The folly of E15 anti-hydrocarbon policie
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EPA’s E-15 ethanol plan is bad for our pocketbooks, environment and energy policy
Guest post by Paul Driessen
The Obama Administration’s anti-hydrocarbon ideology and “renewable” energy mythology continues to subsidize crony capitalists and the politicians they help keep in office – on the backs of American taxpayers, ratepayers and motorists. The latest chapter in the sorry ethanol saga is a perfect example.
Bowing to pressure from ADM, Cargill, Growth Energy and other Big Ethanol lobbyists, Lisa Jackson’s Environmental Protection Agency has decided to allow ethanol manufacturers to register as suppliers of E15 gasoline. E15 contains 15% ethanol, rather than currently mandated 10% blends.
The next lobbying effort will focus on getting E15 registered as a fuel in individual states and persuading oil companies to offer it at service stations. But according to the Associated Press and Washington Post, Team Obama already plans to provide taxpayer-financed grants, loans and loan guarantees to “help station owners install 10,000 blender pumps over the next five years” and promote the use of biofuels.
Pummeled by Obama policies that have helped send regular gasoline prices skyrocketing from $1.85 a gallon when he took office to $4.00 today – many motorists will welcome any perceived “bargain gas.” E15 will likely reduce their obvious pump pain by several cents a gallon, thus persuading people to fill up their cars, trucks and maybe even boats, lawnmowers and other equipment with the new blends.
That would be a huge mistake.
E15 gasoline will be cheaper because we already paid for it with decades of taxpayer subsidies that the Congressional Budget Office says cost taxpayers $1.78 every time a gallon of ethanol replaced a gallon of gasoline. Ethanol blends get fewer miles per tank than gasoline. More ethanol means even worse mileage. People may save at the pump, but cost per mile will increase, as will car maintenance and repair costs.
Ethanol collects water, which can cause engine stalls. It corrodes plastic, rubber and soft metal parts. Pre-2001 car engines, parts and systems may not be able to handle E15, which could also increase emissions and adversely affect engine, fuel pump and sensor durability. Older cars and motorcycles mistakenly (or for price or convenience) fueled with E15 could conk out on congested highways or in the middle of nowhere, boat engines could die miles from land or in the face of a thunderstorm, and snowmobiles could sputter to a stop in a frigid wilderness.
Homeowners and yard care professionals have voiced concerns that E15’s corrosive qualities could damage their gasoline-powered equipment. Because it burns hotter than gasoline, high ethanol gasoline engines could burn users or cause lawnmowers, chainsaws, trimmers, blowers and other outdoor power equipment to start inadvertently or catch fire, they worry.
As several trade associations have noted in a lawsuit, the Clean Air Act says EPA may grant a waiver for a new fuel additive or fuel blend only if it has demonstrated that the new fuel will not damage the emissions control devices of “any” engine in the existing inventory. E15 has not yet met this requirement. EPA should not have moved forward on E15 and should not have ignored studies that indicate serious potential problems with this high-ethanol fuel blend.
Largely because of corn-based ethanol, US corn prices shot up from an annual average of $1.96 per bushel in 2005 to $6.01 in 2011. This year we will make ethanol from 5 billion bushels of corn grown on an area the size of Iowa. E15 fuels will worsen the problem, especially if corn crops fall below expectations.
Ethanol mandates mean more revenues and profits for corn growers and ethanol makers. However, skyrocketing corn prices mean beef, pork, poultry, egg and fish producers pay more for corn-based feed; grocery manufacturers pay more for corn, meat, fish and corn syrup; and families see prices soar for almost everything on their dinner table.
Farmers like pork producer Jim A were hammered hard. Over a 20-year period, Jim became a part owner in a Texas operation and planned to buy out the other shareholders. But when corn and ethanol subsidies went into effect, the cost of feed corn shot from $2.80 per bushel in 2005 to “over $7.00” a bushel in 2008. “We went from treading water and making payments, to losing $100,000 a month,” he told me.
His farm was threatened with foreclosure and the ominous prospect of having to make up the difference in a short sale. After “never missing a single payment to anybody” in his life, he almost lost everything. Fortunately, at the eleventh hour, a large pork producer leased the property, the bank refinanced his loans and Jim arranged a five-year lease. But thanks to ethanol he almost lost everything he’d ever worked for.
Even worse, the price of tortillas and tamales also skyrocketed, leaving countless poor Latin American families even more destitute. Soaring corn and wheat prices have also made it far harder for the USAID and World Food Organization to feed the world’s malnourished, destitute children.
Simply put, corn ethanol is wasteful and immoral. And yet E15 advocates want to go even further.
“For 40 years we have been addicted to foreign oil,” says Growth Energy CEO Tom Buis. “Our nation needs E15 to reduce our dependence on foreign oil, keep gas prices down at the pump, and end the extreme fluctuations in gas prices caused by our reliance on fuel from unstable parts of the world.”
That’s nonsense. America is blessed with centuries of untapped petroleum resources that antediluvian Deep Ecologists, ideology-driven politicians and EPA officials, and subsidy-obsessed renewable energy lobbyists seem intent on keeping locked up, regardless of the negative consequences.
These oil and gas deposits cannot be developed overnight. However, 40 years is not overnight. Yet that’s how long America has kept Alaska’s ANWR coastal plain, most of our Outer Continental Shelf, and most of our western states’ public lands and resources off limits to leasing, exploration and drilling.
If we had started the process twenty, ten or even five years ago, we’d have enough oil flowing to slash imports and cut world crude and US pump prices significantly. If President Obama had approved the Keystone XL pipeline, within two years over 800,000 barrels of Canadian, Montana and North Dakota crude would be flowing daily to Texas refineries – with similar effects on imports and prices.
Developing these resources would also generate hundreds of thousands of jobs – and billions of dollars in lease bonuses and rents, production royalties, and corporate and personal taxes.
America’s surging natural gas production has already driven that fuel’s price from $8 to barely $2.00 per thousand cubic feet (or million Btus). That alone will persuade auto makers to build nat-gas-powered cars and trucks (and consumers to buy them), without massive new subsidy programs as advocated by T. Boone Pickens and assorted politicians. Natural gas can even be converted into ethanol (and diesel).
It will happen, unless Congress interferes – or EPA tries to regulate horizontal drilling and hydraulic fracturing (“fracking”) into oblivion, and send natural gas prices back into the stratosphere.
Right now, we are burning our own – and the world’s – food, to fuel cars and trucks. And to grow corn, convert it into 14 billion gallons of ethanol, and ship it by truck or train, we are consuming one-third of America’s entire corn crop – and using millions of pounds of insecticides, billions of pounds of fertilizer, vast amounts of energy (all petroleum-based), and trillions of gallons of water.
Just imagine how those numbers will soar, if E15 is adopted nationwide – or if Big Ethanol’s big dream becomes reality, and motorists begin to burn “cheap” corn-based E85 in flex-fuel vehicles.
Will President Obama, Democrats and extreme environmentalists ever end their hatred of hydrocarbons, and their obsession with biofuels – and start embracing reliable, affordable energy that actually works?
__________
Paul Driessen is senior policy advisor for the Committee For A Constructive Tomorrow (www.cfact.org) and Congress of Racial Equality, and author of Eco-Imperialism: Green power – Black death.
Related articles
- U.S. approves 20 firms to make ethanol for E15 (reuters.com)
- EPA moves closer to approval of 15 pct ethanol gas (kansascity.com)
- EPA gives E15 go-ahead despite objections, approves production applications (green.autoblog.com)
On the contrary, in my state and several neighboring states 10% ethanol is mandated by state law.
Gail – you are wrong .. the numbers are not “rigged” – when it comes to determining net energy yield (EROI) they DO take into account the energy required to produce fertilizers etc, along with equipment costs and similar. They do detailed research and calculations in an attempt to include all comparable energy inputs when comparing to gasoline production.
These are peer reviewed studies – which means they can be and are critiqued by many others before publication. The vast majority of those studies are largely in a similar range – except Patzek and Pimentel – who have been repeatedly shown to have cooked the books on their numbers – for example FAILING to include the energy required to turn soy beans into animal feed, when comparing with Distillers Dried Grain Solids animal feed – so they can makes ethanol look purposely worse.
A. Scott says:
April 25, 2012 at 1:36 am
Thank you for that and for your subsequent posts. This debate about whether to implement the E15 standard has gone on for a long time; it’s neither sudden nor ill thought out. It’s most likely a modestly good idea.
Roger Sowell says:
“The concept of domestic oil preservation for future strategic needs is not widely discussed but is certainly real. It is not new either.”
Then why have we not filled the national strategic petroleum reserve? President Clinton was urged by Republicans and Democrats alike to fill the reserve when oil was around $9 a barrel. Clinton dithered, and the reserve was never filled. It was not filled by President G.W. Bush either. And now there are rumors that Obama will empty the reserve in order to lower gasoline prices to help his declining re-election prospects.
I’m sorry, but their actions speak loudly. They do not care about future strategic needs. We could be producing most of our oil needs by allowing drilling instead of obstructing it, and by letting the free market operate. It would be relatively easy to get gasoline prices under $2 a gallon again, giving a tremendous boost to our economy and substantially reducing unemployment. But Obama is a complete captive of the eco-lobby, and Americans are suffering needlessly as a result.
Randy … your entire comentary was excellent and directly on point. Exactly like with the AGW proponents the ethanol attackers make unsubstantiated claims, present half-truths or outright lies and ignore all science that goes gainst their position.
Watching people continue to use Patzek and Pimetel as proof that ethanol has a negative net energy balance, when virtually all other studies show a wildly different picture shows they operate from the same intellectually dishonest place as do many of the AGW alarmists.
Smokey … not drilling – leaving proven reserves in the ground – is simply a different version of “strategic reserve” … not saying I agree. It does have the advantage of being a true “reserve” in that unlike with the governments startegic reserve, which as you show is “portable” – can be easily used and abused – oil that is left in the ground is “available” but not “portable” … we can get it iof we need it but can not waste it or use frivilously
A. Scott,
The real question is this: if there is an emergency and we need the oil immediately, where will we get it? There is a long lead time from drilling to refinery output.
I vividly recall the first oil embargo in 1973. You could only get 5 gallons at a time, and only every other day based on your car’s licence plate number [even/odd days]. Cars literally lined up around the block and down the street, waiting their turn to get gas. The stations would routinely run out, and folks who had waited for two hours or more got nothing. This happened every day at every gas station. Tempers were short. People got shot for siphoning other people’s gas tanks at night [prior to 1973 cars didn’t have gas door locks. And diesel was much cheaper than gasoline]. As soon as the embargo was lifted, gas prices promptly shot up 400%. That could all happen again, very easily. I would be surprised if it doesn’t. And we are completely unprepared. Remember also that the economy runs on oil. During that embargo unemployment shot up as businesses shut down, and stagflation followed.
The U.S. has enough oil in it’s jurisdiction to supply most, if not all our needs. But under this incompetent Administration it is illegal to even explore for new oil, much less extract it. When the next emergency hits [remember that there was also a second embargo by OPEC], what are we going to do? If Israel is attacked, or attacks, it’s almost certain that the Strait of Hormuz will be shut down. And now this feckless President refuses to even allow a pipeline to our Canadian friends to the north. Now the Chinese are angling to buy the Canadian oil.
When the next crisis hits — and it will — remember that the blame must be laid directly at the feet of the environmental movement, and their pet politicians. But by then, it will be too late.
All I have done is support my claims with facts and sources. Are you reading someone else’s posts? What I stated about Larry was correct, he made unsubstantiated claims. That is not an “ad hominem” attack that is an irrefutable fact.
Both of your claims are unsubstantiated and in direct contradiction to the empirical testing done by Consumer Reports and the EPA.
I have no idea how you calculated you numbers but they are not right.
Tahoe 1500 4WD
Trans/Speed: A-6
A-6, 5.3L, 8cyl
MPG City/Hwy Gas: 15/20 (17)
MPG City/Hwy E85: 11/16 (13)
Annual Fuel Cost Gas: $3400
Annual Fuel Cost E85: $3600
EPA Annual Fuel cost calculations are based on 15,000 miles annually (55% City and 45% Hwy). The formulas would be:
(6750 / HWY MPG) * Fuel cost per gallon
+
(8250 / CTY MPG) * Fuel cost per gallon
Using National Average Prices (AAA)
$3.830 – Gas (4-26-2012)
$3.296 – E85 (4-26-2012)
Annual Fuel Cost Gas: $3400
Annual Fuel Cost E85: $3863
That is a $463 you lose using E85 annually.
Using your prices:
$3.68 – Gas
$2.88 – E85
Annual Fuel Cost Gas: $3266
Annual Fuel Cost E85: $3375
That is a $109 you lose using E85 annually.
E85 loses either way and the only place it is near the low end is in or next to corn producing states.
Actual empirical testing from both Consumer Reports and the EPA says otherwise. The last thing I or anyone else who is rational should do it believe unsubstantiated claims made on the Internet.
Except you didn’t. You lose money annually running on E85 with the added inconvenience that you have to fill up more because you get less mileage per tank,
Trans/Speed: A-6
A-6, 5.3L, 8cyl
Range Gas: 430
Range E85: 330
That is a 100 mile reduction in driving range using E85.
smokey – that is what the govt strategic reserve is for … I think you need that as well,. And I 100% agree this admin is incompetent and IMO corrupt.
I think we should use our fossil fuel resources … but use them wisely. We should “drill” but should also aggressively pursue alternate fuel sources including renewable.
And even if we stay “as is” corn based ethanol is supplying 10% of our domestic fuel use now. And at same time we are meeting all domestic and export “food” demand for corn, and adding some to reserves every year.
And even IF corn prices are increased slightly because of ethanol – which is no remotely proven – I for one am happy to pay 5 cents more for a box of corn flakes and a few cents more for a nice steak if it buys us even a little benefit for the future.
Ethanol will never supply all of our fuel – and the opponents use that as the excuse to eliminate it altogether. But is IS supplying a respectable share. This both extends our own fossil fuel resources and gives us an additional measure of energy independence.
The numbers are EXACTLY correct. And you SHOULD know where I got my numbers – they were copied DIRECTLY from the link YOU posted … page 25:
I assume you have also looked at EPA’s comments on how they test and what they say about their numbers vs real world results?
From your link – http://www.fueleconomy.com :
NOT real world tests. Tested by the car manufacturers (with a handful verified by EPA). Test usually performed on pre-production new vehicles (ie: not broken in).
And what the EPA says about thge accuracy of ther tests compared to real world:
That is the wrong link and should have been the 2012 Guide which shows,
http://www.fueleconomy.gov/feg/pdfs/guides/FEG2012.pdf
Annual Fuel Cost Gas: $3400
Annual Fuel Cost E85: $3600
This is irrelevant as doing the math using current fuel prices or even your corn producing state E85 prices, E85 is a money loser.
You are of course free to lose money and driving range filling up on E85 the rest of us prefer saving money and utilizing our vehicles maximum driving range.
A. Scott says:
April 26, 2012 at 4:37 pm
Smokey … not drilling – leaving proven reserves in the ground – is simply a different version of “strategic reserve” … not saying I agree. It does have the advantage of being a true “reserve” in that unlike with the governments startegic reserve, which as you show is “portable” – can be easily used and abused – oil that is left in the ground is “available” but not “portable” … we can get it iof we need it but can not waste it or use frivilously
——————————————————————————-
Having done 15 rounds with A. Scott last time ethanol came up on WUWT, and getting nowhere because he is a True Believer unencumbered by boring fact, I have stayed out of this thread so far. But this nonsense is new nonsense, so I will gird my loins and have a go.
Do you have any idea what the lead time is between translating a proven oil reserve in the ground to putting juice in a tank? Not being a petrochemical expert, I don’t know exactly, but one thing is for sure – the strategic oil reserve will have run out a long time beforehand. Perhaps a petrochemical expert can fill in the blanks here. It is like saying, when facing a famine right now – oh, but we have all this potential crop growing country that we have been saving just in case. Just hang on while we clear the land, till the fields, plant the seeds and wait for the the crop to grow, be harvested, turned into food and distributed.
The best form of ‘strategic reserve’ is ongoing production capacity, backed up with removing disincentives to find further production capacity for the future.
Continuing to show you just don’t have a clue … highlighting a 100 mile reduction in driving range – which is completely meaningless regarding costs.
Using the numbers from the link you originally provided – the difference between $3,149 using gas and $3,192 annually using E85 – it costs 0.73% more to run on E85. This would for all practical purposes be unrecognizable in the real world.
Even IF we use the HIGHER numbers you now claim are correct – $3400 annual fuel cost for gas and $3,600 annual fuel cost for E85 – the net difference is a whopping $16.56 per month. I am happy – no thrilled – to spend 54 cents a day to use a renewable fuel that save fossil fuels and is cleaner for the environment.
Despite your repeated attempt to move the goal post – and change data from one post to another … even your latest data – using the inflated EPA numbers vs the real world experience of people like Larry and I – which the EPA acknowledges is accurate and likely – the cost difference is immaterial.
Even after all your blathering about how terrible E85 and ethanol is … the best you can come up with – using the numbers the EPA admits are likely not reflective of the real world – your best shot is ethanol is it’s terrible becasue it costs 54 cents more a day
Now THAT is a big scoop ….
This is a joke right? How else do you expect them to do a unified test with all the vehicles? Defining “real world” testing is completely arbitrary which is why they included the disclaimer. Consumer Reports generally does “driving” tests regardless these may not include your Friday trip to Dairy Queen.
@ur momisugly Poptech 5:24 am on April 26
“You have provided no evidence to support your conspiracy theory.”
I don’t agree there is a conspiracy. Nations make rational choices among their options. This is one of those choices, and we are not the only one doing this. The facts are quite simple, as I laid them out above. Each President, from Truman on, has had advisors on this. Each, no matter which party, came to the same conclusion since 1945. That is almost 70 years, or three generations.
Unless we annex a country with a large quantity of oil, or somebody figures out a way to run war machines without oil – and that includes lube oil in the crankcase and on the bearings – this is likely to continue.
Really – the wrong link? How is it the “wrong” link? It is the exact link YOU posted.
So lest reduce the extra cost to the number that really matters – how much extra does E85 cost per mile driven?
If we use the EPA formula using my local gas prices – that the extra cost is $109 annually … my extra cost per mile is $0.007 per mile – less than 1 cent
And lets look at YOUR latest version of what you claim the EPA numbers now say – that it costs $200 a year more to use E85 vs gas … that extra cost per mile skyrockets all the way up to, err, well ……. a whopping $0.013 per mile – 1.3 cents per mile
The horror of it all … imagine what I could do with an additional 1.3 cents per mile in my pocket
I never claimed it was related to cost but it is definitely meaningful to those who care about driving range.
Even those old numbers show you lose money. Losing money is not an argument for E85 being cost effective.
What do you mean “I” claim are correct? This is the same EPA under the same administration. You do realize that 2012 is more current than 2011? No one cares how happy or thrilled you are to lose money and reduce the driving range of your vehicle.
Move the goal post, change data? WTF are you talking about? It is clear I included the wrong HTML link in my post because it was explicitly titled 2012.
I have done all the calculations using national average fuel costs and your corn producing state fuel prices, E85 comes out a loser in both cases.
The EPA does not acknowledge that your or Larry’s numbers are accurate! What kind of delusional nonsense is this? People can do the math themselves and see that E85 is a loser.
I’ve cited two sources for E85 MPG, the EPA and Consumer Reports because they were current. You have cited ZERO. You want more? Fine,
Ethanol Promises – E85 and Fuel Economy (Car and Driver, July 2006)
E85 vs. Gasoline Comparison Test (Edmunds, May 2007)
We now have Consumer Reports, Car and Driver, Edmunds and the EPA vs. A. Scott and Larry, another tough call.
Nice try at redirection, but no that is not the comparison under discussion!
The discussion point here is your assertion that price correction based on fuel BTU content is a valid idea, and the related direct implication that fuel mileage is closely correlated with fuel energy content.
If your assertion is true than the obvious conclusion must be that if in any case it can be shown that there is a lack of correlation between BTU energy content and fuel mileage than your assertion is wrong and BTU price correction calculations are inherently flawed.
You cannot get a worse correlation than a negative correlation which is what those E30 tests showed. Some cars in the test group not only did not suffer a loss of fuel mileage but they actually got better fuel mileage on a fuel that you already agree has less energy content.
We have listed numerous examples that you have simply ignored or side stepped rather than faced the fact that BTU pro-rated pricing is a bogus concept. Engine design and engine management strategy and technology have far more impact on fuel mileage than the bulk fuel energy. The thing that moves a car down the road is not the bulk fuel energy, it is the portion of that available energy that a given engine can successfully extract and convert to useful work.
So lets review the facts here:
First from one of your own links —
One of my links posted above —
The actual energy drop due to 10% ethanol added is approximately 3.5 – 3.6% depending on the gasoline blend the ethanol is mixed with. Again in this study the actual measured fuel economy loss was from -0.8% to -1.98% for typical cars on a fuel that had 3.5% less energy — actual fuel mileage reduction reported is only 1/3 to 2/3 the energy differential. We again show that fuel BTU content does not directly correlate to fuel mileage.
As noted above in the link for :
http://www.ethanol.org/pdf/contentmgmt/E30_Final_Report.pdf
Scientific study of actual real world cars using mid range ethanol blends sometimes actually exceeded their normal straight gasoline fuel mileage. For those not paying attention the BTU fuel content is not only not well correlated but in those cars it was a reverse correlation. Anyone of even moderate intelligence and of fair mind would by now conclude that your assertion that making fuel energy content cost “corrections” (gee there is that word that keeps popping up in the climate debates too!) is both useless and misleading.
At this point it is obvious that per occams razor our personal tabulation of higher fuel mileage on E85 than predicted by the fuel energy content theorem you propose, is validated as both likely and supported by scientific investigation. If you look closely you will see that the EPA fuel mileage numbers are “estimates” (guesses) based on a theory that has been repeatedly proven faulty, and are nothing more than misleading window dressing to pad their documents.
I could go on digging up other studies that repeatedly show small but real departure from the fuel energy content theory of fuel mileage, but you have demonstrated you are fully able to use google, and can find these yourself if you just take the time to read the details of the study and understand what they say.
Record high spark ignition thermal efficiency reported by MIT and SAE on optimized engines, higher specific energy output than the fuel energy would predict in other studies, apocryphal reports from hundreds of private users who have taken careful efforts to document their actual experience with the ethanol fuels. The fact that fuel buyers in markets where blender pumps are already available most frequently choose to use a high ethanol blend rather than straight gasoline, serves to reinforce all the scientific studies. In the real world high ethanol blends “often” give lower actual cost per mile performance, and always produce more power and better outright engine performance (ie horsepower, torque and ability to operate under load such as towing).
You can ignore the facts if they don’t fit with your world view but you won’t change reality. Just like the climate catastrophe community, the anti-ethanol community is very often wrong in most everything they allege about fuel ethanol. It is a convenient scape goat for the malicious or the uninformed but ranging from the low tech to the very highest tech it has proven to be an additive that substantially improves gasoline and high ethanol blends of gasoline are superior to either by themselves and often out perform high dollar racing gasoline that cost 3-5 times as much.
Larry
@ur momisugly Allan MacRae, 7:06 am on 4-26
“Is oil expensive? First you have to say :”compared to what?” Compared to North American natural gas, it is 8 times (800%) as expensive, on an energy-equivalent basis. This is a special case – perhaps you can find other better comparisons.”
Exactly. Compared to what? Compared to oil after the embargoes of 73 and 79, oil today is the same price, adjusted for inflation. I make this point in my Peak Oil speeches. It usually surprises everyone in the audience.
“Every commodity has an approximate price ceiling at a given time, but that ceiling depends on many factors, not the least of which is currency dilution. How much more money is the Fed going to print? Will tripling the monetary base be enough, or is this just the beginning? When was the last time this was done with a global reserve currency? I think the closest similarity was the late Roman Empire (“Hey – we’re the Roman Empire – we’ll just print the money we need – what could go wrong?”).”
My point is that Saudi Arabia did not increase the price of oil to $50 or $100 when they had the entire world at their feet in 1979-1980. A good reason existed and still exists for that. The same reason exists why oil today is not $500 or $1000 per barrel. The issue is substitution of resources as a commodity’s price increases. In this case, many oil substitutes exist and would be employed if the Saudis, or OPEC, increase the price too much. The US’ ace-in-the-hole is coal, specifically, coal-to-liquids, CTL, technology. The US synfuels research in the late 70s concluded that oil must be priced at $40 per barrel to justify building the plants. Saudi knew this, and set the price of crude at $32 in 1980, as much as they dared without triggering the US going on a CTL building spree. Therefore, oil today at $120 per barrel is NOT expensive, in fact, it has not increased in real terms at all. There is a slight premium today compared to 1980, and that is the US EPA’s anti-coal stance, which has slightly increased the tolerable price of oil.
“As your next-door neighbour in Canada, I am very concerned about the well-being of America. Our bilateral trade is huge, perhaps still the largest in the world. Canada is the biggest foreign supplier of oil to the USA, most of it from the much-maligned oil sands.
Finally, if America fails, it appears improbable that any of the “leading contenders” will act benevolently, in the interests of humanity or the environment.”
I agree on these points. In my Peak Oil speech, I make the point that the US should do exactly what Canada has done, build CTL plants as Canada has done tar sands converters. Each produces synthetic petroleum. From my limited research, Canadian efforts lost money initially but have improved with lessons learned and now turn a profit. It likely helps that world oil price has increased. If I were President, the US would have two or three CTL plants under construction right away, Total output would be approximately 1 million barrels per day. The EPA would be told to grant exemptions to these plants. Nothing but good would come of this, for jobs, for oil security, and to some extent, lower oil prices. It is quite likely that modern technology can beat that of the late 1970s, and the Saudis must reduce the price of oil accordingly. The result would be lower gasoline and diesel and jet fuel prices around the world. This, is indeed a good thing. However, I am not President. Mr. Romney, are you reading this? You’re welcome.
John from CA says:
April 25, 2012 at 4:50 pm
NGOs and Redevelopment Corporations are NOT government agencies and therefore have no right to the use of “Eminent Domain”. If this is occurring they should immediately be sued and imprisoned for fraud.
__________________________________
I think you missed the Supreme Court decision on the issue. A corporation can take my farm using “Eminent Domain” if I do not want to sell. All they have to do is tell the town they will pay more tax.
Yeah it is wiki but I am well aware of the lost liberty inn.
@ur momisugly more soylent green! April 26, 2012 at 8:47 am
“It is the popular perception that it takes years to get oil out of a new field. I don’t know any details about it and I’ll take your word for it. So if we were cut off from Middle Eastern oil, how long would it take to replace it with domestic production?”
As I mentioned earlier in this thread, time to market depends on the oil field. Yes, many years were required from discovery to market for Alaskan North Slope oil. It took quite a few years to drill the production wells in that harsh (cold) environment, then build the pipeline to an unfrozen port (Valdez), and the oil terminal at Valdez. It does not require nearly as much time for the Lower 48 states. Deepwater wells also require much time, primarily to construct the production platform.
What should also be stated is that, if an embargo occurred, the price of oil would jump significantly. This provides incentive to increase production efforts from marginal wells. That oil can be brought to market in a matter of weeks.
Middle Eastern oil imports into the US are not as great as some politicians describe, the last time I checked it was approximately 3 or 4 million barrels per day. It might require a year or two for the US to increase our own production that much. From EIA records for the World War II period, the US increased production by a bit more than 1 million barrels per day in a four year period. We have vastly improved technology today compared to then.
“I understand your thinking on preserving our domestic oil supplies for future use, but I have some issues with it. If oil isn’t really rare and we have a large supply, how much do we really need to keep for future use? The answer depends upon how much oil we really have, how much we estimate the technology to extract it will improve in the future and when/whether we develop new energy sources to compete with oil in terms of convenience and economy. We have Coal-to-Liquid technology now; will it improve in the future? How about Natural Gas-to-Liquid?”
My answer, as given above earlier in this thread, is to preserve all of our domestic oil reserves except for that which is required to maintain a viable oil industry. Presently, we produce about 5 to 6 million barrels per day and import the balance of our needs. While others may not agree with me, I accept this as a prudent national policy.
“As for refinery capacity, how much will we need when our economy recovers? We currently have more than we need, but I expect domestic demand to increase once we get the redistributionist, neo-Marxist greens out of power.”
My view is that we have more than adequate refining capacity, in fact, as I stated up-thread, we are shutting refineries down in the USA. Several reasons exist for this, and not merely a reduced economic activity. As this thread’s topic, bio-ethanol in gasoline is a major reason. If all gasoline sales contain 10 percent ethanol, then that roughly translates to not importing and refining almost 2 million barrels per day of oil. This is based on our current consumption of approximately 9 million barrels of gasoline per day, and our refineries require 2 barrels of oil to produce 1 barrel of gasoline. That is an average ratio, 2:1 oil to gasoline. Other countries have different ratios to suit their needs. Therefore, 10 percent of 9 million is 900,000, and double that is 1.8 million barrels per day. With a refining capacity of almost 18 million, ethanol therefore has removed approximately 10 percent of refining throughput. As I see it, that was indeed the goal. Mission accomplished.
However, there is a major down-side to this. Less oil refined means less diesel fuel produced, also. This has worsened an already dire problem in diesel supply-demand and increased the price of diesel fuel.
Another effect on the refineries is the reduced gasoline demand brought about by automotive CAFE standards, that is, improved gas mileage. Each year that passes finds older cars removed from the vehicle fleet, and more modern cars entering the fleet. Usually, modern cars have higher fuel efficiency compared to the older cars, but not always. I haven’t worked out the numbers on this, but the effect is likely to be another 500,000 barrels per day of oil not imported, perhaps more.
The third point is that our refineries are loafing at the moment, running with approximately 2 million barrels per day of spare capacity. Any economic recovery would easily be absorbed by the existing capacity. If any shortage were to exist, we already import gasoline and diesel fuel and can import more if necessary.
“Regarding Keystone: You keep saying it’s better to use their oil instead of ours. Doesn’t that still apply?”
In my view, Canada is a special case. Only Mexico also can send us oil via pipeline. We have a good relationship with Canada and many of the same views. It is very unlikely that Canada would cut off the oil flow. We have managed for decades without the Keystone Pipeline and will likely do so in the future.
thanks
@ur momisugly Smokey April 26, 2012 at 1:20 pm
“Then why have we not filled the national strategic petroleum reserve? President Clinton was urged by Republicans and Democrats alike to fill the reserve when oil was around $9 a barrel. Clinton dithered, and the reserve was never filled. It was not filled by President G.W. Bush either. And now there are rumors that Obama will empty the reserve in order to lower gasoline prices to help his declining re-election prospects.”
I must gently disagree with the facts as presented. Or, more diplomatically, “that turns out not to be the case.” The SPR has been filled to capacity, and is nearly at capacity at this time. It’s been a while since I looked at the numbers, but I recalled that we had approximately 90 to 100 days of crude supply in the ground, these were the design basis. The DOE website (see below) shows a maximum capacity of 727 million barrels of oil, and we are presently right at 700 million. The average cost of oil in the SPR is $29.76. This is quite a bargain at today’s oil prices. The DOE site states there is 80 days of supply at this time. The filling history is also given. Clinton refused to fill it in order to fulfill his ambition: reduce the deficit and leave office with a fiscal surplus. He had his priorities, it seems. Bush resumed filling it but it takes time. Obama recently released about 30 million barrels to ease the Lybian oil crisis. Thus, the reserves dropped from 727 to 696 million barrels. Essentially, our tank is full.
see http://www.fe.doe.gov/programs/reserves/spr/spr-facts.html
“I’m sorry, but their actions speak loudly. They do not care about future strategic needs. We could be producing most of our oil needs by allowing drilling instead of obstructing it, and by letting the free market operate. It would be relatively easy to get gasoline prices under $2 a gallon again, giving a tremendous boost to our economy and substantially reducing unemployment. But Obama is a complete captive of the eco-lobby, and Americans are suffering needlessly as a result.”
I’m no Obama fan, but at least he has the sense to listen to his advisors on this one. I suspect that this was one of many issues that President Bush wrote in the famous letter addressed simply “From 43 to 44” that Obama found on the desk in the Oval Office on his first day as President. Obama also gets to please the anti-oil contingent in his voting base.
I must disagree with you, Smokey, as I have stated, I firmly believe that each US President has concluded that we could be at war soon, perhaps a prolonged war with oil imports cut off except from Canada and perhaps Mexico. The collapse of the Soviet Union did not produce a “Peace Dividend” as has been painfully obvious. Our wars are more limited in scope but seem to have longer duration than did World War II. We must be prepared to meet our oil needs if that dark day arrives. We could easily supply our oil needs with Coal-to-Liquids, CTL, but those plants will require several years to design and construct.
I agree that gasoline could be under $2 again, but we will require oil flowing from each region. That includes Libya, Iraq, and Iran. There’s a chance for Iraqi oil to flow, but not much chance in Libya and Iran in the near future. I also discuss this in my Peak Oil speech, as the Arab Spring movement has great bearing on the unity of OPEC. On the other hand, increased demand in China and India could easily maintain oil prices above $100.
Yes it is. I linked to AAA National Average Fuel Prices, which explicitly states, “E85 MPG/BTU adjusted price“.
Roberts (2008) found, “the difference in average fuel economy is not statistically different from the differential in energy content.”
This directly supports my point.
It is a valid idea and supported by Roberts (2008).
No they are not estimates, they are laboratory tests,
“Fuel economy is measured under controlled conditions in a laboratory using a standardized test procedure specified by federal law.”
No one except you is discussing racing performance as Ethanol blends do not outperform gasoline in fuel economy.
There is obviously no need for the Ethanol mandate with such a “superior” fuel.