Tom Humphrey at the KNS files this report on a proposed 2.5 cent per-gallon ethanol subsidy currently before the Tennessee General Assembly.
The "pilot" program would be targeted at nine East Tennessee counties. A Pilot Oil lobbyist is promoting the bill. According to the article, the cost would be somewhere around $3.3 million, based on an expected output of 60 million gallons from a producer in Knoxville. The article also mentions Bredesen's proposed $40 million "biomass ethanol production plant" in Oak Ridge.
I've pretty much decided that ethanol is the wrong path to pursue. Some experts say it takes more petroleum to produce ethanol than it replaces and that it's a net energy loss. It seems like a pretty primitive solution, too. We need bigger ideas. And there's already a 51 cent per-gallon federal ethanol subsidy, not to mention corn subsidies.
What if they used the $3.3 million to provide hybrid tax credits instead? A $1000 hybrid tax credit would encourage 3300 new hybrids on Tennessee's roads. Throw in Bredesen's $40 million for an ethanol plant, and that would stimulate purchase of 43,300 new hybrids.
If you figure 15K miles per year at 20MPG v. 15K miles per year at 35MPG, that's a reduction in fuel consumption of more than 14 million gallons per year. Throw in the federal subsidies, and we could all be driving free hybrids! Well, not quite, but you get the picture.
Who would argue with a policy that reduces fuel consumption by 14 million gallons per year and saves Tennessee motorists $37 million at the gas pumps?
Oh, wait...
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hmm
It might be hard to administrate but, I sorta think we could do our fellow citizens a favor by paying them to ride bicycles whenever possible as well as take public transport. Basically attacking the problem from the other end.
CAFKIA
-----------------------------------------------------------
It is impossible to defeat an ignorant man in argument.
- William G. McAdoo
Telecommute to save the planet
I think there should be tax incentives to encourage employees to work from home. The US Patent Office encourages telecommuting.
The new X Prize is focused on getting 100miles per gallon out of gas.
... proposed 2.5 cent
... proposed 2.5 cent per-gallon ethanol subsidy currently before the Tennessee General Assembly.
The "pilot" program would be targeted at nine East Tennessee counties. A Pilot Oil lobbyist is promoting the bill.
Aaarrrgggghhhh! Geez, between Knox and Blount Counties, the State of TN, and the US Federal Government, I am spending way to much time on public issues. What a ridiculous proposal.
I've pretty much decided
I've pretty much decided that ethanol is the wrong path to pursue.
There is another disadvantage of the ethanol path. Corn products are used in so many other daily needs that there will be an inevitable rise in the cost of foods to compensate for growing ethanol demand.
Now, about my magic bullet, kudzu . . .
Come See Us at
The Hill Online
I keep trying to figure out
I keep trying to figure out what's wrong with your proposal, Randy. There's got to be something wrong with it, I swear. Who could be against it?
I am not a farmer, but I
I am not a farmer, but I grew up around them
From what I remember, the grain used for ethanol is not used as a rule for human consumpsion. I was told that kind of corn is mostly feed grains and such. And that lands to grow that kind of corn do not produce the corn that humans mostly eat.
So I am not too sure that ethanol will cut into the human food supply.
I could be wrong, but that was what I was told years ago.
No Matter Where you go, There you Are!!!!
I agree with you that
I agree with you that ethanol does not appear to be the way to go, especially corn-based ethanol (apparently sugarcane-based ethanol production is much more effecient). However, I read something interesting about the hybrids as well (particularly the Prius). The article can be found at:
The Recorder
Or I blogged about it HERE
It mentions that making the batteries for the Prius does a significant amount of damage to the environment as well as using a lot of energy. Then the nickel/batteries are shipped from Canada->Europe->China->Japan->U.S. So a lot of energy is used there as well.
It is simply an interesting article that brings to light that even though the end consumer is using less oil/gasoline, more is used on the front end. Just something to think about when considering a hybrid.
Craig Thomas
(link...)
However, I read something
However, I read something interesting about the hybrids
(link...)
I live right next to a
I live right next to a farmer and he tells me the cost of corn and cattle feed has gone crazy.
Corn products are used in so
Isn't feed corn also used in the production of corn syrup, which is a foodstock in about every prepared food known to man these days?
____________________________
"If people think nature is their friend, then they sure don't need an enemy." K. Vonnegut, 1922-2007
Isn't feed corn also used in
Isn't feed corn also used in the production of corn syrup, which is a foodstock in about every prepared food known to man these days?
Here's an interesting article about that:
(link...)
Archer Daniels Midland
ADM: Sugar Merchant to the World.
____________________________
"If people think nature is their friend, then they sure don't need an enemy." K. Vonnegut, 1922-2007
I go to these guys when I
I go to these guys when I want solid info. Here's the Hybrid Center as a nother resource. And the Vanguard project. And the big one, the FAQ on Ethanol.
I'm shocked...shocked, that
I'm shocked...shocked, that an American Marketing firm would publish a misleading report...Particularly one that specializes in research for American car manufacturers who are getting their asses handed to them by foreign hybrids.
S
If we could only make the
If we could only make the cars as efficient as the wingnut talking point mills...
Dibs
You mean getting them to run on hot air?
I get dibs on Glenn Beck.
____________________________
"If people think nature is their friend, then they sure don't need an enemy." K. Vonnegut, 1922-2007
Math can be tricky.
You say that offering a $1000 subsidy will encourage 3,300 people in Tennessee to buy hybrids. Actually, that subsidy would only fund 3,300 purchases. Whether it would encourage 3,300 people to actually buy the cars is another matter entirely. Using a calculator found at (link...), I compared a Toyota Prius with a similar Camry. If you follow through the calculator staying with all the default choices, it will tell you that you save just over a thousand dollars with the Prius over 7 years. This sounds wonderful until you look closer and find that in order to save that much, you have to be able to sell a 7 year old Prius with 105,000 miles on it for nearly $9000. Unfortunately, Kelly Blue Book gives a trade in value for this car as $7400 if it's in good condition. Using this number the advantage for the Prius becomes only $600. Now, to save that $600, you have to invest $6000, the difference between a Camry and a Prius. I'm willing to bet that I can achieve a higher rate of return on my $6000 than 10% over 7 years.
Suddenly that $1000 subsidy doesn't seem so enticing.
As for selling an additional 43,300 hybrids in Tennessee because of a $1000 subsidy, well, there were only 250,000 hybrids sold in the entire nation last year. It's hard to imagine any scenario that gets Tennesseans to buy 1/5th the national sales of any car, much less a hybrid.
For the final mathematical analysis, let's use your numbers. Your plan would save taxpayers $37 million dollars at the gas pumps, all for the low low price of $44 million in subsidies. (Although it would also cost them roughly $5,000 apiece at the auto lot, net with the subsidy. And you've already factored in the gas savings to offset the subsidies, so you can't use them again to defray the cost of the car.)
So the botom line would be that the tax payers would pay an additional $7 million in taxes, plus pay an extra $5000 for their car.
Yeah, I can't see why anybody would be against that plan...
tricky
Where do the doctor bills from increased asthma and respiratory infections come into the equation?
Under indirect costs and benefits
Indirect or secondary costs and benefits are an entirely different calculation and outside the scope of R. Neal's post, which dealt with subsidizing the direct costs. But if you'd like to start a thread comparing the indirect costs vs benefits of hybrid vehicles, I'm game. There's plenty of information out there on both sides. It's probable that there is a net environmental benefit over the life of the car that balances out or exceeds the initial extra cost.
But that wasn't R. Neal's argument.
outside the scope of R.
outside the scope of R. Neal's post
It's not outside the scope of R. Neal. The whole point reducing gasoline consumption is to relieve the national security pressures on our country due to its dependence on foreign oil and to reduce emissions to curb their many detrimental impacts on human and environmental health. Progress toward energy independence reduces public defense spending, and emissions reduction achievements lower health care spending and the drag pollution places on our economy.
So your overconstrained computation misses the point. Also, it's a Rube-Goldberg calculation whose margin of error surely swamps the marginal conclusion you derive, but that's just nerdy nitpicking.
Nerdy nitpicking
The final calculation is directly from R. Neal's numbers. You'll have to send any Rube-Goldbergian complaints to him. If it costs 43 million (the costs of the subsidies) to save 37 million, by standard math, that's a loss of $6 million.
And I have to disagree with you about the thrust of R Neal's post. He implies that it makes good financial sense, from an economic standpoint alone, to subsidize hybrid vehicles. He makes some questionable computational assumptions to do so, namely that a $1000 subsidy will encourage everyone who can get a subsidy to purchase a hybrid.
As I said, if you'd like to discuss the environmental benefits vs the increased costs of hybrids, that's a discussion I'd be willing to have.
If it costs 43 million (the
If it costs 43 million (the costs of the subsidies) to save 37 million, by standard math, that's a loss of $6 million.
Sigh. Ok. $37 million PER YEAR of 15K miles driven. Times, let's pick a conservative number like three years for the life of the car, equals $111 million. Not to mention the environmental benefits from not burning all those million gallons of fuel. (And 35MPG is conservative for some models - the Prius will easily get 45-50MPG.)
Regarding whether everyone or anyone would take advantage of such a credit, well, then they wouldn't spend $43 million on them if they didn't.
If the credits are such a bad idea, why did the federal government offer $3500 tax credits on Prius cars, $3000 or so on Ford Escape Hybrids, etc. etc.?
They seemed quite popular and generated a lot of interest in increased sales of hybrids, so many in fact that they are being phased out for some models because there were quotas and limits on how many vehicles were eligible.
Sigh
They aren't spending 43 million on the credits. You just suggested they should. And you know as well as I do that once money is budgeted and collected, it is never returned to the tax payer, whether it is spent or not. Or haven't you been following Tennessee's massive budget surplus for this year?
So government credits are always a good idea? Like school vouchers for instance?
Nor did I say that the subsidies were a bad idea, just not an overwhelming no brainer, as you suggested.
Again, that's assuming sales of 43,000 hybrids in Tennessee alone, when annual sales are only in the 250,000 range for the nation. Let's get a more realistic figure. Going by population, you can figure roughly .8 hybrids sold per thousand people. Given Tennessee's population of roughly 6 million, that means if Tennesseans stick with the national average, they'll buy 5000 hybrids without additional subsidies. Even if we assume the subsidies will double potential buyers, we'll only get an additional 5000 hybrids on the road.
Not 43,000.
That results in $4.2 million in annual savings for a program that costs $5 million up front.
Now that is a workable program. Forget the 44 million in funding; the demand isn't there. Fund the subsidies to $5 million and put the rest in alternative fuels research and production.
Oh wait, isn't that what we're doing with it now?
#9 and Rich appear to be
#9 and Rich appear to be sharing Rich's login.
Uncalled for
That was uncalled for. I would not abuse your site by allowing somebody you banned to use my login.
Please delete my account.
Geez, Rich, calm down. It
Geez, Rich, calm down. It was a joke! Your logic is just a little twisted, that's all.
That results in $4.2 million
That results in $4.2 million in annual savings for a program that costs $5 million up front.
Now that is a workable program.
A happy ending! Well done, Rich. I don't think any of us could have discovered the pearl in your oysterian math, but I'm glad you did.
the pearl in your oysterian
the pearl in your oysterian math
Yes, especially the part where school vouchers are exactly like hybrid tax credits.
At any rate, yeah, good for Rich for figuring out how to make hybrid credits work in TN by thinking small. Hope he will actually support this by writing his state rep and senator.
The subsidy does make good
The subsidy does make good financial sense to the entity offering the subsidy, the government, because the government pays most of the security costs and environmental cleanup and protection costs associated with gasoline consumption and because the government represents the interests of the population that bears the increased health care costs.
There is no need for either of us to speculate about Randy's meaning. He's right here. He can tell us whether he was speaking of the subsidy from the perspective of the government or from the narrower perspective of a consumer. Bringing it up as an alternative to an ethanol subsidy indicates to me that he was, indeed, thinking at the broader level. Someone should ask him. (EDIT -- Or realize that he's answering the question at the same I'm asking it)
One thing I'm trying to get
One thing I'm trying to get across is that hybrid vehicle technology is something we have now and it's proven and it works and can have an immediate and dramatic impact on fuel consumption.
The only thing lacking is demand, partly because of negative propaganda such as has been seen here about the hyper-inflated additional cost and the hidden environmental damage they cause.
But they in fact do cost more. But that's mainly because the manufacturers haven't ramped up production because there hasn't been much demand. The tax credits and increasing consumer awareness and Al Gore have all helped educate American motorists though, so they are basically selling all they hybrids they can make and the Japanese auto manufacturers are ramping up production capacity and planning more and more hybrid models.
Once that happens, the price will come down, battery technology will advance, other energy efficiencies will be developed, and it will keep improving.
(Another problem is that they seem to view the American hybrid buyer as a "luxury" market, and add on stuff that isn't found on basic models, or this may be a case of trying to make up extra cost to make a hybrid off higher margin options.)
Another thing I'm trying to get across is that an immediate increase in CAFE standards will immediately reduce our dependence on foreign oil. Car makers know how to do it, they just don't want to. And maybe they are in cahoots with the oil companies, who knows?
Japanese car makers are doing it, even with non-hybrid models (the new Toyota Tundra being sold to the American peak oil dead-enders notwithstanding) and making big bucks and creeping up on American automakers in terms of units sold. I guess GM and Ford and Chrysler will finally pay attention when Toyota takes over the #1 spot.
And, another thing I'm trying to get across is that I don't get the concept of ethanol. I guess it is a longer term short term solution. But it will require changes to cars, changes to the fuel distribution system, etc. that hybrids don't require. And it just seems so primitive. Instead of thinking ahead and investing R&D money in alternative energy sources or better yet alternative propulsion systems to replace internal combustion, we've backtracked 150 years to feeding our horses oats.
And I guess I'm also a little skeptical about this specific subsidy proposal, given all the other subsidies they already get and because of the backers and who it benefits. Hybrid tax credits or rebates would benefit consumers, and lots of them, and the environment, right now.
Sad that reducing our
Sad that reducing our dependence on foreign oil seems, with few exceptions, to depend on foreign cars.
What's amazing to me is that
What's amazing to me is that encouraging (or mandating) higher gas mileage is a partisan issue. After 9/11 how can anyone not think it's a good idea and that it's a better idea to buy Hummers instead?
Just like it's amazing to me that the failed, misguided, and probably illegal war and occupation in Iraq that has been widely recognized by military and foreign policy experts and even some Republican politicians as a complete and abject failure of foreign policy is a partisan issue (although it's mostly the GOP 30% dead enders and surge protectors still on board).
Just like global climate change is a partisan issue when virtually all experts, scientists, policy makers, and even the U.S. Supreme Court acknowledge it exists and it's a looming catastrophe of Biblical proportions and that human activities contribute.
Just like it's amazing to me that 45 million Americans without health insurance is a partisan issue when nearly every health care worker, doctor, insurance company, public policy think tank and responsible politician agrees that it's a national crisis.
Just like it's amazing to me that poverty is a partisan issue.
Just like it's amazing to me that civil rights is a partisan issue.
And so on.
It would appear, though, that progressives and liberals and most Democrats are on the right side of the partisan divide on most issues. Republicans don't seem too concerned about justice or the health and welfare of our people or our planet. It would be helpul for them and everyone else to wise up and get on the right side of issues that matter.
What's really amazing is
that you think I'm being partisan when I'm pointing out just why your economic model is incorrect. Have we gotten to the point where math errors are partisan?
I certainly hope not.
Encouraging higher efficiency in any process is a good thing. Mandating it is not always a good thing. Mandates tend to lead to short term thinking and short term fixes. Many times, the best approach is a long term one.
If you read my comment carefully, you'll notice that nowhere do I say it's a bad idea to buy a hybrid. Only that the subsidy plan R. Neal provides isn't as much of a no-brainer as he suggests.
This sounds wonderful until
Camry w/2.4L engine = 24MPG city, 33MPG hiway
Camry Hybrid w/2.4L engine tandem with 105kW electric motor = 40MPG city, 38MPG hiway
So, for 105,000 miles...
Straight gas - 4375 gallons city (or) 3182 gallons hiway
Hybrid - 2625 city (or) 2763 hiway
Net gain: 1750 gallons (@$2.79/gal): $4882 (city)
419 gallons (@$2.79/gal): $1169 (hiway)
Ten people switch from the Camry gas to the Camry hybrid: 17,500 gallons saved city, 4,190 gallons saved highway.
100: 175,000 city, 41,900 highway.
Etc. Etc.
Now, let's start talking in aggregates...
How many gallons of gas saved per year leads to how many tons of carbon emissions reduced?
Oh, but wait... we have to stack the deck against reducing carbon emissions and pollutants because, well, we can't punish the people buying cars getting 18MPG or worse.
____________________________
"If people think nature is their friend, then they sure don't need an enemy." K. Vonnegut, 1922-2007
Using the calculator linked above
The hybrid Camry has a lifetime cost of roughly $3500 over the standard Camry, and that's including gas savings. I chose the Prius vs the Camry because it came out best for the other side of the argument.
And once again, you're mixing the arguments. Economically, choosing a hybrid is a marginal decision at best. If you save anything, it will more than likely be less than what you could earn off of the initial price differential.
The environmental argument is completely separate. Instead of capital and operating costs, you would have to weigh the environmental impact of construction, usage, and disposal of a hybrid vs a conventional auto. Gas and emissions savings is only one small piece of that puzzle.
And I'm already on record in this thread as saying that it would not surprise me at all if there is some net environmental benefit to hybrid vehicles.
Now,let's look at oil imports. As of January 2007, the US was importing 422 million barrels of oil per month, which translates to roughly 12 billion gallons of gas, figuring 30 gallons per barrel. We'll use your city figure of 1750 gallons saved over a 7 year period (105,000 miles), so using a hybrid will save us 250 gallons of gas per year per hybrid Camry.
Now in the interest of fairness, let's substitute the standard Camry with my Dodge Ram, which gets roughly 16 miles per gallon. That means we'll save 3938 gallons over 7 years, or 563 gallons per hybrid per year. Divide by 12 and we're saving 47 gallons of gas per month for everybody that trades in their gas guzzler for a hybrid Camry. That means we only need to sell 255 million Camry's to eliminate our dependence on foreign oil.
The oil import numbers come from here by the way.
The upshot of this quick and dirty analysis is to echo something R. Neal said earlier in the post. We need big ideas. Like the new X prize for 100MPG car. The small stuff may feel good, but it doesn't get the job done and it diverts attention away from where it's really needed.
Not sure where you are
Not sure where you are getting this "hybrid premium" cost. From a previous thread...
---
As for the pricing of hybrids and the so-called premium, yes, they do cost more. But they are not out of reach for most new car buyers and in fact there isn't that much of a premium any more, especially with the tax credits.
Here are some comparisons of of similarly equipped models (which is a little complicated because the hybrids generally come with more features/options standard):
Honda Civic:
EX: $21,107
Hybrid: $23,893
Hybrid tax credit: $2100
Net hybrid cost: $21,793
Hybrid premium: $686
Toyota Camry:
XLE: $24,900
Hybrid: $26,200
Hybrid tax credit: $650
Net hybrid cost: $25,550
Hybrid premium: $650
Ford Escape:
XLT: $22,830
Hybrid: $25,740
Hybrid tax credit: $3000
Net hybrid cost: $22,740
Hybrid premium: -$90
You can't do a fair comparison on the Prius because it only comes in hybrid. It's probably somewhere in between the Corolla and the Camry in terms of size, comfort and features, and so is the price.
---
To add to that, hybrid owners can EASILY save $650 or so in fuel costs the first year. We expect to save $800-$900 per year.
But it's not just about dollars and cents. But you know that already.
(I think you said you went through and took default options? Haven't bothered to reread what you said. If so, you are not comparing apples to apples. Try it again with "similarly equipped" models.)
Surface analysis
Yeah, this is all surface analysis. Duh.
In another life, I would break it down into (kilo)joules per route mile of transit. (Diesel buses fare pretty well in this calculation, believe it or not. But don't tell the overland freight companies... in terms of marginal energy cost, trains are still the best way to move a ton of crap for a mile.)
If you want truly revolutionary thought around this whole problem, then the problem is the single car driver, period, amen.
Which means that the vehicle, in and of itself, isn't the problem. It's our transportation habits. Again, duh.
Google "peak oil production" if you want some really gloomy stuff to pore over.
____________________________
"If people think nature is their friend, then they sure don't need an enemy." K. Vonnegut, 1922-2007
This might be worthy of a new topic, but..
R.Neal said:
It would appear, though, that progressives and liberals and most Democrats are on the right side of the partisan divide on most issues. Republicans don't seem too concerned about justice or the health and welfare of our people or our planet. It would be helpul for them and everyone else to wise up and get on the right side of issues that matter.
Funny you should bring that up.
Pete McCloskey
Meanwhile, arguments about
Meanwhile, arguments about what the cars will run on dodge the more fundamental question of why we all need to drive so goddamn much.
From the Slate article
From the Slate article posted:
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.
Actually there are some issues here. Number one, the tractor should be converted to ethanol. Why the hell are we fertilizing fields with petroleum products? Did Dick Cheney think this one up? All of these areas can be addressed through increase efficiency and economies of scale. And corn is a lousy way to make ethanol. There are better crops to use.
While we are talking about the costs of oil, have we factored in the enormous amounts money we spend in the Middle East trying to keep the place from going up in massive wars that would prevent us from getting oil? Have we factored in the costs of subsidies we pay farmers not to grow anything so we can keep the cost of crops artificially inflated, instead of having them grow crops that could be used to manufacture ethanol and that could actually be sold? Are we figuring the costs of pollution caused by oil? This "from drilling the well, to transportation, through refining" does not include all of the costs of using oil.
In the long run I find ethanol, and even running cars completely off ethanol a great solution. We get off the Middle East tit, we can put more farmers to work. We can employ scientists to figure out more efficient methods to manufacture ethanol. We have a supply system in place that can also be used for ethanol, unlike hydrogen for which we have no supply system and the energy costs for manufacture are incredibly high. Pollution and its related costs start to go away. It cannot happen over night, but it can happen- unless Dick Cheney has anything to do with it!
What I'd like to know is
What I'd like to know is where these people get their numbers on net energy loss for ethenol. How much ethenol is produced from one acre of corn? How much diesel is consumed by the farm equipment servicing that acre? How much diesel is consumed to transport the corn and then the ethenol between the field, processing plant and gas station? How much petroleum is used to make the fertilizer used on that field?
Until somebody shows me the math on this, I don't believe it. I suspect that one acre of soybeans could produce enough biodiesel to power the equipment need for dozens of acres of corn. I'd also be surprised if there weren't inexpensive non-petroleum based fertilizers available.
But it will require changes
But it will require changes to cars, changes to the fuel distribution system, etc. that hybrids don't require.
The fuel distribution system in place can handle it fine. Most cars on the road now can be altered to run straight ethanol. I would rather run an all electric car, but I don't see that happening any time soon.
Hybrids are great! Imagine your hybrid running cleaner ethanol! Imagine an electric car you can charge, gets passive energy like your hybrid with ethanol as a backup! Imagine solar cells on top of the car! I love hybrids. They do not exclude ethanol, however.
New KV feature
Honda Civic 1978
Why is it that hybrids are impressive getting 35 mpg when Honda Civics got 45 mpg thirty years ago? By all means, though, CAFE should go up, and it should include all the exurban assault vehicles that are being sold to the Going Mobile g-generation and that now get advantageous treatment because they nudge-nudge, wink-wink, must be intended for hauling something besides the narrow asses of my fellow yuppie suburbanites.
Liberty and justice for all.