A subservient Trump bows to Iowa's ethanol establishment

A subservient Trump bows to Iowa's ethanol establishment

By Timothy P. Carney (@TPCarney) • 12/15/15 5:11 PM

American liberals are notoriously bad at understanding conservative arguments. Donald Trump may be the worst of them all.

The Manhattan billionaire keeps accidentally adopting the positions of Hillary Clinton — whom he has long supported with donations — because he confuses pro-business corporatism with pro-market free enterprise.

Falling behind Ted Cruz in Iowa polls, Trump's comeback strategy is to pander to the Hawkeye State's ethanol bandits and attack Cruz for standing on principle.

In a Des Moines campaign event on December 12, days after the bad polls started pouring in, Trump began his attack: "Where are the ethanol people?" Trump asked the crowd. "with the ethanol, really, [Cruz has] gotta come a long way because he's right now for the oil."

Translation: Trump was attacking Cruz for his plan to wind down the Bush-era ethanol mandate, known as the Renewable Fuel Standard. The RFS forces drivers to use ethanol, a fuel made from plants (mostly corn) by requiring refiners to dilute their gasoline with the stuff.

Clearly anti-market, the ethanol mandate drives up food prices and fuel prices, hurting American families to benefit the special interests in the corn and ethanol industries. It unjustly enriches a small number of people who provide a good that would not otherwise be in demand. Environmental groups also oppose the mandate, which they say degrades soil and water supplies. Also, as Trump alluded, the oil industry dislikes it, because the mandate means more of the gasoline Americans buy is squeezed from corn instead of refined from crude.

The ethanol mandate, like the federal ethanol tax credit before it, exists only because the Iowa caucuses are the first nominating contest. For decades, politicians have sold their souls for ethanol. Al Gore admitted as much, recently explaining his ethanol support was rooted in "a certain fondness for the farmers in the state of Iowa because I was about to run for president."

Iowa winners George W. Bush (2000), Mike Huckabee (2008), and Mitt Romney and Rick Santorum (2012) all supported ethanol subsidies. This time around, most Republican presidential candidates are at least a bit embarrassed by their support. Some, like Carly Fiorina, try to walk a fine line: stating general opposition to the mandate, but saying they won't touch it until the current mandated levels expire in 2022.

Trump is unabashed in his love of corporate corn welfare. He's actually attacking Cruz on it, for one thing. And his love for the ethanol mandate isn't new.

Back in August, when Trump's campaign had only recently taken off, Iowa Gov. Terry Brandstad — whose son is a professional ethanol-subsidy advocate — made it clear that Trump, who frames himself as someone who won't bow to the establishment or to special interests, was in fact bowing to Iowa's special-interest power brokers. "I think he's got a real campaign here," said Brandstad. "Whether he's willing to devote the time ... is the question."

A couple of weeks later, when asked if he would support the RFS, Trump was effusive: "Yes, and a very strong yes," he said. "There's no reason not to. We need it. … Ethanol is terrific, especially with the new process, and I am totally in favor of ethanol, 100 percent. And I will support it."

In November, Trump paid a visit to representatives of the ethanol lobby. As he put it, "I went out to see some of the folks on the ethanol. Good stuff and great people, put a lot of people to work out here. I just want to thank them, they're doing an amazing job."

His full-throated support for the ethanol mandate puts no room between him and Hillary, who has never met a corporate handout she didn't like. It also conforms to the liberal line about conservatives: They say they believe in free markets, but they really just believe in Big Business.

Trump has shown this tendency elsewhere. For instance, he loves eminent domain for corporate gain. He says it's "wonderful" when governments seize property to give it big developers like Donald Trump.

Trump's decision to run on ethanol welfare is clearly a naked pander to Iowa special interests, but that's not the entire story.

When considered together with his love of eminent domain to benefit developers, it reflects Trump's view of capitalism, which is also the liberal stereotype of the capitalist — that he simply wants what's best for the rich and successful.

It's almost as if Trump isn't a real conservative.

Timothy P. Carney, The Washington Examiner's senior political columnist, can be contacted at tcarney@washingtonexaminer.com. His column appears Tuesday and Thursday nights on washingtonexaminer.com.

http://www.washingtonexaminer.com/a-...rticle/2578424

Ethanol subsidies are a good thing, because it's an investment in renewable clean energy that actually works, that Americans actually don't mind buying when they purchase gasoline. At the 10% level, it's safe for vehicles, if they raise that limit, it will be hard on older models. But if we keep the participation at 10% with the subsidies that were promised when the investors decided to fund these innovative new energy source operations, then everyone will be better off.

Why anyone would want to criticize Trump for keeping the deal made years ago that is improving the quality of our air and making US less dependent on foreign oil imports is inexplicable. And this was not a Hillary Clinton idea, it was the idea of innovators in alternative energy businesses, some of them very small businesses at the time, a new product to solve problems.

So tell me, Tim P Carney, when some innovator comes up with a cure for cancer and the production of the drug or treatment needs a government subsidy to put it into operation because "free markets" are making a lot of money off cancer, where will you stand on that? Will your "conservativism" yell from the roof-tops, "I'm a conservative who supports free markets, let the people die"?

Yeah, I didn't think so, you two-faced hypocrite. I bet you own quite of number of those subsidized defense company stocks, too.

Ethanol subsidies are a bad thing. The following article may be a little old, but the facts are still as relevant now as they were back then.

A severe drought is raising the price of corn, and proving Washington's energy subsidies foolish.

By Rick NewmanJuly 31, 2012, at 5:10 p.m.+ More

Like many bad ideas, it seemed like a good one at first. Unfortunately, Congress went way overboard.
About 40 percent of the corn produced in America is used to make ethanol, a gasoline additive that ends up in most Americans' gas tanks. When corn is cheap and plentiful, this is a marginally sensible idea. But when corn becomes scarce and prices rise—which is happening now, as a withering drought wrecks much of the nation's corn crop—ethanol production competes directly with the use of corn for food, causing a needless rise in food prices.


Some experts are now calling for Washington to temporarily issue waivers from the law so that more corn can be diverted away from ethanol production and help stabilize rising food prices—which would help consumers not just in the United States, but in poorer countries as well. The problem is that subsidies doled out by Washington for years have distorted the farm economy and left many growers overdependent on a fuel that might not exist without Washington's help. So changing policies now would harm some farmers who, rightly or not, have received implicit promises from Washington to protect their livelihood.

Though it's less efficient than gasoline, corn-based ethanol began to catch on as a home-grown motor fuel during the oil shocks of the 1970s, since it seemed like a way to reduce U.S. dependence on oil from the volatile Middle East. Then it gained allure in the 1990s as a renewable fuel that helps reduce emissions. In the early 2000s, President George W. Bush approved new measures that raised the requirements for the use of renewable fuels—mainly, corn ethanol. All along, Congress, pushed by farm-state legislators, has cranked up ethanol subsidies, which now stand at about $6 billion per year.

This has happened even though ethanol is not very appealing to consumers. The fuel economy it generates is about 25 percent lower than it is for gasoline, which is why the use of E85 (which is 85 percent ethanol and 15 percent gasoline) never really caught on, even though the Detroit automakers have produced millions of "flex-fuel" vehicles with minor modifications that allow them to run on any blend of ethanol and gas. Ethanol costs about 30 cents less per gallon than gasoline, but when you factor in the poorer mileage, the overall cost of running on E85 would be slightly higher for most drivers. So there's no natural incentive to choose it over gasoline.

Ethanol is still mixed with much of the gasoline sold at gas stations, in a blend known as E10 (10 percent ethanol) which most cars can burn without any modifications. This serves two purposes: It oxygenates the gas, which reduces harmful emissions and smog, and it pumps up sales for blenders and corn growers who benefit from the subsidies arranged by their buddies in Congress. Many drivers don't know it, but one reason they tend to get lower gas mileage than the government's own estimates is the presence of ethanol, which government mileage tests don't account for.

Even Congress, however, has begun to acknowledge that government support for ethanol needs to end, as federal budget cutters raise the pressure to axe every wasteful dollar. Last year, the Senate voted to end the 45-cent-per-gallon federal subsidy on ethanol. The bill didn't make it out of Congress, but that was before this year's drought, which is raising the pressure to stop distorting the market for corn. Still, that could take a while, because subsidies for ethanol have helped it grow into a $42 billion industry that employs about 90,000 Americans, and Congress may think twice about jeopardizing anybody's job in such a weak economy.

Meanwhile, other developments are helping achieve the energy independence and lower emissions that were the original purposes of ethanol—with no unintended consequences for food prices or anything else so important. New technology has led to a sharp upturn in U.S. oil production, for one thing, making the nation more self-reliant. Hybrids, initially developed in Japan, have become mainstream, boosting mileage and therefore reducing the amount of gas burned, along with harmful emissions.

Tough new requirements for fuel economy have helped too, which suggests a better way to regulate energy than to subsidize one particular form of it. Presidents Bush and Obama both sharply increased MPG requirements, with the net result being average fuel economy in 2025 that will be roughly double what it is today. That has forced automakers to pursue every type of innovation they can think of to make cars more efficient, from different types of fuel to advanced under-the-hood technology. It's working.

In that case, Washington told automakers what they needed to do, but it didn't tell them how to do it. The result will assuredly be much better than if policymakers had ordered up a fleet of vehicles powered by electricity or hydrogen or natural gas. Technology and the economy change too fast these days for Washington to react in real-time. It's far better to let the markets react to changing conditions—and even to crises—than to lock in the use of any given resource indefinitely. The misallocation of corn has proven that.

http://www.usnews.com/news/blogs/ric...o-dump-ethanol

Ethanol is an excellent idea, because it is clean, renewable, alternative and domestic energy. It helps the environment on a renewable basis and reduces our dependence on foreign oil. Strange the author of your article didn't take those important domestic goals into account, especially the importance of reducing our dependence on foreign oil.

By the way corn is subsidized. In fact America spends $20 billion a year of taxpayer money on many agricultural products, much of which leaves the country in exports. Due to ethanol, much more of our subsidized corn remains in the United States keeping the money and benefits of the subsidy here in the United States.

And based on what I've heard the ethanol credit applies to construction of pumping stations using alternative fuels, not just ethanol which would encourage other forms as well. This credit is also not a subsidy, it's a tax credit, not a direct budget expenditure by government, so it not exactly a subsidy as we normally think of it, it's a tax credit, so a little different than a subsidy.

Does everyone still support those oil-depletion allowance tax credits? You never hear much about that any more.

The amount of tax credits in 2015 is maxed at $200 million.

Food for fuel: The price of ethanol

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Cite as:

D.K. Albino, K.Z. Bertrand, Y. Bar-Yam, Food for fuel: The price of ethanol. arXiv:1210.6080 (October 4, 2012).




Abstract

Conversion of corn to ethanol in the US since 2005 has been a major cause of global food price increases during that time and has been shown to be ineffective in achieving US energy independence and reducing environmental impact. We make three key statements to enhance understanding and communication about ethanol production's impact on the food and fuel markets: (1) The amount of corn used to produce the ethanol in a gallon of regular gas would feed a person for a day, (2) The production of ethanol requires so much fossil fuel energy that its energy benefit is only about 20%, and (3) The cost of gas made with ethanol is actually higher per mile because ethanol reduces gasoline's energy per gallon.

Introduction

The US used over 45% of its 2011 corn crop to produce ethanol, up from under 15% before 2005 [1]--a rise dictated by federal mandate and promoted by federal subsidies. The drought in 2012 is leading to questions about whether using corn for fuel is reasonable while people go hungry due to a world food shortage. Here we provide a context for this discussion by addressing the following three questions: How much food goes into ethanol production? What is the net gain in energy from ethanol production after accounting for the fossil fuel energy used in the process? How does the use of ethanol affect gasoline prices?

1. Food used to make ethanol

How many people could be fed with the corn used for ethanol? In the US, the primary ethanol production input is field corn. While not typically eaten on the cob, field corn is used to make other food including breakfast cereal, corn flour or meal, corn sweetener, and corn oil. It serves both as food for people and feed for livestock--which subsequently becomes food for people in the form of poultry, pork, and beef.

A bushel of field corn can be used to produce about 2.77 gallons of ethanol [2-6]. A bushel of field corn weighs 56 pounds, each pound containing about 1,550 Calories [7, 8]. Therefore, it takes about 31,300 Calories of field corn to produce one gallon of ethanol. Regular gasoline (E10) typically contains 10% ethanol by volume (averaging 9.6% nationally in 2011 [9]). Therefore, about 3,000 Calories of corn energy is used to produce each gallon of regular gas.
The suggested daily food energy intake is 2,100 Calories per person [10]. A single gallon of regular gas contains more than enough food energy to feed a person for one day. More precisely, every gallon would feed 1.4 people for a day or one person for 1.4 days.

It is often pointed out that a portion of the corn energy does not end up in the ethanol, but instead in by-products subsequently fed to animals, called distillers grains, which may account for up to 31% of the corn by weight [11]. The actual amount is often less than 31% and in 2011 was 23% overall [12]. The by-products are not used for food, and their nutritional content limit their use for feed [13]. Even after removing 23% or 31% of its food energy, a gallon of regular gas still contains more than enough to feed a person for a day.

What is the equivalent amount of sweet ("on the cob") corn in regular gas? The energy in sweet corn is 485 Calories per pound [14, 15], and there are about 0.2-0.25 edible pounds on each ear of corn [14]. In a gallon of regular gas there is food energy equivalent to 28 ears of sweet corn, while just 19 ears of sweet corn would satisfy a person's daily energy requirement.

An average 16 gallon tank of gas contains ethanol from enough corn to feed 22 people for a day, or one person for over three weeks.
The total amount of ethanol produced in the US in 2011 was 13.95 billion gallons [9], enough to feed 570 million people that year.

2. Energy balance of corn ethanol

When weighing the costs and benefits of corn ethanol, it is important to consider the net energy yield: how much more energy we get from a gallon of ethanol than is used to make that gallon. Fossil fuel energy is required to produce and transport fertilizers and pesticides, irrigate farmland, and plant and harvest the corn (not including the solar energy involved). Additional energy is required to transport the corn from the field to the ethanol plants and power the conversion process.

The most optimistic assessments claim around 1.3 units of energy are produced for each unit of energy input [16]. However, this estimate uses data from the best corn-growing conditions (requiring relatively low costs to grow), and considers the best processing conditions (including the highest possible distiller grain outputs as well). The average of the net energy yield across all corn-growing regions has been found to be 1.01 [17]. This means that the same amount of fossil fuel energy goes into making a gallon of ethanol as can be obtained by using that ethanol in a car.

Gasoline also requires energy to make. However, the ratio of output to processing energy for petroleum is about 5 to 1 [16]. This means that an extra 20% fossil fuel is used for each gallon of gasoline that is burned in a car [18-20].

Thus we need 1.0 fossil fuel BTUs on average to produce 1.0 ethanol BTUs of fuel energy. We need 1.2 fossil fuel BTUs to produce 1.0 fossil fuel BTUs of fuel energy. By choosing ethanol instead of gasoline, we save about 0.2 fossil fuel BTUs for each BTU used. This is the only gain from ethanol after loss of its food value. The amount of fossil fuel saved by using ethanol is only about 0.2% of the US energy requirements [21, 22].

3. Gasoline price impact of corn ethanol

While it has been claimed that ethanol has reduced the price of gasoline [23, 24], what is reported is the cost per gallon, but what is relevant is the cost per mile driven. Ethanol has less energy per gallon than gasoline. A gallon of gasoline contains about 125,000 BTUs while ethanol contains about 84,300 BTUs [25], or about 67% that of gasoline. When the price of ethanol is between 67% and 100% of the price of gasoline, which it often is, ethanol is cheaper by volume but more expensive by energy. The cost per gallon of gasoline with ethanol is lower, but it is as if the gasoline is watered down - the cost per mile driven is higher.

This means that in addition to the government subsidy of $20 billion from 2005 - 2011 [26], every gallon of gasoline with ethanol bought is an extra subsidy from consumers to the ethanol producers.

http://necsi.edu/research/social/foo...s/foodforfuel/

Ethanol isn't about lowering prices, it's about lowering dependence on foreign oil and reducing carbon emissions. Americans are for the most part a very well fed country so the price of food corn isn't an issue for the United States.

I can buy a package of Betty Crocker corn bread mix for less than 50 cents a package at Walmart. Have 3 of them in the cupboard right now.

Apparently the guys writing these anti-ethanol articles don't know what the prices of corn or corn products really are. But hey, hate on oil alternatives if you will, disregard our goal of reducing dependency on foreign oil if this doesn't matter to you, and continue to pollute our air with carbon emissions if you don't care about clean air.

But a deal is a deal. Maybe this matters to you. Ethanol producers invested in part because of the tax credits they were promised through a period of time we haven't reached yet. It not honorable or good business to pull the rug out from under people by renegging on a deal they thought they could depend on when they made their investments. There are 6 more years to go on that as I understand it until the year 2022. So, keep your word and if in 2022 Congress wants to end them, then end them then.

Judy wrote (excerpt:

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Ethanol is an excellent idea, because it is clean, renewable, alternative and domestic energy. It helps the environment on a renewable basis and reduces our dependence on foreign oil. Strange the author of your article didn't take those important domestic goals into account, especially the importance of reducing our dependence on foreign oil.

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Ethanol is a bad idea on so many levels. Furthermore, producing it actually damages the environment, not help it.

Corn Ethanol: Bad For Farmers, Consumers And The Environment

By Scott Faber, Vice President of Government Affairs



http://cdn.ewg.org/sites/default/fil...?itok=fj_snE9i


MONDAY, FEBRUARY 4, 2013


By driving up the price of food and gas and causing costly engine damage, corn ethanol has been bad news for consumers.
And by driving up the price of food, corn ethanol is also costing all of us money – by increasing the cost of federal programs like food stamps and school lunches.

But corn ethanol has not just been a disaster for consumers, most farmers, and taxpayers; it’s also been a disaster for the environment – worse, in fact, than Canadian tar sands.

That’s according to the Swiss Federal Laboratories, which concluded that biofuels “often shift environmental burdens toward land-use related impacts.”
By dramatically raising the price of corn, the federal corn ethanol mandate has, in just the last four years, contributed to the conversion of 23 million acres from wetland and grassland – an area the size of Indiana – to cropland. In fact, thanks to the corn ethanol mandate, we have lost more than wetlands and grasslands in the last four years than in the previous 40.

By encouraging farmers to plow up wetlands and grasslands, the mandate is causing more carbon to be released into the atmosphere, consuming more water to irrigate crops, causing more fertilizer to wash off farm fields and destroying more habitat that supports wildlife – and millions of jobs.
What’s more, burning corn ethanol in gasoline releases more benzene, a known carcinogen, and other toxic air pollutants that have been linked to asthma, bronchitis and other respiratory ailments.

Thanks to new fuel efficiency standards, the rationale for the corn ethanol mandate created in 2005, and expanded in 2007, has evaporated.
So why is Congress continuing to force consumers to use a fuel that increases food and gas prices and is bad for the environment and public health?
Now is the time to reduce the use of corn ethanol in our gasoline.

http://www.ewg.org/agmag/2013/02/cor...nd-environment

I'm for getting rid of all agricultural subsidies and letting the ethanol tax credits terminate in 2022 at the end of the term they were promised.

Judy wrote:

Quote:

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Ethanol isn't about lowering prices, it's about lowering dependence on foreign oil and reducing carbon emissions. Americans are for the most part a very well fed country so the price of food corn isn't an issue for the United States.

I can buy a package of Betty Crocker corn bread mix for less than 50 cents a package at Walmart. Have 3 of them in the cupboard right now.

Apparently the guys writing these anti-ethanol articles don't know what the prices of corn or corn products really are. But hey, hate on oil alternatives if you will, disregard our goal of reducing dependency on foreign oil if this doesn't matter to you, and continue to pollute our air with carbon emissions if you don't care about clean air.

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Ethanol contributions to reducing our dependency on foreign oil is less than 2% according to the National Academy of Sciences. Canada is the largest importer of petroleum to the United States. Actually, half of our imported petroleum imports come from the Western Hemisphere. More domestic oil and gas development here would make a far greater contribution to energy independence than ethanol every would. If the country is so concerned about energy independence, why is repealing a four decade ban on exporting oil included in the new omnibus bill?

Okay, you mention carbon emissions. Well, what about the release of more benzene and the other toxic pollutants released by ethanol? Pollution from ethanol is riskier than pollution from gasoline when burned because ethanol breaks down in the atmosphere and generates considerable more ozone. Ozone is a highly corrosive gas that damages lung tissue. That is definitely a concern for those with a respiratory illness.

Where I'm concerned, price is of very little concern when compared to the environmental damage ethanol production is causing.

Quote:

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Originally Posted by MW

Judy wrote:



Ethanol contributions to reducing our dependency on foreign oil is less than 2% according to the National Academy of Sciences. Canada is the largest importer of petroleum to the United States. Actually, half of our imported petroleum imports come from the Western Hemisphere. More domestic oil and gas development here would make a far greater contribution to energy independence than ethanol every would. If the country is so concerned about energy independence, why is repealing a four decade ban on exporting oil included in the new omnibus bill?

Okay, you mention carbon emissions. Well, what about the release of more benzene and the other toxic pollutants released by ethanol? Pollution from ethanol is riskier than pollution from gasoline when burned because ethanol breaks down in the atmosphere and generates considerable more ozone. Ozone is a highly corrosive gas that damages lung tissue. That is definitely a concern for those with a respiratory illness.

Where I'm concerned, price is of very little concern when compared to the environmental damage ethanol production is causing.

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I totally oppose the lifting of the ban on oil exports by the United States. We're still importing oil as you point out, so there is no reason at all to have our idiot Congress lifting this ban on our oil exports that's been in place for decades. It just shows they're all total and complete idiots. Americans want to buy US oil, not imported oil.

The ethanol is just another alternative energy source, and I support the tax credit because that's what was promised these people when they made their investments in the production facilities to encourage them to do it. How can you pull out the tax credit before the end of the term these people relied upon? That doesn't make any sense plus it's dishonorable.

As to the environmental and health issues, I'm not buying that, because I don't believe it's true at the 10% level plus you don't have oil spills.

So how about we don't eat corn. We just burn it. I'm kidding. I could live without corn, but I love frying fish with cornmeal. And of course corn is used to feed many animals we are dependent on. And corn tortillas are fabulous. Yep, I'm like the Romans. Conquer a culture, take its best and discard the rest. Or should we be tolerant and accept ritual sacrifice of Aztecs pulling out the still beating heart of virgins? Liberals would think so.

There are all types of ethanol, it doesn't have to be made from corn, it can be made from celluoid materials, like corn cobs, the refuse of corn production, in fact there are 3 of these plants in production now, 2 of them in Iowa, 1 in Kansas. The tax credit applies to any type of ethanol plant, whether it's made from food or nonfood sources, whether it's forest debris, corn, corn cobs, algae, or whatever it is. Why discourage that?

Quote:

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Originally Posted by Judy

There are all types of ethanol, it doesn't have to be made from corn, it can be made from celluoid materials, like corn cobs, the refuse of corn production, in fact there are 3 of these plants in production now, 2 of them in Iowa, 1 in Kansas. The tax credit applies to any type of ethanol plant, whether it's made from food or nonfood sources, whether it's forest debris, corn, corn cobs, algae, or whatever it is. Why discourage that?

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To my knowledge feed corn is used to make most ethanol in the United States.

From the ALIPAC archives.

Rush to Use Crops as Fuel Raises Food Prices & Hunger Fears

Ethanol raises cost of nutrition programs

Quote:

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Originally Posted by MW

To my knowledge feed corn is used to make most ethanol in the United States.

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It may be because there was so much corn grown years ago when ethanol got started, you couldn't give it away. But thanks to Ethanol, corn prices are good, there's plenty of market, and corn farmers are doing very well for a change.

There are many types of ethanol and more technologies being developed all the time. Below is a nice article from 2014 that describes the length and breadth of the ethanol market and different types of feeder stock which can really be any type of biomass, even garbage and waste products.

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Beyond the corn: The new frontier in ethanol is nonfood biofuel

As three cellulosic ethanol plants open in the Midwest, wavering U.S. policy and the oil boom leave a promising technology in limbo.
By and Photos by David Shaffer Star Tribune
October 11, 2014 — 4:57pm

Feed Loader

Corn husks and cobs stripped of their kernels are the raw material for a new cellulosic ethanol plant in Emmetsburg, Iowa. The material is collected in large bales and fed into the first large commercial ethanol plant to rely on nonfood material. Jointly built by ethanol maker Poet Inc. of Sioux Falls, S.D., and Royal DSM of the Netherlands, the plant is expected to produce 25 million gallons of ethanol per year.

EMMETSBURG, Iowa – The first large ethanol plants to produce biofuel from nonfood sources like corn cobs are starting operations in the Midwest amid industry worries that they might also be the last — at least in the United States.

After a decade of research and development, ethanol maker Poet Inc. and its Dutch partner Royal DSM recently produced the first cellulosic ethanol at a $275 million plant next to a cornfield in this northern Iowa town.

Two other companies are completing new cellulosic ethanol plants in Iowa and Kansas. By next year, they expect to be producing millions of gallons of the advanced biofuel.

"It was a big moment when we produced ethanol," said the Emmetsburg plant's general manager, Daron Wilson, who kept a vial from the first batch in August as a memento. "It was jubilation."

Yet the goal of producing ethanol from nonfood sources faces a murky future. Wavering U.S. policy on renewable fuels and the North American oil boom cast a shadow over the commercial triumph.

The next big cellulosic ethanol plants are planned or underway in Brazil, not the United States. Although the U.S. government has spent more than $1 billion to develop cellulosic technology, industry executives recently wrote to President Obama that other countries, including China, could "reap the economic and environmental rewards of technologies pioneered in America."

Ethanol producer Poet-DSM’s new, $275 million cellulosic ethanol plant in Emmetsburg, Iowa, is partly surrounded by thousands of bales of corn cobs, husks and stalks that will feed it. The plant, which opened in September 2014, is the first large commercial ethanol refinery to produce fuel from inedible parts of the corn plant. The new plant is at right, immediately adjacent to an existing corn ethanol plant, left, owned by Poet Inc.

Ethanol producer Poet-DSM’s new, $275 million cellulosic ethanol plant in Emmetsburg, Iowa, is partly surrounded by thousands of bales of corn cobs, husks and stalks that will feed it. The plant, which opened in September 2014, is the first large commercial ethanol refinery to produce fuel from inedible parts of the corn plant. The new plant is at right, immediately adjacent to an existing corn ethanol plant, left, owned by Poet Inc.

Most ethanol is fermented from corn kernels. The fuel made at the new Emmetsburg plant is derived from inedible parts of the corn plant. Straw and grasses also can be used because, like corn residue, they contain sugars that cellulosic technology can extract from the fibers.

Outside the Emmetsburg plant lie 158,000 bales of corn cobs, husks and stalks collected from farmers' fields. The residue is ground up, subjected to acid, water, heat and enzymes to extract hidden sugars. Then they're fermented and distilled. The 200-proof alcohol is the same as that made from corn.

"Cellulosic is kind of like corn ethanol was in the '80s," said Jeff Lautt, CEO of Sioux Falls, S.D.-based Poet, the nation's second-largest ethanol maker operating 27 traditional production plants including four in Minnesota. "It has a lot of promise, it needs some support to allow the innovation and continuous improvement to happen, but long term it can compete on its own just like corn ethanol."

Lautt and other industry officials said cellulosic ethanol can be produced today for $3 per gallon, but costs are sure to drop, making it competitive with corn ethanol, whose U.S. average rack price recently dropped below $2 per gallon.

Besides federal R&D grants, Congress has, at times, offered a $1 per gallon tax credit to promote advanced biofuels like cellulosic ethanol. The credit expired last year. In 2007, Congress enacted the renewable fuel standard that imposed a complex system of mandates to blend more ethanol into the nation's motor fuel. The oil industry has resisted it as onerous, costly and unworkable.

Ethanol makers say that without a blending mandate, it will be difficult if not impossible to raise investment capital for more U.S. cellulosic ethanol plants. The Obama administration, which has signaled it might dramatically alter the mandate, is expected to soon announce its policy.

The new Midwestern cellulosic ethanol plants represent big investments by deep-pocket companies that weathered longer-than-expected paths to commercial scale.

Abengoa Bioenergy, the U.S.-based biofuels arm of a Spanish energy company, says it has just completed and is starting up its $300 million cellulosic ethanol plant in Hugoton, Kan. Like the Poet-DSM plant in Emmetsburg, its output is expected to be 25 million gallons per year.

Daron Wilson, general manager of the Poet-DSM’s cellulosic ethanol plant in Emmetsburg, Iowa, stood in a complex of pipes and tanks. In this key stage of making ethanol from nonedible parts of corn, sugars locked in the fibers of corn cob and stalks are extracted. Once the sugar is free, it goes on to be fermented and distilled into ethanol.

Daron Wilson, general manager of the Poet-DSM’s cellulosic ethanol plant in Emmetsburg, Iowa, stood in a complex of pipes and tanks. In this key stage of making ethanol from nonedible parts of corn, sugars locked in the fibers of corn cob and stalks are extracted. Once the sugar is free, it goes on to be fermented and distilled into ethanol.

DuPont Cellulosic Ethanol, part of the Wilmington, Del.-based industrial giant, expects to complete in a few months its 30 million-gallon-per-year plant in Nevada, Iowa, at a cost of more than $200 million. Last week, DuPont said it will sell more than 500,000 gallons of the output annually to Procter & Gamble for its cold-water Tide laundry detergent. Tide, which has long used ethanol in its formula, will be the first detergent produced with cellulosic ethanol.

Abengoa is upbeat about its new plant's success, but is planning its next project in Brazil. That's already happened with Iogen Corp., an Ottawa-based company with similar cellulosic technology. Iogen is completing a plant in Brazil with ethanol maker Raízen Energia Participacoes. Both plants will make ethanol from bagasse, a fibrous material in sugar cane.

"America remains an exciting and important opportunity," Iogen CEO Brian Foody said in an interview. "It is important that U.S. policy find room for growth of ethanol use beyond the E10 level."

E10 and the 'blend wall'

One problem facing the ethanol industry is that traditional ethanol plants have more than enough capacity to supply 10 percent of the U.S. fuel supply. Almost all gasoline is sold at that blend, E10.

Ethanol makers never planned on cutting back corn ethanol output to make way for the new cellulosic version. At Emmetsburg, the Poet-DSM cellulosic plant called "Project Liberty," stands next to a 9-year-old corn-ethanol plant.

That leaves one choice: higher blends like E15.

"The truth is that there is only so much ethanol being bought in this country," said Paul Niznik, research manager and biofuels expert at Hart Energy Research & Consulting in Houston. "If you are making cellulosic ethanol, you are not competing against petroleum products, you are competing with other ethanol plants."

Once, ethanol marched in the vanguard to reduce U.S. oil imports. Now, the domestic shale oil boom also can claim the energy-independence banner. Oil imports are down to 40 percent of U.S. consumption, the lowest since 1996.

"In 2007 we were talking about peak oil — we don't talk about that anymore," said Jason Hill, assistant professor of bioproducts and biosystems engineering at the University of Minnesota. "The landscape has changed."

What's next?

The game plan for cellulosic pioneers like Poet-DSM is to license their technology to other ethanol companies and earn fees on the intellectual property.

That might be difficult if investment dollars dry up for large, new ethanol plants. Yet there is another, new, low-cost cellulosic option that may appeal to ethanol plants looking to expand.

Quad County Corn Processors, a locally owned ethanol plant in Galva, Iowa, developed technology that extracts trapped sugars from fibrous parts of the corn kernel and ferments them in an ethanol plant's existing equipment. ICM Inc., the Colwich, Kan., company that designed most of the U.S. ethanol plants, offers a competing corn-fiber cellulosic technology.

In September, the Galva cooperative officially flipped the switch on its system — $9 million worth of bolt-on equipment to boost the plant's ethanol output by 6 percent, and, eventually, 11 percent, said CEO Delayne Johnson in an interview.

"Our technology doesn't need any government subsidies to make it profitable," said Johnson, who believes the investment will pay off in three years.

Johnson said the technology also increases the ethanol plant's output of corn oil, and results in a higher ratio of protein in the animal-feed byproduct, making it more valuable. The U.S. Environmental Protection Agency says corn-fiber ethanol qualifies as an advanced biofuel, which gives it a higher value under the agency's blending requirements.

Some researchers have questioned whether cellulosic ethanol from cornfield residue truly helps reduce greenhouse gases linked to climate change. Hill said long-term studies are needed to resolve those scientific issues. Ethanol makers say cellulosic technology's low-carbon benefits are proved — and could offer business opportunities.

The industry is closely watching states like California that have or are considering low-carbon fuel standards. They could pave the way for cellulosic ethanol expansion beyond the Corn Belt, with production plants fed not by crop residue, but organic waste from garbage. Abengoa is piloting such a plant in Spain.

"We are actively promoting a full-scale project using municipal waste as a feedstock, which will allow us go outside the middle of the United States to the coasts where there are heavily populated areas that produce a lot of trash and use a lot fuel," said Christopher G. Standlee, Abengoa executive vice president for global affairs.

http://www.startribune.com/beyond-th...uel/278834141/

Iowa voters have given up on ethanol; presidential candidates are following suit


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Ethanol, the corn-derived fuel that receives major government support, is no longer out of reach for criticism by presidential candidates stumping in Iowa. Here, corn is delivered to an ethanol plant in Shenandoah, Iowa.
(Nati Harnik / Associated Press)


Evan Halper Contact Reporter

The fortunes of the wonder fuel that promised to help clean the environment, secure America and save small family farms have steadily dwindled as environmentalists, food advocates and auto enthusiasts sour on its promise. Now that fuel, corn-based ethanol, finds itself threatened with a defection that was once unthinkable: Iowa voters.

The electorate here in the early voting state often defined by its vast expanses of corn has long demanded that candidates pledge allegiance to government production mandates for millions of gallons of ethanol, the homegrown product. But as the 2016 White House hopefuls traverse the state, they are seeing that Iowans have grown strikingly ambivalent.

“Voters here are just not that interested in ethanol anymore,” said Steffen Schmidt, a professor of political science at Iowa State University. “You don’t even hear the word come out the mouths of candidates much.”

The Republican presidential contender now polling strongest in Iowa, Ted Cruz, is campaigning on an energy platform that would have been a death wish in elections past. Cruz, the U.S. senator from Texas, is an unabashed opponent of giving ethanol any special government help.

He derides it as the worst kind of central planning. He champions legislation to wipe out the decade-old Renewable Fuel Standard, which mandates large amounts of ethanol get blended into the nation’s gas supply.

There are myriad reasons, not the least of which is a modern-day Republican electorate that takes pride in bucking the established order and is increasingly absolute in its disdain for subsidies. But it is also about the shifting politics of renewable fuels in a state where small family farms have given way to much bigger agribusinesses. Only a fraction of the state’s voters work in the corn industry these days. There is as much buzz on the campaign trail in Iowa about wind power as there is about ethanol.

It is all compounded by troubles befalling the decade-old ethanol mandate, signed into law by George W. Bush, that transcend Iowa but now appear to be giving voters pause even there. Cars are more efficient and people are driving fewer miles than the drafters of the law had anticipated, leaving auto manufacturers to warn that engines are at risk of malfunction if the federal government doesn’t ease quotas of ethanol blended into retail gasoline.

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GOP candidates squabble as Californians watch from afar

Environmentalists once hopeful the product would help curb global warming now caution that it may be just as harmful to the planet as fossil fuels.

And even as Iowa’s longtime GOP governor, Terry Branstad, warns that candidates who tangle with ethanol could find their presidential aspirations buried by Iowans, a much more influential force in Midwestern politics is sending the opposite signal.

Koch Industries, the behemoth energy firm run by billionaire political donors Charles and David Koch that itself has a major interest in ethanol, despises the mandate. In an April letter to Congress, the company called it “an unqualified failure that should be repealed in full,” reflecting growing disdain among Republican activists for any programs that prop up renewable fuel industries.

Cruz drew from that zeitgeist at an Iowa agriculture summit earlier in the year at which several of the GOP candidates appeared. “I recognize that this is a gathering of a lot of folks who the answer you’d like me to give is ‘I’m for the RFS, darn it.’ That’d be the easy thing to do,” he said at the event. “But I’ll tell you, people are pretty fed up, I think, with politicians that run around and tell one group one thing, tell another group another thing, and then they go to Washington and they don’t do anything that they said they would do.”

“Sen. Cruz and anyone else who wants to say this is not an issue in Iowa is mistaken,” Eric Branstad said. “Iowa voters are only now starting to pay attention to the campaign. And they are beginning to learn where Sen. Cruz is on this.” Branstad says his group has persuaded some 50,000 Iowans to pledge to caucus only for candidates who support the fuel standard.

But ethanol industry leaders in the state say Cruz will pay a heavy price. They have been running radio advertisements for the last couple of weeks that accuse the Texan of hypocrisy, pointing to tax breaks and other government support enjoyed by the oil industry that Cruz favors. Among those targeting Cruz is Branstad’s son, Eric, who formed a pro-ethanol group called America’s Renewable Future.

Branstad predicts Cruz’s star will fall as a result of his anti-ethanol crusading. Donald Trump sought this month to regain ground he lost to Cruz by highlighting the Texan’s obstinance on energy policy.

But while nobody argues that Cruz can't get knocked out of the pole position, many doubt ethanol would be the reason.

“It’s helped him polish his credentials as a tough guy,” said Dennis Goldsford, a professor of political science at Drake University in Des Moines. “Republican voters here are more concerned about ISIS and Obamacare than this.”

Despite a recent industry poll concluding that large majorities of likely caucus goers, “once informed about the Renewable Fuel Standard and biofuels,” would be more likely to vote for candidates who support them, the issue barely registers on independent voter surveys.

When Iowans are asked what their biggest concerns are this election season, ethanol — and agriculture issues in general — don’t even rank.
It was only two presidential election cycles ago that John McCain bypassed campaigning for the nomination in Iowa almost altogether, declaring that his opposition to government support for ethanol made his bid hopeless. Some strategists argue McCain also had other problems, the biggest of which was his inability to break through with the large segment of voters who define themselves as evangelicals, a group that adores Cruz.

Even so, a self-described “coalition of unlikely bedfellows” that opposes corn ethanol — which includes oil companies, environmentalists, anti-hunger activists and car manufacturers — is watching the Iowa race carefully.

“This could be a real turning point to reforming the Renewable Fuel Standard, or possibly repealing it,” said Daniel Simmons, vice president for policy at the Institute for Energy Research, an advocacy group that receives funding from the network of donors anchored by the Kochs. “For a long time it was thought to be untouchable because of these caucuses.”

http://www.latimes.com/nation/politi...217-story.html

The ethanol subsidy isn't for corn farmers. The ethanol tax credit is for ethanol producers who invest in pump blending equipment which is the only reason this is not a high priority for Iowans.

When Ted Cruz tells them he wants to ban actual agricultural corn subsidies, we'll see how that goes in Iowa. Never met an Iowan who didn't want their government check like most Americans these days.

:p