One of the many mandates of the Energy Policy Act of 2005 calls for oil companies to increase the amount of ethanol mixed with gasoline. President Bush said, during his 2006 State of the Union address, "America is addicted to oil, which is often imported from unstable parts of the world." Let's look at some of the "wonders" of ethanol as a replacement for gasoline.

Ethanol contains water that distillation cannot remove. As such, it can cause major damage to automobile engines not specifically designed to burn ethanol. The water content of ethanol also risks pipeline corrosion and thus must be shipped by truck, rail car or barge. These shipping methods are far more expensive than pipelines.

Ethanol is 20 to 30 percent less efficient than gasoline, making it more expensive per highway mile. It takes 450 pounds of corn to produce the ethanol to fill one SUV tank. That's enough corn to feed one person for a year. Plus, it takes more than one gallon of fossil fuel -- oil and natural gas -- to produce one gallon of ethanol. After all, corn must be grown, fertilized, harvested and trucked to ethanol producers -- all of which are fuel-using activities. And, it takes 1,700 gallons of water to produce one gallon of ethanol. On top of all this, if our total annual corn output were put to ethanol production, it would reduce gasoline consumption by 10 or 12 percent.

Ethanol is so costly that it wouldn't make it in a free market. That's why Congress has enacted major ethanol subsidies, about $1.05 to $1.38 a gallon, which is no less than a tax on consumers. In fact, there's a double tax -- one in the form of ethanol subsidies and another in the form of handouts to corn farmers to the tune of $9.5 billion in 2005 alone.

There's something else wrong with this picture. If Congress and President Bush say we need less reliance on oil and greater use of renewable fuels, then why would Congress impose a stiff tariff, 54 cents a gallon, on ethanol from Brazil? Brazilian ethanol, by the way, is produced from sugar cane and is far more energy efficient, cleaner and cheaper to produce.

Ethanol production has driven up the prices of corn-fed livestock, such as beef, chicken and dairy products, and products made from corn, such as cereals. As a result of higher demand for corn, other grain prices, such as soybean and wheat, have risen dramatically. The fact that the U.S. is the world's largest grain producer and exporter means that the ethanol-induced higher grain prices will have a worldwide impact on food prices.

It's easy to understand how the public, looking for cheaper gasoline, can be taken in by the call for increased ethanol usage. But politicians, corn farmers and ethanol producers know they are running a cruel hoax on the American consumer. They are in it for the money. The top leader in the ethanol hoax is Archer Daniels Midland (ADM), the country's largest producer of ethanol. Ethanol producers and the farm lobby have pressured farm state congressmen into believing that it would be political suicide if they didn't support subsidized ethanol production. That's the stick. Campaign contributions play the role of the carrot.

The ethanol hoax is a good example of a problem economists refer to as narrow, well-defined benefits versus widely dispersed costs. It pays the ethanol lobby to organize and collect money to grease the palms of politicians willing to do their bidding because there's a large benefit for them -- higher wages and profits. The millions of gasoline consumers, who fund the benefits through higher fuel and food prices, as well as taxes, are relatively uninformed and have little clout. After all, who do you think a politician will invite into his congressional or White House office to have a heart-to-heart -- you or an Archer Daniels Midlands executive?

March 2, 79 members of the House of Representatives introduced a bill instituting criminal and civil penalties on any corporation or individual found guilty of gasoline "price gouging." But the real gouger driving up gasoline prices is not the private sector, it is our government.

To "gouge" means to extort, to take by force--something that oil companies and gas stations have no power to do. Unlike a government, which can forcibly take away its citizens' money and dictate their behavior, an oil company can only make us an offer to buy its products, which we are free to reject.

Because sellers must gain the voluntary consent of buyers, and because the market allows freedom of competition, oil and gasoline prices are set, not by the whim of companies, but by economic factors such as supply and demand. If oil companies could set prices at will, surely they would have charged higher prices in the 1990s, when gasoline was under one dollar a gallon!

Because oil companies and gas stations cannot set their prices arbitrarily, they must make their profits by earning them--by efficiently producing something that we value and are eager to buy. In so doing, they assume great risks and expend enormous effort. Over the decades, oil companies have created a huge infrastructure to produce and distribute gasoline by investing hundreds of billions of dollars in prospecting, drilling, transporting, stocking and refining oil.

In the absence of political factors like the 1973 OPEC oil embargo or the Gulf Wars, the net effect of oil companies' pursuit of profit has been to drive the price of oil and gasoline, not up, but down. The price of a gallon of gasoline (in 2006 dollars) fell from $3 in the early 1920's to $2.50 in the 1940's to $2 in the 1960's to under $1.50 in the 1990's. This downward trend is all the more impressive because it required the discovery and exploration of previously inaccessible sources of oil and because it persisted despite massive taxation and increased government regulation of the oil industry.

When we see the price of gasoline today, we should not accuse oil companies of gouging, but rather thank them that prices are not much higher.

The true culprit that we should condemn for driving up prices is the government, which has engaged--with popular support--in the gouging of both the producers and consumers of gasoline.

Federal and state governments have long viewed gasoline taxes as a cash cow. In 2003, for instance, when the average retail price for a gallon of gasoline was $1.56, federal and state taxes averaged about $0.40 a gallon--which amounts to a far higher tax rate, 34 percent, than we pay for almost any other product. (Contrary to popular belief, gasoline taxes do not just pay for the roads we drive on; less than 60% of the gas-tax-funded "Highway Trust Fund" goes toward highways.)

Along with high taxes, environmental regulations--justified in the name of protecting nature from human activity--have dramatically increased the production costs, and thus the price, of oil and gasoline.

The government, for example, has closed huge areas to oil drilling, including the uninhabited wilderness of ANWR and the out-of-sight waters over the Atlantic and Pacific continental shelves. This of course significantly reduces the domestic supply of oil.

The government has also passed onerous environmental regulations that make it uneconomical for many old refineries to keep producing (50 out of 194 refineries were shut down from 1990 to 2004) and discourage new refineries from being built (no major refinery has been built in the last 30 years).

Regulations such as these push the surviving refineries to operate at almost full capacity, creating a situation where any significant reduction in the production of some refineries (e.g., from a hurricane) cannot be compensated by increased production in others. Exorbitant spikes in prices, which many attribute to oil companies' "gouging," are actually caused by government constraints.

If we want to stop the irrational forces that have been driving up the price of gasoline and our cost of living, we must demand that our elected officials eliminate the regulations and excessive taxes that restrict the producers of oil and gas. It's past time to stop gouging oil companies--and ourselves.

**** corn ethanol! 1 gallon of fuel to produce 1 1/2? yeah, that's a good method. if only the sugar lobby was as strong as the corn lobby

Not spin, its a fact. Unlike the agenda driven nonsense on green energy news you site.

Also, it matters not how much water vapor (by the way, a greenhouse gas the comprises 97% of all greenhouse gas, CO2 is only 2%) the corn field puts into the atmosphere, you still have to use that much water to grow the corn and distill it into ethanol.

My reference is to the amount of water used in the process, not how much of it is reclaimed, which also has a cost. Crop run off creates far more environmental damage than fossil fuels. It poisons ground water, kills fish and other wildlife (Salton Sea as an example of this).

My main point is the special interests and knee jerk me too ideas are costing us all money. Money that would be in our pockets. This is the unintended consequence of politicians jumping on a popular bandwagon or being in the pockets of special interest groups like the farm lobby or environmental lobby. With every action in the universe there is a reaction and far too often no one bothers to think things all the way through and see how "A" has an effect on "B" which has an effect on "C, D, E" which in turn has an effect on "G,H, I, J" et al.

I want solutions as much as the next man or woman. But I want real solutions with long term viability that does not line the pockets of special interest or some politician. I want solutions that in the end do not do more harm than good. Is it too much to ask for our government and our people to THINK rather than react to emotions? We are not on a race track going 220 mph with a need to make millisecond decisions about our course of action. If you have ever watched a race, often those snap decisions result in a wreck, which is what ethanol is.

One last point about this issue. The cost of grain has skyrocketed which has an effect on the poorest people everywhere. Should we starve them to death because we want ethanol for our 2.5 cars per household?

Well there are alternatives to corn-based ethanol which are being developed, such as biogas made from sugar cane and switchgrass.

This gas smells like gasoline and has a higher octane that gasoline.

It will take time for these to be developed into a low-cost source, but I think, in time, it will happen.

Until then, there is corn-based ethanol, which might not be the best solution, but it's the only one we have right now.

Repeat

My main point is the special interests and knee jerk me too ideas are costing us all money. Money that would be in our pockets. This is the unintended consequence of politicians jumping on a popular bandwagon or being in the pockets of special interest groups like the farm lobby or environmental lobby. With every action in the universe there is a reaction and far too often no one bothers to think things all the way through and see how "A" has an effect on "B" which has an effect on "C, D, E" which in turn has an effect on "G,H, I, J" et al.

It is not a solution mnhiker. I wish it were. I really do. It sounds like one until you dig into it. It costs way too much, even from sugar beets and switch grass. We can not grow enough organic material if we covered the entire earth surface with it to even cut or dependence on foreign oil or the gasoline we import.

The entire debacle is nothing less than another tax on us. Who do you think is paying all these subsidies? I for one get so darn frustrated that people vote for and support so many of these half thought out ideas. The "The government will/should pay for that" attitude is ignorant. Who the hell do people think the government is? Where do they think the money comes from?

Do they really think our government, with all of its layers of bureaucrats and workers that can not be fired even if they do nothing all day at work and they know it so they do little is an efficient way to get things done? If we really want things like this we would all be better off if we just paid the cost directly and kept the government out of it. The money is coming out of our pockets anyway, it just comes out of your paycheck rather than your bank account. April 23rd? I have to work until April 23rd this year just to pay my taxes? Am I the only one in the country that can do the math and see it's 1/3 of my wages? (Hmmm, I think I see a new topic in this)

As an side point here, Mexico, Canada and Venezuela are the number 1,2 & 3 countries we import from. All the middle east countries combined amount to less than 10% of our imported oil.

Lastly I am more than happy to have a discussion/debate about energy and solutions, but lets not hi-jack this thread with it. Start one and post a link here, I will follow.

What is your solution for an alternative to fossil-fuel gasoline which we have to import and which costs us dearly?

More hybrid cars? They still need gas as one of their fuel components.

my solution would be to turn much of new orleans into a sugar production state for sugar ethonal.

also, a prius is more harmful than many large suv's

The people of New Orleans might differ.

I'm curious now.

How is a Prius more harmful than large SUVs?

dumb place to live



"After all the numbers had been crunched, among vehicles sold in the U.S. in the 2005 calendar year, CNW found the least expensive vehicle to be the Scion xB at 48 cents per mile in overall energy costs. The most energy-expensive vehicle was the Maybach at $11.58 per mile in energy costs over its estimated lifetime. The VW Phaeton, Rolls-Royce line, and Bentley line followed closely behind. In all of these instances, these are overall energy costs incurred from inception through disposal, not energy costs associated only with vehicle ownership.


To compare, the Toyota Prius involves $3.25 per mile in energy costs over its lifetime, according to CNW, while several full-size SUVs scored lower. A Dodge Viper involves only $2.18 in energy per mile over its lifetime. The Range Rover Sport costs $2.42, and the Cadillac Escalade costs $2.75."

http://www.khou.com/topstories/stories/khou070627_ac_hummervsprius.1ce5897b.html

and really that link tries to disprove that a yaris is more harmful than a h2

ha, just now realized i meant to say prius.

see, for at least a year now people have been saying that the prius is more harmful than an h2. on another forum, the link i posted was brought up as a way to disprove that. as far as i can see, it hardly does that. while it may show that a h2 is more harmful, especially now, the link itself shows that many similar suvs are less harmful. if someone really cared about the planet, they wouldn't buy a hybrid. in this present point in time, they're not practical. the best vehicle to get is a small gas powered econo car. i would say a small diesel, but we don't have many of those on our shores

More on the havoc created by this insane idea.

http://www.justsayhi.com/topic/show/99938?page=1

so jura which canidate do you like so far ?

I'm getting sick to death of Hillary's whining.

Her rich pals have been threatening the DNC over superdelegates:

http://www.nydailynews.com/news/politics/2008/03/27/2008-03-27_hillary_clintons_wealthy_pals_warn_nancy.html

She will arm-twist everyone up to the convention and try to hijack the nomination if she can, despite what voters want.

Then, if she gets the nomination, she will be running against John McCain.

What could happen then is that all of the skeletons will fall out of her and Bill's closets and crush her only and final chance for the Presidency because the Democrats will finally realize they have just been had.

Then McCain wins. Meaning 4 more years of Bush Jr. by proxy.

people better start waking up . and not pick mccain or obama
or **** will stay the same....

as long as you vote for somebody

and you can write in patsfan if you wish

but hey if ya win it may come to being called a cheater supporter

What are the other choices?

Ralph Nadar or Ron Paul?

If the past is any indication, a third-party candidate doesn't have much chance of getting elected.

Like Ross Perot and Nader in past elections.

If you don't want to vote for Obama or McCain, that, of course, is your choice.

But accept the fact that if you do this you could be helping elect the person you least want to become President.