85 comments on The Energy Content of the State of the Union
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Open questions....
Can biomass be blended with coal in current plants to lower sulphur emissions and fossil CO2? (and has anyone estimated how much wasted biomass from yard debris and agricultural waste we can capture?)
How much do you all think corn prices will increase? And will this be good for the american diet (less corn syrup, less grain intensive meat)?
Yes, I know at least one University that burns about 40% wood in their boilers with significant benefit.
As for what is going to happen to corn prices, well there is one story on the web that contrary to the current New York TImes story that sees a glorious future, is concerned that, without a greater mandate for ethanol use, may see a bubble about to burst . So maybe the President was acting to save both oil and ethanol from having to do a bit of belt tightening?
Along the lines of the NY Times article, there was story in today's Toronto Globe and Mail headed America's appetite for ethanol poised to take corn from mouths of the poor" (paywall). The article says that the soaring price of corn has pushed up the cost of tortillas in Mexico by a third or more, forcing Pres. Calderon to impose price controls on key corn-based products last week.
Remembering Nate Hagens' recent article on comparative economic advantage, the US accounts for 40% of all corn harvest and 70% of all exports. Although tortillas are made from white corn and the US produces and exports mainly yellow corn, changes in one part of the overall supply affect the other parts of the market. The Globe article goes on to say that the corn needed to fill one 25-gallon tank with ethanol would keep a poor Mexican fed for a year.
Not if the 'poor' are corn farmers--they are about to get really rich.
"Get rich"
Maybe and perhaps not. In any event we are on the merry-go-round now and its not stopping anytime soon.
As input costs of the corn and others grains increase then it becomes a dog chasing its tail. At the point when the input cost in fertilizer rises such that farmers lose profit then the crop will lessen as they shift to other crops more than corn, then the corn price goes up and so on.
08 and 09 futures are already right near the $4 figure. That means many are 'locking in' and so those prices would appear to be good for the next two crop years. Still the price could runup even higher. If we have a bad growing season for instance.
Like said: "Mother nauture is now dealing the hand."
Many farmers are not betting on that huge profit. They are just watching as to when their turn comes around again. Take a hit or check. Its guts poker with mother, she might deal off the bottom and you can't do squat about it. Nobody knows the future in this game.
In fact your drinks are no longer free.
She also owns the casino.
There is one thing for sure. You lock them in and you gotta pay up,no matter if your costs go way up and neither if you corn gets drowned out. You played the game and with that hand you can lose the farm.
But some did make good profit on last years as it gave them easily more than $1/bu over what they were getting. Yet here alas some just couldn't get the corn up out of the mud. They lost again. Maybe made expenses,maybe not.
Those price controls being implemented in Mexico are dependent upon federal subsidies to be maintained. Good luck to Mexico juggling what will, without question, become spiraling corn prices and--due to Cantarell's declining production--significant declines in revenue for the Mexican government. On a positive note, I'm sure the average Mexican will completely understand the necessity for Americans to continue driving cars to the mall to conspicously consume while the rest of the world starves.
There's getting to be some really silly statements made here on corn/maize due to biofuel interest. Most production in north america is for livestock feed corn, not food.
Many city kids on their first gravel run have stolen and ate field corn cobs that sucked. They were for cows not people. Corn comes in many varieties and hybrids.
I found these stats today:
2005-2006 U.S. Corn Use By Segment (bushels)
Feed/Residual 6.1 billion (54.5%)
Exports 2.1 billion (18.8%)
Ethanol (fuel) 1.6 billion (14.3%)
High Fructose Corn Syrup 530 million (4.7%)
Corn Starch 275 million (2.5%)
Corn Sweeteners 225 million (2.0%)
Cereal/Other 190 million (1.7%)
Beverage Alcohol 135 million (1.2%)
Total 11.2 billion bushels
How is Our Corn Crop Used?
(2005/06 Statistics)
Animal Feed
6.1 billion bushels of corn went to feed animals. Your bacon and egg breakfast, glass of milk at lunch, or hamburger for supper were produced with U.S. corn.
* Livestock in Iowa consumed about 550 million bushels of Iowa’s crop. Of that, about 53% went to hogs, 29% to beef cattle, 12% to poultry and 5% to dairy cattle.
Exports
More than 2.1 billion bushels of corn fed people and animals in other countries.
The 10 biggest customers for U.S. corn are: Japan, Mexico, Taiwan, South Korea, Egypt, Colombia, Algeria, Canada, Israel and the Dominican Republic.
* 750 million bushels from Iowa’s crop left the state. More than 55% went to foreign markets. The rest was used in other parts of the United States.
Corn Sweeteners
755 million bushels were refined into corn sweeteners. Read the labels on beverages and foods to find corn sweeteners in colas, candies, cakes and cookies, lunch meats, jams and jellies, snack foods, salad dressings, and ice cream.
* Processing of all kinds (sweeteners, starches, and ethanol) consumed more of the Iowa crop than any other use – over 870 million bushels.
Ethanol
1.6 billionbushels of corn were fermented into fuel alcohol. Fuel alcohol makes gasoline burn cleaner, reducing air pollution, and it doesn’t pollute the water. Using corn, a renewable resource, to replace gasoline helps reduce our need for petroleum, which can’t be renewed.
* Iowa's growing ethanol industry uses about 450 million bushels alone.
Other Uses
275 million bushels were processed into starch for food and industrial uses: paper, textiles, adhesives, plastics, baked goods, condiments, candies, soups and mixes.
190 million bushels became breakfast cereals, snack chips, tortillas and other corn foods.
135 million bushels of corn were fermented into alcoholic beverages.
Because sweetener, starch and alcohol production doesn't use all of the corn kernel, the 2 billion bushels that went into those products also provided 24.2 million tons of animal feed and 3.3 billion pounds of corn oil.
Source: USDA, industry statistics.
2005-2006 U.S. Corn Use By Segment (bushels)
http://www.iowacorn.org/cornuse/cornuse_3.html
and this:
What can you get from one bushel of corn?
1.6 Pounds of Corn Oil
Cooking Oil, Margarine, Mayonnaise, Salad Dressing, Shortening, Soups, Printing Ink, Soap, Leather Tanning
AND
13.5 Pounds of 21% Protein Gluten Feed
Livestock & Poultry Feed, Pet Food
AND
2.6 Pounds of 60% Gluten Meal
Amino Acids, Fur Cleaner, Poultry Feed
AND 32 Pounds of Starch
Adhesives, Batteries, Cardboard, Crayons, Degradable Plastics, Dyes, Plywood, Paper, Antibiotics, Chewing Gum
OR
33 Pounds of Sweetener
Shoe Polish, Soft Drinks & Juices, Jams and Jellies, Canned Fruit, Cereal, Licorice, Peanut Butter, Pickles, Catsup, Marshmallows
OR
2.7 Gallons of Ethanol/Alcohol
Motor Fuel Additive, Alcoholic Beverages, Industrial Alcohol
http://www.iowacorn.org/cornuse/cornuse_10.html
Yeah, but in what way is that not food? Whether it goes through the stomach of an animal, or not, before that animal is eaten, is irrelevant. Diverting corn from the human food chain is diverting food.
It reduces the amount needed, it doesn't eliminate the need for a declining resource. And corn is only renewable up to a certain limit; it is not possible to grow whatever quantity of corn you want.
Most production in north america is for livestock feed corn, not food
Freddy, please redistribute the percentages below for the year 2117 (approximate, just a wild guess) and then estimate the effect on the PRICE of the various corn products (including exports) catagories... and the effect on the price of the products they are used in (and assume little or no contribution from mythical ethanol processes not yet commercially viable please)
Feed/Residual 6.1 billion (54.5%)
Exports 2.1 billion (18.8%)
Ethanol (fuel) 1.6 billion (14.3%)
High Fructose Corn Syrup 530 million (4.7%)
Corn Starch 275 million (2.5%)
Corn Sweeteners 225 million (2.0%)
Cereal/Other 190 million (1.7%)
Beverage Alcohol 135 million (1.2%)
Total 11.2 billion bushels
Read Nate Hagen's article from the other day and wear your thinking cap.
See that 11.2-Bil bushels on the bottom line? It was 8.97-Bil in 2002. Your subsidized farmers and those that do dick-all will be encouraged to change crop and/or work for change. Enuf said...
I know that with time you will be able to face reality and learn to cope with it freddy. In the meantime just continue to avoid questioning your childishly naive assumptions and you can remain comfortably numb and blissfully ignorant.
In Ottawa 10% ethanol blend is sold from a separate pump and sells for a 1¢ premium over regular unleaded. I would say that, in general, consumers are confused about why they should buy the ethanol blend. Currently, there is only one supplier, and one distributor.
A solution to the distribution issue would be to simply deliver all ethanol to the refiners and blend it with unleaded gas to a maximum of 10%. There is no great need for consumers to know that there is ethanol in the gas. Between detergent and other additives, ethanol would just be one more thing. Consumers will quickly become indifferent if they are ever aware of the additive.
In Canada, environmental regulations make it very difficult to open a new gas station. More stations are closing than opening. Adding a new tank to existing stations would be very difficult and costly, just from an environmental/regulatory point of view.
Taken together, the only reasonable way to introduce ethanol blend on a wide scale would be to add it to regular gas.
Interesting that Ottawa gasoline is dispensed from different pumps. Here in the U.S., it's just gasoline with a sign on the pump informing the consumer that the gas may contain up to 10% ethanol by volume.
From what I understand, the ethanol is blended at delivery time, not at the refinery or distributor. Seems I read this here on TOD.
In Toronto, all the pumps at the majors say that the gas COULD contain up to 10% ethanol. Either the majors are aleady selling blended and unblended gasoline from the same pumps or they intend to start doing it soon.
Mixing coal and biomass sounds good in theory but might cause problems in practice. When the Carbon Tax Inspectors come visiting it would be tempting to say 'we burn 70% bio 30% coal' when the reverse is true. Uses for the char (eg tera preta) could be compromised by coal if there are heavy metals and persistant toxins.