Ethanol: the great inflator

[mga]

i had mentioned here a couple of months ago that the recent craze for ethanol was going to be a financial killer for consumers. recent news has indicated that your grocery bills alone are going to increase 7 to 8 percent.

this is not only because of ethanol, but the increasing price of gas. however, MSNBC has a nice video explaining why ethanol is going to kill your wallet more than gasoline. dumb americans....as if paying a few cents less at a pump is much better than paying $50 to $100 more for groceries. bush's recent surge to push ethanol is going to be recored in history as one of the biggest financial scams and disasters to ever hit the american public.

GM, meanwhile is pushing forward with their hydrogen cars and has been making some major steps ahead.

http://www.msnbc.msn.com/

http://video.msn.com/v/us/msnbc.htm?g=ba9e9c35-8538-41f9-98a4-287920ddd82f&f=00&fg=copy

[Wretchosoft]

Ethanol always struck me as a dumb idea for a fuel, because of all the ensuing financial complications.

[Mrhat]

The problem isn't with ethanol per se; its the fact that we tariff foreign (read: Brazilian) ethanol and foreign (read: Brazilian) sugar. So to make ethanol we use the "cheapest" substitute (which isn't REALLY the cheapest, we just stupidly have protectionist policies) which is American corn. And corn is used in the production of pretty much all food at some stage, so increasing corn prices causes the price of everything to increase as well.

[vikingrob]

Basically it amounts to political posturing - if it sells well in Iowa, those with presidential aspirations will be very interested. And how much corn does Iowa produce?

FWIW, a lot of the issue with ethanol is the distribution of it, and the fact that the production is concentrated in several Midwestern states (fair disclosure: Minnesota is one of them). However, one should take out the taxes to make meaningful conclusions about gas prices.

I'm typing this from a truck stop in Wisconsin; the price for regular is posted here as $3.429 per gallon. Take out the taxes, and you're at $2.916 per gallon.

[Gooch's dad]

Ethanol is 2nd only to hydrogen as a bad idea for alternative fuel.

Nothing actually produces ethanol--at best, you get something that produces sugars, which can be fermented to produce some alcohol (but nothing over 15% alcohol) and then you have to put in beaucoup energy to distill off the alcohol. How dumb of an idea is that?

Nearly as dumb as claiming that you can start with water, end up with water, and have an energy source. That's the "hydrogen economy", folks.

[Rathpig]

The problem with ethanol is the fermentable base. All fermentables are not equal.

Corn is a great ethanol source for bourbon. It is a bad source for motorfuel.

As Mrhat points out, Brazil is a great source for both the fermentables and the final product at a much cheaper literal price once politics is removed. (There is a huge negative draw-back to Brazilian sourcing though in rainforest destruction.)

If the U.S. moved away from the corn-producer welfare system of ethanol into a mixed source system, this could provide a partial solution to some oil imports. It is in no way a good final solution.