Bush Blunders on Gasoline

it makes sense is to remove the high sugar tariff, that favors companies like adm, and import ethanol from brazil. break the power of big agribusiness, and let the former tobacco and cotton farmers in the carolinas grow hybred sugar cane. subsidized corn ethanol, from the agri-giants, is highly inefficient.

when kennyboy lay gets on the stand, ask him if anyone from enron was at cheyney's secret energy advisory conference. wouldn't it be nice to see a transcript of that love fest.

a major tax on vehicles, that get less than 25 mpg, would be great. three thousand dollar tax credits for buying vehicles, that got more than 40 mpg, would be even better. so what, if it hurts g.m. the company will eventually go bankrupt, anyway. look for toyota to buy it. don't forget who already owns chrysler corp. don't worry, a bankrupt g.m. will still employ plenty of workers in mexico and canada.

realist - I used to work in that business and there is no US industry as dependent on subsidies than the cane sugar industry... way worse than corn ethanol.

The only way Carolina cane could compete with Brazil WITHOUT PROTECTION is if the Carolinians (1) worked for Brazilian wages since cane is far more labor intensive than corn and (2) Carolina practiced Brazilian environmental laws - ie dumped the stillage into the rivers.

Item (2) isn't too far from the current situation in Carolina (if the hog industry is any measure) but item (1) is still an order of magnitude off Brazilian standards... you all have a lot of racing to the bottom before your wages are as low as ag workers in Brazil.

BTW - ADM runs 'wet mills' which means they 'fractionate' the corn kernel prior to fermentation and because of this is FAR more efficient & economical than most ethanol plants... In a wet mill the only part of the corn kernel that goes for sweeteners or ethanol is the starch... which is of marginal value as a feed source for animals or humans anyway. The high protein & oil fractions of the kernel end up as corn oil or as high protein animal feed and is much greater value than dry distillers grain (by product from 'conventional dry mills').

I ran & started up plants like these for half a decade - I know them pretty well. Growing cane in the US for fuel is NOT our answer unless we want to import the Brazilians & others to work the plantations & pay them a wage low enough to be sure we remained competitive. I think we tried that once already... prior to the Civil War.

all those comments on oil/gasoline markets. i live in state of washington. our gas comes from alaska. no ethanol in that one. prices are up anyway. it is hard to believe the oil/gas industry as long as the fact are so wrong and they just toss every possible excuse in the discussion to increase prices. bush only makes it worse. incompetent foreign policy comes with a hug price tag. i read yesterday that they are sending baker in the field after the current administration messed things completely up. they are now outsourcing the secretary of state position.

dryfly,

what about the idea of importing the ethanol from brazil and removing the tariff? wouldn't that be cheaper for the consumer than adm ethanol?

As for Bush's re-regulations making sense? Its political posturing from an oil-man. He could careless if the air was bad.

As for not filling the Strategic Oil Reserve as fast as planned? I think that pretty much tells us nothing is going to happen to the Iranian bomb effort anytime too soon... other than political posturing here as well.

Bush isn't quite transparent but getting there.

Suggesting that this is a return to air standards of 30+ years ago is hyperbole at its worst (and seems partisan). First, no one has suggested we reintroduce LEAD to gasoline! Second, no one has suggested we do away with modern clean burning fuel injected engines in favor of old style carbs.

California dealt with the 'boutique' gasoline issue several years back--with shortages and sharp price jumps vs. nearby states.

The sensible thing to do would be to reduce/eliminate local variations of gas over a 3-5 year period. Use the tight CA standards if necessary, just get rid of all the arbitrary laws.

what about the idea of importing the ethanol from Brazil and removing the tariff? wouldn't that be cheaper for the consumer than adm ethanol?

ADM & Cargill would love it. Realize they are first & foremost TRADERS... only after that are they processors.

We were doing that like crazy in the 80s when I worked for the 'supermarket to the world' and the sugar & corn lobby put a halt to it (pressed congress to imposed quotas like crystalline sugar and revoke tax breaks).

But even then there isn't enough Brazilian ethanol for everyone and certainly not onstream fast enough to stem this run up.

Biofuels - both domestic & international sources - offer promise but it will take a lot of development & price increases before it is a viable alternative to fossil fuels. They will be there some day but never as cheap & as plentiful as Saudi oil was.

I hope that answers some of your questions.

I hope that answers some of your questions.

it does, but i hate when facts get in the way of my dreams.

generic - many of the local variations are due to local conditions and aren't due to boutique fashion preferences...

Consider diesel fuel... you don't think there are reasons we alter our fuels in Minnesota differently than California? You ever see what diesel fuel looks like at 30 below without seriously lightening the blend? It looks like wax and pours about as well. We alter our blends out here damn near month-to-month.

Similarly we have far less problems with particulates here than Cali since we almost never get inversions. Wind blows on the plains almost all the time. So aren't quite as tough on sulfur.

Many of those local boutique regs are little more than states trying to insure companies market products in those locations that won't compound the problems they already face.

And the 'market' won't handle it... you can't look at diesel fuel at 50 degrees and know if it will clog up or not if a cold front comes through over-night... but the state goes out & tests & fines companies that don't meet the req's.

Lead is a no-brainer since it poisons catalysts in cat-converters but relaxing sulfur isn't so clear cut. High sulfur will result in serious smog increases in many cities - esprcially out west where the sun is so intense.

If there is any partisanship it is on the part of the administration trying to avoid the wrath of the public prior to an election season.

"Many of those local boutique regs are little more than states trying to insure companies market products in those locations that won't compound the problems they already face."

What part of REDUCE didn't you understand? It would be possible to reduce the variations and still meet local needs (cold temps, high altitudes, etc.)

generic, your point is well taken - I haven't seen the specific proposals and I doubt anyone is suggesting we return to leaded gas. But I think the Bush Administration is addressing a long term problem with a "temporary" solution that I hope doesn't become permanent.

I noted in my post that I support reducing the number of blends - that seems reasonable.

Best Wishes.

"Does the Bush Administration believe the recent increase in gasoline prices is temporary?"

Nice political cheapshot. I'm guessing the president will delay next week's ethanol mandate, which is threatening to bring back the gas rationing of 1979. And, BTW, the recent increase of gas prices is temporary. It's a big speculative bubble. Once Americans park a few of their Hummers the price will plummet.

I agree that reducing the number of blends down from the 50+ of today to something like 6-7 would make a lot of sense and still have fuel that would work for everywhere in the country, lets just make sure those 6 or 7 are among the cleanest possible. A one or two month delay in phasing in the ethanol standard is also sensable, to give a little more time to transition, since we seem to be in a pinch, and yes importing ethanol would make sense until we can get our domestic production up to serious levels (hopefully with celloustic based ethanol, which would be a significant net energy gain, where as corn ethanol is a breakeven to 10% gain situation, but even with no net gain in energy, it still makes some sense from an environmental point of view). However, these steps will only help at the margin, perhaps a dime or so at the pump, but better than nothing. Longer term we need higher CAFE standards, a big push for compact floresecnt light bulbs, more wind solar etc. And by the way, lets start building those clean coal gasification plants NOW. The CO2 could be ecaptured at the source there and used for tertiary recovery in stripper oil wells.

What part of REDUCE didn't you understand? It would be possible to reduce the variations and still meet local needs (cold temps, high altitudes, etc.)

I'm not sure that's the case at all - I'd have to see data before I ASSumed that was the case... for all we know maybe MORE variation makes sense.

Understand it isn't necessarily difficult to produce different blends... many times it is little more than just that BLENDING... start with a couple basic feed stocks and then mix according to local time & place requirements at time of order. We did EXACTLY this when we were blending ethanol and sweeteners... it took a few minutes of pumping X amount of one product into a tank with y amount of another, let it mix then load out into a tanker... rocket science eh?

The hard part is starting with very clean low sulfur base product... getting the sulfur out is were the cost is so my guess is that is where the 're-regs' will focus on... letting sulfur pass through to your lungs.

That and the alcohol requirement John S pointed out which was a sop to ag state GOP senators anyway... In hot parts of the country ethanol probably adds to smog more than reduces it because it increase vapor pressure so much.

But ASSuming the boutiques are the problem without even looking at what is involved isn't necessarily the answer.

John S., both the supply and demand curves are very steep for oil. So it is very possible that a small decrease in demand could lead to a large decrease in price. And last year, when prices hit $3 per gallon, we saw some elasticity in demand. But I doubt many people will be parking their Hummers just yet unless the economy slows significantly (possible).

As far as a "cheap shot", I don't think so. As I noted in my post, I supported suspending certain environmental rules last year - it was obviously a short term situation. The current situation appears to be a longer term problem and requires long term solutions.

I didn't mean this to be a partisan post (although most people know how I feel) ... I just want to breathe clean air when I exercise and I don't see this proposal as a good trade-off.

Best Wishes.

As I noted in my post, I supported suspending certain environmental rules last year - it was obviously a short term situation. The current situation appears to be a longer term problem and requires long term solutions.

Personally, I suspect that the short-term problem that is being addressed is the November elections. "When gas prices went up, we acted!" will be an excellent pitch if gas prices have gone back down by October. Cause and effect will have little to do with the the pitch's effectiveness.

Cause and effect will have little to do with the the pitch's effectiveness.

Especially since the 'real cause' of this run up in prices was the 'fear premium' from sword rattling with regard to Iran's nukes... if they stop that then oil falls $20/bbl or so. Heck maybe even more.

The problem Bush will have is justifying doing nothing to his base... but then they aren't complaining too much about doing nothing against North Korea so maybe they will think everything is just fine.

Everyone is going to have the bomb in a few decades.

I've always understood that many of these fuel additives meant to make emissions cleaner also make the fuel less efficient, thus cancelling the environmental bennies while increasing prices. The same goes for lowering engine compression ratios, adding efficiency-robbing catalytic convertors and recirculation hoses that pump hot, dirty air back into your injection. I've got an '05 Ford Focus that is listed as a "Partial Zero Emissions Vehicle" (PZEV): 35 mpg on the highway isn't bad, but I think I'd be better off with the Corolla that's roughly the same size but gets 41 mpg without all the inefficient environmental controls.

Call me evil, but I think the higher prices work to advantage. I wish they'd been done with high gas taxes years ago, but they do encourage personal action. 3 bucks is a psychological tipping point.

I think there is an easy 5 to 10 percent in conservation, more difficult measures in serious car pooling software, eg. scheduling in real time by known, password identified individuals by phone or computer which could also be extended to pickup and delivery, longer term reductions as the fleet is shifted over.

Ditto for electricity and other power. Lots of it's not glorious, insulation and clotheslines along with geothermal heating and cooling, "intelligent" appliances which are able to read the availibility of electricity and in many cases (water heaters, air conditioners...) turn off and on for minutes along with UPS for other items, lcd televisions... backup systems which smooth electric production, holding surplus and supporting spikes in demand so average production can be lower.

I think being scared is going to push us in the direction of these things. People are also going to get a notion of simple group economics such as driving hummers pushes up demand and thus prices, right now the owners think it's a way of saying "F$ck the Arabs!" and believe it an extension of "shopping as the way to fight terrorists" as propsed by the administration after 9/11.

A different state of mind is necessary. Ithink in the medium term we can conserve enough to partially push down prices, but for now it has to frighten and hurt.

The American people are self indulgent as hell and we need politicians who tell them so. I reduced gas usage by 35% in the last 2 years by downsizing vehicles including getting a scooter and more strategic driving. Not everyone could match these numbers, but lots could.

Japan and Germany get along rather well with per-capita energy consumption only a little more than half that of the US.

Angela,
I strongly urge all Democrats to adopt this message immediately. Please make it your top priority to tell everyone how self indulgent they are.

CR,
The AP has updated their story (check the link). It has changed enough that you might consider revising your post. Bush did not order a temporary suspension of clean air rules. Rather, he urged temporary waiver of those rules, and we are talking about 20 day waivers. This does not seem like a big deal to me.

Quoting the story now:

"The EPA said it will consider fuel waivers on a case-by-case basis if gasoline supply problems become apparent, which could result in price spikes or shortages of cleaner summer-blend gasoline.

EPA spokesman John Millett said the waivers would not adversely impact air quality because they are only for 20 days, although states can request extensions. "

b money - Toyota's have ton's of pollution control equipment too... almost identical to what our domestics have.

As for the fuel 'additives'... some do reduce efficiency but not a lot. Ethanol for example has 70% the energy density of gasoline... meaning a gallon of ethanol will only produce as much energy as 7/10ths of a gallon of gasoline... a (30%) loss of efficiency.

But ethanol is never more than 10% of the blend (except for E85) so it only reduces the mileage by 3%... (one tenth of 30%).

But in the right application ethanol greatly reduces pollution from incomplete combustion.

Where these additives cause problems is when they are used in cities with high summer temperatures and lotsa sunshine. Because ethanol raises the vapor pressure of the fuel more evaporates when fueling up or from leaks... the vapors then react with sunlight & sulfur & NOx and produces 'smog'. It is argued that adding ethanol makes smog worse in this one situation.

dryfly,

I realize modern cars have emissions control systems, it just seems to me that my Ford is going a bit overboard with it's PZEV engine when a similar, 4-cylinder Toyota gets another 5 mpg hwy without all the added emissions control crap... if it weren't such a hassle I'd seriously consider cutting out my catalytic converter to save fuel. Funny thing about ethanol and the other additives (like MTBE)is government keeps coming up with "solutions" but only makes the problem worse.

Economic statists,

I only live about three miles from work (but have to drive since the Coronado bridge doesn't permit pedestrian traffic, otherwise I'd run), so I've only put about 5k miles on my car this year. Averaging 30 mpg at $2.50/gal, I figure I've only spent a little over $400 bucks on gas this past year (Choke on that hippies!). Not a bad switch from my 10mpg GMC 2500 4x4 Suburban. Who knows: maybe this free market, consumer choice thing will catch on?

I think there is another noneconomic aspect worth considering. According to articles in The Economist and elseware, Brazilian ethanol plants produce up to 5 times the amount energy it takes to produce the alcohol. Even though they probably highball this figure by ignoring or underestimating some energy imputs (perhaps, energy consumed planting cane, energy consumption of human cane cutters,etc.), it puts Brazillian producers in direct competition with opec.
The bottom line from my point of view is that ethanol from cane may be a renewable resource that we can put into our tanks. It is a direct substitute for imported oil. Ethanol from corn appears to be an "energy scratch," using about as much energy as the process produces. (At current efficiencies, the energy from a barrel of oil is converted into ethanol that produces only about the same amount of energy.) Nothing is gained from an energy point of view.
Where and how energy considerations impact economic ones, is currently beyond my grasp.

Walt the trader

Averaging 30 mpg at $2.50/gal, I figure I've only spent a little over $400 bucks on gas this past year (Choke on that hippies!). Not a bad switch from my 10mpg GMC 2500 4x4 Suburban. Who knows: maybe this free market, consumer choice thing will catch on?

Exactly - my wife and I both drive 50 mpg Turbo Diesel Jetta's and it wasn't because of gov't mandates either. But then we drive a skosh more than you do... I'm in sales and cover half of the central US and call on plants you can't easily fly to so drive a lot (almost 50,000 miles a year)... and my wife has a job 45 miles away and does 90-100 miles each day herself. But at 50 mpg it doesn't hurt too bad... just the time wasted on our ass.

Our long term goal is to reduce driving altogether - I'm doing far more 'selling' on the internet & have reduced miles driven by about 20% (sales holding steady in a down market). But if my wife's career keeps going well then we'll move closer to her job. Not making that decision immediately though.

But you are 100% right - gas prices this high will drive 'market solutions' and many will be good ones (drive less, drive smarter).

I'm afraid we all got deveived about the real reason behind the gas price hikes...
It's not technical differences or foreign politics or whatsoever.
It's the mad money printing of the governments and their central banks. This includes the US, but also any other important country in the world.
If the money supply grows by 10-20% annually, this money will be chasing goods and services. It used to be stocks, then real estate and now it is raw materials including oil. You never know what the actual mania will be about. Stop printing or lending money into existance, and you will have ZERO inflation. Proof: from 1865 to 1913 prices increased by about 3% in 48 years. During this time there was a real gold standard and the money supply did not grow. After the creation of the FED1913 the gold standard was effectively abandoned (and NOT 1933 or 1973), and we got ever growing money quantities and inflation.
If we're serious about preventing inflation, let's just stop growing our money supply.

Foolsmate:

The weakness of Dems was that they lost a lot of faith in responsibility, but the Republicans have trumped that, they are the biggest whiners and finders of excuse ever.

Fight Osama by shopping! Fire someone for saying Iraq will cost a couple hundred billion. They promise easy, easy, easy, free lunch...

You believe our people are gutless babies incapable of facing trth, fat and soggy, this is the Republican view. They share it with Osama.

I however am an AMERICAN and have faith in the strength of our people even though at times it must be awakened.

Angela
I understand completely your meaning.

I bet gasoline prices will stabilize at 2 bucks a gallon by 2009. no worries

Login or register to post comments
Syndicate content