Posted By Mark January 29, 2015
A story in today’s New York Times cites a new study by the World Resource Institute that attempts to discredit the significant and increasing contributions of biofuels to meet the world’s energy needs. On close inspection two things become abundantly clear.
First the so-called “new” study is nothing but the same old stuff trotted out by the anti-ethanol crowd nearly annually to see if any of the misinformation sticks to the wall. Take the wig and mustache off and it’s the same old pig.
Second, the former journalist in me always says to consider the veracity of the source to validate the data. In this case the World Resource Institute is funded by Shell and Statoil, two of the world’s largest oil companies. Always follow the money.
This fraudulent study has more holes than a colander but to address some of the most egregious point by point:
Ethanol production is not inefficient? Some of the best research to date from the University of Illinois Chicago shows you get a 40% net energy gain from ethanol production compared to all the energy used along the production chain from farm to gas pump.
The article begs the question why have so many invested billions of dollars in biofuels if they are a bad idea with no future? They do so because ethanol is a plug and play fuel source that meets the needs of our transportation fleet today. What makes it even more attractive is the bright future for biofuels. Automakers in Detroit make no secret of the fact that the next generation power plant for cars will be smaller, higher compression engines. And the best fuel for this future automotive technology is octane rich ethanol.
It also becomes abundantly clear that these think tank folks might want to meander outside the Washington, DC beltway and visit a farm. They question the percentage of the corn crop being used for ethanol today. It’s not how much of the crop we are using for biofuels but how large the crop has gotten. We have grown the largest 11 corn crops in history in the last 11 years. We currently have the largest carryout (supply of corn) ever so feedstock is abundant to meet all demand for corn.
And all of the above has been accomplished in the US on virtually the same acreage, and with less environmental impact. This is an amazing accomplishment that should make all Americans proud.
Posted By Mark January 23, 2015
Not to sound like a lunatic but it may be entirely possible, maybe even likely, the American public will be begging for a return to $3.60 gas in the near future.
I know it sounds crazy, but if you are following the public debate you can already see the discussion heating up to argue the true implications of today’s bargain basement petroleum prices. The euphoria consumers and market analysts alike were experiencing a few weeks ago is wearing off like a cheap wine hangover.
One big concern is that near term economic gains in the US related to cheaper fuel may be overstated and ultimately result in deflation and a global economic slowdown.
It is becoming increasingly evident that it could take a few years before the full ramifications of this gas guzzlers holiday are known. However, some comments by an oil industry executive this week provide a peek behind the curtain that often shields the business maneuvering and real objectives of international big oil.
The boss of oil giant BP Bob Dudley has said that oil prices could remain low for up to three years. What results next may make our previous high oil prices seem like a gift from grandma.
Once big oil has beaten oil upstarts like the domestic fracking industry to a bloody pulp, they will remerge from the ashes like a phoenix ready to spank bad little consumers for cheering the development. The paddle they will use according to some industry experts will be $200 a-barrel oil, a considerably richer prize than the $110 a barrel which preceded the $47 a barrel we are currently experiencing.
Any reasonable person would wonder why a business would take such a gamble, cut investment, cut jobs and sustain such a huge loss? The simple answer is they will do it because they can and the payoff is immense.
Sure oil countries like Norway, Russia, Venezuela, Scotland, Nigeria and Angola will take a beating but the big players in OPEC – the ones with the large expanses of beach and no water – have lower production costs and care only marginally more for their business partners than they do the consumers that they bleed every day.
People’s Bank of China governor Zhou Xiaochuan also points out low oil prices could slow down China’s development of renewable energy projects. In a wondrous masterpiece of understatement he says: “We worry a little bit that the price signal may give disincentive for new energy types to develop and could reduce investment in new non-fossil energy.”
Does anyone know how to say “duh” in Mandarin?
If we really want to throw the market manipulating overlords at OPEC a curve we should do the opposite of what they expect. Instead of grumbling and driving circus clown size cars we should immediately find ways to encourage an expansion of existing non-fossil energy development such as ethanol. Then we should back that up by launching the largest energy research and development project in history. I contend we will be forced to do this as finite oil supplies run out. Why not do it now rather than waiting until the wolf is at the door.
Besides, in the business world innovation is one of the few things that can still trump monetary muscle.
Posted By Mark April 22, 2014
Ok, I admit I love irony. So I had to chuckle a little bit as everyone was getting fired up about the arrival of another Earth Day. The irony lies in the fact that this momentous occasion occurs two days after the anniversary of the Deepwater Horizon oil disaster in the Gulf of Mexico.
To refresh your memory this was the largest accidental marine oil spill in the history of the petroleum industry, estimated to be up to 31% larger in volume than the previously largest, the Ixtoc I oil spill. Following the explosion and sinking of the Deepwater Horizon oil rig, a sea-floor oil gusher flowed for 87 days, until it was capped on 15 July 2010. The US Government estimated the total discharge at 4.9 million barrels.
That’s 210 million gallons of oil and we don’t even want to talk about the 2 million gallons of toxic chemicals they call dispersants which were either to:
- Hide BP’s Faux Pas and remove it from public display
- or allow nature to recover faster
The irony gets tastier if you are my age because I am old enough, ok more than old enough, to have celebrated the first Earth Day and remember how this whole affirmation of Mother Terra Firma began. It started 44 years ago after a US Senator from Wisconsin, Gaylord Nelson, witnessed the ravages of a massive oil spill in Santa Barbara, California. Inspired by the student anti-war movement, he realized that if he could infuse that energy with an emerging public consciousness about air and water pollution, it would force environmental protection onto the national political agenda.
Well the Earth Day recognition has lasted but the public consciousness and the leadership of our elected officials lacks a little staying power. Today, the oil industry continues to be one of the largest polluters in the world. And because of their deep pockets and political influence they have been allowed to blithely go about their business with little or no consequences.
The BP spill offers a great case in point. Big oil responded initially and spent money for clean-up efforts and they put on a contrite face while the cameras were on. But take a closer look today at their efforts in court to dodge any more clean-up costs and the fines that were imposed. They say their job is done even as the number of dead dolphin washing up on beaches topped 900 last week. Kemp sea turtle have been nearly ravaged into extinction in Gulf waters.
And to add insult to injury petroleum interests are now spending millions to mislead the public. Big oil is poisoning the system as well as the environment. They are doing everything they can to keep a death grip on the liquid transportation fuel market.
That’s why today—Earth Day — you should take few minutes to educate yourself regarding the sheer audacity of oil. It’s as simple as going to OilRigged.com to shine a spotlight on the oil companies’ dirty tricks and dishonest attacks. Americans deserve to know how oil companies have rigged the system to make us pay more at the pump—sending their profits up while our air and water quality goes down.
Posted By Mark April 8, 2014
There is an old saying…”make hay while the sun is shining.” Dating back to at least 1546 this traditional farmer logic translates into grab opportunity while you can. This has never been truer regarding the nation’s energy situation. A new report by the Energy Information Administration makes that abundantly clear. EIA says the greased pig fantasy of energy independence in the US is real.
We’ve reduced our dependence on foreign oil from 60 percent to 45 percent in the last few years. This is real, quantifiable progress brought on by smaller, high mileage vehicles, less driving due to a sagging economy, 15 billion gallons of ethanol capacity and domestic oil production on steroids.
Net oil imports to the U.S. could fall to zero by 2037 because of robust production in areas including North Dakota’s Bakken field and Texas’s Eagle Ford formation, according to this Department of Energy projection released this week.
Most days I am just numb about government studies and gasoline prices. I pull up to the pump, try to ignore the price and move on about my day. But there are other days too when I am angry about being held hostage by oil companies, and especially about their cavalier approach to crushing any real competition.
And that is exactly that they are trying to do with ethanol today. So, here is a novel thought. Let’s take this time of energy abundance to think big and invest in a more sustainable energy future rather than waiting until the wolf is at the door. Because, rest assured petroleum remains finite and the next generation will wonder why we squandered this brief respite from oil piracy.
Oil imports have fallen to about 5 million barrels a day from a peak of almost 13 million barrels in 2006, thanks in part to advances in techniques such as hydraulic fracturing and horizontal drilling in shale rock. Despite this, we continue to spend $1 billion a day protecting our assets in foreign oil. And there is no getting around that gasoline is bad for our health and the environment.
Now would be a great time to call your Congressman and Senator and ask them to show some vision regarding biofuels and our energy future. The rapid growth in ethanol production has shown us the promise of a bio-based fuel future. It’s time to make hay!
Posted By Mark February 7, 2014
It’s tax time again. You know that short window during the year when it’s ok to complain about being taxed. Given the number of people who remain unemployed it really is kind of bad form to complain the rest of the year.
So as you belly up to do your part to keep the skids of government greased here is a whopper of a tax tale to help you really get the bile out and make your complaining count. I am guessing that it will come as no shock to you that each year the average American pays more than 20 percent of their income in federal taxes. This does not include state and local taxes.
So this begs the question; shouldn’t an industry that makes $175,000 per minute pay at least that much? This is a real number reflecting the profits of the five largest oil companies. Together they earn more in one minute than 95 percent of Americans earn in a year.
However, Reuters news service estimates that Chevron, ConocoPhillips, and ExxonMobil pays effective federal tax rates of 19 percent, 18 percent, and 13 percent, respectively. Reuters noted that this is “a far cry from the 35 percent top corporate tax rate.” Likewise the tax bracket for the most successful Americans is 35%.
The petrol industry has prospered over the past decade, thanks to high oil and gasoline prices. The five largest companies — BP, Chevron, ConocoPhillips, ExxonMobil, and Shell — earned more than $1 trillion during this time. In the first nine months of 2013, these five companies realized a combined $71 billion in profits. Certainly, these companies can prosper without $2.4 billion in annual special tax breaks.
The Congressional Joint Committee on Taxation estimated that three tax preferences provide $24 billion per decade in annual benefits to these five companies. The “limitation on Section 199 deduction,” designed to encourage domestic manufacturing to remain on shore, costs the Treasury $14.4 billion per decade for these five companies. The foreign tax credit deduction saves the big three domestic oil companies $7.5 billion per decade. The “intangible drilling costs” deduction saved the five companies another $2 billion, according to the Wall Street Journal.
It also seems the oil and gas industry has been the largest beneficiary of federal financial support in the entire energy sector benefitting from nearly 60 percent of all federal energy support since 1950. Shouldn’t the lion’s share of these dollars be spent on new, alternative, renewable sources to make us less dependent on something as finite and as devastating to the environment as oil?
Big Oil will argue that these breaks are critical to job creation, but recent data from the Bureau of Labor Statistics shows oil industry employment is off 10 percent. This is not nearly as bleak as it sounds given that nearly half of the direct jobs touted by big oil are service station positions.
Simply put, it’s time to end special tax breaks for BP, Chevron, ConocoPhillips, ExxonMobil, and Shell.
Posted By Mark January 17, 2014
A true David and Goliath battle is under way between the nation’s family farmers and Big Oil in the form of the American Petroleum Institute (API). And farmers in recent weeks bounced a big rock off the head of the petroleum behemoth. At issue is American ethanol.
For months the oil industry has been involved in a well-funded campaign of both public and covert efforts to undermine the growing role of sustainable biofuel like ethanol. They capped this massive misinformation campaign by leaning on the White House and EPA to propose a change to the Renewable Fuels Standard (RFS) that would reduce ethanol use by 1.4 billion gallons this year.
The bad news is the most recent slap in the face, if successful, has the potential to hammer farmers and the rural economy to the tune of more than 10 billion dollars.
Before this recommendation can be accepted EPA’s proposal must go through a formal public comment period. Thousands of corn farmers across the country have responded with a vengeance submitting comments urging the U.S. Environmental Protection Agency to retract its proposed 10 percent cut in the amount of corn ethanol in the 2014 Renewable Fuel Standard.
The volume of supportive comments coming from farmers as well as equipment dealers, bankers, school administrators and consumers who favor a fuel choice has been incredible so thanks to everyone who has taken the time to register your opinion.
The response has been so terrific that it tweaked API and in response they have launched yet another effort to remove any competition from the fuel marketplace. It takes the form of an annoying and deceptive “robo-call.”
On the pre-recorded action request API refers to those supporting ethanol as both a “special interest group” and as “extremists.” Since most those making the calls are farmers, I guess that means you. They also use the same old hackneyed and debunked arguments saying ethanol leads to higher food prices and damages car engines.
If being called an extremist makes you a little angry fight back. If having one of the world’s most prosperous industries try to increase their profits at your expense….fight back.
Corn growers: Click here to send a public comment to the EPA.
Non-farmers: Click here to customize and send a public comment to the EPA.
I wish it was a real person calling rather than some digital dweeb called Tom, because I would tell him to quit bugging hard working Americans and get back to cleaning up the their latest oil spill.
Posted By Mark December 19, 2013
I am rapidly getting in the holiday spirit but before I get to relaxed and magnanimous I have to send one final love letter to my friends in the petroleum industry. So with thoughts of sugar plums dancing in my head here goes:
In doing my regular reading today I came across three separate stories that if looked at individually are disturbing. The first touts fracking as the main driver in a U.S. energy revolution.
“America is in the midst of a game-changing energy revolution. This potential has been unlocked by innovations in hydraulic fracturing and horizontal drilling that have made America the world’s top energy producer,” John Felmy, the American Petroleum Institute’s chief economist said. said.
No argument there but let’s drop the other shoe or pair of shoes if you will. I keep asking the same questions regarding fracking; at what cost? What are the environmental consequences of this intrusive, earth rending form of energy extraction? How long will the boom last?
More and more experts are saying enjoy our current respite of available energy because it won’t last. And now the US Coast Guard is looking into the possibility of allowing fracking waste to be barged along American rivers. Granted if they have to ship it this is likely the best way (or at least safest and most economical way), but isn’t it enough that international oil has slimed our oceans on a consistent basis for decades. Now they want to put these toxic substances on our rivers and risk our fresh water too?
Thus, the second article and issue; Every year petroleum finds itself wrapped up in a string of environmental misadventures, and many take place in remote locations and out of the glare of public scrutiny diminishing the attention but not the damage done. From pipeline spills in Arkansas to explosions in Qingdao, China petroleum is the gift that keeps on giving.
Sure they get fined, but amounts that amount to pocket change for Big Oil. On the rare occasion they really get their hand slapped, such as the with the Deep Water Horizon in the Gulf of Mexico, they put on a good show for the media and as time passes they fight in court to get those penalties reduced.
The third leg of this nauseating oil epic is the ongoing efforts by the Obama Administration (hey, it’s your Environmental Protection Agency so you better own it) proposal to hamstring the only economically viable and environmentally responsible alternative to oil….ethanol.
For 2014, the U.S. Environmental Protection Agency has proposed a 1.4 billion gallon reduction in how much corn ethanol will be required under the Renewable Fuel Standard, the federal law that helps get domestic, renewable, cleaner-burning corn ethanol blended in the nation’s fuel supply.
“It is unfortunate that the Obama administration has caved in to Big Oil rather than stand up for rural America and the environment,” said Iowa Secretary of Agriculture Bill Northey at a Protect the RFS rally on November 22, 2013. “The renewable fuels standard needs to be protected as it has helped hold down prices at the pump, created thousands of jobs in rural Iowa, and benefited the environment. The President should be focused on jobs and the economy rather than looking for ways to hurt rural America.” Read more here.
It’s still not too late to do something about this. So if you support renewable ethanol and want to put the environment back in EPA send a note. Oh, and Merry Christmas.
Posted By Mark December 11, 2013
What was the second biggest policy story of the year in eyes of the petroleum industry? According to a recent membership survey by the American Petroleum Institute reconsidering biofuel (ethanol) blending. What was the second biggest transportation, storage and refining story of the year? The battle over biofuels blending. And what was listed 2nd on oil’s list of things they most want to see happen in 2014? Yep, reduction in EPA blending requirements.
Most of the public are too focused on their jobs, raising families and just paying the bills to have a deep understanding of the growing role of biofuels and renewable ethanol in our nation. However, years of education by supporters of the domestic fuel have generated a basic awareness of ethanol’s benefits such as job creation, reducing greenhouse gas, and providing a fuel choice that makes us less reliant on imported petroleum.
Because of this hard fought and well deserved perception that ethanol is good, many of my friends have been asking me lately what the heck is going on with the rash of negative information related to ethanol. How did proven ethanol suddenly become a bad idea over night? Most recently, the Environmental Protection Agency’s proposal to reduce the amount of ethanol to be blended in our fuel supply has been getting a lot of media attention.
Put simply, the oil industry has always been ok with ethanol as long as the market share didn’t get too large. In fact they need a certain amount of ethanol because it allows them to provide a high octane product at less cost…meaning more margin for them. Without ethanol they would be forced to do more extensive and costly refining in order to produce a product that won’t leave your car sputtering curbside.
But in today’s market things have changed. Increasing domestic oil production, more fuel efficient vehicles and a soft economy have shrunk the volume of fuel needed. Thus big oil finds themselves looking at the bigger market slice on ethanol’s plate and thinks “hey we want some of that back.”
The unspoken part of the previous statement is “and yes we will pay nicely to get it.” And they have done so in recent years. Their most recent onslaught has been sustained by millions of dollars of lobbying, advertising and poor pseudo-journalism.
You might be inclined to think the family farmers and independent businessmen that make up the ethanol industry are just paranoid but given the aforementioned high priority petroleum has placed on this issue, “it ain’t paranoia if they’re really out to get ya.”
Posted By Mark November 22, 2013
They call it black gold and Texas Tea but I prefer to call it environmental anathema; that rare combination of disgrace and abomination. Better that than using the words that I would like to use that got my mouth washed out with soap as a child.
Ok, Thanksgiving is almost upon us so I want to purge a little bile so I will enjoy the day a little more. What better target than Big Oil?
You know, those heavily subsidized global scale polluters who control…I mean contribute to every politician to make sure they have their bases covered. Well after an announcement today, I guess we will see how well their “investment” pays off.
It seems gas and oil are almost singlehandedly responsible for the bulk of all the man-made global warming emissions since the dawn of the industrial revolution. Chevron, Exxon and BP are among the companies most responsible for climate change since dawn of industrial age, according to a new analysis.
The climate crisis of the 21st century has been caused largely by just 90 companies, which between them produced nearly two-thirds of the greenhouse gas emissions generated since the dawning of the industrial age, new research suggests.
I have always been a big fan of irony but this week takes the cake. It seemed bizarre that earlier this week EPA announced their proposal to significantly weaken the Renewable Fuel Standard, reducing the volume of renewable fuels like ethanol for 2014; thus making us even more dependent on oil.
Odd that an agency with “Environment” in their name would turn away from a program that has cut emissions of greenhouse gas by 110 million metric tons, making it one of the most successful programs in the EPA arsenal. This is the equivalent of taking more than 20 million vehicles off the road.
Now it will get even more interesting to see how this same administration that purports to be on a crusade to fight greenhouse gases will deal with Big Oil now that the emperor has no clothes.
Posted By Mark October 30, 2013
Ethanol isn’t poison and gasoline is. There….I have said it. It boggles my mind how much of the public buys into the oil industry propaganda related to ethanol, most notably some of the environmental community. Why someone who considers themselves an environmentalist would listen to big oil on energy topics and what is best for consumers leaves me perplexed. Even on a good day when gasoline isn’t $3 to $4 a gallon, it remains a really bad idea when it comes to our health and the environment.
Ethanol is ethanol. There are no additives and it is the same product chemically that some drink in the form of martinis and other cocktails. Drink ethanol and you just think you are better looking and funnier. Drink gasoline and you get dead. Gasoline has terrible environmental risk and repercussions and they are getting worse as we find new ways to dig, steam, and frack to get it out of the ground and the ocean bottom.
However, that is just the beginning of making commercial gasoline. Gasoline starts out as poison and it only gets better as dozens of chemicals can get mixed into the product. They get mixed in to make gas burn better during different seasons, to add octane, and even as a way for the oil industry to charge you for some byproducts of gasoline manufacturing that they otherwise would have to dispose of as toxic waste.
To this day one of my favorite news cartoons of all time showed the Exxon Valdez oil spill with petroleum covered wildlife effected by the disaster. The next panel showed an ethanol spill and featured google-eyed sea otters, dolphin and fish who apparently had been to happy hour.
I am a typical blogger. I have lots of opinions and I like words. But in this case I think I will show good judgement and just shut up and let the accompanying image tell the rest of the story. Take my word for it that many of these chemicals are even worse for your personal health and our future than they sound.