That's what I understood too, their plant waste feedstock is from sugar production - from both cane and beets.
There is something funny going on.
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That's what I understood too, their plant waste feedstock is from sugar production - from both cane and beets.
LVSteve
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I guess Brazil has better plant waste to work with.
Good explanation. Thanks.
Brazil probably has lower labor costs and regulatory overhead. Also, I'm not sure if sugar is priced on by open world market the way corn is.
Actually, it has been going this way on a reginal basis for longer than the mid-1970s. I was stationed in Lawton, OK and the price of gasoline doubled and halved every 30 days. Payday on base at Fort Sill was the end of the month and gas prices were $.17 per gallon. The day after payday the price was $.34 per gallon. It seems unbelievable that those prices ever existed, but in a state with an oil wells on the capital grounds, cheap gas was the norm not the exception.
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I was just reading an article on wsj.com with a bunch of forecasts for gas prices. Many were talking $4.00 in the summer.
They were blaming refining for the most current increase. Gas is up more than oil, the crack spread is up. More than the usual number of refineries are down for maintenance, a general shortage of refining capacity, Ukraine blowing up Russkie refineries.....blah, blah, blah.
Venezuela is buying gas from us. A lack of maintenance is killing their refineries. In the long run Russia's oil business is going to die. It's extremely difficult to keep production even stable without U.S. oil service companies. There are foreign players, but they aren't on the same scale as the U.S., and they ain't playing with Russia either.
They were blaming refining for the most current increase. Gas is up more than oil, the crack spread is up. More than the usual number of refineries are down for maintenance, a general shortage of refining capacity, Ukraine blowing up Russkie refineries.....blah, blah, blah.
Venezuela is buying gas from us. A lack of maintenance is killing their refineries. In the long run Russia's oil business is going to die. It's extremely difficult to keep production even stable without U.S. oil service companies. There are foreign players, but they aren't on the same scale as the U.S., and they ain't playing with Russia either.
The price of corn for fuel is kept high by subsidies. The price for corn for food production is generally averaged out. Most corn is used for critter feed..and.oil. The grains used in Alcohol production is also used for animal feed. There is more use for corn than we think though. Wheat is a major crop for human consumption...and soybeans. Without the subsidies the price of corn would drop... less corn produced eventually everything would even up. The price of corn today in real dollars is half what it was in the 50s. More corn is produced today by the use of a lot more fertilizer new GMO seed. Weed sprays. 1950 yields on corn was about 60-70 bushels where I lived. I had one field of about 30 acres in 1985 of 169 bushels acre. Only one I remember off the top of my head. It cost close to 4 times the cost to grow that than 1950 though. BTW you can get(or could) a fuel alcohol permit. I had one. I got my best yield of alcohol to grain at about 170 proof average. And yes it would run in a properly set up engine. If farmers depended on alcohol to grow their crops today you'd need a lot more corn. I read you could not really break even. Where I live now major crop production is sugar beets for sugar and animal feed and all those grain cars on the train here go to make beer. I guess the farmers make a fair profit on that. The Coors grain elevators are always busy during the harvest
2.85 at the local this morning
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I paid $2.95 yesterday at the Sam's Club. Gas tends to be cheaper here than the National Average. Mostly because we're surrounded by refineries and transportation costs are low. Or maybe the refiners keep it low because they all live here! Something on the order of half the U.S. refining capacity is located in Texas and Louisiana.
The "price"of corn is identical regardless of its utilization - a bushel of corn destined for alcohol production is the same as a bushel of corn headed for a feedlot or a bio-plastics manufacturer. There may be very subtle differences but corn bought on the same day from approximately similar geography all costs the same. Farmers do not make more by selling corn for one utilization versus another. Subsidies for corn-based ethanol production do not go to farmers but rather to ethanol distillers. It's a strange business when those producing do not set the price on any given day for their product.
And if the price of corn falls any further there won't be any. As previously stated the cost of production for corn and soybeans in 2024 is projected to exceed farm income. The average corn/soybean farmer in 2024 will lose money. Agreed if there was less corn it would be worth more but farms disappearing and farmers going out of business has far more consequences than commodity prices.
And yes, Brazil has an ethanol-based fuel economy and it relies on sugarcane as a starter material. Sugarcane beats corn for ethanol yield per ton of dry matter. Remember it's sugar content that mostly determines alcohol yield via fermentation and distillation. Brazil has also invested in the required infrastructure so that ethanol plants are numerous and widely scattered and hence the starting material can be more economically transported.
All "renewable" fuels controversies are, as many of you pointed out, the result of public policy decisions made by elected officials and appointed bureaucrats. They are not, necessarily, based on defensible science or economics.
Telecaster
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Spring break, gas goes up.
2.999 to 3.299 here depending on the station today. Sams Club is the lowest, but I don't trust their gas. Not too long ago they had to replace several engines due to bad gas. They did step up, though.
It seems that you would be right...but surprisingly that really isn't true in many areas. But like other commodities farmers lost the say in crop prices over a 100 years ago. I grew corn back east. I had 4 or 5 buyers, for my corn esp. I actually almost always got more from Chicken producers than any other buyers and less worries about moisture content. Buyers for Alcohol producers generally paid the least. I myself never contracted corn. I usually sold for higher prices to Perdue and others.15 to 25 cents a bushel does add up. And I did store some for higher winter/early spring prices. Quite often as much a dollar a bushell higher...that is where the profits came in. And the chicken producers were still always a bit higher. Subsidies almost never go to the farmers...but it has happened...especially when it comes to when large corporate farms are involved
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Look on the bright side, at least you can get $20 an hour to drop fries there now!
"The United States produced more crude oil than any nation at any time, according to our International Energy Statistics, for the past six years in a row. Crude oil production in the United States, including condensate, averaged 12.9 million barrels per day (b/d) in 2023, breaking the previous U.S. and global record of 12.3 million b/d, set in 2019. Average monthly U.S. crude oil production established a monthly record high in December 2023 at more than 13.3 million b/d."
United States produces more crude oil than any country, ever -
U.S. Energy Information Administration (EIA)
EIA Confirms Historic U.S. Oil Production Record
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Here is some interesting facts about US oil production.
As reported bu US oil producers
In 2019, pre covid, the all time record monthly barrel per day average was in Nov at 13,000,000 barrels per day. That year 2019 US oil production averaged about 12,307,666 barrels per day
In 2023 US production averaged 12,930,083 barrels a day with new all time record months with Nov and Dec having 13,295,000 barrel a day average. That is 9.5% MORE DOMESTIC PRODUCTION, than when gas was under $2 in 2019
As reported bu US oil producers
In 2019, pre covid, the all time record monthly barrel per day average was in Nov at 13,000,000 barrels per day. That year 2019 US oil production averaged about 12,307,666 barrels per day
In 2023 US production averaged 12,930,083 barrels a day with new all time record months with Nov and Dec having 13,295,000 barrel a day average. That is 9.5% MORE DOMESTIC PRODUCTION, than when gas was under $2 in 2019
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Paid $3.35 for mid grade yesterday. It jumped up a bit
I think you missed the "relative to demand" part of my statement. Production is only half of the supply/demand equation.
Production may have increased slightly, but the demand has increased more. 4 years ago we were a NET EXPORTER of oil - producing more than we used. Today we are not. We're back to being dependent on imports to meet the demand.
9.5% increased production comparing now to during the COVID lockdown is comparing apples to oranges. Demand was so low during COVID that at one point crude was priced below $0 per BARREL - they had such an excess of it they were willing to pay refineries to take it off their hands.
Now comparing the pre-COVID record of 13,000,000 per day to today's record of 13,295,000 barrels per day is valid.
But that is only an increase of 2.2%
No doubt in my mind that demand has increased more than 2.2% in the last 4+ years.
Add to that the 5%-9% compounded inflation for the last 3 years and it's no wonder gas prices are double what they were 4 years ago.
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I was comparing the yearly average and did make an error. But, 2023 still had a 5% increase in production from the high in 2019
12,930,038 daily average-12,307,666 daily average=622,37 increase in daaily average.
That divided by 12,307,666=.050567
As far as consumption goes in 2018 the US consumed an average of 19,417,000 barrels a day, in 2019 it was 19,424,000 and in 2022 it was 19,140,000 a day, less than 2018 or 2019. The numbers for 2023 do not appear yet, but will probably still be below 2018-19 numbers due to cost. So, demand is actually down. BTW, I know several board men at different refineries and none of them are running at their peak capacity. I just got done with a job at a refinery and am still in touch within the business.
In other words we are producing more, consuming less, yet paying more. Way more than explained by inflation. Take a look at the record profits being posted by the petroleum companies for the cause.
As far as inflation goes. Any one who believes the 8.6 trillion added between 2008 to 2016 and the 7.8 trillion added between 2016 to 2020 have nothing to do with the current inflation is seriously deluding themselves.
12,930,038 daily average-12,307,666 daily average=622,37 increase in daaily average.
That divided by 12,307,666=.050567
As far as consumption goes in 2018 the US consumed an average of 19,417,000 barrels a day, in 2019 it was 19,424,000 and in 2022 it was 19,140,000 a day, less than 2018 or 2019. The numbers for 2023 do not appear yet, but will probably still be below 2018-19 numbers due to cost. So, demand is actually down. BTW, I know several board men at different refineries and none of them are running at their peak capacity. I just got done with a job at a refinery and am still in touch within the business.
In other words we are producing more, consuming less, yet paying more. Way more than explained by inflation. Take a look at the record profits being posted by the petroleum companies for the cause.
As far as inflation goes. Any one who believes the 8.6 trillion added between 2008 to 2016 and the 7.8 trillion added between 2016 to 2020 have nothing to do with the current inflation is seriously deluding themselves.
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