Seeking Alpha

AP report: The ethanol push is "an ecological disaster"

  • The secret, dirty cost of the U.S. ethanol push: The ethanol era has proven far more damaging to the environment than promised and much worse than the government admits today, according to an AP analysis. (also)
  • As farmers rushed to find new places to plant corn, they wiped out millions of acres of conservation land, destroyed habitat and polluted water supplies, the report says; 5M acres of land set aside for conservation have vanished on Obama's watch.
  • Government mandates to increase ethanol production have helped drive up corn prices, leading to marginal land being farmed to produce the crop; in 2012, 44% of the U.S. corn crop was used for fuel, about twice the rate in 2006.
  • Relevant stocks: VLO, ADM, PEIX, BIOF, GPRE, REGI
Comments (61)
  • Ethanol has destroyed two weed-eaters and clogged my carburetor in my four-wheeler. This garbage kills small engines.
    Now paying for premium gas to run my lawn equipment and plow my driveway.
    Nice that someone researched what would happen to small engines, included outboard motors before loading ethanol into unleaded gas.
    The government knows best and I would bet not a single member of Congress does their own lawn/property maintaining.
    12 Nov 2013, 07:24 PM Reply Like
  • Gotta give your gas a shot of the blue stuff from home depot, find it right next to the stabil
    12 Nov 2013, 09:27 PM Reply Like
  • My son the Ag major uses nothing put premium and synthetic 2-cycle (when needed) in all his small engines. I am now following his lead.
    13 Nov 2013, 07:30 AM Reply Like
  • Another disaster from YewBummer. Nothing new. Hope and change.
    12 Nov 2013, 07:28 PM Reply Like
  • This is not "new news". Politicians payoff to corn farmers. The rest of the nation suffers. After evaporation, ethanol is actually a more dangerous greenhouse gas compared to carbon dioxide. Jail the politicians.
    12 Nov 2013, 07:29 PM Reply Like
  • What has government not screwed up that they touched?


    Love our national parks however.
    12 Nov 2013, 07:30 PM Reply Like
  • I hope you don't drive on those awful interstate highways. We were much better off with those winding, indirect, potholed, poorly marked and maintained state and local routes. Then that commie Ike took our tax money and thought that "central planning" could figure out better where we *should* drive! Wow what a mistake that was. It's too bad we didn't have an organized tea party back then to keep all that from happening. Oh well, I guess we're stuck with them now.


    And don't EVEN get me started on that horrible boondogle called DARPA that led to the internet. (Who uses that huge waste of money, anyway?)
    13 Nov 2013, 02:12 PM Reply Like
  • Ah so private industry would have never figured out how to do roads better. Now we have more roads as 50 states compete for funds, urban sprawl, species threatened with extinction and a honey hole to park money in for politicians so our roads are now super expensive. We might have skipped all that and had hovercrafts, railroads or a lot more bikes and healthier people but instead we copied Hitler's autobahn and all the fixed infrastructure costs that go with it.


    And who would have thought about electronic connectivity between peer computers without government spending trillions on defense and research on how to kill people, then killing people around the world in the name of freedom and never mind somebody outside the US discovered the WWW.


    Big government has solved everything (sarcasm).
    13 Nov 2013, 04:17 PM Reply Like
  • Wow. It's pretty rare when Godwin's Law kicks in this early in an internet conversation - and rarer still when Hitler gets dragged in to disparage the interstate highway system. Congratulations, I guess.


    The fact is that private industry is very good at "stepping in" when there's an immediate payoff right in front of them in a niche immediately obvious to them. The free market however is generally terrible at producing large changes that benefit society with no immediate profit at hand. That's why we have government.


    Who would have built the road that your house is on? Walmart, in hopes that you'd make up their millions in outlay by buying plastic junk from them for about seven billion years? No, you needed the Big Bad Government for the thing you use to get, well, everywhere you go today.


    It is encouraging though to see an (apparent) tea partier aware of urban sprawl, environmental degradation, and the fact that our military is a bloated monstrosity that has been used to kill literally millions of civilians over the past half century. (I wonder if you only drag these issues out when they suit your small government agenda?)


    In any case, sprawl is part of a bigger problem of overpopulation. But guess what the best solution to it to date has been? Yes, that evil "central planning" again. City centers that are thoughtfully laid out where large densities of people can live efficiently in close proximity to the necessities of life - with mass transit connections to keep from having the need for all those roads. If you think private enterprise typically wants to put out that kind of expense just for the public good, you're on something that's illegal in most states.
    14 Nov 2013, 12:12 PM Reply Like
  • MW


    Well it's not very rare that people who don't have an argument trot out the lame Godwin law and hide behind it. Only in the age of the internet and the Kardashians is he anyone of consequence anyways. But the fact is we did copy Hitler's autobahn design post WWII as it was seen by millions of GI's and Ike E. But don't let facts get in the way of your alternative reality.


    What you cannot imagine is life without government tucking you in at night with your pacifier. You have no imagination or confidence in free people. And you don't want to see the direct and indirect effects of all the government activity that you love. It's not being political it's being honest. I am no more a tea partier than you but I look at government and all the power mongers without varnish and false hope.


    It might have been nice to not have so many roads built which would have kept populations less dispersed and urban sprawl down to a dull roar so then government would not be trying to solve the problem they created. As you point out and that only further supports my case for smaller government. People might have had less kids as well. There is a reason that there is no immediate payoff in a lot activities and breaking that natural logic causes many side effects. Plundering the country's wealth with the belief that government is investing in things that will pay off has not been proven and is just speculation in which government has no track record.


    Your copy and paste arguments reflect that you have a hook set deep in your mouth and you are too happy to repeat what you are being told. Now who is smoking something?
    14 Nov 2013, 08:06 PM Reply Like
  • Okayyy...


    You've doubled down on branding our interstate highway program as Nazism, thrown up a gratuitous "pacifier" hyperbole as a "rebuttal" for my point that the government is a wholly appropriate agent for certain tasks, and executed a blanket evasion of my points by randomly calling them "cut and paste". I do believe that's my cue to stop wasting time on your posts.
    16 Nov 2013, 01:34 AM Reply Like
  • Which parts are not true?


    A truth that shatters your reality and points out the elephants in the room is devastating isn't it?


    I never used the word Nazi but accuracy is not that important to you is it?


    Run for the exit, close your ears and eyes while you can and preserve your fantasy while you can.
    18 Nov 2013, 02:56 PM Reply Like
  • If you read the entire article, which I did, it is very disturbing to see how the Government manipulated statistics to get the results they wanted. It is even more disturbing that despite overwhelming evidence, they insist, ethanol is good for the country. Sad, very sad.
    12 Nov 2013, 07:38 PM Reply Like
  • Its good for votes from the midwestern states, and thats all anyone in Washington DC cares out. This is what the country gets for electing a bunch a lawyers who have never run anything but a campaign and letting them run the country. We did this to ourselves, electing based on TV commercials and speeches rather than qualifications and political ideals.
    12 Nov 2013, 08:00 PM Reply Like
  • You are right on the mark!
    13 Nov 2013, 11:10 AM Reply Like
  • Which of Obama's buddy made money of this mess ?
    12 Nov 2013, 07:41 PM Reply Like
  • Don't blame this on Obama.... Blame it on the Farm Lobby and the politicians that take their money and screw the electorate! I could not find the exact date for ethanol in gas quickly but it appears to be late 1990 or early 2000s.
    13 Nov 2013, 07:37 AM Reply Like
  • lol. blame everyone but Odumber.
    13 Nov 2013, 10:00 AM Reply Like
  • Bear bait. Obama's not to blame for the problem. He isn't even aware of it and it just got worse during his White House occupancy time.
    13 Nov 2013, 10:04 AM Reply Like
  • this actually dates back to the late 1970's. I read that the gasohol (what it was called then) was given to the farm lobby as an offset to the US embargoing grain sales to the USSR.
    13 Nov 2013, 10:08 AM Reply Like
  • Another reason for smaller government, dwight. 40 years later and the unintended consequences continue to spread like wildfire.
    13 Nov 2013, 11:05 AM Reply Like
  • Most powerful force in the universe? The law of unintended consequences.
    13 Nov 2013, 11:06 AM Reply Like
  • You clearly haven't been paying attention, Bear. Obama is responsible for every bad thing that's happened in the past 50 years. It started when he - as an eight year old elementary school kid in Indonesia - encouraged Bill Ayers to hang out with anti-war radicals who blew up things. Little "Barry" was apparently kind of a Steven King demon child who controlled people with his mind at great distances.


    Most recently it's been revealed that he's responsible for the conservative Heritage Foundation inventing the idea of universal health care coverage via the Individual Mandate, in the 1990s. Yes! He MADE Republicans from Newt Gingrich to Mitt Romney support the idea, while he was merely a state senator in Illinois. I bet you didn't know this. His magical mind control spell wore off suddenly in 2009 though when they all stopped supporting the idea and started pretending they'd never heard of it.


    Obama is a very powerful bogeyman. Just watch Fox if you still don't understand this.
    13 Nov 2013, 02:19 PM Reply Like
  • you're preaching to the perverted :)
    the challenge with any "short term" government policy is that is rarely ever goes away and usually grows and has unintended consequences unforeseen by whoever originally drafted the legislation, like the AMT
    15 Nov 2013, 09:15 AM Reply Like
  • Blaming Obama is a fool's game. Blame all the folks in the midwest who grow corn. That ethanol program was started by whom? Under what administration? Look it up lazy. You Obama haters just won;t let up. Start blaming Obama for the typhoon in the Philippines.
    12 Nov 2013, 07:45 PM Reply Like
  • Lol. Please Blame Bush idiot. Read all the changes Obama bought in via EPA. Then you will realize its Obama to blame. None else.
    12 Nov 2013, 07:50 PM Reply Like
  • What changes did Obama bring?
    12 Nov 2013, 08:09 PM Reply Like
  • Can the same "blame it on the farmers" stance be used to explain the "Food Pyramid" and how great it is? A few links and perhaps a discussion at another time.


    12 Nov 2013, 08:24 PM Reply Like
  • This was written by newspeople who have incentive to be extreme of one side or another. Likely dirt being stirred on purpose as the EPA decides the ethanol mandate by Nov 30.
    12 Nov 2013, 07:58 PM Reply Like
  • It's kind of sad to see the SA editors playing enabler for them, isn't it (and adding their very own inflammatory language to boot in the "Market Current"). I had tentatively come to expect more professionalism from this site. Oh well.
    13 Nov 2013, 02:22 PM Reply Like
  • Der Spiegel had a story about Germany half a year ago like that.
    12 Nov 2013, 08:13 PM Reply Like
  • Blame for this is shared between Bush and Obama. Bush is mostly guilty -- he passed the law. Obama could not ignore the law, his EPA had to enforce it. But perhaps the EPA might have put in less stringent ethanol requirements. This is where the political pressure caused the problem.


    And this is the problem most americans have with Obama. He usually starts out great. He has the idealism, he puts the right people in the right places (this is a big difference from the last president who had a knack for elevating hapless fools to important positions).


    But then when push comes to shove, someone powerful applies pressure on Obama, and Obama usually caves. So now he put the right people in the EPA and they properly decided that ethanol is not a good idea. But did he stick by that? Of course not. He had to let a bunch failed democratic politicians turned lobbyists pressure the EPA.


    And the most ironic thing is that a lot sad, silly angry people accuse him of being a radical or even a socialist. This ladies and gentlemen is the most pro-corporate democratic president ever. And with Bill Clinton in the running, that is saying something! Now our best hope is for a bunch of more powerful interests to convince Obama to go the other way.


    Who is more powerful -- Big Corn and the ethanol refiners or Big Oil and the mass produced food industry? I guess we will see.
    12 Nov 2013, 08:21 PM Reply Like
  • Still Blaming Bush. Blame the last president. LOL
    12 Nov 2013, 08:35 PM Reply Like
  • If you do not like a law you usually blame the person that passed that law.
    12 Nov 2013, 09:02 PM Reply Like
  • No worries Philip, some of us actually understood the "shared" in your first sentence above.
    12 Nov 2013, 09:27 PM Reply Like
  • Rather than picking a winner between Bush and Obama it is much more clear to recognize the government is your enemy as expressed by William F Buckley I believe.


    Obama is at heart a politician so he will embrace whatever reality he needs to embrace to keep his power which is why his engagement with business is so cynical. Without those constraints he is a populist and economic seize and control transfer agent. I cannot recall him ever say anything positive about capitalism or travel abroad and expound on the benefits of the American economy. The silence says a lot.
    13 Nov 2013, 12:00 AM Reply Like
  • nemonemo


    Marlowe has a point. Ethanol was promoted by Bush II when oil prices went skyward.


    CNN 2008


    And why not? Most of the vehicles in Brazil ran on ethanol because of the amazingly high yield they could get from sugar cane. We made the critical error of believing that with our vast acreages we could accomplish something great with the much less efficient corn. There was also the political aspect of being good to farmers and depriving Sheikhs their lavish lifestyles.


    But ideas have consequences. Ethanol became a hidden tax paid for by citizens in higher food costs, taxes in the form of subsidies and engines wearing out far too soon or being much less efficient.


    The environmentalists liked it because it supposedly burned cleaner though I believe if you penciled out the input costs and the manufacturing processes and the power it took to produce that mystical gallon the savings were ephemeral.


    Now we are sitting on so much natural gas they have capped thousands of wells and stopped seriously looking for gas alone. In parts of Texas and in the Bakken it is still flared off until downstream markets are connected with pipe and tanks. Engines are using a lot less gas than they did and we're producing enough oil that the ethanol seems redundant.


    I would call it a bad piece of public policy. I hope it is phased out and that balloon is gradually deflated. Thankfully, much of the fresh land that was used were not prime farm soils so to idle them will not be any significant loss to the ag sector. Other farmers will be grateful that the water resources are not so thinly stretched.


    In a world where so many countries scramble for enough food, grains and crops can be a beneficial export that will offset whatever petroleum we might bring in.


    Following the "dust bowl" years of the early 1930's, the government came up with a plan to plant trees forming a shelterbelt from Canada down into Texas. This was thought to help break up the massive windstorms that caused so much damage. They planted hundreds of millions of trees on farm grounds and made trees available to other areas where windblown farmers thought it would help.


    Ultimately, there was a reason why the great plains were treeless and most of those rows died during subsequent harsh winters or droughts or simply from neglect 30 years after the fact. Sometimes you can see remnants of what has been the largest re(?)forestation program in the country.


    But such is the state of government or even our own plans and efforts. We try, we hope to solve problems and improve things and sometimes we are spot on and other times we fail. This is, at best, a footnote in our energy history.
    13 Nov 2013, 01:34 AM Reply Like
  • You said it well. It was done as an experiment to see if oil can be replaced. What happened next was disastrous. EPA and Obama's phony environmental scams.
    13 Nov 2013, 03:00 AM Reply Like
  • nemonemo.... I think you used the word earlier that bopped into my mind when I read your last statement,,,,,,,IDIOT. Mr Marlowe has written one of the most concise and efficient explanations I have read so far.
    13 Nov 2013, 07:43 AM Reply Like
  • that was more nemo shit.
    13 Nov 2013, 07:44 AM Reply Like
  • The program was laid out under Bush. Obama's EPA is the one that's reviewing it and making it more fair to all involved.


    So naturally, the right wing Seeking Alpha site blames it entirely on Obama. This is par for the course. Sigh.
    13 Nov 2013, 02:23 PM Reply Like
  • "Fair" is relative.
    13 Nov 2013, 08:54 PM Reply Like
  • Many knowledgeable people predicted this outcome. Sadly, Congress doesn't include many knowledgeable people.
    12 Nov 2013, 08:22 PM Reply Like
  • engjfj


    You are surely correct on that. I'll hold my hand up and admit to being a blue stater with a fondness for being pro-business as long as the business isn't behaving in a creepy or dangerous way. As such, I see my share of politicians of the red variety that are so "he said what???" that it makes me wonder how they ever got elected.


    I am certain those of you who reverse the colors feel the same way. "He wants to do what??!?"


    So I think we need to do the same thing for congress that we require of teachers or college students: they should take a basic test - and not one where they get to make up their own questions.


    #1 might have a big map with the large country north of Minnesota. Yes, it will be too easy for some of them, but anyone who fills in the blank with Bolivia or Turkey is excused from further application to the program. Another, perhaps an essay, might be "Your allowance is $64 billion dollars a week. How much is the most you should spend?"


    I cannot guess how many might fail such a simple test but I'd sleep a little easier knowing that everyone voting on some really important issues had at least the commonest of sense to do so.
    13 Nov 2013, 03:21 AM Reply Like
  • Might be fair to include the Renewable Fuel Associations response to the AP article:
    12 Nov 2013, 08:24 PM Reply Like
  • If we want a pure earth we will just have to give up all carbon based energy. Of course, many other countries will not so, as Hillary says, what difference does it make. Government knows best. :-(
    12 Nov 2013, 08:26 PM Reply Like
  • Ethanol is used as a substitute for MTBE which was banned around 2005. So what do we use as an oxygenate without ethanol?
    12 Nov 2013, 08:40 PM Reply Like
  • We can still use ethanol but we do not have to use so much of it.
    12 Nov 2013, 09:03 PM Reply Like
  • Why have we banned imports of sugar based ethanol and why can't we produce it here. Are sugar based and corn based ethanol's mutually exclusive?
    12 Nov 2013, 09:17 PM Reply Like
  • @PoorTexan -- you can chalk that one up to protectionist lobbies and their "elected" minions
    12 Nov 2013, 09:44 PM Reply Like
  • Sugar tends to be more expensive.
    12 Nov 2013, 10:04 PM Reply Like
  • Obama continues to be an economic disaster and ranks at the bottom of Presidents including Nixon. The temporary halt of the Boeing plant in the Carolina's. the Keystone pipeline, lack of a comprehensive energy policy, the bail out of the auto companies that exceeds $50 billion including tax credits, and Obamacare decisions to favor the unions are all examples of his policies. Watch his actions and not his flowery words.
    12 Nov 2013, 08:52 PM Reply Like
  • AS my Pappy used to say; you wouldn't be happy if Obama hung you with a new rope!. I'm a Republican and I think G W Bush and Cheney were two of the most despicable pieces of crap President and VP ever. Obama may not be all that good but he sure is a lot better than those two. And to think I voted for those two pieces of crap. All I can say is; "to err is human. To make the same mistake twice is stupidity" . I erred but I didn't make that stupid mistake twice!
    13 Nov 2013, 07:55 AM Reply Like
  • Bear


    Well if you are a Rep then the Rep party is in big trouble. Insulting them without any specific complaint is bird bath deep.
    13 Nov 2013, 08:44 AM Reply Like
  • The auto bail out saved the industry..or other option would have been to have let it go bust and be picked over by a handful of PE funds..All the gains on the upside would have accrued to a handful of people who would still only pay 20% tax on it!
    13 Nov 2013, 01:52 PM Reply Like
  • The US auto industry would have been absorbed by stronger hands like Toyota, BMW, Mercedes and a litany of others. PE firms would have likely stayed out as their expertise is limited and they cannot run an auto company. There are too many auto companies in the world AKA too much supply. That leads to losses which leads to taxpayer subsidies and eventual bailouts.


    We need less auto companies.
    13 Nov 2013, 04:23 PM Reply Like
  • Anyone remember those vile POET ads on CNBC hyping ethanol? Pure propaganda. Disgusting. Glad this garbage is being exposed.
    12 Nov 2013, 09:38 PM Reply Like
  • When are people going to realize that ever expanding government, be it by Bush or 0bama, is detrimental to America?
    12 Nov 2013, 10:04 PM Reply Like
  • And all those acres cleared of vegetation.
    Where did the vegetation (and its locked in carbon) go?
    Piled in a corner and set on fire.
    13 Nov 2013, 09:42 AM Reply Like
  • How distasteful, to see Seeking Alpha come out as an unapologetic Fox clone. The article they link to is actually titled "The secret environmental cost of US ethanol policy" (since the program was started by Bush), but they re-title it for the email "The secret dirty cost of Obama's green power push". Subtle, guys, very subtle. I hate to break it to you guys, but Megan still won't sleep with you.


    Ethanol has been mixed at best as a way to fight global warming, but the push for it has been entirely bipartisan at both the state and the Congressional and Administration level. Trying to push it all off on Obama with this inflammatory language like "5M acres of land set aside for conservation have vanished on Obama's watch" is a classic Fox move.


    Very bad form SA. I expect better from someone who wants to be taken seriously as an objective source of investment information.
    13 Nov 2013, 01:49 PM Reply Like
  • I like it. The "it happened on your watch" started with GWB and Obama just inherited the crap that comes with the position. Watching the whimpering left and the self castrated media try to cover and protect their little hero is pretty funny. And frankly it does not help Obama.


    This is why Putin eats Obama for lunch and doesn't even have to burp. He is a snack.
    13 Nov 2013, 04:28 PM Reply Like
DJIA (DIA) S&P 500 (SPY)