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I'm not a big fan of the subsidies given out to promote ethanol production, but to be fair, this article does nothing to mention the tens of billions of dollars

I'm not a big fan of the subsidies given out to promote ethanol production, but to be fair, this article does nothing to mention the tens of billions of dollars given out to promote oil and gas exploration. Oil and gas have had a 100 year head start in developing production technology thanks to federal subsidies. To really get an understanding of how these two energy sources compare, all subsidies for all energy sources need to be accounted for.

mikeash 12y ago
At least oil and gas has a massively better return on the energy invested. A gallon of ethanol barely contains more energy than it takes to produce it. Oil is so much better that, for example, tar sands production is criticized because it only returns something like 4x the energy required for production. Questions of finances and subsidies are secondary to this. I'm no fan of oil either, but ethanol is clearly not the answer.
- bsbechtel 12y ago
  Absolutely true, for corn ethanol in the Midwest, today. Sugar cane ethanol coming out of Brazil has something to the effect of a 10x return on energy spent to produce it (better than oil). I'm from the Midwest, have an ag background, and have been very skeptical of the idea of corn ethanol as an alternative fuel source ever since it became big in 2006/2007 (for the reason you mention, ROE). What I hadn't thought about before though, is the fact that 100 years of compounding subsidies in oil and gas have allowed for massive technology investment which has improved the ROE for petroleum based energy sources over that timeframe. The question then becomes, if we could subsidize ethanol production for the next 100 years to spur R&D in the area, what kind of ROE would we be getting 100 years from now? Or, alternatively, what kind of ROE did gas get when it was first discovered as a new energy source?
  - mikeash 12y ago
    You're right that it's not ethanol in general, just corn ethanol, and by extension American-produced ethanol. Which is the topic here, but it's certainly true that it's not a condemnation of ethanol in general. Ultimately, as far as picking technologies goes, the history of oil doesn't matter. It's interesting for sure, but they're a sunk cost that we get whether we want them or not. If oil is better than ethanol right now, either with no subsidies or with equivalent subsidies, then we should stick with oil. The fact that oil got subsidies in the past doesn't change that. Of course, sticking with oil is a bad idea in the long run, but the same basic idea applies to comparing ethanol with other sorts of renewable energy, and electric cars and such. Would we be better off putting those subsidies into nuclear, wind, solar, electric cars, etc., rather than ethanol? I think so.
- JoeAltmaier 12y ago
  I wonder what it is for Methane Hydrate...Wikipedia says 10X for natural gas, but drilling on the ocean floor has to cost more.

mikeash 12y ago

At least oil and gas has a massively better return on the energy invested. A gallon of ethanol barely contains more energy than it takes to produce it. Oil is so much better that, for example, tar sands production is criticized because it only returns something like 4x the energy required for production. Questions of finances and subsidies are secondary to this. I'm no fan of oil either, but ethanol is clearly not the answer.

bsbechtel 12y ago
Absolutely true, for corn ethanol in the Midwest, today. Sugar cane ethanol coming out of Brazil has something to the effect of a 10x return on energy spent to produce it (better than oil). I'm from the Midwest, have an ag background, and have been very skeptical of the idea of corn ethanol as an alternative fuel source ever since it became big in 2006/2007 (for the reason you mention, ROE). What I hadn't thought about before though, is the fact that 100 years of compounding subsidies in oil and gas have allowed for massive technology investment which has improved the ROE for petroleum based energy sources over that timeframe. The question then becomes, if we could subsidize ethanol production for the next 100 years to spur R&D in the area, what kind of ROE would we be getting 100 years from now? Or, alternatively, what kind of ROE did gas get when it was first discovered as a new energy source?
- mikeash 12y ago
  You're right that it's not ethanol in general, just corn ethanol, and by extension American-produced ethanol. Which is the topic here, but it's certainly true that it's not a condemnation of ethanol in general. Ultimately, as far as picking technologies goes, the history of oil doesn't matter. It's interesting for sure, but they're a sunk cost that we get whether we want them or not. If oil is better than ethanol right now, either with no subsidies or with equivalent subsidies, then we should stick with oil. The fact that oil got subsidies in the past doesn't change that. Of course, sticking with oil is a bad idea in the long run, but the same basic idea applies to comparing ethanol with other sorts of renewable energy, and electric cars and such. Would we be better off putting those subsidies into nuclear, wind, solar, electric cars, etc., rather than ethanol? I think so.
JoeAltmaier 12y ago
I wonder what it is for Methane Hydrate...Wikipedia says 10X for natural gas, but drilling on the ocean floor has to cost more.