The President Wants a $100 million, I can give him Billion$

As President Obama held his first Cabinet meeting today, looking to cut $100 million off the budget, I am surprised that their first priority was not to eliminate the tens of Billions being thrown out the door annually on Ethanol in the form of subsidies, tax rebates and other financial benefits.

Eighteen months ago I wrote an editorial about Ethanol becoming a 10% portion of gasoline and the various pro’s and con’s.  As expected, it fell on deaf ears except for a few pro-ethanol groups slamming me for not having accurate information, all taken from the internet.

Furthermore, I now read that the Federal Government is looking at increasing the Federal Mandate of Ethanol blending to 15%, up from the 10% it is today. 

Several times over the last few decades Ethanol was going to be our saviour from foreign oil, despite the simple facts that it takes more fuel to produce it than it creates, and it is not as efficient as straight gasoline.  Every time these initiatives have failed, Ethanol is expensive and fails to deliver.

I have tested my behemoth SUV, using straight gasoline and Ethanol gasoline.  My mileage declined from an average of 12.25 MPG to 11 MPG when I used gasoline with Ethanol.  It was not a scientifically controlled experiment, but several tanks a week over a month, on the same route, enough said.

Don’t forget, because “Big Oil” is mandated to put Ethanol in your gas, you pay more at the pump.  That on top of your tax support in the form of subsidies.

Nearly 200 Ethanol plants have been built nationwide, yet many a running below capacity or are shuttered because there is less demand for Ethanol. 

Vera-Sun and Aventine, the two largest Ethanol producers have both gone bankrupt in the last several months.  Aventine went public at nearly $40 a share three years ago, and is now worth 30 cents a share.  Vera-Sun has already been broken up. 

Petroleum terminals that distribute gasoline to the trucks who then take it to the stations have stopped retrofitting their loading racks to accommodate ethanol because it does not pay.  Gasoline stations in states including Georgia have signs advertising that they do not sell gasoline with Ethanol.  They maintain higher sales volumes with cheaper gas than stores nearby that are selling Ethanol based gasoline at a higher price and lower efficiency. 

To add insult to injury, Ethanol is complicated to transport and cannot go in a pipeline, so thousands of trucks are moving Ethanol across the country to various loading racks.  Coupled with that are tons of emissions going into the air and even more damage to our roadways at a time when we should be trying to curtail such harmful activities.

It would be simple to say that people are not embracing change. However, when you have key companies going bankrupt despite government support and no real positive or supportive commentary about Ethanol swaying the general public, one really has to wonder if there is any merit to this product at all?

And another key argument to 15% ethanol in our vehicles is that it will likely void your engine warranty and many vehicles will have issues with Ethanol corroding or damaging various engine components. 

Yet more fuel to the smoldering fire is the EPA announcing that Carbon Dioxide is a “Danger to the Public”.  Ethanol is a key emitter of CO2, quite likely more than even gasoline.

So meanwhile, as our Federal Government prints trillions of dollars to bail out our economy, precious billions are being thrown to these bankrupt entities and their supporting infrastructure.

If anything, these wasted billions need to be directed towards alternative viable energy solutions such as Electric Cars, Solar Energy and numerous other ideas, all short of cash but with huge potential.

To continue to throw valuable monies at an infrastructure which has now proven several times it clearly does not work is simple gross mismanagement.

Today, I could have saved Mr. Obama at least $10 Billion, and all he is still looking for is a paltry $100 million.

Oil at $100 brings new meaning to CHANGE

November 6, 2007

With Crude Oil at all but $100, we are quickly being jolted to a new reality. Without doubt, some dramatic changes need to occur.

And rest assured, as I observe the standstill traffic on I-285 and gleefully count my profits, I am sharply rebuked to sobriety as I witness my own transports wallowing in the very same money-losing “zero-sum” entity we call a highway.

I can think of no one that is benefiting from energy prices at these levels. The increased expense of fuel will drive up costs and hurt all of our businesses and incomes, no matter whom we are, a fact I think we are all recognizing.

Lest we forget, oil refiner’s profits were huge and reached unknown highs with crude in the $30 to $60 range. Meanwhile, gas was at $2.40+/- a gallon. With Gas and Diesel now over $3.00, it has still not followed the dramatic increase of crude

Something is out of kilter, but what will give? Is crude going back to $50 or less, or does gas need to be up at $4.00? Markets barely retrace 50% of their gains, which makes $4 gas a good probability.

And does the US economy go into an economic tailspin, most likely dragging the rest of the world economies with it? That in itself would knock crude oil down, although with the demand of China, India and elsewhere at the levels they are, it might be a very different state of affairs from what we have experienced in the past.

America has been on easy street for years, yet our love of huge inefficient gas guzzling behemoths and cheap gas is disintegrating. Concurrently, fuel throughout much of the world has been in the $7 or $8 range, a good portion of the price taxes.

With the extravagant waste in Iraq, the supporting of OPEC for the most inane of reasons, and a complete disregard for fuel economy, global warming and a host of other “in your face signs”, America needs to look for an alternative fuel solution.

I am speaking about a reliable, safe and alternative fuel, most likely some form of Hydrogen Fuel Cell. Clearly, we need to progress.

Bio-Diesel and Ethanol are an inefficient medicinal patch. Ethanol consumes huge amounts of fossil fuel during production, wastes valuable water, drastically lowers fuel economy and is more a pollutant than gas. Bio Diesel has like production and performance drawbacks.

What if we were to pull out of Iraq, where we spend billions a day, where we will likely never “win”, and stop using OPEC and foreign oil?

The trillions of dollars we reap must go directly to alternative energy solutions.

Canada and the US have more than enough producing and undeveloped oil fields to sustain us for a number of years. Canada’s Athabasca Tar Sands alone may be a close second to Saudi Arabia in reserves alone. Don’t forget Hibernia, Prudhoe Bay and a host of others. With prudent usage, they will serve us long enough to get our house in order.

Clearly, Gas and Diesel will cost more, but we are there already.

Think how our economy and environment would be revived and would thrive with the new industries created, and the self reliant economic strength we would instill in building this huge revolutionary infrastructure. Imagine the new jobs created with the construction of energy equipment, technology and the vehicles that to go with it.

Coupled with that, we could start to rebuild the rapidly decaying highway system.

But don’t think Toll Roads. When a steely eyed investment banker and a glowing politician tell you toll roads are good for you and your environment, the last thing they are concerned about is you and your children’s well being.

I am talking about a fuel tax increase to fund new and improved roads (read: Atlanta Northern Arc). Like it or not, you are going to be paying more for fuel and to use the roads, be it to the tax department or an even more expensive toll road. We have numerous options, but we need to think and take control of our destiny, sooner than not.

No matter what, it is imperative that Alternative Energy for America be an “in house” initiative. The United States, Canada and most likely Mexico need to act as one, for independently we will be incapable.

America has gone from an industrial behemoth to a consumption sloth. Our politicians are a disgrace, and the alternative new blood is miserably redundant.

Changes are apparent, needed, and imminent, whether we chose them now or are forced to address them later.