Sugar Prices Skyrocket Thanks to Stupidity of Ethanol
BY: NCViking
If I can think of the single most moronic thing in the world to put in gas tanks to supplant oil it would be our food – this is the basic premise behind ethanol. The last couple of years, the whole entire food chain has experienced shocks to elevated corn prices, thanks in large part to ethanol. This coupled with skyrocketing energy prices is often underestimated in the economic meltdown we experienced last year. Now those wonderful Brazilians are helping drive up sugar to record levels thanks to their increased ethanol production from sugar cane.
Does anybody understand how dangerous this is? Artificially raise the price of food and the byproduct is starvation. Oh, but its so much greener. No its not. Ethanol is inefficient and Brazil is bulldozing the Amazon to plant more sugar cane to feed the pump. Not so green.
From the BBC:
Sugar price reaches 28-year high
The price of raw sugar has increased to its highest level since 1981, as supply concerns grow. Raw sugar futures added 3% on Monday, to finish the day at 22 cents a pound. “The main problem is a deficit in sugar supplies,” said Nick Penney, a trader with Sucden Financial, a firm that focuses on sugar trading.Growing demand in Brazil for sugar to be turned into ethanol, coupled with a sharp fall in Indian production, have both prompted worries, he explained.
So who in their right mind would support such initiatives? Oh yeah, the same ones trying to destroy the economy in an effort to cap CO2 emissions and fix health care.
Emphasis mine:
WSJ: In 2007, the U.S. consumed nearly 55.8 quadrillion British Thermal Units (BTUs), or about 9.6 billion barrels of oil equivalent, in natural gas and oil. That’s about 98 times as much energy as the U.S. consumed in ethanol and biofuels, which totaled 98 million barrels of oil equivalent.
Meanwhile, ethanol and biofuels are getting subsidies of $5.72 per million BTU. That’s 190 times as much as natural gas and petroleum liquids, which get subsidies of $0.03 per million BTU.
The report also shows that the ethanol and biofuels industry are more heavily subsidized — in total dollar terms — than the oil and gas industry. In 2007, the ethanol and biofuels industries got $3.25 billion in subsidies. The oil and gas industry got $1.92 billion.
Growth Energy, an ethanol industry front-group, is pushing the Environmental Protection Agency to adopt a proposal that would increase the amount of ethanol blended into gasoline from the current maximum of 10% to as much as 15%.
That increase would be a gift to corn ethanol producers who have never been able to make a go of it despite decades of federal subsidies and mandates. Growth Energy is also pushing the change even though only about seven million of the 250 million motor vehicles now on U.S. roads are designed to run on fuel containing more than 10% ethanol.
There is also corn ethanol’s effect on food prices. Over the past two years at least a dozen studies have linked subsidies that have increased the production of corn ethanol with higher food prices.
Mr. Obama has been pro-ethanol and anti-oil for years. But he and his allies on Capitol Hill should understand that removing drilling incentives will mean less drilling, which will mean less domestic production and more imports of both oil and natural gas.
That’s hardly a recipe for “energy independence.”
Please stop.
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Despite my home state of Louisiana profiting from the increased sugar cane prices, I am also against ethanol. Build more nuclear plants like (shudder) France. Use the electricity to either power cars directly, via batteries, or indirectly via hydrogen generation from electrolysis of seawater. California may have to build a nuclear fresh water generation plant near the coast anyway, since they are running out of fresh water supply.
Agreed, except for the hydrogen car. H is very volatile and the byproduct is water vapor. If greens really want to change the climate, add massive amounts of water vapor to the atmosphere – the most potent greenhouse gas and 98% of the greenhouse mix.
Tend to agree with everything but who you blamed. Bush was the biggest biofuel proponent of them all. Our biofuel policies were put in place by a rare bipartisan effort. McCain was a big corn ethanol supporter during the presidential race. It seems to me that when our politicians agree on something, they make a bigger mess than when they disagree.
Amen Russ. President Bush support definitely places much of the blame for this ethanol mess on his shoulders, although Obama is continuing this policy just the same, so can be blamed equally. Ethanol usage has been on the rise since 1980, although the Green movement has encouraged us to burn our food more and more these days, usage began rising exponentially in the late Clinton years, and early in Bush’s term. Fearful politicians, scared to offend the first-in-the-nation-caucus Iowans who have hijacked the presidential primary process, have kowtowed to the Ethanol line ever since.
We need someone who reminds the American people that food is for eating, not for burning. Let’s move forward with other alternatives. If clean is your thing, then nuclear coupled with other renewable but not stupid alternatives like wind, solar, and water… but to fill the gap until that is ready to go, more drilling. We are addicted to oil in the short term. Why not drive down the prices on that while we build up the clean nuclear and non-nuclear facilities.
I listed http://www.domesticfuel.org as a good site for you to take a look at your lack of facts. But I can tell this is simply an futile exercise as you clearly are doing NO reseach.
1. It’s been proven that ethanol has NO effect on food prices. Simply put you have been drinking big oils kool aide on food vs fuel.
2. Look at the facts- deforestation in the amazon has actually REVERSED while ethanol production has doubled in the last three years.
3. The corn used for ethanol production is NOT FOOD- it s a high starch corn that has NO direct food purposes. In FACT the BYPRODUCT animal feed is MORE nutritional to livestock than the original corn.
This is the first time I’ve come accross the great illuminator site. I’ll definitely bookmark it for entertainment purposes.
Thank you for commenting and finding us entertaining.
The post sources some of the most reputable media sources in the world including The BBC; Time Magazine; The Wall Street Journal; and then sources an article from the Wharton School of Business @ Upenn – number one in the nation for business. Lots of credible info for this hobby blogger.
You’re pulling together outdated facts and coming to your own wrong conclusion.
The WSJ reference is a paid Big oil Hack FROM the editorial PAGE.
The Time article on the Rain forest has been disproven many different ways and is over 2.5 years old.
The Sugar speculation is exactly that- Market speculation. “coupled with a sharp fall in Indian production” – that’s the key- look at Brazils sugar production- it has not significantly changed. This is The same speculation that sent food, oil, and commodities prices through the roof last year.
Quote all of the “sources” you want. Your premis is faulty and your conclusion is faulty. Entertaining to say the least.
PS- impressive that you published my comments though- kudos.
Oh man, I thought that people like DCPerspective had gone the way of the dodo. Everything anybody says against ethanol comes straight from the propoganda machine of BIG OIL, or its mouthpieces like the Wall Street Journal!
1. It’s been proven that ethanol has NO effect on food prices? It has not. Even the most ardent supporters of corn ethanol take credit for raising the price of corn enough to obviate the need for marketing loan payments and other price-triggered commodity payments. One cannot claim at the same time that ethanol eliminates price-related subsidies and then say that rising prices for corn have no effect on the rest of the food market.
2. Yes, deforestation rates in the Amazon have moderated in recent years … thanks to stronger enforcement by the Brazilian government. To point only to land-use changes in the Amazon is a straw-man argument. That does not mean that grasslands or forests elsewhere (including in parts of Brazil outside the Amazon) aren’t being plowed up. Nobody supporting the indirect land-use argument claims that the only part of the world affected by the diversion of corn to ethanol is the Amazon rain forest. They are also concerned about grasslands, and land formerly enrolled in the Conservation Reserve Program, being converted to grow corn.
3. “The corn used for ethanol production is NOT FOOD – it s a high starch corn that has NO direct food purposes.” Actually, some of the starch IS used for food: about 10% (in the form of corn-based sweeteners, corn starch, and a few other products). Granted, around 50% of U.S. corn consumption is for animal feed, but the byproduct, distillers grains, is more nutritional only for ruminents, not for hogs and poultry, which account for a large part of demand. They need the starch for energy, as well as the protein. Like many biofools, DCPerspective seems to gloss over that little detail.
Oh, and I see it is big bad speculators who are at fault in driving up the price of sugar. Seems like normal market forces — with the added effect of ethanol policies — to me. Drought in India, too wet in Brazil, uncertainty surrounding the output of some countries … why shouldn’t prices rise?
DC,
Hardly. Robert Bryce rails against the oil industry. The Time article is just a little over a year old along with the Penn article – timely to the crisis of last year. I have not heard of Time Magazine rescinding their article because it was false or any reputable news outlet calling them out for yellow journalism. The BBC article is from yesterday as is the OpenMarket article.
We publish opposing comments here as long as they aren’t hate-filled diatribes, spam or off-topic … though we are quite lenient on the last one from time-to-time.
NCViking, when I said “Everything anybody says against ethanol comes straight from the propoganda machine of BIG OIL, or its mouthpieces like the Wall Street Journal!” I was being sarcastic!
Indeed, I cannot think of anybody who is a critic of ethanol policy who is in the pocket of Big Oil (or even little oil), and I know a lot of ethanol-policy critics. I know one critic who does a lot of work for the livestock producers, but so what? Wouldn’t you be a critic if one of your inputs was being drawn away for another use thanks to subsidies and mandates?
No worries, SE … I was responding to DCPerspective’s claim that the author of the WSJ article was a paid Big Oil Hack and his other claims. It seems your comment slipped in ahead of mine before I posted it. I now added a call out for clarification.
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