| Subject: Re: Corn-based ethanol's a flawed concept |
Author:
Duncan7
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Date Posted: 07:58:19 02/19/07 Mon
In reply to:
larry
's message, "Corn-based ethanol's a flawed concept" on 16:00:49 02/18/07 Sun
It is all in how you look at it. Another way is what it does for the stocks of all related agro equipment and land value. If your a farmer used to barely getting by, ethanol is a very attractive way to prop up your bottom line especially in the non irregated sectors. It's not just about the energy.
>hold on to your hats. its a long artical. it says corn
>worse, oil bad. hard to replace bad with worse.
>
>
>href="http://www.marketwatch.com/news/story/corn-based-
>ethanols-flawed-concept/story.aspx?guid=%7BEC55D7AD%2D6
>E1C%2D4AD8%2D912F%2DA2A0BD4D4299%7D&dist=TNMostRead">ht
>tp://www.marketwatch.com/news/story/corn-based-ethanols
>-flawed-concept/story.aspx?guid=%7BEC55D7AD%2D6E1C%2D4A
>D8%2D912F%2DA2A0BD4D4299%7D&dist=TNMostRead
>
>A math and science lesson is in order.
>An easy-to-read measure of whether ethanol's
>economically viable can be derived from taking a look
>at its "energy return on energy invested," or EROI,
>according to Brodrick.
>"It is at the crux of why corn-based ethanol is a
>boondoggle," he said.
>EROI can be expressed as "net energy," he explains.
>The EROI for corn-based ethanol is 1.2:1, so the net
>energy is 0.2, he said.
>That means you put in 1 British thermal unit to get
>1.2 BTUs from it, he said.
>"At EROI of 1.2 to 1, the 3.9 billion gallons that the
>U.S. produced in 2005 required 3.29 billion gallons of
>BTU energy input, resulting in a 'net energy' of 610
>million gallons," he said.
>And that's being generous, he said. "There are some
>computations that show corn-based ethanol has a net
>energy of zero. Others show it as a net energy loser."
>So it all depends on how you look at it.
>A "break even" with the cost of production would be
>largely based on the cost of crude oil and the cost of
>corn, said Rick Kment, an analyst at DTN.
>For example, if crude-oil prices are at $70 to $100
>per barrel, very high corn prices can be paid and
>ethanol can still economically work in the system, he
>said.
>But with $30 crude and $4 corn, "it becomes
>unprofitable," he said.
>At current price levels, DTN estimates a net profit --
>after depreciation and all other factors -- to be near
>5 cents per gallon of ethanol produced, he said.
>That's down from a 50-cent per gallon net profit at
>the first of the year, and down from $2.50 a gallon in
>June 2006, Kment said.
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