Farm Boyz Rule Ottawa - By Terence Corcoran of Financial Post.

[joedales]

Farm boyz rule Ottawa.

Terence Corcoran, Financial Post
Published: Tuesday, December 04, 2007
The fourth annual Canadian Renewable Fuel Subsidies Association Summit, where corn and biofuels are a religion, opened yesterday morning. I couldn't make it to Quebec City for the two-day event, but I had no trouble finding out what the summit is all about. Agriculture Minister Gerry Ritz, a Saskatchewan boy, opened the event with a promise that Ottawa would keep the subsidies coming. As Mr. Ritz said in his speech, "in making every decision on every policy, I'm fully committed to putting farmers first." We all know what that means: Make cities pay.

[URL="http://www.financialpost.com/story.html?id=4e8fbab4-1360-4ea9-b946-353065b8d7f6"]Click Here to Read the Rest of his commentary.[/URL]

What do you think of his point of view...

[Fransisco]

Can't say that I disagree.

One Myth leads to another. The man made global warming holocaust notion is a myth which has lead to the myth that bio fuels can stop it which itself is predicated on the myth that government intervention can and should solve any and all problems.

All of which in this case doesn't help the myth that the Conservatives are actually Conservatives.

[TOM4CWB]

Fransisco,

The price of wheat may 14% protein and 86% politics...

But, energy is even less market driven than wheat!

The price of Energy and Oil is 98% politics and 2% market value if you are lucky!

POLITICIANS ARE THE MARKET!

IT IS ALL ABOUT HOT !

[Fransisco]

Tom says "POLITICIANS ARE THE MARKET!"

That's the problem, and conservatives are the ones who are supposed to know it.

[bgmb]

Doesn't take long for an easterner to start complaining when the west has some influence in gov policy

Torontonians better get used to paying more for food too not just gas.

[northfarmer]

Frankly as a producer I am happy that Ritz is putting the farmer first, as the federal Minister of Agriculture...

As for the inclusion rates in fuel I would rather have ethanol used as the fuel oxygenate (Fuel oxygenates are chemicals containing oxygen that are added to fuels, especially gasoline, to make them burn more efficiently. Adding oxygenates to gasoline boosts the gasoline's octane level and reduces atmospheric pollution associated with automobile emissions. Examples of fuel oxygenates are:methyl tert-butyl ether (MTBE),tert-amyl methyl ether (TAME), diisopropyl ether (DIPE),ethyl tert-butyl ether (ETBE),
tert-amyl alcohol (TAA),tert-butyl alcohol (TBA),and of course ethanol)than the other options.

You see I am pretty sure that the rest of the oxyxygenate options are carbon fuel derived, and are non renewable.

As for bio diesel and ethanol blended gasoline it is a fact that the use of these blended fuels will improve the air quality and the environment, particularly in urban centres where Cocoran calls home and of where most of city and urban readers live. This is much greater importance to me than the myth of man made gloabl warmin and climate change.

Comparing the public policy of supply management in certain segments of agriculture to the Feds involvement in promoting the use of bio derived renewable fuels blends is a stretch at best. To then link the religous right and a climate change alarmist to any current conservative policy direction on the matter is the real joke.

[Hermes]

This article really shows how the media or in this case a jornalist uses his articles for his personal agendas.
He forgets to mention it is the cities who are contributing to the so called global warming...It is the cities who feel that Green house gasses are a major issue....I think it is hilarious that when the cities need to belly up and pay for Global warming, this Jornalist starts to complain
The truth is everybody is concerned about global warming as long as it does not inconvenence or cost them
Politics......This proves you need to be careful for what you ask for..you might actually get it

[Fransisco]

Hermes, you're out of line. Corcoran doesn't buy the greenhouse gas boogie woogie and has written many times about how and why it is BS.

[wd9]

Interesting how i sat with a collection of staffers in a ministers office looking out the window pointing out to them the vehicles driving by that burned diesel. Seems they thought diesel wasn't used in Ottawa. Yup, a long way to go.

[Fransisco]

Took a look into the improved air quality claim.

While ethanol does cut back on the greenhouse gas emissions by about 30%, a byproduct of the combustion of ethanol is ozone, the building block of smog. According to a recent Stanford study, we would see an increase in the amount of smog in major urban areas.

I'm sure the city folks will be real happy with that outcome. It's cleaner burning but we get more smog.

[Fransisco]

Here is another interesting tidbit I found on the subject.

<blockquote>
It turns out that, despite all the claims that ethanol is good for the environment, ethanol may be a net polluter in many ways. Ethanol does reduce carbon monoxide emissions because it is an "oxygenate," which means it adds oxygen to the fuel, converting the CO into CO2, carbon dioxide. (Seeing how CO is not greenhouse gas, our ethanol policies result in making more CO2; what would Al Gore say?) But on the question of hydrocarbons, ethanol appears to make things worse.

Alcohol's hydrogen bonds are weaker than those of water or even gasoline, making alcohol more likely to evaporate, both under high heat, and under normal temperatures. In scientific terms, this means ethanol and other alcohols have greater "volatility" than gasoline.

More volatile fuels send more hydrocarbons into the air, because less of the hydrocarbons will be burnt up in combustion, and more will simply evaporate and float into the air. Adding 10 percent of ethanol to a fuel mixture increases the volatility, sending more smog-causing hydrocarbons into the air. </blockquote>

[freenorth]

Corcoran doesn't need logic or truth to spin his media message. Personally I think it's a good thing that an Ag Minister knows who it is he represents and is concerned about their interests.

We should be grateful that we are now in a demand driven era. The contribution from biofuels is not only good for the environment it is improving agriculture's viabilty. Biofuels provide choices which should improve competitiveness and reduce costs while reducing our energy footprint.Only competition and the threat of it will reduce costs and drive efficiency.

Not surprisingly Corcoran doesn't complain about taxpayers no longer having to provide support to farmers due to high priced grain.

Since your so good at websurfing I'm sure you can locate the CRFA speeches which may already be on the web. I'm sure you can find numerous arguments within them that show ethanol is beneficial in the reduction of GHGs using the most current methodologies not data that may no longer be accurate.

[Fransisco]

Freenorth, do your own homework and back up your own claims.

As far as 'choice' and 'competition' goes I don't see how forcing consumers and motorists through a mandate to buy more expensive(even though its subsidized and tariffed) fuel which may actually decrease air quality accomplishes any of that. But nice try.

And I wouldn't be so sure about the subsidy argument as well. Switching them from grain to ethanol is not eliminating them. But again nice try.

I've said it before and I'll say it again, I don't see a non-subsidized future for these bio fuels, especially wheat based ethanol which is at the bottom of the competitiveness list.

Heck even in Brazil where they can get 5 times the litres of ethanol per acre than we can with wheat they still need a 20% mandate that they lose money on to keep the industry going.

Tom and others have argued Moore's law (think transistors) will save the day. Unfortunately it doesn't apply to bio fuels the inputs of which have been getting more expensive not cheaper.

Lets get back to the 'choice' and 'competition' argument. The ethanol plants in western Canada if given the choice(which they're not)would be going to 100% corn right now. Why? Because of price, you can pretty much get the same amount of ethanol out of a bushel of corn as you can out of a bushel of wheat but corn, as everyone knows, is a whole lot less expensive most of the time and especially these days. Competition and choice are out the window for these guys.

Any farmer that thinks the governments bio fuels initiative is a " free market", "market driven","competition",or "choice" type of policy is mistaken.

If you're in favour of creating artificial demand at someone else's expense then just say so.

I know as well as anyone what all this has done for the bottom line of my grain operation but I'm not going to fool myself or anyone else into believing that any of it is market driven. It's not.

[Fransisco]

The latest edition of the economist seems to agree with me.

http://www.economist.com/opinion/displayStory.cfm?Story_ID=10252015

and

http://www.economist.com/opinion/displaystory.cfm?story_id=10250420

Here's an excerpt, emphasis mine.

<blockquote>
With agflation, policy has reached a new level of self-parody. Take America's supposedly verdant ethanol subsidies. It is not just that they are supporting a relatively dirty version of ethanol (far better to import Brazil's sugar-based liquor); they are also offsetting older grain subsidies that lowered prices by encouraging overproduction. <b>Intervention multiplies like lies.</b> Now countries such as Russia and Venezuela have imposed price controls—an aid to consumers—to offset America's aid to ethanol producers. Meanwhile, high grain prices are persuading people to clear forests to plant more maize. </blockquote>

[just_wondering]

Fransisco> If you're in favour of creating artificial demand at someone Else's expense then just say so
I am in favour of creating demand at some else's expense. The Market does not work in every situation if everyone does not play by the same rules
Biofuels IMHO is now all about not having to rely on brown people to determine the price of energy in the U.S.
You can buy 1 biofuel plant for the price of a Flying fortress and payload. This is NO longer about the farm we are just getting spinoff benefits
From Larry Webers daily report

Ethanol production continues to expand, although at a slower pace than expected a few months ago. Ethanol production margins became very tight in late September, but have rebounded over the past two months. The low margins reflected higher corn prices and much lower ethanol prices. The lower gross margin suggested that some plants were not covering all costs of production. As long as crude oil and unleaded gasoline prices remain high, ethanol prices are expected to remain high enough to generate positive crush margins. LINK

The ethanol plant-announcement surge is probably done . Capacity under construction will mostly be finished within the next nine to 10 months which will put the U.S. industry up to about 13 billion gallons of capacity, and assuming a 15-billion-gallon renewable fuel standard from corn by 2015 that says the corn-starch ethanol industry only expands by about 2 billion in the 2009 to 2015 time frame. The recent slip in ethanol's financial market valuation could also influence the future of the industry, according to analysts. While there may be a public perception that the ADMs, Poets and VeraSuns of the world will be the likely benefactors of an ethanol-industry downturn . . . there still is room for independent producers. DTN Ethanol Center As Yogi Berra said - it ain’t over til its over . . .

The U.S. House on Thursday passed an energy bill that would boost vehicle fuel economy requirements by 40 percent by 2020 and raise ethanol use by five-fold by 2022. But the White House says it will reject the measure in its current form. The centerpiece is an increase in the Corporate Average Fuel Economy standards to 35 miles per gallon (15 km per litre) by 2020. To allay anger from livestock growers and food makers, who have seen corn prices nearly double amid an ethanol boom, the bill caps the amount of corn-blended ethanol at 15 billion gallons. The rest -- 21 billion gallons -- comes from nonfood "cellulosic" sources like switchgrass and wood chips by 2022. LINK

There are some strong signals that Canadian farmer-investors need to view biofuel investments as more than just another value-added proposition for locally grown crops if the legislators have their way.