U.S. Smashes Record: Highest Production Of Lowest Quality Fuel In The World
Yes, it’s true… the United States smashed another fuel production record this year. According to the U.S. Energy Information Agency (EIA), the country produced over one million barrels per day of this liquid gold in the first six months of 2017. Unfortunately, this isn’t something to brag about. It would be wise just to keep this lil record to ourselves, rather than broadcast it loudly across the energy news wires and Mainstream media.
Why do I say that? Because the U.S. produced a record 1.02 million barrels per day of corn-based ethanol, the lowest quality fuel in the world. Corn ethanol’s EROI – Energy Returned On Invested is so low, it barely provides one full barrel of fuel for one barrel worth of energy that it took to produce it. I get into that in a moment, but let’s look at U.S. ethanol production since 2010:
U.S. ethanol fuel production was 870,000 barrels per day (bd) in 2010, fell to 852,000 bd in 2013 and then continued to increase to a new record of 1.02 million bd in the first six months of 2017. We must remember, corn ethanol is blended into gasoline which is called “E10.” All E10 means is that gasoline you buy at the pump can be blended up to 10% with ethanol.
Americans consumed the majority of domestically produced corn ethanol as was blended into the 9.3 million bd of motor gasoline we burned in 2016 (EIA). Actually, it works out quite nicely as 10% of 9.3 million bd or motor gasoline equals 930,000 bd of ethanol. According to the EIA, the U.S. exported 68,000 bd of ethanol in 2016… which is very close to the total 990,000 bd of U.S. ethanol production last year.
Okay, so we are producing one hell of a lot of corn juice to power our vehicles… what does that really mean? It means that we are consuming approximately 40% of our domestic corn crop to produce 10% of our motor gasoline supply. In the article, Trump’s Support For Ethanol Is Bad For Taxpayers & Their Cars:
And the federal government not only requires the use of ethanol; it also subsides it. Tax credits between 1978 and 2012 cost the Treasury as much as $40 billion. Moreover, numerous other federal programs, spanning multiple agencies, allot billions of dollars to ethanol in the form of grants, loan guarantees, tax credits, and other subsidies.
Taxpayers suffer in other ways, too. Vehicles can drive fewer miles per gallon using ethanol blends than they would with pure gasoline. So Americans end up spending an extra $10 billion per year for fuel, the Institute for Energy Research estimates.
Ethanol also guzzles 40 percent of the U.S. corn crop, and the resulting scarcity drives up the price of food. This year alone, the Congressional Budget Office estimated, American consumers will spend $3.5 billion more on groceries because of the ethanol mandate.
As the article states, Americans pay an extra $10 billion a year for E10 fuel, because ethanol has a lower energy content.Basically, a gallon of ethanol has two-thirds the energy content of a gallon of straight motor gasoline. Furthermore, the EPA says that fuel efficiency can decrease by 1.5-3% (or even higher) using ethanol blended gasoline.
When we add up the negatives here, why are we wasting 40% of our corn crop to produce a fuel that has a lower energy content and costs Americans more money to drive down the road? That’s a good question.Unfortunately, it gets even worse.
If we look at the chart below that lists the different EROI – Energy Returned On Investment ratios, corn ethanol is ranked DEAD LAST:
According to different sources I found on the internet, corn-based ethanol has an EROI of 1.8-2/1. That means, for each barrel’s worth of energy burned to produced corn ethanol, the market receives 0.8-1 barrel of fuel. On the other hand, soybean based biodiesel is closer to an EROI of 3/1. Thus, soybean biodiesel supplies about 2 barrels of fuel for the energy cost of 1 barrel.
NOTE: In the original table above, biodiesel was ranked lowest, while ethanol corn was second lowest.I switched them because new research shows that soybean biodiesel has a higher EROI than corn-based ethanol.
In a nutshell, the U.S. is burning good quality oil and natural gas to produce the lowest quality fuel on the planet. This is as moronic as turning GOLD into LEAD. But, the insanity doesn’t stop there. In a Zerohedge article, Farmers Set To Receive $7 Billion In 2016 Subsidies – 10% of Income:
You will notice that the corn farmers received $3.7 billion in subsidies in 2015. This was 71% of total $5.2 billion in farm subsidies. If we assume that the Federal Government was going to pay $7 billion in 2016, than approximately 70% of that $7 billion for the corn farmers would be nearly $5 billion.
Now, if we also assume that corn ethanol consumes 40% of the U.S. corn crop, then 40% of that $5 billion subsidy, or $2 billion is going to subsidize corn ethanol production. Of course, this is just an estimate, but at least it gives us a ball park figure.
Here is the ranking of top Global Ethanol producers in 2016:
United States = 15.3 billion gallons
Brazil = 7.3 billion gallons
European Union = 1.4 billion gallons
China = 845 million gallons
Canada = 436 million gallons
Thailand = 322 million gallons
Argentina = 264 million gallons
India = 225 million gallons
I would like to remind my readers that the modern U.S. economy needs something north of 12-15/1 EROI of its energy-fuels to maintain business as usual. With corn-based ethanol ranked at a whopping 1.8-2/1 EROI, we must be completely insane to be producing a record 1 million barrels a day of this fuel.
Unfortunately, it seems like the BRAIN DAMAGE is spreading further and wider here in the Good ‘ole U.S. of A. At some point, the money printing can’t solve…. STUPIDITY. So, I say… enjoy the ride while it lasts.
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@[Steve St. Angelo](user:22629), I'm still confused as to whether the US subsidizes #ethanol here in the US. It seems like there is a lot of conflicting information in the comment thread with some arguing yes and some insisting no.
Alexis.... first, I never stated in the article that the Ethanol Industry was subsidized. Others may have stated that.. but not me. However, the Corn Farmers were subsidized approximately $5 billion in 2016... according to the USDA data. If 40% of corn grown in the U.S. goes to produce ethanol, than 40% of that $5 billion, or $2 billion was an INDIRECT Ethanol subsidy.
steve
Steve - This is more disingenuous information from you. Are you saying that corn farmers are not part of the ethanol industry? If you make the case that 40% of corn is used for ethanol, and then say that corn farmers received subsidies, then you are implying that ethanol was (singularly) subsidized. But this is not the case.
And as I pointed out in my original reply to you, if you have a problem with Federal subsidies then you should have a real problem with all the subsidies received by the oil industry.
Marc... with all due respect, your reply resembles what normally comes out of a Politicians mouth. If farmers who produce corn receive $2 billion in subsidies to grow and harvest the corn that goes into making Ethanol, then how else can that be misunderstood as not an INDIRECT SUBSIDY?
You are more than welcome to continue posting comments as a VP of the AutoChannel... but I find it quite interesting that a Vice President doesn't have anything better to do than spend time blogging via comments.
steve
Steve, what is it that you think "vice presidents" of a company do? In your original article you showed that you have very little business acumen, are you now compounding it to show that you have zero business acumen?
You say that what comes out of my mouth resembles what a politician says. But that can't be true since I've only 'spoken' the truth to you.
You built this little fantasy where you attack ethanol and corn grown for ethanol. You spout words that you know nothing about.
There are farm subsidies, but there are no corn ethanol subsidies. If you have a problem with Federal subsidies, as many people do, then you should have the same problem regardless of whether the farmer is growing corn or wheat or beans or peas or oranges or apples or potatoes or peanuts. But you didn't write a dopey story attacking peanut butter, you wrote a story attacking ethanol.
And as I wrote previously to you, if you hate federal subsidies then your first target should be the petroleum oil industry.
You made a few great miscalculations in how you handled this entire issue. First is that you repeatedly stated that 40% of all corn is used for ethanol. As I wrote in my initial rebuttal, you have done this in order to imply that the use of the corn for ethanol is creating a food shortage and/or causing general food prices to rise. This is the line of attack that all ignorant oil industry shills take. Corn ethanol production is not responsible for either of these things, and I provided ample source information to support me. You provided nothing to support your implication.
Second, if 40% of all corn is used for ethanol, then it still leaves 60% for all the other uses, such as popcorn, fattening candies, fattening soft drinks, baby powder, corn on the cob, canned corn, etc. If the purpose of your article was to decry corn subsidies, then why not attack the larger portion of where corn is used? Do you seriously think that we must have popcorn in movie theaters? Aren't there better ways to sweeten soft drinks then with corn fructose? Don't you know that America is battling obesity? If you're just an honest concerned guy, why not attack these uses of corn?
Third, most corn used for ethanol is not fit for human consumption, so we shouldn't even be considering it as corn. Therefore, the proper way to evaluate the situation is to say that nearly 100% of all corn grown is for human consumption or bodily applications (baby powder). And then we can say that nearly 100% of this other stuff that resembles corn is what is used for ethanol, which works out good because it's not it for human consumption.
And here's the best part, virtually all corn that is used for ethanol (regardless of whether it was fit for human consumption or not) can be used as a high quality animal feed after the distillation process. And by using the remnants, which are called distillers grains, the animals that are used for human food grow bigger and provide more meat.
In essence, Steve, you created a labyrinth of deceit that you can't escape from except by imagining that company vice presidents should have something better to do then post rebuttals to stupid stories and comments.
You've ignored one other thing: I'm not just any vice president of The Auto Channel, I'm the executive vice president of The Auto Channel. This gives me special powers to combat knuckleheads. :)
Thank you for clarifying Steve!
Excuse me, but I'm confused here. 80 million acres of America's 359 million acres of crop land is used to grow corn. Perhaps my math is incorrect, but that puts the percentage just a tic over 22%. Steve, did you do the math using known total cropland acres and those used to grow corn?
Steve, I read your statement again and better understand how you arrived at the figure you stated. But to be clear, how much subsidy did corn growers receive directly? It is my understanding that farmers receive only the difference (gap) between their hard costs to grow crops and their sales figures. This means if they lose a dime per acre they receive the dime subsidy, which puts them at no profit for that year's hard work. Let's ask a farmer... a corn farmer to get the facts. Anyone?
Steve St. Angelo's article is incorrect. My published reply to the article, Mr. St. Angelo's response to me, and then my follow up reply to him can all be found at: www.theautochannel.com/.../...iticism-ethanol.html.
Marc, I appreciate a devil's advocate as much as the next guy, I love bringing up as many sources of data and as many facts as possible. Your response however seems to just be an attack on Steve however! Instead of delving into the realities of energy production and the economics behind it, you take his wording out of context and use it against him. For example you attack Steve for calling #corn #ethanol a low quality fuel and reply that due to it's high hydrocarbon content it's a very powerful fuel. Now your reply is correct: corn ethanol is very high in hydrocarbons. It produces a lot of power per volume used. That however does not take into account the economics behind the production of this corn ethanol. Many scientists debate whether or not it even breaks the 1.0 EROIE point, and therefore it is barely efficient, if efficient at all, to create this fuel in the first place.
William - I suggest you look up the term "Devil's Advocate." If there is a "Devil's Advocate" related to this issue, it was Steve St. Angelo.
Mr. St. Angelo wrote an spurious article about ethanol. I corrected those inaccuracies. That doesn't make me the Devil's Advocate. I used several sources of information to support my statements; the use of those sources is a good thing, not a bad thing.
I didn't take his words out of context, his entire article was "out of context" with facts. I didn't call ethanol a "low quality fuel," he did. Ethanol is not a low quality fuel, not by any standards.
Scientists do not debate whether corn ethanol is negative or positive EROEI, but some scientists have been paid by the oil industry to say that ethanol is negative EROEI. If you want to see a forum where scientists challenge the two worst offenders' negative assertions about ethanol then you should watch this hour-long video: www.c-span.org/.../ethanol-energy-policy.
Marc, I think YOU should look up the term devil's advocate, as it simply means "a person who expresses a contentious opinion in order to provoke debate or test the strength of the opposing arguments." If that term offended you I apologize, but I meant nothing negative by it.
That video is a presentation by the National Corn Growers Association. I'm not going to waste an hour of my life watching something that has a very very good reason to be biased.
There have been meta-analyses done on the subject of corn ethanol EROEI, and they put corn ethanol AT THE MOST at 1.4 EROEI. As Steve was saying in his article, we need a much more EFFICIENT fuel for America to focus on in order to have a sustainable future. That's what Steve meant by low quality, the corn ethanol low efficiency.
William, very good. I'm glad to see you know how to look up the definition of a word or term.
Now let's put what you learned into practical application: Mr. St. Angelo expressed the contentious opinion in order to provoke debate or test the strength of the opposing arguments (and he did so with lies and misleading information).
I gladly supplied the correct information that tested, and bested, the strength of his arguments. His arguments had no strength, and I remain standing while he slunk away.
Now you try to interpret what Mr. St Angelo's misinformation was meant to say. If he didn't know what he meant to say, and you come along with equal or perhaps even less knowledge of the entire issue, how can you correctly interpret what he meant?
If you say that you are a respected voice in this arena then I will listen to what you have to say, and then respond accordingly.
In any event, you are incorrect. Mr. St. Angelo backed up his contention that ethanol was "low quality" with an argument about energy content. But as I explained in my published rebuttal that energy content is irrelevant in internal combustion engines.
Additionally, as I explained to him, since gasoline actually has a lower EROEI than ethanol, why castigate ethanol? If you want to hate low EROEI, then hate gasoline, which is also responsible for creating health hazards, environmental disasters, and wars.
One more thing: every...EVERY... useable energy/fuel requires enormous energy and fuels to transform the raw energy into usable energy. There is no free ride, and there is no cheap or easy way to create the energy we need to power our machines and electric devices. The closest may be nuclear, which I'm okay with, but many people are not.
Excellent points. Marc, is your beef with the author or with ethanol detractors?
Carl - Mr. St. Angelo decided to venture into territory that he knows nothing about. He wrote a fairly long article that proves he knows nothing about the issue. He used terminology that he doesn't know the meaning of, and he referred to ethanol advocates as having brain defects.
I corrected him and his incorrect information. If doing so seems to you to be an unreasonable personal attack on him, that's your impression, not my intention. I was actually quite polite; asking about his summer and hoping that he has had a good one. I also wrote that I looked forward to his reply. In making a reply to me he didn't say he felt that I attacked him personally, and he said he was grateful that I reached out to him. It is interesting that he wrote to me that he disagreed with many of the points I made in my rebuttal to him, but he failed to mention what those points were, and what information he might have that leads him to disagree with me.
But allow me to clear the air if there is any misconception: I take issue with stupidity. In a time when we have virtually instant access to incredible amounts of information there is no excuse for circulating lies, other than the intention to circulate lies. Mr. St. Angelo claims to be a researcher. He now claims to be agnostic on the issue of ethanol as a fuel. If he is a researcher, and an objective observer then he should have responded in a better manner.
Harsh.
I like harsh.
What about the article that was quoted by the author himself?
www.nationalreview.com/.../donald-trumps-ethanol-subsidy-support-bad-taxpayers
Bill, Donald Trump will say anything... anytime to win any particular battle...real or imagined. I know nothing about politics so please don't go there in your reply, but my entire career has been about "cause and effect," which means whenever my service customers come to me with a problem, my goal is to fix the problem AND whatever can be determined to have caused it. I call this real-world conditions and am proud to pass the "Man-in-the-mirror test daily. Last week, my 46 years service company was awarded 2017 BBB "Torch Award for Ethics in Business" in our two area counties. No brag...just citing the standard by which we perform historically...and going forward.
Again, no politics if you please as my point was more about a human being than the man.
Bill, what about the article that Steve St. Angelo linked to? Did you read it? It refers to subsidies that ended a few years ago. If you read my reply to Mr. St. Angelo you'll note that I said the chart was based on old, wrong information. The National Review story was a hit piece with inaccurate, out dated info.
You should take a look at the link provided by Bobby Likis.
Good read, thanks. Why not submit that article here so people on TalkMarkets who already read this article can see it as well?
The comment was deleted!
I did? Where did I do that? I'm seeing all my comments.
Marc... you are a funny guy. Two can play at that game. Go ahead and continue posting comments everywhere you see my article on different websites. However, I am done here..... LOL.
steve
Two reasons: First, not all blogs allow posting of long reply comments, so I though a link would be easier.
Second, if given a choice I'd rather have people visit my website to read one of my editorials than to read it elsewhere.
How does one become a contributor? And what are the perks?
Seriously? It's on the footer of every page of the site. I see it daily. But to answer your question, here you go:
www.talkmarkets.com/.../why-be-a-contributor-to-talkmarkets
I apologize for calling the author ignorant...normally not my style, but whenever I read someone's negative post re ethanol fuels I get a bit upset. Ethanol burns cleaner, contains 35 percent oxygen in every molecule so far outperforms gasolines that contain toxins and other aromatics. But the fact remains that had it not been for John D. Rockefeller backing Prohibition both politically and financially in order to outlaw farmer made ethanol, Henry Ford's Model T might have run on pure ethanol. As for ethanol subsidies, the latest info (link below) may clear up my statement. www.ethanolrfa.org/.../rfa-issues-one-pager-to-correct-anti-ethanol-rhetoric-on-the-presidential-campaign-trail/ Best, Bobby Likis
Normally I don't respond here, but this is a good exception.
The issue with corn-ethanol goes far beyond the limited scope of it as a fuel versus liquid petroleum such as gasoline. The problem with ethanol is that its high rate of production is only viable with a high EROI of Oil and Gas production.
Unfortunately, the U.S. oil and gas industry is cannibalizing itself to stay alive. The U.S. Shale oil industry has not made any money since 2009, but has seen its debt explode. Even worse, this huge DEBT WALL becomes due over the next five years. It will balloon to $65 billion this year to $200 billion by 2020... and even higher each year.
Without cheap and abundant petroleum based fuels, large scale corn-ethanol production will not be viable. Basically, the U.S. farm industry is made possible by dumping massive amounts of oil and natural gas onto the soils... figuratively.
The U.S. is in serious trouble as its oil industry will likely disintegrate within the next 5-10 years. Thus, the 9+ million barrels per day of domestic oil production will fall precipitously by 2025. Which means, ethanol production will decline along with it.
Lastly, I have no problem with local organic based ethanol production by farmers who save their own corn. However, the modern AG-Business will not survive the disintegration of the U.S. Oil Industry. While Ethanol production will continue going forward... it will be at a much lower volume.
steve
Excellent response.
No, it was a bad response. All internal combustion engine farm equipment can run on ethanol or bio-diesel made from ethanol. And since ethanol is cheaper than gasoline and petroleum diesel fuel it's actually a better way to go.
However, all ocean and land oil shipping vessels/vehicles require massive amounts of expensive petroleum fuels.
And did you know that it has been 15,862 consecutive days since the 1973 Oil Crisis in which an American serviceman has not been killed defending ethanol?
Classy response. One of the reasons I like this site is that though we may disagree, the comments are always respecful and add value to the conversation.
Fascinating, thanks for the link!
The author knows nothing about ethanol fuel and apparently not much about the economics of farming. There is no ethanol subsidy - unlike gasoline's where we spend billions of dollars protecting oil-loaded cargo ships - and ethanol's octane enhancement as well as its cleaner burning properties are truly helping clean up the air we breathe. After 46 years in auto repair and more than 225,000 ars and small trucks coming through my shop's doors having zero engines damaged by ethanol fuels, quite candidly, I tire from such ignorant statements ethanol naysayers post online. Ethanol has been in our fuels since the late 70's with no damaging effects. Prior to that, Henry Ford used it in his Model T, America's first Flex-Fuel automobile. Really!
@[Bobby Likis](user:49793), those in glass houses shouldn't throw stones. Before you call someone ignorant, you may want to check out the facts. The US does subsidize ethanol. You may want to try to Google it if you don't believe me.
As I replied to Michele Grant, above, there are no federal ethanol subsidies. If you think you found a reference to one or more on Google please share the link
Bobby, i appreciate your two-cents backed by your nearly 50 years in the auto industry. I suspect you could offer tremendous insight on numerous articles here. But I think your response was harsh, especially when I don't think you read the article too clearly. First of all, there are ethanol subsidies, the author even quoted another article to back this up. He also never said ethanol damages vehicles, he just said they can't drive as far with ethanol, being it's not as efficient.
Interesting historical trivia on the Model T. though, I hadn't heard that before! Thanks.
There are no federal ethanol subsidies. If you think you found a reference to one or more on Google please share the link.
What about the article that was quoted by the author himself?
www.nationalreview.com/.../donald-trumps-ethanol-subsidy-support-bad-taxpayers
Bill, what about the article that Steve St. Angelo linked to? Did you read it? It refers to subsidies that ended a few years ago. If you read my reply to Mr. St. Angelo you'll note that I said the chart was based on old, wrong information. The National Review story was a hit piece with inaccurate, out dated info.
You should take a look at the link provided by Bobby Likis.
Thanks for clarying Marc. I'm not an expert on the subject. It was confusing seeing some said yes, some said no. Makes sense that there USED to be. When did the subsidies end?
Bill, Donald #Trump will say anything... anytime to win any particular battle...real or imagined. I know nothing about politics so please don't go there in your reply, but my entire career has been about "cause and effect," which means whenever my service customers come to me with a problem, my goal is to fix the problem AND whatever can be determined to have caused it. I call this real-world conditions and am proud to pass the "Man-in-the-mirror test daily. Last week, my 46 years service company was awarded 2017 BBB "Torch Award for Ethics in Business" in our two area counties. No brag...just citing the standard by which we perform historically...and going forward.
Again, no politics if you please as my point was more about a human being than the man.