Ethanol

The Times delivers a rainy-Sunday opportunity for edification and reflection with a long piece on the ethanol boom:

For Good or Ill, Boom in Ethanol Reshapes Economy of Heartland

By ALEXEI BARRIONUEVO

This article was reported by Alexei Barrionuevo, Simon Romero and Michael Janofsky and written by Mr. Barrionuevo.

Dozens of factories that turn corn into the gasoline substitute ethanol are sprouting up across the nation, from Tennessee to Kansas, and California, often in places hundreds of miles away from where corn is grown.

Once considered the green dream of the environmentally sensitive, ethanol has become the province of agricultural giants that have long pressed for its use as fuel, as well as newcomers seeking to cash in on a bonanza.

The modern-day gold rush is driven by a number of factors: generous government subsidies, surging demand for ethanol as a gasoline supplement, a potent blend of farm-state politics and the prospect of generating more than a 100 percent profit in less than two years.

The rush is taking place despite concerns that large-scale diversion of agricultural resources to fuel could result in price increases for food for people and livestock, as well as the transformation of vast preserved areas into farmland.

...

Despite continuing doubts about whether the fuel provides a genuine energy saving, at least 39 new ethanol plants are expected to be completed over the next 9 to 12 months, projects that will push the United States past Brazil as the world's largest ethanol producer.

...

But many energy experts are also questioning the benefits of ethanol to the nation's fuel supply. While it is a renewable, domestically produced fuel that reduces gasoline pollution, large amounts of oil or natural gas go into making ethanol from corn, leaving its net contribution to reducing the use of fossil fuels much in doubt.

Let me just seize on that point - does the production of ethanol have a positive energy balance or not?

Writing in Slate, author/muckraker Robert Bryce is skeptical:

The stickiest question about ethanol is this: Does making alcohol from grain or plant waste really create any new energy?

The answer, of course, depends upon whom you ask. The ethanol lobby claims there's a 30 percent net gain in BTUs from ethanol made from corn. Other boosters, including Woolsey, claim there are huge energy gains (as much as 700 percent) to be had by making ethanol from grass.

But the ethanol critics have shown that the industry calculations are bogus. David Pimentel, a professor of ecology at Cornell University who has been studying grain alcohol for 20 years, and Tad Patzek, an engineering professor at the University of California, Berkeley, co-wrote a recent report that estimates that making ethanol from corn requires 29 percent more fossil energy than the ethanol fuel itself actually contains.

The two scientists calculated all the fuel inputs for ethanol production—from the diesel fuel for the tractor planting the corn, to the fertilizer put in the field, to the energy needed at the processing plant—and found that ethanol is a net energy-loser. According to their calculations, ethanol contains about 76,000 BTUs per gallon, but producing that ethanol from corn takes about 98,000 BTUs. For comparison, a gallon of gasoline contains about 116,000 BTUs per gallon. But making that gallon of gas—from drilling the well, to transportation, through refining—requires around 22,000 BTUs.

However, government-sponsored studies have found erthanol procuction to have a positive energy balance.  Here is a 1995 study by Hosein Shapouri, James A. Duffield and Michael S. Graboski; a 2001 reprise, and an article citing a 2002 effort:

A United States Department of Agriculture (USDA), Economic Research          Service Report number 814 titled "Estimating The Net Energy Balance Of Corn Ethanol: An Update " was published in July of 2002. The Conclusion states in part: "Corn ethanol is energy efficient, as indicated by an energy ratio of 1.34 that is, for every Btu dedicated to producing ethanol, there is a 34-percent energy gain." A similar study done in 1995 indicated only a 1.24 energy ratio. The increase is accounted for by an increase in corn yields and greater efficiencies in the ethanol production process. As a result, energy efficiency in the production of ethanol is increasing.

Well.  I have no doubt that in Iowa in late 2007, ethanol will have a positive energy balance.

Comments

[crosspatch]

It does depending on the source of it but the important things to remember are

A: it has less energy per gallon than gasoline. At any given speed, it takes a certain amount of horsepower to simply overcome wind resistance and maintain speed. It takes about 1.5 gallons of ethanol to produce the same power a 1 gallon of gasoline so in order to be competitive in price, ethanol has to be cheaper per gallon than gasoline is because you need to buy more of it to go the same distance.

B: your fuel supply can be wiped out in a drought or late frost. In the case of a 1930's style drought in the plains, we could be put into a position of having to choose between fuel and feed. If sugar is used, a hurricane can wipe out your fuel supply worse than the current Gulf oil rig problems. An offshore rig can be repaired. When a crop is destroyed, it's just gone. In other words, ethanol is at the mercy of mother nature and she can be fickle.

C: You can't transport ethanol by pipeline. Ethanol absorbs moisture, oil products don't. This means ethanol causes corrosion in pipelines designed to transport oil products. Currently, ethanol must be transported by tank truck or rail car. This causes distrubution bottlenecks. To give one example: As of the first of the year, the EPA ruled out the use of MTBE as an oxygenation additive to gasoline and specified that ethanol be added instead. This caused massive problems and was one of the factors in high gasoline prices because every available tank truck in the midwest was hauling ethanol to the gasoline distribution depots so the fuel could be mixed for transport to the filling stations. This caused a tight supply of fuel in many locations of the country. The President has waived the requirement right now, but this problem is going to return when the waiver period expires.

Ethanol SOUNDS great until you think the process through in actually putting it into practice. When gasoline gets to about $4.50 a gallon or so, ethanol becomes competitive (because, remember, your fuel mileage will be lower on ethanol requiring you to burn more of it to go a given distance). When it becomes a competitive fuel, auto makers will provide more vehicles to burn it and stations will have more of it avialable. But still, having a fuel supply that is so vulnerable to drought or late frost bothers me.

[windansea]

ethanol sucks...

it costs more per gallon to produce than gas and screws up the engines on my boat

[Bob]

Actually I think this is great. No, not because it makes good science (at least now), but it's good politics. Finally the cost of oil is high enough to encourage investment money to be poured into these alternative fuels. This gives the Al Gore moonbats something to do, and in the mean time the cost of oil will stabilize and even begin to come back down. Let the markets dictate who wins the fuel wars and let's just keep the government out of it. Hopefully there will be a technological breakthrough soon, and we can tell the Mideast to go pound sand!

Again let the market forces dictate the best fuel, and we'll all benefit.

As Esqueleto sez "I only believe in Science"

[noah]

Bob, I agree in principle. But the moonbats will insist on "alternative" fuels until every last drop of cheap oil is wasted making them!

Bring back MTBE...the stuff never bothered me none!

There is an interesting article (Scientific American) on superconducting powerline networks connecting clusters of next generation nuclear plants which produce both electrical power and liquid hydrogen. The hydrogen cools the superconductor and is transported as well!

[The Commissar]

Ethanol produced from sugarcane unquestionably has a positive energy balance. We should lift the tariff on Brazilian ethanol. Free markets and all that.

[Beto Ochoa]

Oil is a renewable resource and Dr. Thomas Gold, a professor at Cornell University, in his book The Deep Hot Biosphere: The Myth of Fossil Fuels shows how the earth produces oil naturally. This is no new idea. German scientists were onto this biological process in 1939. Now the Russians, with this information, are finding oil as deep as 40,000 feet. Russia has become the worlds top oil producer and the USA continues to waste energy on crap like ethanol. Our problem is not how much we consume. It is how little we produce and how little attention we pay to real problems.

[M. Simon]

A viable energy system has a gain of 5X to 15X (wind is around 10X currently).

The best use for ethanol is to get the politicians to drink enough of it while the legislature is in session to prevent the legislators from "accomplishing" anything.

[Dwilkers]

The stickiest question about ethanol is this: Does making alcohol from grain or plant waste really create any new energy?

I read some really interesting stuff about this in Scientific American last year re: hydrogen. The punch line was 'we need to work on hybrids'.

Turns out the cost (in energy) of producing and distributing hydrogen is actually higher than the energy delivered to the drive train on a hydrogen car. I had no idea.

[reliapundit]

i'm skeptical, BUT...

if 100% of our fuel was bio/renewable, it wouldn;t mater if we needed 130% of the bio.renewable fule to do what 100% of the "fossil" fuekls did - becasue it's renewable and domestic. and these two aspects are pluses.

my deepest feeling is that we need more energy diversity and we should let the marketp-lace do it and not the government.

as fossil fuels become more expensive other fuels will become more viable.

as with most issues/controversies, the REAL motivation for the Left is using it to justify MORE GOVERNMENT involvment.

this had never ever helped.

[Cecil Turner]

The best use for ethanol is to get the politicians to drink enough of it . . .

Heh. Hey, maybe if we turned it into some sort of fruity-flavored designer drink, marketed heavily toward the trendi crowd, it'd reduce the demand (and price) for single-malt scotch? (Probably not, but worth a try.) I'd like to put in a plug for the National Energy Policy report, which gives a good overview of the issues. Ethanol is a decent means of replacing oil consumption, but is remarkably inefficient as an energy source. (And considering government incentives, looks more like a means for siphoning money out of the treasury than an effective way of improving the energy picture.)

Turns out the cost (in energy) of producing and distributing hydrogen is actually higher than the energy delivered to the drive train on a hydrogen car.

Hydrogen is merely a means of transporting energy from one place to another. And since there are inefficiencies in every system, it'll always have a net loss in transmission. But, as with ethanol, it allows use of sources other than oil.

However, the obvious first requirement is some sort of excess generation capacity, to turn into hydrogen. If you're talking about the bio-generation of hydrogen, there's still significant dispute over its efficiency. There's little doubt about nuclear generation. And since, AFAICT, the only feasible means of significantly increasing generation capacity is nuclear . . .

[ed]

Hmmmm.

Frankly people are overly obsessive about producing energy domestically. While that's a nice idea, it simply won't work with ethanol because corn is a really crappy way of making ethanol.

The best way to do it is to allow ethanol imports from other countries. For one thing this would vastly improve the economies of those nations where we buy our ethanol and induce market forces where corporations and nations compete with one another to supply ethanol to America.

[Michael Heinz]

Popular Mechanics has a great comparison of various alternative fuels, including a chart that breaks it down, by cost. It includes ethanol, methanol, hydrogen, electric, etc..

http://www.popularmechanics.com/science/earth/2690341.html

[ajacksonian]

Ahh... numbers, numbers, numbers... yes, I ran the numbers on most of this some time ago here. The major thing to look at is conversion efficiency of sunlight to useful fuel per acre and growing season. Now, for a growing season of 125 days the US can convert about 9.39% of solar energy, per acre, into 300 gallons of ethanol. Now, if you look at palm oil for biodiesel you get a 9.45% efficiency of conversion rate, but it is garnered via multiple crops per year in tropical conditions and that efficiency drops when you get into a growing season cyclic pattern. Ditto for Rapeseed at 9.58%.

So a quick look at sugarcane:

1) Industrial production is about 5 crops per year Chakra in Argentina. However, that is in tropical conditions with a 'semi-perennial' plant.

2) Yield of ethanol per acre of sugarcane is 662 gallons/acre(SARID source)... but do note that this is in a region that is tropical and so has the equivalent of 5 growing seasons per year for a semi-perennial plant.

3) Insolation received varies between 4.5 to 6.5 kW/square meter/day. Now for palm oil I used 5.0 kW/square meter/day and to keep things generalized in the tropics I will use that for sugarcane. So, the annual energy received from the sun per acre is: 246,193 kWh/year per acre.

4) Per gallon ethanol has 80,000 BTU or 23.4 kWh. Thus, those 662 gallons contain: 15,520 kWh. Or a conversion rate of input energy to output energy of 6.3%.

So the Brazilians are converting 6.3% of their available energy to ethanol per acre and only achieving a net energy gain when they burn the rest of the plant for electricity... say, are they scrubbing that to reduce emissions? Now, if you were *fair* you would also look at all the other things that corn was used for in the way of energy output and such, but I will stick to the pure ethanol equation since that is what everyone seems to harp upon.

So, Brazil, to gain its 'energy independence' needs to cut down vast swaths of rainforst for a crop that will give a minimal turnover for energy yield and deplete the thin rainforest soil in a few years so that it is no longer fit for agriculture. Thus requiring more rainforst to be cut down.

Wash, rinse, repeat.

How green *is* Brazil?

And exactly how sustainable *is* sugarcane for energy production given the agricultural realities of Brazil?

And, as a bonus question, why on Earth would the US want to substitute third world agrarian Nations with a penchant to totalitarianism in place of oil producing natiions with the exact same profile, save many having a virulent strain of a religion vice a tendancy for Communism in the agrarian nations?

Needless to say, I am not impressed with the *green* fuel source. And this does not include the necessary investment in infrastructure to use it.

If we need to have a new infrastructure, let us make sure that it garners us a new entire industrial outlook in the doing, which is what I look at here for the long-term and a stop-gap, near term energy policy to get us from here to there.

But that is because I truly *want* a sustainable energy supply for the long-term and a brighter future for the Nation.

[Moqui]

Pimental and Patzek "calculated all the fuel inputs for ethanol production—from the diesel fuel for the tractor planting the corn, to the fertilizer put in the field, to the energy needed at the processing plant—and found that ethanol is a net energy-loser."

crosspatch tells us that "you can't transport ethanol by pipeline. Ethanol absorbs moisture, oil products don't. This means ethanol causes corrosion in pipelines designed to transport oil products. Currently, ethanol must be transported by tank truck or rail car."

So, if you add the transportation energy to the P & P calculation, then ethanol would seem to have an even larger net loss, no?

[richard mcenroe]

Ethanol is probably a shuck, but MTBE was bad news out here in California; it screwed up several aquifers big time: none, of course, in the Green urban voting districts, cuz they're too sensitive to actually have one of our dwindling number of refineries in their neighborhoods.

Just remember, the people demanding ethanol are the same people who demanded MTBE.

If you want to minimize the short-term economic impact though, now that there's such a huge demand for their product, what say we start eliminating farm subsidies for corn?

[ed]

Hmmm.

Not every third world nation, agrarian or not, is a totalitarian regime. Nor is "having a penchant" the same as being totalitarian.

1. I'm still rather unconvinced that ethanol is a good idea. But if it is a good idea then trying to produce it domestically using corn is frankly absurd.

2. A primary underpinning of totalitarian states is the relative poverty of the population. A prosperous population is IMHO much less likely to either support a totalitarian government or to promote one. The simplest reason being that people with money want to spend it how they choose while totalitarian governments prefer to make those decisions for the general population.

3. A major engine of prosperity for third world agrarian nations is in fact agriculture. Amazing eh? The problem though is that massive amounts of tariffs, import quotas and other restrictions that prevent many third world farmers from realising any sort of prosperity. In these nations if the farmers make money, then the rest of nation will make money from the purchases they will make.

4. The problem with oil is that there are relatively few sources available so it's more of a take it or leave it situation. But with ethanol production there are many nations that could involve themselves in sustained production of ethanol. A wider field of supply of ethanol would allow for the winnowing out of totalitarian nations from the accepted supply list.

5. A secondary benefit would be very likely a reduction in illegal immigration. American spends hundreds of billions of dollars each year for gasoline. If that money were instead spent in Central & South America for refined ethanol that would raise the economic conditions of those areas by a significant amount.

*shrug* If ethanol is the way to go, then outsourcing the production is also the way to go because using corn is rather silly.

[Dwilkers]

Cecil-

Let me self-correct.

The point the study was making was that hydrogen cost significantly more in energy to produce as well as cost more in greenhouse emissions to produce than oil or other alternatives.

It was based on the current electricty production methods, etcetera.

Um...see if I can figure out how to explain the point they made...

In other words, by the time you produced oil, refined it, put it in a hybrid car and ran it, you produced less greenhouse gases at a more efficient energy consumption rate than if you used electric power to produce, transport and burn hydrogen.

I'm not an engineer, but they made a convincing case that hydrogen cars are a pipe dream at this point and would in fact be counterproductive from an energy consumption and pollution point of view.

[TallDave]

Using the same data, one can prove that GASOLINE has a negative energy balance.

That said, corn is not that energy-efficient, and we can't grow cane sugar.

Bioengineers, please call your offices!

[boris]

produced less greenhouse gases

If the hydrogen were produced strictly from dedicated nuclear power plants there would be zero greenhouse gas produced. (not counting H2O)

If ethanol was produced using only ethanol fuel for combustion and nuclear generated electricity, the net contribution would also be zero. Of course if more than 1 gallon of ethanol is needed to produce a gallon, that won't work.

[ajacksonian]

ed - Very true, not every third world nation that is agrarian does have these tendancies. But finding stable, multi-decadal nations with vast amounts of cropland to spare for creating a low efficiency fuel for the US economy is difficult. Even E85 would use up the equivalent of 70% the cropland in the US, going to E100 would use it all up and need another good sized nation to boot... and then there is the actual question of growing *food*.

Dwilkers - You are correct on the hydrogen movement. Electrical fractionation still eats up more energy than is stored by the resultant fuel. And even the latest catalytic systems do not overcome that obstacle. If electricity were cheap, hydrogen is obvious. It isn't so hydrogen isn't.

So, onwards from that...

Overall it is the paradigm of not liking the oil producing regimes for being despotic, etc. and they have fractious problems beyond that. Currently the US uses an approximate 125 billion gallons of gasoline/year note that Brazil's vaunted production of Ethanol is 4 billion gallons per year. The Brazilian solution is fine if you want to exchange rainforest for current fuel supply, not so good otherwise. But, given that, its entire Ethanol output at E85 is 3.2% of US gasoline consumption. Got about 40 Brazils to pony up to the bar on this? Mind you, that is just to *cover* gasoline consumption... not to speak of diesel and the fossil fuels used for plastics, lubricants, and suchlike.

While the argument *could* be made that it would be possible to find a large number of nations each to supply us with a bit of that, we are then looking at the addition of transport costs, etc. done with petroleum. Those vessels haven't been designed yet and because of the nature of Ethanol, is not likely to be an easy retrofit into the existing infrastructure.

Then you can start looking at the actual potential suppliers, which you would like to have year 'round production, so that makes the tropics the obvious looking point. So, South America, Africa, Some parts of the Middle East (although the climate is against that), India (which may do its own thing), South East Asia, and lots of island nations. Start nominating your obvious choices for being the future energy suppliers to the US! You would like stable regimes that have a record of stability, offer freedom to its people, have not had any Communist leanings since the end of the Cold War, have no despotic neighbors seeking to gain control of resources, does *not* have a virulent religion wanting to kill anyone not of it... oh, and is tropical has moderate and consistent rainfall, will practice good agricultural methods to sustain production and is a reliable trading partner. You may have your own criteria, but those are mine and seem semi-sensible at least, so as to avoid the current problems we have with our regular oil suppliers.

Oh, anyone who thinks Global Warming is true, you may want to look at rates of tropical desertification and realize that if all the worrying is *right* then those suppliers of Ethanol will... ummm... dry up. I don't believe that, but climactic cycles are moving back to their pre-1300 norms, and large portions of what we know as rainforst in Mesoamerica and South America were relatively dry grasslands, especially the coastal regions. The Amazon has its own weather, of course... just what deforestation will do to that... who knows?

Or we could invest heavily in Canada and use their oil production and pay them market prices for it to build up their western provinces. And they already have oil pipelines to the US and they reversed the flow of them two years ago, so they now EXPORT oil to the US. And actually open up our continental shelf for exploration... the Cubans have brought in the Chinese to do just that off the coast of Florida.

Decisions, decisions, decisions...

Remember, we use 9.16E11 kWh every year to move our vehicles. Time's a ticking away.

[Cecil Turner]

In other words, by the time you produced oil, refined it, put it in a hybrid car and ran it, you produced less greenhouse gases at a more efficient energy consumption rate than if you used electric power to produce, transport and burn hydrogen.

What Boris said. If you stuck to current methods of electricity production, I'm sure your point is correct. However, that just helps make the case for nukes. The problem with most of the renewable proposals is that they're not capable of keeping up with the increase in demand, let alone replace a sizeable proportion of current generation. Nukes, with all their problems, can.

[abe shorey]

"Ethanol produced from sugarcane unquestionably has a positive energy balance. We should lift the tariff on Brazilian ethanol. Free markets and all that."

I agree. Unfortunately politics and reality will not allow this to occur. Politics being ADM/Farmers/Iowa. Reality being Brazil's got little supply to spare.

[Dwilkers]

Well guys, FWIW I'd support us building nuke plants but at least up to now we're not doing so. Instead from what I've read we're doubling down on coal, lignite and natural gas. I think we still haven't licensed a new nuke plant since the 70's.

What the US has done is we have elected to let the market drive this. That means prices are going to rise significantly as oil becomes more difficult to get into our gas tank.

Personally I think this is one of those things that is so important the government needs to be involved. Like by underwriting the cost of nuke plants in some way, or limiting liability, something to make them more attractive.

But even if we did that we wouldn't use them to make hydrogen short of a breakthrough in production because it isn't currently an efficient way to deliver power to an automobile's wheels as outlined above.

I've just about resigned myself to $5, $6 and $7 per gallon gasoline in the future.

[crosspatch]

I noted with a chuckle that people would switch from imported oil to importen ethanol. Not sure how much that would gain us considering that MOST of our imported oil already comes from the Western hemisphere. Our two largest suppliers of imported oil are Canada and Mexico. Then comes Saudi and then comes Venezueala, I believe. Brazil is already one of our oil importers. I see no net gain from switching from Brazilian oil to Brazilian ethanol.

Check the December 2005 issue of Scientific American for a very good article on a method of recycling nuclear fuel to reduce nuclear waste by 90% and the 10% that is left decays to the level of natural uranium in 300 years instead of tens of thousands of years. Clinton/Gore killed development of the Integral Fuel Cycle reactor that would use these methods.

Build modern, safer reactors, recycle the waste into new fuel, go on an agressive national rail electification program. Domestic electricity would become so cheap that electric commuter vehicles would sweep the market for going to work.

We have the technology to reduce our foreign oil and domestic coal consumption. We just refuse to deploy it.

[M. Simon]

Cecil,

Hydrogen and wind are a very good combination. Given the fact that as wind turbines get larger electical costs will come in below nukes, I don't see nukes as viable. In addition uranium like oil is a non-renewable resource, it puts us in the same boat as oil.

BTW America is the Saudi Arabia of wind.

However, hydrogen is not ready for prime time as a transportation fuel. Fuel cell development still has a ways to go from an economic standpoint. Fuel cells currently cost 100X per Hp vs internal combustion engines. And mobile H2 storage is not well developed either. Stored compressed it is a potential bomb in a severe accident and you have a severe marketing problem. Stored as a hydride you have to carry about 95% dead weight for 5% fuel. Almost as bad as batteries.

[crosspatch]

How many wind mills does it take to power a steel mill? Or a car for that matter. They are fine for domestic lighting and the like, but that is a small segment of out total energy use and does not account for imported oil. Most domestic power is from nuclear and coal.

In fact, one of the largest consumers of electric power is moving water around. From pumping it out of the ground, treating it, distributing it to the homes, taking the waste and treating that ... pumping water 24x7x365 takes a lot of power in this country. People want the toilet to flush even on a cloudy, calm day.

[Jim K.]

The great thing about free markets is that we don't need to figure this out! If ethanol is viable, it will get produced and sold in the market; if it isn't, it won't. Unless there is some environmental benefit, there's no reason to subsidize it. The fact that it's "renewable" has no bearing on the question, as we should continue to use oil as long as it's cheaper, and when it becomes more expensive, we can switch then to alternative fuels. We don't have to switch now when the alternatives are more expensive. It's that simple, really.

[boris]

It's that simple, really

Except oil prices are flexible enough to rise when there is no competition and drop when there is.

It seems one way to bring oil prices lower is to provide secure competition at a lower price.

[JamesH]

Nukes would be fine except the supply/demand imbalance for Uranium is worse than for petroleum. Uranium prices have quintupled over the last few years. China is planning a big pebble bed building program and has been going around locking up supplies, mainly via a deal with Billiton.

The main issues with wind are that it's intermittant, with the windiest times of year in the spring and fall while peak electrical deamand is in summer and winter. The other issue is location with some of the windiest spots being out of the way.

I could imagine a future with hydrogen powered cars filling up at stations supplied by pipeline from wind powered electolysis plants in North Dakota.

[Jim K.]

It seems one way to bring oil prices lower is to provide secure competition at a lower price.

But then it's cheaper to subsidize oil directly and lower its price (not that I would recommend doing that), than to subsidize something that's more expensive sufficiently to lower the price of oil.

[crosspatch]

You can't power planes, trains, or heavy trucks and agricultural equipment on ethanol. Let alone military vehicles. That pretty much just leaves individual cars. We are probably talking maybe 40% of America's total oil consumption if that. A lot of oil goes to make lubricants, plastics, paint, fertilizer, fibers, and other petro-chemicals ... you cant use ethanol for those either.

Have any idea on the fuel consumption of a freighter or non-nuclear naval ship? There's more to "transportation" that just cars.

[boris]

it's cheaper to subsidize oil directly

Only with short term static analysis. The way to keep oil prices low is with competition. The cost of subsidizing oil is spent on all fuel instead of just subsidizing the competition.

Suppose butanol, which is compatible with most gasoline engines, were subsidized to provide a set point of (say) $3 per gallon. When gas goes lower than $3, the subsidy kicks in to keep butanol competitive. Competition from butanol keeps gas from going above $3. Saving money by keeping gas price low offsets periods when subsidies are required. It seems no less rational than other farm subsidies designed to keep food production secure from raw market risk.

[Barney Frank]

"It seems no less rational than other farm subsidies designed to keep food production secure from raw market risk."

Boris,
Are you really using our 1930's-style, quasi socialist farm programs as an economic argument?

[boris]

No. Farm subsidies are rife with ineffeciencies yet there is nothing inherently socialist about risk sharing.

Taxpayers choose to lower risk for farming which keeps food prices low in return.

[Jim K.]

Only with short term static analysis. The way to keep oil prices low is with competition.

Actually, it's your analysis that is short term and static. Oil prices today are affected by the prospect of future competition. Anything that damps down prices 10 or 20 years from now will feed back into prices today.

[boris]

Actually, it's your analysis ...

Since there was nothing in my "analysis" related to term length or dynamics I question the timing.

Subsidising oil consumption across the board would be costly and politically unpopular if not impossible.

Keeping butanol production from going bankrupt when (and if) oil goes below $3 will make oil futures take that into account when prognosticating their investments. IOW they will "predict" more stability in oil prices.

[boris]

Correction ... when (and if) gasoline goes below $3 /gal ...

[Whitehall]

Uranium prices have increased significantly in the last few years for two reasons:

1) demand increased dramatically

2) supply takes longer to respond.

The mining industry and governments stopped looking for ore decades ago because they were finding too much of it. Why spend more $$$ for exploration when you don't intend to invest in a new mine for decades?

As a heavy metal, the 50 years or so of proven reserves is very large. This reflects the dynamics of resource development and the fact that new uranium ore bodies are very easy to find.

Please, uranium resources are NOT a constraint on future nuclear power development. In the longer run, thorium works too and there's even more of it awaiting development.

[Barney Frank]

"Taxpayers choose to lower risk for farming which keeps food prices low in return."

You mean like our cheap dairy and sugar prices?
Technically our representatives choose subsidies not the the taxpayers, and its not by popular demand, its by way of farm states scratching the backs of non farm state's pork in return for 'lower risk'.

It is quasi socialist because the welfare state, which is all farm susidies are, is merely a variation on socialism where the ownership of the means of production is retained in nominally private hands but the state wields the levers of power through the redistribution of wealth or risk sharing as you call it. Risk is indispensable to a market, and state sponsored risk sharing is destructive of markets.

[boris]

state sponsored risk sharing is destructive of markets

Yeah, whatever. No insurance for you huh. Better avoid bank savings. Military is a big bad waste. Private roads only, now there's the ticket. Oops, army corps of engineers gone too, New Orleans can build their own damn dikes. Who needs national waterways anyhow.

Tell you what, get Social Security private accounts implemented and we can talk.