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	<title>Comments on: Anti-Market Bias</title>
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		<title>By: RJN</title>
		<link>http://www.outsidethebeltway.com/archives/anti-market_bias/comment-page-1/#comment-81708</link>
		<dc:creator>RJN</dc:creator>
		<pubDate>Sun, 07 May 2006 17:18:23 +0000</pubDate>
		<guid isPermaLink="false">http://www.outsidethebeltway.com/archives/2006/05/anti-market_bias/#comment-81708</guid>
		<description>Alan, have you ever tried to heat your house with coal? Nasty. Natural gas, on the other hand, is a useful transportation fuel. Using corn, instead of fuel oil, for heat releases fuel oil for use as diesel fuel.

Shale, and tar sands have more potential as feed stocks for motor fuels than ethanol.</description>
		<content:encoded><![CDATA[<p>Alan, have you ever tried to heat your house with coal? Nasty. Natural gas, on the other hand, is a useful transportation fuel. Using corn, instead of fuel oil, for heat releases fuel oil for use as diesel fuel.</p>
<p>Shale, and tar sands have more potential as feed stocks for motor fuels than ethanol.</p>
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		<title>By: Alan</title>
		<link>http://www.outsidethebeltway.com/archives/anti-market_bias/comment-page-1/#comment-81699</link>
		<dc:creator>Alan</dc:creator>
		<pubDate>Sun, 07 May 2006 12:39:12 +0000</pubDate>
		<guid isPermaLink="false">http://www.outsidethebeltway.com/archives/2006/05/anti-market_bias/#comment-81699</guid>
		<description>&gt; My initial point was that using corn as a heating fuel makes much more sense than using it as a costly substitute for gasoline.

Your suggestion of burning corn is a non-solution to a non-problem.  If we want to burn something to produce heat, we burn coal or natural gas, which we have in relative abundance in the North America.  What we are looking for is an alternative transportation fuel, i.e., an alternative to gasoline that makes our cars propel themselves forward.  Burning corn does not solve that problem.</description>
		<content:encoded><![CDATA[<p>&gt; My initial point was that using corn as a heating fuel makes much more sense than using it as a costly substitute for gasoline.</p>
<p>Your suggestion of burning corn is a non-solution to a non-problem.  If we want to burn something to produce heat, we burn coal or natural gas, which we have in relative abundance in the North America.  What we are looking for is an alternative transportation fuel, i.e., an alternative to gasoline that makes our cars propel themselves forward.  Burning corn does not solve that problem.</p>
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		<title>By: RJN</title>
		<link>http://www.outsidethebeltway.com/archives/anti-market_bias/comment-page-1/#comment-81683</link>
		<dc:creator>RJN</dc:creator>
		<pubDate>Sat, 06 May 2006 23:24:40 +0000</pubDate>
		<guid isPermaLink="false">http://www.outsidethebeltway.com/archives/2006/05/anti-market_bias/#comment-81683</guid>
		<description>Alan:

Now you have confused us all. First you make the claim that motorists are willing to pay double for ethanol. Then you say that motorists will buy gas with ethanol if it is discounted. It seems to me that the motorist is going for the discount and not the opportunity to pay double.

Back in the &#039;80s ethanol screwed up non-metalic fuel handling components. I learned my lesson, and have avoided it since. Especially since I learned it is a fake - energy wise - substitute for gasoline.

BTW: My initial point was that using corn as a heating fuel makes much more sense than using it as a costly substitute for gasoline.</description>
		<content:encoded><![CDATA[<p>Alan:</p>
<p>Now you have confused us all. First you make the claim that motorists are willing to pay double for ethanol. Then you say that motorists will buy gas with ethanol if it is discounted. It seems to me that the motorist is going for the discount and not the opportunity to pay double.</p>
<p>Back in the '80s ethanol screwed up non-metalic fuel handling components. I learned my lesson, and have avoided it since. Especially since I learned it is a fake - energy wise - substitute for gasoline.</p>
<p>BTW: My initial point was that using corn as a heating fuel makes much more sense than using it as a costly substitute for gasoline.</p>
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		<title>By: Alan</title>
		<link>http://www.outsidethebeltway.com/archives/anti-market_bias/comment-page-1/#comment-81679</link>
		<dc:creator>Alan</dc:creator>
		<pubDate>Sat, 06 May 2006 19:43:43 +0000</pubDate>
		<guid isPermaLink="false">http://www.outsidethebeltway.com/archives/2006/05/anti-market_bias/#comment-81679</guid>
		<description>&gt; Motorists are not â��willingâ�� to pay double for ethanol energy.

RJN, you have no idea what you are talking about, do you?

Try going to a state that does not mandate gasohol, then go to a service station that is selling gasohol for ~7 cents less per gallon than most other service stations charge for gasoline, then look at how busy they are.  Bottom line, consumers are currently willing to pay basically the same price for gasohol as gasoline.</description>
		<content:encoded><![CDATA[<p>&gt; Motorists are not â��willingâ�� to pay double for ethanol energy.</p>
<p>RJN, you have no idea what you are talking about, do you?</p>
<p>Try going to a state that does not mandate gasohol, then go to a service station that is selling gasohol for ~7 cents less per gallon than most other service stations charge for gasoline, then look at how busy they are.  Bottom line, consumers are currently willing to pay basically the same price for gasohol as gasoline.</p>
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		<title>By: RJN</title>
		<link>http://www.outsidethebeltway.com/archives/anti-market_bias/comment-page-1/#comment-81678</link>
		<dc:creator>RJN</dc:creator>
		<pubDate>Sat, 06 May 2006 19:21:12 +0000</pubDate>
		<guid isPermaLink="false">http://www.outsidethebeltway.com/archives/2006/05/anti-market_bias/#comment-81678</guid>
		<description>Motorists are not &quot;willing&quot; to pay double for ethanol energy. They are forced to by stupid laws requiring an ethanol mix.

Steve is right,of course, in his observations that government should stop propping up intrinsicly underperforming sources of energy.</description>
		<content:encoded><![CDATA[<p>Motorists are not "willing" to pay double for ethanol energy. They are forced to by stupid laws requiring an ethanol mix.</p>
<p>Steve is right,of course, in his observations that government should stop propping up intrinsicly underperforming sources of energy.</p>
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		<title>By: Alan</title>
		<link>http://www.outsidethebeltway.com/archives/anti-market_bias/comment-page-1/#comment-81675</link>
		<dc:creator>Alan</dc:creator>
		<pubDate>Sat, 06 May 2006 19:02:10 +0000</pubDate>
		<guid isPermaLink="false">http://www.outsidethebeltway.com/archives/2006/05/anti-market_bias/#comment-81675</guid>
		<description>P.S. Citing Pimental is cherry picking--he is one of the few researchers that shows a negative energy balance, and the primary reasons are that he overestimates that amount of fertilizer required to produce corn, and overestimates the energy consumption of the ethanol production plant.</description>
		<content:encoded><![CDATA[<p>P.S. Citing Pimental is cherry picking--he is one of the few researchers that shows a negative energy balance, and the primary reasons are that he overestimates that amount of fertilizer required to produce corn, and overestimates the energy consumption of the ethanol production plant.</p>
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		<title>By: Alan</title>
		<link>http://www.outsidethebeltway.com/archives/anti-market_bias/comment-page-1/#comment-81674</link>
		<dc:creator>Alan</dc:creator>
		<pubDate>Sat, 06 May 2006 18:55:02 +0000</pubDate>
		<guid isPermaLink="false">http://www.outsidethebeltway.com/archives/2006/05/anti-market_bias/#comment-81674</guid>
		<description>Hi RJN, it takes about 75-80,000 BTU to produce a bushel of corn and you get out about 5-10% more than that in ethanol energy.  But that&#039;s not all you get out--you also get co-products like corn oil and corn gluten.  One way to do a total net energy analysis is to factor in the amount of energy saved by not having to grow additional corn just for oil and gluten.  This yields the most conservative estimate.  For an example, see &lt;a href=&quot;http://www.transportation.anl.gov/pdfs/AF/265.pdf&quot; rel=&quot;nofollow&quot;&gt;http://www.transportation.anl.gov/pdfs/AF/265.pdf&lt;/a&gt;.
Also note that to some extent, the energy you put in can come from coal, thus allowing you to in effect convert coal energy into a transportation fuel.  Since coal is an abundant domestic energy source, this is an additional positive factor for ethanol production.

But in the end, it comes down to dollars and cents, and the single most important dollar factor  at the moment is that consumers are currently willing to pay double what they should for ethanol relative to its energy content, i.e., they are willing to pay roughly the same amount per gallon of ethanol as a gallon of gasoline, even though ethanol has roughly half the energy content and gets half the gas mileage.</description>
		<content:encoded><![CDATA[<p>Hi RJN, it takes about 75-80,000 BTU to produce a bushel of corn and you get out about 5-10% more than that in ethanol energy.  But that's not all you get out--you also get co-products like corn oil and corn gluten.  One way to do a total net energy analysis is to factor in the amount of energy saved by not having to grow additional corn just for oil and gluten.  This yields the most conservative estimate.  For an example, see <a href="http://www.transportation.anl.gov/pdfs/AF/265.pdf" rel="nofollow">http://www.transportation.anl.gov/pdfs/AF/265.pdf</a>.<br />
Also note that to some extent, the energy you put in can come from coal, thus allowing you to in effect convert coal energy into a transportation fuel.  Since coal is an abundant domestic energy source, this is an additional positive factor for ethanol production.</p>
<p>But in the end, it comes down to dollars and cents, and the single most important dollar factor  at the moment is that consumers are currently willing to pay double what they should for ethanol relative to its energy content, i.e., they are willing to pay roughly the same amount per gallon of ethanol as a gallon of gasoline, even though ethanol has roughly half the energy content and gets half the gas mileage.</p>
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		<title>By: RJN</title>
		<link>http://www.outsidethebeltway.com/archives/anti-market_bias/comment-page-1/#comment-81672</link>
		<dc:creator>RJN</dc:creator>
		<pubDate>Sat, 06 May 2006 17:53:31 +0000</pubDate>
		<guid isPermaLink="false">http://www.outsidethebeltway.com/archives/2006/05/anti-market_bias/#comment-81672</guid>
		<description>That should read 77,000 in my question to Alan.

Ethanol requires a large subsidy to make it cost effective for a consumer. It is bull, and has always been bull. It will always be bull. Ethanol is a sure loser as an energy source.</description>
		<content:encoded><![CDATA[<p>That should read 77,000 in my question to Alan.</p>
<p>Ethanol requires a large subsidy to make it cost effective for a consumer. It is bull, and has always been bull. It will always be bull. Ethanol is a sure loser as an energy source.</p>
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		<title>By: RJN</title>
		<link>http://www.outsidethebeltway.com/archives/anti-market_bias/comment-page-1/#comment-81671</link>
		<dc:creator>RJN</dc:creator>
		<pubDate>Sat, 06 May 2006 17:49:26 +0000</pubDate>
		<guid isPermaLink="false">http://www.outsidethebeltway.com/archives/2006/05/anti-market_bias/#comment-81671</guid>
		<description>Alan:

The corn alone contains 392,000 BTU per bushel. The yield from one bushel of corn is 2.7 gals of ethanol. So, without counting the energy required to  process the corn, it takes 145,000 BTU for one gal of ethanol.

Alan, are you claiming that ethanol has more than 70,000 BTU of energy per gal? No can do.</description>
		<content:encoded><![CDATA[<p>Alan:</p>
<p>The corn alone contains 392,000 BTU per bushel. The yield from one bushel of corn is 2.7 gals of ethanol. So, without counting the energy required to  process the corn, it takes 145,000 BTU for one gal of ethanol.</p>
<p>Alan, are you claiming that ethanol has more than 70,000 BTU of energy per gal? No can do.</p>
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		<title>By: Steve Verdon</title>
		<link>http://www.outsidethebeltway.com/archives/anti-market_bias/comment-page-1/#comment-81663</link>
		<dc:creator>Steve Verdon</dc:creator>
		<pubDate>Sat, 06 May 2006 14:42:39 +0000</pubDate>
		<guid isPermaLink="false">http://www.outsidethebeltway.com/archives/2006/05/anti-market_bias/#comment-81663</guid>
		<description>RJN,

I&#039;m not opposed to ethanol, I&#039;m just opposed to propping it up with government subsidies.  If it takes subsidies too make something economically viable, then it isn&#039;t economically viable.

We can&#039;t get off our addiction to oil by taxing ourselves to pay for an even more expensive alternative.  Now if ethanol doesn&#039;t fit into this catagory then great.</description>
		<content:encoded><![CDATA[<p>RJN,</p>
<p>I'm not opposed to ethanol, I'm just opposed to propping it up with government subsidies.  If it takes subsidies too make something economically viable, then it isn't economically viable.</p>
<p>We can't get off our addiction to oil by taxing ourselves to pay for an even more expensive alternative.  Now if ethanol doesn't fit into this catagory then great.</p>
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		<title>By: Steve Verdon</title>
		<link>http://www.outsidethebeltway.com/archives/anti-market_bias/comment-page-1/#comment-81662</link>
		<dc:creator>Steve Verdon</dc:creator>
		<pubDate>Sat, 06 May 2006 14:32:01 +0000</pubDate>
		<guid isPermaLink="false">http://www.outsidethebeltway.com/archives/2006/05/anti-market_bias/#comment-81662</guid>
		<description>Russell,

I strongly disagree with your analysis.  The idea that Bin Laden is a tool for the Saudi government strikes me as perhaps one of the most out-there things you have written (don&#039;t get me wrong, I frequently agree with you).

Still, your point about re-investing may have some merit.  The UAE isn&#039;t a hotbed of terrorists and that maybe because the Emir there re-invests the oil revenues.

As for places like Saudi Arabia, I think you have completely glossed over the dilemma facing the rulling party:  that early on they got into bed with Islamic extremists.  That extremism takes form in Wahabbism which is similar to the type of islam we saw in Afghanistan.

The national security issue related to oil strikes me as a pretty weak one, overall.</description>
		<content:encoded><![CDATA[<p>Russell,</p>
<p>I strongly disagree with your analysis.  The idea that Bin Laden is a tool for the Saudi government strikes me as perhaps one of the most out-there things you have written (don't get me wrong, I frequently agree with you).</p>
<p>Still, your point about re-investing may have some merit.  The UAE isn't a hotbed of terrorists and that maybe because the Emir there re-invests the oil revenues.</p>
<p>As for places like Saudi Arabia, I think you have completely glossed over the dilemma facing the rulling party:  that early on they got into bed with Islamic extremists.  That extremism takes form in Wahabbism which is similar to the type of islam we saw in Afghanistan.</p>
<p>The national security issue related to oil strikes me as a pretty weak one, overall.</p>
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		<title>By: Alan</title>
		<link>http://www.outsidethebeltway.com/archives/anti-market_bias/comment-page-1/#comment-81653</link>
		<dc:creator>Alan</dc:creator>
		<pubDate>Sat, 06 May 2006 10:24:51 +0000</pubDate>
		<guid isPermaLink="false">http://www.outsidethebeltway.com/archives/2006/05/anti-market_bias/#comment-81653</guid>
		<description>RJN, your figures are wrong.  With currently used technology, you have to invest about 100 BTU to get 130 BTU out.  In other words, there is a 30% net energy gain.  Plants being built today achieve approx. 35% energy gain, and it is estimated that over the next 10 years, that will be pushed up to 45-50%.

But all that doesn&#039;t matter.  What really matters is how much the consumer is willing to pay for ethanol vs. how much it costs to produce.  The answer is that is costs ~$1.20 per gallon to produce, and sells for ~$2.70.</description>
		<content:encoded><![CDATA[<p>RJN, your figures are wrong.  With currently used technology, you have to invest about 100 BTU to get 130 BTU out.  In other words, there is a 30% net energy gain.  Plants being built today achieve approx. 35% energy gain, and it is estimated that over the next 10 years, that will be pushed up to 45-50%.</p>
<p>But all that doesn't matter.  What really matters is how much the consumer is willing to pay for ethanol vs. how much it costs to produce.  The answer is that is costs ~$1.20 per gallon to produce, and sells for ~$2.70.</p>
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		<title>By: Herb</title>
		<link>http://www.outsidethebeltway.com/archives/anti-market_bias/comment-page-1/#comment-81637</link>
		<dc:creator>Herb</dc:creator>
		<pubDate>Sat, 06 May 2006 00:23:03 +0000</pubDate>
		<guid isPermaLink="false">http://www.outsidethebeltway.com/archives/2006/05/anti-market_bias/#comment-81637</guid>
		<description>If the Government would get out of the way, the place to start is to outlaw contributions given to politic ans by the oil companies.

Stop all aid and gifts to such countries as Saudi Arabia, UAE, Qatar, and all the others.

Next Get those wacko environmentalist out of the way and let go hug their trees somewhere else.

There are no doubt several more good moves that could be made, but the problem is that Government will never got out of the way because the people feel that is the only avenue to air their grievances with. The oil companies will not listen to the people so, where does the average schmo go for help.</description>
		<content:encoded><![CDATA[<p>If the Government would get out of the way, the place to start is to outlaw contributions given to politic ans by the oil companies.</p>
<p>Stop all aid and gifts to such countries as Saudi Arabia, UAE, Qatar, and all the others.</p>
<p>Next Get those wacko environmentalist out of the way and let go hug their trees somewhere else.</p>
<p>There are no doubt several more good moves that could be made, but the problem is that Government will never got out of the way because the people feel that is the only avenue to air their grievances with. The oil companies will not listen to the people so, where does the average schmo go for help.</p>
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		<title>By: RJN</title>
		<link>http://www.outsidethebeltway.com/archives/anti-market_bias/comment-page-1/#comment-81635</link>
		<dc:creator>RJN</dc:creator>
		<pubDate>Fri, 05 May 2006 23:50:14 +0000</pubDate>
		<guid isPermaLink="false">http://www.outsidethebeltway.com/archives/2006/05/anti-market_bias/#comment-81635</guid>
		<description>What might be smart is to burn corn for space heat and, thus, replace fuel oil.  

 Example: Calculate cost per million Btu for 15% moisture shelled corn that costs $2.00 per bushel and is burned in a stove that has an efficiency of 65%.

    Cost per million Btu = [$2.00/bu Ã· (392,000 Btu/bu x 0.65 efficiency)] x 1,000,000

    = $7.85 per million Btu

Here are energy content, burner efficiencies, and costs per million Btu at average efficiency and the indicated price for several fuels:

    Fuel oil, 140,000 Btu/gal, 70 to 90% efficiency (80% avg.), $1.50/gal:

    $13.39 per million Btu

Propane or liquefied petroleum gas (LPG), 92,000 Btu/gal, 70 to 90% efficiency (80%avg.), $1.00/gal:

    $13.59 per million Btu

Natural gas, 100,000 Btu/ hundred cubic foot (ccf), 70 to 90% efficiency (80% avg.), $0.80/ccf:

    $10.00 per million Btu</description>
		<content:encoded><![CDATA[<p>What might be smart is to burn corn for space heat and, thus, replace fuel oil.  </p>
<p> Example: Calculate cost per million Btu for 15% moisture shelled corn that costs $2.00 per bushel and is burned in a stove that has an efficiency of 65%.</p>
<p>    Cost per million Btu = [$2.00/bu Ã· (392,000 Btu/bu x 0.65 efficiency)] x 1,000,000</p>
<p>    = $7.85 per million Btu</p>
<p>Here are energy content, burner efficiencies, and costs per million Btu at average efficiency and the indicated price for several fuels:</p>
<p>    Fuel oil, 140,000 Btu/gal, 70 to 90% efficiency (80% avg.), $1.50/gal:</p>
<p>    $13.39 per million Btu</p>
<p>Propane or liquefied petroleum gas (LPG), 92,000 Btu/gal, 70 to 90% efficiency (80%avg.), $1.00/gal:</p>
<p>    $13.59 per million Btu</p>
<p>Natural gas, 100,000 Btu/ hundred cubic foot (ccf), 70 to 90% efficiency (80% avg.), $0.80/ccf:</p>
<p>    $10.00 per million Btu</p>
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		<title>By: RJN</title>
		<link>http://www.outsidethebeltway.com/archives/anti-market_bias/comment-page-1/#comment-81634</link>
		<dc:creator>RJN</dc:creator>
		<pubDate>Fri, 05 May 2006 23:34:48 +0000</pubDate>
		<guid isPermaLink="false">http://www.outsidethebeltway.com/archives/2006/05/anti-market_bias/#comment-81634</guid>
		<description>I found this. It should open some eyes as to the value of ethanol.

&quot;David Pimental, a leading Cornell University agricultural expert, has calculated that powering the average U.S. automobile for one year on ethanol (blended with gasoline) derived from corn would require 11 acres of farmland, the same space needed to grow a year&#039;s supply of food for seven people. Adding up the energy costs of corn production and its conversion into ethanol, 131,000 BTUs are needed to make one gallon of ethanol. One gallon of ethanol has an energy value of only 77,000 BTUS. Thus, 70 percent more energy is required to produce ethanol than the energy that actually is in it. Every time you make one gallon of ethanol, there is a net energy loss of 54,000 BTUs.&#039;</description>
		<content:encoded><![CDATA[<p>I found this. It should open some eyes as to the value of ethanol.</p>
<p>"David Pimental, a leading Cornell University agricultural expert, has calculated that powering the average U.S. automobile for one year on ethanol (blended with gasoline) derived from corn would require 11 acres of farmland, the same space needed to grow a year's supply of food for seven people. Adding up the energy costs of corn production and its conversion into ethanol, 131,000 BTUs are needed to make one gallon of ethanol. One gallon of ethanol has an energy value of only 77,000 BTUS. Thus, 70 percent more energy is required to produce ethanol than the energy that actually is in it. Every time you make one gallon of ethanol, there is a net energy loss of 54,000 BTUs.'</p>
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