Ethanol Bad, Butanol good, bio-diesel better
Butanol can be made from algae and from food production waste like corn stalks.
It's energy content makes it almost a one for one replacement for gasoline
It is water phobic unlike ethanol
Unfortunately, the current price is between $5 and $6 per gallon for butanol
Two very minor changes can radically alter that picture.
1) Dept of Ag could develop a farm oriented "produce your own fuel" program. This would provide education on the systems necessary to produce either butanol for gasoline engines or bio-algae-diesel for diesel equipment
2) phase in the requirement to produce X gallons of either in order to qualify for CRP (Crop Reduction Program). Currently the government pays farmers to not farm their land for a period of time. If this is going to be maintained, the people should also receive a benefit as in the creation of an industry that will at first, remove demand from the market. Secondly, if developed, could obtain a price point that would be competitive with petrol based fuels.
CRP was sold to the taxpayer as a conservation measure to provide wildlife habitat. In reality, it has proven to be a weed incubator/generator, and land left fallow thus often has a lower wildlife population than the ordinary margins of active fields. Why? Active fields tend to have food, where CRP land has scrub and dead weeds. While the government bribed the farmers to take that land out of production, farmers are finding it far more lucrative to produce crops on it.
The net cost of these two changes are a very minor cost to the tax payer, while removing a substantial amount of fuel demand from our food chain. This will work to lower the cost of fuel in general. It will also work to create a new industry / revenue stream for farmers, and work to stabilize the ag industry.
No, and no. First off farmers pay taxes, too. An awful lot gets written off in equipment costs, maintenance, and virtually everything on the farm is part of the 'business' of farming, so the AGI for a farmer might not be so impressive. However, the cash flow can exceed a million dollars a year. Those items bought have taxes collected on them. The equipment, fertilizer, seed, parts, and fluids all are taxed. So I guess the minor cost to the taxpayer depends on where you are standing. Having to build and maintain a facility to generate fuel will subject the farmer to additional taxes, for the construction, operation, and the very existence of the facility.
Considering this area produces some 900,000 barrels of light sweet crude a day, and the (newly acquired by) Tesoro topping facility in the region produces diesel fuel from some of that oil, it will be hard to compete with the price of fuel coming out of there. Especially since soybeans aren't grown here--wheat, sunflowers, and canola are the biggest crops and those oil seeds are processed for cooking oils. Making diesel out of them will make your french fries more expensive.
Farmers, often 'land rich and cash poor' already have a million dollars wrapped up in the sort of equipment needed to farm multi-section grain farms, each 'section' being 640 acres (+/-), or a square mile. To require the farmer to produce his own fuel, too, would require additional equipment, expertise, and a place to house all that, plus the energy to heat and power that. Heating a commercial sized space in places like North Dakota in the winter (because you are going to need that fuel as soon as you no longer have to plow the road to the farm), is going to consume a lot of energy and dollars, too.
Plus, those facilities will doubtless subject to inspection by an alphabet soup of agencies for compliance with regulations which will change every time the wind changes direction, so there is that to keep track of as well. Inspections will consume valuable time, the inevitable compliance modifications time and money. If you are farming, burning daylight is burning crop yield--if it isn't growing, it is costing you yield.
As for reducing fuel consumption, that won't happen, it will only come from a different source. It will take energy to produce that energy, and that is only done at a net gain in operations which have the economy of scale, or are so small as to be insufficient for the fuel consumption needs of a good sized farm. Please note these are not 'Corporate farms', but family owned operations, multigenerational family farms. (Corporate farms are banned in ND). Note, too, that diesel fuel produced currently for farming and construction equipment, and even oil rigs is dyed red and is not taxed for highway use. It is made for 'off road' use, and using that fuel on the highway comes with a stiff fine if caught.
The ag industry remains subject to the same variations in commodity prices seen every year, both seasonal and event related. Prices are usually lower at harvest time. Fuel costs will go up or down depending on oil prices, and seed loans can exceed 100,000 dollars for a fair sized farm to get a crop in. It takes money to make money, but those loans are subject to varying interest rates. Current lows are little enough but I recall the Carter years when State usury law had to be changed so banks could borrow at prime. And then there is the weather. No rain, no crop, hail, no crop, too wet, no crop. There have never been 'stable' years for farming, and unless you are doing it in a completely controlled environment, there won't be.
More rules, more requirements won't make anything more efficient, nor will it make the end product cheaper. Growing government (more, again) to supervise all that and regulate it and enforce those regulations won't save any money, and it a step in the wrong direction when we desperately need to get the Federal leviathan back out of our business and off our back.
