What Consumer Reports missed

September 11th, 2006

We’ve gotten several questions about this Consumer Reports article about ethanol which focuses on the lower fuel economy vehicles get when powered by E85 as opposed to pure gasoline.  The point the article misses is that when you look at it from an energy security point of view the problem is not miles per gallon, it is miles per gallon of oil based fuel.  People have to refuel somewhat more often if they use an alcohol blend, but in terms of reducing oil dependence it’s a clear win, since while you are getting fewer miles per gallon of liquid in your tank, you are getting many more miles per gallon of gas. Of course, if your car is a plug-in hybrid, and your first 20 miles or so of driving are done on grid-electricity, than you’ll hardly ever have to go to the fuel station anyway since you’ll be recharging at home every night and fairly rarely dipping into your liquid fuel tank for power (50% of cars on the road in the U.S. are driven 20 miles a day or less.)  And let’s keep in mind that unlike in the 1970s, today only about 2% of U.S. electricity is generated from oil.

While we’re on the subject: the two key issues regarding alcohol fuels are 1.open up the market to imports by removing the onerous tariff on imported ethanol 2.ensure that flexible fuel vehicles can run on a variety of alcohols in a addition to gasoline (not just ethanol) so that the liquid fuel market can really open up to competition. Gasoline-ethanol-methanol flexible vehicles would do the trick. 

UPDATE:  here’s a relevant quote from Set America Free Coalition member Robert Zubrin’s book review of Nobel Laureate George Olah’s Beyond Oil and Gas: The Methanol Economy: “The commercial competitiveness of ethanol is somewhat confused by the complex influences of a variety of subsidies and tariffs. By contrast, methanol is currently selling—without any subsidy—for about $0.80/gallon. Given that methanol’s energy content is about half that of gasoline, that price is the equivalent, in energy terms, of gasoline for $1.60/gallon. In other words, we can produce a useful and economically viable vehicle fuel, using a huge domestic and Western hemispheric resource base, at prices lower than gasoline.”

NEVER FORGET

September 11th, 2006

One New Yorker’s 9/11 tribute.

Fueling war on the West

September 11th, 2006

Set America Free Coalition members Gal Luft and Milton Copulos write in the Washington Times:

“On September 11, across the nation Americans will gather in remembrance of the nearly 3,000 victims of the worst terror attack in U.S. history. Yet, even as we gather in mournful homage, representatives of the nations largely responsible for the tragedy will meet in Vienna, Austria, at the 141st gathering of the Organization of Petroleum Countries (OPEC) with a different purpose: keeping oil prices high to ensure the continued flow of petrodollars into their coffers. “  Keep reading

Iran: Our Response To Sanctions Will Make the West Shiver With Cold

August 8th, 2006

Iranian Supreme National Security Council Secretary Ali Larijani has a message to all those who think “the oil weapon is obsolete”:

“[sanctions against Iran] will have many ramifications in the international arena. They will be harmed more than us. We control all aspects of this issue. They must not think we will not respond if they hurt us. They must not force us to make them shiver with cold, and make them face more problems. We don’t want to take this path, but if they do, they will have to bear the consequences. This is not immediate, but if they do so, we will respond in a manner that will be sufficiently painful to them.”

In case you missed it

August 2nd, 2006

A recent Detroit Free Press article: “With voters clamoring for relief from sky-high gas prices and facing long waits to buy hybrid cars, bipartisan legislation to increase production of fuel-efficient vehicles and alternative fuels is gaining momentum. More than a quarter of the Senate, including five potential presidential candidates, and 84 House members [ed: 88 as of now] are pushing for a vote on “vehicle and fuel choice” measures that are supported by an unusual alliance of conservative and liberal groups [...] The fuel choices bills reflect proposals of the Set America Free Coalition, a group composed of conservative-leaning military hawks from the Reagan and first Bush administrations, social conservatives, environmentalists and the labor movement.”

Senator Lieberman calls to set America free

August 2nd, 2006

in his recent NY Post editorial:

“Our dependence on oil is sapping America’s inde pendence. We must diversify the fuels that power our nation, or risk ceding our nation’s power to rulers separated from us by a world in geography and by centuries in values.

“Oil recently hit a record high above $75 a barrel and is expected to keep climbing. Fifty-dollar fill-ups have become routine. But couple the already tight global oil market with the fact that much of the world’s oil comes from countries that are unstable or hostile to America, and you realize that our economy and national security hang upon tenuous strings.

“Our dependence on oil means that royals in Saudi Arabia, rebels in Nigeria, mullahs in Iran or Venezuela’s anti-American President Hugo Chavez all have an outsized power over our nation’s destiny and international relations. We are just one well-orchestrated terrorist attack or political upheaval away from an overnight price spike to $100 a barrel that would send the global economy tumbling and the industrialized world scrambling to secure supplies.

“[...] The growing global dependency on oil endangers our nation. Failure to act will leave us a pitiful giant, like Gulliver in Lilliput, tied down and subject to the whim of smaller nations who have oil.

“And the outrage is that we will have given them the ropes and helped them tie the knots – for solutions are readily at hand.

“It is time to set America free. Cutting our dependence on oil will strengthen our security, preserve our independence, and energize our economy. “

What free market?

August 2nd, 2006

Anyone who thinks the oil market is free should read the following Wall Street Journal article very carefully.  Does Venezuela’s national oil company PDVSA, now run by foaming-at-the-mouth dictator Hugo Chavez,  sound like a company run according to free market principles? 

“Since Mr. Chávez took power in 1999, he has become PDVSA’s de facto CEO, steering the oil company into political, economic and philanthropic ventures that have distracted it from its core business of finding and producing more oil. The consequences for PDVSA are stark: Output has fallen to an estimated 1.6 million barrels a day from nearly 3 million barrels in 1998.

“The oil company, the world’s third-biggest by most measures, is run along social and political guidelines as much as business tenets. As a result, much of the decision-making involves figuring out new ways to fund Mr. Chávez’s pet projects. One of the latest ventures was paying to televise soccer’s World Cup for free in Bolivia, a Chávez ally.

“Mr. Chávez’s geopolitical considerations, and his anti-American bent, also influence the way the company does business. PDVSA has turned away from traditional partners like U.S. major Exxon Mobil Corp. and is doing much more business with state companies from Iran, China and India. This weekend, during a visit to Tehran by Mr. Chávez, Iran pledged to invest $4 billion in two Venezuelan oil fields. The two nations also unveiled a raft of joint ventures, including a refinery in Indonesia.

“[...] Nowhere has the company’s decay turned up faster than at PDVSA’s massive 1.3 million-barrel-a-day domestic refining network, which suffered more than a dozen plant outages in 2005. In March, two workers died in a blast at the Amuay refinery, the nation’s largest. Last month, another explosion and subsequent fire caused extensive damage at a 190,000-barrel-a-day unit at Amuay, sending spot gasoline prices higher in the U.S. Gulf Coast where Amuay ships much of its production.”

The consequences to the global market are not at all trivial:  “The company’s diminished production has cut world output by more than 1%. That may not sound like a lot, but in a global oil market stretched tight by growing demand, political volatility and hard-to-expand supply, the company’s production shortfall has contributed to the run-up in oil prices during the past few years, and is likely to continue to do so.”

Treasury Secretary Henry Paulson: “We are too dependent on foreign sources of oil”

August 2nd, 2006

An excerpt from his speech yesterday at Columbia University:

“Another serious long-term structural challenge is energy security. Today this is top of mind for many Americans because they are paying about three dollars per gallon at the gas pump – a cost that generates real hardship for all those who are trying to make ends meet. These prices are largely attributable to a strong global economy that brings with it an increasing demand for oil, particularly in rapidly growing and developing emerging markets such as China and India.

“The fact that our economy has remained strong in the face of these high oil prices is a testament to its remarkable resilience. The global demand for oil is outstripping supply and we as a nation have a long-term structural problem: We consume much more oil than we produce; We are too dependent on foreign sources of oil; And too much of it comes from troubled parts of the world. And this will still be true if gas prices decline.

“The President and this Administration are focused on this problem, and have made important proposals and progress in a number of areas. But everyone I have talked with, from the President, to Sam Bodman, our Secretary of Energy, to Senators and Congressman on both sides of the aisle, agree that much more has to be done. It is a major long-term challenge and one we need to fix through a comprehensive approach. We need to do more on the supply side, and we need to do more to conserve energy. In addition, we need to do much more in terms of investing in new technologies and further developing alternative sources of energy, including nuclear power* and ethanol. In doing so, we need to encourage market-based solutions. Moreover, an energy policy that takes us toward greater energy security should also lead to cleaner air and cleaner water. ”

*We should point out:  unlike in the 1970s, today only 3% of U.S. electricity is generated from oil, so shifting more electricity generation to nuclear power (and solar, and wind, etc etc) may be useful for a variety of reasons, but has nothing to do with reducing oil dependence.

$100 oil?

August 1st, 2006

“Unless somebody discovers something very quickly and very accessibly, we’re all going to be dumbfounded at how high the price of oil will go, including me,” Jim Rogers, the co-founder of George Soros’s Quantum hedge fund, said during an interview in Singapore.

Kudos

July 31st, 2006

to Reps Grace Napolitano [CA-38], Mark Udall [CO-2],  Curt Weldon [PA-7], and Cynthia McKinney [GA-4] for becoming cosponsors of HR4409, The Fuel Choices for American Security Act.
Is your Representative on board yet?