Outrun Change

We need to learn quickly to keep up with the massive change around us so we don't get run over. We need to outrun change.

Ethanol fail

When can we start calling it foolishness to burn corn in our cars?

Via Meadia’s post Biofuel Boondoggle Just Won’t Quit begins:

Corn-based ethanol starves the world’s poor and increases greenhouse gas emissions

Standards set by Congress require a certain amount of ethanol be used. Here’s the required amount this year compared to production and expected demand:

  • 13.8B gallons – required to use by federal law
  • 13.4B gallons – expected demand based on amount of expected driving this year
  • 12.3B gallons – expected production limited by production capacity – hint, that means the producers can’t make any more than that

So let me get this straight. The amount of corn-converted-to-gas ethanol actually produced will be less than the market demand (12.3 vs 13.4). So there won’t be enough ethanol in existence to sell what could be sold.

And the mandatory usage is greater than what will be produced (13.8 vs 12.3) and greater than how much people will buy (13.8 vs 13.4).

That means the gasoline refiners have to buy a production offset credit to make up for what won’t be sold because there isn’t a demand and buy credits for what can’t be sold because there’s not enough edible-corn-in-gasoline-form production capacity.

All of which will get added on to the cost of the gasoline we buy.  File that away for when you wonder why gas prices are going up this year.

Via Meadia’s conclusion:

But the fact that the entire policy is designed to prop up corn-based ethanol, which starves the world’s poor by driving up the price of corn while failing to do a thing to reduce greenhouse gas emissions, is the icing on the cake.

The Via Media article is from a week ago. Yesterday’s Wall Street Journal editorial, The Ethanol Gas Pump Surcharge, points out the price of offsets have jumped to $1 a gallon. So a refiner can cover the shortfall in their share of the gap between 12.3b 13.8b at $1 a gallon of ethanol.

The WSJ editorial  points out the EPA can change the ethanol requirement anytime they want. If they wanted to, they could reduce the price pressure on gasoline. They could also reduce food costs for the world’s poor. If they wanted to. 

This foolishness is doing the following:

  • Taking scarce money out of the pocket of the world’s poor.
  • Driving up the cost of gas in the US.
  • Increasing greenhouse emissions.

Did I get that right?

P.S. Can someone explain to me in the comment section why this is moral?

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