Ethanol an artificial commodity, not the answer
Imagine a plant that can be easily grown on farms all over America. Imagine it can be turned into a fuel through a simple process. Imagine we burn that fuel in our cars to reduce our dependence on foreign oil.
That sounds wonderful. But that plant is not corn. That process is not simple. And that fuel is not ethanol.
Click here for more on "End of the ethanol era"
I can't consider ethanol a real commodity, as is trying to be foisted on us by the government and greenies. There's absolutely nothng about it that has any value, as about every positive assertion made about it is turning out to be false.
Showing posts with label Ethanol Hoax. Show all posts
Showing posts with label Ethanol Hoax. Show all posts
Saturday, January 3, 2009
Monday, November 10, 2008
Commodities: Pacific Ethanol Huge Losses
The ethanol debacle continues, as the latest disaster for the artifical commodity is Pacific Ethanol (nasdaq:PEIX) had an even worse quarter than expected, as losses surged to $54.9 million in the third quarter, up significantly from the $4.8 million in the same quarter last year.
As with other ethanol companies, blame has been placed on the increased price of corn, and in Pacific's case, an impairment charge of $26.6 million for quitting construction on a plant in California.
This is in spite of revenue growing 56 percent to $184 million, a solid increase from $118.1 million a year ago.
Losses equaled 98 cents a share, a much larger number than the 16 cents a share analysts were looking for. Revenue was also far below the $218.6 million projected by analysts.
It's amazing to see this endless black hole continue to be fed by federal subsidies, when it ethanol as an alternative fuel simply needs to be laid aside. It isn't working and it won't work in the future.
We need to get out of denial and admit ethanol as a commodity and alternative fuel is a losing proposition.
As with other ethanol companies, blame has been placed on the increased price of corn, and in Pacific's case, an impairment charge of $26.6 million for quitting construction on a plant in California.
This is in spite of revenue growing 56 percent to $184 million, a solid increase from $118.1 million a year ago.
Losses equaled 98 cents a share, a much larger number than the 16 cents a share analysts were looking for. Revenue was also far below the $218.6 million projected by analysts.
It's amazing to see this endless black hole continue to be fed by federal subsidies, when it ethanol as an alternative fuel simply needs to be laid aside. It isn't working and it won't work in the future.
We need to get out of denial and admit ethanol as a commodity and alternative fuel is a losing proposition.
Wednesday, November 5, 2008
Commodities: Obama's Failed Ethanol Policy
Ethanol as a viable commodity is a joke, yet Obama following same failed Bush policies
The more things "change," the more they stay the same, and that is how it will be with Barack Obama and the ongoing ethanol debacle in America.
With Obama, it's obvious the reasons why, as government subsidies pour into his home state of Illinois, the nations second-largest producer of corn.
Obama campaign senior energy adviser Heather Zichal said concerning Obama's ethanol policy that "Obama recognizes how important the renewable and biofuels industry is to creating jobs and meeting our goal of reducing dependence on foreign oil. He's fully committed to it and sees tremendous value in the renewable fuels standard and continuing down this path."
So the man of change is going to keep the Bush policy goal of a "minimum of 36 billion gallons of biofuels by 2022," said Zichal. At this time ethanol loses close to 66 cents a gallon at existing prices.
Oil refiners receive a subsidy of 51 cents a gallon for the ethanol mixed with regular gasoline, and a stiff 54 cent-a-gallon tariff is put on the sugarcane-based ethanol from Brazil.
The continued idiocy of saying we need to reduce our dependence on foreign oil when we have billions upon billions of barrels proven to be on American soil or off its coastlines is dishonest at best.
There is no way the corn-based ethanol industry currently touted can survive, no matter what the government says. The idea now being thrown about is to use cellulosic ethanol, which is made from non-food crops.
One major problem is it costs about twice as much as corn-based ethanol to produce. Another is it's years away from being any significant contributor to our energy needs, if it ever will be. We need answers in the near future, not 10 or more years from now.
The corn-based ethanol problem is even worse, as it has already caused a lot of pain to poor people around the world who suffered from the resultant high food prices from the misguided effort, and riots ensued in a number of countries because of skyrocketing food costs.
Another huge problem is the increased costs to meat producers in the U.S., who have been damaged greatly from higher feed costs.
This is one area we need to simply toss aside and refuse to bring politics into. The damage is extensive and it'll only get worse if we keep going in this direction.
I wonder if this is the type of "change" Obama was supposedly going to initiate? This ethanol policy and the resultant illusion that it's a real commodity continues to be destructive, as shown by the damage it does to small engine power equipment like chainsaws, snowmobiles and generators.
The more things "change," the more they stay the same, and that is how it will be with Barack Obama and the ongoing ethanol debacle in America.
With Obama, it's obvious the reasons why, as government subsidies pour into his home state of Illinois, the nations second-largest producer of corn.
Obama campaign senior energy adviser Heather Zichal said concerning Obama's ethanol policy that "Obama recognizes how important the renewable and biofuels industry is to creating jobs and meeting our goal of reducing dependence on foreign oil. He's fully committed to it and sees tremendous value in the renewable fuels standard and continuing down this path."
So the man of change is going to keep the Bush policy goal of a "minimum of 36 billion gallons of biofuels by 2022," said Zichal. At this time ethanol loses close to 66 cents a gallon at existing prices.
Oil refiners receive a subsidy of 51 cents a gallon for the ethanol mixed with regular gasoline, and a stiff 54 cent-a-gallon tariff is put on the sugarcane-based ethanol from Brazil.
The continued idiocy of saying we need to reduce our dependence on foreign oil when we have billions upon billions of barrels proven to be on American soil or off its coastlines is dishonest at best.
There is no way the corn-based ethanol industry currently touted can survive, no matter what the government says. The idea now being thrown about is to use cellulosic ethanol, which is made from non-food crops.
One major problem is it costs about twice as much as corn-based ethanol to produce. Another is it's years away from being any significant contributor to our energy needs, if it ever will be. We need answers in the near future, not 10 or more years from now.
The corn-based ethanol problem is even worse, as it has already caused a lot of pain to poor people around the world who suffered from the resultant high food prices from the misguided effort, and riots ensued in a number of countries because of skyrocketing food costs.
Another huge problem is the increased costs to meat producers in the U.S., who have been damaged greatly from higher feed costs.
This is one area we need to simply toss aside and refuse to bring politics into. The damage is extensive and it'll only get worse if we keep going in this direction.
I wonder if this is the type of "change" Obama was supposedly going to initiate? This ethanol policy and the resultant illusion that it's a real commodity continues to be destructive, as shown by the damage it does to small engine power equipment like chainsaws, snowmobiles and generators.
Monday, November 3, 2008
Commodities: Ethanol VeraSun Energy Bankruptcy
Ethanol as commodity continues to lose luster as VeraSun files for bankruptcy
The hugely misguided effort by the U.S. government to artificially produce an ethanol industry in America continues to flounder, with the latest casualty in the debacle being VeraSun Energy Corp., which has filed for Chapter 11 bankruptcy protection.
VeraSun Energy, which accounts for close to 13 percent of the ethanol capacity in the country, is attempting to get $190 million to meet expenses, including payroll. Other needs to be met are buying of corn, leases, natural gas, among a number of others.
Standard & Poor's also lowered the long-term credit rating of the company on its senior secured notes - due in 2012 - from "B-" to "D." They're worth about $210 million. VeraSun has about $450 million in unsecured notes - due in 2017 - lowered from "CCC" to "D."
With profit margins of about zero, almost no credit markets, and terrible, speculative bets on commodities, the company has no chance at operating in its current condition. Another major factor was its irresponsible debt load, which also make it impossible to operate at a profit.
If oil prices stay low for any significant period of time, it's expected that many of the players in the dubious industry will fail as well.
While VeraSun is expected to continue operating at full capacity, thus not helping its competitors, who may have had the opportunity to take over the market share of the company, it has a huge uphill battle, as its changes of suriving, let alone turning a profit remain slim to none.
It remains to be seen if some of the larger competitors of VeraSun will be able to operate at similar losses. Some of the bigger companies are the privately held Poet LLC, along with agribusiness behemoth Archer Daniels Midland.
We should just put this ethanol nonsense to a rest in the U.S., and start drilling for more proven oil reserves in the U.S. and on its coasts, while looking to develop options that have real chances of being successful alternatives to and complements to traditional energy sources.
What a waste of time and money the pursuit of ethanol has been in the U.S.
Update: Judge approves VeraSun's rare bankruptcy financing
End the ethanol subsidy now, or we'll see more ethanol companies collapse, as it's an artificial, propped up commodity, not a real one.
The hugely misguided effort by the U.S. government to artificially produce an ethanol industry in America continues to flounder, with the latest casualty in the debacle being VeraSun Energy Corp., which has filed for Chapter 11 bankruptcy protection.
VeraSun Energy, which accounts for close to 13 percent of the ethanol capacity in the country, is attempting to get $190 million to meet expenses, including payroll. Other needs to be met are buying of corn, leases, natural gas, among a number of others.
Standard & Poor's also lowered the long-term credit rating of the company on its senior secured notes - due in 2012 - from "B-" to "D." They're worth about $210 million. VeraSun has about $450 million in unsecured notes - due in 2017 - lowered from "CCC" to "D."
With profit margins of about zero, almost no credit markets, and terrible, speculative bets on commodities, the company has no chance at operating in its current condition. Another major factor was its irresponsible debt load, which also make it impossible to operate at a profit.
If oil prices stay low for any significant period of time, it's expected that many of the players in the dubious industry will fail as well.
While VeraSun is expected to continue operating at full capacity, thus not helping its competitors, who may have had the opportunity to take over the market share of the company, it has a huge uphill battle, as its changes of suriving, let alone turning a profit remain slim to none.
It remains to be seen if some of the larger competitors of VeraSun will be able to operate at similar losses. Some of the bigger companies are the privately held Poet LLC, along with agribusiness behemoth Archer Daniels Midland.
We should just put this ethanol nonsense to a rest in the U.S., and start drilling for more proven oil reserves in the U.S. and on its coasts, while looking to develop options that have real chances of being successful alternatives to and complements to traditional energy sources.
What a waste of time and money the pursuit of ethanol has been in the U.S.
Update: Judge approves VeraSun's rare bankruptcy financing
End the ethanol subsidy now, or we'll see more ethanol companies collapse, as it's an artificial, propped up commodity, not a real one.
Wednesday, October 22, 2008
Commodities: Livestock Organizations Outraged
Livestock Organizations outraged over loan support by USDA for ethanol industry
With the corn-based, subsidized ethanol industry in America becoming more of a debacle and outrage daily, the recent comments by Agriculture Secretary Ed Schafer shows he must consider the ethanol industry a religion, as it could only be blind faith that could even consider it legitimate, not reality.
Schafer commented on using USDA rural development loan guarantees to artifically support rescue ethanol plants that can't make it. Essentially it would be a bailout of the unwanted industry.
According to the livestock organizations, the reason the ethanol industry is in trouble is their irresponsible speculation in corn futures.
"We in animal agriculture are particularly concerned that you would consider adding one more level of support for the corn-based ethanol industry," eight livestock organization leaders wrote to the secretary.
In one of the understatements of the millenium, Schafer said concerning ethanol plants that they "got away from their focus on producing ethanol and started speculating in the commodity markets. It's hurt them." Duh. Where'd they get this clown?
The livestock organizations correctly pointed out, "It seems to be the opposite of free enterprise to insure companies – and only some companies – against the possibility that their speculative commodity bets might go wrong."
Not only is supporting an already irrelevant industry completely against free enterprise, but then rewarding these government-founded companies with poor behavior is even worse.
We should have a full-blown federal investigation on the misappropriation of funds and misuse of government subsidies. Like some of the crooked and poor managers of financial institutions, these people need to be held accountable and brought to justice.
Taxpayers and all Americans need to rise up and say no to another government-sponsored idiocracy concerning the ethanol industry.
Look at what ethanol is doing to snowmobiles, chainsaws, and other power equipment!
With the corn-based, subsidized ethanol industry in America becoming more of a debacle and outrage daily, the recent comments by Agriculture Secretary Ed Schafer shows he must consider the ethanol industry a religion, as it could only be blind faith that could even consider it legitimate, not reality.
Schafer commented on using USDA rural development loan guarantees to artifically support rescue ethanol plants that can't make it. Essentially it would be a bailout of the unwanted industry.
According to the livestock organizations, the reason the ethanol industry is in trouble is their irresponsible speculation in corn futures.
"We in animal agriculture are particularly concerned that you would consider adding one more level of support for the corn-based ethanol industry," eight livestock organization leaders wrote to the secretary.
In one of the understatements of the millenium, Schafer said concerning ethanol plants that they "got away from their focus on producing ethanol and started speculating in the commodity markets. It's hurt them." Duh. Where'd they get this clown?
The livestock organizations correctly pointed out, "It seems to be the opposite of free enterprise to insure companies – and only some companies – against the possibility that their speculative commodity bets might go wrong."
Not only is supporting an already irrelevant industry completely against free enterprise, but then rewarding these government-founded companies with poor behavior is even worse.
We should have a full-blown federal investigation on the misappropriation of funds and misuse of government subsidies. Like some of the crooked and poor managers of financial institutions, these people need to be held accountable and brought to justice.
Taxpayers and all Americans need to rise up and say no to another government-sponsored idiocracy concerning the ethanol industry.
Look at what ethanol is doing to snowmobiles, chainsaws, and other power equipment!
Wednesday, August 20, 2008
Misguided U.S. Ethanol Subsidy Continues to Cause Food Prices to Soar
The corn-based ethanol subsidy in the U.S. continues to cause pain to consumers around the world as food prices will continue to rise for the foreseeable future, as chicken, beef and pork prices are projected to increase significantly.
U.S. lawmakers keep acting like nothing has gone wrong with the usual unintended consequences accompanying such ignorant initiatives.
U.S. lawmakers keep acting like nothing has gone wrong with the usual unintended consequences accompanying such ignorant initiatives.
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