Archer Daniels Midland and Ethanol

Very interesting (and well footnoted) report on Archer Daniels Midland, the staggering amount of government funds they receive and their push for Ethanol during the Carter administration. Carter pushed the subsidies for corn growing and for the production of Ethanol despite advice from people who knew the subject. I had written about ADM before here talking about their Sugar subsidies and how these affect other businesses. Back to the report -- here is just a brief excerpt explaining the true cost to the consumer for one gallon of Ethanol:
Perhaps the most honest and thorough analysis of the effect of ethanol on farm income and taxpayers and consumers was done by the USDA's Office of Energy in 1986. That study, which included a lower estimate of the inflationary impact of ethanol production on corn prices, concluded,

Corn prices would increase by $0.02-$0.04 per bushel for each 100 million bushel increase in ethanol-induced demand for corn. However, soybean prices would fall by about $0.04 per bushel and soybean prices would fall by $0.12-$0.15 per hundredweight.

Higher corn prices from additional ethanol- induced demand would increase the cost of producing beef, pork, and poultry. Consumer food expenditures would rise by $8.6 billion, or an average of $2.29 for each additional gallon of ethanol produced.

When all the costs and benefits are tallied, the Government, taxpayers and consumers together would lose $6.1-$7.2 billion or $1.61-$1.92 per additional gallon produced during the 1986-94 period if ethanol subsidies were increased enough to prompt the ethanol industry to produce 2 billion gallons in 1995. Conversely, if ethanol production falls to zero, they would save some $6.8-$8.9 billion, or $1.35-$1.76 per gallon not produced.(49)
The study concluded that increased production of ethanol would cost consumers and taxpayers roughly $4 for each $1 of extra farm income.

The report stated,

Increases in consumer food expenditures caused by additional ethanol production far exceed the increases in farm income. Consumers would be much better off if they burned straight gasoline in their automobiles and paid a direct cash subsidy to farmers in the amount that net farm income would be increased by ethanol production.(50)
Since this report is looking at the money, they aren't following the Thermodynamics. A hint -- it takes more caloric energy to make a gallon of Ethanol than you can recover from the Ethanol. Making Ethanol is an Energy Sink not a Source...


It is an energy sink, and the subsidies do suck.

But one gallon of ethanol (roughly 80MJ) is much more convenient for propelling one's car 30 miles than the equivalent output of either solar cells or a nuclear power plant. The only (pseudo) sources available anywhere. (Everything else essentially being a derivative) With 'perfect' solar cells, mid-day, not near Seattle, -> somewhere around 44 square meters of solar cell for a car of the same weight/tires/aerodynamics.

I'm not saying our current methods of _making_ the ethanol are sane, nor am I arguing that we'll be able to 'win', 'break even', or (heck) 'come close' on the efficiency of the conversion of energy. But a GM potato (or something) designed not for food-value, but for ease-of-conversion-to-fuel seems near-inevitable. Trees take far more time to grow, but appear to have a higher energy recovery/energy cost ratio and yield longer chain hydrocarbons....

Otherwise we'll be using nuclear power plants to make fuel at some point - for precisely the reasons you pointed out in the last discussion of how hydrogen doesn't make a lot of sense as a method of storing energy. That is, high energy density liquids are much more convenient than many of our other options.

Senator Bob Dole has been ADM's bitch boy and treasure-spigot since the dawn of petroleum:

Here's a partial list of the loot ADM kicked back to Dole and his wife in return:

ADM is a bunch of pirates, but Dole created that monster...

October 2022

Sun Mon Tue Wed Thu Fri Sat
2 3 4 5 6 7 8
9 10 11 12 13 14 15
16 17 18 19 20 21 22
23 24 25 26 27 28 29
30 31          

Environment and Climate
Cliff Mass Weather Blog
Climate Depot
Ice Age Now
Jennifer Marohasy
Solar Cycle 24
Space Weather
Watts Up With That?

Science and Medicine
Junk Science
Life in the Fast Lane
Luboš Motl
Next Big Future

Geek Stuff
Ars Technica
Boing Boing
Don Lancaster's Guru's Lair
Evil Mad Scientist Laboratories
Hack a Day
Kevin Kelly - Cool Tools
Slashdot: News for nerds
The Register
The Daily WTF

The Argyle Sweater
Chip Bok
Broadside Cartoons
Day by Day
Medium Large
Michael Ramirez
Prickly City
User Friendly
What The Duck

Awkward Family Photos
Cake Wrecks
Not Always Right
Sober in a Nightclub
You Drive What?

Business and Economics
The Austrian Economists
Carpe Diem
Coyote Blog

Photography and Art
Digital Photography Review
James Gurney
Joe McNally's Blog
The Online Photographer

A Western Heart
American Digest
The AnarchAngel
Anti-Idiotarian Rottweiler
Babalu Blog
Belmont Club
Bayou Renaissance Man
Classical Values
Cold Fury
David Limbaugh
Defense Technology
Doug Ross @ Journal
Grouchy Old Cripple
Irons in the Fire
James Lileks
Lowering the Bar
Maggie's Farm
Marginal Revolution
Michael J. Totten
Mostly Cajun
Power Line
Questions and Observations
Rachel Lucas
Roger L. Simon
Sense of Events
Sound Politics
The Strata-Sphere
The Smallest Minority
The Volokh Conspiracy
Tim Blair
Weasel Zippers

Gone but not Forgotten...
A Coyote at the Dog Show
Bad Eagle
Steven DenBeste
democrats give conservatives indigestion
Cox and Forkum
The Diplomad
Priorities & Frivolities
Gut Rumbles
Mean Mr. Mustard 2.0
Neptunus Lex
Other Side of Kim
Ramblings' Journal
Sgt. Stryker
shining full plate and a good broadsword
A Physicist's Perspective
The Daily Demarche
Wayne's Online Newsletter

About this Entry

This page contains a single entry by DaveH published on May 29, 2005 2:58 PM.

Surplus Stuff was the previous entry in this blog.

the French is the next entry in this blog.

Find recent content on the main index or look in the archives to find all content.

Monthly Archives


OpenID accepted here Learn more about OpenID
Powered by Movable Type 5.2.9