Archive for November, 2008

The E10 Backlash Is Brewing…

Posted: 28/11/2008 in Uncategorized
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It’s back to the ethanol grind. I keep reading more and more about the downsides of using ethanol, but the same old arguments pertaining to the benefits get rehashed time and time again, with no change. Anecdotal evidence is increasing against its use here in Maine, but I have doubts as to whether or not the state will listen to the people who pay taxes in this state, and thus their salaries. Perhaps it’s time we cal these people into the office and put them on notice that their jobs are at stake here?

I came across an article from July in the International Herald Tribune[i] called “Backlash brewing against ethanol in United States” Several comments were made regarding this issue. Here are a few comments from that article;

· “What we’re hearing is that the boats are starting, but then they start to sputter” and quit, she said. They are also hard to restart, Massey said, adding that her own weed-whacker sputtered and died with E10 but revived with conventional gasoline.

· “I don’t see any good point to ethanol,” said Gordon Razee, owner of a shop that sells and repairs motorcycles in Rhode Island. “As far as it pertains to the motorcycle industry, all it has done is create problems, so that we’re constantly working on carburetors.”

· “We have seen an increase of primarily fuel problems, fuel-related problems – carburetion, fuel lines, fuel pumps,” O’Connor said, calling it “highly coincidental” that such problems are arising at the same time ethanol has been introduced.

· If E10 is left in the engine, evaporation can leave varnish and deposits. And when E10 is first run through an engine, alcohol’s tendency to clean out old deposits can cause problems. Foster advised consumers to follow the instruction manual, and properly store fuel and maintain equipment.

These are but a few comments from just one article, but there are many more. Click on the title to read the entire script.

Ethanol is actually an alcohol (ethyl alcohol) made from biomass, usually sugarcane or corn. On an international basis, ethanol from sugarcane is the norm, while sugar beets are becoming increasingly used as feedstock for the process of distillation. Newer cars, from about 2000 on up are specifically made to use alcohol fuel, but it isn’t necessarily a good idea. It is also recommended that it not be used in marine engines. Here in Maine, we use a blend called e10, which is a blend of ten percent ethyl alcohol blended with ninety percent gasoline. Its usage should generate a decrease in your mileage, and estimates range from ten to fifteen percent. E85 is said to reduce mileage by roughly thirty to forty percent.

One of the reasons that there has been little protest from the fuel companies that wholesale gasoline is that with a reduced mileage, you’ll be filling up more. But a bigger reason is the fact that the taxpayer subsidizes the manufacture and addition of ethanol to the nations fuel supply. Here in Maine, the subsidies total about 58 cents a gallon. While gaining usage across the US, it is doing so under forced conditions. Cheaper at the pump doesn’t mean it is a cheaper fuel. Without these subsidies, ethanol would not be able to compete against straight gasoline in the market. We pay for it through higher taxation and lower standards of efficiency, or a loss of mpg.

What does e10 really cost us here in Maine? A lot more than you think it does. Colder weather is coming and we’ll see what the reaction is in February when we get our deepest freeze of the year.

[i] Kate Galbraith, International Herald Tribune, Backlash brewing against ethanol in United States, 25 July, 2008

Is the ethanol we now put into our gas tanks here is Maine cutting into our Thanksgiving dinner? Hard to tell for sure. The US corn growing industry claims that only three percent of the rise in food prices can be attributed to the practice of converting food crops into fuel crops. The World Bank on the other hand, claims nearly seventy five percent of the increase in food prices can be attribute to the practice. Watch this video for more….

Surprisingly, the UN has been pushing for the global implementation of ethanol as a way to combat global warming, but nobody stopped to think that the E10 we are now required to poison our gas tanks with would cause increases in food prices. How’s that for a happy Thanksgiving? The increase is causing havoc in the nation’s food banks as well, as there hasn’t been any comparable rise in cash donations to keep pace with the rising operating costs of these food banks and soup kitchens. Check out these videos for more on the issue…

Food prices continue to rise, but in the tightening economy, contributions tend to decrease putting a lot of people, many whom you might even know, of being in danger of being undernourished. Maybe this would be a good year for us to take some of that tightly held cash that we were going to use to buy an Xbox toy game, and instead use it to help our less fortunate neighbors out of a bind. Don’t know anything about your local food bank? Check them out at your local grocer, and find out how you can help this year. You’ll have a much happier Christmas if you do.

And while you’re deciding what you want to do this year, remember, food prices are continuing to rise…

The primary reasons behind the increase of food prices has more to do with commodities traders than it does with ethanol directly. But even so, much of the costs of producing the food we buy and eat is affected by the costs of energy used in that production. Fuel is needed to power tractors to plant and harvest the crops, trucks to get the crops to market, energy is used to process those crops into canned and frozen food products and so on. The hysteria surrounding the false doctrine of global warming was the initiator of much of this drive to divert food into fuel, but most of the cost increase is directly related not to crop diversion as many have claimed, but by the meteoric rise in energy costs, whose fault I lay at the feet of the UN.

Happy Thanksgiving, and that’s Dan’s Maine view for today.

Well, it’s another Turkey day tomorrow. A day off, with no pay for many, but at least you get to eat really well. Unless you cannot afford to. With the tightening recession there are going to be more people in that gravy boat than ever before. The entire world is finally admitting that the world is entering, or already in a global recession. Even our neighbors to the north in Canada….

It’s funny, but a lot of analysts just don’t want to admit the bind we’re in as a nation, let alone the world as currency becomes scarce. One of the problems seems to revolve around the “credit” industry, or lack thereof. In my mind, I believe these bailout packages are going to be bad news. The companies and individuals who are going to benefit from them really don’t give a damn about how they got into the position they are in. We taxpayers are going to be paying for the votes this money will buy for decades.

Let’s face facts here. We are in a recession because we stopped doing business based on cash, and started running our business with plastic money, plain and simple. We need to get off the credit wagon and steer it over the cliff it rightfully deserves. While some credit is a good thing, such as your home mortgage and other big ticket items such as your car loan, do we really need to put televisions, toys and even a night out on the town on a credit card?

The credit crunch is here, and Henry Paulson is stupidly pushing for people to cling to plastic money. Fake wealth. A dangerous hope for a sinking man to cling to when the boat has sunk. Cash is the life preserver we need to learn to cling to, not credit and plastic money. The old folks who made it through the great depression learned that lesson well. Did they forget to teach us that, or is some greedy swindler trying to hide that from us? Cash is king, remember that when next spring comes along and you realize you cannot afford a vacation in 2009.

I’ve been asked a few times what I believe the future holds for the price of gas at the pump. We’re talking 87 Octane here for prices by the way. Hi test will become astronomically high as time progresses. A couple of years ago I predicted it would be at about $5.00 per US gallon by the end of 2010. Unfortunately, we were well on our way to exceeding that dollar amount, but I also predicted it would come back down as election time came closer.

And it did come back down, but I was wrong about how low it was going to go. Pleasant surprise on that miss. I predicted it would maintain a temporary low of about $3.25. $2.00 is almost unbelievable, given the world markets. But I also miscalculated the potential effect the economy was going to have in all of this.

But I still stand with my original prediction of upwards of $5.00 per US gallon by the end of 2010 as a normally acceptable price. I’ll get into more details in late December, but I’d like to see what the outcome of a couple of high level meetings are going to be. The Great B.O. is catching on fast to the fact that just because he is President Elect, it doesn’t mean he’s going to be in charge. I think he and Madame Pelosi are going to do some Jello wrestling in the oval office over some programs and taxes that she wants, but isn’t going to get. We’ll se what happens. In the meantime, check out these articles and videos on gas prices;

There are three things we need to watch carefully; 1, the value of the US dollar against foreign currency, 2, Madame Pelosi, 3, the reaction from the public when they find out big government has swindled the taxpayer with these bailout packages.

As I continue to look at the true impact and compare benefits and costs of using ethanol as an alternative fuel, I am more convinced of my original position regarding its usage. It is a viable alternative under certain conditions, but it should not be a forced alternative. There are simply too many problems, too many variables in this country to be requiring it as a main energy component. One of the things I have noticed is that environmentalists are just now starting to glimpse at the damage they have caused by pushing for the introduction of this biofuel as a required alternative to petro based fuel.

I’m kind of reminded of where this woman goes into the hair salon, sits in the chair and says to the stylist, “I want my hair cut, but I don’t want it to look like it has been cut.” The environmentalists want us to us ethanol because they consider it to be green, but they don’t want it to be produced because it will harm the environment.

The problem here is that they have fallen into the spiders trap of thinking there is a difference between fossil fuel and biofuel. The only true difference is that what we call fossil fuel is merely extremely concentrated carbon, whereas biofuel is still carbon based, but it doesn’t contain such high concentrations of carbon. It still pollutes the atmosphere, and in some instances it will pollute to an even higher degree of pollution.

Take a look at this article from US News;

It is interesting to see how these people heed their emotions before thinking. Had greater cooperation and research/planning been done, perhaps the issues would not have to be addressed today of what harm can ethanol do. The big claim of these leftist groups was that big oil was harming the economy, and they were the cause of skyrocketing gas prices. Ethanol would be the best solution to lower these prices, and as a benefit would clean the environment. Well, that simply isn’t true. Europe has been mandating CO2 reductions for over a decade, and yet we see reports where emissions levels are climbing, not dropping with the introduction and increasing usage of E85 and biodiesel. The market drives the price of commodities. With the economy of the world having been flushed down the toilet, the demand decreases and the price drops.

But where will the price stabilize, and when will it start to climb again? Who knows, but towards the end of December, I’ll post some predictions. I was right on most of them last year, we’ll see what happens this time around.

Check out this video on oil prices;