"The highly competitive nature of the US ethanol market is evident by the growing number of new producers joining the industry."
If it was truly competitive, we wouldn't have to retain such a steep tariff on ethanol imports.

Since we make ethanol from corn and Brazil makes it from sugarcane, they have an advantage. We problably can not go beyond E5 with corn, so we would have to go to cellulose or biomass gasification. It seems like they are trying to get these industries started with subsidies and tariffs. This is usually the case, but it is not exactly free market. In that market the most efficient producer would win.

But, if the long term goal is to secure enough ethanol production to make a substantial reduction to the amount of fuel imported from non-North American countries, then we've got to figure out how to generate more ethanol at home -- and giving temporary protection to the domestic industry might be necessary and sufficient to getting that domestic production up.
stomv,
You must be joking! There is no way ethanol is going to make a dent in oil imports, it is just to small of an industry. In 2005, the US used 14% of its corn harvest to produce enough ethanol (remember less energy/gal than oil) to replace ~1% of its daily oil use (~20 million bbl/d and counting).

You do the math: To the agricultural industry this is big business. And that 14% will increase substantially over the next few years.

To the oil industry this is one big non-event. If you used 100% of the corn harvest, you could only replace 7% of the imported oil! And you'd have to import a ton of corn to feed the nation. Food security anyone?

This is loose-loose farm politics. Scrath the tariffs. It would be good for everybody. And no, Rafael, I don't think clear cutting and growing ethanol goes hand in hand. I also doubt that producing ethanol, even from sugarcane is that profitable.

But don't take my word for it: Fasten your seatbelts. Watch what happens as we ramp up our ethanol production "to infinity and beyond". Watch how this is going to push up corn prices (already up 47% this year). Then watch how ethanol prices itself out of the market (why by ethanol if it is more expensive than gasoline, but gives fewer m.p.g?) Then watch all these new ethanol plants go bust...

Of course, some things never change. The above scenario will be followed by agricultural corporations begging for (and getting) increase subsidies from the federal government, sponsored by working Americans everywhere. Big Oil will, of course, be blamed for everything.

"There is no way ethanol is going to make a dent in oil imports"

I love it when people try to hammer home the point about corn-based ethanol not being able meet our transportation needs....over....and over....and over...well, you get the point.

Are you trying to strike up an argument with yourself? EVERYONE who uses this site completely understands this. You aren't making any new, profound points here.

Do you know how close we are to making cellulosic ethanol profitable? Very. That will make an impact. In the meantime, we need to promote ethanol's supply and demand using existing techniques so that the market does not dry out.

If the perpuse behind the tariff is to protect and incurrage ethanol production I think it should be price sensitive. In other words set a maximum protected whosale price and phase out the tarrif as it exceeds it.
This will protect the bottem line from overly aggresive forien markets and from over expanding capacity.

Are you trying to strike up an argument with yourself? EVERYONE who uses this site completely understands this. You aren't making any new, profound points here.
EVERYONE? You could have fooled me!

Do you know how close we are to making cellulosic ethanol profitable? Very. That will make an impact. In the meantime, we need to promote ethanol's supply and demand using existing techniques so that the market does not dry out.
Perhaps you have trouble reading. As I said: Fasten your seatbelts. Watch what happens as we ramp up our ethanol production "to infinity and beyond". Watch how this is going to push up corn prices (already up 47% this year). Then watch how ethanol prices itself out of the market (why by ethanol if it is more expensive than gasoline, but gives fewer m.p.g?) Then watch all these new ethanol plants go bust... In other words, there is a bust coming, and the current tariff won't change that.

We are VERY close to cellulosic ethanol? Perhaps. Better to wait for the first cellulosic ethanol plant to start churning it out, before you make that call. Time will tell, right now, nobody knows.

My other point obviously has not stuck yet, so here we go again: What makes ethanol so special? Right now, incorporating ethanol into the existing supply of gasoline is a pain in the neck:
1. It cannot be pumped with gasoline due to corrosion issues: Ethanol absorbs water.
2. Ethanol-gasoline mixtures have higher vapor pressures than either ethanol or gasoline. This translates to more emissions and evaporative losses.
3. Ethanol fermentation is inevitably low yield: the fermenters can only grow on a part of the available substrate. You could believe that there is a market for the byproducts, but I would caution against it. Hint: The byproducts are already getting exported. Is the local demand saturated?
4. Separating the ethanol from the broth requires a lot of energy, making overall efficiency lower.

Perhaps a more sensible approach would be to fine tune an existing technology (such as gasification/Fischer-Tropsch) that can use 100% of the feedstock, and yields identical fuels to what we are currently using, hence eliminating all blending issues.

But hey, don't take my word for it. Why not waste 20+ years and $trillions (your tax dollars @ work) and wait for reality to catch up with ethanol?

For all the erudite points you all are making, you're missing a very important consideration. Brazil at the end of this year will be the only energy independent country on the planet. Why? Because they have incorporated and perfected ethanol usage on a national scale over decades. Clearly, ethanol has merit as an alternative to fossil fuel despite all the science you discuss. Sometimes science and speculation are not predictive enough to determine the effects of a mass movement in the right direction.

The United States continues to cripple itself by not allowing any market it's involved in to be truly free-- which immeasurably dimishes our credibility abroad, and where it doesn't it should. Further, for a capitalist, free-market proponent to inhibit foreign markets from benefitting economically when they're generating products, processes, technologies or natural resources more effectively than we are is simply hypocritical short-sighted and wrong.

You all don't get it. MTBE's are bad. You are already using E10. MTBE has been replaced with Ethanol. That alone has outpaced the US Ethanol production. Farmers can produce corn on demand. Every time the world has demanded more corn, the US farmer has stepped up and produced, in surplus, over the US demand.

You talk about cellulosic ethanol like it is something great but is what you don't realize is the logistics of transporting, storing and preserving them would be cost prohibitive.

A gallon of ethanol has approximately 77,000 btu's. A gallon of gasoline has 114,000 btu's and let's not forget about biobutanol at 110,000 btu's.

You also try to say that the energy required to produce a gallon of corn ethanol uses more envergy than the ethanol holds. Have you calculated in your figures that most all of the farm machinery and trucks used run on soydiesel?

The Germans used biobutanol in WWII. It is created using very similar processes as ethanol. It contains 110,000 btu's per gallon, does not attract water (ethanol's downfall for pumping through a pipeline), requires NO modification to your current vehicle (another downfall of ethanol) and is non-corrosive.

From my calculations, if you could take the projected 92M acres of corn planted in 2007, make ethanol out of every kernel at the industry standard of 2.6 gal. of ethanol per bushel of corn, we could produce (using the US estimate of 125 bushels of corn per acre) 29,900,000,000 gallons of ethanol which only a handful of cars could utilize if it was all E85. At the same time, we would not be able to feed the world but we could have enough ethanol to get all those Surburbans to soccer games. Maybe if we stopped trying to prevent ethanol production and embraced the idea of using our own renewable resources produced by our own people to build our own economy and put all the money that you city folk are using to protest it, we wouldn't have the depression, sub-standard living and poverty throughout the Midwest so that your tax dollars do not have to support us through other means. It is a vicious cycle.

Don’t bite the hand that feeds you. (And now is powering your BMW)

BTW, I am writing this on a Gateway 2000 computer running a 486 processor, 40 MB hard drive, 32 MB RAM and Windows 95 on a dialup connection because I cannot afford even a Pentium 4 let alone high-speed internet (which is only available via satellite since any phone company will not invest in the infrastructure so that I could have the choice between DSL, Cable or Wireless). All our companies have left town, even Gateway. Our only hope is our local ethanol plant can keep the local economy going. You have 500 channels on satellite, I have 4 on over-the-air broadcast. Hope you like Public TV.

Just a Midwesterners view. Thanks for reading.