While we wait for automaker bankruptcy filings, we have a little schadenfreude from a different (but equally deserving) sector to keep you going. Reuters reports that spiraling foodstock costs are tearing a giant hole in profit margins for domestic ethanol suppliers, causing a spate of bankruptcy filings. Corn (the main ingredient for domestically-produced ethanol) was already hitting record prices before the recent deluge in the Midwest. Post-flooding price spikes have wrought havoc on the whole ethanol business plan. Alex Moglia of Moglia Advisors, a biofuel consultancy group, tells Reuters that 12 biodiesel and ethanol plants have declared bankruptcy in recent months, with more to follow. The plants that are still open are typically producing at about half capacity, says Moglia. Ironically, a major problem for domestic ethanol producers is the transportation of their fuel. The majority of ethanol refineries are in the Midwest, which has a massive oversupply of corn juice. High fuel costs are preventing America's alternative fuel from reaching larger markets on either coast at competitive prices. Ultimately, the big boys of ethanol– your ADMs, and VersaSuns– will survive the hard times for ethanol producers, thanks to agribusiness diversification. It's the little guys that are being forced out of business, as reality begins to hit home for America's "magic fuel." Even so, their elected officials are probably lobbying for bailouts as we speak. 

Consumer Reports have a brand-spankety new survey out, and it says that Americans can tell that gas is expensive. Oh yeah, and that they might do something about it. Survey says that four-dollar gas™ has 79 percent of us car-shopping Yanks wanting a "car with better fuel economy," and 74 percent driving less to keep costs down. Even though the respondent-identified $4.32 per gallon "tipping point when drivers would further drastically curtail driving" is only upon those of us on the left coast, a full 80 percent of prospective buyers are considering a "diesel, flex-fuel, or hybrid vehicle." Too bad those numbers aren't broken down between those three very different options. So America has taken notice of pricey gas, but the real question is who do Americans blame? And the answers are as unimaginative as you might expect, with the federal government (77 percent), oil companies (75 percent), foreign oil producers (70 percent), and Middle East conflict (68 percent), taking the rap for pain at the pump. When asked what the feds should do to fix the mess, 90 percent say "increase support for alternative energy development", 84 percent say "negotiate lower prices with oil-exporting nations", 83 percent say "encourage conservation through tax incentives for alternative transportation", while 81 percent want to "allow more drilling in the U.S. and offshore." Interestingly, "Putin-style nationalization of oil firms" and "wholesale invasion of the middle east" weren't polled, suggesting there might not be convenient solutions to scapegoats number two, three and four. 

Forty or fifty years ago, every manufacturer built concept cars with alternative– and sometimes pretty outlandish– power plants (small nuclear reactor, anyone?). The gas turbine was a popular choice. GM, Ford and Chrysler were all deeply involved in gas turbine research, stretching back to the late '40s and early '50s. In 1963, Chrysler built a fleet of 50 distinctively-styled turbine-powered cars and gave them to consumers to generate real-world feedback. Turbine engines were the wave of the future– a technologically-advanced powerplant that could run on anything combustible that would flow through a pipe, from kerosene to perfume. Chrysler's test program racked-up over 1.1m miles. They continued turbine engine research until the mid 70s, when they actually planned to put a turbine into production. Then, suddenly, nothing. Chrysler's financial problems led to government loan guarantees that included stipulations that they abandon plans to produce turbines (too risky). GM and Ford had long-since been distracted by other shiny objects like rotary engines and winning LeMans. So turbine engine research halted. With all the emphasis now on alternative fuels, perhaps it's time to revive an engine that can run on hydrogen, biofuels, petroleum distillates or even coal dust. Combined with modern engine-control technology, it could be worth a second look. Or not.

A widely touted goal of the environmental movement: increasing American's percentage of renewable energy use to 25 percent by 2025. According to a report by the RAND corporation, meeting the so-called "25 by 25" goal without significant consumer cost will require "major technological developments." Green Car Congress reports that 9.5 percent of electricity and 1.6 percent of motor vehicle fuel currently comes from renewable energy sources. The RAND report identifies biomass and wind energy as the two greatest opportunities for meeting the 25 by 25 goal. But it also points out that both require significant improvement to make a low-cost impact on renewable energy usage. For motor vehicles in particular, biomass-based (non-foodstock) "second-gen" biofuels must become significantly cheaper and more prevalent. Reducing renewable fuel goals to 10 or 15 percent by 2025 would also disproportionately reduce consumer expenses. Then again, the higher the cost to consumers, the more competitive renewable fuels become. The preceeding was brought to you by the Energy Future Coalition of UAW Boss Ron Gettelfinger's "Marshall Plan" fame. Over to you, taxpayers. 

Bloomberg reports that Democratic presidential candidate Barack Obama is proposing new rules to increase government interven… err… oversight in energy markets. He wants to "require the U.S. Commodity Futures Trading Commission to regulate trading in energy futures contracts and direct the commission to investigate ways to lessen speculation, such as increasing margin requirements." As oil takes an extended sojourn in the neighborhood of $135/barrel, Obama joins the growing chorus blaming high oil prices on greedy speculators. While Sen. Obama rails against the "Enron loophole"– allowing energy speculators to speculate without Uncle Sam riding herd– he's also busy promoting ethanol. And ethanol is promoting him. According to the New York Times, one of Obama's advisors, Tom Daschle (yes, that one), identifies himself as a man who spends "a substantial amount of time providing strategic and policy advice to clients in renewable energy." (That's a lobbyist, to you and me.) Obama's also traveled on a corporate jet owned by "Archer Daniels Midland, which is the nation's largest ethanol producer and is based in his home state;" not-so-coincidentally the nation's second-largest corn producing state. In fairness to Senator Obama… no, that's all I got. 

In an excellent E85 editorial we published two years ago, Michael Karesh pointed out that U.S. corn growers would need a landmass nearly the size of Texas to make a significant dent in American gas consumption. And now a lot of the existing corn-growing land is under water. Ethanol opponents reckon the recent flooding will mean that even more of the current corn crop will be devoted to E85 production– driving-up food prices even further, faster. They want the feds to suspend its ethanol "mandate" (i.e. .51 per gallon subsidy, tariffs on imported ethanol, price supports, CAFE credits, etc.). That little piece of business currently stands at a directive for 15 billion gallons of biofuels by 2015, and 21 billion gallons by 2022. The ethanol industry says HELL NO. Instead, they want the feds to release protected land for their profit patriotic efforts. According to The Detroit News, "Sen. Charles Grassley, R-Iowa… and other farm state members of Congress argue that the Agriculture Department should allow more planting in 35 million acres of conservation land as a way to help ease the price increases." It just gets worse. 

That's the headline on the press release sent by EPIC, the Ethanol Promotion and Information Council. Apparently, "Motorists are frustrated and angry about high gas prices. Everyone is feeling the pinch at the pump, which really underscores our need for biofuels," claims Toni Nuernberg, EPIC's exec director. "As gas prices continue to skyrocket, we must continue the push for the only current transportation energy option we have today-biofuels." Yes, well, by their own admission, EPIC's Royal "we" represents little more than the ethanol industry and wishful thinking. In a not-so-epic EPIC survey on gas prices, only 11 percent of 1004 online (opt in) respondents said they were "taking action to use and support [emphasis added] non-oil based energy." Some 47 percent they'd "like to" and a whopping 43 percent "no, I have not considered this." Anyway, I called Robert White, EPIC's Deputy Director, to ask how soaring gas prices worked in his members' favor. I was surprised to discover EPIC disagrees with the AAA; E85 is cheaper than regular gas! But wait, there's more…

"If Brazil can do it, we can do it; it's as simple as that." Needless to say, Fox News' demagogue-in-chief Bill O'Reilly made this asinine assertion on energy independence while berating a couple of news blonds with his usual steam-roller-like tact, anti-intellectual insights and megalomaniacal aplomb. Ignoring differences in climate (Brazil's ethanol production is based on sugar cane), speaking over pictures of a Chevy FlexFuel Tahoe, Bill O told his acolytes (repeatedly) that we "have to get away from this oil-based economy." Why Brazil's just itching to rescue us from the oil thugs with cheap imported ethanol. But evil Congress is placing restrictive tariffs on our liquid salvation on behalf of… Big Oil. Sooooo close Mr. Bill (correct answer: the farm lobby). One of the news blonds almost dared challenge O'Reilly on the ethanol front– more energy in than out, dependence on oil to create it, deforestation, boondoggles, etc.– but didn't. Hey Bill. If you want a real fight on this issue, drop us a line. 

Computer industry pundit, columnist, documentary film maker, small airplane pilot, classic car enthusiast and former international oil industry correspondent Robert X. Cringely is talking up SwiftFuel. Just in case the name isn't catchy enough (the fuel, not the author), Cringley calls sorghum-based go-juice “The Splenda of motor fuels." "It has an octane rating of 104 (higher than the 100 octane fuel it replaces) yet contains no lead or ethanol. SwiftFuel mixes with gasoline, can be stored in the same tanks as gasoline, and be shipped in the same pipelines as gasoline.” Swift Enterprises claims the sorghum brew yields six times as much fuel per acre as corn and delivers get up to 20 percent better gas mileage than… gas. They're currently selling the alt fuel as a replacement for leaded gasoline in small airplanes. Too good to be true? Cringely doesn’t address many of the problems associated with the whole agricultural feed-into-fuel deal: converting wilderness into farmland, fresh water consumption, the use of pesticides and fertilizers, energy required to convert the biomass into SwiftFuel, etc. Despite E85's rough ride (here and elsewhere), look for more of this outside-the-oil-well thinking as oil prices escalate.

But my God, does Roger Cohen take his time getting to the point. Before the New York Times op ed writer argues for your elected representatives to allow cheap[er] Brazilian ethanol into the U.S., Cohen attempts to entertain us with a discussion of national "re-branding." He begins with the most elliptical lead I've ever read. "Perhaps there’s something to treadmill wisdom. We’re all so narrow-band these days, using the vast resources of broadband to direct ourselves into a chosen news and ideological tunnel. Polarized pluralism defines us." Translation: Cohen was running on a treadmill (geddit?), watching an unknown news channel (broadband) when he fell into a reverie about his Brazilian exile, when the country's economy was almost as hyper-inflated as his prose. And then he thought, wow! "Energy is the country’s new brand." I'm thinking Brazil needs something a bit sexier, but the point– yes! the point!– is corn ethanol bad; sugar cane ethanol, good. "Sugar cane is not a staple. It’s eight times more productive than corn. It grows year round. It must be processed fast, so CO2-spewing transport to distant ethanol plants is impossible (unlike for corn)." The environmental impact of shipping Brazilian ethanol, pathetic workers' wages and the deforestation be damned. See? That wasn't so hard, was it?

"Agriculture Secretary Edward T. Schafer is preparing to walk into a buzzsaw of criticism over American biofuels policy when he meets with world leaders to discuss the global food crisis next week." Ouch! Clearly, The New York Times is through pulling is punches on America's corn-fed bio-fuel bonanza. The majority of their article "Food Report Criticizes Biofuel Policies" is dedicated to a report criticizing biofuel policies (strangely enough), But before the knife is twisted ("The Agriculture Department’s own longtime chief economist, Keith Collins, who retired in January, said that ethanol was the 'foot on the accelerator' of corn demand), Secretary Schafer wants his constituents (corn growers) to know he's got their back. By his department's reckoning, biofuel production accounts for "only" two to three percent of the increase in global food prices, while reducing crude oil consumption by a million (a million!) barrels a day."We think that policy-wise in the United States of America — and certainly in the rest of the world — as we see the price of oil and petroleum escalate dramatically beyond anyone’s imagination, that one of the ways to deal with that is to produce biofuels which are renewables, better for the environment and help lower that cost." So E85 reduces gas use (although it increases gas use) and helps the environment (although it hurts the environment). Let the price supports begin! Oh wait…

When fans of bio-diesel first claimed they were running their [former] oil burners on "free" fuel– restaurants' abandoned cooking oil and grease– we predicted the fat bubble would burst. And so it has. The New York Times reports that "yellow grease" has risen from 7.6 cents per pound (2000) to 33 cents a pound, or almost $2.50 a gallon. And so we delve into the murky– or is that cloudy?– world of grease theft. The Old Gray Lady weaves a strange tale of late night Burger King raids, private dicks working for grease collection and rendering companies, shady environmentalists, and (as always) befuddled cops. Oh, and a lawyer who specializes in defending the "grease rustlers." "Once you put something in the trash, it’s abandoned property,” said Jon A. Jaworski, a lawyer in Houston who represents accused grease thieves. “A lot of times, it’s not theft.” And a lot of times it is. The unsolved 2,500-gallon Burger King heist chronicled at the outset was worth more than $6,000 on the black (yellow) market. There's only two elements missing from this tale of low life and high fat: the drivers who buy the stuff that "fell off the back of a dumpster" and government intervention. How long before the liquid gold is regulated and taxed? Take our word for it: not long at all. 

Several years back, before ethanol as a motor fuel additive became all the rage, Sweden started a program to produce biogas. They envisioned a methane-based fuel made from sewage (with the aid of some bacteria) powering cars, trucks and buses. According to ever-hopeful engineers, with the right process, the average Swede craps out enough yearly to power an average car for an average of 75 miles. Unfortunately for FordonsGas, Dong Energy and other curiously named companies, the biogas biz has encountered the usual, uh, teething problems with new technology. Not to mention a distinct lack of biogas pumps and vehicles that can run on the stuff. (Biogas buses are out there, somewhere, while Volvo stopped making biogas powered vehicles a couple of years ago.) The International Herald Tribune reports that biogas boosters remain undaunted, hopeful of the process' long-term adoption. "When you're in the bathroom in the morning and you can see something good come of that, it's easy to be taken in by the idea – it's like a utopia," quoth a consultant. If you say so…

The United States Postal Service is the single largest buyer of E85-compatible vehicles. According to Bloomberg, from 1995 – 2005, the government agency has used your tax money (and customers') to purchase some 30k corn juice-compatible trucks and minivans. So how's that going then? "You're getting fewer miles per gallon, and it's costing us more,'' according to Walt O'Tormey, P.O. engineering veep. In specific, the mail carrier's gas consumption jumped by more than 1.5m gallons. Well, duh. E85 doesn't deal the mpgs like regular. Still, a Postal Service study put a number to their pain: the new vehicles got as much as 29 percent fewer miles to the gallon than their previous trucks. Oh, and the post office only fueled a thousand of their E-85 compatible fleet with Iowa's best, due to availability. (Stroke of luck, that.) The rest of the article bashes E85, but good. Including news (to us) that the Sierra Club's lining-up against the bio-fuel. "Not only does this [CAFE credit for E85 vehicles] do nothing to improve fuel efficiency,'' says Daniel Becker, an environmental lawyer and former head of Sierra Club's global-warming program. "It's also ensuring that we're going to use more gasoline.'' Yeah, that sucks. Unless, of course, you're a corn farmer.

The bio-fuel industry has an answer for critics who consider the whole food-for-fuel business a dangerous, back asswards proposition: second generation bio-fuels! Ethanol v2 proponents believe that a new range of non-food crops is the "answer" to kvetching. Only it isn't. The New York Times reports that "biologists and botanists are warning that they, too, may bring serious unintended consequences. Most of these newer crops are what scientists label invasive species — that is, weeds — that have an extraordinarily high potential to escape biofuel plantations, overrun adjacent farms and natural land, and create economic and ecological havoc in the process." If that's not enough to put you off the idea, how about some specifics? "The giant reed, previously used mostly in decorations and in making musical instruments — is a fast-growing, thirsty species that has drained wetlands and clogged drainage systems in other places where it has been planted. It is also highly flammable." Willy De Greef, incoming secretary general of EuropaBio (an industry group) says hakuna matata; "biofuel farmers would inevitably introduce new crops carefully because they would not want growth they could not control." Geoffrey Howard, an invasive species expert with the International Union for Conservation of Nature, is not impressed. “We’ve had 100 years of experience with introductions of these crops that turned out to be disastrous for environment, people, health.”