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Let's Start a War on Ethanol; Why RINs Could Be 2013's 4-Letter Word For Gas Prices

From one of my favorite posters on Zero Hedge, and you may have noticed I don't write too much of my own original content, because I don't like re-inventing the wheel.

Mon, 04/08/2013 - 22:31 | 3424792

"I love the Ethanol program; it would be hard to find a program that combines so much damage into one synergistic inferno!

1) Drives up the cost of food inputs, and meat. So JQ Hapless spends more on food.

2) Lowers the avg. mileage per gallon by lowering the energy in Ethanol contaminated gas. So JQ Hapless must spend more to go a given distance.

3) Adds complication to refining and distribution, further increasing the cost per gallon, driving up JQ Hapless' expenses.

4) Requires massive subsidies which the nation, bankrupt, can hardly afford.

5) Uses massive amounts of groundwater that is not/cannot be replenished. Aquifer, goodbye.

6) Damages vehicles, destroys chainsaws and other small engines.

It may be the most Evil, incompetent and criminally Demonic program in the History of the Republic - and that's saying something. I marvel at it, and I gape with wonder."


"RIN is the mechanism for enforcing the Renewable Fuel Standards (RFS) - Suppliers can either blend their own to meet standards OR buy RINs from other blenders... due to weather issues last year 2012 RINs were in short supply - and with Feb as the last date to pay for them we saw prices surge. These RIN prices were passed on to customers at the pump. The problem is there is now not enough for 2013 (and even less for 2014) which means that instead of $0.03, RINs for 2013 could stay high in the $0.75 to $1.00 range (depending on ethanol production) and higher for 2014. This could mean the implementation of several possible alternatives - dependent on exogenous factors such as the supply of feedstock (corn, soybeans, sugar and palm oil) and spare biofuel production and blending capacity - supporting corn prices but the higher prices, we suspect, will lead Congress to revise (lower) its RFS mandates. At current levels, given the weighting of renewable fuels, RINs are adding around 7c to each gallon at the pump; should the RINs rise to $3, then that will mean a 10% rise in the price at the pump implying a 0.9% drag of GDP growth - something our Congress won't accept."


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BMWJIM's picture

It is funny that I can look out my window

and see thousands of acres of sugar cane as I type this. Most all of South Louisiana is covered in sugar cane. You must not have heard of the scandle of the agriculture comissioner and the ethanol plant located here.


1976-1982 USMC, Having my hands in the soil keeps me from soiling my hands on useless politicians.

Busting the Ethanol Myths

Myth #1: It Takes More Energy to ­Produce Ethanol than You Get from It!

Most ethanol research over the past 25 years has been on the topic of energy returned on energy invested (EROEI). Public discussion has been dominated by the American Petroleum Institute’s aggressive distribution of the work of Cornell professor David Pimentel and his numerous, deeply flawed studies. Pimentel stands virtually alone in portraying alcohol as having a negative EROEI—producing less energy than is used in its production.

In fact, it’s oil that has a negative EROEI. Because oil is both the raw material and the energy source for production of gasoline, it comes out to about 20% negative. That’s just common sense; some of the oil is itself used up in the process of refining and delivering it (from the Persian Gulf, a distance of 11,000 miles in tanker travel).

The most exhaustive study on ethanol’s EROEI, by Isaias de Carvalho Macedo, shows an alcohol energy return of more than eight units of output for every unit of input—and this study accounts for everything right down to smelting the ore to make the steel for tractors.

But perhaps more important than EROEI is the energy return on fossil fuel input. Using this criterion, the energy returned from alcohol fuel per fossil energy input is much higher. In a system that supplies almost all of its energy from biomass, the ratio of return could be positive by hundreds to one.

Myth #2: There Isn’t Enough Land to Grow Crops for Both Food and Fuel!

According to the U.S. Department of Agriculture, the U.S. has 434,164,946 acres of “cropland”—land that is able to be worked in an industrial fashion (monoculture). This is the prime, level, and generally deep agricultural soil. In addition to cropland, the U.S. has 939,279,056 acres of “farmland.” This land is also good for agriculture, but it’s not as level and the soil not as deep. Additionally, there is a vast amount of acreage—swamps, arid or sloped land, even rivers, oceans, and ponds—that the USDA doesn’t count as cropland or farmland, but which is still suitable for growing specialized energy crops.

Of its nearly half a billion acres of prime cropland, the U.S. uses only 72.1 million acres for corn in an average year. The land used for corn takes up only 16.6% of our prime cropland, and only 7.45% of our total agricultural land.

Even if, for alcohol production, we used only what the USDA considers prime flat cropland, we would still have to produce only 368.5 gallons of alcohol per acre to meet 100% of the demand for transportation fuel at today’s levels. Corn could easily produce this level—and a wide variety of standard crops yield up to triple this. Plus, of course, the potential alcohol production from cellulose could dwarf all other crops.

Myth #3: Ethanol’s an Ecological ­Nightmare!

You’d be hard-pressed to find another route that so elegantly ties the solutions to the problems as does growing our own energy. Far from destroying the land and ecology, a permaculture ethanol solution will vastly improve soil fertility each year.

The real ecological nightmare is industrial agriculture. Switching to organic-style crop rotation will cut energy use on farms by a third or more: no more petroleum-based herbicides, pesticides, or chemical fertilizers. Fertilizer needs can be served either by applying the byproducts left over from the alcohol manufacturing process directly to the soil, or by first running the byproducts through animals as feed.

Myth #4: It’s Food Versus Fuel—We Should Be Growing Crops for Starving Masses, Not Cars!

Humankind has barely begun to work on designing farming as a method of harvesting solar energy for multiple uses. Given the massive potential for polyculture yields, monoculture-study dismissals of ethanol production seem silly when viewed from economic, energetic, or ecological perspectives.

Because the U.S. grows a lot of it, corn has become the primary crop used in making ­ethanol here. This is supposedly ­controversial, since corn is identified as a staple food in poverty-stricken parts of the world. But 87% of the U.S. corn crop is fed to animals. In most years, the U.S. sends close to 20% of its corn to other countries. While it is assumed that these exports could feed most of the hungry in the world, the corn is actually sold to wealthy nations to fatten their livestock. Plus, virtually no impoverished nation will accept our corn, even when it is offered as charity, due to its being genetically modified and therefore unfit for human consumption.

Also, fermenting the corn to alcohol results in more meat than if you fed the corn directly to the cattle. We can actually increase the meat supply by first processing corn into alcohol, which only takes 28% of the starch, leaving all the protein and fat, creating a higher-quality animal feed than the original corn.

Myth #5: Big Corporations Get All Those Ethanol Subsidies, and Taxpayers Get Nothing in Return!

Between 1968 and 2000, oil companies received subsidies of $149.6 billion, compared to ethanol’s paltry $116.6 million. The subsidies alcohol did receive have worked extremely well in bringing maturity to the industry. Farmer-owned cooperatives now produce the majority of alcohol fuel in the U.S. Farmer-owners pay themselves premium prices for their corn and then pay themselves a dividend on the alcohol profit.

The increased economic activity derived from alcohol fuel production has turned out to be crucial to the survival of noncorporate farmers, and the amounts of money they spend in their communities on goods and services and taxes for schools have been much higher in areas with an ethanol plant. Plus, between $3 and $6 in tax receipts are generated for every dollar of ethanol subsidy. The rate of return can be much higher in rural communities, where re-spending within the community produces a multiplier factor of up to 22 times for each alcohol fuel subsidy dollar...


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I appreciate you researching the data

But only some of what you quote is actual fact. Much of it comes from proponents that have an agenda. I tend to agree with your debunking of myths #3 & 4 but the first two are simply fudging the numbers. #5 misses so much of the big picture that it can't be debunked. The 'broken window fallacy' is not a valid argument to overspend on something non-economic. Not sure why you avoided #6.

#1 Oil does not have a negative EROEI. That's spin talk. It started out at 100:1 and has progressed down to 10:1 with the 'tight' sources (tar sands, shale) dipping into the 3-5:1 range lately. If you don't like Pimental's 1.29:1 for ethanol (since you railed hard on that below), maybe you would rather use Shapouri's 1.34:1 which is MUCH MORE researched. Either way, it's not even close to 2, let alone the ludicrous 200:1. (That's a tale I've GOT to read, LOL. Sources please.) Either way, no one is saying that ethanol is negative.

The 8:1 ratio you quote is for sugar cane ethanol, which can't be grown here in the US. The OP topic is current ethanol, not hypothetical new crops or methods that are unproven. The current fact is that the current system is a scam through and through. Even if you use the newest Fischer-Tropsche synthesis with cobalt, you can't get it over 1.8:1 and using iron and much higher temps can only get it to around 1.6:1. Lots of increased capital expense for not much gain, is it?

#2 Land use. You don't spend much time on farms, do you? You can't just decree that more land be used for farming. The harvested acres is only around 300M per year because the land is changing and the wetland regs are changing. If farmers could plant more, they would because otherwise, they're leaving profit on the table.

The land for all corn is about 85M acres now. It used to be 70M 30 years ago and farmers have only been able to increase it by 15M. Either way, the consumption before counting ethanol's needs doubled due to food, exports and cattle feed. Now, we're taking 20% of that away in a 5 year period. That means that the only way to make it up without impacting prices is to increase the land use by 20%. There's no other way around it.

So your quoted math is off a tad. At 20% of 85M, the ethanol corn land needed is 12,941 gallons per acre. That's slightly higher than 368.5.

The nutshell is that us end users get hit twice to pay for something that uses too much fresh water, too much land and produces an entire infrastructure that ends up using almost as much energy as it provides to our existing fossil fuel industry... which, by the way, it also maintains their continued monopoly over.

Your copy and paste didn't cover the engine/energy problems I discussed below. I wonder if you could weigh in on those too?

More BS by the Ignorant

I gave you the sources even a link at the bottom go prove them wrong. Read the book "Alcohol Can Be A Gas" instead of repeating false internet bits it is very well researched and cited. I even quoted The most exhaustive study on ethanol’s EROEI, by Isaias de Carvalho Macedo... I challenge anyone to disprove the books sources.

You continue to show your ignorance in saying sugar cane cannot be grown in the US which is false. But it does not need to be; there are plenty of feed stocks as good or better then Sugar Cane that can be grown all over the US as I mentioned in a below post.

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Ethanol raises the price of food because it raises the price of gasoline. Food has to be shipped across the country/world. Unless you but local.

proverbs 20:15
There is gold, and an abundance of jewels;
But the lips of knowledge are a more precious thing.

Forget war, boycott it across the board

Ethanol is absolutely one of the most insidious concoctions to hit the energy market. But once again, there are many sides to the whole store and unless you do fair and unbiased research, you'll either hate it for the wrong reasons or love it or ignorantly support it. Either way, almost all public opinions on it leave out some factors. Here's what I know. It may be randomly organized, so my apologies prior.

Just like climate change, drilling for oil, the electric grid and some others, ethanol has spin propaganda flowing freely from both competing sides. This has obfuscated the facts horribly.

Subsidies in the farm industry have wiped out the free market, enslaved poor countries and vastly distorted the food chain. With the impending energy crisis of '03-04, the radical environmentalists pushed for ethanol because, hey, Henry Ford designed his original engine to run on it. They hat not done any current math yet.

Enter Bush and Cheney and we get mandates for way too much. Meanwhile, in the trenches, car manufacturers had just caught up with the changes needed to accept 10% ethanol. Now, there would be a push for E85 and more. They cite Brazil as a working business model but forget to note that Brazil feedstocks ethanol with sugar cane. Sugar cane yields much more energy return for the energy spent acquiring it. It's EROEI is 8:1 as opposed to the US, corn-based ethanol EROEI of 1.29:1. So, we have an energy loser (in ideal measurements) that's being subsidized. Now the farmers begin switching over to growing corn to cash in. Subsidies change all over the place and it becomes profitable overall, but in the meantime, other crops are displaced. The market is really screwed up.

Meanwhile, the engines get redesigned to handle various mixtures and we even get flex-fuel vehicles. The changes made early on were to deal with early rotting of rubber hoses and diaphragms. One example for those saying this wasn't the case was a thin diaphragm used in Ford's Variable Ventury carburetor of 1983+ vintage 351 Windsors. When a user would begin using E10, that diaphragm would get a pinhole within weeks. I personally changed nearly 150 of them in that first year alone. Later changes were to accomodate less lubrication (all alcohols clean precious oil off cylinder walls and valve stems prematurely). Unfortunately, the hidden problem wouldn't show for many more years because it's often diagnosed incorrectly. Gasoline octane ratings are generally lower than ethanol. Computers tune the spark timing advance to whatever advance the fuel can handle without knock (pre-ignition). Unfortunately, this is done after the fact. A vibration sensor (knock sensor) measures when knock occurs and retards the timing a little. When it gets enough, they leave the max advance there for a while before re-checking it. Here's where the problem comes in. Ethanol does not stay mixed perfectly with gas. In addition to it adsorbing water (more later), it sends the engine batches of high, then low octane within seconds of each other. If (and that's the key word), if the timing was just re-checked on fuel that didn't knock and was advanced more, it may take 2-20 seconds before it notices the engine is beating itself to death. If left unchecked, knock can break things, but most often, it rounds the edges of valves and softens their stems, allowing them to bend easily. It can soften rings so they wear faster and even melt them. In extreme cases (like the Plymouth Horizon) it regularly melts the tops of pistons.

Mechanics that say ethanol does no harm are industry trained lapdogs that have never done any extensive research on their own and probably don't know much about metallurgy.

Back on the energy content question. Pure ethanol has an octane rating of 112 while gas varies around 89-94 (without additives). Increasing the octane allows the computer to get more power by increasing timing as I mentioned above. However, ethanol has 80% of the energy content of gas. But it doesn't end there. Ethanol adsorbs water which not only drops energy content more, it extracts energy to deal with the water. On top of that, we can't forget that it still does this in batches. One second, your fuel is pure gas. The next, it's 8% ethanol and 4% water. The next, it's 10% ethanol and 90% gas. This keeps the computer constantly hunting all over the place to balance mixture, EGR, air injection and timing with air flow. The result is that on one tank of gas, you can get 26 mpg while another you can get 22. This is why the fight over gas gauge accuracy in the 80's got killed once again. I fear we will never have a gauge that says 10.84 gallons left. The best you'll get is "half tank".

And lastly, we return to EROEI. With a US value of 1.29:1 (that's getting 29% more energy out than you put in making and refining the stuff), it's barely even worth the effort. When you include the engine issues above, the resulting EROEI is far less than 1:1. (Remember that under 1:1 is like spending $100 to earn $99, but as you drop down further, it gets exponentially bad. It's a divide-by-zero thing.) The estimated final ratio for the average end user in the average car over the average season (all variable factors here), is that we get just over 70% of the energy back that we initially put in. Basically, we spend billions to waste 30% of that original gasoline we mixed it with.

I completely agree with the OP on all the points shown. Now that most of the hidden issues are out, we can all discuss the topic from sound facts, not industry propaganda.

Thanks for repeating

Thanks for repeating Professor Pimentals bullshit without doing any of your own research! There are plenty of feed stocks that can be grown across the US that are as good or better then Sugar cane. Sweet Sorghum for one, fodder beets etc... And much of the south can grow sugar cane also. Brazil is a working model. Trying to say it won't work here because they use sugar cane is ridiculous and shows your lack of understanding and willingness to just repeat BS.

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I didn't repeat his BS. That's the BS I trust.

My numbers are much lower than his but I'm not published, now am I? At least I do my own research unlike your comment above.

Any way you slice it, ethanol is a losing gamble until it can be farmed in extremely dense footprints with energy returns over 10:1. (Go show us how to harvest 20,000 lbs of permaculture cellulose per acre and get rich.)

Brazil is now clear-cutting forests by the miles per week. They're also complacent and has stopped the hunt for better alternatives. Something we will use to best them in the end. Hopefully.

You continue to show your

You continue to show your ignorance. We don't need cellulose. Fodder beets easily rival sugar cane and can out produce them with up to 950 gallons per acre where as sugar cane in Brazil averages about 700 gallons per acre. Sweet Sorghum can average 500-1000 gallons per acre and will grow anywhere corn soybeans or sugarcane grow and can be rotated with those crops or can get 3-4 cuttings and not need to be replanted. It grows faster then corn and will tolerate more stressful conditions There are a number of other feed stocks the rival sugar cane and some grow wild like mesquite and cattails so farm land would not even need to be used.

Brazil clear cutting forests has nothing to do with ethanol production like I said they grow all their ethanol on less then 1% of their farmland they are not cutting forests to plant sugar cane they are doing it for other reasons.

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A rather

Sound assessment of the situation regarding CH3CH2OH fuel.

"Hell is empty, and all the devils are here" (Shakespeare)
RP 2012~ Intellectual Revolution.

End Corn and Farm subsidies,

End Corn and Farm subsidies, problem solved.

Southern Agrarian

Destroying The Rain Forests

I hear that ethanol production is why the rain forests are being destroyed like crazy in Brazil. Just saying. BTW, is it GMO ethanol? hahaha Actually if they just brought back the EV-1 this whole thing would be moot.


This is complete BS! Jeeze

This is complete BS! Jeeze folks do some research instead of repeating propaganda...

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Disinfo on ethanol

Disinfo on ethanol again...what a surprise. First off, while ethanol may raise food prices its NOT because it uses food that otherwise would have fed someone, for several reasons..A.Ethanol is made from corn that is deemed unfit for human consumption for whatever reason. B. Ethanol corn stock is usually used as animal feed....and after ethanol is extracted it still is. C. With existing subsidies on corn(pre ethanol) huge amounts of corn are plowed under each year used for nothing. I know since my uncle farms corn(and cotton), so the only true reason for corn prices to go up is because people believe making ethanol causes shortages...ot does not.

Next, while miles per gallon does indeed drop with the lower specific energy(ie more ethanol needed to reach gasolines specific energy) its not nearly as bad as that implies...first pure 100% ethanol has 80% gasolines specific energy so if you use pure ethanol you would get a 20% fuel efficiency drop...but we dont, the stuff at the pump is E10 or 10% ethanol(for gasoline cars...not flex fuel) that means at MOST its a 2% fuel efficiency drop. I say at most because what is really in the pumps is UP TO 10% ethanol...I spoke with a station owner saying that the availability of ethanol made the true number closer to 2-3%.

Ethanol DOES NOT destroy engines...I am an ASE certified mechanic...you people have been running it in your cars for decades....show me ONE Ethanol related failure...cant? That is because it doesnt hurt an engine....in fact due to the alcohol content it keeps them cleaner. As far as 2 cycle engines like a chainsaw...well, I really dont know...its possible it could since you have to mix oil in...so that one is up in the air. People like to blame ethanol for other unrelated problems with their car.

Excellent points my friend!

Excellent points my friend! One point though there is no mileage loss in a properly tuned engine using ethanol even at 100% only in engines tuned for gasoline.

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Ethanol was one of the main reasons I quit renewqble fuels...

after so much time


thinking that fuel was the future

...but it's not


we are.

btw I'm 'clean and geen' on these forums - take it, live it, learn it'

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I guess I do not understand

I guess I do not understand your post, you claim to have quite renewable fuels yet point us to a renewable fuel website...? Why wouldn't renewable fuels be the future? And why specifically is ethanol the reason you supposedly quit?

Ethanol and Bio-diesel are both proven technologies that work we have right now and need no new yet unknown science to be viable. They could be utilized as clean burning fuels in place of fossil fuels and we could be energy independent in a few years. Brazil runs 50% if there cars on ethanol using less then 1% of their farmland. For nearly a decade imported no oil until they caved to US and big oil pressure to import. Results are damn hard to argue with. We have a proven example of energy self sufficiency in Brazil.

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They do it with sugar cane,

They do it with sugar cane, not corn. Plant the Florida Everglades with sugar cane, then we'll talk. Forward Bitcheez.

So what there are plenty of

So what there are plenty of feed stocks as good or better then sugar cane for ethanol that could be planted acres the US and again Brazil only uses 1% of their farmland. Corn is not the best feed stock it is in the middle somewhere. However even using corn we could still be energy independent inside 2-4 years and still use less then 2% of our farmland. Do your research instead of repeating propaganda and then we'll talk.

End The Fat
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BS Propaganda!

Nice job repeating the propaganda big oil has been spewing for the last near hundred years. It's all BS! Nothing in that article is true about ethanol. Ethanol does not ruin engines it cleans them, it does not drive food prices up none of the grain used for ethanol is used for food. And after distillation the grain is a better high protein animal feed then before it was distilled. It only lowers mileage in older engines tuned for gasoline it burns cleaner and gives more power engines last 2-3 times as long as there is no carbon build up. That's why professional race car drivers use it. Most modern cars can computer adjust for tuning for ethanol now days. The only problem with ethanol is mixing gasoline with it. Its the gasoline that causes all the problems not the ethanol. And the 10% mix is about the worst mix you can get.

Ethanol is a major key to being energy independent. Gasoline is only about 20% efficient where as ethanol is over 80%

Educate yourselves. All the propaganda about how terrible ethanol is can be traced back to one professor on the the big oil payroll...



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before even trying to come from the other side...


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I hate ethanol

dumbest change in fuels ever. Don't forget the problem ethanol has on marine engines. worse problem than cars. causes all sorts of damage and is more hazardous than straight gasoline.

I know some people that tune

I know some people that tune their cars for ethanol 85, and according to them it has a pretty high octane rating; so they can extract quite a bit more performance out of their engine using it as opposed to normal gasoline. Of course, it contains less potential energy so more needs to be used to produce similiar performance and due to this the fueling system usually needs to be upgraded to flow better.

I know. Many of my neighbors

I know. Many of my neighbors boats in SW Florida have been trashed by it.