Ethanol Power

[Fransisco]

Just re-read my posts and no I did not say that.

But since you brought it up, I will say this. Five years ago a U.S. General Accounting Office report showed that ethanol received $11.6 billion in tax incentives since 1968, while the oil industry had received over $150 billion in tax benefit over the same period.

Sounds like Big Oil is really raking in those government cheques now doesn't it? Well hold on there partner.
The oil industry produced 1,068 times more energy so the subsidy rate per unit of energy was <b>54</b> times higher for ethanol.

That’s like ethanol getting 54¢ for every 1¢ oil gets.

So, no, oil is not a pure free market ride either, but it is one heck of a lot closer to it than ethanol.

Ask yourself this, if you took away all those oil subsidies do you think oil would vanish? Now ask yourself the same question about ethanol, if you're honest you'll get a different answer.

One can try to play the moral equivalency card here but it doesn't get you very far. It's like trying to argue that because Canadian grain farmers get crop insurance they are in the same subsidy league as the supply management folks. We all know that they aren't.

[Fransisco]

Lets look at it another way.

In 2006 the US taxpayers shelled out some $5.1 to $6.6 billion dollars for ethanol.

That works out to about $17 per million BTUs. By comparison oil and natural gas subsidies are running at at around 40 cents per million BTUs in 2006.

My first choice is for no subsidies.

My second is for the least amount of subsidies possible.

[cottonpicken]

What if a billion or billions of people starve to death?


Which WILL happen.

[wd9]

Francisco, nice packaged numbers which tell little of the real truth.

Let's take one example. Natural gas royalties and taxation occurs at the outlet. All the gas used in pipelining and pumping etc is not included in either the taxation or the royalty scheme. It takes as much gas to get it to where the taxation starts as delivered, roughly.

Got those numbers which are a subsidy by definition?

[Fransisco]

I'll repeat this since you seemed to have missed it.

Ask yourself this, if you took away all those oil subsidies do you think oil would vanish? Now ask yourself the same question about ethanol, if you're honest you'll get a different answer.

[FarmRanger]

Would there be any oil sands development if there had never been any government incentives? When the government first started subsidizing that sector it wasn't economically viable either.

[Fransisco]

The answer is yes. It didn't make sense at $20 a barrel but it sure makes sense now.

[FarmRanger]

I don't feel like googling the oilsands(long day), but it took at least 10 years and a lot of money before oilsands were viable?

[jensend]

seems like nobody wants to address cotton's post and the implications of what happens en route to that scenario. ethanol just happened to have the bad fortune to come along at the same time as a spike in commodity prices. if oil was high and the world was awash in grains ethanol might make sense in some parts of the world from some crops but if grains are as short supply as some keep promoting i think ethanol will be a short-lived phenomenon. it's a money issue (someone wants to make money off it) not an energy issue (because it makes no sense). about the only people promoting ethanol from grains now are grain farmers and people looking for investment in their plants and politicians (who are followers, not leaders). most of the money men have walked away from it.

[Fransisco]

I've got an Uncle in the oil industry who talked about the oil sands already years ago. He told me what the magic number was where it made sense. I don't remember exactly what it was but I seem to think it was in the $40-60 a barrel range.