Tag Archives: Biofuels

The Renewable Fuels Con, by Eric Peters

Posted on May 7, 2017 | Leave a comment

Renewable fuel mandates are a racket. From Eric Peters at theburningplatform.com:

You can’t just sell gas anymore.

Most people don’t realize it, but what they’re pumping into their car’s tank isn’t actually gasoline, properly speaking. It’s gasoline mixed with ethanol alcohol – the ratio currently set at 10 percent ethanol and 90 percent gas (E10).

“Diesel” often isn’t exactly diesel, either.   

The real stuff – the petroleum-based stuff – is mixed with bio-diesel, which is derived (like ethanol) from non-petroleum sources, usually vegetable matter.

The market isn’t demanding this – but the government is.

There is a law called the Renewable Fuel Standard. It  requires the “blending” of oceans of corn con ethanol and biodiesel boondoggle into the general fuel supply – ostensibly, to reduce America’s dependence on foreign (and non-renewable) oil.

Like so much that government does, it sounds good – but what it actually does isn’t so good.

The RFS has raised refining and distribution costs as well as the cost to motorists, who not only pay more for the Uncle-adulterated fuel but also for the fuel systems in their vehicles, which have had to be modified to be compatible with the not-quite-gas (and sort-of diesel) fuels the government is pushing.

These adulterated fuels are also – ironically – less efficient. A gallon of pure gas will take you farther than a gallon of 90 percent gas and 10 percent ethanol because the gallon of gas contains more energy than a gallon of E10.

As is almost reflexively true of everything the government mandates, we get less – and pay more for it.

But that doesn’t mean someone’s not making a buck – as is also usually true when government intervenes in the market.

In addition to the Usual Suspects – the ethanol lobby, for instance – there is a another group of crony capitalists making hay off the RFS mandate. These are the large refiners and chain gas stations, who can leverage – in the lingo of the federal bureaucracy – Renewable Volume Obligation (RVO) credits to gain an unfair competitive advantage over smaller refiners and independent gas stations.

To continue reading: The Renewable Fuels Con

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Posted in Economy, Energy, Environment, Government, Uncategorized

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Meet Solyndra 2.0: This US-Taxpayer-Subsidized Spanish “Renewables” Firm Is Collapsing, by Tyler Durden

Posted on August 5, 2015 | Leave a comment

Another day, another government-funded boondoggle. From Tyler Durden at zerohedge.com:

News that bonds and stocks of Abengoa SA – the Spanish renewable-energy company – plunged after a plan to shore up capital failed to reassure investors that it can stop burning cash is likely to have passed many by. But coming just one day after President Obama unleashed his Clean Power Plan, the fact that the company – that is now facing significant liquidity concerns – received over $230 million in US taxpayer subsidies in 2014 – despite two ongoing federal investigations – may raise an eyebrow or two as images of Solyndra’s government-sponsored farce come to mind… as Diane Feinstein, Ken Salazar, and Bill Richardson – with the help of subsidies and Ex-Im bank loans alledgely exerted their influence to keep this zombie alive.

In 2014, as FreBeacon reports, the Spanish renewable energy company under investigation by at least two federal agencies unveiled a new biofuel production facility on Friday that will receive hundreds of millions of dollars in federal subsidies.

Former employees of the company have alleged that it routinely engages in violations of U.S. immigration, environmental, and workplace safety laws and uses taxpayer funds to hire foreign workers in violation of federal regulations.

The company received a $132.4 million loan guarantee and a $97 million grant to build a new biofuel plant Hugoton, Kansas. Energy Secretary Ernest Moniz and Kansas Gov. Sam Brownback attended its ribbon-cutting ceremony on Friday.

The announcement of additional subsidies came even as U.S. Customs and Immigration Service and the Department of Labor conduct investigations into potential legal violations by the company.

Both agencies have policies against commenting on ongoing investigations.

In addition to direct taxpayer support for the company, Abengoa benefitted tremendously from federal mandates for biofuels, according to CEO Manuel Sanchez Ortega.

“This would have been simply impossible without the establishment of the Renewable Fuel Standard,” Ortega said, referring to a federal regulation that mandates the use of certain levels of bio energy in transportation fuels.

And now, less than one year later, as Bloomberg reports,

Abengoa SA’s bonds and shares plunged after the Spanish renewable-energy company’s plan to shore up capital failed to reassure investors that it can stop burning cash.

Abengoa said on Monday that it’s seeking to raise 650 million-euros ($713 million) of capital and dispose of 500 million euros of assets, according to a regulatory filing. The Seville-based company stepped up disposal plans from 400 million euros as recently as Friday, when it also told investors that corporate free cash-flow for 2015 will be as much as 800 million euros lower than previously forecast.

The predicted shortfall is the latest in a series of announcements that have eroded trust in Abengoa’s accounting methods and ability to generate sufficient cash to service its debt. The company, which spooked the market by reclassifying some bonds in November, has consolidated net debt that exceeds 6.5 billion euros.

“There were liquidity concerns before and this downward revision of corporate free cash flow guidance is disappointing,” said Felix Fischer, a credit analyst at Lucror Analytics Pte Ltd. in Singapore. “The capital increase more or less just covers the shortfall. There are serious liquidity concerns for this company and bondholders believe this measure isn’t sufficient.”

It’s ugly!!

To continue reading: Meet Solyndra 2.0

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The Bio-fuels Boondoggle, by Eric Peters

Posted on August 4, 2015 | Leave a comment

From Eric Peters at ericpetersautos.com:

If something’s desirable it ought not to be necessary to force people to buy it.

Chipotle, for instance, doesn’t need to spend millions in de facto bribes (“campaign contributions”) to wheedle Congress into passing burrito subsidies. Nor are you forced to eat at Chipotle if burritos and bowls are not your thing. The market has voted – freely, without being prodded or pushed – that Chipotle is a good place to eat and so people go there willingly, part with their money gladly.

Why doesn’t the same standard apply to “renewable” fuels, specifically – ethanol and biodiesel? If, as we’re told, they are viable alternatives to gasoline, why must people be forced to subsidize them?

Required to buy them?

It’s a question that ought to be asked more often – which might result in crony capitalist hog-troughers (this time dressed in “green” livery) shoving their hands in our pockets less often.

But that’s probably just why it’s not asked.

You probably know all about the oceans of money ($6 billion annually; see here) diverted from taxpayers to a handful of massive agribusiness cartels – not mom and pop family farms – to “encourage” the production of ethanol (corn alcohol) which is then mixed in with the supply of what used to be gasoline – but which is now 10 percent ethanol (E10.

The agribusiness cartels get rich. In return, American drivers get adulterated fuel that has less energy content per gallon, is corrosive to the fuel systems of older cars and power equipment such as lawn mowers – and causes newer cars to be less fuel-efficient than they’d be if they were fed pure gasoline.

The diversion of cropland to the production of ethanol feedstock has also made food more expensive.

Corn that might have fed cattle – which would then feed us – instead goes to feed the ethanol stills.

Beef costs more to produce – and costs more to ship.

Now it’s time for another cashing-in.

Sen. Chuck Grassley of Iowa and several others in Congress are pressing for a mandate from the Environmental Protection Agency to require that bio-diesel (which is the diesel equivalent of ethanol) be produced in much greater quantity and (as with ethanol) shunted into the fuel supply in ever-upticking percentages. (See here for the PDF.)

The italics are important.

This is not a request or a suggestion. It is the regulatory gorilla of the federal government – EPA – laying down another edict with the binding force of law that will require the production of more bio-diesel. Which American taxpayers – and motorists – will then be compelled to pay for.

And to use.

First, their tax dollars will be directed into the apparently bottomless pockets of the bio-diesel “industry” (in quotes because an industry that can’t manage without government “help” is really just an arm of the government, with the same control over your wallet as the IRS). Then, they’ll enjoy the “benefits” of reduced mileage and mechanical issues in their diesel-powered vehicles, caused by using sub-par fuel. Finally – as is the case with ethanol – they’ll pay more for food. Because more cropland will be diverted to the production of feedstock for bio-diesel.

Like the ethanol “industry,” we are dealing with a make-work project. The contrived manufacturer of something that hasn’t got a viable natural market, an insufficient customer base. Just the force of government (and corruption) of government behind it.

To continue reading: The Bio-fuels Boondoggle

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