Aerospace engineer and author Robert Zubrin has been getting some media attention lately for his book, “Energy Victory,” in which he outlines a simple plan for “winning the war on terror by breaking free of oil.” Most recently, he was featured on a segment of the Business News Network, a popular nationwide TV show in Canada.
Zubrin believes the American public is getting tired of being beholden to foreign oil interests and he advocates Congress passed a law requiring that all new cars sold in the USA be flex-fueled.
Back on April 7, Michael Ramirez of Investor’s Business Daily won the Pulitzer Prize for Editorial Cartoons. Among the works in his portfolio was this:
Interestingly, the St. Louis Post-Dispatch ran this cartoon in today’s paper:
The similarities are striking. The logic is grievously flawed. There’s little to no connection between ethanol and food supply or prices. Read these reports for more information:
Here’s two pieces of advice for young filmmakers who want to make the ground-breaking documentary attacking a popular industry:
Make sure no relative has connections to the industry you target.
More important: Should a relative have such a connection, and you ignore the above advice, make sure this relative also isn’t a journalist.
Such is the problem now facing poor Curt Ellis, whose sister married the brother of a Marshall, Mo. newspaper columnist.
Marcia Gorrell writes poignantly about life on the farm for the Marshall, Mo., Democrat-News. And her brother’s wife’s brother not only called field corn “crap” because he was stupid enough to try and taste it like it was corn on the cob, but made a movie about it and is out pushing it. In her most recent column, she writes:
“It hurts — alot. It hurts because we take pride in what we do. We are proud of the fact that Americans pay less than of their take-home pay for food than any other country. We don’t think our food supply is “too cheap.” We work hard to make that happen.”
Gorrell goes on from here, and talks about how the mainstream media, many of whom have never worked a field in their lives, fell out of their chairs and on their knees with praise for “King Corn,” eating up every falsehood like it was buttered popcorn.
For a real writer with farmland roots, it was indeed painful for Gorrell to see. And I’m sure that at the next family gathering, it will come up (As it has in the past — she’s already sent Ellis a five-page letter critiquing the movie). But something tells me the more they promote their film, the more they will hear about it from farmers and family who know better.
Julius Schaaf, chair of the Iowa Corn Promotion Board (ICPB) says those who say corn prices at “record” highs should get the facts straight.
Schaaf says when you look at the price of corn in past years, there were times when corn got over three-dollars a bushel – and when plotted against the rate of inflation — that equates to over seven dollars a bushel. “So in real dollars, you can’t say that we’re setting record prices,” Schaaf says, “one thing you can say is that we’re setting record prices with oil, when you plot that (oil prices) against the inflation rate, we are setting records.” He says for example: in mid-1984, corn at the farm gate sold for $3.05 a bushel in Iowa, but it would take $6.27 in today’s dollars to equal that.
Schaaf also notes that transportation and packaging are really driving up the cost of the food.
Congrats to Iowa Corn and Radio Iowa for telling “the rest of the story.”
Texas oilman T. Boone Pickens, who once scoffed at ethanol, recently told the CNBC financial news network that he now supports increased production of the homegrown, renewable fuel. Pickens cited the $1 billion a day that America spends on imported oil.
The editorial writers appear to have been reading our blog. We’ll give them the final word:
In America, ethanol is currently produced chiefly from corn. Consequently, in their latest attack, naysayers have concocted a near-doomsday scenario in which increased demand for corn sends food prices sky high. Farmers all over the world would plow up forests to plant more acres, leading to an environmental disaster.
The critics’ mistake — aside from gross exaggeration — is that they are failing to look ahead.
One day AP Little was walking into her office when — KERPLUNK – a study proclaiming that corn ethanol will mean the end of the world fell on her desk.
“Oh my goodness!” said AP Little. “The sky is falling! I must go and tell the people.”
On her way to the news room, AP Little met Slimy Timey, who was going out into the street to hunt for stories.
“Oh no, don’t go!” said AP Little. “Here is the story. The sky is falling. Come with me and tell the people.”
So they both proceeded to get their stories out as fast as they could without checking the facts. On the way, they met Fretty Netty and Hoggy Bloggy, who were all too happy to join them.
As they were putting all their stories to bed, Foxy Woxy was busy dreaming up other new studies to create new crises to keep AP Little and all her friends happy telling people that the end of the world as we know it is just around the corner.
That’s the multi-million dollar question on the minds of lots of people right now – one that will be answered to some extent by the USDA’s first educated guess on Monday morning when the prospective plantings report is released.
Business Week did an article today about those who are eagerly anticipating the report – from livestock producers to the ethanol industry to market analysts.
Here are a couple of quotes from the article:
“Everybody is looking to see what that report is going to look like,” said Bob Dinneen, a spokesman for the Renewable Fuels Association. “Everybody is anxious, us included.”
Mindy Williamson, a spokeswoman for the Iowa Corn Growers Association, said the ethanol-fueled demand for corn has changed the dynamics.
“Before we weren’t in a demand-driven market,” she said. “Now, it’s all about demand and you have a choice about where we want to sell (corn) and who you want to sell it to. There are still other things beyond farmers’ control, like weather, but it’s a good time.”
Earlier, we provided a dissection of a column by Walter Williams. Another view on the matter is provided here, by Professor Bruce Dale of Michigan State University:
Mr. William’s piece is so full of mistakes that I will probably run out of space before I correct them all. First, all water is removed from ethanol before it is shipped. All cars sold in the U.S. for the last 20 plus years have been able to run just fine on 10% ethanol/90% gasoline. We are now producing hundreds of thousands of “flex-fuel” vehicles per year that can use either gasoline or mixtures of ethanol and gasoline up to 85% ethanol. With some management, ethanol can be shipped in existing pipelines. Very little U.S. corn (about 10%) is fed directly to people; most of it is fed to animals. About one third of the corn converted to ethanol remains behind as a high protein animal feed called distillers grains. Coal and natural gas energy equal to about 70% of the energy in ethanol is required to produce corn ethanol. For cellulosic ethanol (ethanol made from grasses, wood chips, crop wastes, etc.) no net coal or natural gas energy will be required to produce the ethanol. The ethanol blenders credit of $0.51 per gallon cost taxpayers about $3 billion last year, but it reduced crop price supports by about $6 billion and our oil import bill by another $15 billion. It is virtually certain that some of that $15 billion for oil would have gotten into the hands of those who hate America and her people.
As an economist, Mr. Williams ought to know that many factors contribute to rising grain prices: rising wealth and demand in China and India, drought in Australia, and increased ethanol demand all play a role. But that $3 box of corn flakes on our shelves contains about 5 cents worth of corn. Even if corn prices double, the price of grain has a small impact on food prices. Rising energy prices have a much greater impact. Eighty percent of the poorest people in the world are farmers or live in rural areas. Increased grain prices benefit these very poor people and give them more wealth with which to solve their problems. The African farmer especially needs the increased income and agricultural productivity that come with rising grain prices.
Mr. Williams does not like government intervention in markets. I happen to agree with him. Our greatest current market intervention is probably the $50 billion per year (minimum) in military expenditures to keep oil flowing from the Mideast. But we surely aren’t getting cheaper oil in return. Ethanol from corn and later the cellulosic ethanol that will come in much larger volumes will help end our oil addiction, give us cheaper and cleaner fuels and will also promote freer and more stable energy markets.
Recently when I was researching a project, a colleague pointed me in the direction of Set America Free, an organization dedicated to energy independence. Interestingly, the group has an eclectic list of members who run the political gamut.
Set America Free has done a good job of chronicling the impact of foreign oil, and its co-chair, Gal Luft, has spoken eloquently on the issue in numerous media outlets, such as public radio’s Marketplaceand the Miami Herald.
Luft writes, in part:
At current oil prices, this country sends overseas $460 billion per year to finance the daily buying of 12 million barrels of imported oil. This amount of money is about the size of our defense budget and three times the size of the ”economic stimulus” package recently passed by Congress. But the real economic impact of oil dependence is hidden to most Americans. Energy economist Milton Copulos calculated last year that the grand total of all external costs associated with foreign oil dependence — including the cost of oil-related defense expenditures, amortized cost of supply disruptions, and lost economic activity and tax revenues — stands at $825 billion per year.
… and concludes:
To make a car flex-fuel would cost an automaker an extra $100 — the cost of one barrel of oil. If it costs so little, why not make fuel flexibility a standard feature? Just like seat belts, air bags, FM radio and rear view mirrors?
Congressional leaders who promise to end our oil addiction and create competition in the transportation fuel market can do this in one stroke of the pen. It would be nice if the next time the president of Iran and Venezuela threatened to send oil to $200 a barrel, we all pour more alcohol into our tanks and remind them that oil is not the only thing that makes the world go around?
Click here for a more detailed look at the high cost of foreign oil.
An oil company executive this week whined that they are being unfairly attacked by the media.
Say what?!
According to a Reuters report, from the National Petrochemical and Refiners Association meeting in San Diego, Valero Energy Corp Chief Executive Bill Klesse “blasted U.S. policy makers, the U.S. Congress, the press and environmentalists for conducting a “serious attack” on the oil industry while ignoring problems associated with ethanol.”
“Where is the investigation into corn prices and farm prices and land speculation? Of course, that would not be politically acceptable,” Klesse said, noting oil companies routinely face scrutiny when fuel prices rise.
He went on to say that federal mandates to increase ethanol use along with tax credits for ethanol producers are making an uneven playing field.
“All of these programs are just a huge transfer of wealth from our industry to the Midwest farms,” Klesse said.
In the spirit of fighting fallacies with facts, the Renewable Fuels Association responded with a “fact check” to Klesse’s comments.
Fact Check: According to a report in BusinessWeek, the nation’s petroleum industry is spending millions of dollars, together with livestock and food processing interests, to tarnish the public image of ethanol. BusinessWeek’s David Kiley writes, “Efforts range from funding studies that bash the spread of ethanol for driving up the price of corn, and therefore some food, to not supporting E85 pumps at gas stations.”
Fact Check #2: According to Milton Copulos (The Hidden Cost of Oil) at the National Defense Council Foundation, America spends nearly $140 billion a year in military protection of the oil shipping channels out of the Middle East. The less than $4 billion spent in incentives to companies like Valero to blend ethanol pales in comparison. (“The Contribution of the Ethanol Industry to the Economy of the United States“)
Aerospace engineer and author Robert Zubrin has been getting some media attention lately for his book, “Energy Victory,” in which he outlines a simple plan for “winning the war on terror by breaking free of oil.” Most recently, he was featured on a segment of the Business News Network, a popular nationwide TV show in Canada.
Julius Schaaf, chair of the Iowa Corn Promotion Board (ICPB) says those who say corn prices at “record” highs should get the facts straight.
“Oh my goodness!” said AP Little. “The sky is falling! I must go and tell the people.”
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