Wind ($23.37) v. Gas (25 Cents)

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Of particular interest was this revelation...watch the ethanholics stumble around make excuses/refute this...of course, they're never wrong (NOT).
"ethanol and biofuels receive $5.72 per British thermal unit of energy produced. That compares to $2.82 for solar and $1.35 for refined coal, but only three cents per BTU for natural gas and other petroleum liquids" from the US Energy Information Administration
Wind ($23.37) v. Gas (25 Cents)
May 12, 2008;
Congress seems ready to spend billions on a new "Manhattan Project" for green energy, or at least the political class really, really likes talking about one. But maybe we should look at what our energy subsidy dollars are buying now.
Some clarity comes from the U.S. Energy Information Administration (EIA), an independent federal agency that tried to quantify government spending on energy production in 2007. The agency reports that the total taxpayer bill was $16.6 billion in direct subsidies, tax breaks, loan guarantees and the like. That's double in real dollars from eight years earlier, as you'd expect given all the money Congress is throwing at "renewables." Even more subsidies are set to pass this year.
An even better way to tell the story is by how much taxpayer money is dispensed per unit of energy, so the costs are standardized. For electricity generation, the EIA concludes that solar energy is subsidized to the tune of $24.34 per megawatt hour, wind $23.37 and "clean coal" $29.81. By contrast, normal coal receives 44 cents, natural gas a mere quarter, hydroelectric about 67 cents and nuclear power $1.59.
The wind and solar lobbies are currently moaning that they don't get their fair share of the subsidy pie. They also argue that subsidies per unit of energy are always higher at an early stage of development, before innovation makes large-scale production possible. But wind and solar have been on the subsidy take for years, and they still account for less than 1% of total net electricity generation. Would it make any difference if the federal subsidy for wind were $50 per megawatt hour, or even $100? Almost certainly not without a technological breakthrough.
By contrast, nuclear power provides 20% of U.S. base electricity production, yet it is subsidized about 15 times less than wind. We prefer an energy policy that lets markets determine which energy source dominates. But if you believe in subsidies, then nuclear power gets a lot more power for the buck than other "alternatives."
The same study also looked at federal subsidies for non-electrical energy production, such as for fuel. It found that ethanol and biofuels receive $5.72 per British thermal unit of energy produced. That compares to $2.82 for solar and $1.35 for refined coal, but only three cents per BTU for natural gas and other petroleum liquids.
All of this shows that there is a reason fossil fuels continue to dominate American energy production: They are extremely cost-effective. That's a reality to keep in mind the next time you hear a politician talk about creating millions of "green jobs." Those jobs won't come cheap, and you'll be paying for them.
dec
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Question for Dec or whomever may know this;
The article in question states, " It found that ethanol and biofuels receive $5.72 per British thermal unit of energy produced. That compares to $2.82 for solar and $1.35 for refined coal, but only three cents per BTU for natural gas and other petroleum liquids."
Certainly the authors meant Million BTU??
A single BTU is nothing.
I understand the argument is relevant on a percentage basis.
This backs up my growing sadness that renewables are not going to save the day. It'd be FAR LESS stupid to simply tax people and give away fuel certificates to poor folks. The result is the same.
I'm all for spending taxpayer money on University research to discover breakthrough technology. A billion dollars goes a HECK of a long way in basic research. That same billion dollars goes not far at all toward construction of windmills that will be obsolete if the techno geeks do their job.
I'd LOVE to see the gov't throw a few billion at nanotech, and microbiology. That's what public funded Universities are for.
This concept of throwing up wind farms using current subsidy required technology is sheer stupidity.
The wind farm getting built in my home town is stupid. To keep it profitable requires sucking wealth (which IS energy) out of the the rest of the economy.
A simpler way to say this is that Wind/Solar have a negative EROEI, and until that problem is solved, the worst thing we could do is to waste our last bits of wealth on them.
The people of the USA spent more money on buttock implants in 2007 than we did on basic research lab work for hydrocarbon bacteria.
"Install Gun Turrets on Grain Bins"
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Yep and those butts won't keep our lights burning....but who needs lights....right??!!?? Especially when you are old and fat....LOL [}]
Good point OBG...
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dec: I have said from day 1 that nuclear and coal had to do the heavy lifting. But, how about the subsidies to Big Oil??? What do you think it costs per day to have 2 US Navy carrier groups in the Persian Gulf to keep the Straits of Hormuz open to get Big Oil's super tankers like the ExxonValdez safely through??? Maybe you don't understand what a carrier group is. Each carrier is protected by guided missile cruisers and destroyers and submarines, and they are all supplied by tenders. The entire Iraq War is a subsidy to Big Oil. If there wasn't oil there, we would not be there. The Iraq War has bankrupted this country. And, Big Oil gets it's share of subsidies. How about the 42% depletion allowance??? I am no big fan of wind and solar. Best.
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dec, I have very many questions about the study and would suggest that
you post a link.
OBG makes a good point in that if the subsidy for ethanol was as you
quoted we would be spending
$5.72 x 75700 BTUs per gallon ? (bio fuels are lumped together, I am
using one source estimate of the Btus per gallon in ethanol)=
$429,000 per gallon. That can't be right can it????????????????
This is important information if you know what you are reading and think
about what it is really saying.
One way to look at it would be to estimate the potential new energy
developed because of the subsidy dollars.
The estimates of the total dollars of subsidies per BTU for oil,
natural gas, etc could be divided by the new energy that these subsidies
are expected to yield.
One of the reasons that the bio fuels number is so high is that our
country has set a goal of using lots of bio fuels in the future vs today.
Should the subsidies be divided by current production or by the production
the investments in R&D will yield in new gallons of potential production
in the future? Bio fuels are at a big disadvantage using the above
formula when compared to more mature high volumn energy resources like
oil, natural gas, coal, etc. I would like to see the total dollars
spent on each type of energy. I am sure the comparisons look much
different when we see the total dollars or divide the total dollars by
future yields of energy.
The justification for the subsidies would be to reduce price and
economic shocks due to interuptions or deficiencies in current supplies.
or- to stimulate new supplies that would not be brought to market if
not for the subsidies. I a perfect world we would need no energy bill or
subsidies to make this happen. We do not live in a perfect world.
It is also important (as 48 pointed) out to know what is included as a
subsidy in this paper vs what was not included.
We will look forward to the links that will allow us to see the
information as it was written. Orrrrrrrrrrrrrrrr ethanol investors
are going to be looking for some real money coming to their mailbox
to get that subsidy up over $400,000 per gallon.
"Ask not what your country can do for you, ask what you can do for your country."
John Fitzgerald Kennedy
[/b]

quote:
Originally posted by jabber1
[br]dec, I have very many questions about the study and would suggest that
you post a link.
OBG makes a good point in that if the subsidy for ethanol was as you
quoted we would be spending
$5.72 x 75700 BTUs per gallon ? (bio fuels are lumped together, I am
using one source estimate of the Btus per gallon in ethanol)=
$429,000 per gallon. That can't be right can it????????????????
This is important information if you know what you are reading and think
about what it is really saying.
One way to look at it would be to estimate the potential new energy
developed because of the subsidy dollars.
The estimates of the total dollars of subsidies per BTU for oil,
natural gas, etc could be divided by the new energy that these subsidies
are expected to yield.
One of the reasons that the bio fuels number is so high is that our
country has set a goal of using lots of bio fuels in the future vs today.
Should the subsidies be divided by current production or by the production
the investments in R&D will yield in new gallons of potential production
in the future? Bio fuels are at a big disadvantage using the above
formula when compared to more mature high volumn energy resources like
oil, natural gas, coal, etc. I would like to see the total dollars
spent on each type of energy. I am sure the comparisons look much
different when we see the total dollars or divide the total dollars by
future yields of energy.
The justification for the subsidies would be to reduce price and
economic shocks due to interuptions or deficiencies in current supplies.
or- to stimulate new supplies that would not be brought to market if
not for the subsidies. I a perfect world we would need no energy bill or
subsidies to make this happen. We do not live in a perfect world.
It is also important (as 48 pointed) out to know what is included as a
subsidy in this paper vs what was not included.
We will look forward to the links that will allow us to see the
information as it was written. Orrrrrrrrrrrrrrrr ethanol investors
are going to be looking for some real money coming to their mailbox
to get that subsidy up over $400,000 per gallon.
"Ask not what your country can do for you, ask what you can do for your country."
John Fitzgerald Kennedy


http://www.eia.doe.gov/oiaf/servicerpt/subsidy2/pdf/chap5.pdf
dec
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http://online.wsj.com/article/SB121055427930584069.html
This appears to be the article that dec posted above.
They did not list a link to the source research document.
"Ask not what your country can do for you, ask what you can do for your country."
John Fitzgerald Kennedy
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This $5.72 per BTU or $400,000 a gallon subsidy myth is just another example of how the misinformers put out info that the uninformed gobble up and make fools of themselves by repeating. That`s why you no longer have to watch the comedy channel anymore, just dial up CNBC and watch the talking heads mangle the truth and expose their general ignorance about the food production process, if it weren`t so pitiful, it`d be funny.
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Wind ($23.37) v. Gas (25 Cents)
May 12, 2008; Page A14
Congress seems ready to spend billions on a new "Manhattan Project" for green energy, or at least the political class really, really likes talking about one. But maybe we should look at what our energy subsidy dollars are buying now.
Some clarity comes from the U.S. Energy Information Administration (EIA), an independent federal agency that tried to quantify government spending on energy production in 2007. The agency reports that the total taxpayer bill was $16.6 billion in direct subsidies, tax breaks, loan guarantees and the like. That's double in real dollars from eight years earlier, as you'd expect given all the money Congress is throwing at "renewables." Even more subsidies are set to pass this year.
An even better way to tell the story is by how much taxpayer money is dispensed per unit of energy, so the costs are standardized. For electricity generation, the EIA concludes that solar energy is subsidized to the tune of $24.34 per megawatt hour, wind $23.37 and "clean coal" $29.81. By contrast, normal coal receives 44 cents, natural gas a mere quarter, hydroelectric about 67 cents and nuclear power $1.59.
The wind and solar lobbies are currently moaning that they don't get their fair share of the subsidy pie. They also argue that subsidies per unit of energy are always higher at an early stage of development, before innovation makes large-scale production possible. But wind and solar have been on the subsidy take for years, and they still account for less than 1% of total net electricity generation. Would it make any difference if the federal subsidy for wind were $50 per megawatt hour, or even $100? Almost certainly not without a technological breakthrough.
By contrast, nuclear power provides 20% of U.S. base electricity production, yet it is subsidized about 15 times less than wind. We prefer an energy policy that lets markets determine which energy source dominates. But if you believe in subsidies, then nuclear power gets a lot more power for the buck than other "alternatives."
The same study also looked at federal subsidies for non-electrical energy production, such as for fuel. It found that ethanol and biofuels receive $5.72 per British thermal unit of energy produced. That compares to $2.82 for solar and $1.35 for refined coal, but only three cents per BTU for natural gas and other petroleum liquids.
All of this shows that there is a reason fossil fuels continue to dominate American energy production: They are extremely cost-effective. That's a reality to keep in mind the next time you hear a politician talk about creating millions of "green jobs." Those jobs won't come cheap, and you'll be paying for them.
See all of today's editorials and op-eds, plus video commentary, on Opinion Journal.
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OBG is correct. It is million Btu's. In all fairness to dec, he just copied the same mistake that the WSJ made. This is kind of out of context. It is lifted from Section 5 of a report on ELECTRICAL subsidies. We need to read the entire report and see what the subsidies are to Big Oil.
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Table ES1. Summary of Primary Energy Subsidy Elements in Federal Programs by Fuel and
Program Type on a Budget Outlay Basis, Fiscal Year 1999
(Million 1999 Dollars)
Fuel Type of Subsidy Total
Direct Expenditures Tax Expenditures Research and Development
Income Excise
Oil

0

263

0

49
312
Gas

0

1,048

0

115
1,163
Coal

0

85

0

404
489
Oil, Gas, and Coal Combineda

0

205

0

0
205
Nuclear

0

0

0

640
640
Renewables

4

15

b725

327
1,071
Electricity

0

40

0

c33
73
Total

4

1,656

725

1,56
3,953
aThe category Oil, Gas, and Coal Combined includes expenditures that were not allocated to any one of the three individual fuels.
bAlcohol fuels excise tax.
cElectricity research and development is advanced turbine technology. Other generation technology research and development is distributed by fuel.
Sources: Most information drawn from Office of Management and Budget, Budget of the United States Government, Fiscal Year 2000 (Washington, DC, February 1999).
Executive Summary
File last modified: July 10, 2000
URL: http://www.eia.doe.gov/oiaf/servicerpt/subsidy/table_es1.html
[/b]

Hit the URL at the bottom to view the actual report vs agweb's version. This report is dated=2000. But Oil&Gas received $1475mil vs renewables $1071mil=$404mil MORE! The point is that Oil&Gas is heavily subsidized too. And, this does not include the 42% depletion allowance and the stripper oil well tax credits (<100bbl/day which includes a LOT of US oil wells today). Best.
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[quote]Originally posted by 48
[br]Hit the URL at the bottom to view the actual report vs agweb's version. This report is dated=2000. But Oil&Gas received $1475mil vs renewables $1071mil=$404mil MORE! The point is that Oil&Gas is heavily subsidized too. And, this does not include the 42% depletion allowance and the stripper oil well tax credits (<100bbl/day which includes a LOT of US oil wells today). Best.
[/quot
What a crock of manure you spew 48...Jam has made a complete fool of you and yet you just digging yourself a bigger hole. BTW< the report is dated 2007, sorry...now about that 42% depletion allowance?? I think you better dig a little deeper. You don't have a clue how its calculated. You, like all the other ethanholics just blabber nonsense and are so blind by your make believe nonsense it is beyond comparison.
dec
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Table 36. Energy Subsidies Not Related to Electricity Production:
Alternative Measures
Alternative Measures of Subsidy and Support
Category
Fuel
1st NUMBER =Consumption (quadrillion Btu)
2ND NUMBER = (TOTAL DOLLARS) FY 2007 Subsidy and Support(million$ 2007)

3RD NUMBER = Subsidy per million Btu (2007 dollars)
Coal 1.93 78 0.04
Refined Coal 0.16 214 1.35
Natural Gas and Petroleum Liquids 55.78 1,921 0.03
Ethanol/Biofuels 0.57 3,249 5.72
Geothermal 0.04 1 0.02
Solar 0.07 184 2.82
Other Renewables 2.50 360 0.14
Hydrogen * 230 NM
Total Fuel Specific1 60.95 6,237 0.10
Total Non-Fuel Specific NM 3,597 NM
Total End-Use and Non-Electric Energy NM 9,834 NM
NOTES: Non-electric power industry refined coal consumption is based on the sum of monthly deliveries, in short tons,
reported in the EIA publications cited below for FY 2007. Delivered refined coal to non-electric customers is converted to
equivalent Btu consumption based on EIA?s estimate of the average Btu content for refined coal deliveries to generators
reported to EIA. Other renewables includes hydroelectric, wood, biomass losses and co-products, and hydroelectric power
as reported in the sources noted below.
1Subsidy shown differs from that shown in Table 26 due to inclusion of fuels that have no role in electricity production, such
as ethanol and other biofuels.
*Less than 500 trillion Btu.
NM = Not meaningful.
Totals may not equal sum of components due to independent rounding.
Sources: Energy Information Administration, Monthly Energy Review December 2007, DOE/EIA-0035 (2007/12)
(Washington, DC, December 2007), Table 10.2a and 10.2b; Energy Information Administration, Quarterly Coal
Report, DOE/EIA-0121 (2007/03Q) (Washington, DC, December 2007), Table 35; Energy Information Administration,
Quarterly Coal Report , DOE/EIA-0121 (2006/04Q) (Washington, DC, March 2007), Table 38; Office of Management and
Budget, Budget of the United States Government, Fiscal Year 2008-Appendix; Office of Management and Budget,
Analytical Perspectives Budget of the United States Government, Fiscal Year 2008, Federal Receipts and Collections,
http://www.whitehouse.gov/omb/budget/fy2008/; Joint Committee on Taxation, ?Estimated Budget Effects Of The
Conference Agreement For Title XIII of H.R. 6, The Energy Tax Incentives Act Of 2005," JCX59-05, July 27, 2005.
(Washington, DC, November 2007); Energy Information Administration, Form EIA-860, "Annual Electric Generator
Report," 2006; Form EIA-906, "Power Plant Report;" and Form EIA-920, and "Combined Heat and Power Plant Report,"
October 2006 through September 2007.
"Ask not what your country can do for you, ask what you can do for your country."
John Fitzgerald Kennedy
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THE ABOVE IS TAKEN FROM THE LINK POSTED BY DEC(THANKS).
THIS CHART IS PART OF A REPORT THAT IS PRIMARILY ABOUT ELECTRICITY AND
SUBSIDIES FOR ALTERNATIVE SOURCES OF ELECTRICITY AS 48 STATED ABOVE.
NEED TIME TO READ AND THINK ABOUT THIS REPORT OTHER THAN MY COMMENTS
ABOVE.
"Ask not what your country can do for you, ask what you can do for your country."
John Fitzgerald Kennedy
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dec we figured this out while you were out finding old outdated research... The city folks are going to drive electric cars, use mass tansit and car pool... This should take care of high priced fuel. No fuel no food.
[/b]

It would be nice if they normalized the electricity info to the fuel info
to see a comparison. If electricity is to be used for transportation it
needs to be compared to traditional transportation fuels and bio
fuels.
Of course, government policy is in response to future
energy, health issues, and environmental needs. If not for concerns
about air quality wind, solar, and maybe bio fuels would be a not be
funded at this level at this time.
"Ask not what your country can do for you, ask what you can do for your country."
John Fitzgerald Kennedy
[/b]

Of course using the WSJs interpretation of the chart from the report-
we should spend 0 dollars on hydrogen as we aren't using hydrogen for
fuel NOW.
"Ask not what your country can do for you, ask what you can do for your country."
John Fitzgerald Kennedy
[/b]

quote:
Originally posted by Dave in MidMO
[br]dec....all I can say is that you are "One Crude Dude!" A difference of opinion is just that....selectively posting material supportive of one's position is one thing....kind of like a debate is it not?.and while you have had your share of crap thrown at ya, you still amaze me how blatant your criticism of others can be....you tend to lose your audience due to your arrogance and superior self projection...go **********....your ego needs the self validation for YOUR FANTASY?.JMHO
Good evening!


Yep, dec would rather attack the messenger than discuss the
message. Really takes away from his efforts to make his point.
Annnnnnnnnnnnnnndddddddddddddddddd the WSJ must have forgotten how to
check their copy. I already have seen them use some very questionable
sources if the source fits their opinion.
"Ask not what your country can do for you, ask what you can do for your country."
John Fitzgerald Kennedy
[/b]

Can someone easily tell from the report if the total subsidies listed
are for consumption of DOMESTIC or TOTAL production.
(how about it OBG)
Does the
US consume 55.78 Quadrillion BTUs of DOMESTIC Natural Gas and Petroleum
Liquids or is this total consumption including imports?
1st NUMBER =Consumption (quadrillion Btu)
2ND NUMBER = (TOTAL DOLLARS) FY 2007 Subsidy and Support(million$ 2007)
3RD NUMBER = Subsidy per million Btu (2007 dollars)
Coal 1.93 78 0.04
Refined Coal 0.16 214 1.35
Natural Gas and Petroleum Liquids 55.78 1,921 0.03
Ethanol/Biofuels 0.57 3,249 5.72
"Ask not what your country can do for you, ask what you can do for your country."
John Fitzgerald Kennedy
[/b]

It is apparent from the report that the US Energy Information Admin
believes we are spent about $1.3 billion more US dollars on bio
fuel subsidies in 2007 than we are spending in total subsidies
for natural gas and petroleum fluids.
To add context to 48s comments about the costs of our defending the
Persian Gulf oil supply-
What the Iraq war will cost the U.S.
Former White House economist Lawrence Lindsey ignited a furor with his
estimate of the dollar cost of the Iraq war. For the first time, he
tells how he came up with the number and what he thinks now.
http://money.cnn.com/2008/01/10/news/economy/costofwar.fortune/?postversion=2008011112
The article suggests 100 Billion per year. I know, I know, this war is
not just about oil. Correct. How much would we be spending to rid a
muslim country of a tyrant that was pursuing WMDs and might have
relationships with terrorist organizations if not for the fact
that this country was not sitting on pools of oil and surrounded by
countries also sitting on VERY LARGE pools of oil?
Clue- For instance- how much did we spend on Libya?
I really liked the article above and some points discussed that are not
about energy. Want a perspective on the war in Iraq from a former admin
insider? read the link above.
"Ask not what your country can do for you, ask what you can do for your country."
John Fitzgerald Kennedy
[/b]

dec: Thanx for the insults. If you complimented me, I would definitely know that I was on the wrong track. The subsidies to Big Oil dwarf the subsidies to ethanol. The amount of oil and gas dwarfs the amount of ethanol. So, when you compare the subsidies per Btu, it is naturally less per Btu for oil&gas than ethanol. BUT, the TOTAL subsidies to oil & gas are GREATER than to ethanol. And, a good chunk of the so-called subsidies to ethanol like the 51cent/gal blender's tax credit goes to Big Oil--not ethanol. Just like the 54 cent tariff on cheap Brazilian sugarcane ethanol protects Big Oil's gasoline a lot MORE than US corn based ethanol. Beaner has said that he is not against ethanol--just the subsidies and the mandate. Well, then let's be against all subsidies--INCLUDING those to Big Oil which are MORE than those to ethanol. Bring on your next attack against ethanol. You're too easy. lol.Best.
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jabber: Thanx for the URL. The entire cost of the Iraq War, which I support, is a subsidy to Big Oil. If there wasn't oil in Iraq, we wouldn't be there. We're sure not fighting radical Islam in Darfur...are we??? Afghanistan doesn't have any oil, but that's where bin Laden was hiding out. Now, he's in Waziristan in Pakistan. But, we have to prevent the Taliban from regaining control in Afghanistan to prevent it from becoming a training ground for 9/11 terrorists...again. Best.
[/b]

Paul Harvey had an excellent Saturday segment some years ago about the true cost of mid east oil, I think it was 1998, the year oil and hogs both hit $8. I can't remember his exact figures, but he listed out the costs to the USA of our military presence and a few other factors(this before the Iraq war), I believe what he was trying to say was that we needed to support our domestic producers, as foreign oil was not really cheap, it just looked that way on paper. I wonder, and perhaps someone on here knows, just how many stripper wells got plugged 10 years ago, and what their total daily production was. I heard oilmen around here during that time lamenting that the government needed to put a floor price on oil like they had grain. Looking back, I wonder if the cheap oil OPEC produced by over producing was meant all along to make our nation complacent about energy, if it wasn't it sure worked that way.
I honestly don't know what the answer is. We live not very far from the Wolf Creek nuke plant. I wasn't happy when it was built, it scared me to be honest. But, 20 some years after it first started operation, I haven't grown and extra arm, although I have lost alot of my hair...I still don't like it, but I have to admit right now nuclear seems one of our best options for electricity. There is a big controversy in Kansas over the construction of coal fired plants at Holcomb. Here again, I have mixed emotions, but it does seem to me that we are no where near to being weaned from fossil fuels, I think we still have to use coal. I thought at one time wind was going to be a big part of the answer. I can't quote facts and figures on efficiency, all I know is I walked up to a booth at the Topeka farm show in January ready to buy a personal wind turbine for our home, only to learn that it would at best supply about half the power we needed for the house, and take at least 20 years without breakdowns to pay for itself. I couldn't see any reason at that point to waste my money.
Looks to me like our best bets to combat high energy prices are conservation measures. Just as an aside, I hope someday we find a way to replace oil, and then tell OPEC to kiss our collective "buttocks".
[/b]

Dec-We farmers are all for oil, it`s just that it keeps going up in price and we need some other sources of energy. Ethanol production is in it`s infancy so naturally it`s cost per Million btu would be higher. We know it is not the answer, but it`s part of the answer whether you want to admit it or not. Most of the blame for what is happening in energy markets now lies with our so called govt leaders who are mired down in environmental issues when it comes to energy production. Let`s see now, they want to promote electric use for transportation but won`t let any new power plants be built? Anybody want to venture on building some nuke plants across the border in Mexico? Then we could get our energy and our work force from them and sit here and feel stupidly smug. Yes I know I`m stupid but what this country needs are some stupid people who are practical with no axe to grind.
[/b]

dec: Cheer up! I have good news for you after posting that the subsidies to ethanol are $5.72/Btu!!! The Energy Information Administration/Department of Energy has a......KIDS' PAGE!!! lol. Best.
[/b]

quote:
Originally posted by 48
[br]dec: Cheer up! I have good news for you after posting that the subsidies to ethanol are $5.72/Btu!!! The Energy Information Administration/Department of Energy has a......KIDS' PAGE!!! lol. Best.


and for the Wall Street Journal Opinion writers and proof readers
a million BTUs = 1,000,000 not 1 (just in case they skipped that on
the kids page).
"Ask not what your country can do for you, ask what you can do for your country."
John Fitzgerald Kennedy
[/b]

hey ks cowman is there a Peanut M&M factory close by the nuke plant in your neighborhood because even though you haven't grown any extra arms I have noticed quite a few deformed Peanut M&M's of late. lol best (as 48 would say)

quote:
Originally posted by Kansascowman
[br]Paul Harvey had an excellent Saturday segment some years ago about the true cost of mid east oil, I think it was 1998, the year oil and hogs both hit $8. I can't remember his exact figures, but he listed out the costs to the USA of our military presence and a few other factors(this before the Iraq war), I believe what he was trying to say was that we needed to support our domestic producers, as foreign oil was not really cheap, it just looked that way on paper. I wonder, and perhaps someone on here knows, just how many stripper wells got plugged 10 years ago, and what their total daily production was. I heard oilmen around here during that time lamenting that the government needed to put a floor price on oil like they had grain. Looking back, I wonder if the cheap oil OPEC produced by over producing was meant all along to make our nation complacent about energy, if it wasn't it sure worked that way.
I honestly don't know what the answer is. We live not very far from the Wolf Creek nuke plant. I wasn't happy when it was built, it scared me to be honest. But, 20 some years after it first started operation, I haven't grown and extra arm, although I have lost alot of my hair...I still don't like it, but I have to admit right now nuclear seems one of our best options for electricity. There is a big controversy in Kansas over the construction of coal fired plants at Holcomb. Here again, I have mixed emotions, but it does seem to me that we are no where near to being weaned from fossil fuels, I think we still have to use coal. I thought at one time wind was going to be a big part of the answer. I can't quote facts and figures on efficiency, all I know is I walked up to a booth at the Topeka farm show in January ready to buy a personal wind turbine for our home, only to learn that it would at best supply about half the power we needed for the house, and take at least 20 years without breakdowns to pay for itself. I couldn't see any reason at that point to waste my money.
Looks to me like our best bets to combat high energy prices are conservation measures. Just as an aside, I hope someday we find a way to replace oil, and then tell OPEC to kiss our collective "buttocks".


[/b]

A question for you 48. You insist the ethanol blenders credit subsidizes big oil rather than farmers. So, what if the blenders credit were eliminated? Would corn prices change?
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Beaner: If the 51 cent blending tax credit were eliminated, it would have minimal effect on the price of corn. Reduced corn yield from wet, delayed planting is far, far more significant. The cost of gasoline would go up slightly because it COSTS Big Oil money to blend ethanol. Big Oil does not make any money on blending ethanol. There is no margin to mark up. Plus, it costs Big Oil money to blend ethanol because it reduces their gasoline sales gallon for gallon. I am sympathetic to Big Oil in this regard. Our high standard of living is due in large part to Big Oil. The whole ethanol push by a pro-Big Oil President was actually an attempt to protect Big Oil from the competition that it really fears=Nuclear and Clean Coal to gasoline and diesel. How much progress has been made in expanding Nuclear and Coal??? Very little. Think if all the billions that have been spent on ethanol had instead been directed to Nuclear and Coal!!! The 54 cent tariff on cheap Brazilian sugar cane ethanol protects Big Oil's gasoline far more than US corn based ethanol. Think about it. If cheap Brazilian ethanol flooded this country, that means less gasoline sales. I am pro-Big Oil. Where I draw the line is we have a serious threat to the energy security of this country. And, instead of cooperating like Petrobras does in Brazil, Big Oil does what it always does. It tries to crush all competition at all costs, even if it means that this country goes down the drain. I can understand Big Oil's position. They are operating in their own self interest. That's why we have to temper the "free" market with a Mandate. When other large corporations such as General Motors operate in their self interest which is also aligned with the energy security of this country and install E85 filling stations at their large dealerships in large cities and along the interstates, we will no longer need the Mandates. Best.
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My question is "What is Change?" Is it a short word for revolution? Does Obama subscribe to what he has been listening to from Unreverand Wright? I too am discouraged by the candidates offered and being a long time Republican, am almost ready to do the unthinkable and send Hillary a few bucks. At least we know what she is, the other two are a little questionable. On the other hand, maybe McCain would be good because he would be a lame duck from the start and they might not get too much done. That`s why we liked Ernie Chambers in our useless unicameral which gives little or no rights to rural people, he kept a lot of things tied up so they couldn`t pass any more stupid laws. If you want to pay taxes without representation, move to Nebraska!
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optfmr: The Peoples Republic of KS is not much better. Our Governor just killed two clean coal power plants at Holcomb. With any luck Obama will name her his VP, and we can get her out of KS. You are dead on re change=revolution. I hear you on Hillary. I fear she would be better than McCain even though I sent him $50. I know this sounds strange, but maybe us conservative Republicans should switch to dimrats and take that party back from George Soros. It's getting a little scary. lol. Best.
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I am not endoring any political party or candidate, but, I see change as a form of threat....and threat has both danger and opportunity....I don't see it as a revolution unless the change were to be FORCED upon me and I resisted....my resistance will be in the voting booth and how I choose to speak, fund and spend my resouces to support that which I belive is best of America, my State, County, Town and neighborhood.....JMHO

quote:
Originally posted by optfmr
[br]My question is "What is Change?" Is it a short word for revolution? Does Obama subscribe to what he has been listening to from Unreverand Wright? I too am discouraged by the candidates offered and being a long time Republican, am almost ready to do the unthinkable and send Hillary a few bucks. At least we know what she is, the other two are a little questionable. On the other hand, maybe McCain would be good because he would be a lame duck from the start and they might not get too much done. That`s why we liked Ernie Chambers in our useless unicameral which gives little or no rights to rural people, he kept a lot of things tied up so they couldn`t pass any more stupid laws. If you want to pay taxes without representation, move to Nebraska!


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I think it might be smart (not advice) (disclaimer) to invest in bicycle companies. I saw a few people riding bikes to work today... And since Al Gore invented the Internet I am waiting for him to come up with something where we can just beam over. LMAO
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Here is a article from ZFacts....pretty interesting....I, personally, think the 51 cent tax break and mandates have caused some increase in corn prices, but, the effect is NOT the primary driving forces for our higher corn price....JMHO.
Ethanol subsidies: Who really gets them and for what?

To what extent are the blender's credit and indirect subsidies passed on to ethanol producers and corn farmers and to what extent do they lower prices to consumers? This requires a bit of economics. But, in case you're econo-phobic, the answer is:
The indirect subsidies pay producers what they need to cover costs. The direct (51¢) subsidy is split between producers and consumers with consumers getting what the producers needed and producers getting the rest as windfall profits.
With high gas prices, producers keep the whole 51¢ as windfall profits.
If this sounds strange, it's because it is. If producers need 20¢ of the 51¢ subsidy, the ethanol requirements drive the ethanol price up to cover the extra 20¢, and then the 51¢ is split, with 20¢ going to consumers and 31¢ given to producers as windfall profits. No one intended this, but politicians don't understand market forces and the law of unintended consequences often bites them in the ***.
Here's an example. Suppose the costs of making gasoline and ethanol are:
Cost of making gas = $1.80 Cost of making ethanol = $2.00
Ethanol needs a subsidy and gets two of them. (1) Indirectly from a requirement to buy ethanol. (2) Directly from a 51¢ blenders credit. The indirect subsidy--the requirement--will force blenders to pay $2.00 for ethanol because producers will not sell for less than their cost. So that's like a 20¢ subsidy to ethanol producers--just what they need.
But if ethanol producers charged only $2.00, blenders would buy all the ethanol they could. That's because, with the blenders credit, they'd only be paying $1.49, far less than the $1.80 wholesale cost of gasoline. The blenders credit creates artificial demand that drives the wholesale price of ethanol up to $2.31. At that price, ethanol, in effect, costs blenders $1.80, the same as gasoline. That puts an end to the excess demand for ethanol. So here's the final result.
Wholesale price actually paid to ethanol producers = $2.31
Wholesale price effectively paid by ethanol blenders = $1.80
Actual production cost of ethanol = $2.00
So consumers get a 20¢ benefit, because competition forces blenders to pass on their 20¢ savings relative to the $2.00 production cost of ethanol, and producers get a 31¢ windfall profit. That's how the direct 51¢ subsidy is divided up.
If the cost of gasoline goes up closer to the cost of ethanol, say to $1.90, then ethanol producers only need 10¢, so they get a 41¢ windfall and consumers get a 10¢ savings.When gasoline costs more to make than ethanol (because of high oil prices), ethanol producers keep the entire blenders credit as a windfall gain and consumers keep none of it. It makes you wonder who thought this up.
What about corn farmers? If ethanol production grows very quickly, as in 2006--2007, corn production can't keep up. Corn prices rise, and this allows corn farmers to capture some of the windfall profits going to ethanol producers. Once corn production catches up, corn prices will go back down.
Here is a link: http://zfacts.com/p/796.html

quote:
Originally posted by Beaner
[br]A question for you 48. You insist the ethanol blenders credit subsidizes big oil rather than farmers. So, what if the blenders credit were eliminated? Would corn prices change?


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Dave: Thanx for the article. One can make statistics say anything one wants. I don't agree with their logic. It costs Big Oil money to blend ethanol. They have to buy it, handle it, and blend it. There is no margin to mark up. The 51 cent blending tax credit to Big Oil was in recognition of this fact. The premises in the article you posted are wrong to start out with because ethanol is cheaper than gasoline, and Brazilian based sugarcane ethanol is a lot cheaper--even with the 54 cent tariff. But, Brazilian ethanol does not increase US energy independence. Best.
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Dave: re statistics: See the Myths Debunked by the Indiana Director of Agriculture on another thread. A university professor says it takes more water to make ethanol than gasoline--1700 gallons. But, he is including the RAIN that is going to fall regardless. In actual fact in the ethanol plant, it takes 3 gal of water to make one gal of ethanol. In the refinery it takes 66 gal of water to make one gal of gasoline. It takes 22x more water to make a gal of gasoline than a gal of ethanol. Best.
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If you fill your gas tank with E85, and the 15% gasoline in the blend comes from US oil wells, how much of your money goes to the Mideast terrorists who are trying to kill us??? NONE!!! Right now when you fill up with regular gasoline, 60% of it came from the Mideast. You are financing the very terrorists who are trying to kill you every time you fill your gas tank. Best.
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Where are these facts thats buying oil from the middle east is financing terrorists?
1. The US imports the greatest amount of oil from, Canada.
2. The majority of the "terrorists, 9-11" were from Saudia Arabia, a country king george is ,negotiating with to increase oil exports from, king george negotiates with terroistics nations, huh, what a liar.
The question is, where does this 66 gallons of water get used in the refining of oil to gas?
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How does water get used in refining petroleum?
From Wikipedia-
Siting/locating of petroleum refineries
The principles of finding a construction site for refineries are similar to those for other chemical plants:
The site has to be reasonably far from residential areas.
Facilities for raw materials access and products delivery to markets should be easily available.
Processing energy requirements should be easily available.
Waste product disposal should not cause difficulties.
For refineries which use large amounts of process steam and cooling water, an abundant source of water is important. Because of this, oil refineries are often located (associated to a port) near navigable rivers or even better on a sea shore. Either are of dual purpose, making also available cheap transport by river or by sea. Although the advantages of crude oil transport by pipeline are evident, and the method is also often used by oil companies to deliver large output products such as fuels to their bulk distribution terminals, pipeline delivery is not practical for small output products. For these, rail cars, road tankers or barges may be used.
It is useful to site refineries in areas where there is abundant space to be used by the same company or others, for the construction of petrochemical plants, solvent manufacturing (fine fractionating) plants and/or similar plants to allow these easy access to large output refinery products for further processing, or plants that produce chemical additives that the refinery may need to blend into a product at source rather than at blending terminals.
"Ask not what your country can do for you, ask what you can do for your country."
John Fitzgerald Kennedy
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Who cares if you use a lot of water to refine petroleum if the water is pumped out of the ocean? The water is evaporated into atmosphere as steam where it condenses and falls back to earth as rainfall. It is a different thing if the water is pumped from underground or taken from a river ahd thereby reduces irrigation potential.
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quote:
Originally posted by Beaner
[br]Who cares if you use a lot of water to refine petroleum if the water is pumped out of the ocean? The water is evaporated into atmosphere as steam where it condenses and falls back to earth as rainfall. It is a different thing if the water is pumped from underground or taken from a river ahd thereby reduces irrigation potential.


Yep ocean water seems to be in BIG supply. Some water supplies are more
inadequate/vulnerable than others. How many OF THE US DOMESTIC OIL RE-
FINERIES USE OCEAN WATER VS RIVER VS GROUND WATER?
"Ask not what your country can do for you, ask what you can do for your country."
John Fitzgerald Kennedy
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Beaner: The point is that the author was counting the rainfall to grow the corn and trying to put ethanol in the worst possible light. It's going to rain whether we have ethanol or not. 95% of the corn used in ethanol is not irrigated and depends solely on rainfall. Our local ethanol plant bought 3 irrigated circles and the accompanying water rights. Then the local Ground Water Management District cut the water rights by 20%. This was unlawful, but the ethanol plant just treated it as a cost of doing business. So, now the water withdrawal from the Ogallala Aquifer is LESS than if the 3 circles had continued to raise corn. If you want to get concerned about the Ogallala Aquifer, how about T. Boone Pickens buying up all the water rights around Pampa, TX and pipelining the water to the Brazos River, and then using the Brazos River as a "pipeline" and selling said water to San Antonio and Austin??? The 66 gallons is the water used in a refinery. This does not include the water used in waterflood in the oilfields in secondary recovery. Granted, this is connate salt water from the oil well pumping up salt water with the crude oil which has to be disposed of any way. BUT, tertiary recovery using steam injection is NOT salt water in Kern County, CA. This is well water. If you charge this water to the gallon of gasoline, it is a lot more than 66 gallons. Best.
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ivn: It is a fact that every time an American fills the gas tank, he is sending money to the same radical Muslims who are trying to kill us. I am sure that a small amount of the terrorists' financing comes from goat sales. Maybe you would care to document the amount of terrorist financing that comes from crude oil and then how much comes from goat sales. Best.
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I cannot tell you what share of the refinery capacity is on or near the ocean. However, a sizable share is. The following webite shows an interactive map of all U.S. refineries.
http://www.energysupplylogistics.com/refineries/
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Let's Drill
There's oil in them thar hills.
by Fred Barnes
05/26/2008, Volume 013, Issue 35
Senate Democratic leader Harry Reid, the Mr. Magoo of American politics, stumbled onto the truth last week. He discovered the law of supply and demand. "We want to put [more oil] on the market to increase supply and lower prices," Reid said. "With oil and gas prices continuing to break record highs every day, much more needs to be done."
Indeed it does. But Reid won't allow it. His understanding of economics only extends to matters in which he might embarrass President Bush. The oil he wants on the market is the oil the administration is buying for the Strategic Petroleum Reserve (SPR), now nearly full. Reid got his way. The administration now plans to stop oil shipments to the SPR next month.
Beyond that, Reid and his party are committed to suppressing increased oil production in this country, as they wait for that magical day when fossil fuels are no longer needed to supply the nation's energy needs.
That day may come in 50, 60, 70 years--or never. In the meantime, America needs oil, and the good news is we're awash in the stuff. If the oil reserves miles off the Atlantic and Pacific coasts, in the eastern Gulf of Mexico, and in federally owned lands in the West and Alaska were tapped, our dependence on foreign oil could begin to be reversed. In 10 years, half of America's oil could be produced at home (up from 40 percent), with more coming from increased exports from Canada.
We wouldn't achieve energy independence. That's a pipedream, and anyway it isn't necessary in a global economy with multiple producers. But America would be taking a big step toward energy security and reducing the flow of dollars to unstable countries--notably Iran and Venezuela--that do not wish us well.
So more oil production would strengthen America's national security. By increasing the supply of oil, it would reduce the price, or at least ease the pressure on price from rising world demand. And the mere commitment to boosting production would have a soothing effect on a world market easily spooked by threats to supply.
But there's a problem: Eighty-five percent of the untapped domestic sources of oil have been put off-limits. There's a federally mandated moratorium on drilling offshore, and huge roadblocks to exploiting the oil on the vast federal lands have been erected.
"What keeps these areas closed are exaggerated environmental fears, strong prejudice against oil companies and sheer stupidity," wrote Robert Samuelson recently. Lifting the moratorium requires action by Congress and the White House. So don't hold your breath. The Democratic Congress is a wholly owned subsidiary of the environmental lobby, which regards oil exploration, much less drilling, as a sin against nature.
Advances in technology, however, make serious offshore oil spills a thing of the past. One hundred eight platforms were destroyed and hundreds more damaged in the Gulf of Mexico by hurricanes Rita and Katrina without a single major spill. Californians may remember the damaging spill off Santa Barbara, but that was 40 years ago and was the result of ancient technology.
New technology also means the coastlines would not be marred by unsightly oil platforms. Drilling now goes miles deeper to capture oil once out of reach--and much farther offshore. The moratorium doesn't take this into account. It blindly bars drilling for 200 miles off the Atlantic and Pacific shores.
The United States is virtually alone in treating offshore production as taboo. Great Britain and Norway drill off their coasts without polluting the North Sea. Brazil has achieved energy independence not only by ethanol use but also by expanded offshore oil production. China is now drilling at Cuba's behest in waters halfway to the coast of Florida.
There's another compelling reason to boost domestic production. Oil from current sites is gradually being depleted. Unless new sources come on line in the next few years, America will produce less oil at home and become even more dependent on oil from abroad, the Middle East in particular.
Reid and Democrats, OPEC's best friends, aren't noticeably concerned. Their next step is to remove tax incentives to explore and drill for more oil. And Senator Hillary Clinton is eager to impose a new windfall profits tax on oil revenues. These measures have no purpose other than to punish oil companies. They are counterproductive.
When you remove incentives to produce something and when you slap higher taxes on its producers, one thing happens: You get less of the product. In the case of oil, we need more of it and will for the foreseeable future. The oil is there for the getting. But it won't come out of the ground on its own.
--Fred Barnes, for the Editors

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Our Hopeless Energy Policy
Bad questions lead to bad answers.
by Irwin M. Stelzer
05/26/2008, Volume 013, Issue 35
Students of energy policy despair, and at times believe that Dante's inscriptsion on the entrance to hell should be emblazoned on the entrances to the Capitol and the White House, "Abandon hope all ye who enter here."
Our president has just gone to Saudi Arabia to grovel before the royal family in the hope of persuading the kingdom to open its taps just a bit to bring soaring oil prices down. The caribou lobby in the Senate has voted down a bill that would have opened a small portion of Alaska's untapped oil fields to exploration and development. (Hillary Clinton and Barack Obama voted to continue the restriction, and John McCain would have joined them had he not been out of town reveling in the applause for his speech promising to lead the fight on global warming.) And the farm and ethanol lobbies are prepared to crush the groups calling for an end to the food-for-fuel mandate that requires motorists to use nine billion gallons of ethanol (auto fuel made from corn) this year.
A good part of the energy policy muddle stems from a tendency to ask the wrong questions. Ask the wrong questions, and you get the wrong answers. The question now being asked by Hillary Clinton, John McCain, and other politicians whose notion of the long run extends only for the six months until the November election is, "How can we lower gasoline prices?" Their answer: Reduce the approximately 18 cent-per-gallon federal tax on gasoline during the summer driving season. The reasons that is exactly the wrong policy are too many to list. One is that oil producers, or oil companies, or service station operators would raise prices by an equivalent amount. Hillary Clinton, in her new populist incarnation, might dismiss this as the ranting of pointy-headed economists, but it is nevertheless true. But give the pandering pols the benefit of the doubt, and assume that prices would go down. The right question would have been, "Is it good policy to lower gasoline prices?" The right answer is "no."
Higher prices seem to be persuading Americans to use less gasoline, witness the increased use of mass transit reported in many cities around the country. Lower gasoline prices would encourage Americans to drive more, use more of the cheaper gasoline, emit more pollutants, and increase the demand for crude oil. So regimes hostile to the United States would sell us still more oil. Venezuela's Hugo Chávez, whose government owns some 8,000 Citgo gasoline stations in America, must be astonished to learn that leading American politicians are eager to increase his revenues so that he can step up his propaganda campaign against America. And the Saudi financiers of jihadists and of the Wahabbi mullahs who fuel anti-Americanism would be pleased to have a few extra hundred million. So would Vladimir Putin. Better that, figure our politicians, than to take the political risk of increasing taxes on gasoline, reducing demand, and getting to the consumers' wallets before OPEC and its allies do.
The wrong question--how do we lower prices?--also led Congress last week to pass legislation ordering the president to stop buying oil for the Strategic Petroleum Reserve. The reserve now contains 701.3 million barrels, a record. Bush wants to fill it to its capacity of 727 million barrels this year, and eventually double the capacity. Stop buying oil, critics, including John McCain, tell President Bush, and demand pressures will ease. Better still, start selling off some of the strategic reserve, and increase supplies of crude oil. The notion that the government can outsmart the market by buying low and selling high is, to put it mildly, questionable. As is the assumption that it is smart enough to distinguish a shock, which might justify use of the reserve, from a trend, which should be allowed to play itself out so that the economy can readjust to the new prices. Besides, oil companies are likely to increase their own inventories when the government stops stockpiling, stepping up purchases of imported crude oil in order to do so. Net effect of all of this on demand and supply: nil. Net effect on our ability to withstand a supply cut-off: substantial.
Next wrong question, and one being asked not only in America, but in most other countries: "How can we replace crude oil with renewable sources of energy?" Answer: Subsidize construction of wind turbines, solar panels, nuclear plants, and the production of corn. But neither wind turbines nor solar energy, on the cheeriest of assumptions, can make a significant dent in the demand for crude oil and its products. As for nuclear, few of these costly plants--and cost estimates seem to be doubling every few months--will be built unless overt or covert subsidies are offered to private-sector players, licensing proceedings and construction times are shortened, and politicians are willing to override Senate Majority Leader Harry Reid to allow the opening of the Yucca Mountain nuclear waste depository.
Which leaves corn. Congress has mandated that farmers be paid huge subsidies to grow corn to be converted into ethanol, a gasoline substitute, while quite inconsistently maintaining a tariff wall to deny motorists access to cheaper imported ethanol. The answer produced by the wrong question has serious negative consequences. For one thing, the negative environmental impact of these biofuels seems to outweigh their positive effect. Among other things, production requires the use of huge amounts of fertilizers, causing run-off that pollutes streams and rivers; farmers around the world cut down environmentally friendly forests to increase planting of oil-substitutes; and acreage previously devoted to growing food is converted to growing fuel. That has contributed to the massive increases in food prices that are afflicting not only Americans but, with greater ferocity, the world's poor. In essence, rich countries are trying to fill their gasoline tanks at the expense of empty stomachs in Africa, Central America, and parts of Asia.
So what are the right questions? First, have any of the programs now in place proved counterproductive? Yes, several have costs that exceed their benefits. Best example: the attempt to grow our way out of the energy problem. Admit that we have erred, and wind down the subsidies that are denuding forests and contributing to food shortages without significantly adding to fuel supplies. That's what a coalition of environmentalists, livestock producers, and consumer groups last week called on Congress to do. They are unlikely to overcome the powerful farmer-ethanol lobby.
Second, are there cost-effective ways of increasing the supply of conventional crude oil? Probably. Studies that showed that the environmental cost of drilling in Alaska's Arctic National Wildlife Reserve and offshore Florida and California exceeded any benefit from new discoveries are now out of date. The benefits were estimated when oil prices were less than half current levels. So the benefits of stepped up exploration have multiplied with the price and value of oil. Meanwhile, the industry claims to have learned a great deal about reducing the environmental impact of such stepped-up drilling. If new studies bear out these impressions, and suggest that the environmental and other costs of drilling are now exceeded by their benefits, restrictions on domestic drilling should be relaxed. But that is not in the cards--all three of the presidential wannabes are pledged to keep Alaska closed to drilling, no matter what the balance of costs and benefits.
Final sensible question, Can anything be done to increase supplies of oil from the world's important suppliers? Answer: Yes, if there is the will to act. The Mexican government depends heavily on remittances sent to poor Mexican families from the millions of its citizens working, legally and illegally, in the United States; the Saudi regime depends on the U.S. military umbrella for its survival; and the Saudi-led OPEC cartel, which has held production constant for eight months in the face of a 54 percent increase in prices, exists only because successive administrations have prevented the antitrust authorities from attempting to break it up. Hillary Clinton is on to something when she calls for antitrust action against this cartel, which would not be the first time the Justice Department has moved against a price-fixing conspiracy by foreign firms. Antitrust lawyers tell me that the immunity of sovereign governments from antitrust prosecution does not extend to their commercial activities.
Bush knows this. He knows that nothing frightens the Saudi regime more than the threat of the furling of the U.S. umbrella, which as Karen Elliott House put it in the Wall Street Journal, "has provided the Saudis with a security blanket that puts this desert kingdom off limits to regional predators" and prevented Iran and Syria from turning Saudi Arabia into another Lebanon. He knows that the Saudis have about two million barrels per day of shut-in, excess capacity. And he knows how vulnerable the Saudi-led OPEC cartel is to antitrust action. Perhaps he worries that if he deploys any of these weapons the Saudis will dump some part of their dollar pile on the market, driving down the value of our currency, and increasing inflationary pressures and interest rates in America. They might, but only if they are willing to drive down the value of the billions of dollars remaining in their vaults, and damage the value of their U.S. investments. Would the president of the United States or the king of Saudi Arabia be the first to blink in a stare down? We will never know, since the administration prefers the role of supplicant to that of tough bargainer.
Nor is there any indication that we are prepared to harden our line with Mexico. No one has suggested that Mexico's continued refusal to allow American capital to flow into its oil industry might be considered when NAFTA is reviewed. Is it unreasonable to suggest that free trade in goods and services, and the virtually unhindered movement of labor across the border, must be accompanied by the free flow of capital across borders? Yes, we benefit from NAFTA, and its abrogation would impose costs on us. But so does Mexico's ban on U.S. participation in its oil industry.
A serious American administration would explain to the Saudis and their OPEC allies, and to the Mexicans, that continuation of their present policies would not be without cost to them. Continued defense of the Saudi regime, a staying of the hand of the antitrust authorities, and continued absence of restrictions on remittances to Mexico will, they should be told, depend at least in part on their willingness to allow Western firms to develop new reserves and to wring more oil from existing fields, and to relax cartel restrictions on current output.
Unfortunately, the right questions are precisely the sorts of questions that politicians abhor. Asking them produces politically difficult answers--higher not lower taxes on gasoline to encourage new technologies and discourage consumption, the opening of now-closed areas to exploration and development, the end of massive subsidies to farmers to grow corn-for-fuel.
Wrong questions and the inevitably wrong policy answers might be one reason Goldman Sachs is talking about a "super spike" that would take oil prices to $200 per barrel. Remember: These are the guys who were laughed at when they predicted that the price of oil would hit $100. Dante might have been referring to what happens to good ideas on energy policy when they are sent to the halls of Congress or the White House, when he wrote, "Through me you pass into the city of woe .#8201;#8201;.#8201;#8201;. into eternal pain."
Irwin M. Stelzer is a contributing editor to THE WEEKLY STANDARD, director of economic policy studies at the Hudson Institute, and a columnist for the Sunday Times (London).

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Striking Out on Energy
Bush and McCain need a new approach.
By Larry Kudlow
President George W. Bush and Sen. John McCain went to bat on energy policy this week. And guess what? They both struck out.
Bush went hat in hand to the Saudis to ask for more oil production in order to bring down world prices. He whiffed. They said no for the second time this year.
ExxonMobil chairman and CEO Rex Tillerson said it?s ?astonishing? that Bush keeps asking Saudi Arabia to pump more oil, rather than working harder for increased oil production at home. Tillerson called this ?terribly upside down,? and went on to say the president should be fighting to open U.S. coastal waters to drilling and production on the outer continental shelf. He correctly wants to end the federal moratorium on such off-shore drilling, where kajillions of barrels of oil and natural gas are being completely ignored.
Motorists are furious with oil at $125 a barrel and a $4 pump price for gas. And they seem to be taking it out on the GOP. That may not be fair, since Bush does favor a pro-production energy policy that includes off-shore drilling, building refineries, clean-coal development, oil sands, natural gas, and nuclear power. But Democrats in Congress stridently oppose these ideas, as does Hill-Bama on the campaign trail. They want an excess-profits tax. Brilliant.
Nonetheless, the longer the energy stalemate lasts, the angrier voters get. You can see it in consumer-confidence polls that are now hitting 25-year lows.
What?s to be done?
Sen. McCain weighed in with a cap-and-trade program that he alleges will solve our global climate and energy problem. It?s a bad idea. It?s really a cap-and-kill-the-economy plan, as well as an unlimited spend-and-tax-and-regulate plan. It?s a huge government command-and-control operation that would make any old Soviet Gosplan bureaucrat smile.
Ironically, the U.S. has virtually the cleanest air of any country in the world. And market forces over the past 30 years have increased all manner of energy efficiency per unit of GDP by more than 50 percent. In fact, according the editorial page of Investor?s Business Daily, U.S. carbon emissions grew by only 6.6 percent between 1997 and 2004, compared with 18 percent for the world and 21 percent for the nations that signed the Kyoto protocol on greenhouse gasses. (Think Europe.)
Then there?s a bunch of scientists who don?t think we have a global-warming problem at all. And many who do acknowledge the threat link it to solar warming, or increased solar activity, rather than carbon.
Cap-and-trade, in other words, may very well be unnecessary. Meanwhile, it will surely reduce economic growth in the years ahead.
The regulatory aspects are mind-boggling. All manner of U.S. businesses ? be they small pig farms, large power plants, or the millions of companies in between ? will be subjected to government rulemaking and standard-setting. EPA inspectors will literally have to visit five million American businesses in order to evaluate carbon emissions and figure out allowances for trading permits.
Think of it. Some sort of federal cap-and-trade department will send out 100,000 inspectors to comb through American corporations and calculate their carbon stories. This is total insanity. The Congressional Budget Office guesses it will cost at least $1 trillion. And a lot of that cost comes from the government?s willingness to give companies carbon allowances which then can be traded in some sort of after-market.
Later on, according to the McCain plan, the government will auction off these allowances, reaping a gigantic windfall. But so far there are no strictures on this revenue honey pot and the unprecedented federal spending it will fuel.
Some global warmers simply want to tax carbon. That at least would reduce the Gosplan effect. Responsible people like Harvard?s Greg Mankiw have even suggested taking the carbon-tax revenue and using it to cut income-tax rates. This is a much better idea ? that is, if you buy into global warming at all.
My friend Art Laffer tells me Al Gore wants a carbon tax, with the revenues being used to abolish the Social Security/Medicare payroll tax altogether. Laffer would prefer a big income-tax-rate reduction that would get us to a 13 percent flat tax. I agree. Either way, taxing carbon, when compared to cap-and-trade, is the lesser of two evils.
To be fair, Sen. McCain does favor nuclear power. But he is opposed to Tillerson?s idea of drilling offshore and President Bush?s idea of drilling in Alaska. That?s not good. And make no mistake about it, his cap-and trade plan will vastly increase the cost of doing business everywhere, including gas prices at the pump. And when you cap something like power, well before so-called alternative-energy technologies have been invented or commercialized, you put a cap on economic growth and prosperity.
That?s not going to make anybody happy.
? Larry Kudlow, NRO?s Economics Editor, is host of CNBC?s Kudlow & Company and author of the daily web blog, Kudlow?s Money Politic$.
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Thanks Beaner...problem with caps is that when they are removed the industry collapses. The market is gone and there is no one and or nothing to move the market in the direction it should go. Caps cause shortages... after caps are taken off the market goes down rather than up in the face of a shortage. There is no short covering to move the market up. JMHO and I am far from an expert.
Besides that the market is correcting as we go demand is disappearing and we have not see it as of yet. Everyone is way more cautious. McCain is as much an economist as I am.
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quote:
Originally posted by verbatime
[br]Thanks Beaner...problem with caps is that when they are removed the industry collapses. The market is gone and there is no one and or nothing to move the market in the direction it should go. Caps cause shortages... after caps are taken off the market goes down rather than up in the face of a shortage. There is no short covering to move the market up. JMHO and I am far from an expert.
Besides that the market is correcting as we go demand is disappearing and we have not see it as of yet. Everyone is way more cautious. McCain is as much an economist as I am.


I agree totally that caps are not the answer. I simply posted what McCain believes.
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Beaner: All good posts. I agree with most all of them except the attacks on ethanol. It is a shame that we have these 3 Presidential candidates. Most disappointing is McCain. If he's the best the Republican Party can come up with, we're in trouble. This is going to cause lasting damage to the Republican Party. Best.
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