On Sat, 05 Jul 2008 12:11:45 -0700, Don Tiberone wrote:

> http://globaleconomicanalysis.blogspot.com/2008/07/i
nsane-us-ethanol-policy.html
>
> A World Bank Report suggests Biofuels behind food price hikes.
>
> Biofuels have caused world food prices to increase by 75 percent,
> according to the findings of an unpublished World Bank report
> published in The Guardian newspaper on Friday.

That's horseshit. Food shortages are being caused by worldwide bad
weather. __**AND**__ biofuels. I will not buy the cause and effect any
other way. And these worldwide increases in biofuel production were not
caused by the USA. Such export intensive or energy intensive operations
have their roots in moves from subsistence farming to cash crop farming.
If it wasn't biofuels that caused this then it would have been something
else like "tulips".

> The report's author, a senior World Bank economist, assessed that
> contrary to claims by US President George W. Bush, increased demand
> from India and China has not been the cause of rising food prices.

How about a multiyear drought that destroys the wheat crops in Australia?
But you don't see me claiming global warming.

> "Without the increase in biofuels, global wheat and maize stocks
> would not have declined appreciably and price increases due to other
> factors would have been moderate," the report said.

The usual sensationalist crapola. The wheat crop is not all that big for
biofuels.

> 16 Ethanol Planys File Bankruptcy
>
> The US Ethanol Industry Is In Distress.
>
> The U.S. ethanol industry is in trouble and can expect to see a
> rash of bankruptcies and dismantling of at least some production,
> according to a specialist who helps companies in distress.

And that is __**EXACTLY**__ what we should see. The &^%$^@#&^ government
mandating the use of corn for ethanol is just as bad as the Bush Regime
funding a war by printing money.

> Alex Moglia, president of Moglia Advisors based in the Chicago
> area, said he knows of at least 16 ethanol companies that are filing
> for bankruptcy, and there will be at least two to three times that
> number filing within the next year.
>
> The weakness of the U.S. dollar makes it possible for foreign
> investors to acquire ethanol plants "at a deep discount," he said.

And they too will lose their asses. The corn don't work.

> "They can buy as low as 20 or 30 cents on the dollar," Moglia
> said. "That should scare the hell out of anyone in the biofuels
> industry. I've worked with plants that are incomplete, others that
> can't offer profitably so they've all shut down. This will shake out
> most of small- and mid-sized players. Larger players will survive
> because they have buying power."

No. They won't survive either. Not unless gas prices top $10 a gallon and
I am not sure that will do it in the case of something that must be
planted and harvested with a friggin tractor. Corn is not viable
economically. Palm and switchgrass may work but the other stuff you could
grow on the land is probably worth more than the oil you would get from
the palm or the swithgrass. There is a hungry world out there and dollar
devaluation makes our food competitive while it makes the fuel we need
more expensive/valuable. A_L_G_A_E is the answer. Current projections on
algae are horrendously wrong because the assume fuel prices that are way
too low. Fuel prices are not going to fall and traditional farming takes
too much fuel and too much land.

> More ethanol producers will continue to file bankruptcy, he said,
> because of high feedstock costs and a "limited upside flexibility in
> terms of how much you can sell ethanol for."

It is the feedstock costs that are the real problem.

> "The demand for ethanol is not there," Moglia said. "The same
> thing happening to ethanol is happening in the biodiesel business. It
> will be the Wal-Mart-ization of the ethanol industry. It's just a
> mess."

Algae is the __**ONLY**__ way to go on this stuff. If you can't do it
with algae, it can't be done. That __**MAY**__ mean that it can't be
done, but I don't think so. At any rate, boifuels done with algae do not
compete with any food crops and algae does not require planting and
harvesting with fuel consuming tractors.

> Peiffer said many ethanol plants are and will be folding because
> "the business model they were built on doesn't work." Farmers and
> their cooperatives have either borrowed money or pledged their land as
> collateral in building ethanol plants, he said.

The inputs cost too much. All that plowing and harvesting takes way to
much capital investment and too much fuel and fertilizer. Then there is
the cost of the land which is the income that could have been had by
growing food or the value of the food itself depending on what sort of
economist you are. Algae takes a little more capital investment but a lot
less fuel and fertilizer and the land it needs has no other real use. It
probably gets down to the actual land costs. And those costs are being
realized as the price of food rises. All of that is __LAND__ costs. The
land should have been used for food. It wasn't. The land that is needed
to do algae is essentially free. IT has no other real use.

> For every 10 ethanol and/or biodiesel plants "you read about in
> the media, there are probably 50 to 100 others that are in financial
> difficulty and are contemplating shutdown," Moglia said.
>
> Since ethanol production is mandated by the federal government, he
> said they are already "operating outside free-market fundamentals.

That is true enough. But it is the cost of the feedstock that is the
problem. Making ethanol from corn is just plain stupid unless you have a
lot of excess corn. The floods in the midwest show us the error of our
ways. There is no excess. Algae farms do best in the arid southwest.
Not a lot of floods out there.

> Ethanol Tariffs An Economic Failure
>
> Ethanol Producer Magazine is reporting Brazil launches campaign to
> remove ethanol tariff.

Good idea. But don't bitch about the cost of food. The people who make
corn expect to get paid.

> The Brazilian Sugarcane Industry Association is launching a public
> relations campaign on the Fourth of July designed to encourage the
> American public to pressure the U.S. Congress into removing the 54
> cent ethanol import tariff. The 2008 farm bill extended the tariff,
> designed to support an emerging U.S. ethanol industry and to prevent
> foreign ethanol producers from benefiting from American subsidies,
> through 2010.

No more need for it at all. Why have a subsidy for ethanol when a tax on
petroleum works much better? I think it has something to do with being
a brain dead Republican. They break out in a rash if you say the "tax".
They go into a virtual smiling swoon when you say T-Bills.

> The Are We There Yet? campaign, which consists of an interactive
> Web site and television ads, is supported by various U.S. food and
> meat processing companies. The association chose to launch its
> campaign on the Fourth of July holiday because it's one of America's
> busiest travel holidays.
>
> "Americans are being denied an opportunity to save money at the
> pump," said Joel Velasco, chief representative for UNICA. "There is a
> solution that could have an immediate impact on [the] price at the
> pump -- lifting the tariff on imported ethanol."

But that is not the answer. The real answer is to tax petroleum AND
imported ethanol at the same time. While offsetting it with a stimulus
like the one we recently had but on a quarterly basis.

> Government Mandated Solutions Fail Again
>
> * 16 ethanol producers have gone bankrupt, many more are on the
> way.
> * Farmers pledging land as collateral for ethanol production are
> at risk.
> * Food prices are higher.
> * Consumers are paying higher prices at the pump.
> * Corn is fertilizer intensive. Growing corn for ethanol
> production drives up the cost of fertilizer.

Corn based biofuels are as dumb as it gets.... Almost. Invading Iraq and
cutting taxes is even dumber.

--
"I know no safe depository of the ultimate powers
of society but the people themselves; and
if we think them not enlightened enough to
exercise their control with a wholesome
discretion, the remedy is not to take it from
them, but to inform their discretion by
education." - Thomas Jefferson
http://GreaterVoice.org/extend