MN State Auditor: Get rid of Ethanol!

[scheides]

Get rid of ethanol subsidies, state's auditor says

Minnesota should get out of the business of subsidizing the state's ethanol industry, the Legislative Auditor's office said today.

By BOB VON STERNBERG, Star Tribune

Last update: April 17, 2009 - 9:18 AM
http://www.startribune.com/local/43173372.html

Minnesota should get out of the business of subsidizing the state's ethanol industry, the Legislative Auditor's office said today.

In a report on the sometimes-controversial program that pays producers of corn-based ethanol, the office found that the subsidy program fails to maximize the energy and environmental benefits of the fuel.

The money, $93 million paid to producers over the past five years, could be better spent on other programs that do a better job of reaching those goals, it concluded.

Plus, at a time of crushing state budget deficits, the $44 million expected to be spent on the program through 2012 could be redirected to other uses, according to the report.

"Legislators should look carefully at this program in light of the current budget deficit and the state's goals of reducing energy consumption and greenhouse gas emissions," the report states.

Legislative audits are strictly advisory and legislators are not bound to follow their recommendations.

In a letter sent to the auditor's office last week, Agriculture Secretary Gene Hugoson pushed back against the recommendation to end the subsidy because of the "profoundly positive impact" the ethanol industry has had on the state's economy.

In 2007, he wrote, the industry's economic impact on the state totaled $2.27 billion, employing 4,300 Minnesotans.

However, the auditor's report said the subsidies represent only slightly more than 1 percent of the industry's sales and that producers earned profits of $619 million during the past five years.

The report also said the state should give tax breaks to ethanol plants only if they need it and are able to offer energy and environmental benefits. In the past, it said, the state has used incentives through its Job Opportunity Building Zone program for ethanol plants that might not have needed it.

[Kracka]

I agree 100%. Corn-based ethanol is a huge drain on our economy and is driving up the cost of goods.

[scheides]

IMHO They should drop the subsidaries either all at once or slowly and push the producers to figure out how to bring the price down.

[Tachyon]

I am going to be one very unhappy camper if they decide to do away with my corn fuel in the next 5 years. I will have to have a support van with C110 following me around on the weekends.

[scheides]

BP92 + alky injection It's the wave of the future!

[Tachyon]

Originally Posted by scheides

BP92 + alky injection It's the wave of the future!

But it doesn't have that great original vodka smell that I've grown so accustom to!

I was actually going to to alky injection before E-fuels became so prevalent. I wonder how it would hold up to my specific setup...

[carltalon]

I think Ethanol fuel is a good thing, But the use of corn to make it doese mess with our economy. Just because the state stopes subsidising doesnt mean E85 is going to dissapear. It will just drive up the price, andThe producers will have to find a more cost afective way to produce it. Or it will die a slow painfull death

[mdost03]

Originally Posted by Kracka

I agree 100%. Corn-based ethanol is a huge drain on our economy and is driving up the cost of goods.

The production of ethanol from corn uses only the starch of the corn kernel, all of the valuable protein, minerals and nutrients remain. One bushel of corn produces about 2.7 gallons of ethanol AND 11.4 pounds of gluten feed (20% protein) AND 3 pounds of gluten meal (60% protein) AND 1.6 pounds of corn oil.

Corn used for ethanol production is field corn typically used to feed livestock. Wet mill ethanol production facilities, also known as corn refineries, also produce starch, corn sweeteners, and corn oil — all products that are used as food ingredients for human consumption. Ethanol production also results in the production of distiller’s grains and gluten feed — both of which are fed to livestock, helping produce high-quality meat products for distribution domestically and abroad. There is no shortage of corn. In 2004, U.S. farmers produced a record 11.8 billion bushel corn harvest — and some 1.3 billion bushels (about 11 percent) were used in ethanol production. Additionally, the 2005 crop was among the largest on record. In other words, there is still room to significantly grow the ethanol market without limiting the availability of corn. Steadily increasing corn yields and the improved ability of other nations to grow corn also make it clear that ethanol production can continue to grow without affecting the food supply.

The ethanol industry opens a new market for corn growers, allowing them to enjoy greater profitability. Studies have shown that corn prices in areas near ethanol plants tend to be 5 to 10 cents per bushel higher than in other areas. This additional income helps cut the costs of farm programs and add vitality to rural economies. The additional profit potential for farmers created by ethanol production allows more farmers to stay in business — helping ensure adequate food supplies in the future. Ethanol production also creates jobs, many of which are in rural communities where good jobs are hard to come by. A 2005 study by LECG found the ethanol industry powered the U.S. economy by creating more than 147,000 jobs, boosting U.S. household income by $4.4 billion and reducing the U.S. trade deficit by $5.1 billion by eliminating the need to import 143.3 million barrels of oil. Those kinds of numbers help farmers and all Americans.

-Change2E85

[turbotalon1g]

Someone is getting stabbed if E-fuel is done.

[Kracka]

Originally Posted by totaleclipse_05

-Change2E85

Now go find an actual credible source that isn't clearly biased Search around, I linked to some great Time articles in a previous E-85 discussion thread.

[scheides]

Originally Posted by totaleclipse_05

-Change2E85

NONE of this matters. The article is about subsidizing.

Originally Posted by totaleclipse_05

The additional profit potential for farmers created by ethanol production allows more farmers to stay in business...

Ok this is the only thing you really should have posted. And even in the context of this article, they should be able to produce ethanol and make a profit from it, or not produce it. If they can't do it w/o subsidizing, then it is killing us elsewhere.

Ethanol is cool as fuck but its methods of production NEED to change. Why its subsidized I understand but it NEEDS to be driven into efficient production one way or another.

[Halon]

I hope Ethanol stays, simply for the performance aspect. I don't care if it's made from corn, switch grass, or sugar cane. I just like that it makes my car fast. So I hope somehow they find a way to keep ethanol fuel, and keep it somewhat affordable.

[TalonFiero]

I'm willing to pay the same price as 92 for a gallon of E-85. I'd even pay a bit more! Better than 110 and a heck of a lot more reliable less work than a meth setup. I'd maybe change my tune if I lived in a area where e85 wasn't plentiful but for now unsubsidize my e85 and I'll still be smiling.

[mdost03]

Originally Posted by scheides

NONE of this matters.

I quoted Kracka, that's what my reply was to.

[311evo]

Everyone thinks e85 is the devil of fuels, theres no reason to be hating, we just need to be more efficient about it. Whenever new things get started, none of them were efficient until we pushed for technology advances.

[Jakey]

I love it when politicians and the media think they understand how production agriculture works.

[Swifty1638]

I second that massive fricken' stabbing! I just got tuned on this shiz!

-A. Swift

[iceminion]

I put in my vote for E100 or E98 made form other sources (ironically, more cost effective too)