Don't Sell Any Wheat This Week

[westernvicki]

Funny you would mention that "Furrowtickler" was looking out to office window just the other day to the plot of land where the plant would have been, and thinking about the dynamics it takes to build opportunity. Taxation was not on the list.

[iceman]

Obama announced record ethanol quotas that refiners must adhere to in 2017. Don't think the market has fully digested the news with the announcement coming right before US Thanksgiving. Next week should be a good one for the grain sector. Lets hope the turkey hangover has worn off by then.

IMO this canola rally is to be sold into. Highly unlikely we break above 535 in the front month. My feeling anyways.

Iceman out

[oneoff]

It could be that ethanol mandates contributed greatly to past decent prices for farm production. Would be nice to know why ethanol production never did take off in Canada. Of course CNG never did any better and in other parts of the world maybe 25% of heavy vehicles and commercial vehicles/buses are on the roads. Probably old story of landlocked and thousands of miles to ports and markets.


It also could be an industry that just doesn't fit in with distance to markets for distillers grains and maybe even our climate that can be more difficult to extract moisture necessary to prevent spoilage. Whatever the reasons that ethanol plants aren't here and can't seem to be profitable; it does illustrate that ideas that are feasible elsewhere; don't necessarily fit in Canada

There is a parallel there for those who would push wind and solar. Keep your eyes open or you fall into obvious traps that should be avoided less you wish for serious damage for a region.

There's also a possibility that a project can be designed to fail and/or it never did fit in with some master scheme

[oneoff]

This from Bloomberg


The Obama administration is forcing refiners to use a record amount of biofuel next year, delivering a victory to Midwest farmers at the expense of oil companies that say they are struggling with the program’s costs.
Under quotas the U.S. Environmental Protection Agency announced Wednesday, refiners must mix 19.28 billion gallons of renewable fuel into the U.S. gasoline and diesel supply next year, including up to 15 billion gallons of traditional, corn-based ethanol.
The mandates are above levels the agency proposed in May and also above last year’s requirements. For the first time, the targets match a 15 billion-gallon ceiling that Congress established for conventional renewable fuels in creating a program to boost their use 11 years ago.
The 2017 quotas are certain to increase pressure on Congress and President-elect Donald Trump to overhaul the Renewable Fuel Standard. While Trump is unlikely to rescind the new targets now that they have been finalized, he may support efforts to overhaul it by Congress.
Trump’s Take
During his campaign, Trump had varying views of the program. In Iowa early this year, Trump said the U.S. should increase biofuel mandates. But in September, his campaign issued a fact sheet calling for the elimination of the system for buying and selling biofuel blending credits, following criticism from billionaire investor Carl Icahn. His campaign later reissued the fact sheet without the language opposing the system.
The EPA’s decision is good news for biofuel backers and Midwest leaders who had argued that climbing gasoline demand justified hitting that 15 billion cap. Americans are on track to consume a record 144 billion gallons of gasoline this year, according to an October forecast from the U.S. Energy Information Administration.
Bob Dinneen, president of the Renewable Fuels Association, said the move "will send a positive signal to investors."
‘New Interest’
"By signaling its commitment to a growing biofuels market, the agency will stimulate new interest in cellulosic ethanol and other advanced biofuels, drive investment in infrastructure to accommodate E15 and higher ethanol blends, and make a further dent in reducing greenhouse gas emissions," Dinneen said in an e-mailed statement.
Jeff Broin, chairman of POET LLC, the nation’s second-largest ethanol producer, praised the EPA for "holding firm to the letter of the law despite enormous pressure from oil interests."
Oil companies blasted the move, arguing that the 2017 quotas push them beyond a “blend wall” where they are forced to mix a higher proportion of ethanol into fuel than the 10 percent level approved for use in all cars and trucks. Oil companies and industry trade groups had unsuccessfully lobbied the Obama administration to keep total ethanol levels at 9.7 percent of gasoline demand -- an amount that would provide a buffer below the conventional 10 percent blend while also accommodating sales of ethanol-free gasoline coveted by boaters.
The EPA’s 2017 quotas push well beyond that threshold, and translate to roughly an 11.2 percent blend of ethanol from both advanced and conventional corn-based sources, FBR & Co. said in a research note to clients.

[chuckChuck]

The renewable fuel standard is an indirect subsidy to US farmers and benefits Canadian farmers with higher prices. Imagine what would happen if all that corn and soybeans had to find another market besides bio-fuel? It would be a market disaster.

Freemarket loving farmers have become dependent on this subsidy program.

There is not much of a case to promote bio-fuels for environmental benefit if you consider all the energy that goes into the crops.

[bucket]

Except it's renewable as opposed to the one shot deal with refining a barrel of oil.

You can't put a barrel of oil in the ground and get 172 back like corn. Or 45 for soybeans.

[riders2010]

Furrow, refreshing to read an objective post from someone leaning right on why biofuels did not take off. We are missing such an opportunity in the bio fuel arena which could both take care of or greatly
lessen the environmental concerns while bringing decent returns to us farmers.
We all have to stop blindly supporting the left or the right simply because they are left or right and either support or promote from our own people that will actually represent us farmers.

[chuckChuck]

According to calculations done by Minnesota researchers, 54 percent of the total energy represented by a gallon of ethanol is offset by the energy required to process the fuel; another 24 percent is offset by the energy required to grow the corn. While about 25 percent more energy is squeezed out of the biofuel than is used to produce it, other fuels yield much bigger gains, says Stephen Polasky, a professor of ecological and environmental economics at Minnesota. Making etha*nol is “not a cheap process,” he says. “From my perspective, the biggest problem [with corn ethanol] is just the straight-out economics and the costs. The energy input/output is not very good.”

The high energy requirements of ethanol production mean that using ethanol as fuel isn’t all that much better for the environment than using gasoline. One might think that burning the biofuel would release only the carbon dioxide that corn captures as it grows. But that simplified picture, which has often been conjured up to support the use of ethanol fuel, doesn’t withstand closer scrutiny.

In fact, Polasky says, the fossil fuels needed to raise and harvest corn and produce ethanol are responsible for significant carbon emissions. Not only that, but the cultivation of corn also produces two other potent greenhouse gases: nitrous oxide and methane. Polasky calculates that corn-derived ethanol is responsible for greenhouse-gas emissions about 15 to 20 percent below those associated with gasoline: “The bottom line is that you’re getting a slight saving in terms of greenhouse-gas emissions, but not much.”

[chuckChuck]

Study: Ethanol Worse for Environment Than Gasoline
AP Photo
The Associated Press

by Marita Noon6 Sep 2016973

University of Michigan’s Energy Institute research professor John DeCicco, Ph.D., believes that rising carbon dioxide emissions cause global warming and, therefore, humans must find a way to reduce its levels in the atmosphere. But ethanol is the wrong solution.

According to his just-released study, political support for biofuels, particularly ethanol, exacerbates the problem instead of curing it.

DeCicco and his co-authors assert: “Contrary to popular belief, the heat-trapping carbon dioxide gas emitted when biofuels are burned is not fully balanced by the CO2 uptake that occurs as the plants grow.” The presumption that biofuels emit significantly fewer greenhouse gases (GHG) than gasoline does is, according to DeCicco: “misguided.”

His research has upended the conventional wisdom and angered the alternative fuel lobbyists. The headline-grabbing claim is that biofuels prove worse for the environment than gasoline.

DeCicco has been focused on this topic for nearly a decade. In 2007, when the Energy Independence and Security Act (also known as the expanded ethanol mandate) was in the works, he told me: “I realized that something seemed horribly amiss with a law that established a sweeping mandate which rested on assumptions, not scientific fact, that were unverified and might be quite wrong, even though they were commonly accepted and politically correct (and politically convenient).” He saw that while biofuels sounded good, no one had checked the math.

Previously, based on life cycle analysis, it has been assumed that crop-based biofuels, were not just carbon neutral, but actually offered modest net GHG reductions. This, DeCicco says, is the “premise of most climate related fuel policies promulgated to date, including measures such as the LCFS [California’s Low Carbon Fuel Standard] and RFS [the federal Renewable Fuel Standard passed in 2005 and expanded in 2007].”

The DeCicco study, Carbon balance effects of U.S. biofuel production and use, uses Annual Basis Carbon (ABC) accounting—which does not treat biofuels as inherently carbon neutral. Instead, it treats biofuels as “part of a dynamic stock-and-flow system.” Its methodology “tallies CO2 emissions based on the chemistry in the specific locations where they occur.” In May, on my radio program, DeCicco explained: “Life Cycle Analysis is wrong because it fails to actually look at what is going on at the farms.”

The concept behind DeCicco’s premise is that the idea of ethanol being carbon neutral assumes that the ground where the corn is grown was barren dirt (without any plants removing carbon dioxide from the atmosphere) before the farmer decided to plant corn for ethanol. If that were the case, then, yes, planting corn on that land, converting that corn to ethanol that is then burned as a vehicle fuel, might come close to being carbon neutral. But the reality is that land already had corn, or some other crop, growing on it—so that land’s use was already absorbing CO2. You can’t count it twice.

DeCicco explains “Growing the corn that becomes ethanol absorbs no more carbon from the air than the corn that goes into cattle feed or corn flakes. Burning the ethanol releases essentially the same amount of CO2 as burning gasoline. No less CO2 went into the air from the tailpipe; no more CO2 was removed from the air at the cornfield. So where’s the climate benefit?”

Much of that farmland was growing corn to feed cattle and chickens—also known as feedstock. The RFS requires an ever-increasing amount of ethanol be blended into the nation’s fuel supply. Since the RFS became law in 2005, the amount of land dedicated to growing corn for ethanol has increased from 12.4 percent of the overall corn crop to 38.6 percent. While the annual supply of corn has increased by 17 percent, the amount going into feedstock has decreased from 57.5 percent to 37.98%.

The rub comes from the fact that we are not eating less. Globally, more food is required, not less. The livestock still needs to be fed. So while the percentage of corn going into feedstock in the U.S. has decreased because of the RFS, that corn is now grown somewhere else. One such place is Brazil where previous pasture land, because it is already flat, has been converted to growing corps. Ranchers have been pushed out to what was forest and deforestation is taking place.

Adding to the biofuels-are-worse-than-gasoline accounting are the effects from producing ethanol. You have to cook it and ferment it—which requires energy. In the process, CO2 bubbles off. By expanding the quantity of corn grown, prairie land is busted up and stored CO2 is released.

DeCicco says: “it is this domino effect that makes ethanol worse.”

How much worse?

The study looks at the period with the highest increase in ethanol production due to the RFS: 2005-2013. The conclusion is that the increased carbon dioxide uptake by the crops was only enough to offset 37 percent of the CO2 emissions due to biofuel combustion.

DeCicco’s research finds, that while further work is needed to examine the research and policy implications going forward, “it makes more sense to soak up CO2 through reforestation and redouble efforts to protect forests rather than producing biofuels, which puts carbon rich lands at risk.”

Regardless of differing views on climate change, we can agree that more trees are a good thing and that “using government mandates and subsidies to promote politically favored fuels is a waste of taxpayers’ money.”

The author of Energy Freedom, Marita Noon serves as the executive director for Energy Makes America Great Inc., and the companion educational organization, the Citizens’ Alliance for Responsible Energy (CARE). She hosts a weekly radio program: America’s Voice for Energy—which expands on the content of her weekly column. Follow her @EnergyRabbit.
Read More Stories About:

Big Government, Economics, Environment, CO2 emissions, ethanol, John DeCicco, Low Carbon Fuel Standard, Renewable Fuel Standard

[riders2010]

All that tells me is that there is a problem with their processing that needs to be fixed.

[sumdumguy]

Does anyone read these pages and pages of pasted crap?

[checking]

SDG.

cc. isn't known as carbon copy for nothing. lol

[stonepicker]

Does anyone read these pages and pages of pasted crap?

Nope, garbage in garbage out.

[Oliver88]

Does anyone read these pages and pages of pasted crap?

No since it's usually completed by a environmental loon for an author with an agenda.

[furrowtickler]

Exactly Oliver