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Thread: yet another unintended consequence of ethanol subsidies ...

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    Default yet another unintended consequence of ethanol subsidies ...

    (snip)"Fuel rules soak soap makers

    Alternative-energy subsidies pinch supply of a key ingredient.
    John J. Fialka
    10 July 2007
    WASHINGTON -- Government efforts to reduce U.S. reliance on imported oil are forcing up prices for another indispensable commodity: soap.

    Soap and detergent makers say they are being hurt by a double whammy of federal subsidies and mandates that has reduced the supply and pushed up the costs of a key ingredient, beef tallow. The steeply rising price of corn, driven by a federal requirement to use more ethanol, has pushed up corn prices, making animal feed more expensive and prompting farmers to blend the less-expensive tallow and other fats into their feed.

    The upshot: In the past year, beef-tallow prices have doubled.
    Then in April, the Internal Revenue Service issued a tax ruling that will expand an existing subsidy for turning animal fat into a diesel additive. The chief beneficiary will be a joint venture by ConocoPhillips, a Houston oil company, and Tyson Foods Inc., a major food producer, that will make a new "renewable" diesel oil later this year.

    Tyson says it plans to shift about a quarter of its animal-fat output into the joint venture. By 2009, the companies expect to produce 175 million gallons per year, which would be eligible for a $1-a-gallon tax credit. The oil will be added to diesel fuel burned in cars and trucks.

    'Radical Change'
    Tallow is a solid, nearly colorless fat extracted from the natural fat of cattle. Already, rising tallow prices "are causing a radical change in the structure of our marketplace," says Dennis Griesing, a vice president of the Soap and Detergent Association. He says some major U.S. companies are importing more-expensive palm oil as a tallow substitute. But that makes those companies more vulnerable to competition from soap makers in Indonesia and Malaysia, which enjoy better access to palm oil and have cheaper labor.

    "Our companies will have to change their formulations," he says. "They'll never come back to the tallow base and pretty soon, voilà, we've killed off another American industry."

    Andrew DeSouza, a spokesman for the Treasury Department, says the IRS revenue ruling was intended to extend the administration's efforts to "incentivize the growth of alternative energies and alternate and renewable fuels."

    Jeff Webster, general manager of Tyson's renewable energy program, says he is aware of the soap-makers' problems and says his company will try to keep supplying them with the beef tallow they need. Mr. Webster says the government's fuel subsidies are creating market changes for lots of companies, including Tyson, which must buy high-priced corn for its big animal-feeding operations. "We're all having to make trade-offs, if you will, in terms of bringing renewable fuels to market."

    Defining Renewable Fuels
    The issue will surface later this month when the House takes up the energy bill. Rep. Lloyd Doggett of Texas, a Democrat on the Ways and Means Committee, will attempt to narrow the definition of renewable fuels in the bill. His move would prevent Conoco and Tyson from collecting the $1-per-gallon credit to make sure, as he puts it, that "green energy initiatives are not converted into public boondoggles." An earlier effort to restrict the tax credit in the Senate failed.

    Mr. Doggett is strongly backed by a group of small refiners, called the National Biodiesel Board, which rely on the tax subsidy to make a different diesel additive, called "biodiesel," out of animal fats and vegetable oils that are blended into diesel oil.

    One consequence for consumers is that higher prices for soap are already on their way. "If you monkey with the markets, you never get quite the result you intended," says June A. Stahl, president of Stahl Soap Corp., a small, family-owned business in East Rutherford, N.J. Her company is trying to renegotiate its contracts to pass the higher costs for raw ingredients to its customers. "In some cases we can, and in some cases we can't, but we're trying to do everything we can to avoid going out of business."

    A stable market for animal fat has been part of the economic foundation for U.S. soap makers for more than 100 years. Niek Stapel, general manager for Akzo Nobel Inc., a Chicago maker of surfactants, a chemical used in fabric softeners, estimates the Conoco-Tyson venture will use as much as 25% of the available beef tallow, which his company needs to make the chemical.

    "If you have one or two more of these ventures, the oil companies can gobble up the whole tallow supply in an afternoon," he says. "That is a big problem for us." His company is a subsidiary of Akzo Nobel NV, a Dutch pharmaceutical and chemical giant.

    Joe Jobe, chief executive officer of the National Biodiesel Board, a trade association of 147 small refiners that use soybean oil and other fatty materials to make biodiesel, says his members deserve the $1-a-gallon tax credit because they have built new refineries to make their products."(snip)


    In case anybody is wondering, the $1 per gallon tax credit is a direct transfer of 'other people's' tax money onto the bottom lines of Tyson Foods, Conoco Phillips, and the 147 small refiners !

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    Default Re: yet another unintended consequence of ethanol subsidies ...

    ironically, it would appear that the soapmakers may have found a way to solve their cost problem (from the same link) ...

    (snip)"One possible way out of this mess is for some soap companies to make their products out of petroleum. For example, Mr. Stapel says some of Akzo's products can be derived from a petroleum feedstock, which, like most petroleum used in the U.S., would have to be imported. "But that would defeat the whole purpose of having renewable products in the first place," he says."(snip)


    This is truly absurd. US taxpayers pay $1 per gallon (actually more if you count separate subsidies for growing corn and for retail sales of ethanol) in order to reduce our dependence on foreign oil as a motor fuel. This drives up the price of 'natural' ingredients used by the soapmakers to the point of threatening their continued economic viability. So in order to stay in business the soapmakers start importing oil to substitute for the now super expensive 'natural' ingredients that are being diverted to the production of 'alternate' fuels !!!

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    Default Re: yet another unintended consequence of ethanol subsidies ...

    One of the bad things about being embedded in an oil based economy is the disruptions on changing the base. They'll figure it out.

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    Default Re: yet another unintended consequence of ethanol subsidies ...

    Melonie, when you post about ethanol, you remind me of the people that said color TV would never make it. Corn is not the only thing ethanol can be made from. Ethanol plants which will convert trees into ethanol are currently being built.

    Sure, there will be problems in the transition, but in the long run, we will be better off.

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    Default Re: yet another unintended consequence of ethanol subsidies ...

    I agree w/ the last 2 posts. When it comes to oil the status quo just isn't going to cut it anymore. We need ethanol and should be supporting it not trying to trash it.

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    Default Re: yet another unintended consequence of ethanol subsidies ...

    Corn is not the only thing ethanol can be made from.
    Absolutely true. Sugar cane is a much more efficient source as ethanol feedstock, and results in production costs that are as much as $1 per gallon lower than corn based ethanol. Brazil has vast ethanol refining capabilities based on sugar cane. Unfortunately, sugar cane can only be grown in a handful of places within US territory. Therefore, the US gov't has instituted a 56 cent per gallon 'stealth tax' at US pumps ... US ethanol producers get paid this 56 cents per gallon, while imported ethanol producers get paid nothing. And even at a 56 cent per gallon legislative disadvantage (i.e. lack of tax funded subsidy), Brazilian sugar cane ethanol can still be sold cheaper than US corn based ethanol in America. However, you still can't buy the lower priced ethanol because the same legislators have enacted an import quota to stop imported ethanol from coming into the US markets !!! If this were truly about environmental concerns and a desire to reduce dependence on middle eastern oil sources, why aren't the legislators allowing Americans to buy Brazilian ethanol - which would not require that American's taxes be raised to subsidize US corn based ethanol and which would result in a significantly lower price at US pumps ex the present 56 cents per gallon 'stealth' ethanol tax ?

    Ethanol plants which will convert trees into ethanol are currently being built
    to be perfectly accurate, there is only ONE commercial sized cellulosic ethanol plant now in operation, in northern Spain. Plants being constructed in the US and Canada are 'demonstration' sized plants, with Iogen's Canadian plant having a capacity of only 600 gallons per day ! The estimated production cost of cellulosic ethanol is around 3.50 per gallon, or $4.00 per equivalent btu of one gallon of gasoline. Today's wholesale price for one gallon of gasoline is $2.26 ! Brazilian sugar cane ethanol can reportedly be produced for less than $1.50 per gallon.

    Tack on transportation costs and the 56 cent per gallon 'stealth' ethanol tax, plus federal and state road tax, and you're looking at a pump price approaching $6 per gallon for cellulosic ethanol ... PLUS increased income taxes on all Americans to finance tax credits granted to the celullosic ethanol refiners.




    We need ethanol and should be supporting it not trying to trash it.
    that's the whole point ... we ARE supporting it through tax funded gov't subsidies and through 56 cent per gallon higher prices at US pumps due to the 'stealth' tax.

    IMHO if the voters of this country want to support ethanol, then fine ... do so ... but just be honest about what you are doing. Mandate that all gasoline blends sold in the USA must contain 10% ethanol. Mark up the pump price of ethanol blend gasoline enough to cover the true costs of corn farming and ethanol refining, instead of burying those higher costs in a wealth transfer scheme which taxes the middle class. Then with 10% ethanol blend gasoline being $1.00+ per gallon more expensive than straight gasoline at US pumps, let the financial consequences fall where they may in regard to the impact on American household budgets and American car/truck sales.

    Of course this may also mean that your average strip club customer has $50 a week less money to spend in your club !

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    Default Re: yet another unintended consequence of ethanol subsidies ...

    Quote Originally Posted by Melonie View Post
    ...to be perfectly accurate, there is only ONE commercial sized cellulosic ethanol plant now in operation, in northern Spain. Plants being constructed in the US and Canada are 'demonstration' sized plants, with Iogen's Canadian plant having a capacity of only 600 gallons per day ! The estimated production cost of cellulosic ethanol is around 3.50 per gallon, or $4.00 per equivalent btu of one gallon of gasoline. Today's wholesale price for one gallon of gasoline is $2.26 ! Brazilian sugar cane ethanol can reportedly be produced for less than $1.50 per gallon....
    I'm confused by one quote from the link in your post:

    "All biomass-based fuel ethanol starts out, of course, as carbon dioxide sequestered from the atmosphere. Fuels from petroleum and natural gas do not have this environmentally beneficial first step built in, because their carbon has not seen the atmosphere for millions of years. In this way, biofuel is neutral with respect to atmospheric carbon dioxide levels, a crucial distinction between it and fossil fuels."

    Or maybe confused by Kdogg's earlier post re: producing ethanol from trees. I've heard in the past, from a former executive(who lived in Europe until age 20) at a paper and wood pulp company based in Toronto, that Europe does a much better job of replacing its forest trees than is currently the case in either the U.S. or Canada.

    If we're going to be "mowing down" trees to produce ethanol, how is that beneficial to the environment? Considering those businesses selling carbon credits, if I understand correctly, are planting trees in order to sell carbon credits. It seems to me this would contribute more to CO2 increases vs. decreases, unless most of the production is to be from some kind of "junk plants"?

    Alas, the current legislation, as you've pointed out in your analysis, is simply yet another corporate welfare program.
    Last edited by PhaedrusZ; 07-12-2007 at 10:49 PM. Reason: typos

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    Default Re: yet another unintended consequence of ethanol subsidies ...

    ^^^ and arguably the Carbon Credits scheme isn't going to be applied across the board either ... it is targeted towards certain selected foreign countries and already includes a fat subsidy for cellulosic ethanol but a miniscule one for sugar cane based ethanol ...



    (snip)"Guyana's President Bharrat Jagdeo on Thursday criticized the Kyoto Protocol on climate change for failing to allow countries like his nation with pristine unharvested forests to earn carbon credits.

    "The Kyoto Protocol is limited in that sense, and it's short-sighted in that it encourages bad behaviour basically among countries; if you cut down trees and you plant them back you get money, if you preserve them, you don't get anything," Jagdeo told a forum on agro-energy.

    The Guyanese leader noted that Guyana would reap "miniscule" assistance under the Clean Development Mechanism of the Kyoto Protocol when the South American country begins large-scale production of ethanol and other types of agro-based energy.

    He said Guyana has decided to get into the production of bio-fuels such as ethanol and biodiesel. But "assistance is miniscule through the Clean Development Mechanism as compared to the carbon credits we could get from standing forests," said Jagdeo, a Russian-trained economist.

    Carbon credits are the center of a system of credits that allows a company or country that reduces its carbon-dioxide emissions below a target level to sell the extra reduction as a credit to a company or country that has not met the target level.

    Under the Clean Development Mechanism of the Kyoto Protocol to the United Nations Framework Convention on Climate Change, developed countries can take up a greenhouse gas reduction project in a developing country where the cost of greenhouse gas reduction projects is usually much lower.

    Guyana has already set aside 80,940 ha (200,000 acres) of land in the eastern part of the country for investors to plant special varieties of sugar cane to make ethanol."(snip)


    ... again this confirms that the very real, arguably affordable, and well proven alternative of sugar cane based ethanol is deliberately being excluded from the 'alternative fuels' initiative, as well as being excluded from the carbon credits / tax credits scheme. IMHO this serves as irrefutable proof that the true purpose of the 'alternative fuels' initiative, at the very least, is NOT making available affordable 'alternate fuels' !!! As you state, it would appear that the carbon credits / 'alternative fuels' tax credit scheme is being narrowly focused to comprise a new corporate welfare program for selected US and European industries (as well as for selected foreign companies in selected foreign countries).

    Additionally, in the US at least, the already available already economically affordable option of sugar cane based ethanol is under a virtual mainstream media 'news blackout'. Also seemingly under a 'news blackout' is the existance of the 56 cent/gallon 'stealth tax' = US taxpayer funded subsidy on ethanol produced in the USA, and the existance of US import quotas which are currently preventing high volume importation of low priced sugar cane based ethanol produced by South American countries.

    Again, these elements deal with the direct costs of ethanol produced by various means. They do NOT deal with the indirect costs of ethanol i.e. the impact on the costs of other products in the 'food chain'. i.e. higher corn, grain and soybean prices, cascading into higher beef and poultry prices, further cascading into higher soap and detergent prices and who knows what other products. I am certain that the downstream 'raw material' cost increases currently being imposed on soapmakers because US gov't subsidies have now artificially created vastly increased demand for that 'raw material' for use in the production of non-cost effective alternate fuels, to inevitably be followed by either significant retail price increases for soaps and detergents or these US companies being priced out of business vs foreign competitors, is merely the first of many future examples.

    It also disturbs me that the cumulative costs of US ethanol programs on US consumers / taxpayers, from the farm subsidies, to the ethanol refiner subsidies, to higher prices at the pump, to the higher food prices, and now to higher prices for 'secondary products', also appear to be under a mainstream media 'news blackout'.
    Last edited by Melonie; 07-13-2007 at 12:16 AM.

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    Default Re: yet another unintended consequence of ethanol subsidies ...

    ^^^One other question I have is, depending upon which crops are chosen for the manufacture of ethanol, how will this impact crop rotation, the number of acres of arable land available, and topsoil erosion?

    I also vaguely recall reading somewhere that the EPA, under certain circumstances, considers topsoil erosion to be a form of pollution. It should be interesting to see wheher or not those laws will be enforced should ethanol production have a deleterious effect upon topsoil erosion in the U.S.

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    Default Re: yet another unintended consequence of ethanol subsidies ...

    ^^^ we'll admittedly I'm no expert on corn, soybeans etc. but my neighbors are since they have been farming commercially for 3 generations. Obviously this year they have planted just about every bit of available farmland they have with corn, in anticipation of the subsidy money plus high corn prices in the area due to the construction of a (mostly state subsided) new ethanol refinery increasing demand, and high soybean prices due to increased demand for the biodiesel market. The 'old man' of the family was concerned that the 'younger boys' weren't leaving enough land fallow, weren't planting enough land with (nitrogen fixing) soybeans, and weren't planting any different crops.

    The 'younger boys' countered that with the current high corn prices, they needed to plant as many acres as they possibly could with corn and the rest with soybeans to 'cash in' now while they were able to sell the 'alternate fuel' market at high prices and able to collect high farm subsidy payments. If this means that they will need to spend more money out of pocket for chemical fertilizers and pesticides next year, then they would at least have enough money to do so based on this year's expected profits. The 'younger boys' are of the opinion that the farm subsidies and tax credits for ethanol production are too good to last forever, and they want to cash in quick before the subsidies change.



    I didn't hear the subject of topsoil erosion come up to any great degree, but then again the hills and valleys of upstate NY are far different than the flat open fields of the 'great plains'. I also didn't hear the topic of water come up since lack of rain and/or flooding are almost never regional problems in upstate NY. I DID hear the topic of property tax increases come up, because it seems that 'developers' are buying up adjacent farm acreage in upstate NY left and right in order to convert several adjacent 'family farms' into large scale 'corporate corn and soybean farm' operations which is raising tax assessments for all farms in the area. I also heard a LOT on the topic of increasing prices for diesel fuel, and the 'younger boys' are already trying their hand at producing 'homemade biodiesel' using soybeans in conjunction with leftover animal fat products from another neighbor's small scale meat processing facility.

    One issue that struck me as rather important is that the 'younger boys' as well as the 'old man' both assumed that large quantities of chemical fertilizer would be available next year to offset their deliberate lack of 'natural' crop rotation this year, and that this chemical fertilizer would be available at prices which are 'affordable'. This assumption on the part of my neighbors is probably shared by thousands of other farmers, and probably leads to a conclusion that I should research and invest in a couple of fertilizer companies !!!

    From what little research that I have done already, it would appear that phosphate and potash fertilizer are already pricey due to rising energy prices (apparently, processing chemical fertilizers is very energy intensive). Also, America is becoming increasingly dependent on the importation of ammonia and potassium as fertilizer components, and the declining US dollar will automatically raise the US dollar denominated price of these components thus the price of fertilizers mixed in the USA. I wish that the charts in the following 'free' report included 2006 data, but one can assume that the previous year's trends have gotten even worse ...



    Also, like the soapmakers in the original post, it is highly probable that other products which depend on a ready supply of ammonia and potassium at a 'reasonable' price ( i.e. the paper industry, the cosmetics industry, probably dozens of other industries) could also wind up having to deal with sudden major increases in the price of their 'raw materials' if rising demand for fertilizer production strains the available supply and bids up prices.

    I am given to understand that, unlike crude oil refining which is essentially a 'self contained' process, the 'alternate fuels' industry requires all sorts of external inputs. These apparently run the gamut from ammonia and potassium and natural gas for fertilizers to produce corn and soybeans, to component chemicals for pesticides to produce corn and soybeans, to water and diesel fuel for farming, to more diesel fuel for crop transportation to refineries, to more natural gas and catalyst chemicals for refining, to yet more diesel fuel for ethanol delivery. The suppliers of these external inputs do not necessarily have the capacity available to deal with a huge potential new demand as a result of huge growth in 'alternate fuels'. This has the potential to bid up prices of these external inputs, and perhaps create a situation of outright shortages. Other industries which depend on these same external inputs will undoubtedly be forced to deal with these higher prices and possible shortages, with the expected downstream effects in terms of higher prices being charged to consumers for products which would 'appear' unrelated to the 'alternate fuels' industry but which in fact ARE related ... because they must compete for the same component materials.

    There has also been speculation that the vastly increased demand for natural gas to fuel ethanol refineries, in the absence of LNG terminals to allow the importation of foreign gas, has the potential to cause a huge spike in US natural gas prices next year as compared to this year. Some new ethanol refineries have attempted to come online burning huge amounts of coal instead of natural gas to fuel their refining process and reduce their ethanol production costs, but this is drawing a ton of flak from environmental groups. Because of this environmental flak, almost all of the new ethanol refineries which are coming online this year and next year will be natural gas fired, and will make a significant addition to the US natural gas demand vs supply equation.



    I guess I should buy back into US natural gas royalty stocks too !!!! But more importantly, if the ethanol refineries do wind up causing a major spike in US natural gas prices next year, this is going to impact the cost structures of a wide range of other US industries. This in turn will result in higher prices for a wide range of other US products, as well as the obviously connected price increases for natural gas for heating and price increases for electricity (primarily priced by natural gas fueled generators) which will hit virtually every US industry and consumer.

    I really wish that the Heritage Foundation or some such think tank would take the time to add up all of the additional direct and indirect costs that are stemming from the US ethanol industry !!! So far this task isn't being focused on, or perhaps HAS been focused on but has been subject to 'news blackout' ...



    The only general overview I could find from Heritage re ethanol is devoid of economic specifics, but is pretty clear about general trends ...



    ~
    Last edited by Melonie; 07-13-2007 at 08:47 AM.

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    Default Re: yet another unintended consequence of ethanol subsidies ...

    continued ...

    The only general overview I could find from Heritage re ethanol is devoid of economic specifics, but is pretty clear about general trends ...



    ... which yields two noteworthy quotes -

    (snip)"According to an article by the Federal Reserve Bank of
    Chicago, “despite the many analytic tools that economists have to inform public policy, no
    one…could report that there had been any comprehensive and respectable benefit-cost study
    conducted to evaluate subsidies and mandates for ethanol production and use.”19 This means
    that taxpayers are writing a blank check to an industry that has not proven itself in the free
    market."(snip) and

    (snip)"A professor of geo-engineering at the University of California-
    Berkeley, Ted Patzek stated that ethanol backers are “playing on human inability to see the
    scale.” He continued that “five years from now with all the ethanol anybody will be able to produce, the impact on gasoline consumption of all of that is less than inflating car tires
    properly, just in passenger cars.”(snip)


    Again please understand that I am not trying to take 'potshots' at the US ethanol industry for personal or political reasons. I AM taking potshots at the US ethanol industry because, if the truth of the situation were publicized, it is resulting in a huge additional tax burden on US consumers, it is causing large cost increases to US consumers for 'unrelated' products from food to soap to who knows what else, and in exchange for all of these extra costs it is NOT actually producing a significant reduction in US fossil fuel dependence or in environmental problems (the fossil fuel dependence and the environmental consequences merely take different forms).
    ~

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    Default Re: yet another unintended consequence of ethanol subsidies ...

    and here's another story about a different industry that is being squeezed because of ethanol's impact on corn prices as well as prices of downstream food products ...



    I would also add that all of these stories are being reported in FOREIGN press, with extremely few mentions of any adverse affects of ethanol in the US mainstream press.

    (snip)"This month, the price of milk in the United States surged to a near-record in part because of the increasing costs of feeding a dairy herd. The corn feed used to feed cattle has almost doubled in price in a year as demand has grown for the grain to produce ethanol.

    Christina Seid, whose family have been making ice-cream at the Chinatown Ice Cream Factory for 28 years, said yesterday that she expected to have to raise her prices, along with all competitors in the short term. “We are holding out as long as we can, but prices will rise,” Ms Seid said.

    Amy Green’s Ivanna Cone ice-cream emporium in Lincoln, Nebraska, has already raised its prices for a small cone to $3.50 before tax, up from $2.95 a few months ago. She also estimates that she is paying $150 more a week for the butterfat that she uses in her ice-cream.

    The squeeze on ice-cream makers, chocolate manufacturers and pizza companies – all of whom use dairy produce as a raw material – is set to tighten as the price of a gallon of milk in the US – up 55 per cent in the past 12 months in some American states – is now the same as a gallon of petrol, with dairy prices accelerating faster than the cost of fuel. "(snip)

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    Default Re: yet another unintended consequence of ethanol subsidies ...

    Quote Originally Posted by kdogg247 View Post
    Melonie, when you post about ethanol, you remind me of the people that said color TV would never make it.
    it's actually starting to remind me of those religious nutcases who stand outside concert venues with megaphones screaming at the crowds

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    Default Re: yet another unintended consequence of ethanol subsidies ...

    Well Mel....I always appreciate your posts, whether or not they are always the popular view or "conspiracy-ish"....least someone is trying to pry open the eyes of the sheeple . Hey Raven from Reno....if I played Huey Lewis and the News - "It's Alright" in a set with say....Aerosmith "Deuces are Wild"".....what would I remind you of??
    Last edited by DJ Maimed; 07-16-2007 at 08:44 PM.

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    Default Re: yet another unintended consequence of ethanol subsidies ...

    DJ ... I recently ran across a T-Shirt that sums up my situation in very few words ...


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    Default Re: yet another unintended consequence of ethanol subsidies ...

    How many more facts on the subject (which for some strange reason usually have to come from foreign news sources) will it take to convince people that there really are some serious 'unintended consequences' taking place as a result of the US ethanol program ?

    (snip)"Food inflation is undeniable, and is getting the attention of worldwide organizations who are actually monitoring correct food inflation.

    An unprecedented surge in global demand is behind the 23 percent rise in food prices that the International Monetary Fund recorded during the last 18 months. “We haven’t seen anything on this scale before,'’ says Martin von Lampe, an agricultural economist in Paris at the Organization for Economic Cooperation and Development.

    Organizations like the UN are also being impacted by massive food inflation.

    The WFP said its purchasing costs had risen “almost 50 per cent in the last five years”. The UN organisation said the price it pays for maize had risen up to 120 per cent in the past sixth months in some countries.

    Food inflation in China, what does China really need, food, or more mortgage backed caca?

    Like tens of millions of shoppers across China, Zhou Benqi has had to change her buying habits to cope with sharply rising prices of pork and eggs, staple foods for any Chinese family. “Because of price hikes, an ordinary meal is a big constraint on us, as my pension has already been eaten into by fees for electricity, water, broadband, gas and so on,” said Ms Zhou, a 53-year-old Shanghai native. “We’ve seen officials talking about adjustment many times, but so far they have failed to control prices.”

    Jing Ulrich, of JPMorgan in Hong Kong, believes higher farm prices in China have become “structural” rather than cyclical because of declining stocks of arable land and water problems. On top of that, local manufacturers, who have long struggled to pass on the cost of higher wages and raw materials, are gaining pricing power."(snip)

    from

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    Default Re: yet another unintended consequence of ethanol subsidies ...

    Are you saying I should give up my day-job driving "Team Short Bus" around ? The only thing I might argue with you about on this subject is whether these are "unintended" consequences or not.....the powers that be play the fool very well .

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    Default Re: yet another unintended consequence of ethanol subsidies ...

    Quote Originally Posted by Melonie View Post
    How many more facts on the subject (which for some strange reason usually have to come from foreign news sources) will it take to convince people that there really are some serious 'unintended consequences' taking place as a result of the US ethanol program ?
    well duh, ofcourse there are 'unintended consequences' ! That is true about anything and everything! Besides I have yet to see anyone here say that there are zip, nada, no 'unintended consequences'. So where are you getting that anway?

    Besides 'unintended consequences' doesn't mean that ethanol should not exist or be researched like you seem to think should be the case. Like or not for whatever personal issues you may have there are plenty of good and honest reasons to fund ethanol.

    Seriously, if everyone in history acted like you we would not have lightbulbs, radios, movies, modern meds, tv, computers and so on and so forth. There were a few people who acted just like you do about ethanol for each and every one of these modern advances. Yet do you really want to live without every single one of those things today?

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    Default Re: yet another unintended consequence of ethanol subsidies ...

    Seriously, if everyone in history acted like you we would not have lightbulbs, radios, movies, modern meds, tv, computers and so on and so forth. There were a few people who acted just like you do about ethanol for each and every one of these modern advances. Yet do you really want to live without every single one of those things today?
    hmmm ... if I'm not mistaken, every one of the items that you mentioned were developed with PRIVATE research funds and/or defense research funds, and all were sold to US consumers WITHOUT gov't price subsidies and/or 'stealth' taxes. Granted that various items on your list did benefit from gov't regulation (i.e. licensing policy, standardization directives etc.), and from gov't research for their own purposes (i.e. wartime radio / TV / codebreaking computers etc.).

    But this is not the same thing as making other taxpayers pick up 25%-35% of the retail price as a kickback to the manufacturers to allow them to turn a profit. Nor is it the same thing as the US gov't enacting tariffs and quotas to prevent the importation of lower cost competing product from foreign countries in order to guarantee US manufacturers a profit by selling their product at a very high price in a gov't sanctioned non-competitive marketplace.

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    Default Re: yet another unintended consequence of ethanol subsidies ...

    oh for fucks sake you are obviously just too obtuse to grasp the point

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    Default Re: yet another unintended consequence of ethanol subsidies ...

    The only thing I might argue with you about on this subject is whether these are "unintended" consequences or not.....the powers that be play the fool very well
    I made exactly that sort of speculation in the 'other' ethanol thread ...

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