Wednesday, April 25, 2012


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 ( and Congress of Racial Equality, and author of Eco-Imperialism: Green power - Black death.



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 Visit our website at www.

Wednesday, April 4, 2012

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.

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Tuesday, April 3, 2012

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.