E85 and Bio-Diesel

[aplusmnt]

As I understand it. The .51 subsidy is for an incentive to develop alternative fuels. The market place at work.

. Yes we will pay a little more for corn because of the market...... at work.

The Market place at Work would be leaving Subsidies out of it and allowing Supply and Demand to dictate what businesses do. Once you start giving Subsidies to someone you are altering the Market Place in the direction of the Subsidy.

A Free Market works like this, once we as consumers demand an alternative someone will find it. Once the Supply runs dry someone will come up with the Alternative. When the government gives a subsidy to ethanol plants they are now making the decision on which way we will go with alternative energy.

If they stayed out of it, maybe the answer will be in better battery research but will never know because the big Subsidy money will be in ethanol.

When will we get away from Welfare and realize if a company wants to make it in this market they better work hard and provide a good service with no hand outs. Were is the survival of the fittest instead of Subsidy for the weakest?

 

[preston39]

Apl...,

Agreed... re; subsidy. Hopefully that will just be temporary to encourage development.

The market at work.... was referring to the supply and demand of corn. It would appear even higher prices are in store. Futures are being sold way into next year at current and greater prices. Current projection of corn crop plans are down 2-3%. That may change between now and the next crop time because higher corn prices will bring some increase in corn planting...I would think.

 

[tom4018]

When discussing the energy required to produce a gallon of ethanol versus what you get out of it, does this take into account the byproducts you get? I was told you end up with 3 products of approximate equal parts.

 

[stocky]

"We need to tap nuclear, hydro and wind for power. We have over half the worlds known coal reserves and the technology to liquidfy it. We haven proven oil reserves off the East, West and Fla coast, that are not being drilled because not in my backyard the same with refineries."


Those are some real important words for everyone to consider from Camp.
None of this has been done for 40 years because of the political power of the groups that dont want anything done close to them but they want all the benefits. Because of these same people, we refuse to drill for oil in Alaska and off our coasts, but other countries are coming in with less safegaurds and taking the oil. So we pay out the nose for oil in the middle east and China and Russia come in and takes the oil that we should have and they will flood our beaches with oil spills because we have no control over their safety standards, but we will pay to clean it up and none of these politicians who are blocking our use of the oil will ever be held accountable.
Hydro power is limited because there probably wont be any new dams built. I can understand alot of the areas being off limit to dams, but there are many other areas that could be used, but there are environmental and animal issues that hold them up. No one wants a wind farm close to them. So it is back to "I want everything, but getting it, cant affect something that is in my area, even though I dont own it or pay taxes on it."
As water becomes more valuable, you can bet that there will be a way to make us pay for water from our own wells. Anything that has value will be taxed by the government in time. This last election and the next one in 2 years will hasten the elimination of private property rights like we have never seen before. As more liberal and anti property judges take the bench, the property we sweat and bleed and pay for will be under the control of others, and it is already to some extent with zoning laws.
You have seen alot of differing opinions and that is a small sample of why farmers have never been able to get together on anything as a group. What is good for grain farmers is bad for beef, dairy, hogs, and chicken. Many things that are good for beef are bad for hogs and chicken. A huge supply of chicken is bad for beef. A huge supply of slaughter dairy animals is bad for beef farmers. In essence, farmers are pitted against each other.
As corn prices rise, the acreage planted will increase drastically. Also, just like with beef, if corn gets very high, there will be an opening of the borders to corn from Brazil and other countries to knock the price down.

 

[preston39]

From Iowa State U;

"Long-Run Impact of Corn-Based Ethanol on the Grain, Oilseed, and Livestock Sectors: A Preliminary Assessment, The
Amani Elobeid, Simla Tokgoz, Dermot J. Hayes, Bruce A. Babcock, Chad E. Hart
November 2006 [06-BP 49]

The ongoing growth of corn-based ethanol production raises some fundamental questions about what impact continued growth will have on U.S. and world agriculture. Estimates of the long-run potential for ethanol production can be made by calculating the corn price at which the incentive to expand ethanol production disappears. Under current ethanol tax policy, if the prices of crude oil, natural gas, and distillers grains stay at current levels, then the break-even corn price is $4.05 per bushel. A multi-commodity, multi-country system of integrated commodity models is used to estimate the impacts if we ever get to $4.05 corn. At this price, corn-based ethanol production would reach 31.5 billion gallons per year, or about 20% of projected U.S. fuel consumption in 2015. Supporting this level of production would require 95.6 million acres of corn to be planted. Total corn production would be approximately 15.6 billion bushels, compared to 11.0 billion bushels today. Most of the additional corn acres come from reduced soybean acreage. Wheat markets would adjust to fulfill increased demand for feed wheat. Corn exports and production of pork and poultry would all be reduced in response to higher corn prices and increased utilization of corn by ethanol plants. These results should not be viewed as a prediction of what will eventually materialize. Rather, they indicate a logical end point to the current incentives to invest in corn-based ethanol plants.

Keywords: biofuels, commodity markets, corn price, energy markets, ethanol.

Full Text 114 KB"