Tag Archives: Ethanol fraud

Nothing new here, but still depressing

The public face of Goldman Sachs, Hamptons rapist, Jason Lee

The public face of Goldman Sachs only acknowledged rapist, Jason Lee

Instapundit on the ethanol scam and, naturally, Goldman Sachs

CRONY CAPITALISM: In government-created market, Wall Street wins.

When you drag commerce into the arena of government, it’s always a home game for the big guys.

When Congress created an ethanol mandate in 2005 and expanded it in 2007, this was widely, and correctly, derided as a political gift to the ethanol industry. But it’s worth noting that big Wall Street players were also pushing for the ethanol mandate.

In fact, Goldman Sachs lobbyist Mark Patterson was lobbying on ethanol within a year of becoming Treasury Department chief of staff in the Obama administration.

When I write about the big guys lobbying for and profiting from big-government, some liberal bloggers yawn and ask “who cares if someone’s getting rich?” (See, for instance, Brad Plumer, Matt Yglesias, Ezra Klein.)

But figuring out who believes they will profit off of a law can help us detect flaws in the law we may not have previously detected. In other words, we should ask “what are these lobbyists seeing that we’re not?”

In the case of the ethanol mandate, that flaw may be the ability of big banks to rig the market in ethanol credits.

Ethanol is a scam, and it’s also starving poor people.

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Don’t get your hopes up

A handful of senators (Democrats and Republicans) introduce bill to repeal Renewable Fuels Act – the ethanol mandate.* Ethanol consumes more energy to produce than it yields, ruins engines, leads to gasoline shortages (because ethanol absorbs moisture and must be transported in separate pipelines), diverts 40% of our corn crop, thus driving up the cost of food, and is on track to increase the price of diesel 300% and gasoline (at least) 30%.

Ethanol is also made from corn grown in Iowa, and the Iowa presidential primary is crucial to politicians hoping to run for the highest office in our land.

“I promise you, Senator Barrasso’s proposal will never become law because it is the wrong policy for America, and we will continue fighting for the RFS until the cows come home,” [president and CEO of Renewable Fuels Association Robert] Dinneen concluded.

I’m sure Mr. Dinneen is right.

*10% blend currently, EPA has mandated an increase to 15%, despite uncontroverted evidence that so much ethanol will ruin small engines and all automobile engines manufactured before 2012.


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Ethanol – it’s what for dinner in Washington

Not that I haven’t ranted about this boondoggle for years, but here’s a nice summary of all that’s wrong with the corn-into-fuel program. It’s 26% less efficient than gasoline, far more expensive, pollutes more than gasoline, uses a huge amount of water and is ruining every small engine (lawnmowers, snowmobiles, even leaf blowers, which may be a plus), all by government mandate.


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Ethanol + Congress + tax $ = exactly what you’d think

$4 billion wasted on “bio-fuels” in 2008 alone, adding $1.95 per gallon of gas, for nothing (good).  Congress is increasing the ethanol requirement from 10% to 20%, which should finish off your engine. If Maine held its presidential primary before Iowa. we’d be cramming blueberries in our fuel tanks.


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Ethanol Fraud advances

The EPA is drawing closer to approving an increase to 15% of mandatory ethanol in our gasoline, despite protests from engine makers, car manufacturers, gasoline dealers and even the Union of Concerned Scientists, for God’s sake. Remember that ethanol contributes nothing to clean air (it’s useless in fuel-injected engines, which have been standard since 1988), is at best a break-even proposition for energy used versus energy consumed to produce it, and must be shipped separately from gasoline because it absorbs water, so costs consumers more. The only reason for mandating its use is to placate Midwestern politicians and farmers, yet, as noted earlier, Obama is contemplating abandoning his pledge to put science ahead of politics and ordering the EPA to increase its use. Hope and change.

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Politics or science?

Poor Obama has a problem: enforce Congress’s mandatory increase in the ethanol boondoggle or get rid of the mandate. He can do either, under the law as enacted, and according to the NYT, it’s proving a real poser. Mr. Obama’s campaign vow to put “science before politics” sounded fine when he was addressing pro-abortion advocates, but mid-western Democrats from the corn belt are another matter. By the way, the fact that the issue is even being considered answers the question of whether the One will honor his pledge: the decision is supposed to be made by the EPA, not the White House, so if the White House is claiming authority to decide how the EPA will rule, then it seems to me we’re already back to days of that ol Debbil’ Bush, eh? I expect the protesters to assemble on Pennsylvania Avenue tomorrow.


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Car industry failing? Make cars more expensive and useless! Yeah, that’s the ticket!

Obama and his demmerkrats are about to turn the car industry over to the tender mercies of the EPA, which wants to mandate high ethanol fuel blends (which cars can’t run on), initiate a carbon tax (which consumers will pay) and force mileage to increase by 40% (raising the price of cars still higher). I used to think that the people advocating these things were merely deluded fools – the more it continues, the more I’m convinced that the have the goal of destroying our economy, nothing less.

The EPA is trying to craft new federal emissions standards that would match California’s still-to-be-implemented state-level greenhouse-gas standards for vehicles and federal automobile fuel economy regulations now being developed by the Transportation Department. Figuring out how to do this won’t be easy, or cheap.

The Obama administration inherited a congressional mandate for auto makers to boost the average fuel economy of their vehicle fleets to at least 35 miles per gallon by 2020, a 40% increase from the roughly 25 mpg standard for the current fleet. California estimates its standards would require auto makers to achieve 35 mpg by 2017. And unlike the federal government, which gives auto makers compliance credits for churning out “flex-fuel” vehicles capable of running on high levels of ethanol, California requires auto makers to prove motorists are actually filling up on those high-level blends in order to claim credit.

Just meeting the federal standards will require huge investments by auto makers. Last summer, the Transportation Department estimated its proposal to require auto makers to achieve 31.6 mpg by 2015 would cost them $46.7 billion, a sum the agency said would make it among the most expensive rule makings in U.S. history.

Under one portion of the Clean Air Act, facilities that could be major sources of air pollution can be built or significantly modified only if they are equipped with “the best available control technology.” The law generally applies to power plants, refineries, steel mills or other facilities if they emit at least 100 tons per year of any regulated air pollutant.

But the law also covers “any building, structure, facility or installation” that emits at least 250 tons per year of any regulated air pollutant — a threshold low enough to cover roughly one million midsize to large commercial-sector sources, including restaurants, hospitals, schools and office buildings, based on estimates by the U.S. Chamber of Commerce.

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Ethanol – $4 billion boondoggle

I bet that $4 billion is understating the case.

From what we’re reading in a report released by the Congressional Budget Office, ethanol can’t become profitable on its own, it barely reduces our use of foreign oil, its benefit to the environment is questionable and its cost to the government is massive–$4 billion to be precise.

In the report the CBO says that increased use of the ethanol between April 2007 and 2008, accounted for 10 to 15 percent of the rise in food prices during that same period. The 10-15% increase in food prices attributed to ethanol means that federal spending on the Supplemental Nutrition Assisteance Program and child nutrition programs went up by $600 to $900 million.

Also in the report, the CBO says firms that blend ethanol with gasoline receive a tax credit of 45 cents per gallon. The cost of that credit in forgone tax revenue was $3 billion in 2007. If that remains steady for this year, it means that the total bill for ethanol production could be $3.9 billion. Factor in an increase in $75 million to the WIC (another government food program) and you’re basically at $4 billion for ethanol.

For all that spending, the benefits appear to be minimal. As far as reducing greenhouse gas emissions is concerned, the Argonne National Labratory says it only reduces them by 20% in the short term on average compared to gasoline. In the long run it becomes less clear, because increasing the amount of land used to farm corn means that there are fewer trees around to absorb carbon.

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WSJ: Nobody doesn’t hate ethanol

Except for Wesley Clark and politicians, of course. The Wall Street Journal points out what this writer has been saying for a long time: the stuff is too expensive, useless and a disaster waiting to happen. Thus, a typical government-mandated program.

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In the new world of Obama we’ll do away with politics as usual

Obama’s Secretary of Agricultural calls for increased ethanol mandate. He was speaking before an audience of corn farmers, the daring guy – speaking truth to power!

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Scum rises to the surface

Ethanol producers want government to force us to buy more of their product.

The struggling ethanol industry is flexing its political clout to try to change government regulations on how much ethanol can be blended into gasoline.

Today retired General Wesley Clark, a onetime presidential candidate who now co-chairs of an ethanol industry group, asked the Environmental Protection Agency to raise the limit on how much ethanol can be blended into gasoline. The current limit is 10 percent; General Clark and his group, Growth Energy, want the amount raised as high as 15 percent.

Many environmentalists, however, don’t like corn ethanol.

“This is a likely prescription for more pollution – and more engine damage,” wrote Frank O’Donnell of Clean Air Watch on his blog today.

Indeed, many opponents of corn ethanol argue that it creates plenty of greenhouse gas emissions, partly because of the fertilizer needed, and partly because in their view, growing corn as an energy feedstock displaces food crops, and forces an outward expansion of agriculture into precious forest land abroad.

Plenty of drivers already complain that the 10 percent ethanol blend reduces their mileage, and boaters and other users of small engines worry about complications that result from ethanol’s ability to attract water when the fuel is stored.

Kris Kiser, the executive vice president at the Outdoor Power Equipment Institute, warned today of “serious concerns” about E15.

“We need to acknowledge that current equipment — including boats, chainsaws, lawn mowers, snow mobiles, motorcycles, generators and other small engine equipment — may be permanently damaged and poses a safety risk if E15 fuel is used,” Mr. Kiser said in a statement. “Current equipment is neither designed, built or warrantied for mid-level blends.”

From its inception, the mandatory use of ethanol has been a political program that has nothing to do with clean air – touted as an “oxygenator” when first proposed, it was totally useless for that purpose once cars switched to fuel-injection systems back in 1988. The fuel was forced on consumers for no better reason than that Iowa farmers grow corn and Iowa holds presidential caucuses earlier than other states. That’s it.

Because ethanol absorbs water it cannot be mixed with gasoline and shipped via pipeline so we pay the extra cost of having it brewed in Iowa and trucked to local distribution plants while our cars deteriorate and our mileage suffers. It does nothing to clean the air or reduce our dependence on foreign oil (it costs more energy to produce than it yields).  IT DOES NO GOOD!

And that smarmy pseudo-war hero Wesley Clark wants us to buy more of the junk so that he can get richer. I don’t think that’s a good idea.

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Ethanol, busted

Just a year ago Congress had to rush through mandatory ethanol requirements to save the nation. No time for debate and besides, the debate was over. It was actually over before this boondoggle ever got started. Anyone who wasn’t a politician or didn’t have a federal subsidy knew the truth of the matter but then it didn’t matter. Now it does. I haven’t checked – who could? – but I’m sure the stimulus bill has more billions in store for this fiasco. I’ve railed about this fraud for years. Today, the New York Times discovered the same thing.   Since federal programs only expand and never disappear, it’s surely too late to stop this nonsense.

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