Here’s a bad idea which proves that if you bleed taxpayers for enough government subsidies and mix it with billionaire industrialists, there is just no stopping it.
What is it?
A newly-formed Minnesota company, Midwest AgEnergy Group, has just broken ground on an ethanol production plant to be built in North Dakota. It will produce 65 million gallons of ethanol per year.
For power, the plant will use a nearby and currently idle coal plant to generate steam energy. This energy will in turn be used to drive the ethanol production process.
The process is fossil fuel dependent and carbon-intensive from beginning to end:
• Farmers fill up their tractors with diesel fuel and burn billions of gallons per year to plant vast acreages of corn across the country.
• The corn is fertilized with petroleum-intensive fertilizers, but mostly nitrogen which requires burning natural gas to create.
• Tons of nitrogen ends up in the natural water supply, requiring even more government spending for studies and pollution control efforts to address the problem.
• The corn is harvested with diesel-fuel-powered combines.
• The corn is shipped by truck and trains using gas or diesel fuel to get to the ethanol plant.
• Once at the ethanol plant, heavy loads of energy are needed to process the corn into ethanol.
• Because carbon-intensive coal is still cheap, it is seen a profitable way to distill corn into ethanol.
• The coal spews tons of greenhouse gases into the atmosphere, driving climate change.
• As the ethanol industry has advanced (artificially afloat on government subsidies), the price of corn has skyrocketed.
• Today 40% of corn is being absorbed by the ethanol industry. That means corn for feeding livestock – chickens, turkeys and cows – has grown rapidly more expensive.
• Since 2007, annual feed costs have ballooned by $8.8 billion for chicken producers and $1.9 billion for turkey farmers.
• In year 2012 alone a family of four suffered a $2,000 increase in yearly food costs.
• Higher corn prices mean more land is being cleared to plant more corn – which often means clearing forested or wooded areas which once absorbed greenhouses gases from the earth’s atmosphere – creating a vicious cycle.
Note: While the giant corporations are sucking up taxpayer money to create ethanol – the corn farming business also has its hands deeply into the pocket of the taxpayer – corn subsidies cost U.S. taxpayers $84.4 billion from 1995 through 2012.
The fossil fuel industry –oil, gas and coal – suck up from $10 billion to $52 billion per year.
On top of all this, the ethanol industry is on life support. Dozens of ethanol plants throughout Minnesota are losing money, and some have gone bankrupt.
But wait – what about the coal-to-ethanol model? Is burning cheap coal to make ethanol the key, then, to helping ethanol producers turn a profit?
Well, let’s take a look at one one of Minnesota’s earliest coal-to-ethanol plants, The Heron Lake BioEnergy plant – it has racked up $17 million dollars in losses during the past five years. It also has a mountain of debt – it owes its creditor $54 million.
The Heron Lake BioEnergy plant was heading for bankruptcy -- but was recently granted a reprieve from oblivion by Granit Falls Energy, which agreed to buy majority interest in Heron Lake on August 1.
All this, and the price of gas at the pump has gone nowhere but higher since Congress passes the Renewable Fuel Standard in 2005 requiring that all of the gasoline we burn contain an ever increasing percentage of ethanol.
One might say the story of ethanol is the poster child for that old adage: “The road to hell is paved with good intentions.” Just a couple of decades ago, people were saying that ethanol could make Minnesota “the Saudi Arabia of alternative fuel.”
Instead, what we have seen is the creation of a vastly troubled industry that has:
• Redistributed billions of dollars of American taxpayer money into the hands of corporations.
• Ruinously raised the price of food for ordinary families.
• Increased greenhouse gases, pollution and made climate change worse.
• Destroyed natural woodlands and habitats for wildlife.
• Exacerbated the ever rising specter of nitrogen pollution in our lakes and rivers.
Now let's return to where we started at beginning of this article – a Minnesota company, Midwest AgEnergy Group, which has just broken ground on yet another new coal-burning ethanol plant.
Present at the groundbreaking ceremony for the plant east of Jamestown was North Dakota Governor Jack Dalrymple. His comment at the groundbreaking:
“In North Dakota, we have stayed true to a proven energy policy that promotes the responsible development of all our energy resources. Our work is paying off in very significant ways and this biorefinery is another example of what can be accomplished when states create an environment in which private industry can thrive.” Source
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