The Great Ethanol Scam – Tea Party Nation

The Great Ethanol Scam – Tea Party Nation.

By Alan Caruba

The rocketing costs of gasoline and the price of corn being paid worldwide are the result of U.S. government mandates requiring the inclusion of ethanol in the gasoline all Americans must use. The time has long since passed to eliminate ethanol from this primary fuel.

A recent report by ActionAid USA, “Fueling the Food Crisis: The Cost to Developing Countries of U.S. Corn Ethanol Expansion” is based on work by researchers at Tufts University. ActionAid USA is an anti-poverty group. The study found that the corn-importing countries of Central America and North Africa are at the highest risk from ethanol expansion—the requirement to include ethanol with gasoline.

“Strong policy should not be based on prayers for good weather, especially when the stakes are so high. From the U.S. Environmental Protection Agency to the G20, it is time to recognize that current biofuel mandates are unsustainable,” said Kristin Sundell, a policy analyst for ActionAid USA.

The group is calling on G20 leaders who are meeting on World Food Day, October 16, to eliminate incentives that encourage unsustainable biofuels production.

The idea behind ethanol is that it reduces carbon dioxide (CO2) emissions and, in doing so, it saves the Earth from global warming/climate change, but CO2 plays no role in climate change, and shows up well after any increase or decrease of temperatures. Ethanol is bad science. It is bad for the engines of cars that must use such a gasoline blend. It increases the cost of gasoline and all other corn-based products. It actually increases the amount of CO2 in the atmosphere. And it reduces the mileage a car can achieve with pure gasoline.

An authority on the U.S. oil industry is Sel Graham, the author of “Why Your Gasoline Prices Are High”. He is a man with more than fifty year’s experience, first as a petroleum reservoir engineer and later as an oil and gas attorney. He is also a graduate of West Point.
Here’s what Graham has to say about the current gas prices:

“Gasoline prices could be decreased instantly by President Obama if he wanted to do so. Republicans have not yet picked up on this issue.”

“Abolishing the ethanol mandate requiring ethanol to be blended with gasoline at the pump or waiving the Renewable Fuel Standard (RFS) would: (1) lower gasoline prices by millions of dollars; (2) result in billions of miles of free travel annually; (3) prevent millions of tons of additional carbon dioxide from being emitted into the air; and (4) improve national security and the energy picture since it is impossible for US ethanol to ever replace foreign oil imports.”

“The following is reference data for skeptics. Gasoline prices can be lowered instantly by either abolishing the ethanol mandate which requires that ethanol be blended with gasoline at the pump or waiving the RFS. This would eliminate the millions of dollars in waivers which refineries are required to purchase because there is no cellulosic ethanol production, thereby decreasing the price of gasoline.”

“The 2012 RFS for cellulosic ethanol is 8.65 million gallons. Cellulosic ethanol production through August 2012 has been only 20,069 gallons, a shortage of 8.63 million gallons requiring $0.78 per gallon waivers.”

An essential truth that few Americans are aware of is that “The price of U.S. oil is always lower than the price of foreign oil. Last year, U.S. oil averaged $95.73 per barrel, $7.25 cheaper than foreign oil imports at $102.98 per barrel. If U.S. oil replaced the 3,261 million barrels of foreign oil imports, it would be a savings to Americans of $23.6 billion annually.”

Given the enormous oil reserves in America, both domestic and offshore, there is no reason why they should not be extracted, but the environmental movement in combination with the Environmental Protection Agency, the Interior and Energy Departments, has restricted access to our own oil.

The ethanol mandates are not just robbing Americans at the gas pump, they are endangering the cost of food prices worldwide

Current government energy policies are a definition of insanity.

© Alan Caruba, 2012

Ethanol: The Power of a Really Bad Idea – Tea Party Nation

 

Ethanol: The Power of a Really Bad Idea – Tea Party Nation.

By Alan Caruba

It took some eighty years for Communism to fail in the former Soviet Union. Along the way, millions were sent to gulags and millions more died from starvation and World War Two added to the death tolls. Spreading Communism like a religion, it had similar results in China and everywhere it has been adopted.

It takes a long time to rid the world of a really bad idea and, in the latter part of the last century, environmentalism sprung up like a weed to overwhelm the common sense of people with its mix of lies and hatred for humanity.

What does this have to do with the price of corn? A lot.

Under the Renewable Fuel Standard (RFS), an ethanol mandate exists that requires refiners to blend this moonshine with gasoline for the alleged purpose of reducing the emissions that driving a car produces. We are told it contributes to cleaner air and the effects of global warming—which is not occurring.

What it actually does is ruin your car’s engine because it is highly corrosive and it reduces the mileage you would get if it was not part of the gasoline blend. It also ensures that the growers of corn have a government mandated requirement that it be purchased. It is a farm lobby bonanza.

As Marlo Lewis of the Competitive Enterprise Institute points out about the RFS, “No matter how much of the U.S. corn crop is ruined by drought, no matter how high corn prices et, no matter how many people in developing countries are imperiled, the RFS requires that billions of bushels of corn be used to fuel cars rather than feed livestock and people. This is crazy.”

What most people, being city folk, don’t realize is how great a role corn plays in the nation’s economy, its export generates, and the astonishing list of uses to which it is put other than as a vital food for livestock—beef, pork and poultry—and consumed in hundreds of ways by people.

Corn is used in bakery products, baby foods, brewed beverages (bourbon, beer, ale), carbonated beverages, cheese spreads and foods, cereals, condiments, chewing gun, prepared mixes (pancakes, waffle, biscuit, cake flour, puddings), gravies and sauces, canned soups, coffee “creamers”, frosting and icings, in instant coffee, marshmallows, sweetened ice tea, most snack foods….I could go on, but the list is long, very long.

The Wall Street Journal, on July 19, reported that corn and soybean prices leapt to records on rising fears that the searing Midwest drought is further eroding the size of the coming harvests for two of America’s most important crops…The drought now covers more than half of the continental U.S. and covers a wider stretch of the country than in any drought since 1956, according to the U.S. government.”

And, even so, the Journal reported that “U.S. Agriculture Secretary Tom Vilsack said the situation wasn’t bad enough to warrant a reduction in government mandates for how much ethanol—typically made from corn—is blended into gasoline.” As for as Vilsack is concerned the RFS mandate must be enforced.

Marlo Lewis asks “Why as a matter of law should ethanol producers get first dibs on the U.S. corn crop?”

“What should their interest legally trump that of every other industry and consumer affected by corn prices?”

“Why should they have a legal privilege to jump to the front of the line ahead of meat, poultry, and dairy producers, or those who export grain to hunger-stricken countries?”

If we got rid of the ethanol mandate tomorrow our cars would last longer and drive farther. Since they are on our roads and streets anyway, does anyone really believe that air quality would be significant affected?

So ethanol, like communism and environmentalism, is yet one more very bad idea that is backed by the power of government mandates that benefit its growers, but does little else of any value for consumers.

© Alan Caruba, 2012

 

EDITORIAL: Getting burned by biofuels – Washington Times

OBAMAS  MARXIST ADMINISTRATION ON DISPLAY FOR ...

OBAMAS MARXIST ADMINISTRATION ON DISPLAY FOR ALL TO SEE (Photo credit: SS&SS)

EDITORIAL: Getting burned by biofuels – Washington Times.

Energy firms are caught in green-credit crossfire

When individuals attempt to solve a problem and end up creating unforeseen troubles, it’s called the law of unintended consequences. When government does it, it’s called the law of the land. In its zeal for regulation, the federal leviathan has invented a market for something called renewable-fuel credits and, not surprisingly, it’s filled with fraud. Businesses are getting swindled and Uncle Sam’s unsympathetic response is “heads I win, tails you lose.”

The Energy Policy Act of 2005 mandated that the Environmental Protection Agency (EPA) implement a Renewable Fuel Standard forcing fuel refiners to dilute their petroleum products with vegetable oil, corn, algae and animal fat so companies that label themselves “green” would reap a financial windfall. Refiners who can’t make those substances on their own are allowed to buy renewable-fuel credits to meet their federal quota. Each credit carries a 38-digit renewable identification number (RIN) as proof of purchase. The credits can be traded.

As this is an entirely artificial market that serves no purpose other than to make politicians and their political donors happy, it’s rife with fraud. Since November, the EPA has claimed 140 million invalid RINs have been sold. The agency alleges 48 million bogus credits came from Absolute Fuels of Texas, netting about $62 million. Another 32 million were purportedly sold by Clean Green Fuel LLC in Maryland for $9 million, and 60 million were marketed by Green Diesel of Texas, worth $84 million.

House Republicans expect the scam to hit at least 300 million fake credits. “Unfortunately, the production of and trade in fraudulent or invalid RINs has developed into a large and growing problem,” wrote House Energy and Commerce Committee chairman Fred Upton, Michigan Republican, and three other committee members in a May 24 letter to EPA Administrator Lisa Jackson. “And EPA’s efforts to address the problem so far appear ineffective, and in some respects have harmed the renewable-fuels marketplace.”

Rather than taking responsibility for authenticating the RIN market, the EPA is putting refiners on the hook for unwittingly buying fake RINs. In March, the agency announced it would fine firms 10 cents for each invalid credit they use and 20 cents for each credit missing from their quotas. One credit trading company, OceanConnect, filed suit in federal court in April, charging the EPA’s “buyer beware” policy is undermining the biofuels industry.

That’s an industry that should be undermined if it’s unable to offer consumers an affordable product that they want. Instead, Washington insiders who view Big Oil as the root of evil have decided the nation must transition to energy products that aren’t anywhere near viable. It’s the essence of crony capitalism when lawmakers dictate that one product – corn fuel – the winner at the expense of another – affordable petroleum.

Ultimately, it’s the taxpayer and the environment that end up paying the price for this folly as the nation’s productive resources are diverted into the most wasteful endeavor of all: satisfying bureaucrats.

The Washington Times

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