CORN SHOULD BE FOR EATING, NOT FOR DRIVING!

CARE FAVORITE PAUL DRIESSEN TELLS YOU WHY

The folly of E15 anti-hydrocarbon policies

EPA’s E-15 ethanol plan is bad for our pocketbooks, environment and energy policy

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.

SPECULATION GOOD FOR THE ECONOMY?

READ CARE FAVORITE DENNIS T. AVERY FOR HIS TAKE

IS IT OIL SPECULATORS?

BY DENNIS T. AVERY

Churchville, VA—President Obama stood in the Rose Garden and pledged to prosecute “oil speculators.” Bill O’Reilly goes on TV night after night and blames “speculators” for gas pump prices, while guest after guest tell him he’s wrong. My wife asks, “What’s an oil speculator?”

Most of the speculators are common folk who buy futures contracts for oil to be delivered at some later date. The speculators actually have a lot in common with the rest of us who buy and sell stock when the price and product are attractive. If you want to play, go on line and find a futures broker. You’ll have to buy in big units—1000 barrels per contract—but you pay only about 10 percent of that value up front. Thus you have a lot of leverage. A small price change could yield a lot of profit. Know, however, that your position will be “marked to market” thru the life of the contract, so be prepared for “margin calls” demanding more of your cash if the market moves against you.

If the buying price is $90 per barrel, you’ll be hoping it goes to $92 or $95. If the price drops instead, you’ll think seriously about selling out before you lose more of your money.

Believe it or not, your speculation is good for the economy. You’ve assumed some of the inherent price risk in owning oil during volatile times. You’ve bought that risk from the oil producer or refiner, who just wants to process the stuff for his normal margin without risking huge losses on the value of the commodity itself. You take on that risk, using “spare” cash, hoping to win.

Right now, your fellow oil speculators are betting the price will rise because of President Obama. He’s shut down every oil production facility in America where he can deny a permit. He made it very clear during his election campaign that he wants oil prices to rise so we’ll use less. We know he is dragging his feet on the pipe line and all new oil drilling opportunities. He’s also just unleashed the EPA to suppress the coal burning that provides half of our electricity, thereby ensuring that other fuel prices will rise.

I spent eight years as a federal regulator with the U.S. Commodity Futures Trading Commission, which oversees oil (and other commodity) speculators. What keeps the futures markets honest is the threat of delivery. If you still hold your oil futures contract at the delivery date, you suddenly get physical possession of 42,000 gallons of oil! You’d better have a very big storage tank, or you’ll have to sell the oil back to the industry at whatever price you can get. Mostly, speculators settle their contracts before they incur the big expense of taking delivery.

But not always. The oil-rich Hunt Brothers decided in 1977 that soybeans would be in short supply, and they bought (with other family members) 22 million bushels of soybeans for fall delivery. As it happened, the South American soybean crops were bigger than expected, and the price of soybeans went down instead. The Hunts took delivery on 600,000 tons of soybeans, delivered in Toledo as the St. Lawrence Seaway was freezing for the winter! They had to pay massive storage charges and then sell the beans at a loss in the spring.

In another famous attempt to corner the silver futures market, the Hunts lost a reported $1.5 billion. They bet they could control the silver market by buying huge amounts of futures contracts, hoping industrial demand for silver in computers and photo film would drive up the price. In a counter-move, the sellers bought huge amounts of silver jewelry from village women in India, had it refined, and dumped it at the Hunt’s feet—within a few weeks.

The President’s energy policies are still tied to the environmental movement’s belief that humans have to give up most of our current energy, live in high-rises so we can walk to work, or alternatively live on a farm and plough our land with horses.

I wrote after Obama came into office that “Only a fool would try to limit greenhouse emissions during a recession and while global temperatures are falling. But the grand green dream of a small human population living sparsely is dying hard.

Dennis T. Avery, a senior fellow for the Hudson Institute in Washington, D.C., is an environmental economist. He was formerly a senior analyst for the Department of State. He is co-author, with S. Fred Singer, of Unstoppable Global Warming Every 1500 Years. Readers may write to him at PO Box 202 Churchville, VA 2442; email to cgfi@hughes.net. Visit our website at www. cgfi.org

Want a "green" job?

You might want to rethink your focus.

Read what Malcolm Kline says about where the jobs are

Unsustainable Green Jobs

Malcolm A. Kline, April 4, 2012

Apparently even college campuses aren’t providing green jobs anymore. A survey by the Association for the Advancement of Sustainability in Higher Education (Aashe) “showed that creation of new sustainability positions peaked in 2008, then dropped 31 percent in 2009,” Dave Newport reported in The Chronicle of Higher Education on April 6, 2012.

Newport directs the Environmental Center at the University of Colorado at Boulder. That actually might be a better record than the Obama Administration has amassed in its much-touted—at least by administration officials—green jobs program.

The Department of Labor, Employment and Training Administration (ETA) found that “ETA and grantees have reported achieving limited performance targets for serving and placing workers.”

“Grantees have reported serving 52,762 (42 percent) of the targeted 124,893 participants with 61 percent of training grant periods having elapsed and have reported placing 8,035 participants (10 percent) into employment out of the target of 79,854 participants. The rates at which grantees are achieving their performance goals have been increasing. However, with 61 percent of the training grant periods elapsed and only 10 percent of participants entered employment, there is no evidence that grantees will effectively use the funds and deliver targeted employment outcomes by the end of the grant periods.”

As you might expect, hope and change has a longer shelf life on campus, despite mounting evidence that it might be misplaced. Newport notes that “Aashe has tracked remarkable growth in campus-sustainability programs—the group’s membership has gone from a handful of campuses in 2006 to about 1,000 today. The American College & University Presidents’ Climate Commitment, a landmark carbon-neutrality effort, has committed almost 700 college presidents to zeroing out greenhouse-gas emissions and increasing climate-literacy efforts.”

They might consider increasing “climate-literacy efforts” by looking at the failures of environmentalism at home and abroad. “The British government, although not yet ready to say so, has finally rejected the bogus economics of climate change or, more likely, it always knew the figures didn’t add up but is now desperate for the internationally competitive cheap energy needed to keep our industrial base from wholesale emigration,” Dominic Lawson wrote in The Sunday Times on April 1, 2012.

“The lack of warming for more than a decade—indeed, the smaller-than-predicted warming over the 22 years since the U.N.’s Intergovernmental Panel on Climate Change (IPCC) began issuing projections—suggests that computer models have greatly exaggerated how much warming additional CO2 can cause,”16 scientists noted in a letter which appeared in The Wall Street Journal. “Faced with this embarrassment, those promoting alarm have shifted their drumbeat from warming to weather extremes, to enable anything unusual that happens in our chaotic climate to be ascribed to CO2.”

Campus environmentalists may have another option: Thought control. “Resistance at individual and societal levels must be recognized before real action can be taken to effectively address threats facing the planet from human-caused contributions to climate change,” the University of Oregon states. “That’s the message to this week’s Planet Under Pressure Conference by a group of speakers led by Kari Marie Norgaard, professor of sociology and environmental studies at the University of Oregon.”

Well, at least she has a green job.

Malcolm A. Kline is the Executive Director of Accuracy in Academia.

If you would like to comment on this article, e-mail mal.kline@academia.org.

Why are environmentalists so concentrated on attacking fracking?

Probably because it does not fit their "agenda"

Read CARE favorite Paul Driessen's explanation for the real facts and more information

Fracking: An existential threat to green dogma

Misleading claims about shale gas development serve dogma but not the public interest

Paul Driessen

The Sierra Club and other environmental pressure groups are redoubling their efforts to “stop fracking in its tracks.” No wonder. The technology is an existential threat to fundamental “green” dogmas.

Horizontal drilling and hydraulic fracturing is a true “game changer.” In less than two years, this proven but still rapidly advancing technology has obliterated longstanding claims that we are running out of petroleum. Instead, the USA now finds itself blessed with centuries of oil and gas.

Thankfully, much of it is on state and private lands, which cannot easily be locked up by federal diktat.

Poland and Estonia are using it, China has invited companies to the Middle Kingdom, Britain, Israel and Jordan are evaluating their shale deposits, and other nations are following suit – coaxing oil and natural gas from shale and other rock formations that previously had refused to yield their hydrocarbon riches.

By making more natural gas available, fracking has reduced the US price for this clean-burning fuel to under $3 per thousand cubic feet (or million Btu), compared to a peak of $8 a few years ago.

Natural gas is also supplanting coal for electricity generation. Due to excessive, mostly unnecessary new Environmental Protection Agency regulations, many US coal-fired power plants are shutting down. Replacement plants are far more likely to be gas-powered than nuclear, especially in the near term.

Natural gas makes heating and electricity more affordable for families, hospitals, government buildings and businesses; feed stocks less expensive for makers of plastics, paints, fabrics and other petrochemical products; and the prospect of natural gas-power vehicles more enticing, without mandates or subsidies. That translates into thousands of jobs created or saved.

Companies are keeping chemical plants open that were slated to close, due to soaring prices for oil that they now can readily replace with cheap natural gas. Shell plans to build a $2-biillion ethane “cracking” plant near Pittsburgh – creating 10,000 construction jobs and 10,000 permanent jobs – thanks to abundant gas from Marcellus Shale. Louisiana, North Dakota, Pennsylvania, Texas and other states are reporting subsidy-free employment and revenue gains from shale gas development. More are likely to follow, as companies seek new ways to capitalize on access to abundant, inexpensive, reliable gas.

Natural gas also provides essential backup power for wind turbines. Without such backup, electricity generation from these projects would plummet to zero 70-80% of the time, affecting assembly lines, computers, televisions, air conditioners and other electrical equipment dozens of times every day.

Even harder for environmentalists to accept, cheap natural gas also makes it harder to justify building redundant wind turbines that require large subsidies to generate far more expensive electricity only 5-8 hours a day, on average, while killing large numbers of raptors, migratory birds and bats. It makes more sense to simply build the gas turbines, and forget about the mostly useless wind turbines.

Fracking is also unlocking oil in the vast Bakken Shale formations beneath Montana, North Dakota and Saskatchewan. Oil production there has shot from 3,000 barrels a day in 2006 to nearly 500,000 today – creating thousands of jobs … and a growing need for the Keystone XL pipeline to Texas.

In response, eco-activists are spreading unfounded fears about this proven technology. Using words like “reckless,” “dangerous” and “poisonous,” they say unregulated fracking companies are operating with little concern for ecological values and causing cancer, earthquakes and groundwater contamination.

The claims have fanned borderline hysteria in some quarters and prompted Maryland, New York and other states to launch drawn-out studies or impose moratoria that will postpone drilling and the benefits it would bring. Facts are sorely needed.

Drilling and fracking have been carefully and effectively regulated by states for decades. As studies by the University of Texas and various state agencies have documented, there has never been a confirmed case of groundwater contamination due to fracking. Even EPA Administrator Lisa Jackson acknowledged that to a congressional panel.

These analysts, drilling companies and even an Environmental Defense expert now say fracking has not played a role in any of the rare cases where methane has gotten into drinking water.

Instead, the cause has generally been a failure of “well integrity” – the result of improper cementing between the well borehole and the steel “casing” and pipes that go down through aquifers and thousands of feet deeper into gas-laden shale formations. Similar failures occur in water wells drilled through rock formations containing methane (natural gas).

The solution is straightforward: better standards and procedures for cementing vertical pipes in place, and testing them initially and periodically to ensure there are no leaks.

Similarly, fracking fluids fail to match the “toxic” and “cancerous” opprobrium alleged by anti-drilling campaigns. Over 99.5% of the fluids is water and sand. The other 0.5% is chemicals to keep sand particles suspended in the liquid, fight bacterial growth and improve gas production.

Although industrial chemicals were once used, almost all of today’s are vegetable oil and chemicals used in cheese, beer, canned fish, dairy desserts, shampoo, and other food and cosmetic products.

As to “earthquakes,” barely detectable “tremors” have occasionally been measured near fracking operations and wastewater disposal injection wells. However, calling these snap, crackle and pop noises and movements “earthquakes” is akin to screaming “Earthquake!” when a cement truck goes by.

Despite these facts, EPA is nevertheless trying to invent problems and inject itself into already vigilant and responsive state regulatory efforts. The agency has conducted a roundly criticized study in Wyoming and is conducting water tests in Pennsylvania, where state officials view its activities as unnecessary meddling.

Additional over-reach and over-regulation would be hugely detrimental to US and global well-being. Fracking could help create numerous jobs and provide a far more secure, affordable, dependable and lower-pollution future than would ever be possible with wind or solar power.

By expanding oil and gas development, it could make North America the world’s new energy hub. Middle East sheiks, mullahs and OPEC ministers would lose economic, political and strategic power. Threats of Russian pipeline closures would no longer intimidate Eastern European countries. Politicians everywhere would waste less money on “renewable” energy T-Boonedoggles.

Unfortunately, though, fear campaigns are preventing some of America’s poorest counties and families from enjoying the economic benefits of Marcellus Shale development.

Baltimore’s Sage Policy Group calculated that fracking in western Maryland could reduce energy costs, create thousands of jobs, and generate millions of dollars annually in revenue for the state and Allegany and Garrett Counties. Similar studies in New York and elsewhere have reached similar conclusions.

Hydraulic fracturing technologies are proven. Regulations to protect drinking water are in place and improving steadily, as cementing and other legitimate concerns are recognized and addressed.

North Dakota, Pennsylvania, Texas, Poland and Israel are showing the way forward.

Communities that have not yet opened their doors to responsible drilling, fracking and production need to replace anti-hydrocarbon agendas and fears with facts, optimism and science-based regulations.

_______________

Paul Driessen is senior policy advisor for the Committee For A Constructive Tomorrow and Congress of Racial Equality, and author of Eco-Imperialism: Green power - Black death.

Read about the "fiction" in Obama's recent Energy Speech

Rust points out the "disastrous" results if the president's plans are put into effect

President Obama’s University of Miami Energy Speech---

A Prescription For Disaster

James H. Rust

President Obama’s Energy Speech at the University of Miami February 23 added more details to his energy thoughts as given by his State Of The Union Speech and 2013 Fiscal Year budget submitted to Congress. An advance copy of President Obama's Miami Energy Speech posted by Steve Milloy's Junkscience is given by the following url: http://junkscience.com/2012/02/23/obamas-miami-energy-speech/

These ideas are based upon curtailing use of fossil fuels, in particular coal, due to fears carbon dioxide produced from combustion causes catastrophic global warming. This motivation will guide future energy policies for the next four years. Policies implemented and policies ignored lead to a dismal economic future for the United States.

The United States has the most abundant fossil fuel reserves in the world, the greatest agriculture system, and the most innovative population, which should lead to prosperity for centuries. A few remarks about current energy policies follow:

President Obama decried high gasoline prices and said his opponents will shout the 30-year old solution—"drill, drill, drill"—that has not worked. He said: “Anyone who tells you we can drill our way out of this problem doesn’t know what they are talking about…The U. S. consumes more than a fifth of the world’s oil. But we only have 2% of the world’s oil reserves.” President Obama could not be more wrong.

Our annual consumption of oil is about 7 billion barrels. Reserves in Alaska exceed 35 billion barrels of oil, reserves offshore 29 billion barrels, and oil shale reserves in Texas, Wyoming, Montana, and North Dakota exceed 1 trillion barrels. Another trillion barrels of oil are in Canada’s Alberta province adjacent to Montana. TransCanada’s proposed Keystone XL pipeline, for which President Obama refuses to allow construction, is to transport 700,000 barrels per day of Alberta’s oil to Texas. Individuals with President Obama's thinking have stalled developing the more than 10 billion barrels of oil in the 2000-acre portion of the 19 million-acre Alaskan National Wildlife Refuge for more than 30 years.

President Obama mentioned the United States produced more oil in 2011 than in the past eight years. This is true due to recent increased oil production on state and private lands in North Dakota, and natural gas wells in Texas, Ohio, and Pennsylvania. This is in spite of millions of acres of Western land being declared out of bounds for exploration by the Department of Interior, delays in permitting exploratory drilling in Alaska, and delays in off shore drilling on the East Coast and the Gulf of Mexico. Has Shell Oil Company been given permits to do exploratory drilling off Alaska that it has been seeking for years? The year 2011 had a few glimpses of economic brightness due to increased private sector oil and natural gas production, in spite of Obama Administration policies.

President Obama made a big issue of an agreement with Mexico to open 1.5 million acres (2350 square miles) of the Gulf of Mexico for exploration that could yield 172 million barrels of oil and 304 billion cubic feet of natural gas. These numbers may appear large; but they only amount to 9 days consumption of oil and 5 days consumption of natural gas by the United States. This amount of oil that would take decades for delivery to the United States what could be delivered in 250 days by the Keystone XL pipeline. Just one of the new 1100 Megawatt nuclear power plants being constructed near Augusta, GA, could save this amount of natural gas in 3.7 years.

President Obama said the country needs to exploit “every available source of American energy—oil, gas, wind, solar, nuclear, biofuels, and more.” He complains “four billion of your tax dollars subsidizes the oil industry every year.” At the same time, we need “to double-down on a clean energy industry that’s never been more promising.”

Wind, solar, and nuclear provide electricity, and we use very little oil in producing electricity. Thus, these sources provide no immediate relief from oil consumption. For years solar and wind has been provided subsidies of grants or government-guaranteed loans for plant construction, requirements for utilities to buy back electricity from these plants at costs way above conventional electricity costs (feed-in-tariffs), and mandates (renewable portfolio standards--RPS)to use their electricity regardless of cost. California has one of the most stringent mandates in the nation with an RPS of 20 percent renewable electricity by December 31, 2013 and 33 percent by 2020. As of May 2011, the all-sector cost of electricity in California was 13.38 cents per kilowatt-hour—36 percent higher than the national average of 9.87 cents. A string of bankruptcies from solar energy plants show solar energy is not economical—winners are bankruptcy lawyers and losers are taxpayers and electricity-rate payers.

Biofuels consist mostly of ethanol produced from corn. In 2011, five billion bushels of corn was converted to twelve billion gallons of ethanol, which caused the wholesale price of corn to rise to $7 per bushel against $2.50 a few years earlier. Much research shows it requires more energy to make ethanol than is contained in the product. The situation will get worse in the future due to mandates from the 2007 Energy Independence and Security Act to use 35 billion gallons of ethanol as fuel by 2022. Wikipedia states a 2010 study by the U. S. Congressional Budget Office found the cost to taxpayers to replace one gallon of gasoline with ethanol was $1.78. The whole country suffers because of food price inflation due to this program. Some policy experts speculated increased worldwide corn prices might have been a primary cause of Arab Spring uprisings that started in January 2011 due to starvation-level food prices. Let U.S. farmers export the five billion bushels or more of corn wasted on ethanol production, or its equivalent, to alleviate world hunger.

One of the “more” clean energy forms referred to by President Obama is battery-powered cars. Presently electric car purchasers are given $7500 by the federal and various other amounts by state governments to stimulate sales. In order to stimulate more sales from the dismal 16,000 in 2011, President Obama is proposing raising the “gift” to $10,000 in 2013. Because electric cars cost from $35,000 to over $100,000, these subsidies are clearly for the highest-income people in the country. It is easy to show electric cars provide no energy savings because their energy use must be traced back to power plants from which electricity to charge batteries originated. These cars are compacts and their equivalent energy consumption is the order of 30 mpg versus 40 mpg from cars they compete against. About $5 billion has been given as subsidies to manufactures, buyers, and placement of charging stations in homes and elsewhere.

President Obama only mentioned nuclear power once in his speech; but it has promise for extending our fossil fuels hundreds of years in the future. Just one of the two 1100 Megawatt nuclear power plants under construction near Augusta, Georgia could save the consumption of 230 million tons of coal or 5 trillion cubic feet of natural gas during its 60-year lifetime. These numbers represent 23 percent current consumption of coal or natural gas in the United States.

The public may not be aware; but since 1983 all electricity produced by nuclear power paid a fee of 0.1 cents per kilowatt-hour to the federal government for future storage of nuclear waste. The annual fee today is $800 million and cumulative payments the past 28 years have to exceed $16 billion. Back in the 1980s a multi-year search was made all over the United States to find the best location to store nuclear wastes. After much study, it was decided the Nevada Yucca Mountain location was best and construction started to prepare the site. After $13 billion was spent on the project, President Obama decided to stop construction and revisit site selection. After all the work and money spent on Yucca Mountain, it seems inconceivable a better site could be found.

Only a few percent of materials in nuclear power plant spent fuel elements is considered waste. This is a small volume compared to fuel element volume. The majority of materials is uranium and plutonium that can be used as fuel for future power plants. These materials are reclaimed by a process called nuclear fuel reprocessing. To date the United States has not built a facility to reprocess fuel elements from our commercial nuclear power plants. As a result of this policy, spent fuel elements are stored on site at nuclear power plants for times exceeding forty years. One of the lessons learned from the Fukushima Dai-ichi nuclear power plant accident is the presence of spent fuel elements creates problems. It seems prudent for the United States government to reprocess nuclear fuels to remove spent fuels elements from plant sites. This dramatically reduces nuclear-waste volume and allows a site like Yucca Mountain to permanently store materials for thousands of years. Building these facilities will create jobs. Taxpayers should not to pay for this project—use fees paid by customers of nuclear power generation.

President Obama’s energy speech was long on words and solved no problems. He suggested expanding subsidies for renewable energy that are a total waste. Solar and wind power plants have lifetimes of 20 to 25 years. After this time, there is nothing left to show for money spent. Biofuels are not needed at this time because of our vast fossil fuel reserves. Some projects to conserve oil can be achieved at no cost to taxpayers. Eliminate use of heating oil by extending natural gas pipelines to areas where heating oil is used. Due to heating oil costing 6 or 7 times more than natural gas, customers can pay for pipelines by lowering their heating bills by a factor of two. Once pipelines are paid for, customers receive true cost benefits. Use liquefied natural gas for producing electricity in Hawaii instead of oil. This could substantially reduce electricity cost of 36 cents per kw-hr paid by Hawaiian customers.

President Obama mocked the four billion dollar subsidy given oil companies each year. Is it in the form of taxpayer grants to oil companies for explorations, build pipelines, build refineries, or build filling stations? Is there a mandate forcing citizens to buy gas from a particular company or pay a government selected price? Or is it a tax deduction for costs of doing business that all other forms of business are granted? Oil companies seem like a nice whipping boy in times of stress. That can divert attention away from terrible mistakes in energy policy. There are vast oil reserves across the world. It would not be prudent energy policy driving oil companies to other countries to search for oil as was done in 2010-11. Multi-million dollar rigs that left the Gulf of Mexico in 2010 for exploration in Brazil, Africa, and the Middle East may never come back.

Much attention is devoted to the United States’ loss of employment in the manufacturing sector due to technology improvements and movement of jobs out of country for lower paid employees. Production of energy from coal, uranium, oil, and natural gas is manufacturing. Six hundred tons of coal, four hundred barrels of oil, or ten million cubic feet of natural gas has the same economic value of making a $30,000 car or harvesting 4000 bushels of corn. Millions of high-paying jobs can be created to satisfy domestic energy use and an expanding export market. These jobs can't be outsourced because raw materials are domestic. The beauty of this activity is no government subsidies are required, and government revenues increase by trillions of dollars through royalty payments, business and income taxes.

It is difficult to find reasons for energy policies we have today. In this Lenten season it may be wise to fall back on the words of Jesus two millennia ago when on the cross he said, “Father forgive them, for they know not what they do."

__________________________________________________

Dr. Rust is a retired nuclear engineering professor from Georgia Tech with over fifty years of experience in areas related to energy policy.

Coming to a state near you - a tax on miles driven, instead of fuel consumed

Read Care favorite Furchtgott-Roth's take on the issue

Taxing Miles Driven Over Fuel Consumed

By Diana Furchtgott-Roth

RealClearMarkets.com
March 1, 2012

SALEM, OREGON--It was an unusually sunny day in Oregon on Monday, and at the Oregon Department of Transportation Jim Whitty was in a sunny mood. Even though last year the state legislature ended his pilot program to replace motor vehicle fuel taxes with a charge for vehicle-miles traveled, he is going back to the drawing board to come up with a revenue substitute for taxes, road charges based on gallons of fuel purchased.

Cars are becoming more fuel-efficient and rising gasoline prices are discouraging driving. As the Transportation Department's Manager of Innovative Partnerships and Funding, Whitty hopes to submit to the legislature in 2012 a new proposal for collecting revenue on the basis of miles driven, rather than on motor fuel consumed.

Other states, also concerned about their future revenues, have been developing their own programs. They are monitoring the progress of Oregon's pilot project and waiting to see what Whitty and the Beaver State will try next.

Whitty anticipates increased use of hybrid vehicles, which burn less motor fuel. If hybrid or electric cars are the wave of the future, states and Uncle Sam will have to work out how to charge owners of these vehicles for road use.

It is now technically practicable to charge drivers on the basis of vehicle-miles traveled, or VMT, either by on-board meters that use GPS, or by odometer readings, or by tapping into an automobile's internal electronics. With prices of transponders and on-board meters falling, sophisticated and efficient systems are now available, with drivers paying as easily as they pay for cell phones or E-Z Pass tolls.

Groups such as the National Surface Transportation Policy & Revenue Study Commission, the American Association of State Highway Transportation Officials, the International Bridge, Tunnel and Turnpike Association, and the National Surface Transportation Infrastructure Financing Commission have endorsed the concept of VMT as a substitute for motor fuel taxes.

One advantage of VMT taxes is that it might lead to roads financed by private capital instead of by governments. Such private investment in roads was the norm in the 18th and 19th centuries but fell out of favor in the 20th, because of the unpopularity of paying tolls.

One exception is the ten-mile express "tollway" added to California's State Route 91 (east of Los Angeles) which is subject to variable tolls, the tolls being varied electronically to ensure that traffic on them is uncongested at all times. Another example is the Dulles Greenway in Virginia.

Private road building and financing would let market-economy criteria for pricing and investment be applied to roads, thus enabling motorists to get most of the roads they would be prepared to pay for. Road providers could set tolls in conjunction with the state, like a regulated utility, because there might be controversy about letting them set tolls unilaterally.

Oregon has been a leader in charging for road use. It was the first state to levy a gasoline tax, in 1919. In 2001, a voluntary pilot program incorporating GPS-based distance measurements was designed to replace the fuel taxes that pay for the construction and maintenance of roads. In 2006 and 2007, the 299 drivers in the pilot program had a choice of paying either fuel taxes or mileage charges. When they filled up at participating gas stations, a device on their car calculated how far they had driven. Instead of being charged the gas tax with their purchase, they were charged for the miles they had driven in Oregon.

Although Oregon's program was technically successful, the legislature did not renew it in 2011, citing, among other issues, privacy concerns. With government-provided GPS devices on their cars, some people feared that the government was tracking their movements and whereabouts. Oregon assured residents that their whereabouts were not recorded, but quite a few Oregonians were not convinced.

So, Jim Whitty has moved on to a different way to charge for miles driven. It would allow road users, if the legislature approved, to choose from a variety of devices, supplied by different providers, so that the VMT system is not necessarily linked to GPS.

Whitty told me, "Providing drivers choices of devices and choices of providers may well lead to public acceptance of mileage fees as an alternative revenue source for our nation's roadways."

His object now is to build a road user-charging system based on existing realities in the marketplace. Rather than requiring motorists to use a particular device, such as a government-supplied GPS monitor, people would choose their own device. It would not have to have GPS, so they would not have the feeling that Big Brother was able to watch them.

One must note that there is some inconsistency in the privacy objection. These days ever more people are walking around with smartphones, which contain GPS software capable of tracking their movements. This does not appear to trouble them. They are troubled if the government, rather than a private vendor, asks them to purchase a GPS compatible device. This leads Whitty to believe that if individuals have a choice about the device to monitor their driving, they will find it less objectionable.

Such a device could be an app on a smartphone, or perhaps an invention still to come. The important point is that it is chosen by the consumer, and it has the capability of being integrated with other systems.

The Oregon Transportation Department is developing standards for such devices to be designed by private sellers. Motorists will be able to choose a device, and also pick a method of payment, such as mileage charges on a credit card, phone bill, or gas or electricity bill.

The devices and accounting methods would be certified by the state to make sure they are private, efficient, and free of fraud. Rather than becoming a provider of VMT devices and a collector of revenues, the State of Oregon would become a certifier of different technologies and accounting methods, while the road providers (whether public or private sector) would collect the revenues.

Possible technologies include reporting of mileage from a car's odometer, or from an onboard device. Another possibility is a flat annual fee to cover unlimited driving. In addition, providers would be able to offer services that could be related to mileage driven, such as vehicle insurance. Such devices could also be used for purchasing parking, or as a phone, or for music storage.

Whitty is asking companies to demonstrate technologies that they would like to sell to drivers, and he is asking drivers to volunteer to test them, paying VMT charges instead of motor fuel taxes. He hopes to be ready for demonstrations of the devices by December.

In 2013, the project would go before the state legislature for a vote. If approved, the system could be phased in, starting on a voluntary basis in July 2013, according to Whitty's ambitious timetable. A compulsory system, covering all vehicles, including security features, could take several more years, including establishing an independent certifications agency, setting standards for security, anti-tampering, accuracy, and privacy, as well as auditing and enforcement.

Other states are interested. Pilot projects and draft legislation are under way in Nevada, Colorado, Ohio, Maryland, Pennsylvania, and Wisconsin.

As fuel efficiency increases, and as Americans purchase more hybrid and electric cars, it has become time to look beyond the gas tax for revenues for road use. Whitty is to be congratulated for moving the ball forward.

Diana Furchtgott-Roth is a senior fellow at the Manhattan Institute.

OK, so we're not surprised that the EPA thinks its new regulations will create HUGE benefits, although scientific research shows little to no benefits

What it will do is create more government control and authority over ever wider swaths of our lives

Agenda-driven “science” at EPA

Newly proposed air pollution rules impose exorbitant costs for illusory health benefits

Willie Soon and Paul Driessen

In December 2011, the Environmental Protection Agency released new Clean Air Act “National Emission Standards for Hazardous Air Pollutants.” Once again, EPA Administrator Lisa Jackson touted the supposedly huge benefits of controlling emissions of mercury (Hg) and other air toxics from U.S. coal- and oil-fired power plants (or electric generating units, EGUs).

The people of Idaho may welcome this new rule, since EPA’s miraculous modeling machine has promised to prevent “six premature deaths” and create “up to $54 million” in health benefits by 2016 – even though not one coal-fired EGU in Idaho fits the EPA’s final rules. Even the District of Columbia, which has only one oil-fired unit, will somehow, magically realize “up to $120 million” in health benefits, presumably from new restrictions on coal-fired units in Maryland or Virginia.

The average U.S. citizen, however, can be excused for no longer being willing to be penalized by EPA – the Extreme Punishment Authority – for such minimal, imaginary and manufactured benefits.

In fact, the final rule may be the most expensive one ever devised by EPA. And yet, even EPA admits, the alleged “hazards to public health” from mercury and non-mercury emissions from American EGUs are “anticipated to remain after imposition” of the new regulations.

As to benefits, EPA computer models claim Hg emission cuts will reduce average per person “avoided IQ loss” by an undetectable “0.00209 IQ points,” with estimated “total nationwide benefits” of $500,000 to $6.1 million by 2016. For the electric utility sector, says EPA, net job creation from the rules will be “not statistically different from zero” and could be between minus 15,000 and plus 30,000 jobs.

In fact, the new regulations will likely eliminate tens of thousands of jobs annually, especially in energy-intensive industries that rely on low-cost electricity to survive and face growing competition from foreign companies that pay far less for energy, labor and raw materials. Small businesses will also get hammered.

“EPA cannot certify that there will be no SISNOSE from this rule,” the agency admits. “SISNOSE” is EPA-speak for “significant impacts on a substantial number of small entities.” In other words, the rules are likely to inflict significant economic harm on small businesses, and thus on the health and welfare of numerous (former) small business owners, employees and families. The agency failed to explain why it has once again ignored the adverse impacts on human health and welfare caused by its rules.

EPA also confessed that U.S. power plants actually contribute a mere 3% of the total mercury deposited in computer-modeled American watersheds, and thus in fish tissue. Citizens will justifiably wonder where the other 97% comes from, and why we should spend so much money for so little benefit. (The “missing” mercury comes from foreign sources and from volcanoes, subsea vents and other natural sources.)

To see how extreme EPA’s scenarios are, consider five more egregious errors in the final regulations. First, EPA admitted it could “calculate risk” for only 3,100 (4%) of the continental USA’s 88,000 watersheds.

Second, for over 60% of the 3,100 watersheds it did model, EPA took only one or two fish mercury measurements – making it virtually impossible to adopt even valid 75th-percentile fish mercury values. There is a breaking point where extremely poor statistical sampling renders EPA’s pretentious number crunching, conclusions and rules invalid. That breaking point has clearly been reached.

Third, the agency’s estimates for mercury exposure risks are solely for “hypothetical female subsistence consumers” who daily eat almost a pound of fish that they themselves catch in U.S. streams, rivers, and lakes over a 70-year lifetime. That’s less than 1% of U.S. women. For the rest of American women (who eat mostly ocean fish, purchased at a grocery, on a far less regular basis), EPA’s rules are irrelevant.

Fourth, EPA admits that only 22 to 29% of its computer-modeled watersheds are “at risk” from EGU mercury, even when it erroneously assumed that at least 5% of total Hg deposition into the watersheds came from U.S. power plants. If the modeling criteria were tweaked only slightly – to reflect average freshwater fish consumption rates for American women, and require that at least 15% of total mercury deposition be attributable to EGUs – not one U.S. watershed would be at risk.

Finally, EPA ignores the presence of selenium in nearly all fish. Its strong attraction to mercury molecules protects fish and people against buildups of methylmercury (MeHg), mercury’s biologically active and more toxic form.

Combining any series of small probability scenarios results in a near-zero likelihood that the events will actually happen. If each of five scenarios has only a 20% chance of happening, the likelihood that all five will happen is 0.032 percent.

As the preceding analysis suggests, the probability that all the EPA’s improbable scenarios will actually happen is virtually zero; the likelihood that its new regulations will benefit human health is also zero.

However, EPA still stubbornly “disagrees that [mercury] exposure levels in the U.S. are lower than those in the Faroe Islands.” Exposure to MeHg in the U.S. is “the same” as in the Faroe Islands, EPA insists.

The agency is simply wrong.

Extensive medical and scientific studies demonstrate that average Americans are exposed to at least 5 to 10 times less MeHg than average Faroe Islanders. The islanders consume large quantities of pilot whale meat and blubber – which is high in methylmercury, high in PCBs and low in selenium. As a result, their blood mercury concentrations can be up to 350 times higher than the mean blood mercury levels measured by the Centers for Disease Control for average American women.

The Faroe Islands study is irrelevant to mercury exposure risk for average Americans. EPA’s use of that study is deceptive. American women and children are safe from any likely threats from mercury.

To top it off, EPA itself proclaims: “The emissions limits in today’s rule are technology-based … and do not need to be justified based on their ability to protect public health.”

In other words, if the technology exists to eliminate these pollutants, the agency will impose the new regulations – regardless of their cost, their effect on electricity prices and reliability, their impact on factory and other jobs, and whether the rules actually do little or nothing to improve human health.

It has become increasingly obvious that EPA’s real goal is to assert its authority over ever-increasing segments of our economy; reinterpret medical and scientific studies to fit its regulatory agenda; and replace as many coal-fired power plants as possible with costly, unreliable renewable energy systems.

American voters, elected officials and courts need to challenge these radical, unelected, unaccountable bureaucrats, demand an end to EPA’s distortion of science and reality – and reverse these flawed rules.

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Willie Soon is a natural scientist with strong interest in mercury and public health issues. Paul Driessen is senior policy advisor for the Committee For A Constructive Tomorrow and Congress of Racial Equality.