2 thoughts on “Poet: South Dakota Ethanol Corporate Blogging”

  1. One interesting thing about our home state and energy, Lee Raymond, the recently retired CEO of ExxonMobil, who grew up in Watertown, is one of ethanol's biggest critics.

    I don't know if he ever visits South Dakota, but if he does, he sees evidence of ethanol everywhere. While I tend to agree with many of Raymond's viewpoints on energy, it's great to see farmers doing well.

  2. All other things being equal, it probably would be smarter to develop nuclear power as our next power source and convert excess farmland into conservation land. If this is Raymond's critique, it's hard to blame him for it.

    But all things aren't equally, the farm lobby's powerful, and it shows no sign of moving to a non-production bias. Given current realities, there are worse things than ramping up ethanol production so that it has a chance of reaching critical mass.

  3. It's a complex thing. When it comes to pouring something in the tank that will go boom in the combustion chamber, a free market would naturally take one to the cheapest fluid, which is still fossil fuel.

    Only government and the taxpayer can alter that natural course, so we have ethanol.

  4. Dan,

    Thanks for the link and the nice comments. We're enjoying the blogosphere and really trying to get a conversation going like you have here on this post. Of course, I now must weigh in.

    The government is not only intervening in the free market on behalf of ethanol. Every form of energy is regulated and subsidized and Mr. Raymond's industry is one of the largest beneficiaries. The NDCF puts the hidden cost of gasoline at more than $8 per gallon. The Pentagon said that the annual cost to the taxpayer to secure oil reserves in the Persian Gulf is $44.4 billion. People tend to focus on biofuels due to the government payment. But the government is in all aspects of the energy market.

    Thanks again for the link! I hope you keep reading.

  5. There's a big difference between direct and indirect, and I've always wondered where the accountant who allocated $50,000 in costs to a toilet lid/screwdriver got his next job. 🙂

  6. Nathan,

    Excellent points! And thanks for the comment!


    “There's a big difference between direct and indirect,”

    Which is?

    “and I've always wondered where the accountant who allocated $50,000 in costs to a toilet lid/screwdriver got his next job. :)”

    If I remember correctly, Wilson [1] said that was an artifact of the accountancy system used in that warehouse, where the recorded value of each item was the total value of all items divided by the number of items.

    [1] http://www.amazon.com/American-Government-Institutions-James-Wilson/dp/0618043594

  7. At first I thought you were talking about that Wilson who used to talk to his neighbors from behind the fence. I would trust that guy.

    Let's just say an allocation system can make the hidden price of gasoline just about any number you want; that doesn't make it accurate. The cost of security cited, for instance, is odd since the vast majority of our oil comes from the United States, Canada, Mexico, and Venezuela.

    Has the price of keeping us safe from Hugo Chavez and those crazy Canadians gone up that much?

    I wonder how much of the cost of security in the Mideast was allocated to the tourism industry, or the shipping industry, or the national security? Maybe it was done accurately, or maybe it was just gloomed onto the oil industry. I would view that number with a great degree of skepticism.

  8. The point is not the individual numbers, which you're right we could debate all day long. The point is that ethanol is not the only energy source subsidized by the government. If you remove the ethanol subsidy you do not get a level playing field.

  9. Agreed.

    Also, I presume ExxonMobil benefits on ethanol pricing on par with all other consumers in that they buy ethanol in fairly huge amounts- I believe more than one million gallons of it per day.

  10. Nathan & sonofsamphm1c,

    I think we're all on the same page.

    Most Middle Eastern oil goes to Asia, but as large scale long-distance fleet deployments by the Japanese Maritime Self Defense Forces and People's Liberation Army Navy are probably not in our interest now, we do that work ourselves.

    Without oil, the middle east would be just as important to us as sub-saharan Africa.

  11. Hey, with the right accountant even sub-Saharan Africa could be a $50,000 toilet seat.

    My wife worked for several years on a huge oil and gas project in sub-Saharan Africa. She has a really cool desert pass. There is a lot of oil there.

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