Thanks for the comprehensive survey of recent news items relating to the ethanol debate. (And for providing a link to our article, of course!)

Regarding the Oregon State University study (which is written in very clear, approachable language), it is worth pointing out that your last quote actually refers to Oregon only. Here's what the report says on page iv:

For comparison, the degree of energy independence resulting from a one mile-per-gallon increase in average motor vehicle fuel economy in Oregon would be equivalent to 3-4 corn ethanol plants like the one evaluated here [each 50 million gallons per year], or 13 biodiesel plants [each 2 million gallons per year] like the one evaluated here. [My emphasis.]

On a national basis, a lot more than 200 million gallons per year of ethanol capacity, or 26 million gallons per year of biodiesel capacity would be required to match a one mile-per-gallon increase in average motor vehicle fuel economy!

These are only my personal opinions.

Now, Oregon is a pretty small state--3.4 million people. Extrapolating based on US population, it would take 308 ethanol plants to match that standard nation wide. To be fair, Oregon's distance from the corn belt makes it less efficient than many other states, since corn has to be hauled there. So let's say that it would take 200 new corn-based ethanol plants to match a 1mpg boost in milage standards.

There are currently 97 plants up and running. So, if my rough analysis is right, we could double the current number of existing plants, and just achieve the net energy benefits 1 mpg boost in standards.

Wouldn't it be smarter to chill on the ethanol and just start pushing up CAFE? Even the tiniest steps would be just as effective as spending billions building out ethanol infrastructure.

Victual Reality

Wouldn't it be smarter to chill on the ethanol and just start pushing up CAFE?

...yes.

The true meaning of life is to plant trees, under whose shade you do not expect to sit.

I was working to help develop a method of isolating and extracting a relatively high quality zein product from the corn.  Zein is a kind of protein that makes up about half the protein in corn.  It is notable for its film-forming properties, and is presently used as an edible coating such as on pills.

I was the lab technician on this project for about a year (around 2000), and I left before the project was over.  At that point, the zein we were able to extract from corn was not anywhere close to competing with other zein sources on the market.  I believe the researcher (there was only the two of us) retired shortly after.  I don't know what became of the program, but I figure it was probably nothing.  

Considering that our project was existing on the premise that producing corn for ethanol was not a profitable option, and that our project likely did not help much, I wonder how the farmers are getting paid enough for this.

Is a change in a fuel-economy standard the same thing as a change in rate of fuel consumption?

GOOD QUESTION!. Indeed, I was thinking of at some point writing a separate blog on this very topic.

The short answer is: No.

The long answer is: No, and therefore beware of confusion over the cost of achieving a one mile-per-gallon increase in an average fuel economy (e.g., CAFE) standard with the the cost of achieving a one mile-per-gallon increase in average fuel economy (i.e., roughly a 4% improvement), which is yet different from the cost of reducing fuel consumption by an equivalent amount.

Researchers, such as those at the Congressional Budget Office (CBO), when estimating the cost of increasing the CAFE standard assume no change in the model composition of the vehicles manufactured and purchased. That is to say, they assume that the fuel-economy gains are achieved solely through technological improvements in the vehicles themselves. To quote from their December 2003 study, "The Economic Costs of Fuel Economy Standards Versus a Gasoline Tax", which examined several ways of achieving a 10% reduction (3.8 mpg improvement) in gasoline consumption:

CBO's analysis is limited to technologies that would improve the fuel economy of gasoline-powered vehicles. It thus excludes vehicles powered by alternative means, such as fuel cells and gas-electric hybrid engines. Such vehicles as yet constitute an insignificant portion of the market. To the extent that their rate of adoption grows and that firms do not offset the resulting fuel economy gains by boosting the performance of their vehicles, the costs of complying with CAFE standards would shrink. Furthermore, the analysis considers only compliance strategies that do not involve reductions in vehicle weight or performance (such as acceleration). CBO's predictions of costs pertain to a vehicle fleet resembling that actually existing today. [My emphasis.]

Note that the study only looked at improvements to gasoline-powered vehicles, and not at innovations such as hybrids, nor at the possibility of a shift from gasoline-powered to diesel-powered vehicles.

Clearly, if consumers down-size, and start buying smaller, more fuel-efficient vehicles, the cost of achieving a 3.8 miles-per-gallon improvement in average fuel economy would be less than the CBO estimated. The study does acknowledge that point:

Should consumers become willing to sacrifice some weight or performance in their vehicles in exchange for higher fuel economy, compliance costs as measured in this analysis would be reduced, but the true costs would also include the value of the surrendered attributes.

This means that the analysis produces a maximum estimate, and thus potentially overstates the actual cost of improving average fuel economy.

Perhaps there would be a considerable loss in consumer welfare if people shifted (voluntarily, let's not forget) to smaller, more fuel-efficient vehicles -- or, in the language of the CBO study, surrendered certain attributes. But would that loss in consumer welfare be significant? Presumably anybody shifting to a less-powerful or smaller, more fuel-efficient vehicle has a lower willingness to pay for the attributes of their old vehicle than assumed implicitly in the way that the CBO analysis is undertaken. And we know they do shift, as witnessed by declining sales in large SUVs lately.

So, the actual cost of improving the average fuel economy of the private vehicle fleet should be less than the modelled cost of increasing the average fuel economy of the fleet solely through technical improvements, because people will both change the types of vehicles they drive and (presumably, if fuel prices remain high) drive in a way that improves their gas mileage. Drivers changing to more fuel-efficient cars, because their fuel cost per mile will drop, may compensate by driving more miles in total; but that effect is unlikely to exceed the reduction in fuel consumption gained through an improvement in miles per gallon.

Finally, reducing fuel consumption by an equivalent amount as an increase in the CAFE standard, or an improvement in average fuel economy, is likely to cost yet less than either of these two scenarios, because (assuming retail prices for transport fuels do not fall) one can assume also that many people will drive fewer miles in a year -- through carpooling, combining trips, moving closer to their place of work, etc.

For these and other reasons the CBO concluded, not surprisingly, that a gasoline tax would achieve a 10% reduction in gasoline consumption at a lower cost (19% lower), and more quickly, than raising CAFE standards by the amount necessary to achieve the same outcome.

These are only my personal opinions.

The plugin hybrid subsidy has the added benefit of GHG elimination by curtailing combustion of 100 billion gallons of liquid fuel and preserving conservation land (that would otherwise be used for fuel farming)to sequester CO2.

In addition the plugin tax credits would spur mass production of plugin hybrids lowering the cost and making  plugins competitive on initial price  with internal combustion vehicles.

This could help plugin technology reach the critical 10% level, putting it right into the exponential part of the typical new product adoption curve.

That could start the total replacement of internal combustion drivetrains.  Eventually reducing  liquid fuel use by 90% when internal combustion only exists in classic cars in museums.  

Fuel farming will never provide over a few percent of present oil based fuel consumption.  There just isn't enough farmland to acomplish anymore than that.

Then as global climate change marches on, unabated by fuel farming and flex fuel vehicle scamming, farmland will be converted to desert as drought dries up aqifers.  No more farmland will be left for fuel farming then.  It will all be needed for food production.

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