan unveiled today. While some critics say the governor is just trying to set himself up for a presidential run by endearing himself to the state of Iowa, most are applauding Pataki’s initiatives to boost production and use of renewable fuels and “position NY as the world leader in renewable energy research.”
Highlights of the Governor’s plan include: elimination of state taxes on renewable automotive fuels; creation of new renewable fuel stations across the State; development of “clean coal” power plants; a new hybrid vehicle tax credit; discounted Thruway tolls for hybrid vehicles; creation of a new state-of-the-art alternative fuel vehicle research lab; new tax-free benefits for clean energy companies that create jobs; a new $500 tax heating credit for lower-income seniors; a $50 million increase in Low-Income Home Energy Assistance Program (LIHEAP) benefits, and a new tax credit for homeowners who upgrade to a high-efficiency home heating system.
EVWorld Blogs about Bio-Energy
Check out this January 11 post on the EV World blog – Bio-Energy Economy Picking Up Steam. This blog, from what I can tell, mainly focuses on electric vehicles and hybrids but recent developments in the biofuels department really caught the blogger’s attention. He writes: My read is that the idea of a biomass economy is beginning to catch on not only in Colorado and California and New York, where Governor Pataki just announced his own initiative to spur biofuel production and sales, but globally. Where millions of dollars in public funds continue to be poured into hydrogen research, the real investment dollars are going into biofuel production from ethanol plants here in Nebraska (where we already have two cellulosic ethanol projects in the works) to palm oil plantations in Asia. He even posts a map from the National Ethanol Vehicle Coalition showing E85 fueling stations.
The author of EVWorld is Bill Moore of Papillion, NE.
Airing Both Sides
Wilson College in Chambersburg, PA is hosting an ethanol forum January 30 to “address concerns on both sides of the ethanol debate.” The college, located in south-central Pennsylvania, is billing the event as an educational forum being co-sponsored by Citizens for a Quality Environment and Penn-Mar Ethanol LLC.
In this corner …. representing the ethanol industry …. Dr. David Morris, vice president of the Institute for Local Self-Reliance in Minneapolis, will discuss the benefits that ethanol can provide as an alternative fuel. I have never heard of him or this organization, so I don’t really know – but because of that I would think there might be others better qualified to talk on the benefits of ethanol.
The opposing view will be presented by Dr. Tadeusz Patzek from the University of California, Berkeley – best known for his ethanol-bashing, oil-industry sponsored, short-on-facts report that got some media traction last summer.
From what I can gather from other stories on the web, the Citizens for a Quality Environment group says ethanol plants are bad for the environment and has been actively opposing Penn-Mar’s plans for developing ethanol plants in the area (Pennsylvania and Maryland). Basically, we’re talking about environmental wackos here. I have no patience for people like that who just like to oppose stuff and offer no alternatives. I really don’t understand why any “environmental” group can oppose efforts to develop renewable fuel sources here in the United States that would lessen our dependence on petroleum. Makes absolutely no sense to me.
Here is a link to the press release from the college with all the details.
Investing in the Future
Biodiesel and ethanol plants are getting lots of interest from investors, especially in the midwest.
According to an article in yesterday’s Des Moines Register, organizers of a biodiesel plant in Newton, IA raised $7 million in two days last week, with at least one investor driving over 200 miles across the state to put in his $25,000. According to the article, another group of organizers recently raised $20 million in a little more than a week to build a 30 million-gallon-a-year biodiesel plant in Wall Lake, IA.
Is the industry growing too big too fast? One person quoted in the article thinks so. Leland Tong of MARC-IV Consulting, which tracks the biodiesel market, warns against thinking of the industry as “the next big cash cow.”
But, Iowa State University economist Roger Ginder, a specialist in agribusiness management, disagrees – saying there is sufficient demand for biodiesel fuel and sufficient feedstocks like soybeans and animal fats to support the industry’s growth.
Good article by veteran agricultural journalist Jerry Perkins.
Fuel of the Future
This is an interesting story from the Land Down Under I found today while Googling around.
Take a bunch of old buggers, a 1925 Austin ragtop, a thousand litres of pure ethanol and what have you got? Queensland’s only entry in the 2005 Panasonic World Solar Challenge! This event, which has been running every two years since 1987, now attracts teams from all over Australia and around the world. It runs in late September, from Darwin to Adelaide, over about six days.
Team Ethanol, from Mackay, was entered in the Greenfleet Class, a recent innovation to showcase alternative fuel solutions, other than solar. It was one of 11 teams, which included electric, hybrid, bio-diesel, smart petrol and smart diesel cars and was the only ethanol powered entrant.
It’s a long story and worth reading – so here is the link to the whole thing.
The picture is the 1925 Austin ragtop from the story. Kinda reminds you of the Model T Ford – which Henry Ford originally built to run on what he called the “fuel of the future” … ethanol. I guess the future is finally here!
Check out Wikipedia’s entry about Ford and the Model T – some very interesting stuff there. For instance – in 1913, Ford attempted to enter a reworked Model T in the Indianapolis 500, but was told rules required the addition of another 1,000 pounds (450 kg) to the car before it could qualify. Ford dropped out of the race, and soon thereafter dropped out of racing permanently, citing dissatisfaction with the sport’s rules and the demands on his time by the now-booming production of the Model Ts.
Interestingly, this year all cars in the Indy 500 will run on 10 percent ethanol for the first time – and switch to 100 percent next year! And … there is a Team Ethanol car in the IRL, sponsored by our friends at EPIC. Last year was the first year the car was in the race – and you can expect to hear much more about it this year!
Show-Me the Ethanol
The Governor of Missouri is calling for a 10 percent ethanol mandate in the Show-Me state. Encouraging the use of domestic fuels is one of Gov. Matt Blunt’s priorities outlined in his state of the state address this week.
“Through the ethanol and bio-diesel incentive programs we are encouraging a vital expansion of the economy by producing renewable fuels and reducing America’s and Missouri’s dependence on the Middle East while providing ready markets for the farmers of the Midwest. My budget calls for full funding of Missouri’s bio-diesel and ethanol incentive funds.
I also call upon this General Assembly to pass an “Energy and Green Power Initiative,” to reach beyond full funding for bio-diesel and ethanol incentives. I ask that we give Missouri’s heartland economy a major and lasting boost by requiring that motor fuel sold in Missouri for passenger cars and trucks contain 10 percent ethanol.
This standard will spur even greater economic development in rural Missouri. For all of us, it will provide cleaner air, lower prices and greater independence from Middle East oil supplies. Please stand with me against special interests and for our farmers, consumers, the environment and new energy supplies made right here in Missouri.”
The picture is of Gov. Blunt at the grand-opening ceremony for Mid-Missouri Energy in June 2005.
WICHITA RESIDENTS EMBRACE ETHANOL
The Ethanol Promotion and Information Council – or EPIC – is pleased with the success of it’s ethanol awareness campaign conducted last fall in Wichita, KS. (see previous post) EPIC Executive Director Tom Sluneka calls the results of the campaign “outstanding.” “Our partner in Wichita-Hutchinson market was Kwik Shop, and their stores branded ethanol with our E-logo. At that point in time they saw a 42.8 percent increase of sales to branded ethanol over regular fuel. This is a dramatic increase and our partners there were very excited to see those types of results at their stores.” Conversely, ethanol-enriched fuel sales at Kansas Kwik Shops located outside the promotion area accounted for just 22 percent of the total during the same period. This marks nearly a 100 percent increase in ethanol sales between the two sets of stores. Prior to the EPIC promotion efforts, sales of ethanol-enriched fuel inside and outside the promotion area were nearly identical. (full release)
One of the ways EPIC promoted ethanol at the Kwik Shops was to give away their E-logo magnets to motorists who filled up with an ethanol-blend – as you can see in the picture.