Some links for you

by on December 21, 2012 at 6:53 am in Uncategorized | Permalink

Good reads that haven’t been covered here on MR:

1. Institute for Justice on too much eminent domain discretion imparting bad incentives on redevelopment agencies.

2. The beginning of the end for corn ethanol?

3. My co-author Wayne Leighton on Bruce Yandle’s Bootleggers and Baptists: “it’s much more than a clever label for an interesting phenomenon; it’s serious political theory”.

4. Robert Sirico and Jeff Sandefur’s new book on how to be a hero.

5. Michael Makowsky and Stephen Miller on the effect of intelligence and education on the intensity of environmentalist beliefs.

prior_approval December 21, 2012 at 7:06 am

Corn ethanol is another fascinating picture of how the American economy works. According to a recent German radio report, 1/3 of America’s entire corn crop is used to make ethanol. Leaving aside the entire question of energy returned on energy invested, this represents one third of America’s largest legal commercial crop that is being converted to fuel (instead of used for food) – and yet, it the ethanol quantity is not that significant compared to actual U.S. petroleum imports. Possibly because it takes roughly the same amount of energy in oil to create an equivalent amount from corn ethanol in the U.S. – in contrast, Brasilian ethanol is at least positive in terms of net energy, but as Brasil becomes an offshore producer like Norway, ethanol is not especially attractive as a fuel.

mofo December 21, 2012 at 8:32 am

My understanding is that the left over portion of the corn mash is turned into animal feed that is more or less the same as the corn was in the first place. I guess most animals cant digest the portion of the corn that is made into ethanol. Also leaving aside the question of energy returned to energy invested, if that is true, the “being converted to fuel (instead of used for food)” portion of your argument fails.

Simone Simonini December 21, 2012 at 11:02 am

Ethanol is created from sugars and starches. Livestock can most certainly digest sugars and starches.

JWatts December 21, 2012 at 2:51 pm

“My understanding is that the left over portion of the corn mash is turned into animal feed that is more or less the same as the corn was in the first place. I guess most animals cant digest the portion of the corn that is made into ethanol. ”

I believe that’s wrong. I’m pretty sure that the corn mash sans ethanol sells at a discount to straight corn feed. It has less energy and provides less value as feed. However, the money it does sell for does recover some of the money of the original corn cost.

jtf December 21, 2012 at 11:42 am

Your radio program was incorrect, last year the proportion was roughly 50%. However, it is incorrect to characterize the corn crop as food. Field corn is a feed grain, and is used to raise livestock; there is negligible human consumption of field corn.

Mofo is correct, the leftover corn mash, roughly 1/3 (17/52) of the mass goes to distiller’s grains and solubles, which have a higher nutritional value as animal feed than plain corn meal does. The USDA estimated the substitution factor at roughly 1.22 to 1, implying a reduced displacement of feed.

Ted Craig December 21, 2012 at 7:23 am

2. As long as Big Corn can own liberal Democrats like Al Franken, I see no end in sight for ethanol. That’s not a slam on Franken, but rather saying he should be a natural enemy of corporate welfare.

Of course, some folks might say “Better in our cars than in our cattle.”

Brian Moore December 21, 2012 at 8:37 am

Corn is bad fuel for cars, people or cattle.

bluto December 21, 2012 at 9:07 am

It’s great fuel for people but only after it’s been aged in charred oak barrels for a couple of years!

libfree December 21, 2012 at 9:39 am

+1

preferably 12 plus years

Benny Lava December 21, 2012 at 7:16 pm

Amen!

Faria December 21, 2012 at 7:44 am

#5 has a obvious result and flawed conclusion.

FORMAL education and moderate positions are obviously correlate, that’s the whole point of standartized formal education since it existis, it is inevitable that it makes people think and behave much more similarly than they would otherwise.

Also, it is only natural that people with more extreme opinions tend to disregard the formal education, that’s what happens when you don’t agree with it.

Urso December 21, 2012 at 10:53 am

“Also, it is only natural that people with more extreme opinions tend to disregard the formal education, that’s what happens when you don’t agree with it.”

That is one possible explanation. I don’t know that it passes Occam’s razor. Especially when you consider that the paper includes high school diplomas in the definition of “formal education.”

jtf December 21, 2012 at 11:51 am

It’s really sad to see the WSJ write about markets it does not understand. It has it completely backwards: for cane producers, sugar is a much higher value product than ethanol. More sugar now is going into ethanol, it’s true, but it has much more to do with the sugar market than with the ethanol market. World sugar prices were very high over the last couple of years, in part due to poor harvests in Brazil and in Asia from abnormal weather and poor plantings. No one should be surprised that ethanol is now more attractive in a time of abundant crops.

There’s also other factors at play here that the WSJ isn’t mentioning. One reason ethanol is looking more favorable are the persistent rumors that Brazil will finally raise the regulated price cap on gasoline prices, which has been artificially holding down the profitability of hydrous ethanol (which is a widespread substitute in the Brazilian vehicular fuel market).

No doubt the relaxation of tariffs in the US has helped, but that’s old, old, OLD news – it happened nearly a year ago now. Furthermore, the article doesn’t mention the EU’s decision to further raise their tariffs on imported cane ethanol to protect their domestic manufacturers of ethanol, which make it from wheat.

Wheat, by the way, doesn’t have any of the redeeming features of field corn used for ethanol. Wheat ethanol is a disgraceful trade of food for fuel, with no excuses. Inefficient market distortion at work. Ugh.

Dave December 21, 2012 at 7:02 pm

FYI – the Kindle version of #4 is currently showing as free for me.

Comments on this entry are closed.

Previous post:

Next post: