Monthly Archives: July 2012

Corn Should Not Be Used To Make Automobile Fuel

US farms that grow corn are mainly located in the Midwest.  The Midwest is experiencing a drought that the head agriculture meteorologist with MDA EarthSat say is the worst since 1988.  The MDA EarthSat group is estimating a corn yield of about 118 bushels per acre this year.  In a good year, the corn yield is about 150 to 160 bushels per acre which suggests that this year’s yield will be about 75% of normal.  Shortages always have a way of driving the price of a commodity upward.  However making the likelihood of even higher prices for corn is the fact that the ethanol mixed with gasoline is essentially produced from corn.

It is estimated that about 40% of the corn produced last year was used to make ethanol fuel.  The refiners are required to use ethanol and most filling stations have a 10%ethanol/90% gasoline blend.  Last year 14.2 billion gallons of ethanol were blended with gasoline.   By law, in 2012,  15.2 billion gallons of ethanol must be used.  Of that total, 13.2 must be from corn ethanol.  The remainder must be not corn based.  In order to get a better understanding of what is going on, a brief review of the Renewable Fuel Standard will probably be helpful.

In 2005, Congress enacted the Energy Policy Act of 2005.  It mandated minimum ethanol use.  However, two years later the Energy Independence and Security Act superseded and expanded the Energy Policy Act of 05 and set new, larger use requirements as well as added requirements for cellulosic based ethanol. Cellulosic means from corncobs, wood chips, straw, grass, etc.—by and large almost anything but from the corn kernel (corn starch).  These two acts combined are often referred to as Renewable Fuels Standard (RFS2).  Further RFS2 set a maximum use level for cornstarch-based ethanol at 15.0 billion gallons.  The Environmental Protection Agency(EPA) is responsible for establishing and implementing regulations to ensure that the nation’s transportation fuel supply contains the mandated biofuels volumes.


2011 13.95 12.6 0.0066 1.1
2012 15.20 13.2 0.0085 1.5
2015 20.50 15.0 3.00 TBD
2020 30.00 15.0 10.5 TBD
2022 36.00 15.0



If you are wondering if the EPA will enforce the law designating mandated minimum use, the following story will be instructive:  The 2011 requirement for minimum usage of cellulosic ethanol is 6.6 million gallons.—(See chart above and note 0.0066.)  No one is making cellulosic ethanol so there is none available for use.   None-the-less, the companies that supply motor fuels are being fined $6 million because they failed to mix cellulosic ethanol into their motor fuels.   Go figure.

Corn is a major source of food for humans and it is also it is a major source of animal feed.  The price of beef, pork and chicken for example are directly affected by the increase in livestock feed prices. Much has been written about the negative impact of soaring corn prices on the well being of people all over the world.

As noted earlier, ethanol is mandated to be used in gasoline. It is said that the some of the corn used for making ethanol is somewhat different from the corn that normally goes into the food chain.  But that corn will also suffer a loss due to the drought making it necessary for the ethanol manufacturers to buy more food corn to supply ethanol to the gasoline suppliers. Thus the fuel chain will be bidding against the food chain for the limited supply of corn.

The commodities markets are showing this now.  According to reliable sources, corn that was going for $2.00 a bushel in 2005 when this legislation was enacted now sells for over $8 per bushel.  Because ethanol is mandated, the cost of ethanol for blending has little meaning to a gasoline producer as all gasoline producers must use it regardless of cost.  The cost of the ethanol will be passed on to the motorists.

Actually, ethanol is not viable economically but only used because of the mandate.  It will never be in sufficient supply to be a replacement for gasoline.  According to a study reported by Wikipedia, if you are concerned about greenhouse gases, ethanol’s use is a negative:  “A team led by Searchinger from Princeton University concluded that once direct and indirect effect of land use changes are considered, both corn and cellulosic ethanol increased carbon emissions as compared to gasoline by 93 and 50 percent respectively.”

The driving force for the use of corn to make ethanol is the votes that politicians get from their farming constituents. The other reasons weigh against using an important food source to make an automobile fuel.


Chicago Heat Wave–Wind Farms Fail To Provide Power

Chicago, Illinois and the surrounding areas of Central and Northern Illinois experienced very high temperatures in the first and second weeks of July.   One day topped out at 104 F with air conditioners going full out. It is at times like these that electrical utilities experience their highest demand.   They were up to the task although one segment of those utilities that was not.  The segment that flunked the test was the wind farms.  High temperatures and low temperatures most often are accompanied by near zero wind.   Wind farms are most likely to be unproductive at the times when they are most needed.

(picture byYellow Dandelions © 2009)   

Lets look at what happened during the heat wave based on the research by Jonathan Lesser

“Illinois wind generated less than five percent of its capacity during the record breaking heat last week, producing only an average of 120 MW of electricity from the over 2,700 MW installed.  On July 6th, when the demand for electricity in northern Illinois and Chicago averaged 22,000 MW, the average amount of wind power available during the day was a virtually nonexistent four MW, less than the output of two large wind turbines, or about and enough power to operate 4,000 blow dryers. In fact, the most electricity wind produced on any day during last week’s heat wave was an average of 320 MW on July 3rd, or about 10 percent of the capacity of the wind turbines built in Illinois, when temperatures soared to 103 degrees. Wind power’s failure during last week’s extended heat wave is no fluke. When I performed a similar analysis last summer, the results were the same: the hotter the weather and greater customers’ demand for electricity, the less electricity produced from wind.”  To read all of Lesser’s report click here.

The Department of Energy’s Energy Information Administration (EIA) calls wind farm-produced energy “non-dispatchable” which means it is too unreliable to be scheduled for use as a supply to the gird that distributes electricity to the many users.  State laws often require the grid to use this alternative form of energy.  So in order assure the capability of the gird to supply electricity to their customers, they require backup power supply for every MW of installed wind farm power. This backup is typically provided by natural gas turbine power generating facilities.  These natural gas turbines are kept hot ––ready to turn on quickly.  When the wind quits blowing, the lost wind farm produced electricity must be matched by a new supply.  The natural gas turbines are quickly put into service.  This means that wind farms capacity must be matched through the expenditure of additional monies for natural gas power generation facilities.  Thus the wind farm generated power is not a primary source of power. It is supplemental form of supply.  Think about that.  Installation of wind farms (and for that matter the even more expensive solar power) are not primary sources but rather supplementary.  In plain English, electricity generated by fossil fuel and nuclear power are the primary sources and the expensive, unreliable, non-dispatchable wind farms are supplemental.  Every day you are paying for the installation of more wind farms, which are never likely to be the primary.   Time you made the politician and their cronies answer why they are foisting this on you.



How Many Years Of No Global Warming Are Required To Disprove CO2 As The Primary Factor In Global Warming?

The WoodforTrees Chart below shows no Global warming since 1997 to date.  The data used to construct the chart came from Hadley Center and University of East Anglia’s Climate Research Unit—yes this is the CRU of Climategate fame.

(click on charts for clarity.)

During this period, carbon dioxide (CO2) has increased from about 362 ppm in 1997 to 396ppm by mid-year 2012.  (See atmospheric CO2 chart below.)  If CO2 is the potent forcing agent claimed by the proponents of the man-made global warming theory, then why are the global temperatures flat?   15 years of no statistically significant global temperature increase are in the books. When is enough, enough.  Last I heard, the warmers had lengthened the needed time to 17 years.  Want to bet that when 17 years arrives and the temperature shows no increase, that they will want to lengthen the time needed, once again.


This posting is not to deny that for 10,000 years or so the globe has been warming.   Rather it is to demonstrate that no one really has proven the cause to be other than “natural”.

Do you hear a chorus of “cherrypicking” from the warmers? Please note that their CO2 theory was postulated during a period of rising global temperatures and a corresponding atmospheric CO2 increase.  We said then, about their theory, that correlation does not prove causation.  And we were right.   15 years of no correlation proves no causation.


Volt: Refund Policy Allows For Tax Credit Abuse and Other Issues

General Motors (GM) provides a 60-day money back policy for all Chevy models.   So if you buy a Volt you can claim a $7500 federal tax credit.  Then 59 days later, return it and get your money back.  But, you may get to keep the tax credit.  According to a posting by Mark Modica, the IRS tax form for plug-in vehicle credit does not have a minimum time requirement for the buyer to own their qualified vehicle.   Ok, so it is doubtful that anyone will buy a series of Volts in order to accumulate tax credits.  But this is just another glitch in the Volt epic.

So how is the Volt doing now as opposed to how GM felt about the Volt in the days before the first sales?  In a November, 2010 posting in WardsAuto the following was reported:

In 2012, the automaker plans to reach production capacity for the Volt at its Detroit-Hamtramck, MI, assembly plant here with about 45,000 units annually for U.S. consumption. Including export to markets such as Canada and China, capacity could reach 60,000 cars annually.

Well, they are missing the 2012 sales forecast by a wide margin.  Sales were not too good even when gasoline prices approached $4 per gallon earlier this year (2012). Will it get any better if the price of gasoline continues it’s current decline?

And in that same WardsAuto posting the following was reported:

General Motors Co. executives call the new-for-’11 Chevrolet Volt a key first step in the electrification of all its products, while also confirming long-held assumptions the car will not make money in the first years of production. However, the typical all-new vehicle program for an automaker averages $1 billion. Given its sophisticated technology, the Volt likely will cost much more to develop, build and sell.

It can’t be making money now if 45,000 units are just breakeven.  Somehow a lot of cars will have to be sold to amortize the $1 billion cost of development.



Why Does The US Have The Lead On Shale Gas?

The United States (US) is now ranked as the world’s leading producer of natural gas.  The Wall Street Journal (WSJ) says that this lead is partly due to the abundant shale resources we have—though many other countries have those too.   Partly due to our technological leadership in developing hydraulic fracturing (fracking)—but these techniques are known all over the world now.  The edge is really a result of private ownership of subsurface mineral resources.   Almost no major country recognizes full subsurface private property rights, except the US.  Quoting from the WJS: “….this blessing of American jurisprudence helps explain one of the few bright patches in the Obama economy—the booming production of shale gas and increasingly, oil.”

There is a profit motive driving the property owner as well as the driller. Typically the property owners get a royalty checks from the driller representing a percentage of the worth of the value of oil produced. Often the royalty percentage is 12.5%.  (My home in Texas was built well after the East Texas oil boom.  By then all the subsurface mineral rights had been sold/leased and my deed spelled out that I had no ownership. There were number of wells back in the woods behind my house. Someone was getting royalty checks, but alas, it was not I.)

But many people in North Dakota (Bakken Shale) and Pennsylvania (Marcellus Shale), for example, have leased their mineral rights and natural gas is being produced.  And the landowners are getting royalty checks!

France and Bulgaria have banned fracking. Because these governments own the subsurface property rights, there has been no pushback from the landowners.   In other countries where fracking has not been banned, the governments are moving at a glacial pace.

Quoting the WSJ: “ ….the deeper lesson is that this is a revolution that came about not through government planning or foresight, but through a combination of individual risk-taking and private property. “

Thank heavens for these privately owned resources.  Unfortunately, favorable outcomes are not happening where the US government has control of natural gas and oil.  The Obama Administration puts up road blocks in the way of the exploitation of resources found in places like  Off-Shore, Federal lands, and the Arctic National Wildlife Reserve.


Solar Cycle 24 Update June 2012

The Sunspots and F10.7 flux are slightly lower in June than in the previous month.  April next year is still the expert’s rough timing for Cycle 24 maximum.   After the usual charts, a chart is added  showing how Solar Cycles 21, 22 and 23 compare with the current Cycle 24.    This is a good illustration of how much less active Cycle 24 is. This chart is from:

(click on the charts for clarity)

These charts would have been posted earlier but a death within the family has occupied my time for the past several weeks.


June Global Temperature Update

The UAH satellite global temperature for June 2012 departure from average is +0.37C.   The upward trend from last month continues.

I am adding in its entirety, a discussion regarding satellite temperatures by Dr. Spencer.

Latest Global Average Tropospheric Temperatures

Since 1979, NOAA satellites have been carrying instruments which measure the natural microwave thermal emissions from oxygen in the atmosphere. The signals that these microwave radiometers measure at different microwave frequencies are directly proportional to the temperature of different, deep layers of the atmosphere. Every month, John Christy and I update global temperature datasets (see here and here)that represent the piecing together of the temperature data from a total of eleven instruments flying on eleven different satellites over the years. As of early 2012, our most stable instrument for this monitoring is the Advanced Microwave Sounding Unit (AMSU-A) flying on NASA’s Aqua satellite and providing data since late 2002.

The graph above represents the latest update; updates are usually made within the first week of every month. Contrary to some reports, the satellite measurements are not calibrated in any way with the global surface-based thermometer records of temperature. They instead use their own on-board precision redundant platinum resistance thermometers calibrated to a laboratory reference standard before launch.


OPEC Provides Low Priced Fuel Internally

The price of crude for the residents within OPEC states is lower than the export price.  As these states are mostly dictatorships, it is one way to placate the ruled.  But it seems that the low prices provides the residents no incentive to be frugal.  In the last decade, Saudi Arabia internal use has nearly doubled.  According to Reuters:

”Consumption has trebled in Angola, doubled in Ecuador and climbed 55 percent in Venezuela. OPEC members also seem to be becoming less efficient. Oil usage per head is up 24 percent since 2000, Deutsche (Bank) says, while it is flat for the globe as a whole.

For importers, the uneven treatment is costly. The wasteful consumption in exporting countries reduces the supply available for the global market, presumably pushing up the price. It also cuts into the potential reserve capacity, making the price more volatile.

But OPEC members don’t really gain, either. Governments lose potential export revenue and state-owned oil producers lose potential income. In 2010, the opportunity cost of discount domestic pricing was roughly 15 percent of OPEC’s total oil export revenue of $770 billion, according to International Energy Agency calculations. Such largesse adds to the fiscal strain on many of these nations – contributing to the exporters’ hunger for ever higher global oil prices.”

I am not sure that this analysis as it is presented is consistent.  First it says that the practice of diverting some fuel to internal use reduces the available supply and results in “pushing up oil prices”.  Ok, that makes some sense.  However the next paragraph seems to say that the practice causes them strain contributing to the exporters hunger for ever higher global oil prices.

What does that mean?  If they had more crude to export they would have more revenue?  But the artificial shortage that OPEC creates is done to get as high global oil prices as they can.  Maybe the author of this analysis saying that OPEC would get all the revenue it wants if it could export more by using less at home. This presumably would allow the exporters to lower the price because they would not need the revenue.  I doubt that.

Well, I probably have spent far too much time on this.   Especially, since OPEC will continue to lower the price of crude.  OPEC knows that there is a lot of untapped crude out there in the world.  Much of it becomes economic to produce as the price of OPEC crude goes up.   I have heard that North Dakota Bakken tight oil needs a price of around $75 per barrel to justify production.  OPEC has lowered world crude prices before to slow down/stop bringing in new supplies of crude.  They will do it again.  They dread the slogan  “drill baby drill” about as much as the liberal Democrats do.

To read more of the Reuter’s posting, click here.


Decoding Solar Flare Classifications

When a solar expert says that there are multiple M-Class solar flares being detected on the Sun, do you know what that means?   From today’s (5 July) posting on

Solar Update / High Solar Activity:
Solar activity is currently at high levels with multiple M-Class solar flares being detected around mostly large Sunspot 1515 in the southern hemisphere. This region retains its Beta-Gamma-Delta magnetic configuration and may produce an X-Class solar flare within the next 24-48 hours. Sunspot 1513 located in the northern hemisphere did generate an M1.8 event on Wednesday and was associated with a possible Earth directed CME. An impact is expected by July 7 the earliest. Minor geomagnetic activity will be possible.” 

This solar update reports M-Class flares are being detected and that an X-Class flare maybe produced in the next 24 to 48 hours.    Are these conditions a threat to Earth?

Knowing the classifications for Solar Flares  may serve you well. The classifications can be found in this website: The HandyMan’s Guide to Solar/Geomagnetic Conditions by Paul Harden, NA5N

Solar Flare Classification  

Flare Class

Type of Flare

HF Radio Effects

Resulting Geomagnetic Storm


Very Small









* Low Absorptons

* Active to Minor



* High absorption

* Minor to Major



* Possible Blackout

* Major to Severe*

*Conditions cited if Earth is in the trajectory of the flare emissions

Flare class is further rated from 1-9, ex. M1, M2, M3…M9

The larger the number, the larger the flare within that class. An X7-X9 is considered a “Grand Daddy” flare. Only a few have occurred over the past 30 years and cause total disruptions to communications, huge auroras, power grid failures, etc. Radio and X-Ray emissions from a flare affect the Earth for the duration of the solar event, usually 30 minutes or less. The Earth is 8 light-minutes from the Sun.

Conflicting Sunspot Classifications

I believe the Sunspot classification shown in  The HandyMan’s Guide to Solar/Geomagnetic Conditions by Paul Harden, NA5N groups the consequences reasonably well.  However,  the Sunspots classifications used in the Solar Update follow the Mount Wilson classification system which can be seen here.  It has a more detailed grouping system, including a gamma designation not included in the HandyMan’s Guide.




Russia’s Oil Potential In Siberia

You may not have known this but Russia vies with Saudi Arabia for the title of biggest crude oil producer.  According to a June Bloomberg posting, oil and gas provided half of Russia’s income in 2011.  So Putin is pushing for more oil discoveries to keep his government afloat. Exxon has been invited to help drill oil fields in Siberia.  These Siberian oil fields are estimated to hold something like half the proven reserves of the US.  Exxon will joint venture with the Russian government run oil company, OAO Rosneft.  Exxon’s fracking technology is to be used on the Bazhenov shale formation in west Siberia.  Rosneft said these deposits might hold 13.2 billion barrels of oil. As part of the alliance with Exxon, Moscow-based Rosneft in April said it acquired a 30 percent stake in a Texas tight oil¹  project to gain experience with the technology. Exxon will be able to book reserves in a mature oil province without taking on the exploration or environment risk it faces in its offshore projects with Rosneft, which will require an initial $3.2 billion investment to explore in the Arctic Kara Sea and the Black Sea. Exxon is also working with Romania’s Petrom in the Black Sea where they have discovered a major gas find.

But Exxon is not the only player.  According to Bloomberg:

Non-state Russian oil companies, including its second-largest producer OAO Lukoil and fourth-biggest OAO Surgutneftegas, also have resources in the billions of barrels in the Bazhenov formation.

Ronald Paul Smith a Moscow-based oil and gas analyst at Citigroup Inc said: “Lukoil is already using horizontal wells and multistage fracking to support its West Siberian production, and therefore may be the earliest, clearest beneficiary” of the tax breaks.  Lukoil subsidiary Ritek produces about 2,000 barrels a day from the Bazhenov formation……”

“Another competitor, Gazprom Neft, together with Royal Dutch Shell Plc plan to drill an extended reach horizontal well with multistage hydrofractures next year to tap tight oil at their Siberian Salym Petroleum Development venture, Gazprom Neft Deputy Chief Executive Vadim Yakovlev told journalists at June 8 press conference.”

As noted in earlier postings, Exxon has other  fracking joint ventures besides these in Russia and Romania.  They are active in China and have projects in Argentina’s Vaca Muerta formation.  It is my understanding that they have backed out of ventures in Poland saying that there are too many governmental hurdles.

To read more click here,

¹ I am seeing the words “tight oil” being used frequently.  Here is a definition of those words. Tight oil is a play that consists of light crude oil contained in petroleum bearing formations of relatively low porosity and permeability (shales).  It uses the same horizontal well and hydraulic fracturing technology used in recent boom in production of shale gas.  The North Dakota’s Bakken field is a tight oil play.