U.S. Crop Yields Have Continued Trending Higher Over the Last Five Years Despite Claims of Climate Catastrophe

Politico has recently been making claims that bad weather that has slightly depressed this last years farm yields is due to man-made global warming.  This is complete and utter baloney.  Actually, it is less than baloney -- it is completely dishonest.  But what else is new with the alarmist community advocating catastrophic man-made global warming?

James Taylor, of the Heartland Institute, has written an article called Record Farm Yields Contradict Climate Doomsayers' Claims which solidly refutes the claims of Politico, which were highly promulgated by Google News.

One of his key sections notes:

Presenting crop data collected by the UN Food and Agriculture Organization, the Global Economy website documents that U.S. crop yields are enjoying excellent short-term, mid-term, and long-term growth, with new records being set almost every year. According to the USDA publication, “Crop Production Historical Track Records,” the past three years produced the three highest U.S. wheat yields per acre in history. The past five years produced the five highest U.S. corn yields and the five highest soybean yields per acre in history. U.S. and global crop production are a story of steady growth and almost yearly new records as the Earth modestly warms.

Even with the “catastrophic weather this year,” the USDA projects this year’s corn, soybean, and wheat yields to each be among the top six years all-time. Also, much of the problematic “catastrophic weather” occurred as part of early-spring snowstorms and late-fall snowstorms, which will continue to become less frequent and severe with ongoing modest warming.

There is no limit to the dishonesty of the catastrophic man-made global warming movement.  The facts simply do not matter to them.  The Big Lie told often enough will get them the power they want over our lives and that is all that matters to them.

No end in sight for the biofuel wars by Paul Driessen

Biofuels are unsustainable in every way, but still demand – and get – preferential treatment

The Big Oil-Big Biofuel wars rage on. From my perch, ethanol, biodiesel and “advanced biofuels” make about zero energy, economic or environmental sense. They make little political sense either, until you recognize that politics is largely driven by crony-capitalism, campaign contributions and vote hustling.

Even now, once again, as you read this, White House, EPA, Energy, Agriculture and corporate factions are battling it out, trying to get President Trump to sign off on their preferred “compromise” – over how much ethanol must be blended into gasoline, how many small refiners should be exempted, et cetera.

This all got started in the 1970s, when publicly spirited citizens persuaded Congress that “growing our own energy” would safeguard the USA against oil embargoes and price gouging by OPEC and other unfriendly nations, especially as our own petroleum reserves rapidly dwindled into oblivion. Congress then instituted the Renewable Fuels Standard in 2005, when the Iraq War triggered renewed fears of global oil supply disruptions. The RFS requires that almost all gasoline sold in the USA must contain 10% ethanol – which gets a third fewer miles per gallon than gasoline and damages small engines.

But, we were told, these fuels are renewable, sustainable, a way to prevent “dangerous climate change.”

It’s all bunk. In recent years, the horizontal drilling and hydraulic fracturing (fracking) revolution has given America and the world at least a century of new oil and natural gas reserves. America has become the world’s largest oil and gas producer and within five years could be producing far more oil and gas than any other country in the world. Terminals built years ago to import fuel from distant lands are being reconfigured to export abundant US oil, liquefied natural gas and refined products to distant lands.

Average global temperatures – as actually measured by satellites and weather balloons – are now almost a full degree Fahrenheit lower than predicted by climate models (the average of 102 IPCC computer model forecasts) that also foretell the daily litany of climate and weather cataclysms. However, hurricanes are less frequent and intense than a half-century ago, and Harvey was the first Category 3-5 hurricane to make US landfall in a record 12 years. Violent F4-5 tornadoes have also been less frequent over the past 34 years than during the 35 years before that, and not one F4-5 tornado hit the USA in 2018.

Over their full life cycle (from planting, growing and harvesting crops, to converting them to fuel, to transporting them by truck or rail car, to blending and burning them), biofuels emit just as much (plant-fertilizing) carbon dioxide as oil-based gasoline and diesel. Those biofuels also require enormous amounts of land, water, fertilizer, insecticides and energy. None of this is renewable or sustainable.

In fact, corn turned into E85 fuel (85% ethanol/15% gasoline) and grown where rainfall is insufficient requires irrigation – and up to 28 gallons of water from rivers or groundwater supplies per mile traveled!

US ethanol production utilizes 38% of America’s corn and 27% of its sorghum – grown on cropland the size of Iowa: 36 million acres, much of which would otherwise be wildlife habitat. And the fertilizers used to grow those crops, especially the corn, result in nutrient-rich runoff that increases nitrogen levels in the Gulf of Mexico, causing deadly algal blooms. When the algae die and decompose, they create low and no-oxygen zones the size of Delaware – killing marine life that can’t swim away quickly enough.

In short, biofuels have huge downsides and do nothing to address the scary scenarios that have either shriveled amid the winds of history – or were wildly exaggerated or imaginary to begin with.

But once these biofuel programs were launched, they became permanent. They created a biofuel industry that wants to get bigger every year, and supports politicians who want to get reelected year after year. That brings us back to the Executive Branch biofuel battles – and to issues that I myself struggle to comprehend, amid the morass of acronyms and conflicting policies and mandates.

Congress and the Environmental Protection Agency require that refiners blend “conventional biofuel” (mostly ethanol) into gasoline – and also meet various “advanced biofuel” and biomass-based diesel requirements. However, too much ethanol in gasoline damages engines in older cars, generators, garden equipment and boats; that puts a limit on how much ethanol can actually go in the fuel supply (the “blend wall”). As a result, while ethanol blending continues to increase gradually, American motorists have never been able to consume enough ethanol to satisfy applicable Renewable Fuel Standards.

However, biofuel interests want the government to keep mandating even more ethanol – a desire that faces multiple problems. Gasoline demand is decreasing, as people drive less, in more fuel-efficient cars, and in electric and hybrid vehicles (that are heavily subsidized under other laws).

Tariff wars with China and other countries have hurt corn and sorghum farmers, who want to be “compensated” via more biofuel mandates under the Renewable Fuels Standard – even though beef, pork and poultry farmers get hurt by higher grain prices resulting from so much corn devoted to ethanol.

Declining fuel demand and the blend wall mean refiners cannot mix all the mandated 15 billion annual gallons of ethanol into gasoline. They are thus forced to over-comply with the “advanced biofuel” part of the RFS mandate by buying expensive foreign biodiesel and “renewable” diesel. Refiners that do not control the point where biofuel can be blended into gasoline (eg, large distribution terminals or local gas stations) must buy “credits” called Renewable Identification Numbers (RINs) that show (or pretend to show)  the required (foreign) biofuels were mixed with the gasoline they make domestically.

This all gets really expensive, really fast, which is why the law allows exemptions to small refiners that  face “disproportionate economic hardship” from costs that have gotten so high that courts have ordered the EPA to grant more “small refinery exemptions” (SREs) – waivers from the RFS mandates.

However, biofuel has been blended into the fuel small refiners make anyway. This situation resulted in ample supplies of RFS compliance credits, and RIN prices have dropped from over 90 cents apiece to 12 or 20 cents over the past two years or even lower at times. Of course, this all angered the biofuel lobby, which has attacked the Administration for issuing SREs, falsely claiming the exemptions are   “destroying demand” for biofuel and “hurting American farmers.” 

They levied these attacks on EPA, despite the fact that the Trump Administration granted the biofuel industry its biggest request in 20 years: an air quality waiver that allows E15 to be sold year round. So some in the Administration have proposed to “reallocate lost biofuel gallons” the biofuel industry says were caused by SREs. But there’s nothing to reallocate, since ethanol is being blended despite the SREs.

The reallocation proposal thus has the practical effect of increasing the biofuel mandate by over 700 million gallons above the 15-billion-gallon statutory ceiling on ethanol. That brings us back to the fact that America is not producing enough advanced biofuels, biodiesel or renewable diesel. That means refiners have to buy more foreign supplies of these fuels, from Argentina, Brazil, Indonesia, et cetera.

Of course, that does nothing to help American farmers. It just turns the Renewable Fuel Standard into a big foreign biofuel mandate. It also means President Trump is caught between trying to placate two of his core constituencies: farmers, primarily in the Midwest, and the oil and refining industry with all its jobs.

This is mind-numbingly complicated. But the bottom line is pretty simple: Every time Congress gets involved in trying to fix complex energy and economic problems – instead of letting free market industries and innovators sort things out – it creates a legislative, regulatory, legal and lobbying mess. Every attempted additional fix makes things worse. And trying to justify all the meddling, by claiming we’re running out of oil or face manmade climate cataclysms, just makes things worse.

We should end this crazy-quilt biofuel program. But anyone who thinks that will happen in Washington, DC or Des Moines, Iowa is smoking that stuff that’s now legal and widespread in Boulder, Colorado. But President Trump and his EPA should at least reduce – and certainly not increase – any biofuel quotas.

Paul Driessen is senior policy analyst for the Committee For A Constructive Tomorrow (www.CFACT.org) and author of books and articles on energy and environmental policy.

Charles' Comments:

Crony-capitalism is a self-contradiction.  The correct term is mercantilism, the common practice of kings and the aristocracy who granted special business privileges and monopolies to friends and supporters since ancient times.  We still are governed by an aristocracy, though their titles have changed from king, baron, earl, and count to President, Senator, Representative, and about a million bureaucrat titles.  The aristocracy still believes that force makes right and they know the needs and what the aspirations should be of the serfs / deplorables better than they do.

Washington, DC is a swamp predominantly controlled by predatory special interests who feed on the vast majority of Americans.  When anyone threatens their control, a vast coalition of usually disparate groups arises to oppose that threat, though in normal times these groups behave more like hyenas fighting over a carcass -- the stolen fruits of production of the American people.  We see a great example of that in the effort to remove Trump from office by many denizens in the bowels of our thieving government even before he took the oath of office.

A recent study by researchers at the University of Minnesota, says that the production of a gallon of ethanol from corn takes anywhere from 5 to 2,138 gallons of water, depending on the irrigation needs of the area in the United States where the corn is grown.  As the amount of corn dedicated to ethanol production has grown, the amount of land dedicated to corn planting has increased.  That increase has required that land less and less suitable to corn production be used.  When ethanol production was doubled between 2005 and 2008, the amount of water used in ethanol from corn production more than tripled.  The proposal to make 15% ethanol in gasoline the requirement will cause a further increase in corn production for ethanol and still more water use.  In many areas of the U.S. water aquifers have been depleted at alarming rates as it is.  The huge Ogallala aquifer stretching from South Dakota to Texas is a particularly important and very stressed aquifer.

Forests Saved by Fossil Fuels and High Farm Productivity

American forests were disappearing between 1850 and 1910 due to the need for wood as fuel and the increases in farmland.  After 1910, the extent of our forests was stable and then they began to expand as crop yields increased dramatically.  High-yield varieties of wheat, rice, and corn were developed.  Fossil fuel use spared the forests from use as fuel.  See Ronald Bailey's article Peak Farmland?, which is largely based on a lecture by Jesse Ausubel at Rockefeller University in December 2012.

U.S. corn production from 1860 to 2010 increased by a factor of 17.  Corn yields in America are now averaging 180 bushels per acre, while worldwide yields are 82 bushels per acre.  Increasing yields should continue, since non-irrigated yields of about 300 bushels per acre are already being produced with new varieties.

The story of India is instructive.
 In 1960:

• Population = 435 million
• Diet = 2000 calories a day
• Farmland = 398 million acres (slightly more that 2 times the size of Texas), 0.91 acre/capita

In 2010:

• Population =  1.155 billion, increase of 2.66 times
• Diet = 2330 calories a day, or one-sixth more
• Farmland = 420 million acres, or 5.5% more, 0.36 acre/capita

If Indian wheat production had not improved since 1960, an additional 161 acres of farmland would have been needed to produce the same amount of wheat.  Thanks to Indians flocking to the cities since then, Indian forests have actually expanded by 37 million acres.

China in the post-Mao period has a similar history.  The population doubled, GDP increased 45 times, farmland planted in corn doubled, but corn yield was 4.5 times greater per acre.  The corn yield increase kept 297 million acres of land from being used to produce this corn.  Chinese forest land increased from 1990 to 2010 by 30%.

Without crop yield increases from 1960 to 2010, about 7.4 billion more acres of farmland would have been needed worldwide.  This land area is almost twice that of South America or equal to that of the USA, Canada, and China combined.  Fortunately, farmers today are producing almost three times as much food on the amount of land used in 1960 for farming.

Ausubel and colleagues estimate that the world average corn yield in 2060 will be about equal to that of the USA in 2010.  General increases in crop yields will release between 360 and 990 acres of farmland by 2060.  In addition, about 40% of the world's grain is used for livestock.  A biotech company called Modern Meadows wants to use 3D printers and tissue engineering to make meat.  If that idea works, less farmland still will be needed.  The forests are saved.

Deficit Pushes Senate to End Ethanol Thieving of Taxpayers

The monumental deficit has pushed the Senate to repeal the $5 billion of tax credits and subsidies per year for corn growers, ethanol refiners, and gasoline blenders.  A tariff of $0.54 per gallon on imported ethanol would also be eliminated.  38 Democrats, 2 independents, and 33 Republicans voted to end these pointless subsidies which had wrongly been sold as a path to cleaner skies, energy independence, and a means to reduce CO2 emissions.  I have long pointed at these subsidies, along with the mandate for ethanol production still required by the insane Renewable Fuel Standard law, as a clear sign of Congressional and Presidential perfidy and a determination to rob the taxpayers blind for naked political power.  For more than 30 years, the attitude was clearly let the General Welfare be damned as the votes of special interest groups were bought. 

The repeal bill was sponsored by Senators Tom Coburn of Oklahoma and Dianne Feinstein of California.  14 Republicans and 13 Democrats opposed the 73-27 vote repeal action.  Obama and his Sec. of Agriculture, Tom Vilsack, still oppose the end of these deleterious subsidies, claiming they are needed to reach Obama's imagined plan to reduce oil imports by one-third by 2025. The House has not yet voted on ending these ethanol subsidies and will reject the Senate bill because tax bills are constitutionally required to be initiated in the House of Representatives.  Fortunately, the ethanol subsidies will expire at the end of this year unless the House and Senate renew them.  This Senate vote makes it unlikely that it will renew this special interest travesty.

The ethanol subsidy is a $0.45/gallon of ethanol tax credit given against the excise tax of $0.184 per gallon of gasoline paid by gasoline blenders such as Valero and Marathon Oil.  This allows the blenders to pay more for corn ethanol made by such companies as Archer-Daniels-Midland and to compete for corn used as food or as livestock feed. 

The overall effect of a repeal of the subsidies upon food and feed prices will be minimal, since the mandate for ethanol use in fuel by the Renewable Fuel Standard law passed by the last Democrat Congress requires 12.6 billion gallons of ethanol use in fuel this year and up to 15 billion gallons in 2015.  By 2022, 36 billion gallons of so-called renewable fuel must be blended into gasoline, though only 15 billion gallons of that can be conventional corn-derived ethanol.  The remainder is somehow magically supposed to come from other low-carbon biofuels, such as switchgrass, which as yet produce a negligible 3 to 4 million gallons a year of ethanol or fuel in expensive pilot plants.

This mandate and the subsidies have caused the price of corn to be over $7/bushel all spring, which is twice the price of a year ago.  The subsidy and the high price of oil has caused blenders to use a billion gallons more corn ethanol than they were required to use.  This put still more pressure on corn, corn products, and meat products.  On Friday, buyers bought corn in the Toledo, Ohio grain trading hub at $7.35 per bushel.  A desperate turkey grower even offered $8.37/bushel of corn and got few offers of corn at that price.  Corn supplies are expected to be at a 15-year low in late August.  This may force some makers of corn-derived ethanol to shut down their plants.

The impact of ethanol from corn on the market and on some states can be judged from the graphic below from the 17 June Wall Street Journal:

Note that the food, seed, and industrial use of corn has grown very little since 2000 and the use in feed and residual use has shrunk since 2005 due to the increased cost of corn brought on by the huge increase in ethanol production since about 1998.  Iowa, the first major event for presidential candidates produces 21% of all U.S. ethanol, which is more than twice the production of any other state.  It is no accident that so much of the Iowa corn production is bought for the purpose of ethanol production.  The subsidy takers know how to put the political pressure on.  About 5 billion bushels of corn, or 40% of all corn production, is used to produce ethanol.  The great growth in corn production that has resulted has displaced other food crops and led to price increases severe enough that the World Bank and other international institutions have called for an end to corn ethanol subsidies.

The end effect due to the continuing ethanol in fuel mandate will be continued very high corn prices.  The income tax taxpayer will be relieved of a burden, but that burden will be shifted to the consumer.  It is better that the burden be on the consumer, which is a much broader base of people than the minority who pay federal income taxes.  It would be better yet if we removed the renewable fuel mandate and simply allowed the free market to figure out which fuel resources will be used.  Obama's centrally-planned economy will be a disaster just as all prior central planning has historically led to catastrophe.  The last place a catastrophe will come from will be man-made global warming due to CO2 emissions.

The Battle Over Ethanol Limits in Gasoline

Congress has mandated that renewable fuels must provide 36 billion gallons to be blended into the domestic fuel supply by 2022.  This means principally that ethanol must be blended into gasoline to meet this requirement.  The ethanol trade group Growth Energy, headed up by General Wesley Clark, says this goal cannot be met unless the present EPA limit of 10% ethanol in gasoline is increased to 15%.  The EPA just announced that it has increased the 10% blend limit to 15% for cars and light trucks of model year 2007 and later.

The EPA is waiting for additional research on cars and light trucks of the 2001 to 2006 model years, before deciding whether to increase the ethanol blend limit up to 15% for those models.  Live stock ranchers, auto makers, oil refiners, and many environmental groups oppose an increase in the blend limit.  Live stock ranchers do not want their feed costs to go up as more and more corn is converted into ethanol.  Auto makers are concerned about lower performance from engines and damage caused by higher ethanol blends.  Many of their warranties are voided by the use of 15% ethanol blends, called E-15.  Oil refiners simply do not like having to make still more blends of gasoline.  The many blends cause their production costs to go up, which means they must charge their customers more.  Environmentalists are concerned that engines degraded by ethanol will emit more pollution.

There is concern about people being confused at the gas pumps by the additional blends of gasoline.  But this brings up the interesting issue of even if the EPA allows 15% ethanol blends, who would want to use them?  They will be more expensive per mile driven and cars and light trucks using them will suffer some performance loss.  The answer is probably that some states will start requiring their use through some means or other.  Will that be by subsidizing the high ethanol blends or will they actually mandate that people with newer vehicles must use the higher blends, despite their higher costs and performance degradation? 

There are strong lobbyists, such as the ethanol refiners and corn farmers who are conniving to get their states to make such requirements.  This will not be good for most Americans.  This is just one more example of factions and special interests taking advantage of most Americans for their own financial gain by using the force of government to remove themselves from the free market into a protected, crony status.  As I have often noted, the only way to prevent such crony and faction based rip-offs is to limit the power and scope of all of our governments: federal, state, and local.  Questions are being asked about why this announcement was made just prior to the mid-term elections, but the increased use of ethanol is popular in many rural areas of the Midwest.  Pleasing those special interests prior to the election is the reason for the timing.

Asian Droughts and Grain Production and Demand

Russian Prime Minister Putin announced that exports of Russian grain have been banned from 15 August through the remainder of the year.  China has imported 1.2 million metric tons of corn this year.  The total Chinese imports of corn from all countries in prior years has been less than 100,000 metric tons a year.  Ukraine has also canceled several contracts to deliver wheat.  Widespread drought in Russia and across the northeastern corn belt of China for the last two years has reduced their supplies.  The growing middle class in China has also developed an appetite for more pork, chicken, milk, and eggs from animals fed on corn, as well as soft drinks that use corn syrup as a sweetener.  China is expected to pass Japan to become the world's second largest economy this year.  Demand for more and better food has been growing in India, Brazil, and Russia as well.

As recently as 2003, China was a large exporter of corn, when it exported 15.2 million metric tons.  One expert believes China will import 5.8 million tons of corn in 2011 and 15 million by 2015.  Russia provided 14.5% of the world's total wheat exports in 2009-2010 according to the Food and Agriculture Organization.  Egypt is the world's largest importer of wheat, buying much of it from Russia in recent years.  Russia exported less than 1 million metric tons of wheat in 2000-2001, but increased that to 17.5 million metric tons in 2009-2010.  The top five wheat exporting nations in the year ending in June 2010 were:

U.S.                    23.6 million metric tons
European Union  21.0
Canada               18.5
Russia                 17.5
Australia              14.0

Wheat prices leaped upward in 2007 and have stayed higher.  The story is similar for corn, oats, barley, grain sorghum, and sugar beets.  Rice prices started going up somewhat earlier, but continued to be higher since 2007.  One of the factors that pushed prices higher in 2007 was the U.S. mandate that required the use of ethanol in gasoline be set at 4.7 billion gallons of ethanol.  This is scheduled to rise to 7.5 billion gallons in 2012.  Meanwhile, the EPA was supposed to rule this month whether the ethanol content in gasoline could be raised to 15%, but now says the tests on engines will not be completed until the end of September.  Should the required gasoline content of ethanol be increased to 15%, there will be a further upward pressure on corn and meat prices.  More wheat and other crops will be displaced as farmers grow more corn.

There is some reason to believe that demand can continue to be met in the grain market.  Average corn yields in the U.S. have doubled in the last 40 years to 165 bushels an acre.  David Fischhoff, V.P. of Technology Strategy and Development at Monsanto Co., thinks corn yield can become nearly 300 bushels an acre by 2030.  If we do that and end the foolish subsidies for ethanol production from corn, it will be much easier for the U.S. to develop a greater and more lucrative export market as the rest of the world eats more meat, eggs, milk, and grains.  Healthy farm product exports would help to ease us out of the recession and produce some of the jobs we have failed to produce for most of this last decade.

Soaking the People in Ethanol

In 2007, then President Bush and the Democrat Congress mandated the annual sale of 36 billion gallons of ethanol by 2022.  The rationale offered the public was that ethanol would decrease our use of oil from abroad and help reduce air pollution.  Both of these rationales have been shown to be without justification.  The mandate would then have been withdrawn, if its real purpose were as stated.  But, the real reason is that some political entrepreneurs, who disdain the rough and tumble of the free market, are being heavily subsidized with a $0.45 per gallon blender's tax credit.  The 52 producers known as "Growth Energy" have requested the EPA to increase the 10% ethanol blend for our vehicles to 15% this summer.  To meet the insane Democrat Congress and Bush mandate coming due in 2022, the EPA is likely to approve this massive consumer robbery.  The Growth Energy group will receive an additional $16 billion subsidy at taxpayer's expense.

It gets worse.  Of  course.  We consumers also get suckered for:

• A gas mileage reduction of 5.3%.
• Higher fuel cost per gallon.
• Increased repair costs for vehicle engines not designed for 15% ethanol.
• Added costs to gas stations and storage facilities as they replace tanks and lines unable to handle gasoline with 15% ethanol, which is passed on to drivers.
• Corn costs higher by $0.18 per bushel.
• Wheat more expensive by $0.15 per bushel.
• Soybeans more expensive by $0.28 per bushel.
• Other crops that can be grown where corn is grown will be more expensive.
• Hogs, chickens, and cattle prices will rise along with meat from them.

If Obama and the Democrat Congress cared about the People having jobs and about their welfare, they would repeal this dumb law.  But, they apparently want the campaign contributions from Growth Energy companies and corn farmers more.  The hypocrisy could not be more obvious.

Congress Backpeddling on Ethanol

It seems clear now that both the Democrats and the Republicans in Congress are largely coming to the conclusion that they made a big mistake in backing ethanol mandates, subsidies, and exclusionary tariffs. Some aspects of the magnitude of their mistake have only relatively recently become clear such as the fact that there is probably no net energy achieved with the use of farmed plants to create ethanol, with the possible exception of sugar cane grown in some very favorable areas. Another example of recent knowledge is that ethanol use does not likely reduce net pollution when all factors are accounted for. On the other hand, the idea that one-quarter of all corn could be used to create ethanol and that this would not greatly increase the cost of corn, those end products dependent upon corn such as beef, pork, chicken, corn oil, and corn syrup, and of soybeans and wheat as corn was planted in their stead, was ludicrous. This year, 35% of the corn crop may be going to ethanol production.

President Bush is still saying that the ethanol mandates are not barely responsible for the food cost increases. He is disappointingly slow on coming around on this. It is true that corn and other food prices are going up both because of the reduction of supply due to the ethanol mandates and due to a major increase in world-wide demand for better and more food.

Congress has pleasantly surprised me by starting to change course so soon. House Minority Leader Steny Hoyer, Democrat, is not as nimble-minded as he should be, but he is now advocating that the upcoming farm bill, delayed from last year, should reduce the ethanol subsidy. They would also increase the subsidy for cellulosic ethanol. He has said, "Obviously, sometimes there are unforseen or unintended consequences of actions." Imagine a committed socialist allowing that he is not omnipotent! Even that he may have been wrong-headed!

Republicans in Congress actually want now to remove mandates requiring the blending of ethanol with gasoline. Representative Jeff Flake, Arizona Republican, introduced a bill to end all federal ethanol supports, including the requirement to blend it with gas, the tax credits for ethanol refiners, and the tariffs to prevent the importation of sugar cane produced ethanol, primarily from Brazil. He recognizes that our economy does not need big increases in food prices on top of those for energy, such as oil. Senator Kay Bailey Hutchison, Texas Republican, wants to freeze the ethanol mandate for gasoline at this year's level. On Rush Limmbaugh's program, she noted that cattle and pig producers were being hurt badly. Apparently there are a few of them in Texas! Rick Perry, Texas governor, has asked the EPA to allow Texas to use only half as much ethanol in gasoline blends as is required.

Meanwhile, some farmers are asking Congress to put windfall taxes on oil producing companies, claiming that these companies are responsible for driving up their costs. The National Corn Growers Association made the foolish claim that the use of biofuels with gasoline was saving Americans $69 billion a year. Others such as Hillary Clinton are also demagogically calling for windfall profit taxes on the oil companies.

Food Riots and Food Fuels

Believe it or not, there is a substantial number of people who recognize that turning foods such as corn and soybeans into fuel for cars does not make sense. Steven Milloy, who publishes JunkScience.com and DemandDebate.com and is an adjunct scholar at the Competitive Enterprise Institute, has written a commentary on food riots and other consequences of the Green lobbyists. The article is entitled A New 'Green' Body Count Begins.

The human population is growing and with it the demand for food and fuel. People in many areas of the world are finally improving their diets and traveling and trading more. The agricultural effort world-wide has been remarkable in doing such a great job in meeting the increased demand for food. The foolish campaign against Frankenfoods, especially strong in childish Europe, is doing what it can to restrict the increase in food production. In general, the Greens are not friendly to farmers. They do not like them using woodlands, prairie lands, or marsh lands. They do not like them using fertilizers and insecticides. They do not like them using water or fuel. They sometimes do want them to produce fuel from foods such as corn, soybeans, sugar cane, and biomass. The use of biomass such as general leaves and stalks is not yet economical and may never be very economic, due to the need to haul large masses of material to biomass fuel plants, as Steven Milloy points out. So, the conversion of valuable food such as corn and soybeans into fuel is now what is happening. This reduces the food supply and drives up prices to the point that many of the poor in the underdeveloped world cannot afford enough food.

Steven Milloy points out food riots in Haiti, Egypt, Cameroon, Ivory Coast, Senegal, and Ethiopia. He does not mention the anger in Mexico due to rising tortilla prices. He does note that troops have been deployed to protect the farm fields and food warehouses in Pakistan and Thailand. Indian and Turkish government officials are quoted as saying it is foolish to turn food into biofuels.

Milloy goes on to note that the Greens are doing everything they can to prevent us from having adequate power. They propose biomass fuel disasters. They oppose every economical means of generating power, however. The Sierra Club wants to shut down our coal power plants. The Natural Resources Defense Council opposes nuclear power plants. Earth First! opposes almost every source of power, including natural gas, whose cost is rising rapidly now due to the failure to build more nuclear power plants, restrictions on new coal power plants, and restrictions on developing new oil fields in the stable western countries. Maryland Gov. Martin O'Malley has declared that no wind mills will be allowed in Maryland, since they are an eyesore! It is clear that the Greens simply do not want to allow people to have power.

So, how do we plan for a future without power. Well, in Maryland officials are planning rolling blackouts beginning in 2011. As I have noted, we already have nightly brownouts. Personally, I would much rather live with coal-fired power plants and with nuclear power plants! I want my power and, indeed, it is essential for my laboratory business that I have high quality and dependable power. The damn Greens can go and live in Antarctica or take over Paraguay and use as little power as they wish to use!

Price of Corn Shoots Upward -- Ethanol Will Too!

In my 24 March 2008 post Corn for Real Food or Energy Myth?, I demonstrated how every argument for the use of corn to make ethanol was wrong. In some cases, it has long been clear that these arguments were at least dubious and more recently it has become clear that the entire policy is idiotic. On Friday, 4 April 2008, the futures price for corn to be delivered in May on the most actively traded contract hit $6 per bushel. Corn prices have risen nearly 30% already this year due to reduced stockpiles and an huge increase in demand for ethanol and livestock feed. Prices have shot up 89% in the last 18 months!

Recall from the earlier post that distillers can produce 2.7 gallons of ethanol from one bushel of corn. Presently, the cost of one gallon of ethanol is $2.50, so the 2.7 gallons produced from one bushel of corn are worth $6.75. This means that the cost of production in converting a bushel of corn into 2.7 gallons of ethanol and delivering it to the refiners, must be significantly below $0.75. This is really putting a squeeze on the ethanol refiners, so the cost of ethanol will likely have to go up. This will further increase our gasoline prices at the pump.

Just this last week, the oil industry was running ads, as the Democrats in Congress once again called them before committees to justify their profits, claiming that prices were going up due to the cost of a barrel of oil and the uncertain situation in the Middle East and in some other oil-producing countries, such as Venezuela and increased world-wide demand. This is true, but it was noteworthy that they did not complain about the effects of gasoline taxes, the requirement to use ethanol in gasoline blends, the many restrictions on their drilling for oil, and restrictions on using oil shale lands, most of which is on Federal land. Clearly, they were too afraid of the politicians who were challenging their profits. They told Congress their profits are in line with those of other industries. Democrats love to call them before Congress and grandstand that the oil companies are gouging the American public, but every rational examination of the situation always shows that they are not the guilty party. But the fools in Congress who are guilty use this means to divert attention from their hands in the cookie jar.

One of the interesting factors driving futures prices upward is that the U.S. Department of Agriculture has projected that farmers are only going to plant 86 million acres of corn this year, which is an 8% drop from last year, when the area planted in corn was the highest it has been since 1944. This is rather puzzling given the increase in corn prices! One would expect the expected high demand and the resulting high prices to drive farmers to plant more acreage in corn. Why is this not expected to happen?

One reason is that soybean prices have also gone up in the last year since much of the increased acreage planted in corn was due to a decrease in acreage planted in soybeans. Another factor is that the cost of planting corn is going up. Apparently one of the reasons for this is that corn seed is going up in cost, which caused the price of Monsanto Company stock to go up last week greatly. They are the biggest seed producer. Still another factor is one predicted in the March article, the need for crop rotation, which was too much ignored last year. When it is ignored, more fertilizer has to be used and that means more expense or there is a decrease in corn yields. When more fertilizer is used, there are more pollution run-off problems and this results in problems for farmers also. Heavy rains are forecast to continue in the Delta and southern Corn Belt regions far enough into April that planting delays will tend to drive farmers to plant more soybeans and less corn, since soybeans do better in wet conditions and with late planting than does corn. Fertilizer supplies are also low and since soybeans do not need nitrogen fertilizer as corn does, this gives an incentive to switch acreage to soybeans.

Meanwhile, the government requirement for ethanol use in gasoline blends is not going to diminish, so the ethanol cost will be driven sharply upward as the supply of corn diminishes and food and livestock demand remains. In fact, hog prices have been so low that farmers have been holding them back from the market in hopes of better prices. Meanwhile, these larger numbers of hogs have to be fed. Cattle stocks are also running high.

So, analysts are expecting the new corn crop prices to fluctuate between $6.20 and $6.55 per bushel, further driving the costs of corn products, beef, pork, and chicken upward. Ethanol will also increase in cost and there will be probable increases in the subsidies for ethanol so that ethanol production and use in gasoline blends will increase as Congress has determined it will. So as taxpayers, food consumers, and as users of transportation your costs are going to go up, up, and up some more. Tell your local politicians how grateful you are for their wise policies with respect to ethanol, energy in general, the environment, global warming, and taxation!

Corn for Real Food or Energy Myth?

The ethanol scam, con, fraud, boondoggle, looting, tax, myth, price inflater is a study in governmental willingness to set obviously wrongheaded policies in law in the name of the General Welfare. Ethanol is being sold as a route to energy independence and as a way to reduce pollution. Its consequences for food production and costs are too rarely discussed among Americans. Its cost is too little understood. There are glaring problems with the mandated requirements for present and further ethanol use, which must be known to the politicians who have given us the ethanol laws. A shocking immorality is revealed in this story. This story is rich in the lesson that politicians cannot be entrusted with the Public Interest or the General Welfare without the most severe limitations of their power, such as are imposed by the Constitution, but whose provisions they ignore. This is not surprising, since Teddy Roosevelt and Woodrow Wilson began a long history of blatantly ignoring the limits of their power and trained Congress to do the same.

Let us follow the story of Congress and their mandates for ethanol use and their subsidies to encourage its production and use. Archer Daniels Midland began pushing for the use of ethanol as a fuel additive to reduce pollution in the 1970s. In the early 1980s, they were producing 175 million gallons of ethanol a year. ADM established a close working relationship with Sen. Bob Dole (Rep., Kansas) and gave the Republicans more than $1 million in the 1992 election and Democrats about $455,000. Bob Dole then helped ADM and corn farmers to line up billions of dollars in subsidies and tax breaks. The Cato Institute estimated that almost half of the profits of ADM were the result of product sales protected by or or subsidized by government in 1995. The 10% ethanol and 90% gasoline mixture E10 was required, especially in the winter months, in areas deemed to have a smog problem, under the rationale that the ethanol additive burned more cleanly.

The 2005 Energy Policy Act requires refiners to use 7.5 billion gallons of biofuels and specifically 250 million gallons of cellulosic ethanol in 2012. This cellulosic ethanol is ethanol made from plants or plant parts other than the corn fruit and the sugar of sugar cane. In 2006, ADM produced more than 1 billion gallons of ethanol. 200 subsidies and tax breaks were providing between $5.1 and $6.8 billion to make sales of ethanol possible. In June, Congress passed The American Fuels Act of 2007, which had been introduced by Barack Obama (Dem., IL), Tom Harkin (Dem., IA), and Richard Lugar (Rep., IN) to mandate increased use of biodiesel and provides tax credits for the production of cellulosic ethanol. This law requires the production of 36 billion gallons of ethanol by 2022. Of this amount only 15 billion gallons of ethanol are expected to come from corn, since that will be a bit more than half the present corn crop. The remaining 21 billion gallons of ethanol and biodiesel must come from other sources, which have not been developed. When introduced, the proposed bill was even more outrageous: it called for a mandate of 60 billion gallons of biofuels by 2030! Former Sen. Edwards called for 65 billion gallons of biofuels by 2025. Sen. Clinton voted against ethanol 17 times before she began her presidential campaign and turned into a supporter. Sen. McCain, who had been a doubter, became more positive when his campaign was well underway. Obama, Edwards, Clinton, and McCain were driven by the desire for votes in the Iowa caucuses. President Bush has been an enthusiastic supporter since his 2006 State of the Union address.

None of the sources of ethanol or biodiesel are even close to being economical and competitive with fossil fuels and nuclear power. The least subsidized source is ethanol from sugar cane, but we grow little sugar cane in the U.S. Brazil grows more than any other country and produces the cheapest ethanol, but it is nonetheless heavily subsidized in Brazil where a dictator first established the ethanol use requirement in 1975. There they directly subsidize hydrous-ethanol (5% water), ban diesel-powered cars, put a 21.5% import duty on foreign ethanol, and provide an alcohol storage program. They also provided subsidies to car manufacturers who made cars capable of running on ethanol concentrations which started at 10% and grew to numbers as high as 26%, though this number varies through the 20 to 26% range under democratically elected governments. Because of this commitment to ethanol, Brazil has found that ethanol made from corn in the U.S. is cheaper than ethanol made from sugar cane in more marginal land brought under production for the purpose in Brazil. They import American ethanol, despite the protective tariff!

So where does ethanol production, essentially that from corn, stand in the U.S.? About 5.4 billion gallons per year (bgy) was produced in 2006. Most of this went into the E10 gasoline fuel mix, which is 90% gasoline. The Congressional mandate is for 9 bgy in 2008, 15.2 bgy in 2012, and finally 36 bgy in 2022. This is a hugely ambitious program and yet the 36 bgy will provide the energy equivalent of 7% of current oil use. And that figure is a figment of the imagination for a number of reasons which we will examine.

Ethanol from corn requires energy to produce it. This energy needs to be measured to understand what part of the enormous effort to create 36 bgy of ethanol will actually result in a net energy gain. What fraction of the 7% substituted for gasoline in cars can really be realized as new energy? Corn requires plowing, fertilizing, and harvesting, which commonly uses diesel fuel on the farm. The fertilizer requires that large amounts of natural gas be used to make it. This fertilizer then has to be transported to the farm. Further fuel is often used to irrigate the corn fields. The corn when harvested has to be delivered to the fermentation plants where it will be converted into ethanol and that process requires fuel to generate heat and energy to handle and move materials. Waste water has to be disposed of and cleaned up. Once the ethanol is made, it cannot be transported in relatively efficient gas pipelines because its water content makes it incompatible with the seals and other materials of pipelines. So, more expensive transport by truck and train is required.

Studies of the net gain in energy from ethanol vary, but the highest estimates are that it produces 1.3 times as much energy as it takes to obtain it. More realistic and recent estimates have tended to conclude that one gets about an equal amount of energy, so there is no net gain at all. A recent study by researchers at Cornell University and the University of California - Berkeley found that it took 29% more energy to produce ethanol from corn than it gave back! What is more, as more and more land is devoted to corn production for ethanol, more and more of the land will be less and less suitable and productive. The amounts of fertilizer and irrigation water needed will increase. The distance to markets may also increase. So more and more energy will be required and the process of producing net energy will become tougher and improbable. So the idea that ethanol is renewable energy is entirely wrongheaded. There is always an exchange of used coal, gasoline, diesel, and electric power for an approximately equal amount of energy in the form of ethanol.

In order to achieve this magnificent goal of zero net energy, we will soon be subsidizing the manufacture of ethanol and other biofuels to the tune of $8.6 billion per year. These subsidizes are further supplemented by tax-exempt bonds to finance ethanol plant construction, loan guarantees, state vehicle fleet purchases of biofuel-using vehicles, irrigation water subsidized by government, and the benefit of the state and federal mandates that require the use of ethanol whether it is economical or not.

This failure to create net additional energy using ethanol, makes a lie of the idea that ethanol will help to make the U.S. more independent of unreliable and unfriendly governments with control of oil resources. There are still more problems with this argument. First, if the object is to have more options for energy, then we clearly should not exclude Brazilian ethanol from the U.S. market by imposing a $.54 per gallon tariff on it. Second, corn-derived ethanol depends mostly on the corn crop output of the Midwest, which is generally a more risky outcome than is the international supply of oil. Based on data from 1960 to 2005, corn yields may readily decline by 11.9% in a given year, while the corresponding year to year equally likely decline for oil from the Middle East is 6.8%. In one out of every 20 years, corn yields can be expected to decline by 31.8%, while the corresponding oil decline would only be 14.9%. A further problem is that corn yields tend to fall if it is too hot in August. Such heat calls for more total energy use to cool homes and cars, which may result in more ethanol use when less future ethanol can be produced due to lower corn yields.

This same failure to create net additional energy also places limits on the argument that we can reduce the amount of money going to oil-rich Muslim countries where that money is used against us by Muslim terrorists and despotic governments by using more ethanol instead of oil. There may be some substitution of coal and natural gas for oil in the making of the ethanol, but these are often substitutes in other of our energy needs anyway. That is, coal and natural gas are used in many industrial processes and in generating electric power in competition with oil. If we use coal and natural gas to create ethanol, we increase their demand and their prices, which then makes oil look more attractive where it can be used as an alternative.

Ethanol has been touted as a means to reduce smog and pollution, as mentioned above. However, a 2006 study by Robert Niven of the Australian Defense Force Academy shows that E10 increases the total emissions of hydrocarbons and toxic compounds relative to gasoline, when evaporative emissions are fully accounted for. E85 is even worse. There is a slight advantage to using E10 with respect to greenhouse gas emissions, if you ignore the energy used to produce it in the first place, but it is microscopic at about a 1 to 5% level. This apparent low level advantage means that it costs about $250/ton to decrease greenhouse gases, according to the International Energy Agency. This is ridiculously expensive, and it actually is much more expensive given that this neglects the greenhouse gases emitted when using the other energy sources used to produce the ethanol. In fact, taking that into account will mean that the use of ethanol will create almost two times as much greenhouse gases as gasoline does.

A given volume of ethanol will produce about 66% as much energy as an equal volume of gasoline. This means that when ethanol is mixed with gasoline, a driver on the road must stop more often to refill his vehicle's tank. In the workplace, this is a cause of decreased productivity. For already busy people, this is a waste of time. For a given amount of transportation need, there must then be more fuel tankers on the road and on the rails and larger fuel storage facilities at refineries, shipping centers, and at the local gas stations to handle the larger volumes of fuel. There must also be more pumps and gas stations to pump it into vehicle tanks. Our time and scarce resources must be devoted to satisfying these requirements.

So, in the interest of a zero-sum game with respect to energy and an increase in greenhouse gases, we are converting valuable foods into vapors. What are the consequences of doing this?

Corn production for food purposes and for ethanol production use was subsidized, according to the Environmental Working Group, to the tune of $9.4 billion dollars in 2005. Note that this is larger than the ethanol subsidy numbers given above because it includes the normal subsidies for corn food production which does not go into ethanol. Corn for food is the most heavily subsidized of the major crops. This money is provided by heavier taxes and earns the taxpayer higher food prices in the grocery store, since some of it is in the form of price supports and it discourages productivity improvements. Corn costs more there as a result and so does corn syrup, corn oil, and meats such as beef, pork, and chicken which depend upon corn feed products very heavily. All the products with these as ingredients cost more because of these subsidies.

Distillers can produce 2.7 gallons of ethanol from one bushel of corn. American farmers produced 10.5 billion bushels of corn in 2006. If the entire corn crop of 2006 were turned into ethanol, only 28.3 billion gallons of ethanol would result. This would leave us short of the 36 bgy requirement for 2022. Of course, corn will still need to be used for food purposes in 2022 and the thought is that only 15 bgy of the required 36 bgy of ethanol will come from corn. Assuming that other ethanol sources are developed, this requires that the capacity to produce another 9.6 bgy of corn ethanol be developed by 2022. This requires an increase in corn production by 34% relative to 2006, while falsely assuming that our food needs will not increase also between now and 2022. This in turn means that huge tracts of farmland will either have to be diverted from growing other crops or from ranching or that much of the land once farmed long ago in the U.S. and now returned to forests will have to become farmland again.

Much of the land in the U.S. no longer farmed went out of production because it was less suitable for farming than the more efficient lands now being farmed. The loss of forests, which have increased greatly since the early 1900s, will be very substantial. These forests help to remove CO2 from the atmosphere as they grow and remove much more than does land planted in corn. So, those who believe that an increasing CO2 concentration in the atmosphere is a terrible thing, will see some negative effect here. The less suitable farm lands which will be returned to production will require larger amounts of fertilizer, pesticides, and water in general than does the land presently under till for corn. This means that the ethanol produced from this corn will cost more, that more pollution from fertilizer and pesticides will occur, and that more precious water will be used and contaminated. Even on optimal corn-growing farmland, it takes 1700 gallons of water to produce one gallon of ethanol. Another effect has already been observed: land will be planted in corn and rather than rotating with soybeans or another legume, it will be planted in corn again. This will mean that presently good farmland will either need more fertilizer or it will wear out. Meanwhile, the price of farmland suitable for growing corn has increased dramatically, which has increased the costs for those newcomers who would buy farmland to put to use in growing corn either for food or ethanol. The value of farmland in Iowa increased 18% in 2007.

From 2001 to 2006, the percentage of the U.S. corn crop used for ethanol production rose from 3% to 20%. As a result of limited increases in total corn production, the futures price of corn rose by 80% in 2006 alone. University of Minnesota economists C. Ford Runge and Benjamin Senauer wrote an article for Foreign Affairs entitled "How Biofuels Could Starve the Poor." They note that filling the gas tank of a SUV with pure ethanol made from corn takes 450 pounds of corn. This is enough calories to feed a person for a year. The price of beef, pork, and poultry rose more than 3% in the first 5 months of 2007. Tortilla prices rose 60% in Mexico, causing food riots. Butter prices increased 40% in Europe. Pork prices rose 20% in China. All this because the U.S. is the biggest exporter of food in the world. Much of our corn crop has always been exported, but now that it draws higher prices as future ethanol, it is boosting the cost of foods dependent upon corn around the world. Runge and Senauer believe 600 million additional people may go hungry by 2025 due to the increased use of corn to produce ethanol.

Dennis T. Avery, director of global food issues at the Hudson Institute, says "We would effectively be burning food as auto fuel in a world that is not fully well-fed now, and whose food demand will more than double in the next 40 years." Because of the recent advances in many Third World countries, 2 billion people are making the transition from grain diets to meat diets. It takes a lot of corn to feed livestock and to produce the meat they are seeking. The U.S. has been the biggest exporter of this meat and has the potential to profit greatly from the further growth of this market. That cannot happen if we shoot ourselves in the foot by making our meat prices too high due to our escalating corn costs. The market for exported corn products such as corn, corn oil, and high-fructose corn syrup and the products made from them (Coca-Cola, etc.) is also a large one. This is not good for either us or the rest of the world.

On top of this, we tax ourselves heavily to provide for the ethanol subsidies and protections, we endure higher car fuel prices, pay higher food prices, and we have to build new kinds of cars, new kinds of refineries, new storage tanks, new tanker trucks, new rail cars, we use more water, we cause more pollution, and we create more greenhouse gases. So, why do we do this when none of the widely claimed energy advantages hold water when examined? It is because the governments and the politicians who run them always want more power and are eager to hand out goodies to special interests such as ADM and the corn farmers in this case, as long as they can get away with selling a myth to the public.

The mandate for increased ethanol use is adding to the present forces pushing us toward a possible recession. It adds to fuel and food costs and causes much economic uncertainty about the future, which causes less business investment and encourages consumers to spend less on goods and services other than food and fuel. We must kill this ethanol myth. That a representative republic can fall for such a scam is disgraceful. We must prove that we can be fooled only sometimes and for awhile, but then we come awake and exercise our rational faculties and finally Stand Sure against the con artists.