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Wheat, soybean, corn prices spiking - why? (http://www.msnbc.msn.com/id/23632933/)

http://www.cleanmpg.com/photos/data/501/Corn_to_Propane.jpgTom Curry - MSNBC - Mar 14, 2008

Related: World corn production only 54 days ahead of demand - just like oil. (http://ap.google.com/article/ALeqM5izrj8anPoPFJKWGVG9FIQu3Dh5bgD8UFEBL00)

Washington - If you’re fuming about how high gasoline prices have gotten, why not relax with a nice meal?

Perhaps a few beers and a turkey sandwich? Maybe a chicken Caesar salad?

Well, it's not just the price of gasoline that's going up. That beer, turkey and chicken are also costing more too

As President Bush noted in his comments on the economy Friday, “Prices are up at the gas pump and in the supermarket.” … http://www.msnbc.msn.com/id/23632933/

Bush will go down as the worst president ever, and this latest ethanol boondoggle is another one of his idiotic legacies.

Harry

Harry,
Are you against all bio-fuels or only corn based ethanol? It seems to me any small step away from dependence on foreign oil is a positive one... I know I don't know of any silver bullets, do you?

I think the issue with ethanol is the fact that we're using a food source as a stopgap so that we may continue to propel ourselves around, and that people are starving around the world.

Bush will go down as the worst president ever, and this latest ethanol boondoggle is another one of his idiotic legacies.

Harry

Bush may still go down as the worst president anyways, but ethanol is an idiotic bi-partisan boondoggle.

Ethanol was not Bush's idea. Biofuels may have a positive impact in the end particularly as things other than corn are used. The biggest problem here in my opinion is misguided government subsidies.

I think the emotions involved against Bush lead people to blame him for everything from hurricanes to the plight of the middle class to rising food prices. I don't mean to defend him but we could find truly terrible things that every president has done or not done.

What will happen in 2009 when you don't have hime to blame for things. I can tell you that no candidate has made energy policy and the environment a reasonable priority (except perhaps McCain....)

Hi All,

I like to call this issue the "SUV Tax" . Because SUV's are a large part of why we are paying more for fuel, and hence agriculture.

I think the issue with ethanol is the fact that we're using a food source as a stopgap so that we may continue to propel ourselves around, and that people are starving around the world.

Many people are against farm subsidies that lower the price of food, and harm the agricultural producers of 3rd world countries. Now folks aren't so keen on those artificially low prices increasing. I, for one, don't mind supporting the American farmer, who by the way, has increasing input costs as well (fuel, fert., etc). Also, the price of grain is hardly the only reason food prices increase.

I fully agree corn-based ethanol is not the long term answer, but hopefully it will lead the way for more efficient processes and broader utilization of other bio-fuels. Hopefully cellulose-based technology will rapidly become economical. I believe we must have a multi-tiered approach (plug-in flex fuel hybrids) that will allow flexibility to wean us off oil...first foreign oil, then oil in general. Obviously, any move to electric cars must have the infrastructure to support it, which will take many years.

I guess i just don't quite understand the virulent opposition to ethanol from some on this site. Maybe there is a better way to do things with current technology, but I'm not aware of it, perhaps someone could enlighten me?

Thanks

Hi All,

I like to call this issue the "SUV Tax" . Because SUV's are a large part of why we are paying more for fuel, and hence agriculture.


donee,

You've struck a nerve, and I agree with you. I am paying way more for groceries so that SUV's can be fed ethanol, which is preposterous!

If we want to become independent of foreign oil, the obvious choice is to drive fuel-efficient vehicles and lower our consumption of foreign oil that way. Ethanol does nothing but facilitate and encourage America to keep driving gas-hogs, which of course will not solve the problem, even if we turn every last ear of corn into ethanol.

I'm against corn-based ethanol because it won't work, it won't solve anything, and all it does is raise my grocery bills, and yours.

A guy at work recently put on a very thorough presentation on Peak Oil. He discussed energy considerations and energy sources. Back in the early days, you could produce domestic oil with very little energy investment, with a ratio of 100-to-1. You got 100 times as much energy out as you put in to retrieve the oil.

The energy return on ethanol? Not 100-to-1; it is 1.3-to-1. So you invest a lot of energy to grow and harvest the corn and turn it into ethanol, and you barely break even, all the while stuffing CO2 into the atomosphere. Ethanol makes no sense at all. It only makes sense to Archer Daniels Midland and their army of lobbyists, and to all the politicians in Washington who are guilty of corruption by going along with the Ethanol scam. It's just plain stupid.

Harry

Many people are against farm subsidies that lower the price of food, and harm the agricultural producers of 3rd world countries. Now folks aren't so keen on those artificially low prices increasing. I, for one, don't mind supporting the American farmer, who by the way, has increasing input costs as well (fuel, fert., etc). Also, the price of grain is hardly the only reason food prices increase.

I fully agree corn-based ethanol is not the long term answer, but hopefully it will lead the way for more efficient processes and broader utilization of other bio-fuels. Hopefully cellulose-based technology will rapidly become economical. I believe we must have a multi-tiered approach (plug-in flex fuel hybrids) that will allow flexibility to wean us off oil...first foreign oil, then oil in general. Obviously, any move to electric cars must have the infrastructure to support it, which will take many years.

I guess i just don't quite understand the virulent opposition to ethanol from some on this site. Maybe there is a better way to do things with current technology, but I'm not aware of it, perhaps someone could enlighten me?

Thanks

Ethanol is (for now) a feel good measure - like we are doing something - but we aren't really. Ethanol (from corn) has no realistic way of replacing oil to the degree it is hoped to. Ethanol probably has no environmental benefit over oil in re:CO2. The ethanol subsidies (heretofore referred to as scam) are increasing the cost of corn, soy, wheat and all food products dependent on them - which hurts poor people probably more than a gas tax would. The most recent energy bill gives flex fuel vehicles a mileage credit despite the fact that today - almost 0% are actually using an alternative fuel. The conversion is so easy - to give a credit for it is ridiculous - a straight forward mandate would cost <<$100 per car.

That is where the opposition comes from. Hard to say if I agree. Some would say hybrids aren't the answer and they are a distraction. Ok - but what is the alternative. Probably a multi-tiered approach (as you say) is the answer. But every step along the way is just a distraction - and some will be opposed to it. Ethanol has the downside of making food - which is necessary for life - more expensive. That is a pretty big downside....

My vote - outlaw any vehicle (don't sell new ones) that can't get 50 mpg. Tax credits of $5,000 per vehicle for plug ins. No new fossil fuel electric plants. Expedite nuclear. Ramp up large scale PV production. Paid for by a 100% gas (and electric, NG, heating oil) tax. Perfect - off foreign oil in 5 years. Off most oil in 10-15 years. But - guess what - my vote isn't worth.....

Ethanol is (for now) a feel good measure - like we are doing something - but we aren't really. Ethanol (from corn) has no realistic way of replacing oil to the degree it is hoped to. Ethanol probably has no environmental benefit over oil in re:CO2. The ethanol subsidies (heretofore referred to as scam) are increasing the cost of corn, soy, wheat and all food products dependent on them - which hurts poor people probably more than a gas tax would. The most recent energy bill gives flex fuel vehicles a mileage credit despite the fact that today - almost 0% are actually using an alternative fuel. The conversion is so easy - to give a credit for it is ridiculous - a straight forward mandate would cost <<$100 per car.

That is where the opposition comes from. Hard to say if I agree. Some would say hybrids aren't the answer and they are a distraction. Ok - but what is the alternative. Probably a multi-tiered approach (as you say) is the answer. But every step along the way is just a distraction - and some will be opposed to it. Ethanol has the downside of making food - which is necessary for life - more expensive. That is a pretty big downside....

My vote - outlaw any vehicle (don't sell new ones) that can't get 50 mpg. Tax credits of $5,000 per vehicle for plug ins. No new fossil fuel electric plants. Expedite nuclear. Ramp up large scale PV production. Paid for by a 100% gas (and electric, NG, heating oil) tax. Perfect - off foreign oil in 5 years. Off most oil in 10-15 years. But - guess what - my vote isn't worth.....

Once again, I agree corn-based ethanol is not a long term solution. I would disagree that ethanol is not 'doing anything'. As an additive, it is replacing MTBE. While the CO2 benefits may be in debate, other pollutants are less with ethanol than gasoline. It lowers smog in cities. I believe it keeps money out of OPECs hands and in Americans' hands. As for subsidies, I would think high grain prices would help lower agricultural subsidies, since historically a large portion have been price floors. I do not claim to have done the math on that, however.

As for flex-vehicles, I agree that they should not get CAFE credit...only a rebate for the cost of upgrade.

Personally, I have high hopes for cellulose based ethanol. If you can leverage waste products into fuel, I believe you can make large inroads to the problem. Perhaps algae based systems will be able to produce biofuels in the future. Unfortunately, these are future technologies, and it seems we are already behind the curve.

Unfortunately for your mandated 50 MPG, here are our vehicle choices:
http://www.automotive.com/fuel-efficient-cars/108/50-mpg/index.html
I would not call this realistic. The logistics of only having two cars on the market aside...these vehicles hardly cover the spectrum of utility.

There are major hurdles to upgrading our power grid to be able to handle plug-in cars...even with allowing new coal plants. I'm in favor of building new nuclear plants, many folks are not.

If I read correctly, you are proposing a 100% tax on all energy...once again I don't really see the reality in that, perhaps it is good your vote only counts once. :D

I'm all for lowering consumption, but I think it helps to be realistic. Even if everyone woke up tomorrow and realized they shouldn't drive an SUV solo, it would still take a while for our consumption to drop. High prices should help with this, hopefully it does not take a depression.

There is no panacea, it's going to take a wide range of solutions to fix this very complex problem. All solutions have pros and cons, and I'm still trying to sort them all out. I don't claim to have all the answers, but I tend to get a bit frustrated while reading many of these posts that are rather negative about everything. Perhaps it is a function of every subject has someone who is against it...

Here's what's in my head FWIW:

1. Personal responsibility...acknowledgment by the American people that high demand is a main driver of price, not those that supply the demand (high hopes :))
2. Continue to increase CAFE standards
3. Offer tax credits to consumers for hybrids, esp plug-ins
4. Mandate flex-fuel upgrades in all new cars
5. More research in economic biofuels (ie no more subsidies necessary)
6. Upgrade power grid with solar, wind, geothermal and contemporary nuclear plants
7. Ban incandescent bulbs like Australia, California and Cuba
8. As battery technology matures, and infrastructure can handle it, move towards EVs
9. People on sites such as these continue to evangelize...it's going to be a tough road and we are going to have to get the word out to 'joe six-pack', he may just listen...

Thanks

Ok - I'll reply a bit.

The current power grid could handle 80% of all vehicle instantly being electrified with the same mix (ie weight/aerodynamics). That does not factor in reduced electricity use which is easy with a 100% tax. It also does not factor in a change in weight and aerodynamics - ie it assumes the same SUV mix. That is easy to change (over 15 years with fleet turnover of course). This is a well cited study but I do not have the reference. The idea being that plug ins are charged at night when no lights are on - less a/c is being used. Cutting the 20% (or 30%) of combined household electric use or weight/aerodynamics is easy....

Infrastructure for plug in - there is none. Ok - there are perhaps 30% of the US that does not have parking at their house. Probably those people use a bit more public transportation (ie in Manhattan). I haven't lived without off street parking since I was in college - well 1 or 2 years maybe. Even in grad school - I had off street parking. Now - you will need outlets in apartment complexes with locks. That could take a few years to install - just a few.

Why is 100% tax on energy a problem. I think 6-8% is what the average american spends on energy - just cut out sales tax to make it even ... or cut out the first $2000 that people put in social security. It isn't that hard. Make it revenue neutral - why is that so hard. Yes - people with SUVs will pay dearly - people with 5000 sq feet houses will pay dearly. I am not a harda$$ - phase it in over 10 years if you have to.

The last one - 50 mpg. There are at least 20 cars coming in the next few years if you also add in what is available in Europe currently - like from Ford and GM. This of course is not including plug ins. The only cars that wouldn't necessarily be plug ins would be compacts that could get 50 mpg. All SUVs or whatever comparable beast would have to be plug in to make the cut. I didn't mean to suggest that tomorrow was the time frame. I am all about being reasonable. The floor in 2008 could be 15 mpg (sorry Hummer). It needs to climb 3 and change per year to meet my 10 year time line. The argument against this is that it can't be done. It can - it will just cost some coin to drive a 3 ton beast with a good 0-60 time. If it can't be done - then we can all drive HCH-IIs - would that be so bad. (commercial exemptions of course).

Of course - the big three would probably all go bankrupt. Not really - I bet one could survive - just bring in the cars sold in Europe and they would be ok. It doesn't take a genius to build a 2000lb car with 80 hp that gets 50 mpg.

Ok - I'll reply a bit.

The current power grid could handle 80% of all vehicle instantly being electrified with the same mix (ie weight/aerodynamics). That does not factor in reduced electricity use which is easy with a 100% tax. It also does not factor in a change in weight and aerodynamics - ie it assumes the same SUV mix. That is easy to change (over 15 years with fleet turnover of course). This is a well cited study but I do not have the reference. The idea being that plug ins are charged at night when no lights are on - less a/c is being used. Cutting the 20% (or 30%) of combined household electric use or weight/aerodynamics is easy....

Infrastructure for plug in - there is none. Ok - there are perhaps 30% of the US that does not have parking at their house. Probably those people use a bit more public transportation (ie in Manhattan). I haven't lived without off street parking since I was in college - well 1 or 2 years maybe. Even in grad school - I had off street parking. Now - you will need outlets in apartment complexes with locks. That could take a few years to install - just a few.

Why is 100% tax on energy a problem. I think 6-8% is what the average american spends on energy - just cut out sales tax to make it even ... or cut out the first $2000 that people put in social security. It isn't that hard. Make it revenue neutral - why is that so hard. Yes - people with SUVs will pay dearly - people with 5000 sq feet houses will pay dearly. I am not a harda$$ - phase it in over 10 years if you have to.

The last one - 50 mpg. There are at least 20 cars coming in the next few years if you also add in what is available in Europe currently - like from Ford and GM. This of course is not including plug ins. The only cars that wouldn't necessarily be plug ins would be compacts that could get 50 mpg. All SUVs or whatever comparable beast would have to be plug in to make the cut. I didn't mean to suggest that tomorrow was the time frame. I am all about being reasonable. The floor in 2008 could be 15 mpg (sorry Hummer). It needs to climb 3 and change per year to meet my 10 year time line. The argument against this is that it can't be done. It can - it will just cost some coin to drive a 3 ton beast with a good 0-60 time. If it can't be done - then we can all drive HCH-IIs - would that be so bad. (commercial exemptions of course).

Of course - the big three would probably all go bankrupt. Not really - I bet one could survive - just bring in the cars sold in Europe and they would be ok. It doesn't take a genius to build a 2000lb car with 80 hp that gets 50 mpg.

I was under the impression the American power grid is very near capacity as is...I have no data to support that however. If you could find that study I'd like to read it. If we really can support 80% of our automobiles as EV now, I'd say we're in great shape already.

I assumed the 100% tax you propose means an effective doubling of energy spending. We are already seeing the economic effects of doubling gasoline over the past few years. If you cut sales tax, where does the revenue come to support what it used to cover? Social Security is another system that certainly cannot support any reduction in inputs. I don't know if our economy could handle such a shock, but like you say, phasing it in could perhaps reduce the pain.

I am excited to hear there will be many more efficient vehicles in the near future. I will be in the market for a new vehicle in a few years. A hybrid mini-van would be high on my list. I was surprised to find that they do not exist in the US. Factoring in the plug-in aspect, I agree your plan makes more sense.

And the last comment makes it clear why the political will has not been conducive to raising fuel economy standards. I would not want to be the one blamed for killing the american auto, regardless if it were true or not. In an ideal world, I'd like to see us get out of this mess without killing our economy and corporations. Also, I don't fully agree with outlawing the SUV...just the SUV as a commuter vehicle.

Bottom line, perhaps you guys are right, we don't need biofuels and can make the move much sooner to EVs.

Hi All:

___Let me add some input to the power grid equation … Refining gasoline swallows up as much NG and electricity as it would take to drive an EV. That being said, gasoline refining will probably not be replaced by Electrical production for EV’s.

___This is where the numbers get dark … The reason why we have “reserves” is because the plants that supply it are the most expensive to operate. The NG Turbines peekers do not come online until grid prices (aka demand) has exceeded the capability of the base loaded nukes and coal burners to supply. You just do not want to fire those things up due to cost. If we go to overnight charging, either more base load comes in (coal or nuke) or you fire up all those little peeking units all over the country all night long and it is not going to be cheap. Expect another $0.05/kWh to be added to your electric bill. Problem being, NG is becoming a short supply fuel and we all know what happens with a short supply fuel when all of a sudden all the Peekers are firing up all night long. Add a $0.01 - $0.02/kWh per year to the price until it becomes prohibitively expensive to power the grid. All of this will balance out and it will probably not balance out in the consumers favor. Just wait until the country hits 10% PHEV/BEV’s and you will see the taxing bodies jumping all over your electric bill to get their piece. That is when stored solar comes in for the home. It is about the only thing the taxing bodies cannot get their hands on right now but you know they will try.

___Good Luck

___Wayne

One last point...

Perhaps to allay these runaway food costs Americans can 'hypermile' their diet. I see many parallels between guzzling cheap fuel in one's auto while simultaneously guzzling cheap food in the drive-thru. Overconsumption is overconsumption, and we have a ton of fat people AND fat vehicles. Maybe laying off the 20oz bottles of high fructose corn syrup that have been trucked around in self serve plastic bottles might cure many of our societies' ills...

Food for thought

chief302,

Just heard on the radio about a record number of teens with their teeth dissolving. :eek: It's the sports drinks, so I'm brushing more regularly.

Im going to spend my rebate on the roulette table, 1 spin, black. I like to gamble with my future just like the govt. Except ill only lose $1200....160 billion more seems like a lot, but eh when you are 9 trillion in the hole, whos counting. So in summary, no food prices will eat into my rebate :bananapartyhat:

chief302,

Just heard on the radio about a record number of teens with their teeth dissolving. :eek: It's the sports drinks, so I'm brushing more regularly.

BRAWNDO...IT'S GOT ELECTROLYTES!!!