Wednesday, September 30, 2020

Is corn ethanol still necessary?

By Rick Manning

With the election around the corner, the D.C. swamp is hard at work. Various special interests are trying to make their pet issue look like an election asset or liability. One interest group working overtime is the biofuel lobby. The federal Renewable Fuel Standard – or RFS – is often falsely labeled as a “pro-farmer” energy policy that helps the Heartland. In reality, the RFS has become a tool for lining the pockets of the global agribusiness complex at the expense of real American farmers. It also puts domestically manufactured fuel supplies at risk. Coupled with their support of open borders immigration policies, the RFS further enables agribusiness giants to profit at the expense of rural Americans and heartland jobs.

Passed in 2005 and greatly expanded in 2007, the RFS was meant to “reduce America’s reliance on foreign oil” and promote rural economic development in the process. The law established increasing mandates for different types of biofuels, culminating in a requirement to blend 36 billion gallons of biofuel into the gasoline and diesel supply in 2022. Of that total, 15 billion gallons can be met via corn based ethanol. Unfortunately, after more than a decade of this law, it has become clear that the unintended negative consequences have outweighed the benefits.

First, the law was passed before America’s energy revolution. Since the U.S. in now the world’s largest oil and gas producer, the law’s energy independence and security justification is no longer relevant. Second, the law has actually worked to the detriment of most farmers. The Clean Air Act and RFS – both of which mandated ethanol in some fashion – have driven up farmland values, which have tripled since the 1990s. However, cash rents have also gone up in concert; rising more than 130 percent in Iowa alone since the mid-90s. Since the majority of actual farmers are tenant farmers – which work over 54 percent of cropland nationally and 57 percent in Iowa – the rise in land values has just meant more money out of the average farmers’ pockets as net farm income has plummeted over the last decade. It is also the sole reason that wealthy landowners see a net return per acre over 300 times that of tenant farmers. The erosion of farm income over the last decade, which has hit tenant farmers the hardest, has occurred despite the fact ethanol use in the fuel supply has increased by over 20 times its 1990 level.

Many of the same interests benefitting from the inflated land values attributable in part to the RFS are giant global and foreign agribusiness. Foreign investors are increasingly buying up American farmland and agribusiness is increasing gobbling up massive swaths of soil. In Iowa alone, the percentage of farmland agribusiness owned grew from 20 to 40 percent between 2002 and 2017. Large, global agribusinesses are the same interests thwarting progress in controlling illegal immigration. They are the same companies that often turn their backs on American workers to pay illegal immigrants substandard wages; giving them an unfair and immoral advantage over the yeoman tenant farmer.

Finally, adding insult to injury, the RFS also advantages global oil companies and foreign biofuel interests over small to mid-sized American refiners. Escalating compliance costs for the RFS contributed to the bankruptcy of a Philadelphia refinery in 2019. With refiners expected to post historic losses for the second quarter, RFS costs could be the straw that breaks the camel’s back for many other American refiners. The cost for tradable credits needed to comply with the RFS have been skyrocketing all year. Historically, paying for the RFS has often exceeded the payroll of independent American refiners. Additionally, a quirk in the program allows global, integrated oil companies that own fuel retail outlets to generate more credits than they need, which independent American refiners are forced to buy for compliance.

Unfortunately, bankrupting tenant farmers and domestic refiners may not even be the worst part of the program. The true insult lies in the fact that we need foreign biofuel to comply with the RFS. Since the program mandates more ethanol than can be blended into gasoline due to engine and infrastructure constraints, U.S. refiners have had to rely on at least half a billion gallons of FOREIGN BIODIESEL in each of the last three years to meet the programs overly stringent requirements. Such result is the furthest thing from an America First energy policy.

The President promised to protect every manufacturing job and get tough on illegal immigration. Reforming the RFS would help the American farmers that are actually working in the fields and the small US refiners that are disproportionately disadvantaged relative to the global oil giants. Change is necessary to prevent global businesses and foreign interests that are already erecting barriers to sensible immigration controls from imposing additional threats real American farmers and domestic fuel manufacturers.


Offshore Wind Is Really A Pirate Ship on the Sea of Subsidies

The Manhattan Institute does fantastic research and a little over two weeks ago it issued a report by Jonathan Lesser that addresses the fiasco that is wind energy; offshore that is. Titled “Out to Sea: The Dismal Economics of Offshore Wind,” it illustrates the piracy occurring on those seas as wind developers ride a wave of green political correctness and raid the ships of state to steal their booty of government subsidies.

New Jersey and New York and a handful of other Northeast nincompoop states are both currently chasing wind with abandon; the abandon of economic sanity with respect to the interests of ratepayers and taxpayers. It’s one gigantic scam; a new venue for hedge fund types who want maximize government rent as a source of profits, milking consumers for every bit of it, while distorting the economics of every other form of energy. Wind has been just this sort of scam for decades now, but the production tax credits that made the theft possible are slowly be ratcheted backward, so wind energy has blown out to sea. Offshore is the new hedge fund opportunity for the pirate managers who want to empty the pockets of energy consumers.

Here are the following key findings from the report (emphasis added):

Offshore wind is not cost-effective, and the forecasts of rapidly declining costs through increasing economies of scale are unrealistic. Absent continued subsidies—such as state mandates for offshore generation and renewable energy credits, which force electric utilities to sign long-term agreements with offshore wind developers at above-market prices—it is unlikely that any offshore wind facilities will be developed. These subsidies, along with the need for additional transmission infrastructure and backup sources of electricity, will increase the cost of electricity for consumers and reduce economic growth.

The actual costs of offshore wind projects borne by electric ratepayers and taxpayers are likely to be greater than advertised. Experience in Europe over the previous decade demonstrates that the performance of offshore wind turbines degrades rapidly—on average, 4.5% per year. As output declines and maintenance costs increase, project developers will have a growing economic incentive to abandon their projects before the end of their contracts to supply power. In contrast to the strict requirements for nuclear power plants, it is unclear whether offshore wind project owners will be required to set aside sufficient funds to decommission their facilities. This will likely mean that electricity ratepayers and state taxpayers will pay to decommission offshore wind turbines or pay higher prices to keep the projects operating.

The cumulative environmental impacts of multiple offshore wind projects along the Atlantic Coast—including on fisheries and endangered species—may be significant and irreversible. Also, mining the raw materials of offshore wind turbines, especially rare-earth minerals, has significant environmental impacts because those materials primarily are mined overseas, where environmental regulations are less stringent than in the United States. Dismissing environmental impacts that occur outside the U.S. while championing offshore wind’s alleged worldwide climate-change benefits is hypocritical.

The justification of subsidies for offshore wind based on increased economic growth, new industries, and state job creation is an appeal to “free-lunch” economics. The subsidies will benefit the well-connected few while imposing economic costs on consumers and businesses at large.
Here are the money paragraphs (in more ways than one):

As part of its Annual Energy Outlook, which provides a long-term forecast of U.S. energy demand, EIA publishes an accompanying report on the projected costs of different types of generating resources. In its most recent report, EIA estimated the real LCOE for offshore wind facilities beginning service in 2025 as between $102.68/MWh and $155.55/MWh, with an average price of $122.25/MWh (2019$).[62] EIA estimates that the costs for offshore wind installed in 2040 will be about one-third less, with levelized costs between $74.47/MWh and $105.39/MWh, with an average price of $85.53/MWh (2019$).[63]

By comparison, the levelized cost of gas-fired combined- cycle generating units entering service in 2025 is between $33.35/MWh and $45.31/MWh, with an average price of $38.07/MWh (2019$). For 2040, EIA projects levelized costs for combined-cycle units to range between $34.27/MWh and $72.32/ MWh, with an average levelized cost of $42.89/MWh (2019$). (The higher real levelized costs in 2040 are the result of higher projected prices for natural gas.)

So, even in 2040, EIA projects that the levelized costs of gas-fired combined-cycle units will still be half the levelized cost of offshore wind generation.

There’s much more, so read the whole thing. You’ll find wind energy of the offshore sort is piracy of the worst sort and the victims are the passengers on the good ship “Energy.”


Environmental Disaster: Northern Europe Deforestation Up 49% Due To Effort To Meet “CO2 Targets”!

Environmental Disaster: Northern Europe Deforestation Up 49% Due To Effort To Meet “CO2 Targets”!

Swiss meteorologist Jörg Kachelmann calls it “the dumbest energy and environmental policy ever”. Now, finally, after years of being warned, Germany’s mainstream media are finally showing signs of waking up to it.

Germany’s flagship ARD public broadcasting recently presented a report earlier today about how “CO2 neutral” wood burning is leading to widespread deforestation across northern Europe – a rather embarrassing development for the Europeans, who recently expressed their condemnation over Brazilian forest policy.

The ARD’s “Das Erste” reports how satellite images show deforestation has risen 49% since 2016 in Sweden, Finland and the Baltic countries. The reason: “Because of the CO2 targets. That sounds totally crazy but precisely because of the trend to renewable energies is in part responsible for deforestation in Estonia,” says the Das Erste moderator.

Having spent some time working for the EU, Liiana Steinberg explains in the report how she recently returned to her native Estonia and was shocked to see how much deforestation had taken place over the recent years (2:25). “I discovered how the forests no longer exists here left and right.”

For “CO2-neutral” wood pellets

Where once massive hardwoods once stood now grows tiny fir trees. The harvested trees, the report says, were used for wood pellets – a form of renewable green energy. The trees, the pellet industry says, will grow back.

Not only are the forests taking a hit, but so is the wildlife that once inhabited in them. According to Ms. Steinberg, bird life has fallen some 25%. “It’s wasted. Now we have to start all over again.”

Idiots “follow the science”

Climate activists, including the media like ARD, have long insisted that burning trees was good for the climate and environment because the emitted CO2 would simply be recycled back into nature – “follow the science” they insisted again and again. But they failed to understand that trees, depending on their age, acted as sinks and that some 100 years of stored carbon would be unloaded into the atmosphere in just a matter of hours if burned for heat.

It’s sad that they are just waking up to this (maybe).


Democrats want to hand climate science over to the mob

The House of Representatives had an opportunity this week to take meaningful steps toward combating climate change. But instead of proposing bipartisan reforms that would enable new clean energy technologies to flourish, Democrats opted to politicize science and add costly new regulatory hurdles that would do nothing to reduce global emissions.

Inside the new 900-page Clean Economy Jobs and Innovation Act is a proposal to adopt a new “community-based science” model that allows for “voluntary public participation in the scientific process.” This means that instead of allowing scientists to have the final say in conducting experiments, collecting data, interpreting results, and developing new technologies, the so-called “party of science” would let everyone have a say. They call it the “democratization of science” — and if you’re against it, you’re probably against democracy, too.

In another attempt to politicize science, the Clean Economy Jobs and Innovation Act proposes establishing a new 26-person Environmental Justice Advisory Council to ensure the “fair treatment” of different groups based on race, ethnicity, and socioeconomic status. They would accomplish this by taking the already cumbersome National Environmental Policy Act review process, which is used to approve new energy and infrastructure projects, and require these projects to undergo an “environmental justice” review. This review would need the consultation and meaningful participation of different groups, likely leading to long and costly litigation. Instead of accomplishing net-zero carbon emissions, this proposal would result in net-zero job growth. And instead of more justice, the Environmental Justice Advisory Council would result in fewer clean energy options for underserved communities.
Democrats claim to have the moral high ground when talking about their lofty goals of decarbonizing our economy in the next decade. But by prioritizing complex regulations and woke mandates over innovation and markets, they curtail the causes they claim to support.

Despite the Clean Economy Jobs and Innovation Act featuring some good proposals, Democrats inserted so many social justice poison pills that the legislative package is unworkable. On Monday, the White House issued a veto threat. The Left and the media will use this as evidence to say Republicans don’t care about climate change, but as the White House said in a statement:

The Administration supports clean energy, job development, and the innovation economy and adheres to a bottom-up energy philosophy that promotes free-markets, funds scientific research, and honors the choices of producers and consumers. This bill, however, would implement a top-down approach that would undermine the Administration’s deregulatory agenda and empower the government to select favored solutions while reinstating big-government policies and programs.

Republicans know the regulatory process has to be workable for companies to be able to succeed in not only innovating clean-energy technologies, but actually getting them into communities that need them most. They have already led on a number of bipartisan bills to make technologies such as advanced nuclear energy, carbon capture, and energy storage more viable. And this week, they introduced legislation that would make innovation possible by making the regulatory process more efficient for clean energy companies to build.

Instead of furthering an agenda that’s designed to appease far-Left activist mobs, Democrats should work across the aisle with their Republican colleagues who are offering serious, science-based solutions for a clean energy future.

So, don’t believe the false narrative that Republicans aren’t doing anything to reduce global emissions. Considering the anti-science framework of the Clean Economy Jobs and Innovation Act, it’s quite the opposite. Republicans are serious, and it’s time Democrats are, too.




Preserving the graphics: Most graphics on this site are hotlinked from elsewhere. But hotlinked graphics sometimes have only a short life — as little as a week in some cases. After that they no longer come up. From January 2011 on, therefore, I have posted a monthly copy of everything on this blog to a separate site where I can host text and graphics together — which should make the graphics available even if they are no longer coming up on this site. See here or here


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