Cane Ethanol from Brazil: Current Pricing

Sugar cane is a much better crop for ethanol production than maize (corn). Brazilian producers can price ethanol currently at $1.64 a gallon, wholesale. US ethanol wholesales for $2.55 a gallon, which is probably less than the actual costs of producing ethanol from maize. It is time for the US government to get rid of corn ethanol mandates, and open the market for international business without the protectionist tariffs.

“I think we are going to see record ethanol production this year in Brazil, while the U.S. ethanol producers are struggling to make a profit,” said Antonio Augusto Duva, a soft commodities manager at BNP Paribas bank in Sao Paulo. “The (Brazilian) industry’s hope, and this might be wishful thinking on their part, is that lower prices here and high gas prices there could result in big ethanol exports to the U.S.,” he said.

Another reason is that high corn prices — hovering near $6 per bushel on the Chicago Board of Trade — means U.S. corn ethanol producers are facing very tight profit margins, if they have any profit margin to speak of. Corn prices shot up last week when the U.S. Department of Agriculture reported an 8% expected drop in U.S. corn plantings to 86 million acres this season. “At these prices, a lot of ethanol producers are on the edge. You get bad weather this summer and the crop looks bad, and suddenly prices go to $7.

That would be impossible for U.S. ethanol companies,” said Joseph Petrowski, chief executive of Gulf Oil in Boston. Nevertheless, the U.S. has mandated ethanol use. So ethanol isn’t just going to vanish if corn prices stay at these levels and ethanol companies [will] start to go bankrupt as did Kansas-based Ethanex Energy Inc. (EHTE) on March 25. ___QiBioenergy

The US government has no idea how to deal with current energy problems. The Democratic Party dominated US Congress is particularly slow and obtuse. Congressional policies are driving up the cost of conventional energy to intolerable levels, while making it almost impossible for the market to bring in much needed alternatives. What we are seeing is political peak oil, and political global warming from all the hot air emanating from the US Capitol Building.

For a more enlightened look at bio-energy alternatives than anything you will find typically on the news media, check out NPR's Science Friday tomorrow:

NPR’s Science Friday will air an update on biofuels research tomorrow (April 11), with calls accepted from 2-4 EDT. In this week’s segment, George Huber, of the University of Massachusetts at Amherst, reports on green gasoline, highlighted earlier this week in Biofuels Digest. Also, Miriam Sticklen of Michigan State University will highlight work on enzymes from cattle used for cellulosic ethanol and Percival Zhang of Virginia Tech will relate developments in producing hydrogen gas from biomass. __BiofuelsDigest

For a fascinating summary-style look at some of the problems the IPCC and the "climate consensus" are facing, check out this interesting article from a New Zealand website. H/T Energy Blog

The issues of CAGW, Peak Oil, and BioEnergy are inextricably inter-tied, in a perverse way. Many close observers and critics of the many inconsistencies and inadequacies of CAGW orthodoxy, feel strangely compelled to attack BioEnergy. Many supporters of BioEnergy seem to think that biofuels will help stave off CAGW, although that is surely whimsical thinking at its worst. Many believers in catastrophic Peak Oil resent BioEnergy as a "party crasher" that threatens to spoil all the fun of watching civilisation crashing all about. Many members of the cloned-consensus of CAGW also believe in catastrophic Peak Oil, although there are deep contradictions involved in the path to catastrophe of the two apocalypses.

Quasi-religious thinking lies at the heart of most people's beliefs about energy, economics, society, politics, and life in general. Even atheists unwittingly tread the same quasi-religious thought pathways and processes that the most devout believers walk. But don't tell them. They might burn you at the stake.