Seeing the Round Corners

March 26, 2018

THE WIND INDUSTRY – ANOTHER FEDERAL CHARITY

This writer’s research file on ethanol begins in 2005. Beginning a column on the wind industry/wind energy with a review of the ethanol debacle may seem a little strange, but stick with me and read on to see how the two are similar charities of the U. S. federal government.

Ethanol has been referred to as one of the most egregious political scams to come out of a city where there is never a dearth of shameless political scams.

Here is a list of only the most serious of the impacts of the federal government propping up the ethanol industry:

corn ethanol may actually have higher emissions than petroleum-based gasoline;
more corn going into biofuels caused Americans to pay an estimated $40 billion a year more at the grocery store;
health issues – ozone-related mortality
cattle feeders squeezed out by the higher price of corn and consumers also paying more for food;
corn uses more herbicides and insecticides than any other crop produced in the U. S.; (fertilizer runoff has enlarged a dead zone in the Gulf of Mexico);
air pollution; and
large quantities of waste water from coal-fired ethanol plants as opposed to natural gas.

Two researchers – David Pimentel of Cornel University and Tad Patzek of the University of California at Berkeley – took the unusual step of compiling the energy consumption that it takes to produce ethanol:

energy it takes to build and run tractors;
energy embodied in the other inputs and irrigation; and
parsed out how much energy is used at ethanol plants.

The result: 29 percent more energy to make ethanol from corn than is contained in the ethanol itself. According to Pimentel and Patzek “. . . corn production uses more herbicides and insecticides than any other crop produced in the U. S.”

For those not so familiar with the tedious production process it takes to make ethanol, the quick (and “dirty” steps):

corn is grown, harvested, then delivered to an ethanol plant;
corn is ground and mixed with water; and
after fermentation, a mixture that is about 8 percent alcohol must be repeatedly distilled until it is 99.5 percent pure ethanol.

The process to “produce ethanol of a high enough quality to replace SOME of the gasoline in your car requires an enormous amount of energy.” Ethanol plants also “produce large quantities of waste water as well.”

According to the American Enterprise Institute, “No matter how expensive fossil fuels become, ethanol will never be economical because it takes so much fossil fuel to produce.”

Disinformation always plays a huge role in the hype of such politically controversial ideas when they purport to “save the environment.” Very seldom can verifiable figures be obtained to show what the costs are of these environmental “saviors,” especially the one involving ethanol. Production of corn alone was subsidized more than $4 billion in 2004, according to the American Enterprise Institute.

Perhaps one of the most horrendous consequences of ethanol is that deforestation in countries such as Brazil accounts for 20 percent of all current carbon emissions. As one researcher said in a TIME magazine article, “using land to grow fuel leads to the destruction of forests, wetlands and grasslands that store enormous amounts of carbon.”

Always left out of any hype by the U. S. government are the unintended consequences of its charitable programs such as the ethanol, solar and wind industry escapades. Here is a recap of the most egregious for the ethanol industry:

virgin grasslands being plowed under for corn;
farmers plowing previously untouched land other than those considered virgin grasslands;
fertilizer runoff adding to pollution;
increasing proportion of corn going to fuel production as opposed to livestock feed;
older vehicles would be damaged by fuel that would have more than 10 percent ethanol which the intent was always to increase the percentage to be mixed with gasoline; and
the sharp rise in the price of corn and that effect on other parts of the economy

Still believe ethanol is a part of the alternative fuel sources? Should the federal government continue to provide the level of charity it does to the ethanol industry?

Now to an even bigger recipient of charity – the wind industry. It is mind boggling just how the wind industry has followed the path of the ethanol debacle.

Perhaps the most unbelievable hype about the wind industry is that wind power can replace fossil fuels. According to the American Wind Energy Association (AWEA), wind power accounted for just 4.7 percent of the total electricity generated in the U. S. in 2015.

What the reader should keep in mind is that wind energy does nothing to “actually prevent greenhouse gases from being released into the atmosphere.”

Congress is great about very few things, but showering corporate charity on its pet projects is one it is expert at. The Production Tax Credit (PTC) and the Investment Tax Credit (ITC) are at the head of the list at this time. Accurate credible statistics on such charitable recipients are difficult to get hold of, but here are some from the non-glorifying side of wind energy:

the Production Tax Credit (PTC) gives the industry $23 for every megawatt-hour of electricity produced (increased annually for inflation);
the Investment Tax Credit (ITC) allows corporations to write off 30 percent of a project’s development cost;
in 2016, the PTC and ITC amounted to $6 billion; and
according to the AWEA, since 2000, the U. S. wind industry has received $176 billion in subsidies (counting local, state and federal subsidies, as well as federal loans and loan guarantees received by companies).

When asked about wind farm subsidies, Warren Buffet made this statement: “[We] get a tax credit if we build a lot of wind farms. That’s the only reason to build them. They don’t make sense without the tax credit.”

During the past 25 (+/-) years, wind energy projects started to fade “out-of-existence” when the tax credits were on the Congressional chopping block, but miraculously revived when the tax credit was renewed no doubt due to pressure and persuasion from elected and officials and Congressional representatives from corn-growing states such as Iowa and Illinois where corn is a cash cow for their constituents.

Next week, the specifics on what tax credits mean and the weakness of the wind energy.

The reader's comments or questions are always welcome. E-mail me at doris@dorisbeaver.com.