108 comments on JHK: "The ethanol craze means that we're going to burn up the Midwest's last six inches of topsoil in our gas-tanks."
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OK, I'll start.
I think corn-based ethanol production is going to come to a very simple end: however fast the price of fuel increases, the price of corn will go up faster. In a couple of years, three at the outside, all these nifty new ethanol plants will no longer be financially viable. Their feedstock will cost more than their product.
They will close down. The investors will lose their shirts. The jobs will be lost.
We are simply too close to "peak food" to be allocating food to fuel production. It will show up as price increases.
For information on food production, I highly recommend "Outgrowing the Earth" by Lester R. Brown (2004).
Maybe those plants can converted to non-food feedstocks, I don't know.
I forsee a lot of moonshine being made in those plants.
Moonshine carries a much higher margin than fuel.
Yes. And given our future prospects, we are going to need a lot of booze to assuage the pain.
If they all close down corn prices will drop and some of them will start back up. Given current subsidies (or higher crude prices) the most efficient corn ethanol producers can handle current corn price levels. More acres of corn will be planted in response to higher corn prices which will tend to dampen the price pressure. Distillers grain from ethanol producers will substitute for some of the corn going into cattle feeding. Prediction: higher crude prices, higher corn prices, higher ethanol prices, higher farm land prices, higher ADM stock price!
Right after all those ethanol plants close down, gas will be at $10.00 a gallon. Concurrently, high food prices will start to make the situation desperate for lower income families. Some idealistic politician, like the current Montana governor, will say, "let's open some CTL plants to make fertilizer and diesel fuel!". Nothing will get built for 5-10 years because that's how long it will take the reality of permanent oil shortages to set in and for the desperation to build up enough to make the situation "real" enough to the public at large that something -- absolutely anything -- needs to be done -- global warming or no global warming.
A lot earlier than that we'll start shipping all our coal to China. They will turn it into Diesel fuel and fertilizer in their CTL plants that they are currently constructing. They will then ship the diesel fuel and fertilizer back to us. They can do this with a clean conscience as they signed on to Kyoto treaty but are not bound by any CO2 emission limits.
I'm not saying that the approach to peak oil is simply a choice between CTL and conservation. It's everything (conservation, electrification, re-localization, tar sands, any unforeseen Deus ex machina techno-fixes, animal-traction, etc) all at the same time -- full speed ahead. Even with all this, there will still be plenty of unpleasantness.
1) The rich don't care.
2) The rich can pay.
My guess, and this seems to be guessing, is that the corn prices will go up - the demand for ethanol as a fuel will not be that elastic if there is no other fuel choice. Meat prices will increase too - but again the rich don't care.
The only salvation will be ethanol based upon cellulose; although that'll still destroy the land. All farming is strip mining - if you don't return to the land what you grow as compost for future crops (unless you keep the house of cards teetering by providing fertilizers; but even then the issue of soil erosion is not addressed nor is aquifer depletion and contamination).
Food for humans in general will go up. Ethanol is a way to continue the subsidy for an automotible-dependent socienty and spread the payment of that subsidy to everyone, regardless of how much you drive or whether you even own a car. Everyone has got to eat.
I imagine those outrageous corn subsidies will continue, obscuring the unfavorable energetics from the All Powerful, Beneficient Market. So we seem to be observing boondoggle, and progressing economic dysfunction at the gate to the backside of Hubbert's peak.
I find it astonishing that the Powers That Be don't institute conservation measures. Even the most rudimentary calculation of enlightened self-interest should show that conservation has the most immediate, largest, and most enduring benefits for the US capitalist economy, especially for the ruling elites. Instead, we have defunding of our vestigial passenger rail service, ruinous wars, and re-enforced business as usual.
I just don't get it. Anybody got a spare planet out there?
Long term vs short term. Short term requires year on year growth, or the natives get restless. Long term ultimately requires recognizing physical realities. It is easier to apply a steep discount rate and say that technology and the Invisible Hand will save us than it is to accept the possibility that some of those limits are here now and that technology and the Invisible Hand may bite us in the hind end instead. If you're a vested interested, you don't want to hear about it; if you're a voter (whose productivity is going up but whose wages are not, and who may have done the irrational exuberance thing in the days of low interest rates) you don't want to hear about it; if you're a politician, you tell the voters what they want to hear. Reconciling the long and short terms will require pain and wrenching effort on the part of the people -- how would you go about doing it?
There is going to be an economic crunch (to put it mildly) if we attempt to maintain business as usual much longer. There will also doubtless be economic and social pain if we attempt to mitigate peak oil before the fact.
But there is no getting around major economic dislocation in the near-to-intermediate future.
The issue is: do we attempt to manage the transition proactively, or do we just party on the deck of the Titanic while the captain orders steady-as-she-goes, full-speed-ahead?
Capitalism thrives on change, churning and new frontiers of all sorts anyway, so a big redirection to conservation shouldn't be threatening to the current elites. A conservation program would provide ample new business oportunities and growth while energy is still relatively cheap. The history of the US War Production Board in WWII shows us that even stringent measures such as rationing, do not send the economy, or public opinion, into a nose dive. (Wikipedia has a good entry on the War Production Board).
It seems perfectly reasonable to massage public opinion with a marketing campaign; conservation should be a much easier sell than the war in Irag, Afghanistan (and Iran?). The public's opinion has been successfully manipulated for decades to be hostile to its own self interest. With a propoganda machine that powerful, it should be easy to mobilize public support for measures to conserve resources of all sorts, and relocalize the economy.
An augmented social safety net will be established so the public won't be staring into an abyss; that's why the Great Depression left us with the New Deal, instead of a Socialist revolution. And, for better or worse, even the current elites get to maintain their power and priviledge, at least for longer than with present trends.