The Ehthanol Hoax: Still Going Strong

I posted last year about how ethanol was one big hoax. You can read that blog entry here:

Big Corn And Ethanol Hoax
84rules
March 13, 2008

And you can get information about the side effects here:

Ethanol: The Side Effects
84rules
April 29, 2008

Well, ethanol is still a big hoax and the Obama adminstration thinks that you and I are still dumb enough to fall for it. From the Wall Street Journal:

The biofuels industry already receives a 45 cent tax credit for every gallon of ethanol produced, or about $3 billion a year. Meanwhile, import tariffs of 54 cents a gallon and an ad valorem tariff of four to seven cents a gallon keep out sugar-based ethanol from Brazil and the Caribbean. The federal 10% blending requirement insures a market for ethanol whether consumers want it or not -- a market Congress has mandated will double to 20.5 billion gallons in 2015.

What has happened here is that the Big Corn/Ethanol lobby has successfully conned Congress into giving them a monopoly over the ethanol industry and forced Americans to buy only from this monopoly. (Where are the trust-busters now?)

And then there are the side effects:

The Congressional Budget Office reported last month that Americans pay another surcharge for ethanol in higher food prices. CBO estimates that from April 2007 to April 2008 "the increased use of ethanol accounted for about 10 percent to 15 percent of the rise in food prices." Ethanol raises food prices because millions of acres of farmland and three billion bushels of corn were diverted to ethanol from food production. Americans spend about $1.1 trillion a year on food, so in 2007 the ethanol subsidy cost families between $5.5 billion and $8.8 billion in higher grocery bills.

So, not only are you paying higher gas prices, but you are paying higher food prices as well.

But, many of you out there will say, "We're helping the environment, though!" Not so. Ethanol is having negligible effects, and in many instances, negative effects.

A second study -- by the Environmental Protection Agency's Office of Transportation and Air Quality -- explains that the reduction in CO2 emissions from burning ethanol are minimal and maybe negative. Making ethanol requires new land from clearing forest and grasslands that would otherwise sequester carbon emissions. "As with petroleum based fuels," the report concludes: "GHG [greenhouse gas] emissions are associated with the conversion and combustion of bio-fuels and every year they are produced GHG emissions could be released through time if new acres are needed to produce corn or other crops for biofuels." The EPA study also explores a series of alternative scenarios over 30 to 100 years. In some cases ethanol leads to a net reduction in carbon relative to using gasoline. But many other long-term scenarios observe a net increase in CO2 relative to burning fossil fuels. Ethanol produced in a "basic natural gas fired dry mill" will over a 30-year horizon produce "a 5% increase in GHG emissions compared to petroleum gasoline." When ethanol is produced with coal burning mills, the process "significantly worsens the lifecycle GHG impact of ethanol" creating 34% more greenhouse gases than gasoline does over 30 years.

And the parting shot:

As public policy, ethanol is like the joke about the baseball prospect who is a poor hitter but a bad fielder. It doesn't reduce CO2 but it does cost more. Imagine how many subsidies the Beltway would throw at ethanol if the fuel actually had any benefits.

You can access the complete article on-line here:

Ethanol's Grocery Bill
Review & Outlook
Wall Street Journal
June 2, 2009

Nancy Pelosi's Delusional Stance On "Trying To Save The Planet"

I swear, the Dems never cease to amaze me with how incredibly naive they are in their own beliefs and with their sadly mistaken idea that we will beleive anything they say. Nancy Pelosi's comments to the Politco about why she refuses to allow a vote on domestic production of energy is proof positive of that.

When asked why she was blocking a vote on a bill that is overwhemlingly supported by the American people, she said: "I'm trying to save the planet; I'm trying to save the planet."

Well, Charles Krauthammer over at TownHall looks into that and finds that by forcing Americans to buy foreign oil, she is doing more harm to the environment than if we were producing oil here at home.

From his column:

Places like Nigeria where chronic corruption, environmental neglect and resulting unrest and instability lead to pipeline explosions, oil spills and illegal siphoning by the poverty-stricken population -- which leads to more spills and explosions. Just this week, two Royal Dutch Shell pipelines had to be shut down because bombings by local militants were causing leaks into the ground. Compare the Niger Delta to the Gulf of Mexico where deep-sea U.S. oil rigs withstood Hurricanes Katrina and Rita without a single undersea well suffering a significant spill. The United States has the highest technology to ensure the safest drilling. Today, directional drilling -- essentially drilling down, then sideways -- allows access to oil that in 1970 would have required a surface footprint more than three times as large. Additionally, the U.S. has one of the most extensive and least corrupt regulatory systems on the planet.

So, what is Pelosi and company trying to save us from? A healthy economy? Lower energy costs? She certainly isn't trying to protect the environment, not by a long-shot.

More:

Does Pelosi imagine that with so much of America declared off-limits, the planet is less injured as drilling shifts to Kazakhstan and Venezuela and Equatorial Guinea? That Russia will be more environmentally scrupulous than we in drilling in its Arctic? The net environmental effect of Pelosi's no-drilling willfulness is negative. Outsourcing U.S. oil production does nothing to lessen worldwide environmental despoliation. It simply exports it to more corrupt, less efficient, more unstable parts of the world -- thereby increasing net planetary damage.

But Pelosi would never let facts get in her way. She apparently believes that she knows best despite the fact that doesn't even know what the facts are. One of her party's favorite lines to parrot is "We can't drill our way out of this!"

But apprently, the Saudis can drill for us.

Check this out:

Democrats want no oil from the American OCS or ANWR. But of course they do want more oil. From OPEC. From where Americans don't vote. From places Democratic legislators can't see. On May 13, Sen. Chuck Schumer -- deeply committed to saving just those pieces of the planet that might have huge reserves of American oil -- demanded that the Saudis increase production by a million barrels a day. It doesn't occur to him that by eschewing the slightest disturbance of the mating habits of the Arctic caribou, he is calling for the further exploitation of the pristine deserts of Arabia. In the name of the planet, mind you.

Not only are the Dems completely out of touch on the energy issue, they are trying to pull the wool over our eyes as well.

It won't work. Too many of us can see right through it. They offered us bio-fuels and we got higher food and gas prices as a result. Is this the "common sense approach" to lower energy costs that Pelosi promised back in 2006? That promise was nothing more than a bold-faced lie.

Here's more:

The other panacea, yesterday's rage, is biofuels: We can't drill our way out of the crisis, it seems, but we can greenly grow our way out. By now, however, it is blindingly obvious even to Democrats that biofuels are a devastating force for environmental degradation. It has led to the rape of "lungs of the world" rainforests in Indonesia and Brazil as huge tracts have been destroyed to make room for palm oil and sugar plantations. Here in the U.S., one out of every three ears of corn is stuffed into a gas tank (by way of ethanol), causing not just food shortages abroad and high prices at home, but intensive increases in farming with all of the attendant environmental problems (soil erosion, insecticide pollution, water consumption, etc.). This to prevent drilling on an area in the Arctic one-sixth the size of Dulles Airport that leaves untouched a refuge one-third the size of Britain. There are a dizzying number of economic and national security arguments for drilling at home: a $700 billion oil balance-of-payment deficit, a gas tax (equivalent) levied on the paychecks of American workers and poured into the treasuries of enemy and terror-supporting regimes, growing dependence on unstable states of the Persian Gulf and Caspian basin. Pelosi and the Democrats stand athwart shouting: We don't care. We come to save the planet!

Clearly, the Dems are caught up in their own delusions and expect us to blindly follow them. No, thanks. I'll stick with the facts of reality.

You can access the complete column on-line here:

Drilling And Blissful Ignorance
Charles Krauthammer
TownHall.com
August 1, 2008

How Ethanol Helps Al Gore Get Rich Off Of Starving People

I remember back only a few years ago when the left-wing liberals were all about helping those in need, especially those who did not have enough to eat. Well, the tables have turned these days. Today, the libs are causing starvation, not aiding those who are afflicted by it.

How did this happen? One word: ethanol. Ethanol has been driving up food prices here at home and around the world. Additionally, it has also driven up the price of gasoline and in a year or two, we will see ethanol drive up the cost of maintaining an automobile. But let's look at the food angle right now.

Jerry Bowyer gives some excellent insights about how food prices are going up and people like Al Gore are getting rich off of seeing other people starve. From TownHall.com:

Foods seem to be rising in price in direct proportion to their proximity to ethanol subsidies. Feed grain is up an amazing 41% in the past year. Fruit and nuts are down 3% over the same period. Why? Because we turn corn into ethanol, but we don’t do the same with walnuts or bananas.

And of course, their are certain politicians who, in order to cover their own rear-ends, come up with some interesting spin as to why this is happening. Actually, "spin" is not the correct word. Upon viewing the data and evidence, "lies" would be a more appropriate word:

They say that very little of the jump in food prices comes from ethanol, that it’s mostly energy prices, or a weak dollar, or general inflation. ... Why would general inflation cause corn to a rate of doubling every two years, and yet leave meat, fruit, nut and some vegetable prices dropping? How could high energy prices do that? Don’t vegetable farmers use tractors? Don’t sugar farmers fuel their tractors with the same diesel? Don’t the trucks and trains which deliver almonds run on the same kinds of fuel as the ones which deliver grains?

Does anyone really believe that energy prices could affect one agricultural commodity while at the same time having no effect at all on other agricultural commodities in the same exact market? I don't. I suspect that the politicians making these arguments don't believe it either. They are merely trying to deflect attention away from the true culprit here: ethanol subsidies.

Read on:

It’s not a general inflation problem; it’s a problem of political corruption. America’s first presidential primary happens to be in Iowa. That gives ethanol first dibs at the pork barrel. Add Republican farm voters to Democratic environmentalists, shake vigorously and you get a brew called ethanol. The farmers get rich on taxpayer subsidies, the venture capitalists who focus on alternative fuels (I’m looking in your direction, Mr. Gore) get fat on profits.

We need to end this ethanol hoax now, before people here in the U.S. begin to starve as a result.

Jerry's parting shot:

Foreigners are not starving because the dollar lost value. In fact, the drop in the dollar helps them. ... The problem isn’t the dollar – the problem is that we’re burning food. We’re taking carbohydrates which would have gone into someone’s stomach, chemically altering them and putting them into our gas tanks instead. One SUV fill-up is roughly the same amount of calories as it takes to sustain a man, woman or a child – for a year. I believe that future generations will look back in history at the hungry of this world, and the preening self-satisfaction of the ethanol lobby and call it what it is, a crime against humanity.

You can access the complete column on-line here:

How Al Gore Is Getting Fat Off Of A Starving World
Jerry Bowyer
TownHall.com
May 31, 2008

Senator Domenici Introduces The American Energy Production Act (S. 2958)

It would have been nice if this legislation had been introduced and passed two years ago when the Republicans still controlled the House and Senate. But if nothing else, this bill will definitely show how the Democrats have beholdened themselves to special interest groups, even when such groups push agendas that are not in line with the well-being of the American people.

The Press Release for the American Energy Prodcution Act (S. 2958) can be accessed here:

Summary Of The American Energy Production Act S. 2958
U.S. Senate Committee on Energy & Natural Resources
May 1, 2008

Here is the executive summary:

The American Energy Production Act, introduced today by Senator Domenici and Senate Republicans, will address America’s soaring gas prices by focusing on common sense measures that will increase production of oil and gas in America. If enacted, the American Energy Production Act will produce up to 24 billion barrels of oil—enough oil to keep America running for 5 years with no foreign imports. And that doesn’t include billions more barrels of potential fuel from oil shale and coal to liquids in the bill. By expanding production offshore and in Alaska, and removing obstacles to domestic production in the West, this bill will help us reduce our dependence on foreign oil.

That sounds really good to me and if you are concerned about rising gas prices and the fact that we send $40 billion annually to nations that have anti-American agendas, then it should sound good to you too.

As such, I have written my Senators to express my support for this bill. I encourage all who are reading this blog to do likewise. Just copy and paste the following, then print it out and mail it to your Senators:

Dear [Senator's name], I am writing this letter to ask you to support and/or co-sponsor the American Energy Production Act (S. 2958) introduced by Senator Domenici (R-NM) on May 1st, 2008. This bill would provide the American people with a potential 24 billion barrels of oil which we can sell to ourselves much more cheaply rather than paying an annual $40 billion to buy oil from overseas. The benefits of this bill are many-fold. Not only will it help ease the price at the pump by increasing supply, it will also help reduce the amount of money we send overseas to buy oil, much of that money going to fill the coffers of governments that actively pursue an anti-American agenda (e.g. Saudi Arabia, Venezuela, etc.). Additionally, the money saved by supplying ourselves with our own oil can go into research for truly viable alternative energy supplies. The price of gasoline has gone up for many reasons, most of which can be attributed to the policies enacted into law by this very Congress. For example, the mandate of using ethanol, despite its supporters’ promise of bringing down gas prices, actually drove the price of gasoline up as it also drove up the price of food. The end result: people now have to pay more at the pump in order to get to the store to pay more for food. This has also had a worldwide impact as food prices have gone up globally resulting in food riots in Mexico and Egypt and people starving as close to home as Haiti. Further, there was also a promise of lower carbon emissions, but since it requires the burning of 1.5 gallons of petro-chemicals to produce a single gallon of ethanol, that promise was nothing more than fantasy as well. The main reason for the high price of oil is simple supply and demand. Nations that have been aggressively developing the industrial sectors of their economies (India and China) have been using more and more oil which means demand has gone up. As any first year economics student knows, when demand goes up, so do prices. But, when demand goes up and supply does not keep pace, or even goes down, prices rise even faster. Evidence of this can be seen every time OPEC announces there will be reduced production. Prices are pushed up. Domestically producing oil would help ease the supply issues that we now face and would help ease the burden on the American consumer. That is one of the best actions Congress can take to help bring us out of recession. Please support S. 2958 so that we can get our economy back on track and stop funding those who would do us harm. Thank you.

This is the reality we live in now. We need to bring our Congressional representatives out into this same reality.

Petronomics 101

I am almost amazed that there has been no major outcry from the American consumer about the price of gasoline. After all, it is the life blood of our economy.

But the price keeps going up and up and up. Not because of any "greedy" oil companies (their profit margin is a lowly 6%) but because of two reasons:

1) Increasing Global Demand
2) Decreasing Supply

Either one of these by themselves will drive prices up, but a combination of both will be like launching prices with JATO packs. What we have is a combination of both. The global demand is something that is out of our control. We simply cannot tell India and China that they have to stop using so much oil as it is the life-blood of their economies too.

The decreasing supply on the other hand, is something we could do something about, if only the leftist Dems (and a few Republicans) in Congress would get off of their high horses and join the rest of us in reality.

Lt. Col. Oliver North's most recnt column deals with these topics. From TownHall.com:

While Washington's political elites in both parties have debated and dithered, the price of crude oil has risen to $123 per barrel -- nearly double what it was at this time last year. The average cost of a gallon of gas at the pump is approaching $4 per gallon. Some analysts now are predicting that the price of a barrel of oil could approach $200 in the next two years -- and that gasoline could be $6 a gallon. An equal amount of diesel may cost truckers as much as $7.50.

But, when Congress tried to do something about it, this happened:

Ethanol: The Side Effects
84rules
April 29, 2008

And this:

Big Corn And Ethanol Hoax
84rules
March 13, 2008

And Lt. Col. North continues:

The cost of crude oil is out of sight and climbing. Petrodollars are funding a radical Islamic jihad being waged against us. Here at home, the cost of everything from fuel to food is going up, and we're sending out of the country capital needed to resuscitate an economy that is, at best, sluggish and, at worst, foundering. The majority in Congress has responded by proposing tax increases for domestic energy production, suggesting new mandates on producers, demanding that coal-fired electric plants be shut down, and whining that foreign governments need to increase oil production -- while opposing exploitation of reserves here at home. In a news conference two weeks ago, President Bush criticized Congress for blocking efforts to expand domestic oil production in the Arctic National Wildlife Refuge. And this week, in a noteworthy understatement, White House spokesman Scott Stanzel observed, "We have here, in this nation, resources that we are not utilizing." No, really? The newest oil refinery in the United States was built by Marathon in Garyville, La., in 1976. Since then, every effort to construct new facilities has been thwarted by protests and lawsuits from "environmental" groups and government red tape. It has been 12 years since the last nuclear reactor came on line to generate electrical power in the United States.

But not all in Congress are so blinded by PC idiocy:

Sen. Kay Bailey Hutchison of Texas has proposed a realistic solution: the Domestic Energy Production Act of 2008. Her bill would permit exploitation of more than a trillion barrels of U.S. territorial oil and nearly 600 trillion cubic feet of natural gas -- more than the combined hydrocarbon reserves of Saudi Arabia, Mexico, Nigeria, Venezuela, Libya and Iran. The measure also would streamline the process for building new refineries and clean, safe nuclear power plants, as well as funding to develop alternative fuels. But none of that -- and the consequent reduction in energy costs -- ever will benefit American consumers, unless Congress acts.

The longer we wait to get a comprehensive energy plan, the higher gas prices will go and the less money we will have to research and convert to alternative sources later on.

Please write to Congress and ask them to stop being so short-sighted and to support the Domestic Energy Production Act of 2008.

You can access the complete column on-line here:

Petronomics 101
Lt. Col. Oliver North
TownHall.com
May 9, 2008

Ethanol: The Side Effects

Take a look at this:

They don't have enough to eat. Five people are dead in Port Au Prince, Haiti after a week of food riots. Unions in Burkina Faso have called a general strike to protest the high cost of grain. Food riots have rocked Egypt, Cameroon, Indonesia, Ethiopia and other nations. In Manila, police with M-16s have supervised the sale and distribution of subsidized grain. Hoarders have been threatened with life imprisonment. In Thailand and Pakistan, troops are guarding fields and warehouses. In Egypt, the army has been called out to bake bread. Even in the United States, a run on rice has caused big-box retailers Sam's Club and Costco to limit the amount of rice consumers can purchase per visit (though the cap is extremely generous -- each customer can buy four 20 pound bags of rice per day at Costco).

That sounds like the plot to one of the futuristic apocalypse/disaster movies from the 1970s/1980s. But it's not. It's real life and it's happening today. Why? Well, the answer to that will surprise most liberals and green activists.

In his epic work, Wealth Of Nations, Adam Smith noted that whenever a transaction between two people occurred, it was because both believed they were gaining something in the exchange. Further, Smith noted that when both parties did gain something, there were unintended side-benefits that went beyond the single transaction.

Well, the idea of side-benefits also applies to unintended consequences. What you read in the above excerpt is just that: unintended consequences of a transaction that has been forced upon us by our own government. I am, of course, referring to ethanol.

It is simple economics. When supply goes down, price goes up. It does not matter the reason that supply went down, just that it went down. When our government mandated the use of ethanol in our gasoline, it cut into the supply of corn that we use for food and food production. As a result of this, the price of food has gone up, not just here at home, but worldwide.

More, from Mona Charen over at TownHall.com:

It seemed like such a painless solution. It fits on a bumper sticker. In fact, I saw one yesterday: "Don't burn fuel. Grow it." The EU adopted a goal of producing 10 percent of its fuel for road transportation from biofuels by 2020. The U.S. government (cheered on by the agriculture industry and environmentalists) adopted a mandate of 36 billion gallons of biofuel production by 2022 -- a five-fold increase over 2006 levels amounting to 28 percent of the U.S. grain harvest. Congress and the president joined hands to pass this feel-good legislation just when, as the Wall Street Journal pointed out, new data were demonstrating that biofuels cost more energy than they save. "When the hidden costs of conversion are included, greenhouse-gas emissions from corn ethanol over the next 30 years will be twice as high as from regular gasoline. In the long term, it will take 167 years before the reduction in carbon emissions from using ethanol 'pays back' the carbon released by land-use change."

Of course, that will be a small relief to those who will starve over the next 167 years just so we can feel good about a law that will never reach it's stated goals.

We aren't even sure that Global Warming (or any kind of climate change) is even human induced. But we can be absolutely sure that whatever we try to do about it will have serious costs.

Mona's parting shot:

"When millions of people are going hungry," Palaniappan Chidambaram, India's finance minister told the Journal, "it's a crime against humanity that food should be diverted to biofuels." This is not to suggest that all efforts to conserve energy or maintain the environment are folly. Rather, it's a cautionary tale. How much environmental improvement do we really get and -- this is paramount -- at what price?

Yes. At what price? I have no doubt that the environmentalists and others who cheered on this bill went to sleep that night feeling very good about themselves.

But, as was noted in the book (and movie) The Neverending Story, when travellers reached the second gate to get to the Southern oracle, they looked into a mirror and saw their true selves. Brave men found they were truly cowards and kind people found they were truly cruel. Those who cheered on this ill-thought out ethanol law fall in the latter category.

You can access the complete column on-line here:

Let Them Eat Ethanol?
Mona Charen
TownHall.com
April 25, 2008

Big Corn And Ethanol Hoax

Remember the Energy Act of 2005? Remember how ethanol was to be our savior from high gas prices and was supposed to help us get off of our dependence on foreign oil? Well, those promises were as empty as the space that fills the light-years between solar systems.

As you have probably noticed, gas prices have gone up and you've probably also noticed that we are still just as dependent, if not moreso, on foreign oil as we were before. You've probably also noticed the unintended side-effect of higher food prices for us consumers to pay.

Anyone schooled in basic economics would have seen this coming. Further, anyone schooled in basic economics can see where it is going and more importantly, why.

Dr. Walter Williams notes the following in his latest column:

Ethanol contains water that distillation cannot remove. As such, it can cause major damage to automobile engines not specifically designed to burn ethanol. The water content of ethanol also risks pipeline corrosion and thus must be shipped by truck, rail car or barge. These shipping methods are far more expensive than pipelines. Ethanol is 20 to 30 percent less efficient than gasoline, making it more expensive per highway mile. It takes 450 pounds of corn to produce the ethanol to fill one SUV tank. That's enough corn to feed one person for a year. Plus, it takes more than one gallon of fossil fuel -- oil and natural gas -- to produce one gallon of ethanol. After all, corn must be grown, fertilized, harvested and trucked to ethanol producers -- all of which are fuel-using activities. And, it takes 1,700 gallons of water to produce one gallon of ethanol. On top of all this, if our total annual corn output were put to ethanol production, it would reduce gasoline consumption by 10 or 12 percent. Ethanol is so costly that it wouldn't make it in a free market. That's why Congress has enacted major ethanol subsidies, about $1.05 to $1.38 a gallon, which is no less than a tax on consumers. In fact, there's a double tax -- one in the form of ethanol subsidies and another in the form of handouts to corn farmers to the tune of $9.5 billion in 2005 alone. There's something else wrong with this picture. If Congress and President Bush say we need less reliance on oil and greater use of renewable fuels, then why would Congress impose a stiff tariff, 54 cents a gallon, on ethanol from Brazil? Brazilian ethanol, by the way, is produced from sugar cane and is far more energy efficient, cleaner and cheaper to produce.

Because this whole thing has been a sham and a hoax. The only results are that we have less efficient fuels, higher prices for food, use of even more oil to produce the ethanol and only the big corn and ethanol companies and interests are showing any profit from it.

Dr. Williams goes on:

But politicians, corn farmers and ethanol producers know they are running a cruel hoax on the American consumer. They are in it for the money. The top leader in the ethanol hoax is Archer Daniels Midland (ADM), the country's largest producer of ethanol. Ethanol producers and the farm lobby have pressured farm state congressmen into believing that it would be political suicide if they didn't support subsidized ethanol production. That's the stick. Campaign contributions play the role of the carrot. The ethanol hoax is a good example of a problem economists refer to as narrow, well-defined benefits versus widely dispersed costs. It pays the ethanol lobby to organize and collect money to grease the palms of politicians willing to do their bidding because there's a large benefit for them -- higher wages and profits.

So, when are the socialist Dems going to investigate "Big Corn" for price gouging?

Congress needs to end this madness now, before it costs us so much that we won't be able to afford any new research into truly viable alternative energy.

You can access the complete article on-line here:

Big Corn And Ethanol Hoax
Dr. Walter Williams
TownHall.com
March 12, 2008