Not that they will, but they could. In fact, they should. Check it: today's The New York Times op ed reminds us that "The final [energy] bill correctly included environmental safeguards. The most important is a requirement that ethanol, regardless of its source, achieve at least a 20 percent reduction in greenhouse gases compared with conventional gasoline." Only the Times (and TTAC) noticed two studies in Science magazine that conclude that ethanol production increases global warming. So.. that's it then. Until ethanol can be made from non-corn sources, the Environmental Protection Agency (charged with calculating ethanol emissions) should pull the plug on corn juice and sink the subsidy-sucking ethanol industry. The chances of that happening are between none and none. Still, it's nice to see the Times (almost) acknowledge a green boondoggle when they see one. 

If you're a member of the TV rat pack or a crowd control officer with the Los Angeles police, we suggest you gear-up and head over to Conserv Fuel on San Vicente Blvd in Brentwood on February 26. For just two hours, from noon to 2pm, GM is subsidizing E85 to the tune of 85 cents per gallon (geddit?). GM's press release says they want to "help raise awareness about the first station in Los Angeles to offer E85 ethanol, and to encourage drivers of FlexFuel vehicles to use this cleaner, renewable fuel instead of gasoline." Of course it has nothing to do with the fact they just sank a bunch of bucks into an ethanol producer. Even with the decreased power and poorer mileage of E85, 85 cents per gallon makes it an attractive alternative (hence the incipient flared tempers). But how many of the bargain hunters will be back when it's back to to the station's normal $3 per gallon? That's when you'll see– well, could see if the media was bothered– what the average driver really thinks about E85.

E85 ethanol is methadone for America's oil addiction; it lets us believe we're kicking a bad habit. Which is fine if we could exercise our judgment as consumers. As taxpayers, E85's a done deal, on both the federal and state level. The Bradenton Herald reports that Florida politicians have already shelled-out some $25m in taxpayer-funded (who else?) grants to "alternative fuel developers." The "Farm to Fuel" initiative is set to throw tens of millions more in the same direction. As a member of the National Steering Committee of 25×25 (25 percent of America's fuel farmed by 2025), Florida Agriculture and Consumer Services Commissioner Charles Bronson is leading the pigs to the trough drive towards U.S. energy independence. From his taxpayer funded website, Bronson makes a Wall Street-style pitch for ethanol: "In the past decade, there have been great strides in biofuel technology and manufacturing facilities, substantially improving the efficiency of this fuel source. Florida will be the site of great advances in the development of fuel and energy alternatives, which is why we are pushing our 'Farm to Fuel' initiative so aggressively." In case you were wondering.

Claiming that America's economy is lurching ever more quickly from economic bubble to economic bubble, the founder of iTulip predicts a surge in alternative energy and infrastructure spending – sort of a green bubble. Writing for Harper's [sub], Eric Janszen defined the main economic drivers of "the cleantech bubble:" the need to recover from recession, weakness in the dollar, loss of petrodollar liquidity, loss of energy security and peak cheap oil. As a result, consumers will be faced with a bewildering array of fuels and vehicles: biofuels, electric vehicles, plug-in hybrids, hydrogen fuel cells, photovoltaics, wind turbines, ocean wave energy, geothermal energy, clean coal and even nukes. Janszen sees these technologies becoming the hot, overvalued commodities of the new bubble. At the same time, he predicts corporations will plan and (God forbid) implement the new energy infrastructure to power expensive new vehicles and public transit. Responding in the Association for the Study of Peak Oil & Gas – USA , commentator Dave Cohen notes that venture capitalists (VC) are already looking to invest in what they call “the largest economic opportunity of the 21st century.” Fortunately for cutting edge companies like Tesla Motors, there's a VC born every minute.

A new report in Science magazine [reported by Yahoo! News] claims that "using good cropland to expand biofuels will probably exacerbate global warming." The researchers worry that farmers looking to cash in on ethanol will continue to plow up more forests and/or grasslands. Biofuels boosters have cited studies stating corn-based ethanol produces 20 percent less greenhouse gases than gas, while celluosic ethanol results in a 70 percent reduction. The Science study says the analysis was "one-sided;" it didn't include the carbon costs of land use change. Factor in that variable, and corn-based ethanol production would increase greenhouse gases by 93 percent (compared to gasoline over a 30-year period). The Renewable Fuels Association dismissed the researchers' conclusions as simplistic. "Assigning the blame for rainforest deforestation and grassland conversion to agriculture solely on the renewable fuels industry ignores key factors that play a greater role." The ethanol industry cheerleaders didn't speciify those "key factors."

The United States will have the capacity to produce 13 billion gallons of ethanol by the end of 2008. The United Sates will have the capacity to process 12 billions of ethanol by the end of 2008. Oops! This analysis comes to us from Wally Tyner. The agricultural economist for Purdue University predicts that this disparity will force some ethanol plants to reduce or halt production, and drive down the price of ethanol. Controversially, Tyner also suggests that U.S. ethanol over-production could lead to exports. And this is just E10 folks. During a phone interview [podcast below], the prof reveals that America's entire consumption of E85 could be satisfied by the output of ONE ethanol plant. How many do we have now? 100. Tyner agreed that the American ethanol industry couldn't survive without state and federal subsidies. But I suppose you kinda knew that already.

Let’s say you’re driving down South Dakota Highway 50 and you’ve GOT to fill-up on E85. Obviously, you don't REALLY have to; any car that can run on E85 can run on “normal” gasoline. (And run farther too, but that's another story.) So let's just imagine it's a patriotic “our boys don’t have to die defending corn fields” thing. Or maybe a "I heart Federal Subsidies" deal. So, how do you know where to get a tankful of corn juice? Tom-Tom Go? Phone a friend? Not to worry! The South Dakota’s legislature is here to help! According to KXMC.com, the Mount Rushmore State just enacted legislation that requires state officials to list E85 availability on interstate highway signs. Hang on; “State officials say the bill is premature because South Dakota is in a regional compact of states that are planning a system of uniform signs for renewable fuels.” So they're doing this twice? Anyway, no word yet on how much either boondoggle’s going to cost. But we ALL know who’s going to pay for it…

“It can be an expensive process to install the pumps and get the infrastructure ready to sell E85, so we’re offering as much assistance as we can to those retailers that have elected to sell E85.” So sayeth Mark Walters, Biofuels Director for the Indiana Corn Marketing Council. Apparently the "as much as we can bit" amounts to $5k per eligible gas station. Big whoop. Shell Oil– which doesn't pay for any of its franchisees to sell E85– pegs the cost of a corn juice compatible storage tank at $240k. And that doesn't include the time and hassle of local planning permission, or the disruption of construction to normal trade. According to the Brownfield Network (AG News for America), "Walters says that if the state grant is increased to $20,000 as proposed, the two combined should be very attractive to retailers." But not customers. At the moment, Indiana only has 100 E85 retailers, and you can bet that's not because consumers are clamoring for the stuff. [check out the podcast with Mr. Walters at the bottom of BN's post]

Biofuels are driving up the price of food. Biofuel production threatens to worsen water shortages and force poor communities off their land. That’s the damning conclusion of a United Nations bioenergy forum, as reported by CNN. In its opposition to the biofuels boom, the U.N. is not alone. The Hartford Courant reports that residents of Suffield, Connecticut are none too pleased with CT Biodiesel's plan to build the largest biodiesel plant in the Northeast in their town. "No Biodiesel" signs sprouted up on front lawns. Vexed by health and safety (especially fire) concerns, residents flooded planning meetings, chanting, "Get out of our town." CT [Biofuels] responded in the time-honored American tradition; company officials offered the town 35k gallons of free biodiesel a year, more than $400k a year in projected property taxes, guaranteed first crack at new jobs and aid for the town's fuel bank, student scholarships and charitable organizations. “Resident Laureen Peck had a message for company officials at a recent town meeting: ‘There are safety issues here, and money will not override us.’”

It's a rare day that TTAC gets to report a roll-back on government (i.e. taxpayer) funding for ethanol, but that's the way it's going down in… Michigan. Yes, the Daily News reports that the home state of the American [owned] automotive industry, where a trio of carmakers are LOVING the federal fuel economy credits given their dirt-cheap-to-mod greenwashed E85-mobiles, has rolled back a seven cent a gallon corn juice tax credit. State Rep Dan Nitz is not amused. "This tax break was good for consumers, GM and Ford, and the environment. With nearly $777,000 saved, it's obvious that people are taking advantage of this incentive, and I can't figure out why keeping it is not a priority." No? What about the legislature's desire to pocket every damn penny in revenue they can find to support their political power? Nah. Meanwhile, gas station owner Jim Little does the math. "With a capital investment of almost $70,000 to install E85 pumps, I want to make sure I have some kind of incentive to sell E85 to customers. This incentive was a cushion to help me keep E85 at a lower cost for consumers and still be able to afford to sell it." Otherwise… why bother?

You know the old joke that ends "We've already established what you are. We're just haggling over price"? Same deal here. Despite public outcry that forced Mayor Bloomberg to make congestion charging someone else's fault– a 17 member commission– The New York Times wants to keep the "dream" alive. Apparently, congestion charging is THE answer to gridlock. "London proved as much when it adopted congestion pricing, charging drivers to use certain streets. Traffic moved faster, tailpipe emissions went down and the fees collected went to improve public transportation." Uh, no. No. And no. While The Old Gray Lady is ready for NYC motorists to lay down (bend over?) for a regressive tax/PC money grab, the newspaper of record doesn't like "the unworkable suggestion of rationing entry to the city each day based on the last digit of license plates. There are other duds, including the idea — sure to die in Albany — of putting tolls on toll-free bridges over the East and Harlem Rivers. An $8 surcharge on taxi rides, part of another proposal, is another nonstarter." Those crazy commissioners, eh? And the winner is… forcing "most cars $8 and trucks $21 to drive on the city’s busiest streets during weekdays." Fare enough?

In the grand scheme of things, in the face of a federal mandate calling for U.S. production of 36 billion gallons of renewable fuels per year by 2020, a $55k grant to The Cornhusker State's Ethanol Board is a meaningless gesture. But ours is not to do or die; ours is to wonder why. According to Nebraska Farmer, "Funds will support workshops to train ethanol producers, E85 distributors and marketers for the direct marketing of E85 from producers to local retailers. The one-day workshops will be offered on multiple dates and cover EPA ethanol storage requirements, fuel tax incentives, ethanol safety and handling training, and E85 marketing and brand awareness." The money will come from the Nebraska Department of Economic Development, The Clean Fuels Development Coalition, the National Ethanol Vehicle Coalition and the Clean Fuels Foundation. "Ethanol has brought much in terms of jobs and wealth to Nebraska," says Todd Sneller, administrator of the Nebraska Ethanol Board. "By encouraging direct relationships between ethanol producers and their communities, drivers get a cheaper fuel for their cars and the number of E85 pumps in Nebraska increases." I wonder how much Todd gets a year… 

As we mentioned yesterday, GM has bought a piece of Coskata, a bacteria-loving ethanol high tech start-up. Speaking to DailyTech, GM Car Czar Maximum Bob Lutz described the process. "All the other companies use enzymes, which are incredibly expensive." Instead, Coskata grinds organic wastes into a powder which is "then exposed to plasma, which causes the organic powder to ferment, releasing carbon-chain gas." [NB: plasma is a superheated ionized gas which would incinerate the material] This gas "rises into the air where natural anaerobic bacteria eats [sic] the gas molecules and excretes [sic] ethanol and water vapor." [NB 2: anaerobic bacteria can't survive "in the air"] Maximum Bob promises a pilot plant will produce ethanol this year. By 2011, they'll be cranking out 50 to 100m gallons of ethanol per year. And get this: "The price per gallon to produce the fuel is approximately $1 per gallon." MB admits that overhead, profits, shipping, etc. will raise that price to around $2 per gallon. And they'll have to fight big oil to get their cheap fuel to the masses as "less than 1% of the pumps in the U.S. are ethanol-equipped." Here's a thought: why not give GM dealers ethanol pumps? That would more than quadruple America's E85 outlets at a stroke. Sorry, Bob; make that "with one move." 

How anyone convinced GM CEO Rick Wagoner to invest in an experimental process to turn crop wastes, wood chips, scrap plastic, rubber and garbage into ethanol is a mystery shrouded in corporate secrecy. Fortunately for GM PR, the New York Times somehow managed to find an expert willing to give Wagoner's mob props for picking some cash out of the fire to spend on Coskata: an unproven company with an unproven process attempting to service an unproven market. "Lee Schipper, a visiting scholar at the transportation center of the University of California, Berkeley, said that a new method to make ethanol 'presents them with a way of wiggling the industry out of fuel economy standards.'" Yes, OK, but why buy a high tech firm that's only been in biz since 2006, and isn't even considered an industry leader? Or, for that, matter why spend precious R&D dollars on ANY E85 company? Why not just build the vehicles that burn the stuff? Lest we forget, Wagoner can't even convince Wal-Mart to offer E85 pumps, never mind find a new way to produce the fuel. Well, they say con men are easy targets…

Driverless cars, intra-traffic electronic crash avoidance, plug-in electric hybrids, fuel cells, expanding foreign markets– GM CEO Rick Wagoner is on a tear, talking about everything and anything except, you know, the fact that GM NA isn't making a profit or, God forbid, predicting when it might be back in black. So what the Hell, let's add E85 to the list. C/Net reports that Rabid Rick reckons we need to increase the number of American gas stations selling E85 from the current 1400ish level to 15k to 20k (out of approximately 170k total). To serve corn juice to all those GM Flex-Fuel vehicles earning the company federal fuel economy credits, GM claims it's been working with big box retailers "like Wal-Mart and Target" to install ethanol pumps. "It has been remarkably difficult to get pumps installed," Mr. Wagoner admitted. "We've been doing more work than I thought we would need to." I think that's Rick's way of saying it ain't happening– which makes sense as Wal-Mart spokesman Kory Lundberg told us "we don't have a timeline for E85 implementation." In any case, Rick's well-up on the farm-based limitations of increasing E85 distribution ten-fold. "To get beyond a certain level, it is going to have to go beyond grain-based in the U.S.," he said. By then we should all be driving around in flex-fuel E-flex Volts.