Biofuels Are a Disaster, Stop It Already

I think it is safe to say that the use of things like corn and other crops to produce biofuels simply a stupid and wrongheaded philosophy. We were told that biofuels were supposed to help break our dependence on foreign oil. Yet here I sit having to pay, if I’m lucky, $4/gallon to fill up my gas tank. If biofuels are supposed to cut our dependency on foreign oil, how come prices for both oil and gasoline are so high? Have any of these idiot politicians and their advisers ever heard of Jevon’s Paradox? And then there is the issue of food prices. Haven’t these same idiot politicians and their advisers ever heard of supply and demand and the substitution effect? Prices for food items are at an all time high and we take huge amounts of grain products and turn them into fuel. Really? That is a smart idea? Here is a suggestion for Obama, McCain or Hillary: Whichever of you dipwads ends up in the White House can you please knock off this biofuel crap?

FILED UNDER: Economics and Business, Environment, US Politics, , , ,
Steve Verdon
About Steve Verdon
Steve has a B.A. in Economics from the University of California, Los Angeles and attended graduate school at The George Washington University, leaving school shortly before staring work on his dissertation when his first child was born. He works in the energy industry and prior to that worked at the Bureau of Labor Statistics in the Division of Price Index and Number Research. He joined the staff at OTB in November 2004.

Comments

  1. arnonerik says:

    I have no facts to back up my suspicions but I would love to see a full scale independent investigation on the ethanol industry’s pay-offs and bribes to politicians. We can start with a list a “campaign” contributions naming all the names of who is selling political influence.
    We need people in Washington who look for solutions to problems not just new ways to feather their own nests or build constituency’s.

  2. A vicious cycle, considering a portion of the increased cost for food is driven by the cost of oil to cultivate, fertilize, harvest and transport it as well.

  3. Ookla says:

    Actually biofuels do work, just not as their set up now. Farm wastes, forest wastes, non-food crops (hemp, switchgrass, etc)cooking grease, etc can all be transformed into usable fuels without cutting into our food crops. Biofuels do work and can be done, they’ve just been fouled up with government subsidies and a short-sighted pork-barrel rush to get on the ethanol band wagon.

  4. Ookla says:

    For example: Cellulosic Ethanol

  5. Butelli says:

    Before calling everyone idiots, why don’t you stop a little bit and think that oil is still the main source of energy in the world, and high demand, with the loss of value of the dollar caused by the recession (among other things), will increase its price?

    Biofuels are really useful, but its market use is just beginning (we don’t see cars running on ethanol on the US, but in Brazil they’re really common), and government subsidies are the ones creating problems with food prices. With enough market freedom, producers will choose what to produce based on demand, and prices won’t be deformed by subsidies.

  6. Rick DeMent says:

    Steve is right, while bio fuels should and will be an adjunct to out energy needs they simply don’t scale. Turning farm waste and other by-products into energy is a great thing but to grow crops specifically to turn into ethanol is a mind boggling waste of energy.

    The Brazil example will not work here and really doesn’t work in Brazil. Like all bio fuels it simply can’t scale up to replace oil in any meaningful way. When oil becomes more expensive the $$ to grow and process the sugar cane into ethanol will make it prohibitive as well …

    Right now conservation in the short term and an Apollo like program to develop truly renewable energy along with sane nuclear development and plug in hybreds (then fully electric cars and mass transit) is the only policy that will work. but we must start now while oil is still relatively cheap.

  7. anjin-san says:

    I suspect that biofuels are having problems due to poor implementation. As mentioned above, poorly thought out government subsidies are part of the problem. I suspect the oil industry is at least partly behind the attempt to portray biofuels as a “disaster”

  8. Bithead says:

    There is but one answer to our current situation.

    1: Tell the ennviro-nazis to shut up
    2: Eliminate governmental regulation on energy
    3: Drill here in the US.
    4: Refine
    5: Repeat

  9. Zelsdorf Ragshaft III says:

    Bithead, as usual has the answer. The oil execs gave the answer to the congressional committee but they only hear what they want to hear. Maxine Waters suggest nationalizing the oil industry. Pure communism.

  10. anjin-san says:

    Eliminate governmental regulation on energy

    Right, because deregulation worked so well for electricity. Ask any California rate payer or Enron employee who is wondering where he retirement benefits got off to…

  11. Bithead says:

    Holding up Grey-out Davis as a shining example of deregulation, is like ordering Spam Egg Sausage and Spam because it’s not got much Spam in it.

    I mean get government totally out of the picture.
    What Davis did was exactly the opposite.

  12. anjin-san says:

    Why so angry Bit? Is it because you have been kissing the oil companies asses for years and still they don’t advertise on your blog?

  13. John Burgess says:

    I wonder about the economies of converting enironazis to biodiesel. There seems to be an abundance of them; they reproduce through the medium of American universities (oops, subsidy!) in endless numbers; they’re full of methane-replete crap.

    Getting rid of their hot air would appreciable reduce global warming.

    What’s not to like about this idea?

    I suggest we declare S. CA, NYC, OR and WA national biofuel reserves and start culling the flock. Begin by fencing them in so they can’t get out before they’re rendered into something useful.

  14. Zelsdorf Ragshaft III says:

    Pilot, it must be sad being so incompetent you need government to oversee your every move. I think the solution for you would be to move to a nation who’s policies more coincide with yours. I suggest North Korea. I understand government has vast control there, like from cradle to grave. If you find freedom too difficult, move. Stop advocating socialism. It is not what our country was founded on nor is it desirable.

  15. Bithead says:

    Why so angry Bit? Is it because you have been kissing the oil companies asses for years and still they don’t advertise on your blog?

    I haven’t been paying any attention to that, really. I’ve just been running Google ads. They work pretty well, and I don’t have to mess with them.

    And Angry? Do folk usually invoke Monty Python when they’re angry? Try ‘amused’.

  16. anjin-san says:

    Try ‘amused’

    Right, because people always rant about “nazis” when they are amused…

  17. Dutchgirl says:

    Ultimately the problem is our reliance on a single resource: oil, and the solution is to diversify the source. Bio-diesel alone won’t do it, nor any of the renewable energy sources. I find it amazing that in southern California, where I now live, almost no one uses solar water heating.

  18. Bithead says:

    Dutch:
    Maybe that’s because being in SouCal, heating isn’t much an issue, save a few days per year, and as such the effect on the mythical ‘carbon footprint’ is so minimal as to be ignored. I love it when these things answer themselves.

    Anjin:

    Right, because people always rant about “nazis” when they are amused…

    My, we ARE reaching, aren’t we? (Chuckle)

  19. Dutchgirl says:

    Sorry Bithead, but I use hot water everyday. Solar water heaters mean free hot water without the need for the electric furnace, thats their primary function. They can also be used to run refrigerators and washing machines.

  20. anjin-san says:

    Lots of solar in the Bay Area. Companies that do solar can’t find enough qualified installers, so community colleges are now offering solar technology classes.

    Bit, you can throw in all the denial you want, but you posts make it pretty obvious that you are one angry dude. A shrink would have a field day with your blog. But don’t feel bad, you have Zelsdorf in your corner. Water really does seek it’s own level.

  21. anjin-san says:

    The way off topic thought for the day:

    When people speak to you about a preventive war, you tell them to go and fight it. After my experience, I have come to hate war.

    — Dwight D. Eisenhower

  22. William d'Inger says:

    WOW! There have 21 responses already, and not one person has mentioned why we have biofuels. If you don’t even know what they’re for, how are you going to solve the problem?

    Biofuels are not really intended to limit fossil fuel usage in any meaningful way. Instead, they are farm subsidies. The farm lobbyists tugged on the ecological heartstrings of Congress and laughed all the way to the bank.

    Given the overwhelming support for the farm bill this year, you are probably spitting into the wind.

  23. G.A.Phillips says:

    Right, because people always rant about “nazis” when they are amused…

    Wrong, its people who study history and see it repeating itself angry or not.

  24. Bithead says:

    Dutch:

    Sorry. I took…

    I find it amazing that in southern California, where I now live, almost no one uses solar water heating.

    ….to mean heating a house heating system using solar. My error.

    Interesting; SouCal is one of the few areas where such a system as you propose will work at all, much less reliably. It’s a system which by it’s every design, cannot work as well, reliably. (Yes, they have cloudy days in SouCal, having seen such myself).

    But I suppose that the real issue with acceptance out there of that system would be the cost… replacing a traditional tank or tankless heater, vs the cost of installing a solar system.

    You’re asking people there to pay for and get less. I guess you can always apply environmental guilt to the subject and get the mess adopted anyway and enforced by law. Yeah, that’ll work.

    Biofuels are not really intended to limit fossil fuel usage in any meaningful way. Instead, they are farm subsidies. The farm lobbyists tugged on the ecological heartstrings of Congress and laughed all the way to the bank.

    Well, exactly. Of course by allowing this to happen, Congress gets to claim it’s ‘doing something’ about the problem without ever mentionng that what they’re doing is making it worse.

    Anjin, do not make the mistake of conflating anger with correct identification of a problem.

  25. Grewgills says:

    Interesting; SouCal is one of the few areas where such a system as you propose will work at all, much less reliably. It’s a system which by it’s every design, cannot work as well, reliably. (Yes, they have cloudy days in SouCal, having seen such myself).

    But I suppose that the real issue with acceptance out there of that system would be the cost… replacing a traditional tank or tankless heater, vs the cost of installing a solar system.

    They work well and reliably in the Netherlands and are visibly more common there than in SoCal*. You can get a home system for 3-5K. That is a relatively high up front cost, but will pay for itself in less than 10 years**. If you are buying a new house, particularly somewhere like SoCal, the additional cost is trivial and saves you money over the length of your mortgage.

    Anjin, do not make the mistake of conflating anger with correct identification of a problem.

    Don’t confuse spouting ridiculous terms like ___nazi with correct identification of any problem. All it does is stifle reasoned discourse and make light of the horrors actually perpetrated by the nazis. Sensible people do not toss this term about lightly when trying to engage in reasoned debate. It is done with some regularity by people of all political stripes and is always stupid.

    * There the hot water is used for home heating as well.
    ** We installed one on our home in South Kona over 20 years ago (older tech a family of 5 and frequent guests) and it paid for itself in lower electric bills in closer to 5 than 10 years.

  26. anjin-san says:

    It’s a system which by it’s every design, cannot work as well, reliabl

    I know quite a few people who have solar water heating systems, they all say the same thing. They work well and they more than pay for themselves over time. Of course I live in California, where we have plenty of sunshine, but since an eight our population is here, solar would be worth doing just for the energy savings here.

    Why do the new Luddites on the right want to cling to 19th century technology? Its a mystery.

  27. Bithead says:

    __nazi with correct identification of any problem.

    Ah, but it IS correct ident. In what other area has the force of government been more ruthlessly applied? In what other area has dissent been more ruthlessly squashed?

    I know quite a few people who have solar water heating systems, they all say the same thing. They work well and they more than pay for themselves over time. Of course I live in California, where we have plenty of sunshine, but since an eight our population is here, solar would be worth doing just for the energy savings here.

    As I suggested, SouCal (AZ,NM, etc) is the exception, rather than the rule. Given the number of deserted homes I found while roaming around out there a few years ago, I suppose the lack of adoption by the people who live there to be a reflection of the high initial cost. When you’re paying 230k for a postage stamp, as I saw in a number of places around LA and SD, and having the snot taxed out of you, you tend to scrip where you can.

  28. spencer says:

    Actually,in March real oil imports were down 15% from their year ago level. So if you are complaining that biofuels are not contributing to a drop in oil imports you are just wrong.

    Yes, using corn to produce biofuels is contributing to higher food prices.

    But you seem to be in the school of thought that by some miracle of the free market we can reduce our dependence on oil imports without any costs or other negative consequences.

    What do you propose as a better method of reducing US dependence on oil imports that will cost less then using biofuels? Yes, I agree that drilling in ANWAR would help, but essentially all it would do is offset the decline in output from other North Slope oil fields. So the net impact on imports would be minor.

    You are a trained economist, but you also appear to obviously be a member of the free lunch school of economics that got us into the mess we are in.

  29. anjin-san says:

    Ah, but it IS correct ident. In what other area has the force of government been more ruthlessly applied? In what other area has dissent been more ruthlessly squashed?

    Perhaps you could provide a bit of detail on this… where are the death camps that opponents of domestic drilling have been sent to?

    Grewgills is quite correct. This type of hysterical use of “nazi” does a great disservice to the memory of actual nazi victims. It is an obstacle to rational political discourse, and an insult to the actual study of history.

    Since there has been so much discussion about domestic drilling, I do think it is worth pointing out to those who oppose domestic drilling on environmental grounds that drilling in other countries does harm to their ecosystems.

    As a society, we need to examine our willingness to outsource the environmental consequences of our lavish lifestyles. Its one more reason to get off our asses and move beyond this primitive technology.

  30. TJIT says:

    Spencer you said.

    Actually,in March real oil imports were down 15% from their year ago level. So if you are complaining that biofuels are not contributing to a drop in oil imports you are just wrong.

    First, correlation is not causation. Furthermore if biofuels were responsible for the impact we should have seen the import dropoff much earlier since the ethanol mandates were in place long before the march dropoff.

    Second, when all of the petroleum inputs (farm fuel, fertilizer, pesticides, herbicides, transport fuel, natural gas for ethanol distillation, etc, etc.) required to produce ethanol are accurately accounted for it is possible that the amount of petroleum required to make ethanol exceeds the volume of petroleum ethanol displaces.

    Not a good way to reduce our dependence on petroleum.

  31. anjin-san says:

    Second, when all of the petroleum inputs (farm fuel, fertilizer, pesticides, herbicides, transport fuel, natural gas for ethanol distillation, etc, etc.) required to produce ethanol are accurately accounted for it is possible that the amount of petroleum required to make ethanol exceeds the volume of petroleum ethanol displaces.

    Certainly a possibility, do you have any metrics?

    pesticides, herbicides,

    Good argument for getting off of this crap.

  32. Bithead says:

    Actually,in March real oil imports were down 15% from their year ago level. So if you are complaining that biofuels are not contributing to a drop in oil imports you are just wrong.

    Hold it, back the truck up, here.
    So, imports are 15% down. That doesn’t of itself say that that 15% is due to ethanol. How much of that drop is due to increases in domestic production, and how much of is is due to less fuel… of all kinds… being consumed?

    If we are to make your assumption that this entire 15% is attributable to Ethanol is it also a tacit admission that attempts at fuel efficiency have been totally without effect, then?

  33. Bithead says:

    Perhaps you could provide a bit of detail on this… where are the death camps that opponents of domestic drilling have been sent to?

    Cute.
    Rather the reverse. What is the reaction to the suggestion of domestic drilling and increased refining? Arguments designed to shut down all discussion.

    What do you propose as a better method of reducing US dependence on oil imports that will cost less then using biofuels? Yes, I agree that drilling in ANWAR would help, but essentially all it would do is offset the decline in output from other North Slope oil fields. So the net impact on imports would be minor.

    I’ve answered that question repeatedly, and ANWR is but a small part of it.

  34. TJIT says:

    anjin-san,

    The link below is a good place to start gathering information on the energy balance issue.

    Government ag policy (subsidies and mandates) help drive the usage of pesticides and herbicides. Getting the governement out of ag policy is a simple, effective, and economical way to discourage the overuse of ag chemicals.

    How Reliable are Those USDA Ethanol Studies?

    Given the selective accounting employed in the USDA papers (both 2002 and 2004), it is doubtful that it would have passed peer-review without substantial modification.

    While I have my reservations about the data used by Pimentel, the USDA work is very shoddy in comparison. It has all the ear-marks of an agency attempting to push a political agenda.

    Certain data were selectively omitted from the energy calculation. The reported EROI of 1.67, parroted by the pro-ethanol contingent, completely breaks down under close examination. It is simply inaccurate and irresponsible to claim this EROI given the factors examined in this essay.

  35. Al Bee says:

    As a boy there were street cars and interurban electric train cars. Freight and goods were delivered by trains, steam engines and boxcars etc. Intra city delivery was by transfer company trucks. From seller to buyer, from train depot to recipient. It was a good model yet was defeated by greedy combination of oil interests and vehicle manufacturers.

    How many semis loads can fit into a flat car or boxcar?

  36. anjin-san says:

    Arguments designed to shut down all discussion

    What does an argument “designed to shut down all discussion” have to do with nazis? Sounds more like a debate tactic. Nazi shut down discussion by force of arms. To compare the two is infantile.

    How has dissent been “ruthlessly squashed” exactly?

  37. Bithead says:

    How many semis loads can fit into a flat car or boxcar?

    You’re forgetting the issues of profit and man hours. How many dollars does it take to transfer freight from trucks to boxcars? More than it costs to run the truck directly in.

    Nazi shut down discussion by force of arms

    Not always, and particularly, not on the leading edge of the movement.

    What does an argument “designed to shut down all discussion” have to do with nazis?

    Clearly, you would do well to study your history a bit more completely than your government school can have afforded you.

  38. anjin-san says:

    Clearly, you would do well to study your history a bit more completely than your government school can have afforded you.

    Sort of a typical, lame ass, I don’t have an answer answer. I read Churchill’s “The Second World War” (yes all 6 volumes), The Rise & Fall of the Third Reich, “Inside the Third Reich” and so on before I was 15. Please Bit, try to come up with responses that are at least semi-intelligent.

    The oil companies have vast power and influence in this country. To say that they and their supporters are not free to present arguments in favor of domestic drilling is beyond idiotic. Have you not been doing so in this very thread? Have the brown shirts kicked your door in and dragged you off?

    While we are on the subject, what is the deal your nazi fetish?

  39. anjin-san says:

    In what other area has dissent been more ruthlessly squashed?

    Please provide even a single example of this ruthless squashing of dissent – even one…

  40. spencer says:

    TJIT & BITHEAD — Note I said biofuels contributed to the drop in oil imports. But both of you argued against a claim that biofuels caused the drop in oil imports.

    No wonder you are in the camp you are in, you refuse to read.

    Got any more strawmen you want to put down while you ignore the subsistence of what I said and completely ignore my comments about being in the free lunch economics school.

  41. Steve Verdon says:

    They work well and they more than pay for themselves over time. Of course I live in California, where we have plenty of sunshine,….

    Let us also not forget that solar is also heavily subsidized in California.

  42. anjin-san says:

    Let us also not forget that solar is also heavily subsidized

    Sort of like the oil industry…

  43. G.A.Phillips says:

    Grewgills is quite correct. This type of hysterical use of “nazi” does a great disservice to the memory of actual nazi victims. It is an obstacle to rational political discourse, and an insult to the actual study of history.

    And of course if you following in their footsteps you don’t wanna here that term used ether.

  44. Bithead says:

    Sort of a typical, lame ass, I don’t have an answer answer.

    Actually, it’s more I don’t have the amount of headache meds needed to explain the obvious to you.”

    The oil companies have vast power and influence in this country

    Again, Exxon/Mobil made $40b in 2007. THe taxes paid were over $100b. I’d say offhand, that any org that records profits of only 40% of what they’re being taxed, clearly isn’t very powerful.

  45. anjin-san says:

    Bit,

    Still waiting for even a single example of the nazi-esque suppression of dissent you were raving about. Really dude, just one… Something tells me you can’t produce one.

    You bandy “nazi” around, then you cannot produce an iota of substance to back up your claim. Where I come from we call that “punking out” Are you a punk, Bit?

    As for headache meds, clearly you are only dancing so fast because you cannot back up you arguments. Run awayyyyyyyyyyyyyyyyyyyyy

    Yea, Exxon and Chevron are only making the greatest profits in the history of capitalism. Clearly they have no power.

    Thanks for the holiday comic relief.

  46. Bithead says:

    Consider that the reponse to anyone who dares to suggest domestic drilling as the answer, and government the problem.

    Consider your own response to me.

    Do you really consider that Nazi tactics are limited to violence?

  47. anjin-san says:

    Consider your own response to me.

    I am making fun of you because your arguments are a joke. If that makes me a nazi in your eyes, so be it. If you want people to take you seriously, present intelligent arguments and back them up, dont spout dogma.

    Seriously Bit, stuff like:

    Actually, it’s more I don’t have the amount of headache meds needed to explain the obvious to you.

    Guys used to say that kind of thing when I was a teenager. But not all that often, because it was deemed weak even when we were kids.

    You really seem to enjoy bandying “nazi” around. I ask you to consider the sacrifices made by those who fought the actual nazis, and treat the subject with a bit more respect. Remember what day it is.

  48. Bithead says:

    I am

    making fun of you because your arguments are a joke.

    Well, it’d help if I didn’t need to translate it to what little vocab you will understand. It’s my experience also, that anything outside your narrow worldview, you think a joke.

    You really seem to enjoy bandying “nazi” around. I ask you to consider the sacrifices made by those who fought the actual nazis, and treat the subject with a bit more respect

    I am in fact treating the subject with the utmost in respoct. I’m tryig to make sure we don’t end up having to go throuhg such again. The Nazi movement was a leftist movement, you see.

  49. Bithead says:

    You have no answer for my last question, I note.

    Guys used to say that kind of thing when I was a teenager

    Of that I have little doubt. They’re still saying it. Perhaps it’s soemthing you never grew out of.

  50. anjin-san says:

    In what other area has dissent been more ruthlessly squashe

    d?

    Well bit you are still unable to come up with a single instance of the ruthless suppression you have been carrying on about.

    Guess its one more thing that exists only in your imagination.

  51. Steve Verdon says:

    Sort of like the oil industry…

    Are you being deliberately mendacious? No, not at all like the oil industry. Yes the oil industry receives very nice subsidies, but nobody would believe you if you were to assert that the oil industry wouldn’t still be huge without them. Solar, wind, etc. wouldn’t exist in their current state without various mandates and subsidies.

    So no, not at all like the oil industry. Even trying to assert that makes you look like a foolish liar. So don’t do it.