A Scare In Your Tank

CNNMoney attempts to write about the hidden cost of putting ethanol in one’s gas tank in this article.

Almost seems Malthusian, food or fuel, doesn’t it?

Lets look at one statement that seems shocking when first read.

The U.S. Department of Agriculture reports that world grain consumption will increase by 20 million tons this year, roughly one percent. Of that, 14 million tons will be used to fuel cars in the U.S., leaving only six million tons to cover the world's growing food needs.

Pretty scary sounding it seems. 14 million out of 20 million tons going to ethanol. The horror! 20 million tons is 787,365,000 bushels of corn. Source for calculations. In 2004, Iowa alone produced 1.2 billion bushels for ethanol and another 1 billion bushels for startches, sweetners, and dry milling. http://www.iowacorn.org/forms/cornuse04.pdf So there is a lot left out of the above paragraph to mislead the reader.

There must be a boom in ethanol plant construction in Iowa since the author writes:

In some U.S. Cornbelt states, ethanol distilleries are taking over the corn supply. In Iowa, 25 ethanol plants are operating, four are under construction, and another 26 are planned.

I would like to know his sources since there are only 17 plants in operation and a further 20 under construction or planned according to this source.

Suddenly I am less and less enthused by this writer’s premise. But lets look further into the article shall we?

The equivalent of the three percent of U.S. automotive fuel supplies coming from ethanol could be achieved several times over -- and at a fraction of the cost -- by raising auto fuel-efficiency standards by 20 percent.

Did not find in three pages of Google seraching any exacts hits for ‘cost of raising fuel efficiency by 20%’ except over 15 years it would add about $1000 to the cost of a vehicle and probably reduce overall safety of the vehicle. But I did find these lecture notes from Ohio State on automobiles, pollution, safety, and cost to operate. Lecture notes. Now we are facing gasoline costs per gallon about double what is shown in the lecture, but what I find interesting is how large a chunk taxes are in Europe for every gallon. Then skip a little further down and we see in Kagan’s lecture notes it would cost $1billion in retooling costs for every mile/gallon increase in fuel efficiency. Huh.

Now we get to electric cars will solve the problem meme.

By investing not in hundreds of wind farms, as we now are, but rather in thousands of them to feed cheap electricity into the grid, the U.S. could have cars running primarily on wind energy, and at the gasoline equivalent of less than $1 a gallon.

That is rude if true, plugging the electric car with lead-acid batteries into the house current could increase the monthly electric bill by 55%, wonder if that is in the tight California market? This is also an older document but gives somewhere to start from. Then there is David Friedman’s blogging about the cost effectiveness of electric vehicles to chew on.

Now lets look at the other part of this paragraph, windmills. Here is a good one stop source on modern windmills; that is reassuring, the cost of wind power can be seven to nine cents a Kilowatt hour. But usually the biggest problem with windmill emplacement is the location. Shoreline is prefferred because of the constant shore breeze. But this raises conflict with humans who do not want their beach views destroyed by all these efficient windmills. A case in point is Sen. Ted Kennedy trying to block such a project on Nantuckett Sound. This is called the Not In My Backyard[NIMB] mentality. And it is a shame Sen. Kennedy puts more value on a pretty view than reducing national dependence on foreign oil.

So overall I think the author has been creative in his writing and not completely convincing in his arguments. But expect the mantra of the 14 million tons being sucked up by SUVs instead of feeding the poor to scoot around the media spin cycle.