Thursday, November 09, 2006
Ethanol
Ethanol
Democrats took over both Senate and House of Representatives in the states and I think alternative fuels will be a big thing for the democratic agenda. Republicans have supported big lobbying firms for the last decade and now with new leadership, I think the house will pass bills allowing for increased tax cuts for alternative fuel usage.
It will cost roughly $1 to produce ethanol fuel from corn. A bushel can be converted into three gallons of ethanol ready to be put into your car for driving. When corn is purchased, it isn’t bought from some big time food company. The source is the American Farmer.
Farmers earn relatively low wages from actual farming land. Most farmers make money through increasing prices in raw land. A farmer who finds a highway moving through his crops will be sitting on millions of dollars in land because of the new traffic. The distribution of wealth through the consumer to the farmer will go mostly to the farmer. Small time farmers are having hard times selling their excess crop and government subsidies can only offer so much. If ethanol became a serious fuel source in America I think overall the economic situation would be much better.
Ethanol is only 80% as efficient as gasoline. Gasoline has more energy content gallon for gallon, but essentially you will be paying $1.25 for something that is as useful as $3 of gasoline. Sounds like a good deal to me!
Ethanol is also negative carbon emissions. While driving, burning off the ethanol fuel is actually helping the environment. The crops that are grown to produce ethanol help sequester carbon into the ground. While gasoline creates many deadly gasses when burned, ethanol is actually helping! It’s hard to believe but it’s true.
Cars that can run on ethanol are produced in Brazil by American auto companies so doing the same in the US shouldn’t be an issue. I would look to invest in the first company to announce a car that can run on ethanol. The company that offers an inside look into their new models first would get their name out before another other company attempts to take market share.
Years will pass before we see these new “flex” fuel cars on America’s road but be on the lookout for any company investing R&D money into alternative energy cars. They will be the best performers for the money.