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340 comments on Key Questions on Energy Options

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Khebab on January 24, 2007 - 12:12pm Permalink | Subthread | Comments top

Thanks Robert!

This is a great summary that is very much needed!

In case of grain ethanol, you may also consider the potential economic consequences of the increase of the use of corn ethanol as the grain production per capita is peaking at the world level:

Also, global warming may increase the occurrence of severe weather that may impact corn production in the future (e.g. severe droughts).

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Jason Bradford on January 24, 2007 - 12:46pm Permalink | Subthread | Parent | Comments top

And there are the social ramifications of the increase in corn prices. Energy Bulletin had a great summary recently on the effects in Mexico:

http://www.energybulletin.net/24986.html

Couple of snippets:

"High corn prices are wreaking havoc on Mexico's inflation rate and forcing shoppers to pay more for eggs, milk and tortillas. But they're a godsend to farmers such as Victor Manuel Amador Luna."

"Facing public outrage over the soaring price of tortillas, President Felipe Calderón abandoned his free-trade principles on Thursday and forced producers to sign an agreement fixing prices for corn products."

A simple law of ecology is that it is impossible to do only one thing. What are the feedback loops between the inability to politically tell people that curtailment of demand is necessary, the short-sighted investments in an ethanol production system with no future, rising commodity prices and food insecurity in Mexico, political and economic stability in our neighboring country, further immigration pressures, the US' inability to maintain, let alone expand its own decaying public infrastructure, the high expectations of a generally clueless and delusional populace, and the continued failure of institutions to meet those expectations?

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Keithster100 on January 24, 2007 - 2:32pm Permalink | Subthread | Parent | Comments top

And true to form, Mexico screwed it up. The corn producers will just send all their corn to the US and make loads of money and abandon the local tortilla market. Now instead of having expensive tortillas, they will have none at all. This situation can be blamed on one entity: the Mexican government. Of course, people will blame everyone else--the US, George Bush, Drivers, capitalism etc.

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PeakOil Tarzan on January 24, 2007 - 3:38pm Permalink | Subthread | Parent | Comments top

I expect the corn will go where it fetches the most money. If American drivers are willing to pay more than the average Mexican peasant is willing (or able) to pay, then it will come Norte. No bureaucratic bungling necessary.

Of course, there are things that we can do to mitigate the consequences:

  • American taxpayers could subsidize Mexican corn growers like they are subsidizing American corn growers.
  • We could put up a big fence to keep hungry Mexicans from...(oh, yeah, we're already doing that).
  • We could nuke those pesky Mexicans.
  • We could teach the Mexicans to root for truffles.

    • Have I forgotten anything???

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    Keithster100 on January 24, 2007 - 5:16pm Permalink | Subthread | Parent | Comments top

    Yes, the obvious thing: the Mexicans can grow more corn and be a part of the bonanza. This will lower the price of corn and then Juan and Maria can afford their tortillas again. Bonus points if Juan and Maria invest in corn or ethanol-related companies.

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    beggar on January 24, 2007 - 6:41pm Permalink | Subthread | Parent | Comments top

    Actually, the Pseudo-Free Market comes to mind as a culprit here.

    Is the market not designed to make the rich even more rich, and the poor even poorer?

    Surely the market is contrived and it is contrived often to benefit some people at the expense of others.

    Economist John Gray's work comes to mind as a good balance to the "Free Market" agit prop we are spoon fed so often.

    Just a thought.

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    dgrimm on January 24, 2007 - 2:04pm Permalink | Subthread | Parent | Comments top

    Graphs like this can be very misleading. Why would the world hold LARGE stocks of grain? You can argue food security, but no one is willing to pay for that security. Over the last 10 years, grain prices in the US and therefore the world have been quite low. So there has been a STRONG incentive to not produce grain, or do something with the grain produced. See the rapid rise in the livestock industry... If we looked at a graph of "calories available" I think it would look quite different.

    If you notice the last time world stocks were below 60 days (early 1970's), we saw a dramatic rise in prices (from $1 bushel/corn to $3 bushel) that lasted until the ag economy collapse in the mid 80's. What did this price rise do -- dramatically increased grain production.

    The last 10 years of low (sub $2) prices have caused a fall in grain production -- where did it go? see the increase in oilseed production for example.. What will $4 corn do -- increase production no doubt. Simple economics.

    Grain for food vs. Grain for energy is worthy of an entirely different post...

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    Syntec on January 24, 2007 - 7:19pm Permalink | Subthread | Parent | Comments top

    BINGO!

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    Magnus Redin on January 25, 2007 - 12:05pm Permalink | Subthread | Parent | Comments top

    Having a very large grain, etc to liquid fuel industry is essentially the same as having a large spare production for food use. In case of emergency drive less and food is available.

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    Starship Trooper on January 25, 2007 - 2:16pm Permalink | Subthread | Parent | Comments top

    Not really. That grains curve is all grains, not just corn. includes wheat, rice, barley, etc. You can draw separate curves for the individual consumption characteristics of the various grains.

    Second, not all corn grown for ethanol (or just plain grown) is for human consumption. A very significant portion of the corn produced is for corn meal for animal production.

    Can humans consume it? Maybe. Maybe not.

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    airdale on January 25, 2007 - 10:11pm Permalink | Subthread | Parent | Comments top

    "Can humans consume it? Maybe.Maybe not."

    I think you are very misinformed or just plain don't understand.

    What grain is specifically grown then for ethanol?

    You never heard of yellow corn meal?

    Do you think they intentionally seperate the various types of corn at the dump station? White ..yes. Non-GMO vs GMO yes but not so that some doesn't get mixed in with the others.

    Can humans consume it? Consume what? #3 yellow dent corn? #3 yellow dent corn?

    We just dump the harvest in the bins and pits. They classify it and sell you sell it either spot or contract. Some may go one way if a buyer purchases and specifies #3 yellow dent or flint or what ever.

    As you are dumping your load you may also be dumping on top of part of the other guys load in front of you.

    I think we have little idea of what we are or are not consuming.

    I grind up #2 yellow dent for my own cornmeal. I grind up my white if I want white. All is edible. Hybrid is hybrid. Non hybrid doesn't get classified as far as I know. I have never been asked that question by the pit crew.

    You might want to call some companies who have grain operations and ask but I believe they will not tell you or obfuscate. ADM is one. CGB is another. There are more.

    If you wish to make statements that can stand then you must state that its your experience or give a source. Otherwise you lead others astray.

    I don't all the answers but I can find most out but what I stated is my opinion and based on harvesting and hauling to market and general knowledge.

    airdale

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    Starship Trooper on January 26, 2007 - 4:42pm Permalink | Subthread | Parent | Comments top

    The state of NC Department of Agriculture certainly makes this distinction, if I understood what my ex told me several years ago at the NC State Fair.

    I was unaware, until about 4 years ago, that the NCDA made such a distinction and yet at one of the NCDA displays was this segregation according to whether the corn was designated for animal consumption versus human consumption.

    Maybe NCDA is unique amongst states. I can ask next week when I have lunch with my ex.

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    Magnus Redin on January 26, 2007 - 6:32pm Permalink | Subthread | Parent | Comments top

    Any feed that pigs can grow on commercially is good enough for keeping humans from starving. Tasty and legal are stricter requirements. Sometimes pigs get the better feed. A pig food additive made from treated oats to replace antibiotics as a stomache stabilizer is now sold as health food with a HUGE markup.

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