Re: [MLUG - DISCUSSION] Is Obama a Shill for the Ethanol Lobby?

[Mike Miller <EMAIL:PROTECTED>]

On Wed, 2 Jul 2008, Jack Smith wrote:

> On Wed, 2008-07-02 at 19:37 -0500, Mike Miller wrote:
>
>> I used to think ethanol was good, but now I think it is wasting too much
>> good farm land.  It's working for Brazil but they can grow lots of extra
>> sugar cane, apparently.
>
> I wouldn't say that it is wasting farm land at all. By definition, 
> wasting something means getting little to no benefit from it.

But the return on the energy investment is pretty poor.  Are they being 
subsidized or otherwise encouraged to get into the ethanol business?  It 
isn't just a free market situation, is it?


> Farmers most certainly DO benefit from the overall increased demand for 
> corn due to ethanol fermentation and distillation in the form of better 
> grain prices. Just look at the number of acres put in corn this year 
> versus ten years ago before ethanol was being produced on such a large 
> scale and you'll see that the land certainly isn't being wasted- in 
> fact, land that was formerly being used for very little is being brought 
> into production.

That's a plus.  But what is this doing to the price of grains and then to 
the price of all foods?


> I think that what you're trying to get at is that growing corn for
> ethanol reduces the amount of corn available for feed and food or at the
> very least causes feed and food to become more expensive. That is true,
> which is why corn-based ethanol will never be more than a small part of
> the fuel supply of the nation.

There's that and coupled with my concern that the ethanol production 
process only provides a little more energy than it takes in.


> However, completely turning your back on something only because it isn't 
> the end-all, be-all, _single_ silver bullet solution for everything is 
> not too bright. I am not even implying that you are doing this but I 
> have noticed that the media by and large has this kind of mindset.

One problem with this, and with a lot of other things, is that we either 
have to do it or not do it.  People who want it will then take a strong 
favorable position and those opposed will take a strong unfavorable 
position and then they do battle.  I guess that's what happens with 
political campaigns too.  For the ethanol debate, I'm not very sure of 
what the answer is so I'm not taking a strong position yet.


>> Do I have a strong reason to care about ethanol policy?  Not right now, 
>> so maybe someone should convince me.
>
> It does put an external force on the agricultural and fuel commodity 
> markets as well as putting an indirect force on the market for other 
> goods that happen to use these commodities as feedstocks or competes 
> with them. This "ripple effect" affects all of economically to some 
> degree or other, so it should matter at least a little bit. How much it 
> affects you may vary widely depending on your particular situation.

Well, I do buy food.  So far I don't like it.  It's not saving me money 
and it isn't helping to feed the hungry.

By the way, recent increases in food prices in developing countries are 
causing serious problems for many poor people.  Apparently, this problem 
is not caused by ethanol, or maybe just a little by ethanol.  The 
disheartening reality is that the problem is caused by the rise of the 
middle class in these countries.  Once people start to make more money, 
they start to eat more good food and the resulting increase in demand 
leads to an increase in prices.  The increase in price makes the food too 
expensive for the poor who used to be able to afford it.  So now what do 
we do??!!  Recent rticle by Econ Nobelist:

http://www.nytimes.com/2008/05/28/opinion/28sen.html

"The first task is to understand the nature of the problem."  OK, but we 
need to get to that second task pretty soon too!

Mike

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