Big Oil Rips Off Ethanol Subsidies

Talk about biting the hand that feeds you. Big Oil is using Ethanol subsidies, corporate welfare, to fight Ethanol blending. The U.S. taxpayer is subsidizing big oils fight against Ethanol another good reason NOT to have corporate welfare for Ethanol.

For some industries, the prospect of $3.5 billion in federal subsidies now, and double that in three years, might be a powerful incentive. But not, apparently, for the oil industry, which is seeing crude oil prices soar to record highs. Despite collecting billions for blending small amounts of ethanol with gas, oil companies seem determined to fight the spread of E85, a fuel that is 85% ethanol and 15% gas. Congress has set a target of displacing 15% of projected annual gasoline use with alternative fuels by 2017. Right now, wider availability of E85 is the likeliest way to get there.

At the same time the industry is collecting a 51 cents-per-gallon federal subsidy for each gallon of ethanol it mixes with gas and sells as E10 (10% ethanol and 90% gas), it's working against the E85 blend with tactics both overt and stealthy. Efforts range from funding studies that bash the spread of ethanol for driving up the price of corn, and therefore some food, to not supporting E85 pumps at gas stations. The tactics infuriate a growing chorus of critics, from the usual suspects—pro-ethanol consumer groups—to the unexpected: the oil industry's oft-time ally, the auto industry.

The industry collects the subsidies, but didn't lobby for them—Congress created them to encourage a larger ethanol market. While oil reps say they aren't anti-ethanol, they are candid about disliking E85. Says Al Mannato of the American Petroleum Institute (API), the chief trade group for oil and natural-gas companies: "We think [ethanol] makes an effective additive to gasoline but that it doesn't work well as an alternative fuel. And we don't think the marketplace wants E85."

One prong in the oil industry's strategy is an anti-ethanol information campaign. In June the API released a study it commissioned from research firm Global Insight Inc. The report concludes that consumers will be "losers" in the runup to Congress' target of 35 billion gallons of biofuel by 2017 because, it forecasts, they'll pay $12 billion-plus a year more for food as corn prices rise to meet ethanol demand. The conclusions are far from universally accepted, but they have been picked up and promoted by anti-ethanol groups like the Coalition for Balanced Food & Fuel Policy, made up of the major beef, dairy, and poultry lobbies. Global Insight spokesman Jim Dorsey says the funding didn't influence the findings: "We don't have a dog in this hunt."

SEE:

Bio-Fuel B.S.

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Bio-Fuel B.S.

Another excellent post on the real story behind bio-fuels.

Biofuels: The Five Myths of the Agro-fuels Transition

The agro-fuel transition closes a 200-year chapter in the relation between agriculture and industry that began with the Industrial Revolution. Then, the invention of the steam engine promised an end to drudgery. However, industry’s take-off lagged until governments privatized common lands, driving the poorest peasants out of agriculture and into urban factories. Peasant agriculture effectively subsidized industry with both cheap food and cheap labor. Over the next 100 years, as industry grew, so did the urban percentage of the world’s population: from 3% to 13%. Cheap oil and petroleum-based fertilizers opened up agriculture itself to industrial capital. Mechanization intensified production, keeping food prices low and industry booming. The next hundred years saw a three-fold global shift to urban living. Today, the world has as many people living in cities as in the countryside. [10] The massive transfer of wealth from agriculture to industry, the industrialization of agriculture, and the rural-urban shift are all part of the “Agrarian Transition,” the lesser-known twin of the Industrial Revolution. The Agrarian/Industrial twins transformed most of the world’s fuel and food systems and established non-renewable petroleum as the foundation of today’s multi-trillion dollar agri-foods complex.

The pillars of the agri-foods industry are the great grain corporations, e.g., ADM, Cargill and Bunge. They are surrounded by an equally formidable phalanx of food processors, distributors, and supermarket chains on one hand, and agro-chemical, seed, and machinery companies on the other. Together, these industries consume four of every five food dollars. For some time, the production side of the agri-foods complex has suffered from agricultural “involution” in which increasing rates of investment (chemical inputs, genetic engineering, and machinery) have not increased the rates of agricultural productivity—the agri-foods complex is paying more and reaping less.

Agro-fuels are the perfect answer to involution because they’re subsidized, grow as oil shrinks, and facilitate the concentration of market power in the hands of the most powerful players in the food and fuel industries. Like the original Agrarian Transition, the present Agro-fuels Transition will “enclose the commons” by industrializing the remaining forests and prairies of the world. It will drive the planet’s remaining smallholders, family farmers, and indigenous peoples to the cities. It will funnel rural resources to urban centers in the form of fuel, and will generate massive amounts of industrial wealth.

See

Real Costs of Bio-Fuels

Conrad Black and ADM

Bio Fuels = Eco Disaster

GMO News Roundup

Lost and Found

Boreno is Burning

Agribusiness

Desertification

BioFuel and The Wheat Board

The Ethanol Scam: ADM and Brian Mulroney

ADM

Wheat Board

Farmers


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Blackstone Hi-jinx

Having appointed former PM the RH Brian Mulroney to the board, Blackstone the private equity hedge fund went public with an IPO. In the two weeks it has made no money on its posting in the stock market, but had paid off its CEO handsomely. This week it offered to buy out Hilton Hotels, with a bid that led to cries of insider trading. If any fallout occurs then Blackstone can always call on Mulroney to bail them out as he did with ADM.

Since the close on its first full day of trading on June 22nd, Blackstone Group (BX) has not finished a single session in positive territory.

Blackstone, whose founder Stephen Schwarzman pocketed $677 million from his IPO's proceeds.

Shares of Hilton Hotels Corp. rose 6.44% to close at $36.05 Tuesday -- ahead of the announcement of the company's sale to the Blackstone Group for approximately $20 billion in cash. After the close, Blackstone said it would pay $47.50 per share for Hilton, a 32% premium. The pre-news rise -- the shares' strongest surge since 2005 -- has prompted calls of insider trading.

Although much of the attention on Blackstone has centered on CEO and co-founder Stephen Schwarzman, it is Hamilton "Tony" James who runs the firm, his hand on everything from private equity deals to real estate transactions to advisory work.

As Blackstone's No. 2, the pressure is on James to lead the firm through its new chapter as a public company and steer the massive money machine through the rough waters facing private equity firms.

With the private equity industry booming, James earned more than the CEOs of Goldman Sachs (GS.N: Quote, Profile, Research) and JPMorgan (JPM.N: Quote, Profile, Research) combined last year and his stake in the firm is currently worth $1.55 billion after its June IPO -- a huge amount considering his riches have come neither as a chief executive nor a company founder.

The billions Blackstone's top executives raked in through the $4 billion IPO however, attracted the scrutiny of lawmakers, who proposed legislation to jack up the firm's tax bill.

"I'm worried about the fact that private equity has grown so quickly and so fast that it's made itself a natural target for speculation and resentment," James said at the Reuters Investment Banking Summit in November. "It has made a lot of money."

Also worrying are investor doubts about Blackstone's high valuation and a pullback in the credit markets, factors that have sent shares of the company lower since their debut.

See:

The Ethanol Scam: ADM and Brian Mulroney

Criminal Capitalism Business As Usual

Gambling On Your Future

Criminal Capitalism Redux

Golden Parachutes

Rich Getting Richer

CEO Cream Sour Milk for Workers

Criminal Capitalism The Story of 2006

White Collar Crime Reporter 1

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Hilton, IPO, Canada,
CEO, pay, goldenparachutes, Corporations, fatcats, rich, superrich,

More Critics of Bio Fuels

The truth about bio-fuels is spreading.

Biofuels and the destruction of the rain forest

Murray Dobbin's Last Stage Of Denial: ethanol will save us!

A H/T to Driving the Porcelain Bus.

See

Bio Fuel

Bio-Fuels

ADM

Ethanol


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Junk Science: Ethanol

So who benefits from the Conservatives push for Ethanol? Big Agri-business, the opponents of the Wheat Board, and the Blogging Tories and their pals run the Canadian Renewable Fuels Association.

You have seen the CRFA ads on TV complete with a nerdy goof promoting Harpers 5% promise. That we will have 5% ethanol for cars in Canada. The guy has to be a Blogging Tory.

Gee I have heard that 5% promise before,about the GST, but that still hasn't happened either.

But does ethanol help the environment? Well like the Conservative government's Clean Air Act, the answer is no.

Mowhak and Petro-Canada have been selling Ethanol for years in Canada as an additive, and we still have air pollution and greenhouse gas.

Ethanol auto emissions no greener than gasoline: study

The federal Conservative government committed $2 billion in incentives for ethanol, made from wheat and corn, and biodiesel in last week's budget.

But based on Ottawa's own research, critics say the investment is based more on myth than hard science.

Scientists at Environment Canada studied four vehicles of recent makes, testing their emissions in a range for driving conditions and temperatures.

"Looking at tailpipe emissions, from a greenhouse gas perspective, there really isn't much difference between ethanol and gasoline," said Greg Rideout, head of Environment Canada's toxic emissions research.

"Our results seemed to indicate that with today's vehicles, there's not a lot of difference at the tailpipe with greenhouse gas emissions."

The study found no statistical difference between the greenhouse gas emissions of regular unleaded fuel and 10 per cent ethanol blended fuel.

Although the study found a reduction in carbon monoxide, a pollutant that forms smog, emissions of some other gases, such as hydrocarbons, actually increased under certain conditions.

Bill Rees, an ecology professor at the University of British Columbia and longtime opponent of ethanol, has read the report and thinks Canadians need to know its conclusions.

"I must say, I'm a little surprised at that, because it seems to fly in the face of current policy initiatives," he said.

"People are being conned into believing in a product and paying for it through their tax monies when there's no justifiable benefit and indeed many negative costs."

See

Bio Fuel

Bio-Fuels

ADM

Ethanol


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Corn Crisis

Once again the State interferes in the marketplace and prices jump on commodities exchanges.

In the U.S. George Bush announced subsidies for bio-fuels not once but twice in State of the Union addresses.

And while he talked about switchgrass and other waste material based biomass, no funding opportunities have been created to subsidize this.

Instead bio-fuel announcements have fed the monopoly agribusiness oligopolies like ADM, who specialize in corn and wheat based ethanol production.

In Canada part of the Governments Green Plan and its efforts to undermine the Wheat Board was to announce subsidies for ethanol production.

While the only existing wheat straw based bio-fuel company in the world with new technology, remember that new technology that the government talks about is going to solve the global warming crisis, can't find anywhere to pedal its technology in Canada and is looking for investors. Just as its American counterparts are.

Meanwhile in Mexico tortilla prices have skyrocketed on ethanol speculation as corn is transformed from a basic food stuff into a fuel for financial speculation.

In Canada and the United States the increase in corn speculation has led to higher costs for pig farmers.

Bio-fuels are not a green solution, in fact they are not ecological at all, but a way to subsidize big Agribusiness like ADM and the financial markets. The only green about them is greenbacks.

And their impact on climate change and global warming will be minimal since they only blend with existing fossil fuels not replace their use.

Last year Mexico had the largest corn harvest in its history – more than twice as much as in 1980. Yet the price of tortillas has doubled and in some regions tripled over the past few months.

Corn is a key ingredient in poultry feed because of its high energy yield and increasing demand for ethanol has nearly doubled the price of corn over the past year. Corn futures on the Chicago Board of Trade traded in the $2.20-per-bushel range one year ago; now they go for over $4.00. Corn is also an important component in hog feed. However, Hormel was able to keep costs in check in this area because it uses outside farmers to raise hogs, unlike its turkey operations, which are in-house. This deflected some of the higher costs to the contractors, explained Agnese

An explosion in U.S. production of corn-based ethanol has strained supplies of the grain for human and animal consumption. Making ethanol from inedible feedstocks such as bagasse, grasses, and agricultural waste could be a better way, but commercial success has been elusive despite years of efforts.

In fact, in the fall of 1998, Celunol, then called BC International, announced plans to build a cellulosic ethanol plant in Jennings with Department of Energy assistance. The plant was never built, a spokesman says, because the company wasn't able to secure the rest of the financing.

Today, Celunol has competition in the race to build the first cellulosic ethanol plant. The enzymes company Iogen operates a small wheat-straw-based facility in Canada and is scouting locations for a larger plant.

Kansas became America’s top wheat grower, regularly producing close to one-fifth of the country’s total harvest. With their sheaves of wheat, called shocks, stacked upright everywhere in the fields to dry, wheat became so ingrained in the Kansas mind-set that Wichita State University adopted the name Shockers for its mascot.

But in the last two decades, farmers have increasingly turned to corn and soybeans, which need nearly twice as much water.

“That part of the state is going to be out of water in about 25 years at the current rate of consumption,” said Mike Hayden, the secretary of the Kansas Department of Wildlife and Parks and a former Kansas governor.

See

Real Costs of Bio-Fuels

Conrad Black and ADM

Bio Fuels = Eco Disaster

GMO News Roundup

BioFuel and The Wheat Board

The Ethanol Scam: ADM and Brian Mulroney

ADM

Wheat Board

Farmers

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Conrad Black and ADM

Along with its connection to Brian Mulroney, Archer Daniels Midland, ADM, the major beneficiary of subsidies for bio-fuels in the United States and Canada has a connection with Conrad Black.

Ethanol's boosters, led primarily by ADM, go to great lengths to screen the
public's knowledge of the facts behind this taxpayer-funded rip-off.
Justifications for the subsidy are draped in histrionics, flawed research
and/or demogogic appeals to patriotism (i.e. "No American soldiers should
die for foreign oil") --- Who would disagree with that ---
but who looks behind the statement to discover its falsehoods?

ADM's de facto monopoly in ethanol and its subjugating influence across wide
swaths of our agro-food system has been accomplished stealthily over decades
and is currently enforced by several largely hidden (but interlocking)
realities:
(1) political contributions and placement of ADM-approved toadies at all
levels of
government, particularly USDA and Congress,
(2) a large phalanx of controlled trade associations, commodity groups, and
related foundations at national, state and local levels and
(3) controlling influence in important media sectors through stock ownership
of newspapers, advertising and holding companies.

Let's illustrate the last point --- Have you been watching the public
destruction of Conrad Black, erstwhile chairman of Hollinger International,
and a member of British House of Lords? Hollinger, which controlled, among
other assets, The Chicago Sun Times, The London Daily Telegraph and dozens
of smaller newspapers, began imploding shortly after ADM's chairman emeritus
Dwayne O. Andreas and another longtime ADM director, Robert Strauss,
resigned their board seats at Hollinger in early 2003.

Other ADM directors and toadies, including former Ambassador Richard Burt and former Illinois governor James Thompson, continued serving on Hollinger's board and helped spark an internal investigation, brought in a former SEC chairman for window dressing and dumped Black amid a swirl of nasty allegations. Having orchestrated Black's ouster, by exposing audits
and other internal revelations of indefensible corporate greed, it would
appear the "Pot (Andreas) can call the kettle (Black)" and get away unscathed --- while simultaneously riding the public's post-Enron indignation.

See:

Bio Fuels = Eco Disaster

Real Costs of Bio-Fuels

BioFuel and The Wheat Board

The Ethanol Scam: ADM and Brian Mulroney

Capitalism Endangers Orangutan

Criminal Capitalism

ADM



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Bio Fuels = Eco Disaster

The production of biofuels, long a cornerstone of the quest for greener energy, may sometimes create more harmful emissions than fossil fuels, scientific studies are finding.

Says the NYTimes in an article on Palm Oil. Once a Dream Fuel, Palm Oil May Be an Eco-Nightmare

As I have blogged here, Palm Oil production is creating an eco disaster in Indonesia and Malaysia with wildfires and threats to the endangered Organutan population.

And with both the Bush and Harper regimes promoting biofuels in grains and corn the result is increasing prices for these commodities which adversely affect other farm commodities like pork.

The Chair of Manitoba Pork Council says swine producers on the two sides of the Canada U.S. border share a common concern over rapidly rising feed prices resulting from expanded ethanol production.

And this is why the Harpocrites want to open the market up to the big Agribusiness giants like ADM and Cargill who also produce soya, palm oil, etc. But to do that they must eliminate the Wheat Board.

Biofuels are not ecologically sound alternatives to petroleum, they are just another capitalist band-aid, like Kyoto with its carbon exchange marketing.

Capitalism can only offer 'profit based' ways of adjusting to the current ecological and environmental crisis we face. That is because this crisis is about capitalism, which is not sustainable.

That is the real problem of Green Capitalism and all the so called Green alternatives, they are not alternatives at all, merely attempts to ameliorate the worst excesses of capitalism.

Without the development of democratic self managed (worker community control) socialism, capitalism Green or otherwise will continue to lead to planetary entropy.


See

GMO News Roundup

Lost and Found

Boreno is Burning

Bio-Fuels


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Adam's Rotten Apples

Adam Daifallah is promoting the rise of the new right in Quebec as if it was a libertarian movement when in reality it is just so much of the same old, same old neo-con job.

As I posted in his comments if he really wants a libertarian solution to Quebec statism he would promote workers control of their workplaces and worker cooperatives. But of course that is not what these dweebs are suggesting at all.

Bill Hall of the local CKWS News, Youth for Liberty member Adam Daifallah and Paul Quick (one of the counter-demonstrators) take advantage of a photo-op during the Walk for Capitalism in Kingston, Ontario, Canada.

See:

Adam Daifallah

Duh Oh

Quebec BQ vs Conservatives

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