This article gives some analytical results of an attempt to optimize economic and thermodynamic efficiency simultaneously. The attempt to impose complete mathematical rationality and consistency on the pricing of energy commodities fails. since it is not possible to weigh consistently purely physical efficiency measures. much less social factors. This means that energy or entropy theories of value must suffer the fate of other single-factor theories. such as the labor theory of value. Such a single-factor theory cannot adequately handle such questions as fixed capital, subjective utility. and contradictory constraints on economic choice.
This report wa•s prepared as a part of SERI task number 3321.3, Gasohol Policy Analysis. This work is supported by the Biomass Energy Systems Branch of the Office of Energy • Technology, U.S. Department of Energy. The report describes some of the preliminary results that affect such issues as the balance of payments and energy import impacts of obtaining liquid fuels from agricultural crops. This report is a precursor to a more detailed and comprehensive look at these and other issues such as food price impacts and farm income impacts that will come in Fall 1979. Policy issues related to this work concern farm income and production programs and tax and subsidy schemes for the end products. The leader for this subtask is Donald I. Hertzmark of SERrs Policy Analysis Branch. The overall direction of the economic analysis of Biomass fuels is performed by Silvio Flaim of the Economic Analysis Branch. The author acknowledges the helpful comments on this report offered by Melvin Simmons and Silvio Flaim of SERI.
This report is the final one of a series of three on the agricultural impacts of making ethanol from grain. The previous two reports provided preliminary assessments of the issues and a detailed analysis of joint-product use. The Analysis and Applications Division of the Solar Energy Research Institute (SERI) is also sponsoring work on the direct combustion of crop residues and the cultivation of specialized energy crops. The autho.rs wish to thank Bert Mason, Wallace Tyner, and Richard Carlson for their helpful comments.
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