Sunday, May 4, 2008


Part 1 - King Corn
*Cross posted with "To Inform and To Inflame"

You have all heard about the "Food Riots" occurring around the world, and the politicians pooh-poohing that it is not alternative fuels causing the price increases.
Here are some articles on "Food Riots":

Food riots rock Yemen

Global food riots turn deadly - - Breaking News, Political News

Haiti's government falls after food riots International Reuters

The World's Growing Food-Price Crisis - TIME

News results for "food riots"

612 related articles »

Corn Hits $6 a Bushel on Tight Supplies
Thursday April 3, 6:56 pm ET
By Stevenson Jacobs, AP Business Writer
Corn Prices Jump to Record $6 a Bushel, Driving Up Costs for Food, Alternative Energy
Corn Hits $6 a Bushel on Tight Supplies

Some background:
Maize (IPA: /mez/) (Zea mays L. ssp. mays), known as corn in some countries, is a cereal grain domesticated in Mesoamerica and subsequently spread throughout the American continents. After European contact with the Americas in the late 15th century and early 16th century, Maize spread to the rest of the world.

Maize is the largest crop in the Americas (270 million metric tons annually in the U.S. alone). Hybrid maize, due to its high grain yield due to heterosis ("hybrid vigour"), is preferred by farmers over conventional varieties.
Maize is widely cultivated throughout the world, and a greater weight of maize is produced each year than any other grain. While the United States produces almost half of the world's harvest, other top producing countries are as widespread as China, Brazil, France, Indonesia, India and South Africa. Worldwide production was over 600 million metric tons in 2003 — just slightly more than rice or wheat. In 2004, close to 33 million hectares of maize were planted worldwide, with a production value of more than $23 billion.

Corn is the most widely produced feed grain in the United States, accounting for more than 90 percent of total value and production of feed grains. Around 80 million acres of land are planted to corn, with the majority of the crop grown in the Heartland region. Most of the crop is used as the main energy ingredient in livestock feed. Corn is also processed into a multitude of food and industrial products including starch, sweeteners, corn oil, beverage and industrial alcohol, and fuel ethanol. The United States is a major player in the world corn trade market, with approximately 20 percent of the corn crop exported to other countries. ERS analyzes events in the domestic and global corn markets that influence supply, demand, trade, and prices.

Did you know corn is America's number one field crop? Corn leads all other crops in value and volume of production. Here's some more interesting facts about corn:

Corn Math
* An ear of corn averages 800 kernels in 16 rows.
* A pound of corn consists of approximately 1,300 kernels.
* 100 bushels of corn produces approximately 7,280,000 kernels.
* Each year, a single U.S. farmer provides food and fiber for 129 people - 97 in the U.S. and 32 overseas.
* In the U.S., corn production measures more than 2 times that of any other crop.
* Over 55% of Iowa's corn goes to foreign markets. The rest is used in other parts of the United States.
Corn Products
* Your bacon and egg breakfast, glass of milk at lunch, or hamburger for supper were all produced with U.S. corn.
* Soft drinks such as Coke and Pepsi have high fructose corn sweeteners in them.Corn is a major component in many food items like cereals, peanut butter, snack foods and soft drinks.
* U.S. researchers have led the way in finding many uses for corn - like in vitamins and amino acids.
* Corn is used to produce fuel alcohol. Fuel alcohol makes gasoline burn cleaner, reducing air pollution, and it doesn't pollute the water.
Corn Geography
* Iowa, Illinois, Nebraska and Minnesota account for over 50 percent of the corn grown in the U.S. Other major corn growing states are Indiana, Ohio, Wisconsin, South Dakota, Michigan, Missouri, Kansas and Kentucky.
* The "Corn Belt" includes the states of Iowa, Illinois, Nebraska, Minnesota, Indiana, Ohio, Wisconsin, South Dakota, Michigan, Missouri, Kansas and Kentucky.
* Corn is produced on every continent of the world with the exception of Antarctica.
* The area known as the "Pacific Rim" region (in Asia) is emerging as the world's fastest growing market for U.S. corn. There, most of the corn is fed to livestock to produce food for humans. The majority of the world's population is located in the Pacific Rim region.
* Exports are critical to the well being of American agriculture. Nearly one third of our nation's corn crop is targeted for exports.

These are the people who open markets for the more than 9 billion bushels of corn produced by U.S. growers in 2002. These are the people who will push ethanol production to use more than 900 million bushels of corn this year, nearly 9 percent of our total supply. These are the people who develop new products that help corn growers maintain their leadership in the world market, as they account for nearly 40 percent of the world's production. These people are the heroes of our story because they brave the weather, survive uncertain markets, manage the crops and create the basic unit of value that fuels a worldwide market.

Corn is an expensive crop to grow in more ways than one. It takes a lot of fertilizer to grow, but is very efficient at stripping nutrients from the soil, and there are side-effects:

The U.S. Geological Survey report examined factors contributing to excessive levels of nutrients in the Mississippi River that create areas of hypoxia -- low oxygen levels -- resulting in the large dead zone that forms off Louisiana's coast every summer. The zone kills bottom-dwelling organisms in the Gulf.

According to the report, Illinois, Iowa, Indiana, Missouri, Arkansas, Tennessee, Ohio, Kentucky and Mississippi make up only one-third of the 31-state Mississippi River drainage area, but contribute more than three-quarters of the nitrogen and phosphorus in the Gulf.

The use of nitrogen-based fertilizers to support corn and soybean crops contributes the most to the nutrient runoff, the report said.

ScienceDaily (Mar. 12, 2008) — The U.S. government's rush to produce corn-based ethanol as a fuel alternative will worsen pollution in the Gulf of Mexico, increasing a "Dead Zone" that kills fish and aquatic life, according to University of British Columbia researcher Simon Donner.

With 99% of corn production under intensive fossil fuel nitrogen fertilization regimes, there is a directly proportionate resulting contamination of surface and groundwater and growth of the dead zones where our rivers drain.
There is already the push to put the marginal Conservation Reserve Program lands, vital for wildlife and water quality and quantity, into intense energy crop production. Old school ethical farmers in the corn belt are already lamenting the destruction of soil saving windbreaks, some planted during the CCC years, the plowing under of hayfields to corn, highly erodable hilly lands being put into corn, and water drainages being reduced, hearkening back to the depression era insanity that squandered so much vital topsoil. Cellulostic ethanol scams will fare even worse for the soils as "residues" are scooped up, leaving virtually nothing to feed back to the soil. "The nation that destroys its soil, destroys itself," said President Franklin D. Roosevelt. In the rush to burn our nation's dwindling soil resources, corn is king. Corn devours soil nutrients at 12-20 times the rate of soil renewal, meaning it is already a highly unsustainable crop. Corn is also highly dependent on fossil fuel based fertilizer and pesticide inputs. With the inevitable hybridization and Genetically Modified Organism corn crops, the soil nutrient depletion will accelerate.

Domestic Energy makes America more Secure

Our Government subsidizes corn very heavily:

exporting corn world wide is one of the U.S.'s biggest moneymakers and helps keep our trade deficit from totally blowing out:

But there again are effects:
U.S. corn subsidies aggravating Amazon deforestation -

US Corn Subsidies Are Devastating Mexican Farmers.

U.S. Corn Exports to Drop Dramatically Due to Ethanol Growth

Brownfield Network: Corn exports hit a new marketing year low

us corn exports to drop dramatically due to

Agrofuel Industry Raising Corn Prices in Central America-Corn Feeding Cars Not People

Finally the Kicker:
For over 100 years, the world has been depending on AMerica for food. Due to our early and almost complete mechanization of the farm, we outproduced the world in grains. Since poorer countries cannot compete on the scale that we produce, they have depended on importing grain from the U.S. to feed their people. Well...........
In 2007, for the first time in U.S. Agricultural history (not even during the Depression or the Dust Bowl) the U.S. IMPORTED corn.......

Coupled with the falling dollar, almost no corn exports, and us importing corn.........

Yes, we are starving the world.

Part 2 - Ethanol
Ethanol fuel is ethanol (ethyl alcohol), the same type of alcohol found in alcoholic beverages. It can be used as a fuel, mainly as a biofuel alternative to gasoline, and is widely used in cars in Brazil. Because it is easy to manufacture and process, and can be made from very common materials, such as sugar cane, it is steadily becoming a promising alternative to gasoline throughout much of the world.

Anhydrous ethanol (ethanol with less than 1% water) can be blended with gasoline in varying quantities up to pure ethanol (E100), and most spark-ignited gasoline style engines will operate well with mixtures of 10% ethanol (E10). Most cars on the road today in the U.S. can run on blends of up to 10% ethanol, and the use of 10% ethanol gasoline is mandated in some cities where harmful levels of auto emissions are possible.
Concerns relate to the large amount of arable land required for crops, as well as the energy and pollution balance of the whole cycle of ethanol production.
However, since the energy content (by volume) of ethanol fuel is less than gasoline, a larger volume of ethanol fuel (151%) would still be required to produce the same amount of energy.

Ethanol (E100) consumption in an engine is approximately 34% higher than that of gasoline (the energy per volume unit is 34% lower).

Production of ethanol from corn is 5 to 6 times less efficient than producing it from sugarcane. Ethanol production from corn is highly dependent upon subsidies and it consumes a food crop to produce fuel. The subsidies paid to fuel blenders and ethanol refineries have often been cited as the reason for driving up the price of corn, and in farmers planting more corn and the conversion of considerable land to corn (maize) production which generally consumes more fertilizers and pesticides than many other land uses. This is at odds with the subsidies actually paid directly to farmers that are designed to take corn land out of production and pay farmers to plant grass and idle the land, often in conjunction with soil conservation programs, in an attempt to boost corn prices.

Figures compiled in a 2007 National Geographic Magazine article point to modest results for corn ethanol produced in the US: one unit of fossil-fuel energy is required to create 1.3 energy units from the resulting ethanol.

One rationale given for extensive ethanol production in the U.S. is its benefit to energy security, by shifting the need for some foreign-produced oil to domestically-produced energy sources. Production of ethanol requires significant energy, but current U.S. production derives most of that energy from coal, natural gas and other sources, rather than oil. Because 66% of oil consumed in the U.S. is imported, compared to a net surplus of coal and just 16% of natural gas (2006 figures), the displacement of oil-based fuels to ethanol produces a net shift from foreign to domestic U.S. energy sources
In 2007, biofuels consumed one third of America's corn (maize) harvest. Filling up one large vehicle fuel tank one time with 100% ethanol uses enough corn to feed one person for a year. Thirty million tons of U.S. corn going to ethanol in 2007 greatly reduces the world's overall supply of grain.

When all 200 American ethanol subsidies are considered, they cost about $7 billion USD per year (equal to roughly $1.90 USD total for each a gallon of ethanol). When the price of one agricultural commodity increases, farmers are motivated to quickly shift finite land and water resources to it, away from traditional food crops.
The 2007-12-19 U.S. Energy Independence and Security Act of 2007 requires American "fuel producers to use at least 36 billion gallons of biofuel in 2022. This is nearly a fivefold increase over current levels."

Using 100% ethanol fuel decreases fuel-economy by 15-30% over using 100% gasoline; this can be avoided using certain modifications that would, however, render the engine inoperable on regular petrol without the addition of an adjustable ECU.

Are there any problems with ethanol?
Oh, yes. Ethanol can't travel in pipelines along with gasoline, because it picks up excess water and impurities. As a result, ethanol needs to be transported by trucks, trains, or barges, which is more expensive and complicated than sending it down a pipeline. As refiners switched to ethanol this spring, the change in transport needs has likely contributed to the rise in gas prices. Some experts argue that the U. S. doesn't have adequate infrastructure for wide ethanol use.
Also, ethanol contains less energy than gas. That means drivers have to make more frequent trips to the pump.

Doesn't producing ethanol on a large scale use a great deal of energy?
Yes. Some ethanol skeptics have even argued that the process involved in growing grain and then transforming it into ethanol requires more energy from fossil fuels than ethanol generates. In other words, they say the whole movement is a farce.
There's no absolute consensus in the scientific community, but that argument is losing strength. Michael Wang, a scientist at the Energy Dept.-funded Argonne National Laboratory for Transportation Research, says "The energy used for each unit of ethanol produced has been reduced by about half [since 1980]." Now, Wang says, the delivery of 1 million British thermal units (BTUs) of ethanol uses 0.74 million BTUs of fossil fuels. (That does not include the solar energy -- the sun shining -- used in growing corn.) By contrast, he finds that the delivery of 1 million BTUs of gasoline requires 1.23 million BTU of fossil fuels.

Is ethanol cheaper than gas?

Surprise, surprise, it isn't. The move this spring by more regions to use ethanol means that demand has spiked, driving up prices. On Monday, the New York harbor price was around $3 per gallon compared with about $2.28 for gasoline (before being mixed with ethanol). In other words, for now ethanol is helping to increase prices at the pump, not to push them down.

So ethanol production and distribution are also controlled by market forces, right?
Only to a certain degree. In addition to heavily subsidizing the ethanol produced domestically, the U.S. government levies a 54 cent per gallon tariff on imports from other countries, such as Brazil, a lower-cost producer. This, of course, discourages the U.S. from importing cheaper ethanol.
Corn ethanol subsidies totaled $7.0 billion in 2006 for 4.9 billion gallons of ethanol. That's $1.45 per gallon of ethanol (and $2.21 per gal of gas replaced).

Where did those subsidies come from:
1. 51¢ per gallon federal blenders credit for $2.5 billion = your tax dollars.
2. $0.9 billion in corn subsidies for ethanol corn = your tax dollars.
3. $3.6 billion extra paid at the pump.
That's quite a bit when you figure it only made us 1.1% more energy independent and only reduced US greenhouse gases by 1/19 of 1%.
Direct subsidies are paid out of taxes. Ethanol produced in 2006 received $2.5 billion in direct subsidies paid to blenders. The 51¢ per gallon "blender's credit" is paid to those who blend ethanol with gasoline before selling it to gas stations. Although it's paid to blenders, this is a competitive business and the market prevents them from profiting from it. Instead, it is passed on to producers or consumers depending on the relative price of gasoline and ethanol.

Indirect Subsidies
Indirect subsidies are paid by consumers through high prices at the pump. The USDA found that between 1982 and 2006 the wholesale price of ethanol averaged 57¢ more than the wholesale price of gasoline (USDA 2007c). The average subsidy during that period was 54¢. From the blender's perspective, after the subsidy, the price of ethanol was just 3¢ more than the cost of gasoline. Apparently there is a strong tendency for the price of ethanol to equal the price of gasoline, but something is giving the ethanol price a little boost.
Although it may seem obvious that ethanol and gasoline would sell for the same price per gallon, the USDA's chief economist points out that with more supply, the premium could "decline toward ethanol's energy equivalent with gasoline." (USDA, 2007) In other words, Collins is saying that in a balanced market, ethanol and gasoline will tend to sell for the same price per energy, not the same price per gallon. That seems reasonable since it's energy that powers a car, and not just gallons .

But the USDA found that for the last 25 years there was no tendency towards this balance. Ethanol and gasoline have sold at the same price per gallon (after subtracting the subsidy) and not at the same price per energy. Ethanol selling at the same price per energy as $2.00 gasoline would not sell at $2.00 per gallon but at $1.33 per gallon. At $2.00 per gallon, ethanol is getting a 67¢ price subsidy simply because its lack of energy is ignored by the market.

Why does the market make this mistake? First, consumers often don't know they are buying the ethanol--it's just blended in for smog control. Second, they have no choice because all the gasoline has it included. Third, very few people know it has less energy. These market anomalies are the source of the mis-pricing and the primary source of ethanol's indirect subsidy. In 2006, because of the MTBE phaseout and the switch to ethanol as an additive, wholesale ethanol sold (after subtracting the subsidy) for 13¢ more per gallon than gasoline. This added to the subsidy from mis-pricing.
In 2006, the effective wholesale price of ethanol, after subtracting the blender's subsidy, was 80¢ higher than the price of gasoline with the same energy content, hence the indirect subsidy to ethanol, paid at the pump, was 80¢ per gallon of ethanol.

Total Direct and Indirect Subsidies
The indirect subsidy to ethanol on the 4.9 billion gallons produced in 2006 comes to $3.9 billion. Together with the direct subsidies of $0.9 billion for corn and $2.5 billion for ethanol the grand total is $7.3 billion. That's $1.50 per gallon of ethanol, or $2.28 per gallon of gasoline replaced.
In 2006, the total subsidies for ethanol came to roughly $7.3 billion, which is $1.50 per gallon of ethanol produced or $2.28 per gallon of gasoline replaced.

The federal government gives preferential treatment to domestic, corn-based ethanol in the form of a 54-cent-per-gallon tax on imported ethanol, which largely affects Brazilian producers of ethanol from sugar cane. That tax comes on top of a 51-cent exemption from the federal excise tax on gasoline that goes to fuel mixed with ethanol.

As grain prices rise, so does the price of livestock feed. As a result, beef, pork, poultry, and dairy farmers are incurring record-high feed costs. According to Cal Dooley, president of the Grocery Manufacturers Association, about 40 percent of the cost of producing pork, for example, comes from feeding the livestock.
That hits consumers, too: A May 2007 study by Iowa State University economists found that "the direct effect of higher feed costs is that U.S. food prices would increase by a minimum of 1.1 percent over baseline level."

What's causing grocery bills to rise? Some blame policies that have made it especially profitable for farmers to divert their crops into corn for the production of ethanol. "The ethanol industry is hogging more and more of the corn supply, and that is squeezing ranchers and dairy farmers," says Daniel Griswold, director of the Center for Trade Policy Studies at the Cato Institute, a Washington, D.C., think tank.
"Deforestation accounts for 20 percent of all current carbon emissions. So unless the world can eliminate emissions from all other sources — cars, power plants, factories, even flatulent cows — it needs to reduce deforestation or risk an environmental catastrophe. That means limiting the expansion of agriculture, a daunting task as the world's population keeps expanding. And saving forests is probably an impossibility so long as vast expanses of cropland are used to grow modest amounts of fuel. The biofuels boom, in short, is one that could haunt the planet for generations — and it's only getting started.",9171,1725975,00.html

Most analyses indicate that corn ethanol delivers a 10 to 20 percent reduction in global warming emissions over its full lifecycle compared with gasoline. This reduction is modest because corn production requires a significant amount of fossil fuel inputs for farm operations and fertilizer production (generally natural gas). Corn production also generates a substantial amount of nitrous oxide, a global warming pollutant, as unused fertilizer breaks down in the field. In addition, many corn ethanol production facilities operate on natural gas; if new production facilities use coal instead, the emission benefits of corn ethanol could be reduced or eliminated.

Ethanol production consumed about 18 percent of the nation's third largest corn harvest in 2006—some 2.15 billion bushels.
One bushel of corn yields about 2.8 gallons of ethanol.

The distortions in agricultural production are startling. Corn prices are up about 50 percent from last year, while soybean prices are projected to rise up to 30 percent in the coming year, as farmers have replaced soy with corn in their fields. The increasing cost of animal feed is raising the prices of dairy and poultry products.

Earlier this year, rising prices of corn imports from the United States triggered mass protests in Mexico.
The economics of corn ethanol have never made much sense. Rather than importing cheap Brazilian ethanol made from sugar cane, the United States slaps a tariff of 54 cents a gallon on ethanol from Brazil. Then the government provides a tax break of 51 cents a gallon to American ethanol producers — on top of the generous subsidies that corn growers already receive under the farm program.
Corn-based ethanol also requires a lot of land. An O.E.C.D. report two years ago suggested that replacing 10 percent of America's motor fuel with biofuels would require about a third of the total cropland devoted to cereals, oilseeds and sugar crops.
Meanwhile, the environmental benefits are modest. A study published last year by scientists at the University of California, Berkeley, estimated that after accounting for the energy used to grow the corn and turn it into ethanol, corn ethanol lowers emissions of greenhouse gases by only 13 percent.
The Renewable Fuels Standard combined with a rule relaxing requirements on producer emissions will lead to increased ozone levels, particularly in Midwestern states.
The Bush Administration touts its new Renewable Fuels Standard (RFS) to increase ethanol and other biofuels in gasoline as a step toward oil independence, clean air, and lower greenhouse-gas emissions. Yet the U.S. EPA's own analysis reveals that an increase in corn-based ethanol will raise levels of ozone in certain Midwestern states, even as research points toward more premature deaths when ozone levels are high.

The air quality in Midwestern states will not be helped by a separate EPA rule that increases the amount of pollution that ethanol production plants can emit. The rule, released on April 12, raises the "threshold" of ambient air pollution—such as NOx, carbon monoxide, and sulfur—for these facilities from 100 to 250 t/yr. This means that new or expanding plants responding to the surging ethanol demand won't have to install pollution-control equipment if their emissions don't exceed the threshold. The producers won't have to control emissions from leaks or evaporative processes either, the rule states. Several ethanol plants were cited in 2002 for uncontrolled emissions of VOCs, including the carcinogens formaldehyde and acetaldehyde.

This estimate is the sum of the various energy effects induced by the ethanol mandate:
􀂾 Increase in energy use to produce additional ethanol;
􀂾 Increase in total gasoline out-turn, to compensate for the fuel efficiency loss caused by ethanol's low energy content relative to gasoline;
􀂾 Reduction in refinery inputs (imported crude oil and purchased blendstocks, ex ethanol);
􀂾 Reduction in refinery outputs of products other than gasoline;
􀂾 Reduction in refinery energy use, reflecting reduced refinery through-puts and operating severity; and
􀂾 Increase in energy inputs to ethanol logistics.

We estimate that the national cost of the savings in fossil fuel energy consumption generated by a 5 bgy ethanol mandate would be $80–$100/coeb.
This cost is over and above the marginal cost of the energy source displaced by the ethanol. (In other words, the indicated national cost is $80–$100/coeb higher than the average price of crude oil projected by DOE for 2012).
"National cost" is the dollar value of the net additional resources that society consumes to implement a given regulatory program or mandate. The indicated national cost for an ethanol mandate, which incorporates the federal tax subsidy (likely to be 51¢/gal in 2012), measures the net resource losses that the U.S. economy would incur on ethanol production above the baseline volume. In other words, national cost is the amount by which the full cost of meeting U.S. gasoline demand with a 5 bgy ethanol mandate would exceed the corresponding cost without the mandate.
An ethanol mandate would incur a significant national cost for one over-riding reason: ethanol's value as a gasoline blendstock is less than the full cost of producing and delivering it (including all federal and state subsidies).5 In the scenarios that we analyzed, ethanol's full cost of supply is about 50–60¢/gal higher than its value in gasoline. The various subsidies for ethanol do not reduce its cost; they merely shift a substantial portion of it from gasoline consumers to taxpayers. Ethanol's value as a gasoline blendstock decreases – and its production cost increases – with increasing ethanol volume. Hence, the more ethanol is used, the higher its national cost – in aggregate, per gallon of additional ethanol use, and per coeb of fossil fuel energy saved

This is from an editorial:
In the pantheon of well-intentioned governmental policies gone awry, massive ethanol biofuel production may go down as one of the biggest blunders in history. An unholy alliance of environmentalists, agribusiness, biofuel corporations and politicians has been touting ethanol as the cure to all our environmental ills, when in fact it may be doing more harm than good. An array of unintended consequences is wreaking havoc on the economy, food production and, perhaps most ironically, the environment.
Corn, or some derivative thereof, is a common ingredient in a variety of packaged food products. So it's only natural that, as it becomes a rarer commodity due to the conflicting demands of biofuel production, the prices of those products will go up. The prices of food products containing barley and wheat are also on the rise as farmers switch to growing subsidized corn crops.
Corn is the main ingredient in livestock feed and its dearth is causing prices of those products to rise as well. Farmers have had to scramble to find alternative sources of feed for their livestock and, in some cases, have had to sell off animals they can no longer afford to feed. This, in turn, has led to an increase in the price of meat and dairy products for consumers.
The hit on the livestock industry has also affected jobs, with countless employees being laid off due to the downturn. Pilgrim's Pride Corp., the nation's largest chicken producer, announced in March that it was closing a North Carolina chicken processing plant, and six of 13 U.S. distribution centers, due to the jump in feed costs. Even Iowa, the state that produces the most corn and therefore the supposed beneficiary of new jobs due to ethanol production, has seen its unemployment rate rise over the past year.
Another adverse impact of ethanol production is potential water shortage. One gallon of ethanol requires four gallons of water to produce. According to a recent report from the National Research Council, an institution that focuses on science, engineering, technology and health, "increased production could greatly increase pressure on water supplies for drinking, industry, hydropower, fish habitat and recreation."
Not only is ethanol less productive than gasoline as a fuel source, its production is hurting the environment it was intended to preserve, particularly in the Third World. The amount of land needed to grow corn and other biofuel sources means that their production is leading to deforestation, the destruction of wetlands and grasslands, species extinction, displacement of indigenous peoples and small farmers, and loss of habitats that store carbon.

This from environmentalists:
CO2 greenhouse gas, is emitted during fermentation and combustion. However, this is canceled out by the greater uptake of carbon dioxide by the plants as they grow to produce the biomass. When compared to gasoline, depending on the production method, ethanol releases less greenhouse gases.

Compared with conventional unleaded gasoline, ethanol is a particulate-free burning fuel source that combusts cleanly with oxygen to form carbon dioxide and water. Gasoline produces 2.44 CO2 equivalent kg/l and ethanol 1.94 (this is -21% CO2). The Clean Air Act requires the addition of oxygenates to reduce carbon monoxide emissions in the United States. The additive MTBE is currently being phased out due to ground water contamination, hence ethanol becomes an attractive alternative additive. Current production methods includes air pollution from the manufacturer of macronutrient fertilizers such as ammonia.

A study by atmospheric scientists at Stanford University found that E85 fuel would increase the risk of air pollution deaths relative to gasoline. Ozone levels are significantly increased, thereby increasing photochemical smog and aggravating medical problems such as asthma.

In 2002, monitoring of ethanol plants revealed that they released VOCs (volatile organic compounds) at a higher rate than had previously been disclosed.] The Environmental Protection Agency (EPA) subsequently reached settlement with Archer Daniels Midland and Cargill, two of the largest producers of ethanol, to reduce emission of these VOCs. VOCs are produced when fermented corn mash is dried for sale as a supplement for livestock feed. Devices known as thermal oxidizers or catalytic oxidizers can be attached to the plants to burn off the hazardous gases. Smog causing pollutants are also increased by using ethanol fuel in comparison to gasoline.

"It's just damning of the notion of ethanol as a clean fuel," said Mark Kresowik, a Sierra Club organizer based in Iowa. "If we need to burn coal to create a clean burning fuel, we're not creating a clean burning fuel. It rips the shiny green veneer right off of ethanol."

A February 7, 2008 Associated Press article stated, "The widespread use of ethanol from corn could result in nearly twice the greenhouse gas emissions as the gasoline it would replace because of expected land-use changes, researchers concluded Thursday. The study challenges the rush to biofuels as a response to global warming."

All sides agree that it takes lots of electricity to produce ethanol. Utilities note a typical plant eats up as much energy as 1,600 farms.
The divide comes over where that electricity should come from. Environmental activists believe greener means, such as natural gas, should be used. Power companies argue that coal is the only cost-efficient solution.
In Iowa, the nation's top producer of corn and ethanol, dozens of plants are producing the fuel and more are being built. That's prompted a push for two coal-fired electricity plants, in Marshalltown and near Waterloo.
Both projects explicitly pitch ethanol as a reason for their construction.

Ethanol fuel from corn faulted as 'unsustainable subsidized food burning' in analysis by Cornell scientist

FOR RELEASE: Aug. 6, 2001
At a time when ethanol-gasoline mixtures (gasohol) are touted as the American answer to fossil fuel shortages by corn producers, food processors and some lawmakers, Cornell's David Pimentel takes a longer range view.
Among his findings are:
- An acre of U.S. corn yields about 7,110 pounds of corn for processing into 328 gallons of ethanol. But planting, growing and harvesting that much corn requires about 140 gallons of fossil fuels and costs $347 per acre, according to Pimentel's analysis. Thus, even before corn is converted to ethanol, the feedstock costs $1.05 per gallon of ethanol.
- The energy economics get worse at the processing plants, where the grain is crushed and fermented. As many as three distillation steps are needed to separate the 8 percent ethanol from the 92 percent water. Additional treatment and energy are required to produce the 99.8 percent pure ethanol for mixing with gasoline. o Adding up the energy costs of corn production and its conversion to ethanol, 131,000 BTUs are needed to make 1 gallon of ethanol. One gallon of ethanol has an energy value of only 77,000 BTU. "Put another way," Pimentel says, "about 70 percent more energy is required to produce ethanol than the energy that actually is in ethanol. Every time you make 1 gallon of ethanol, there is a net energy loss of 54,000 BTU."
- Ethanol from corn costs about $1.74 per gallon to produce, compared with about 95 cents to produce a gallon of gasoline. "That helps explain why fossil fuels -- not ethanol -- are used to produce ethanol," Pimentel says. "The growers and processors can't afford to burn ethanol to make ethanol. U.S. drivers couldn't afford it, either, if it weren't for government subsidies to artificially lower the price."
- Most economic analyses of corn-to-ethanol production overlook the costs of environmental damages, which Pimentel says should add another 23 cents per gallon. "Corn production in the U.S. erodes soil about 12 times faster than the soil can be reformed, and irrigating corn mines groundwater 25 percent faster than the natural recharge rate of ground water. The environmental system in which corn is being produced is being rapidly degraded. Corn should not be considered a renewable resource for ethanol energy production, especially when human food is being converted into ethanol."
- The approximately $1 billion a year in current federal and state subsidies (mainly to large corporations) for ethanol production are not the only costs to consumers, the Cornell scientist observes. Subsidized corn results in higher prices for meat, milk and eggs because about 70 percent of corn grain is fed to livestock and poultry in the United States Increasing ethanol production would further inflate corn prices, Pimentel says, noting: "In addition to paying tax dollars for ethanol subsidies, consumers would be paying significantly higher food prices in the marketplace."
Nickels and dimes aside, some drivers still would rather see their cars fueled by farms in the Midwest than by oil wells in the Middle East, Pimentel acknowledges, so he calculated the amount of corn needed to power an automobile:
- The average U.S. automobile, traveling 10,000 miles a year on pure ethanol (not a gasoline-ethanol mix) would need about 852 gallons of the corn-based fuel. This would take 11 acres to grow, based on net ethanol production. This is the same amount of cropland required to feed seven Americans.
- If all the automobiles in the United States were fueled with 100 percent ethanol, a total of about 97 percent of U.S. land area would be needed to grow the corn feedstock. Corn would cover nearly the total land area of the United States.

Ethanol fuel presents a corn-undrum
Corn ethanol yields an energy dividend but gains are higher with soy biodiesel, a new study shows
A definitive study of ethanol derived from corn reveals its pros and cons compared with biodiesel fuel from soybeans and points the way toward new sources of renewable energy.
By Deane Morrison
July 18, 2006; updated Sept. 18, 2006
Five University researchers have taken a stand in the long-running debate over whether ethanol from corn requires more fossil fuel energy to produce than it delivers.
Their answer? It delivers 25 percent more energy than is used (mostly fossil fuel) in producing it, though much of that 25 percent energy dividend comes from the production of an ethanol byproduct, animal feed.
But the net energy gain is much higher -- 93 percent -- from biodiesel fuel derived from soybeans. And alternative crops such as switchgrass or mixed prairie grasses, which can grow on marginal land with minimal input of fossil fuel derived fertilizers and pesticides, offer the best hope for the future.
It takes a lot of energy besides sunlight to produce ethanol. Energy is needed for transportation, fertilizers, fermentation, and refining. A Cornell University study by Professor David Pimentel claimed that the energy released by combustion of corn ethanol is less than the energy used to create it. The US Department of Agriculture is more optimistic, estimating that 100 BTU of energy is expended to create 134 BTU of corn ethanol.

Ethanol is not needed in gasoline for environmental reasons, either. The US had required 2% oxygen content in reformulated gasoline to reduce smog-causing NOX (nitrogen oxides) tailpipe emissions in heavily populated areas. The oxygen was supplied by supplementing gasoline with 11% MtBE (Methyl tertiary Butyl Ether) or 6% ethanol. MtBE use has ended after leakage from underground gasoline tanks into groundwater, and ethanol use has increased to replace MtBE. However NOX emissions are properly controlled by modern fuel injection engines, so the ethanol oxygenate is not needed, and the Energy Policy Act of 2005 eliminated this requirement.

The common complaints about biofuels — and they seem to become more common by the day — are that they are expensive and ineffective at reducing fossil-fuel consumption, that they intensify farming needlessly, that they dress up discredited farm subsidies in new green clothes, and that they push up the price of food. All these things are true to some extent of corn-based ethanol, America's biofuel of choice, and many are also true of Europe's favoured biodiesel plans.

As far as the greenhouse goes, figures from the International Institute for Sustainable Development's Global Subsidies Initiative put the cost of averting carbon dioxide emissions by using corn-based ethanol at more than $500 a tonne of carbon dioxide. What's more, the heavy use of nitrogen fertilizer in growing corn leads to significant emissions of nitrous oxide, an even more potent greenhouse gas.

In a recent article in Foreign Affairs, C. Ford Runge and Benjamin Senauer of the University of Minnesota in Minneapolis point to estimates that this artificial price-hike will drive world corn prices up by 20% by 2010. This has a knock-on effect on other staple crops — more land for corn means less for wheat, for example. Higher prices are good news for farmers, including some of those in developed countries. But they can be bad news for the very poor, who spend a disproportionate amount of their income on food. According to World Bank studies, for the poorest people in the world a 1% increase in the price of staple food leads to a 0.5% drop in caloric consumption.

At a little over $2 per bushel when the mandate was first effective, the price of corn has recently surged well above $5, due in large part to nearly a quarter of the crop's now being needed for fuel use. A host of corn-related foods, such as corn-fed meat and dairy, have seen sharp price increases. Wheat and soybeans are also up, partly as a result of fewer acres now being planted in favor of corn. European biodiesel mandates have had a similar impact.

A Purdue University study places the annual food cost increases for 2007 at $22 billion and estimates that "$15 billion of this increase is related to the recent surge in demand to use crops as fuel." That $15 billion calculates to an additional $130 per household in 2007, and food prices are considerably higher thus far in 2008.

Other factors--high energy costs, below-average yields in some regions, growing world population, a weak dollar--have also impinged on food supplies and prices. However, most experts see the biofuels mandates as a substantial contributor, and one that exacerbates any other pressures on food costs.

Moreover, all of this is occurring from biofuels usage that is only a fraction of what will be required in the years ahead. America is only one-quarter of the way toward the 36 billion gallon requirement by 2022 included in last December's big energy bill. The European Union also has plans to increase its biodiesel use, though it is now reconsidering this policy.

To add insult to injury, the global warming benefits of biofuels have been called into question. Two recent studies published in the journal Science conclude that, rather than reducing carbon dioxide and other greenhouse gas emissions, biofuels actually increase them. One study finds that clearing lands for energy crops creates a so-called carbon debt by "releasing 17 to 420 times more carbon dioxide than the annual greenhouse gas (GHG) reductions that these biofuels would provide by displacing fossil fuels," while the other projects "GHG emissions from corn ethanol nearly double those from gasoline for each km driven."

Last year, a study conducted for the Organization for Economic Cooperation and Development, presciently entitled "Biofuels: Is The Cure Worse Than the Disease?" stated that "the rush to energy crops threatens to cause food shortages and damage to biodiversity with limited benefits." The authors were right. Oxfam, an international aid organization that has been very vocal about the threat of global warming, now concedes that "large-scale growth in biofuels demand has pushed up food prices and so far there is little evidence that it is reducing overall carbon emissions.".

Corn growers confess that ethanol leads to higher corn prices - Kansas City Star - 16 related articles

And Finally:
The nation's 147 ethanol plants now have the capacity to produce 8.5 billion gallons of fuel a year, according to the Renewable Fuels Association. Corn is the basic feedstock for most of the plants and about 20 percent of last year's 13 billion bushel corn crop was consumed by ethanol production. That percentage is expected to increase to 30 percent for the next crop year, which ends Aug. 31, 2009, according to Terry Francl, a senior economist for the American Farm Bureau Federation.
In Conclusion:
Remember that 20% of our corn crop is usually exported.............2007 we used that full 20%, this year we expect to use 30% for ethanol? That means we will have to import corn again - higher prices, higher cost, more inflation, more food price increases, increased ethanol cost, higher gas prices..............the never ending spiral continues. Corn planting is estimated to rise to 88 million acres this year as compared to 73 million in 2007 - which roughly translated means 15 million less acres of soybeans or wheat etc etc

Got the picture about Ethanol?????

Part 3 - Oil - and some big surprises

I'm sure you have seen the following chart in some form or other on the evening news or in your local paper or news:
Photobucket's wrong - and I am going to tell you why:

Some of you won't be old enough to remember these, but many others of you will.........


These finds are not included in those reserves, since they were never allowed to drill further test wells to discover the limits if those oil fields. They do have an estimation, based on seismic and geological ..

The U.S. Department of Interior (DOI), in its April, 1987 report on the oil and gas potential of the Coastal Plain, estimated that there are billions of barrels of oil to be discovered in the area. DOI estimates that "in-place resources" range from 4.8 billion to 29.4 billion barrels of oil. Recoverable oil estimates ranges from 600 million barrels at the low end to 9.2 billion barrels at the high end. They also reported identifying 26 separate oil and gas prospects in the Coastal Plain that could each contain "super giant" fields (500 million barrels or more). The U.S. Department of Interior (DOI), in its April, 1987 report on the oil and gas potential of the Coastal Plain, estimated that there are billions of barrels of oil to be discovered in the area. DOI estimates that "in-place resources" range from 4.8 billion to 29.4 billion barrels of oil. Recoverable oil estimates ranges from 600 million barrels at the low end to 9.2 billion barrels at the high end. They also reported identifying 26 separate oil and gas prospects in the Coastal Plain that could each contain "super giant" fields (500 million barrels or more). Another estimate by USGS : California Coast: estimated 11.61 Million barrels of Probable oil reserves.

Now keep in mind.............Oil companies are often able to recover triple what the government estimates.

Let's move on to Alaska. There are finds on the North Slope - currently under production, but declining, with no new drilling allowed. This field is included in the reserve totals above. remaining North Slope reserves, estimated between 5 billion and 10 billion barrels of oil equivalent.

BUT - Anwar is not.

Estimates of how much might be recoverable, have ranged from 3 billion barrels (by the Congressional Office of Technology Assessment in 1989), to 3.6 billion barrels (by the Department of Interior in 1991), to 4-12 billion barrels (by the USGS in 1998). This means, in round numbers (and assuming oil would be found there in one of the indicated quantities), that ANWR could provide between 6 months and 2 years' current US oil supply, or 1 to 4 years' current imports, or 4 to 16 years' current imports from the Persian Gulf.

U.S. Geological Survey - 1980. In 1980, the U.S. Geological Survey estimated the Coastal Plain could contain up to 17 billion barrels of oil and 34 trillion cubic feet of natural gas.

We're not through with Alaska yet..............
There are three more Oil fields, as yet undrilled. One of these is Chukchi
Estimated Reserves 15 Billion Barrels and 76 TRILLION cuft in Natural Gas. PSSSSST............are you adding this up yet?
Drilling was stopped by courts here in 1991 due to Polar Bear Habitat.
Now add ; Teshekpuk Lake National Wildlife Refuge
(No map for this one, but is due East of Chukchi.)
Estimated reserves: 15.6 Billion Barrels of Oil and 83.2 Trillion CuFt of Natural Gas.
Now add : Yukon Flats National Wildlife Refuge
another 15 Billion Barrels, no estimate on Natural Gas.
Do you see where I'm going yet? Have you added it up?
(Puts us ahead of Iraq on the list if you are paying attention!)
and here is a real shocker.............all the above Alaska fields were originally designated as Naval Oil Reserves in 1923.
The NPR-A was created by President Warren G. Harding in 1923 as "Naval Petroleum Reserve Number 4" during a time when the United States was converting its navy to run on oil rather than coal. In 1976 the Naval Petroleum Reserves Production Act renamed the reserve the National Petroleum Reserve in Alaska and transferred it from the Navy to the Department of the Interior. The 1980 Interior Department Appropriations Act directed the Bureau of Land Management (BLM) within the Department of Interior to conduct oil and gas leasing. Nevertheless, the area was left essentially as a wilderness until the late 1990s
Now Add: BeaufortAlaska's Beaufort and Bering Sea.
233 billion barrels of oil equivalent in crude and natural gas have been discovered and 166 billion barrels of oil equivalent are thought to remain undiscovered. Did that knock your socks off? It just put us ahead of Saudi Arabia..................
Drilling stopped by courts because of the Right Whale.........

Now Add: New discoveries in the Gulf of MexicoPhotobucket


Beneath some 20,000 feet of earth and 7,000 feet of water, 175 miles off the U.S. coast in the Gulf of Mexico, lies an enormous field of oil and gas -- enough to potentially double U.S. oil reserves. The lucky SOBs who found it are oil giant Chevron and partners Devon Energy Corp. and Statoil ASA, via the modestly named Jack No. 2 test well. Petro-experts predict that the field found by Jack No. 2 will ultimately produce anywhere from 6 billion to 30 billion barrels, the high end of which could match or exceed previous record holder Prudhoe Bay in Alaska. Along with 2 TRILLION cu ft of Natural Gas.
Did you add that? I'm at over 537 Billion Barrels of Crude.......

We haven't got to Florida yet:
It is expected to match Gulf of Mexico figures, since Cuba is drilling into a 90 Billion barrel field - but unknown - no test wells allowed in U.S. continental waters.

And last but not least, Add:
America is sitting on top of a super massive 200 billion barrel Oil Field that could potentially make America Energy Independent and until now has largely gone unnoticed. Thanks to new technology the Bakken Formation in North Dakota could boost America's Oil reserves by an incredible 10 times, giving western economies the trump card against OPEC's short squeeze on oil supply and making Iranian and Venezuelan threats of disrupted supply irrelevant.

In the next 30 days the USGS (U.S. Geological Survey) will release a new report giving an accurate resource assessment of the Bakken Oil Formation that covers North Dakota and portions of South Dakota and Montana. With new horizontal drilling technology it is believed that from 175 to 500 billion barrels of recoverable oil are held in this 200,000 square mile reserve that was initially discovered in 1951. The USGS did an initial study back in 1999 that estimated 400 billion recoverable barrels were present but with prices bottoming out at $10 a barrel back then the report was dismissed because of the higher cost of horizontal drilling techniques that would be needed, estimated at $20-$40 a barrel. North Dakota: Leigh Price, a USGS scientist, authored a study before his death in 2000 estimating that the entire formation, which extends into Saskatchewan and Manitoba, may hold up to 500 billion barrels of recoverable oil, an amount that dwarf's the 16 billion barrels in the Arctic National Wildlife Refuge (ANWR).
So how did your math end up? How big are our reserves really?
Do we relly need ethanol? Do we really need OPEC? my figures ended up with 1127 Billion barrels of crude reserves - what did you get? All of Opec is only 902..............

But we have the problem:

Clinton extends moratorium on offshore oil drilling
June 12, 1998
Web posted at: 7:31 p.m. EDT (2331 GMT)

MONTEREY, California (CNN) -- President Clinton signed an order Friday extending a ban on most offshore oil drilling for 10 years and permanently protecting national marine sanctuaries from oil and gas drilling.
Oil and gas leasing and drilling are prohibited on most of the outer continental shelf,

By the 1980s, the issue began appearing on ballots.
California voters in 26 coastal communities passed initiatives that provided no zoning to accommodate onshore facilities for companies pursuing offshore oil development.
The state later passed a permanent ban on oil drilling in California waters, with the exception of areas off Santa Barbara and Orange County, covered by pre-existing leases.

The moratorium Clinton is extending was established by his predecessor, President Bush, and expires in 2002. The presidential moratorium is separate from a year-to-year moratorium imposed annually by the Congress since 1981. And re-signed by that OIL MAN in the White House - George W. Bush.

Protection weighed for bird in West's energy areas
Saturday, April 26, 2008
By SCOTT SONNER, Associated Press Writer
RENO, Nev. — The fate of basic industries across the Intermountain West _ grazing, mining, energy _ soon could be at least partially tied to that of a bird about the size of a chicken.

The federal government is under a judge's order to reconsider an earlier decision against listing the sage grouse as endangered, and wildlife biologists are scouring the species' customary mating grounds to see how many are left.

The species was seen as recently as 2004 over an area as large as California and Texas combined, but its habitat used to be close to twice that and research has shown that many types of human activity continue to harm it.

States and even some companies have made efforts to protect the sage grouse on their own, hoping to avoid a federal listing that could stretch across 11 states.
The prospect of listing the species has drawn comparisons to the northern spotted owl, whose listing as a threatened species in 1990 drew the ire of logging interests in the Northwest.

But the grouse occupies several times as much land as the owl.
"It will affect everything we do and know (as) a Western state, everything from livestock grazing to mining to development of sage brush habitat, wind energy," said Ken Mayer, director of the Nevada wildlife department.
"I don't think we have ever been in this position before.

Ranchers and the oil and gas industry dodged stiff regulations in January 2005 when the government decided the bird didn't need to be listed as an endangered species.
But in December, U.S. District Judge B. Lynn Winmill in Boise overturned that decision by the U.S. Fish and Wildlife Service, partly because it was tainted by political pressure from Assistant Interior Secretary Julie MacDonald. She resigned last May amid questions about alleged interference in dozens of other endangered species decisions.

"Her tactics included everything from editing scientific conclusions to intimidating staffers," Winmill wrote.
The agency has until December to issue a new decision. It has given wildlife agencies in 11 states until June 24 to update information on local populations, the threat the sage grouse faces and the steps being taken to conserve them.

The grouse _ mottled brown, black and white _ is found on sagebrush plains and high desert from Colorado to California and north into southern Canada. Their courtship rituals, where males puff up bright yellow air sacks under their neck and fan out the pointy feathers in their tails, are imitated in dances of several American Indian tribes.

The birds return each spring to breeding and nesting locations called leks _ generally high desert with sagebrush, grass and wildflowers that provide both food and cover from predators.

Wildfires, development and industry have steadily cut into that habitat.
"The last 17 years, more than 16 million acres have burned in the Great Basin," Assistant Interior Secretary Stephen Allred recently told the National Association of Conservation Districts.

Allred said 75 sage grouse leks were destroyed last summer in Idaho near the Nevada line by just one set of fires.

The sage grouse now occupy about half of their original, year-round habitat. The Fish and Wildlife Service estimated in 2005 there were 100,000 to 500,000 greater sage grouse.

The birds' reproductive and survival rates are also down in states hit hard by drought and invasive plants such as cheat grass, which elbow out sage brush and native grasses after fires. West Nile virus also is taking a toll.

In Nevada, for example, the numbers of chicks per hen hit a historic low of 0.58 last fall compared to a more typical figure of 1.8 to 2.0, said Shawn Espinosa, a wildlife biologist with the Nevada Department of Wildlife.

Biologists are quick to remind that grouse populations operate in cycles, but Espinosa said "the highs and lows are getting lower and lower and the overall trend of sage grouse population is going down.

Environmentalists who have been pushing for federal protection for more than a decade are convinced its population is on a path toward extinction.
An "honest assessment" of the bird's numbers and the threats it faces will show that it must be listed, said Katie Fite, director of biodiversity for the Idaho-based Western Watersheds Project, which sued the Fish and Wildlife Service over its 2005 decision.
"Unfortunately, in several Western states, efforts seem to be under way to be creative with grouse counting and mask how much numbers are down," she said. "Populations do sort of cycle, but part of the last upward trend was a result of agencies taking great pains to find and count grouse.

Pat Deibert, a Fish and Wildlife Service biologist based in Wyoming and the federal coordinator of the new review, said lek counts are up in her state and others report the same in parts of Oregon and Colorado thanks to recent rainy springs and the absence of significant wildfires.

But she said those areas may be the exception.
Since last fall, Wyoming has undertaken nearly two dozen projects to help grouse, including restoring habitat, purchasing easements on ranch lands, improving livestock grazing practices and researching ways to reduce the effects of oil and gas drilling.
"A number of individual companies have done conservation actions as well. Often they move well locations voluntarily to get out of a lek," said Cheryl Sorenson, vice president of the Petroleum Association of Wyoming in Casper.
"We did not want to even consider having this animal listed," she said. (This one affects the Bakken North Dakota Fields)

U.S. Rep. Kathy Castor, D-Tampa, announced Monday new legislation she is sponsoring to restrict oil drilling off Florida's coastlines.
The congresswoman, whose district includes part of Manatee County, introduced a bill that would make existing restrictions to offshore drilling permanent.

Currently, oil and natural gas drilling is banned within 125 miles of Florida's coastline.
That restriction was enacted in 2006 as a moratorium under the Gulf of Mexico Energy and Security Act and expires in 2022.
Castor said with the Florida Coastal Protection Act she wants to put a permanent ban on drilling within 125 miles of Florida's coastline.
"When I think of the beautiful beaches in Anna Maria Island and Longboat Key I think that it would be devastating to have an oil spill," Castor said.

A bill was introduced in the House (I can't find it yet) at the same time as the above to totally ban drilling in the Bering Sea............

Politicians keep promising a plentiful supply of alternative energy, but that remains far in the future, and much of it will be more expensive than $4-per-gallon gasoline. Ponder this: How could you afford any fuel that needs government subsidies to compete with $120-a-barrel oil? Those will never be affordable for consumers.

We don't have a shortage of oil and gas reserves; they've just been placed off limits. They include parts of Alaska, other public lands, the Gulf of Mexico and offshore areas. The American Petroleum Institute, or API, reports that opening up these areas would provide enough oil to power 60 million cars for 60 years, plus enough natural gas to heat 60 million homes for 160 years. But 85 percent of coastal waters have been declared off limits, along with similar restrictions on 75 percent of the onshore prospects.

That's why 60 percent of our oil is now imported. And these restrictions caused America to lose more than 1 million jobs in oil and gas during the past 25 years. How many "green collar" jobs have we gained to replace them?

Similar federal policies have blocked construction of oil refineries and nuclear power plants for more than 30 years, again increasing our dependence on foreign supplies of energy.
The stifling of domestic oil and gas production and the suppression of new refineries and nuclear power plants have choked off the supplies of domestic energy, forcing us to rely on foreign oil. In the international market, we must bid against the growing energy appetites of China and India, and we're held hostage by the oil cartels of OPEC. The world market is unstable and expensive, and we shouldn't be at its mercy.

With gasoline so expensive, oil executives were called before Congress to discuss record-high profits. The hope was to justify taxing them for another $18 billion, on top of the $90 billion they already pay. Politicians then would give that $18 billion to subsidize other types of energy that are too expensive to operate profitably.

Yet the profit margin for oil and gas is about 7 cents for each dollar invested, according to Business Week. That's about the same margin as Avon Cosmetics, and Bed Bath & Beyond. And toothpaste maker Colgate-Palmolive. Apple, with high-tech gurus, was twice as profitable. So were Coke and Pepsi. And Microsoft and Google made four times the average oil company's rate of return.

But is anybody angry about the high cost of toothpaste, iPods or soft drinks? Why don't more profitable companies get raked over the coals by Congress? Because Congress doesn't need them as scapegoats. Lawmakers have messed up America's energy supply so badly that they need someone and something else to blame. They're creating a diversion – trying to brainwash the public into how to think and who to accuse.

Another reason for high gas prices: federal and state regulations that require dozens of "boutique fuels," dictating different blends of gas for different regions. As a result, we no longer have an efficient national market that enables a surplus in one area to be shifted to another part of the country. Boutique fuels require expensive refinery shutdowns to change output from one formula to another, lowering production and risking overproduction for one area and underproduction for someplace else. Consumers pay the price.

A big part of boutique fuels is the ethanol mandate, now set by Congress at $18 billion a year, which shifted the corn supply from food to fuel. The mandate set off a domino effect as the government pays farmers to grow corn rather than other grains, and to sell it for fuel instead of food. And because corn is the major feed for livestock, the prices of meat, eggs, milk and so on climb along with prices for grain, flour, baked goods, etc.

Nobody wants to be blamed for food riots and world hunger, but the public is realizing those are the outrageous results of ethanol subsidies.
Now, if we want to get serious about lower gasoline prices (and food prices), here's a simple five-point checklist:
1. Understand the causes, especially the role of government
2. Open up reserve areas
3. Build refineries and nuclear power plants
4. End expensive and wasteful mandates, especially ethanol
5. Let the free market develop alternatives for the future
(they said it better than I could!)
Thought I would just throw this one out there...........California won't let us drill because of the "possibilty" of oil spills or leaks..............I guess they forgot they can't boss Mother Nature around. I found this little gem at NOAA.
Know what it is? It's naturally occurring oil seepage into the ocean......

"Nothing has been a more reliable indicator for an upcoming recession as the price of Oil. Every major bear market, every major economic decline has been preceded by a large spike in oil prices. The 73-74 recession, recession of beginning 80's and the recession of 2000. Oil prices jumped 80% between 1999 and 2000. Oil prices have been the most important indicator of major economic disasters. Whenever Oil prices rise about 80% from year ago levels, a fair chance does exist that a recession/bear market will follow."
-Stephen Leeb

"Very little is written about what will happen when all the dollars, built up as foreign central bank and private holdings, get spent. Indeed, we believe that not only will the dollars get spent, but this spending will have massive inflationary implications for America."
-Richard Benson

In closing, I didn't get into the pricing etc of oil and gas and oil company profits (I'll throw this little gem at you though........)
In 2007, ExxonMobil posted an impressive profit of $40 billion dollars, and the Democrats have let everyone they can know about it. But they don't mention how much they paid in taxes. They never talk about the "$105 billion in taxes in 2007…more than two-and-a-half times as much as it made in profit."
When you adjust for inflation, oil companies have collected $643 billion in profits since 1977. The government has more than doubled that, collecting $1.34 trillion.

All these facts can be researched thru Google - using known Government websites (USGS, Dept. Interior, DOE etc) and Oil company sites...........

Finally - the main reason Oil prices are so high (besides us not being able to drill, build a refinery etc)
China and India. Behold, some headlines:

* China And India: A Rage For Oil
* Warning on Impact of China and India Oil Demand
* China and India driving oil demand (Video)
* India, China oil demand 'frightening': Aramco
* China, India to drive demand for oil through 2030 - MarketWatch

China and India have increased their demand so much, that "they have created a worrisome climate among the world's energy producers."

So when you see that talking head on TV or your politicians in Washington saying there is nothing they or we can do and there isn't enough to mitigate our imports..............THEY ARE LYING
Doesn't our National Security and strength of our dollar and economy demand we drill????????????? If I could find this out..........they sure as Hell could!

Signing off................Hope you enjoyed it and are now as thoroughly pissed as I am! Remember - Oil is generally recovered at the rate of 3 times government estimates.........(even more pissed????) - NUKE

*Cross posted with "To Inform and To Inflame"

P.S. The U.S uses 7.5 Billion Barrels a year. At our current rate of consumption, with 1127 Billion in reserve, it would take 150 years to use it all...................
P.S. 2 - If we used our own and didn't import, our trade deficit would be cut by 82% - can you say - "Rock Solid Dollar?" and if we started exporting corn and/or ethanol again - could you say "Trade Surplus".

1 comment:

domino said...

They will always find reasons to complain!