Monday, May 11, 2009

Senator Lugar, Ethanol and 5th grade math.

Dick Lugar supports Ethanol. In Saturday’s Journal Gazette he is quoted as saying that 9.2 billion gallons of Ethanol last year prevented the outflow of $32 Billion from the US. Ethanol saved us 325 million barrels of imported oil. Is this really true?

Let us kick some numbers around. 9.2 billion gallons of ethanol saved 25 million barrels of oil. This means Ethanol equated to gasoline is 28.3 gallons of gas out of every barrel. The rest of the oil is too thick and is used for other products. The average price of these 325 million barrels was $98.46. The price of corn was just over $6.30 a bushel. The ethanol process gets just over 2 gallons of ethanol from a bushel of corn. This means that 9.2 Billion gallons consumed 4.6 Billion bushels of corn. At $6.30 per bushel, the US lost $29 billion in agricultural exports. The Taxpayer also subsidized 51 cents a gallon for ethanol production costing the taxpayer $4.692 Billion. On top of this the American family saw their grocery bill sore in 2008 due to artificial stimulation of corn, causing a shift from wheat, beans and other agricultural crops to corn.

Senator Lugar says Ethanol prevented $32 Billion from leaving the US, but it increased the deficit by $4.692 billion which was funded by foreign investors (outflow) and prevented $29 billion in exported corn. For a net outflow of $33.692 Billion. I think Senator Lugar needs to go back to school and study 5th grade math again. Many wonder why the last budget surplus was in 1957, well this type of Senatorial math may provide the answer.


At 4:59 PM, Blogger Bob G. said...

To ADD insult to injury, I recently heard that the FEDS are going to CUT hydrogen fuel cell technology monies by a LOT...

That doesn;t bode well for honestly CLEAN alternative energy, does it?

But I'd wager the political pundits are creaming their pants (and skirts) over it.

Ethanol is never (nor ever was) the DEFINITIVE answer to cleaner vehicles.

Sooner or later. they will WISE UP...(looks like later, though).

Good post.


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