Monday, May 30, 2011

Saudi Prince: "We Don't Want the West to Go and Find Alternatives"

The fist rule of monopolies and parasites is to never kill your customer or your host.

Apparently, high oil prices is bad for business.

Saudi Prince Al Waleed bin Talal told CNN yesterday that he wants oil prices to decrease so that the United States doesn't find alternatives to his country's supple of oil.
"We don't want the West to go and find alternatives, because, clearly, the higher the price of oil goes, the more they have incentives to go and find alternatives,"
Well isn't that so nice of him and his country.  Let's keep the price of oil lower.  

As in lower than "outrageous" and greater than the real market price due to OPEC's cartel.


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Sunday, May 29, 2011

Secretary Vilsack Highlights Efforts to Decrease U.S. Dependence on Foreign Oil

US Agriculture Secretary Tom Vilsack highlighted last week the importance of moving toward a clean energy economy and breaking our country's unsustainable dependence on foreign oil.
"Flex-fuel pumps give Americans a choice to purchase domestically produced renewable transportation fuels," Vilsack said. "The Obama Administration is working to transform the United States into a global clean energy leader because transportation fuels created from a wide variety of renewable energy sources will create a new generation of jobs here at home, reduce dependence on foreign oil and enhance our national security."

This past April, Secretary Vilsack announced a series of initiatives to help farmers and rural small businesses implement renewable energy systems and become more energy efficient. One of those initiatives allows USDA's Rural Energy for America Program (REAP) to now make funding available for flexible fuel pumps, sometimes referred to as "blender pumps." 

This is expected to encourage fuel station owners to invest the capital necessary to give American motorists the option of selecting the blend of renewable fuel that meets their needs.

The Obama administration has set a goal of installing 10,000 flexible fuel pumps nationwide within 5 years.

Today, most gasoline sold in this country is a mix of 10 percent ethanol.

Currently, there are 8 - 8.5 million flexible fuel vehicles on U.S. roads, constituting about 3.2 - 3.5 percent of the approximately 250 million vehicles on the road.

These flexible fuel vehicles can be fueled with E85 (a blend of 85% ethanol and 15% gasoline).

There are approximately 2,350 fueling stations that offer E85 of the more than 167,800 stations nationwide.

Earlier this year, the Environmental Protection Agency (EPA) released the results of E15 testing on vehicles years 2001 and younger.

EPA's findings confirm there are additional vehicles on the road able to take advantage of higher ethanol blends than currently available at local, non-E85, pumps.

Saturday, May 28, 2011

Gov. Mitt Romney Declares His Support for Ethanol

Former Massachusetts Gov. Mitt Romney came out in a strong show of support of ethanol this week by publicly embracing ethanol subsidies.

As reported by the Wall Street Journal, Romney:

“I support the subsidy of ethanol,” he told an Iowa voter. “I believe ethanol is an important part of our energy solution for this country.” 

Romney made his ethanol-friendly statements while in Des Moines, Iowa.  Romney is a leading contender for the 2012 Republican presidential nomination.  And Iowa is the country's largest ethanol-producing state and an important first stop in the 2012 presidential primary race.

Romney's announcement comes just a week after Romney's Republican contender, former Minnesota Governor Tim Pawlenty, made his own statement that subsidies for ethanol should be phased out.

So what is this "ethanol subsidy" that has the presidential contenders making these statements?

The Volumetric Ethanol Excise Tax Credit, also known as VEETC, is a credit of $.45 for every gallon of pure ethanol blended into gasoline.  It was established to allow the oil industry to invest in the infrastructure to blend ethanol into the country's gasoline supply.  The credit goes to the actual "blender" of the ethanol, not to corn growers and not to the ethanol plants that make ethanol.

God knows the oil industry wasn't going to do it without some financial encouragement from Congress.  The American Petroleum Institute remains a powerful opponent of alternative fuels like ethanol.

The VEETC is currently funded by Congress until the end of 2011.  Congress is considering legislation that would modify the credit for future years to promote flex fuel vehicles and the installation of flex fuel pumps.

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Friday, May 27, 2011

We're Fueling Terrorism by Paying OPEC

"We're Fueling Terrorism by Paying OPEC"

That's what T. Boone Pickens told CNBC today.

He went on to say that he was "trying to get away from the terrorists," and that "I think the money we pay to OPEC gets in the hands of the Taliban."



But the sad fact remains that the United States is addicted to a foreign oil-based economy.

Our oil addiction continues to fund hostile governments who sell us that oil.

And the United States and its allies spend billions of dollars, and sacrifice our children's blood, to protect the fragile supply route of foreign oil.

Something to think about as we remember our veterans this Memorial Day.

Photo credit: David Shankbone

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Wednesday, May 25, 2011

President Orders Federal Fleet to Use Alternative Fuels

President Obama wants the federal fleet, the largest fleet of light duty vehicles in America, to use alternative fuels by 2015.

In his Presidential Memorandum released Tuesday, he outlined his goal to  "reduce oil imports by one-third by 2025 and putting one million advanced vehicles on the road by 2015."
"By December 31, 2015, all new light duty vehicles leased or purchased by agencies must be alternative fueled vehicles, such as hybrid or electric, compressed natural gas, or biofuel. Moreover, agency alternative fueled vehicles must, as soon as practicable, be located in proximity to fueling stations with available alternative fuels, and be operated on the alternative fuel for which the vehicle is designed. Where practicable, agencies should encourage development of commercial infrastructure for alternative fuel or provide flex fuel and alternative fuel pumps and charging stations at Federal fueling sites."
This good news means that the Federal government will practice what it preaches by actually buying alternative fuel vehicles and ensuring that fueling stations are available.

Monday, May 23, 2011

Ethanol Lowers Fuel Prices!

A new study shows that the use of American ethanol saved the average U.S. motorist about $800 last year.

The study, by Iowa State University and University of Wisconsin, economists says that without ethanol, gasoline prices in U.S. would rise almost 92%.

The impact of ethanol production on U.S. and Regional Gasoline Markets for the period 2000 to 2010 was evaluated by economists the Center for Agricultural and Rural Development at Iowa State University. The results of the study, released last week, show that blending ethanol with gasoline had a dramatic effect on lowering fuel costs.

  • The CARD study says that increased use of ethanol reduced wholesale gasoline prices by an average of $0.89 per gallon in 2010.
  • Midwesterners benefited the most from ethanol because last year they saved $1.37 per gallon compared to the national average of $0.89.
  • The growth in ethanol production reduced gasoline prices by an average of $0.25, or 16% over the entire decade of 2000 - 2010.
  • Department of Energy data shows U.S. gasoline use averaged 138 billion gallons per year from 2000 to 2010, resulting in an annual average savings due to ethanol of $34.5 billion.
  • Last year alone, ethanol reduced the average American household's gasoline bill by more than $800, according to the Renewable Fuels Association.
  • Since ethanol now makes up nearly 10% of the gasoline used in automobiles in the U.S., CARD's economists measured the impact of ethanol's disappearance from the fuel market. If ethanol was no longer available, gas price increases would be of historic proportions, rising by as much as 92% in the short-term.

Click HERE for the study, go to

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Wednesday, May 18, 2011

Corn Prices Higher Regardless of Ethanol

To hear critics of corn ethanol spin it, the reason corn prices are high is because of that mean ol' nasty ethanol.

But the facts and analysis from economists just don't support that skewed thinking.

Corn prices would have done about the same thing with or without ethanol.

That's the conclusion of a recently released report from the Iowa State University Center for Agricultural and Rural Development (CARD).

The analysis by Bruce Babcock and Jacinto Fabiosa showed that general pattern of corn prices seen during 2006-2009—increasing prices in in 2006 and 2007, a price spike in 2008, followed by a sharp price decline in 2009—would have occurred without ethanol subsidies or even if corn ethanol production had not expanded.

It also showed that investor speculation for corn ethanol in 2005, 2006, and 2007 would have occurred even without subsidies due to a combination of cheap corn, a phase-out of MTBE, and higher crude oil prices which made ethanol profitable. Thus, ethanol production would have expanded quite rapidly even without subsidies.
Using the 2004 corn price of $2.06 per bushel as a reference, actual corn prices increased by an average of $1.65 per bushel from 2006 to 2009. Only 14 cents (8%) of this increase was due to ethanol subsidies. Another 45 cents of the increase was due to market-based expansion of the corn ethanol industry. Together, expansion of corn ethanol from subsidies and market forces accounted for 36% of the average increase that we saw in corn prices from 2006 to 2009. All other market factors accounted for 64% of the corn price increase.

Tuesday, May 17, 2011

New Study on Indirect Land Use Change Clears Biofuels

Michigan State University (MSU) released a new study this week that clears biofuels from Indirect Land Use Change (ILUC) charges.

The report conducted by MSU scientists Seungdo Kim and Bruce Dale says that biofuel production in the United States through 2007, “probably has not induced any indirect land use change.”

This new reports sets the record straight from previous reports that maligned biofuels by using incomplete and faulty data.

ILUC has been used as an argument for stopping biofuels development.  The theory goes that any acre used in the production of feedstocks for biofuels in the U.S. results in a new acre coming into food or feed production somewhere else in the world.

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Monday, May 16, 2011

Rising Gas Prices; America Held Hostage to Foreign Oil

America continues to be held hostage to foreign oil.  And we are paying for it.  Literally.

It's hitting everyone's pockets hard.  Rising gas prices continue to climb.  For anyone who has visited a gas pump recently, it's really no surprise.  Gas prices across the country often top $4 per gallon for regular unleaded.  And in some markets, $5 per gallon is the new "norm".

But the pain doesn't just stop at the local Shell, Mobil or Texaco station.

Higher gas prices, brought on by higher world oil prices, means these higher costs will be passed along to consumers in higher costs for everyday items like food and merchandise.

And just very conveniently, Big Oil will show record profits.

We're addicted to oil. Foreign oil.  Foreign oil that fuels the economies of countries and dictators more than happy to see the fall of American prestige and economic and military might.

The death of Osama bin Laden, among other factors, fuels the fears that access to foreign oil will be stopped or curtailed.

But it doesn't have to be that way.  America needs to continue to move to alternative fuels.  And ethanol is already playing its part for a renewable future for America.

But more ethanol pumps are needed.  And more vehicles capable of using higher blends of ethanol (for example, up to 85% ethanol).

In conjunction with other energy strategies, America can reduce its dependence upon hostile countries.

But not if Big Oil has its way.

Source: US Department of Energy

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Saturday, May 14, 2011

That's a Lot of Hamburgers.

It really is Food AND Fuel for America and the world.

An important point often overlooked in the war against corn ethanol is that 1/3 or the corn used for producing ethanol is returned as Dried Distillers Grains.

Ethanol production requires only the starch portion of a corn kernel to produce the American-grown, renewable fuel. The remaining protein, fat, fiber, and other nutrients are returned to livestock feeders.

A new report this week from the Renewable Fuels Association, Fueling a Nation; Feeding the World, shows that the US ethanol industry is providing an important and growing nutritious livestock feed for both domestic and international markets.

According to the RFA report, America’s ethanol producers produced nearly 35 million metric tons (mmt) of livestock feed in the 2009/2010 marketing year.  That's a lot of corn that is being returned to the livestock market.

According to the RFA, by volume, that production is greater than the total amount of grain consumed by all of the beef cattle in the nation’s feedlots.

The RFA also pointed out some fun facts about how much corn this represents:

For the current 2010/2011 marketing year, feed production from the ethanol industry is projected at 39 mmt.  
- if the 39 mmt of livestock feed was a country’s corn crop, it would represent the 4th largest crop in the world 39 mmt of livestock feed would be enough feed to produce 50 billion quarter-pound hamburgers – seven patties for each person on the planet 
- 39 mmt of livestock feed would be enough to produce one chicken breast for every American every day for a year
American ethanol produces both Food AND Fuel.

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Record Corn Crop for 2011 / 2012 Projected

The USDA released its World Agricultural Demand and Supply Estimate report this week and the corn crop shows a projection for a record 13.5 billion bushel crop for 2011.
Corn production for 2011/12 is projected at a record 13.5 billion bushels, up 1.1 billion from 2010/11 as a 4.0-million-acre increase in intended plantings and a recovery from last year’s weather-reduced yields boost expected output.
World Agricultural Demand and Supply Estimates (WASDE), May 11, 2011 (PDF)

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