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The Tortilla Crisis

Discussions about the economic and financial ramifications of PEAK OIL

Re: The Tortilla Crisis

Unread postby Bas » Wed 07 Feb 2007, 11:56:52

$this->bbcode_second_pass_quote('Gideon', 'T')he OP wrote:

"Here’s the deal. This year about 17 percent of the North American corn crop went to making ethanol for the continent’s millions of cars and trucks. Next year about 50 percent of the crop is slated for ethanol, and in two years, if all the new distilleries planned are built, 90 percent of the corn crop will go to make fuel for cars."


Can you back this up? This seems flat out wrong.


I'd like to see a source for that as well.
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Re: The Tortilla Crisis

Unread postby Aaron » Wed 07 Feb 2007, 11:58:22

$this->bbcode_second_pass_quote('', 'P')ersonally, I would sooner see $10 billion blown a year in ethanol R&D subsidies


And I think it's just another "business opportunity" & little else.

No matter how good we get at ethanol production it still amounts to food for fuel.

And it's the Chinese who will all but guarantee that no matter how much corn we shuck, all we will accomplish is stripping the flesh from impoverished people with these "green" bio-solutions.

Add all the switch-grass or whatever you like to the mix... American farmers will still be selling their corn to the highest bidder... & that bidder will be Shell... not [s]Archer Daniels[/s] Safeway.

No amount of "drive less" can realistically touch demand growth from China & India alone, much less the whole world.

And when you argue demand will be destroyed lowering Chinese & Indian demand... it's 1938 all over again.

(Didn't mean to hold you personally responsible) :)
Last edited by Aaron on Thu 08 Feb 2007, 16:02:46, edited 1 time in total.
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Re: The Tortilla Crisis

Unread postby Aaron » Wed 07 Feb 2007, 12:36:32

$this->bbcode_second_pass_quote('', 'E')thanol production is heavily subsidized to keep it affordable. One study says that federal and state subsidies in 2006 were as high as $6.8 billion and will increase to $8.7 billion this year.


Once you subtract this subsidy, what's left is nothing but the false security of political promises & profit-taking by investors.

Same thing with Canada's Tar Sands projects. The subsidies are so heavy, it distorts the reality of this poor substitute.

The reality is simple & intuitive & requires no special education to understand.

Richard Smalley explained it to me personally.

The oil is there in all these marginal sources... it's just a whole lot harder to get to it & make stuff out of it, than conventional oil.

Orders of magnitude harder.

So much so that it renders any "advances" in bio-fuel tech irrelevant for the foreseeable future.

I have little doubt that we will burn everything combustible before we are done.

And that I think is an inescapable consequence at this point.

But that don't make it right...
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Re: The Tortilla Crisis

Unread postby Colorado-Valley » Wed 07 Feb 2007, 12:50:25

From the Business Week article over at Energy Bulletin:

"The spike in the price of corn that's hurting Boerboom and other pork producers isn't caused by any big dip in the overall supply. In the U.S., last year's harvest was 10.5 billion bushels, the third-largest crop ever. But instead of going into the maws of pigs or cattle or people, an increasing slice of that supply is being transformed into fuel for cars. The roughly 5 billion gallons of ethanol made in 2006 by 112 U.S. plants consumed nearly one-fifth of the corn crop. If all the scores of factories under construction or planned go into operation, fuel will gobble up no less than half of the entire corn harvest by 2008."

I'm really thinking about sticking with raising grass-fed cattle. Corn takes a lot of work and energy imputs, and you always have those unknown unknowables, like late frost, hail and too much rain during harvest season. Farming is a Las Vegas gamble ...

Raising cattle on solar grass is so much easier, as long as you can raise your own hay for the winter.

Have you guys seen what the price of hay is now? My God ...


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Re: The Tortilla Crisis

Unread postby Bas » Wed 07 Feb 2007, 12:53:06

can't wait to pay more for meat, don't eat much of it as it is...
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Re: The Tortilla Crisis

Unread postby MrBill » Wed 07 Feb 2007, 13:01:51

Aaron wrote:
$this->bbcode_second_pass_quote('', 'A')nd when you argue demand will be destroyed lowering Chinese & Indian demand... it's 1938 all over again.

(Didn't mean to hold you personally responsible)



Hmm, a lost decade followed by almost 70-years of uninterupted growth and prosperity? ; - ))
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Re: The Tortilla Crisis

Unread postby Aaron » Wed 07 Feb 2007, 13:19:26

$this->bbcode_second_pass_quote('MrBill', 'A')aron wrote:
$this->bbcode_second_pass_quote('', 'A')nd when you argue demand will be destroyed lowering Chinese & Indian demand... it's 1938 all over again.

(Didn't mean to hold you personally responsible)



Hmm, a lost decade followed by almost 70-years of uninterupted growth and prosperity? ; - ))


Not lost... at least not to me.

Resource wars in the future may well compare to WWII, as crack compares to Sanka.

And I am as yet unconvinced of the public merits the blessings of technology have visited on mankind.

In any category you can name, modern "advances" have not only failed to deliver on the promises made, but many have spectacularly failed making us wonder if the technologies themselves may have contributed to the failure.

Advances in modern medicine, education, human rights, agriculture etc... have not saved our species from disease, ignorance, cruelty or hunger... in fact all of these things are at never before seen heights.

More people die from treatable disease, starve, are oppressed, & ignorant, than at any other point in human history.

It's difficult to argue the merits of such a system without recognizing it's obvious failure to meet it's goals.

So 70-years of uninterrupted growth and prosperity for 10% of the population, seems more accurate to me.
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Re: The Tortilla Crisis

Unread postby Colorado-Valley » Wed 07 Feb 2007, 14:49:00

$this->bbcode_second_pass_quote('Gideon', '')$this->bbcode_second_pass_quote('', 'O')P wrote:"If all the scores of factories under construction or planned go into operation, fuel will gobble up no less than half of the entire corn harvest by 2008." "


So your original post, which is what you intend to publish, is untrue?


That's what I wrote. Half of the corn crop will be used for ethanol by next year.

I'm a philosopher farmer. I don't like the idea of using food for fuel. But most farmers are interested in the bottom line, and ethanol is a potential gold mine. Ethanol plants are going up everywhere.
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Re: The Tortilla Crisis

Unread postby Dreamtwister » Wed 07 Feb 2007, 15:01:35

$this->bbcode_second_pass_quote('Aaron', 'A')dd all the switch-grass or whatever you like to the mix... American farmers will still be selling their corn to the highest bidder... & that bidder will be Shell... not Archer Daniels.


Actually, according to the ADM webste, they are the largest producer of fuel ethanol in the US.
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Re: The Tortilla Crisis

Unread postby Aaron » Wed 07 Feb 2007, 15:29:08

$this->bbcode_second_pass_quote('Dreamtwister', '')$this->bbcode_second_pass_quote('Aaron', 'A')dd all the switch-grass or whatever you like to the mix... American farmers will still be selling their corn to the highest bidder... & that bidder will be Shell... not Archer Daniels.


Actually, according to the ADM webste, they are the largest producer of fuel ethanol in the US.


I deserve that...
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Re: The Tortilla Crisis

Unread postby Dreamtwister » Wed 07 Feb 2007, 16:12:02

$this->bbcode_second_pass_quote('Aaron', 'I') deserve that...


I don't think your point was lost though. I think it's pretty clear your intent was spot-on. That corn will go to the ethanol division, not the "What the hell is Pedro supposed to feed his family now" division.

But it just goes to prove, yet again, that even the oil companies can't compete with the pure evil that is Archer Daniels Midland.
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Re: The Tortilla Crisis

Unread postby Aaron » Wed 07 Feb 2007, 17:04:08

$this->bbcode_second_pass_quote('', 'e')ven the oil companies can't compete with the pure evil that is Archer Daniels Midland.


I loled
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Re: The Tortilla Crisis

Unread postby charlesfinney_99 » Wed 07 Feb 2007, 17:41:39

I believe the trend of biofuel usage causing higher price of grain due to competition between fuels and foods is inexorable


But the question is whether biofuel can replace decreasing crude-based fuels,or even mitigate Peak Oil


Expanded biofuel production WILL require more crude oil,so Peak Oil may accelerate the depletion of Crude Oil
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Re: The Tortilla Crisis

Unread postby dinopello » Wed 07 Feb 2007, 17:50:03

$this->bbcode_second_pass_quote('charlesfinney_99', 'E')xpanded biofuel production WILL require more crude oil,so Peak Oil may accelerate the depletion of Crude Oil

I hate the way it works like that.
$this->bbcode_second_pass_quote('', 'T')he chief cause of problems is solutions. - Eric Severeid
$this->bbcode_second_pass_quote('', 'B')ut it just goes to prove, yet again, that even the oil companies can't compete with the pure evil that is Archer Daniels Midland.

Just wait for the big mergers to start between Agribusiness and Energy Companies...
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Re: The Tortilla Crisis

Unread postby Dreamtwister » Wed 07 Feb 2007, 19:03:12

$this->bbcode_second_pass_quote('Aaron', 'I') loled


I almost did as well, until I realized just how grim it really was.

The good news is, once those rediculous government subsidies dry up (and we all know they will sooner or later), the ethanol market will vanish like a fart in the wind.
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Re: The Tortilla Crisis

Unread postby Pixie » Wed 07 Feb 2007, 20:02:14

$this->bbcode_second_pass_quote('Bas', '')$this->bbcode_second_pass_quote('Gideon', 'T')he OP wrote:

"Here’s the deal. This year about 17 percent of the North American corn crop went to making ethanol for the continent’s millions of cars and trucks. Next year about 50 percent of the crop is slated for ethanol, and in two years, if all the new distilleries planned are built, 90 percent of the corn crop will go to make fuel for cars."


Can you back this up? This seems flat out wrong.


I'd like to see a source for that as well.


I think the numbers I have seen over and over here on peakoil.com are that ethanol production took up 20% of the US corn crop this year, and planned ethanol factories will increase ethanol production 250% in the next two years. That would be 50% of the US corn crop in two years, not 90%. But, of course, Bush's 35million gallon goal would be 140% of the US corn crop by 2017, so I guess his plan is for us to become a net corn importer. Wouldn't that be ironic?

Oh, wait, he's counting on cellulosic ethanol, huh? You know, in the long run, I can't help thinking that cellulosic ethanol is going to be equivalent to shovelling our topsoil into our gas tanks as fast as we can.
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Re: The Tortilla Crisis

Unread postby eastbay » Wed 07 Feb 2007, 20:41:47

...ethanol factories will increase ethanol production 250% in the next two years. That would be 50% of the US corn crop in two years, not 90%.

Actually, if one takes 20% of anything, say red marbles, and increases its percentage by 250% it will result in red marbles rising to 70% of the total.

I'm just a simple retired cop, so maybe my math is screwey so please someone correct me if I'm wrong.

I calculate a 100% increase (doubling) of 20% red marbles would be 40% red marbles. A 200% increase (tripling) would be 60% red marbles and a 250% increase (tripling and a half) would be 70% red marbles, which is also probably about the percentage of US corn production that will go to fuels in two years.

70%, not 50% or 90%.
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Re: The Tortilla Crisis

Unread postby eastbay » Wed 07 Feb 2007, 20:53:25

That's what I'm talking about..... good at math! Lol... :-D
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Re: The Tortilla Crisis

Unread postby Tyler_JC » Wed 07 Feb 2007, 23:18:24

50%, 70%, 90%, it doesn't matter.

We don't have enough corn to make it happen. Well, we could grow more corn, but I'd prefer a little variety in my diet.

And even if we felt like becoming a net food importer in order to become a little more energy independent, we would starve off an entire continent to fuel our cars.

This corn ethanol stuff is utter madness!

At least with corn ethanol the subsidy is direct and easily measureable. How much of the war in Iraq should we tack on to gasoline's real cost?
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Re: The Tortilla Crisis

Unread postby Colorado-Valley » Thu 08 Feb 2007, 02:23:23

The figures I read a couple of weeks ago were 17 percent of the corn crop this year, 50 percent in 2008 and up to 90 percent in 2009 — if all the ethanol plants currently on paper actually get built.

Every corn stalk in the country will go to ethanol if there's money to be made.
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