Ethanol and the special interests keeping it alive.
Does anyone really know where this Ethanol situation all started?
It all started in the 70s, when the new pollution standard came around (adding catalytic converters required on all vehicle), then the mid 80s, corn prices had bottomed out, and most farmers, and especially corporate farmers were standing to lose a LOT of money if they were to sell their corn at the prices of the time (average price for 1987 was $1.56/bushel, for 86 was $1.96).
One major player in this was Democrat from South Dakota, Tom Daschle who combined with the same morons that force at least $5-10,000 in emissions equipment on every new vehicle today, and were paid off by these corporate farmers, helped mandate Ethanol use.
They used excuses of contaminants in the ground water caused by MTBE which was common in most Unleaded fuel, and by 1992 Daschle was helping (of course after being paid off by these corporate farmers) to help make Ethanol a requirement. I remember seeing Ethanol in use by the early 90s in South Dakota, although because it caused so many problems with our vehicles, most people refused to use it.
Through the 90s and early 2000s, the government had added subsidies and tax breaks for domestic ethanol producers. This meant these same corporate special interests that paid off Daschle, were now getting subsidies for growing the corn, more subsidies and tax breaks for converting it to Ethanol, and more tax breaks for owning the gas stations that were adding Ethanol. Today they continue to get the all this added subsidies and tax breaks, even though now corn prices for 2012 were at $6.67/bushel. This means those special interests got to Daschle, and now we have increasing fuel standards mandated while at the same time the expansion of Ethanol use. Adding Ethanol drops gas mileage by approximately the same percentage of Ethanol added, 10% Ethanol equates to average 10% drop in gas mileage, although tops out around 40% hit with E85 on certain vehicles, although some only see a 20% drop using E85 so it really depends on the manufacturer. Of course the propaganda piece fueleconomy.gov says it is only 3-4% drop with E10, but anyone who has done real world testing long term, sees that with most vehicles it is definitely closer to 10%.
Looking at costs, this corn based Ethanol is actually keeping gas prices high artificially. With today’s technology, one bushel of corn yields 2.8 gallons of ethanol. Using 2012 cost of $6.67 per bushel, that comes out to $2.38 per gallon of Ethanol. That of course means for every 10 gallons of E10 you use, that is 1 gallon of Ethanol. I have prices shown below, but for example, at $3.25 per gallon of E10, that means 10 gallons costs $32.50, or approximately $2.58 of that cost for the Ethanol (it is expected after all the companies have their cut, the prices would more likely be closer to $3.50). One major reason for this is that corn prices have exploded in the last few years, thanks to much wider mandates by the feds, where they give more Federal money to states that require Ethanol. In 2010 corn prices averaged $3.83 per bushel, but almost doubled for 2011 and 2012 ($6.01 and 6.67/bushel respectively). One side to this is that it has kept fuel prices a bit more stable these past 2 years, but at the same time the higher corn prices is also keeping it artificially higher than it should be.
Running E85 in a compatible vehicle does not save you any money due to the mileage lost. For example, the flex-fuel 2010 Chevrolet Impala equipped with a 3.5-liter V-6 engine gets an EPA-estimated 18/29 mpg (city/highway) on E10 and 14/21 mpg when burning E85.
Lets do the math (using local gas prices):
$3.18/gal for gas with NO Ethanol
$3.25/gal for E10
17 gal tank on that 2010 Impala
E10: 18 mpg x 16 gals = 288 miles, $52 worth of gas used, 18 cents per mile cost
E85: 14 mpg x 16 gals = 224 miles, $47.84 worth of gas, 21.4 cents per mile cost.
No Ethanol: 20 mpg x 16 gals = 320 miles, $50.88 worth, 15.9 cents per mile cost
Expand that to highway and it gets worse:
E10: 29 mpg x 16 gals = 464 miles, $52 worth of gas, 11.2 cents per mile
E85: 21 mpg x 16 gals = 336 miles, $47.84 worth, 14.2 cents per mile.
No E: 33 mpg x 16 gals = 528 miles, $50.88 worth, 9.6 cents per mile
Expand that to a one way 2000 mile trip averaging the above highway numbers, and assuming you start with a full tank and all gas stations have the same cost of fuel, just to make this much easier:
Using E10, you would fill up 5 times costing you $260 ($312 including initial fill up),
with E85 it would be 6 times costing you $287 ($335 including initial fill up).
BUT using no ethanol gas, you would fill up 4 times costing $203.52 ($255 including initial fill up) (I know a non-ethanol trip would be impossible without making extra mileage on side trips to find these stations)
At that mileage, you are better off driving a 2009 Durango that gets 22-24 mpg highway (with E10), but has better safety specs, more interior room for people and storage, and is better in the case of bad weather/snow with AWD or 4×4.
A flex-fuel car burning E85 has different levels of tailpipe pollutants, but it’s not dramatically better overall than gasoline exhaust. Separate from true pollution emissions, E85’s output of carbon dioxide — a greenhouse gas — is again comparable to that of gasoline, at the car’s tailpipe. The theoretical (ahem, unproven) benefit is that the carbon in ethanol comes from corn plants, which, in a sense, recycle the carbon. Of coursemost of us see this as bogus since the amount of CO2 and pollutants for each vehicle is the same therefore has no benefit, AND when you add in that 5-10% loss in gas mileage, it is a negative impact, not positive.
By comparison, petroleum is carbon that was trapped underground for millions of years before being released into the ecosystem. The National Ethanol Vehicle Coalition says E85 reduces CO2 by about 36 percent to 42 percent versus gas. Still, scientists point out that petroleum is used to plant, fertilize, harvest, process and transport E85. One you figure in the pollutants released from the harvesting, multiple transporting levels, transition and so on from corn to your tank, some sources say it is actually much worse for the environment than normal gasoline. Add in the 5-10% better gas mileage using non-ethanol gasoline, and it actually starts looking like the animal it really is: special interests making massive profits, while we the people pay more in the long run with reduced gas mileage, more pollution, more usable land for food growth taken away and instead used for fuel.
Right now this nation is at the tipping point. Either we go off the deep end by allowing them to use this land for fuel usage causing food prices to continue to climb and fuel mileage to drop, or else we step up and start supporting the non-ethanol gas stations, showing them where we stand with our money.