Saturday, August 16, 2008

Another busy week for America and Ethanol

For starters, it was really nice to see Texas Gov. Rick Perry suffer defeat by the EPA recently. Gov. Perry, claiming to represent poultry farmers in Texas (as if the as if petroleum companies aren't encouraging him) led a charge to roll back ethanol production mandates. I have written before about the myth that ethanol is blamed for tight food supplies.

Now, FAITH BREMNER of writes a fine article in the link below:

WASHINGTON — Ethanol producers will use about a quarter of the U.S. corn crop this year, an amount that alarms ranchers and poultry producers who depend on corn to feed their animals. As the demand for corn and energy costs climb, so do prices at the grocery store.

But the ethanol industry's impact on the nation's supply of corn for feed isn't as dramatic as it may seem.

One-third of all the corn used to make ethanol ends up as an ingredient in feed that farmers in the upper Midwest — where most of the ethanol plants are located — give their cattle, poultry and pigs.

This year, farmers will feed 18 million metric tons of this ethanol byproduct, called distillers grains, to their animals, up from 2.3 million tons nine years ago. Last year they used 14.6 million tons. About 1 million tons will be exported to places such as Canada, Mexico, Taiwan and Japan.

The article goes on to say that distillers grains aren't easy to come by where there are no distilleries, so Texas chicken farmers are probably experiencing difficulty. Given that Texas is enjoying the fruits of soaring petroleum prices, I think the state can manage for a while. Funny how Gov. Rich Perry doesn't complain to the EPA about soaring petroleum prices. And let's face it! The EPA's mission on earth is not to regulate the price of chicken feed (or the price of tea in China for that matter).

Maybe Texas needs some distilleries producing distillers grain. Maybe Texas petroleum companies need to share some of their record profits subsidizing the state's embattled poultry farmers. I think Texas can solve this problem quite handily without any help from the EPA, the Federal Government, and the rest of the country. All they have to do is get with the program.

In other wonderful news...

Going to Google News and entering "Ethanol" for a search yields fresh news every day about new plants coming on line. Ethanol plants go up FAST. It takes 2 years from start to finish to put an ethanol plant on line.

There are a lot of new cellulosic ethanol plants coming on line too. Each one has rather unique technology; some which may turn out to be more efficient than others. The soaring price of petroleum is fueling a surging technological race to replace it with alcohol fuels.

FYI, the EPA mandate for corn ethanol has already been met (or will be so by the time you read this). The race is on for more cellulosic ethanol production which is the other half of the EPA ethanol mandate. Ooops! Gov. Perry didn't mention that when he whined about the price of chicken feed.

I'll tell you a little secret: Texas has some of the best darn energy engineers found on the planet. They can probably put up distilleries faster than the rest of us. All Texas has to do to fix their little chicken farmers' problem is get with the program.

In yet additional good news...

Yahoo AP reports:

Oil touches 3-month low on stronger US dollar

NEW YORK (AP) -- Oil fell to its lowest price in three months Friday, briefly touching the $111 level after the dollar muscled higher and OPEC predicted the world's thirst for fuel next year will fall to its lowest point since 2002.

Gee! Maybe some of these spot market speculators are figuring out that we have a very nice future with automotive fuels that will compete quite nicely with petroleum sold at ridiculous speculative prices. Maybe OPEC is starting to realize that the party is over. I wouldn't go dancing in the streets just yet. Alcohol fuels start losing their competitive edge at around $50/barrel; still a VERY healthy price for petroleum.

Nobody is going to starve because we put alcohol fuels in our cars. In fact, we'll all have more jobs making fuels here in the United States that bring a good buck to American workers.

Eventually, our idiot politicians are going to get bowled over by economics performing a work of nature that cannot be stopped. It would be nice if they act smart and pass the Open Fuels Standard Act of 2008 and make every car sold in America capable of running on any blend of gasoline or alcohol. Then we'll have even more domestic alcohol plants, more jobs, the price of petroleum will be forced down, the dollar will regain its glory and we'll all live happily ever after.

Have a nice day,

There is NO Santa Claus

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