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.