Cramer: "Ethanol Is a Fuel That Doesn't Work"

Cramer -- who spews out on so many things he can't help but be wrong on many of them -- at least gets the problems with Ethanol right:

"The bemused best-selling author noted the "utter inconsistency" of laissez faire.

"We want laissez faire when it comes to business -- except when it comes to the insistence of a politically popular but economically and environmentally hazardous renewable fuel, ethanol," he said.

As a result, he said we have unequivocal government support for a fuel that doesn't work and that raises the price of food for everyone including those who can least afford it, which, in turn, forces the Federal Reserve to keep the money supply tight to rein in resulting inflation.

"So we are laissez faire when it suits us … and we are anti-laissez faire when we can help farm states crucify us on a cross of ethanol," he said.

He railed against a tax structure that supports "tax rates for billionaires at a lower percentage level than those who make $30,000 a year. This is utterly shameless."

Populism lives . . .

Source:
Jim Cramer challenges 'laissez faire' government
Jan. 30, 2008
http://www.bucknell.edu/x40027.xml

Comments

[Dr. No]

Cramer uses (as the author of this post) the ethanol tag word as a board to jump on a waggon. While there are issues with ethanol, rising oil prices (i.e. 100% from Feb 07 to Feb 08) have a much bigger impact on food and all living expenses than increased use of corn for ethanol. Run the numbers! (so the corn in a box of corn flakes is about 10c, how much does the box sell for ?)

[Stillrenting]

What's stupid about burning your food in your car when the world is bursting at the seams with untapped oil reserves?

Just kidding. ;)

What a lot of people do not understand is that there is a significantly greater amount of energy in a gallon of gas than a gallon of ethonal.

My son, who grows soy and corn, loves this though!!!!

[ErnieMontague]

It takes almost as much energy from oil (fertilizer and pesticide and transport) to grow and process corn into ethanol as is derived. A moronic equation.

[ElliotMiller]

There is nothing wrong--and much right--with a tax system that has lower rates on dividends and capital gains than on labor. Capital is harder to come by, and needs more incentives, than do employees. That is simply an inconvenient truth.

[gabby]

Cut the US subsidies to the US sugar growers, eliminate the 54 cent/gallon tariff on Brazilian sugar cane ethanol, increase the ethanol % in fuel. Sugar cane based ethanol is 6-8x more fuel efficient to create. Promoting usage of cane ethanol would preclude diverting vital food crops like corn and wheat for fuel. The world is going to need those crops for food. CZZ (Cosan) is a Brazilian company at the fore front of cane ethanol. Brazil is expected to increase their cane consumption by 64% and in Europe a five fold increase is expected.

GL,
gabby

2 Bloomberg stories follow:

Brazil's Sugar, Ethanol Output May Rise This Year (Update1)
By Thomas Kutty Abraham

Feb. 4 (Bloomberg) -- Sugar-cane production in Brazil, the world's biggest producer of sugar, may rise this year as growers plant more to benefit from soaring demand for biofuels, research company Datagro Ltd. said.

Brazil may harvest as much as 45 million tons more cane than in the previous year, Plinio Nastari, head of the Sao Paulo-based company, said. The amount of sugar produced from the crop in the year starting May 2008 may be between 30 million tons and 31.5 million tons, compared with 30.6 million in 2007-08, he said in an interview at a conference in Dubai today.

Higher Brazilian sugar output may add to a global surplus and stem a rally in prices of sugar, the best performer in the UBS Bloomberg Constant Maturity Commodity Index this year. Sugar jumped 14 percent in January and reached a 17-month high of 13.09 cents a pound on Jan. 17.

``Brazilian output is certainly going to rise this year,'' Nastari said. ``Price equilibrium is going to be dictated next year more by Brazil than India.''

Mills may use as much as 59 percent of the cane produced in Brazil's Center-South region to make ethanol, up from 56 percent last year, he said.

Demand for ethanol in blending with gasoline to run vehicles in Brazil will rise by 2.9 billion liters this year from 16.7 billion last year as more and more people buy so-called Flexi cars, Nastari said.

``Brazil is adding more than 2 million Flexi vehicles every year and that's going to push up local demand for ethanol,'' said Marcos Jank, president of Brazil's Sugar Cane Industry Association, also known as Unica, said. ``Brazil is looking at the local market to grow its ethanol industry.''

Soros

Investors including billionaire George Soros are pouring 30 billion reais ($17 billion) into Brazil to develop 80 new mills, according to Maurilio Biagi Filho, a producer whose family accounts for about 10 percent of sugar output in Brazil.

Ethanol exports from Brazil may decline marginally to 3.46 billion liters next year compared with 3.84 billion liters last year as the U.S. government was expected to introduce quotas to save its local bio-fuel makers, Nastari said.

``I don't expect the U.S. to remove the duty on imports of ethanol,'' he said. The U.S. government may introduce a quota system so that local producers' interests are protected.''

Datagro expects sugar to trade between 12.5 cents to 14 cents a pound in the next four months as investors scale down a global surplus to as low as 6 million tons from 11 million tons a month earlier, Nastari said.

Surplus

The global sugar surplus may disappear in the year to September 2009 as growers switch to other crops in India and excessive rains hamper planting in Brazil, he said.

``Heavy rains in recent days have denied standing crops the light and warmth required to mature and planting of the new crop for 2009 has also been hit.''

Sugar for March delivery rose 0.2 percent to 12.38 cents a pound on ICE Futures U.S., formerly the New York Board of Trade, at 9:33 a.m. London time. Sugar, which has gained 14.5 percent this year, reached a 17-month high of 13.09 cents on Jan. 17.

White sugar for March delivery was 0.1 percent lower at $344 a ton as of 12:14 p.m. on the Liffe exchange in London today.

To contact the reporter on this story: Thomas Kutty Abraham in Dubai at [e-mail]... .

Last Updated: February 4, 2008 07:18 EST

Sugar May Gain on Rising Consumption, Ethanol Demand, ISO Says
By Marianne Stigset

Feb. 4 (Bloomberg) -- Sugar, one of the worst-performing commodities in 2007, may gain on rising consumption, including for ethanol made from the crop, said Peter Baron, executive director of the International Sugar Organization.

``A great deal of optimism is justified,'' for the sugar market, Barron told a conference in Dubai today. ``There's a big untapped consumption for sugar.''

Raw sugar declined 7.9 percent last year, making it the fourth-worst performer on the UBS Bloomberg Constant Maturity Commodity Index of 26 raw materials, on concerns about a swelling supply glut. Sugar production is forecast to exceed demand by 11.1 million metric tons this season, according to the ISO.

Emerging markets such as China are set to consume more as incomes rise, Barron said, citing average Chinese per capita consumption of 10 kilograms a year, compared with a world average of 25 kilograms.

Ethanol consumption from sugar will rise 64 percent to 23 billion liters in Brazil, and more than fivefold in the European Union to 10 billion liters, between 2006 and 2010, Barron said.

``There's a finite availability of crude oil,'' Barron said. ``Soaring oil prices and increasing environmental concerns'' are boosting demand for ethanol.

Raw sugar futures for March delivery rose 0.06 cent, or 0.5 percent, to 12.41 cents a pound on ICE Futures U.S. at 9:04 a.m. London time today.

To contact the reporter on this story: Marianne Stigset in London at [e-mail]

Last Updated: February 4, 2008 04:08 EST

[Tom C inAnacortes,WA]

What does it take for people to understand that ethanol from corn is only temporary. Ethanol from cellulose is already on its way in the U.S. Two cellulosic plants are starting construcion now next to landfills in the U.S. that will provide the cellulosic material needed to make the ethanol. BlueFire Ethanol Fuels, Inc. has already proven the commercially viable process to make ethanol out of our garbage. They have a plant in Izumi, Japan that has been doing it since the year 2002. They have the exclusive license for the process for the entire U.S. Their plan is to put a cellulosic ethanol plant next to every land in the U.S. It is a win - win situation.

[Rhino127]

The international price of Hydrous Ethano is 1.58 cents per gallon or $66/Barrel... while RBOB is trading at 2.25 cpg or $94.5/Barrel. Cramer needs to look at the real math of ethanol. It is not only Corn and surprise surprise free trade does not exist for Ethanol... US has a 54 cpg duy and Europe has a 192Euro/cube duty while singapore has a $70/liter tax... maybe introducing a world wide duty free status for Ethanol would unleash the POWER of Ethanol and finally prove that Henry FORD was right after all to build the first model T on ethanol combustion...