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By Robert Rapier on Jul 21, 2011 with 40 responses

The SPR as a National Piggy Bank

I was strongly opposed to the recent decision to release oil from U.S. and international strategic petroleum reserves. I have covered the reasons for my opposition many times, but the single biggest reason I oppose these sorts of releases is that the fundamental reason for the existence of the Strategic Petroleum Reserve (SPR) is to provide insurance in case of a supply emergency. Politicians who use the reserve in an attempt to influence gas prices so they can enhance their chances of reelection should be thrown in jail if a national emergency does occur and we find ourselves with a depleted reserve.

I have also pointed out the irony that politicians who are deeply concerned about climate change are leading the charge to release oil from the SPR — because they want lower gas prices. It is as if they do not understand that when gasoline is cheap, people burn more of it and there are more carbon dioxide emissions. The only context in which their positions make some sort of twisted sense, is if they believe that by depleting the petroleum reserve prices will actually become much more volatile and spike much higher, thus hastening our move away from oil.

Of course if they believe that, they couldn’t come out and admit it because most people would conclude that they were insane. It would be like a person going without fire insurance and hoping their house burns down so they can move into a “better” house. But then when the house burns, the person realizes they are broke and can’t afford a better house. So they go live under an overpass.

Until now, the only two contexts in which I could interpret their position were either they are putting their reelection interests ahead of the climate change problem they profess to be concerned about, or their ulterior motive is to put the U.S. at grave economic risk in an attempt to address the climate change issue by removing our catastrophic insurance policy. But there is another possibility. The value of the SPR has increased as oil prices have increased, and they view the SPR as a fat source of revenue. The following story recently came to my attention via Consumer Energy Report’s Energy Ticker:

McClintock says required sale of SPR oil in energy bill a ‘scandal’

Rep. Tom McClintock (R-Calif.) on Thursday said he opposes language in the 2012 Energy and Water Appropriations Act that requires the sale of $500 million worth of oil in the U.S. Strategic Petroleum Reserve to help fund other government spending.

“There’s a half a billion dollars going out of the Strategic Petroleum Reserve, not to replenish the reserve but to fund additional spending in this budget,” he said. “That is a scandal. It’s time we put a stop to it.”

McClintock said under current law, any money earned on the sale of SPR oil must be returned for the purpose of replenishing the reserve.

Under the bill under consideration this week, H.R. 2354, the secretary of Energy would be required to sell $500 million worth of SPR oil by March 1, 2012. The bill says the secretary “shall deposit any proceeds from such sales in the General Fund of the Treasury.”

Report language accompanying the bill from the Appropriations Committee acknowledges that money raised from the sale would be used to “offset spending elsewhere in the Department of Energy’s budget request.” The report also says this change should not be seen as a precedent.

Has our government completely lost their mind here? Using the SPR to fund other programs? Again, I suppose there is some twisted logic in there: If we use money from the SPR to fund programs designed to reduce oil consumption, perhaps that is a good investment. Perhaps, unless those programs don’t work very well, we find ourselves still heavily dependent upon oil, and major unrest in the Middle East suddenly takes 10 or 15 million barrels of oil per day off the market.

But count me among those who would prefer to see fiscal constraint rather than see us start viewing the SPR as a national piggy bank for the politicians. History has shown that our politicians aren’t very good at saving money, but they do know how to spend it. So it would be in our best interest to have them keep their hands off the SPR and find the funding for their programs — if they are truly worth funding — elsewhere.

  1. By Wendell Mercantile on July 21, 2011 at 10:30 am

    Has our government completely lost their mind here? Using the SPR to fund other programs?

    Yes, they’ve lost their minds. It might make a bit of sense if at some future date we could refill the SPR with lower costing petroleum, but what are the chances of that happening? As Dean Wormer said in Animal House when reviewing Bluto’s grade point average, “Zero, point, zero.”

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  2. By doggydogworld on July 21, 2011 at 10:48 am

    The idea that the US Gov’t can “put money from SPR sales aside” is a bit odd. Where exactly would the gov’t put the money? You or I can deposit our money in a local bank, but since the US Gov’t created that money in the first place and guarantees bank deposits the entire concept falls apart. It’s like the Social Security “lockbox”. It’s just a figment of the imagination.

    Unless the gov’t immediately replenished the SPR (i.e. the next day, which would be pointless), then the sales proceeds will be immediately spent just like all other money the gov’t gets (tax receipts, import duties, etc.). The only other alternatives are to purchase some other durable assets (i.e. fill up the “gold SPR”, aka Fort Knox) or buy something like foreign currencies.

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  3. By Brian on July 21, 2011 at 11:02 am

    RR,

    Will you write soon about the proposed ethanol ‘compromise’ and your thoughts on it?

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  4. By Benny BND Cole on July 21, 2011 at 12:49 pm

    Okay, we can’t vote for the Dems, and we can’t vote for the GOP-Tea Party.

    Please, I want another option.

    As Casey Stengel once said, viewing the 1963 Mets, “Can’t anybody here play this game?”

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  5. By Wendell Mercantile on July 21, 2011 at 1:45 pm

    Please, I want another option.

    Benny,

    Perhaps we should resuscitate the Whigs, or ask the Progressive Conservative Party of Canada to open a franchise in the U.S.

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  6. By Walter Sobchak on July 21, 2011 at 2:45 pm

    Congress behaving imprudently with the taxpayers trust.

    Not news.

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  7. By art on July 21, 2011 at 7:16 pm

    what is even more amazing that also europe released some of its “strategic” reserve,s in coordinate action with the US release.

    US congress being sensitive for elections is one, but how did they convince eu to release spr as well?
    I wonder whether releasing spr’s open the last dance on the volcano of peakoil….
    just watched an interview with jeremy rifkin, after bashing genome and dna research for years he now claims to be an energy expert… still I listened carefully

    http://www.youtube.com/watch?v…..9wM-p8wTq4

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  8. By rrapier on July 21, 2011 at 7:28 pm

    art said:

    US congress being sensitive for elections is one, but how did they convince eu to release spr as well?


     

    The latest news is that the IEA won’t release more, and one of the reasons cited in this story was because the move didn’t actually work:

    IEA to Stop Selling Emergency Oil Despite High Prices

    However, experts questioned whether the sale had stopped
    because it was not very effective at lowering prices. Oil dropped sharply
    following the announcement, but had almost rebounded within a week and the
    price of Brent crude now stands at $117.78 per barrel – higher than before.

    Akihiko Tembo, chairman of the Petroleum Association of
    Japan, had said there was no need for an additional release of strategic oil
    reserves, because the first action had a limited impact.

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  9. By Douglas Hvistendahl on July 21, 2011 at 8:16 pm

    Please, I want another option.

    Take a look at GOOOH. Look Ma, no batteries – oops, I mean parties. Could be worth trying out!

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  10. By mac on July 21, 2011 at 9:11 pm

    Rufus,

    The best thing you can do to save energy is to vent and insulate your attic. soffit vents, plus passive “whirly-gig” turbines or electric, forced air roof vents, and insulation. You need to get the heat out of your attic. It has no-where to escape otherwise. And it will force its way back down into your rooms through the sheetrock or plaster ceiling,

    Remember the old attic fans ? You left the windows open an inch or two and that old attic fan sucked a lot of hot air out of the house and brought cooler night-time air in through the cracks in the windows ?

    The SPR Thing ? …..Just a bunch of dizzy, clueless politicians (most of whom are lawyers)

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  11. By mac on July 21, 2011 at 10:57 pm

    Look Robert,

    If you want to get rich off oil stocks in the near to mid term, that’s fine

    I just thought you were interested in an actual “energy solution”

    Apparently, not.

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  12. By rrapier on July 22, 2011 at 12:00 am

    mac said:

    Look Robert,

    If you want to get rich off oil stocks in the near to mid term, that’s fine

    I just thought you were interested in an actual “energy solution”

    Apparently, not.


     

    Mac, either someone else uses your computer to post from time to time, you are posting under the influence, or you have multiple personalities. I have never seen someone with such inconsistency in their posts. At times you sound perfectly normal, and then you veer off into complete nonsense.

    RR

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  13. By mac on July 22, 2011 at 12:12 am

    RR

    Not at all…… What is your solution to the so-called energy crises ? Buy more Petrobas Oil ???? So your stock price and dividends can go up ?

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  14. By mac on July 22, 2011 at 12:33 am

    No.

     

    Robert,

     

    Everyone who has ever disagreed with you whether it be Rufus, Kit P. (and many others) including  mac has had to listen to this nonsense for months……..even years.

     

    I think everyone is getting a bit tired of it.

     

    Uh, er Humility ? 

     

    As in, “Gee Whiz”,  I actually don’t know everything !! 

     

    Singed “”Robert”

     

    Mac

     

     

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  15. By mac on July 22, 2011 at 1:03 am

    No Rorert.

     

    I’s not that you don’t know what you are talkng about……..Fine …

     

    It’s simply that you don’t know what you are talking about because of your limited perspective.

     

    Hug those hydro-carbon molecules when you go to sleep

     

     

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  16. By mac on July 22, 2011 at 1:21 am

    Robert.

     

    You want to talk about “real” solutions to the energy crises ?

     

    Uhhhh ????   Investing in Petrobas stock is NOT one of them ……

     

    You are investing in the very thing we are trying to get away from…..

     

     

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  17. By rrapier on July 22, 2011 at 1:53 am

    mac said:

    Everyone who has ever disagreed with you whether it be Rufus, Kit P. (and many others) including  mac has had to listen to this nonsense for months……..even years.


     

    You aren’t so much disagreeing as you are simply babbling. In fact, it isn’t even clear what you would be disagreeing with. That using the SPR for political purposes is a mistake? But nobody can tell, because your replies are garbled and cryptic. But for the record, disagreement is fine. Acting like a jerk is not.

    Actually, it has been apparent to multiple posters for a while that you like to perhaps drink a bit and post, and when you do that your posts become simply nonsensical. Who is talking about buying Petrobras stock? Only you. I own Petrobras stock because oil is going to be in use for a very long time, and I bought it at a very cheap price. (They are also invested in ethanol, by the way). By the way, if you have any interest in a pension fund, you probably own oil stocks too. But that has no relevance. We aren’t advocating for oil here.

    On the other hand, I work for a renewable energy company. So I am actually working to solve problems, and we discuss solutions to problems here every day. You, on the other hand, sit in the cheap seats, get drunk, and then start acting like a drunk.

    In fact, two other posters have previously written to me and asked if you have a drinking problem — because some of your posts scream that you are impaired. I had already come to that conclusion. The posts you make in the evening are just a mess. My advice to you is “Do not drink and post. You end up arguing with yourself.”

    Regarding your post that I replied to — someone else actually sent me the link and suggested that you might be impaired. Reflect on that a bit. I would rather not deal with this sort of nonsense.

    RR

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  18. By mac on July 22, 2011 at 2:54 am

    Robert.

    Yes, my posts might seem to be cryptic. That’s only because I try to get people to think.

    When I said You do not know everything, I meant that. You don’t.

    What do you want me to say ? A simple recitation of facts ? Like “we have six nuclear power plants on the books ” ?

    Or do you wish me to say that the Italians voted down nuclear power by an astonishing 95% margin,

    If I say there are six nukes on line to be built in the U.S., then I am sane, but if I say that over in Italy they voted by a 95% margin to do away with nukes, then I have “suddenly lost it”

    You need to take a course in “critical thinking” Robert.

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  19. By rrapier on July 22, 2011 at 3:09 am

    mac said:

    Robert.

    Yes, my posts might seem to be cryptic. That’s only because I try to get people to think.


     

    Yeah, but what people are thinking is not what you apparently want them to think. They are thinking “What on earth are you talking about?” I know, because Sam and I both get the e-mails.

    What do you want me to say ? A simple recitation of facts ? Like “we have six nuclear power plants on the books ” ?

    No, what I want is for your responses to have some sort of relevance. This isn’t the first time you have posted something that is seemingly gibberish. What does PBR have to do with anything? I struggle to see your point. Do you have a specific criticism about the article? Not that I can see. You just threw mud, but for purposes only you can understand.

    So what you might do is say “I disagree because…..” Then people might be able to engage you in dialogue. But it is impossible to have any sort of constructive dialogue given your last 3 or 4 posts.

    My recommendation is to get some sleep and pick this back up tomorrow.

    RR

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  20. By Eddie Devere on July 22, 2011 at 9:53 am

    I think that point of the article was clear. Robert’s point is that he views the SPR as a source of oil in case of an emergency.
    So, he was trying to speculate on whether US politicians see the world right now as in an emergency, or whether they are just looking to score political points. It’s a good question to ask.

    Robert,
    What do you think about selling US gold reserves in order to cut the deficit?
    I did a quick calculation and estimated that the US stores ~$400 billion in gold (at today’s gold prices) either at Fort Knox or under Manhattan.
    Do you see the gold reserves differently than you see the SPR?
    Best,
    Eddie

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  21. By Judy on July 22, 2011 at 10:44 am

    The purpose of the SPR is NOT to provde insurance, no matter how many times you say it. “The Strategic Petroleum Reserve exists, first and foremost, as an emergency response tool the President can use should the United States be confronted with an economically-threatening disruption in oil supplies.” It says this right on DOE’s webpage (http://fossil.energy.gov/progr…..wdown.html), first line. You may WANT it to be for insurance, but in fact, DOE has arranged the SPR for other purposes, namely, to mitigate the effects of high oil prices. The SPR was released because oil prices were going through the roof due to the LIbyan oil disruption and OPEC’s lack of response in February to that disruption.

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  22. By Wendell Mercantile on July 22, 2011 at 11:41 am

    Judy,

    The word “strategic” in SPR means exactly that. In this case a stockpile of strategic reserves essential to our national defense. The SPR was intended to be a reserve to ensure national survival in the event the flow of oil from overseas is cut off. It was not intended to be a tool with which to manipulate the price of oil.

    And the SPR is not the first (or only) such strategic stockpile. We maintain strategic reserves of other commodities essential to the national defense. The Defense Logistics Agency Strategic Materials program maintains stockpiles of at least 28 essential commodities (germanium, platinum, vanadium, quartz crystals, etc.) at 15 sites around the U.S.

    We’ve also had petroleum reserves before. The Teapot Oil Dome scandal of the 1920′s was about oil in Wyoming that was part of the Naval Oil Reserves — a program that still exists, although much diminished from what it once was in the early part of the 20th century.

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  23. By rufus on July 22, 2011 at 1:10 pm

    Well, evidently, the Army, Air Force, Marines, and Navy (Coast Guard, also, I presume) know that it’s time to move on. They’re going to leave fossil fuels before fossil fuels “leave them.”

    http://cleantechnica.com/2011/…..ading-out/

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  24. By Wendell Mercantile on July 22, 2011 at 1:24 pm

    Rufus~

    And they are smart to look forward and try to do that. Combat operations are critically dependent on fuel. The big question that is how much it will cost*, and when it can be scaled-up to support the entire Department of Defense.

    ____________
    * In May, the Air Force’s demo team, the Thunderbirds, flew a performance where two of the jets used fuel made from biomass (camelina). That fuel cost ~ $30 per gallon.

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  25. By rufus on July 22, 2011 at 1:54 pm

    Well, I imagine such numbers are kinda deceptive, Wendell. By the time they scaled up, and built a “real” refinery, and got their feet on the ground they’d be looking in the $3.50 – $4.00 range. Biodiesel for trucks, or ships will be less, of course. Those standards aren’t quite so demanding.

    The Army, and Marines are more jazzed about “Solar” than anything else. 50% of the Diesel we use in Iraq, and Afghanista is used for Generators (mostly a/c, I suppose.)

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  26. By rrapier on July 22, 2011 at 2:02 pm

    Judy said:

    The purpose of the SPR is NOT to provde insurance, no matter how many times you say it. “The Strategic Petroleum Reserve exists, first and foremost, as an emergency response tool the President can use should the United States be confronted with an economically-threatening disruption in oil supplies.” It says this right on DOE’s webpage (http://fossil.energy.gov/progr…..wdown.html), first line. You may WANT it to be for insurance, but in fact, DOE has arranged the SPR for other purposes, namely, to mitigate the effects of high oil prices. The SPR was released because oil prices were going through the roof due to the LIbyan oil disruption and OPEC’s lack of response in February to that disruption.


     

    False. The Libya thing is just a cover for the action. In fact, world crude inventories were at very high levels, and prices were actually declining when the move was made. Historically, the President has released oil two times, under very different conditions than at present:

    A Presidentially-directed release has occurred two times under these
    conditions.  First, in 1991, at the beginning of Operation Desert
    Storm the United States joined its allies in assuring the adequacy of
    global oil supplies when war broke out in the Persian Gulf.  An
    emergency sale of SPR crude oil was announced the day the war
    began.  The second was in September 2005 after Hurricane Katrina
    devastated the oil production, distribution, and refining industries in
    the Gulf regions of Louisiana and Mississippi.  Hurricane Katrina’s
    impact was so great, in fact, that SPR emergency oil loans preceded the President’s decision to drawdown and sell oil from the Reserve.

    Those were actual or potentially severe supply disruptions in both cases. In Hurricane Katrina, there was actually not enough oil available to run the refineries. In Desert Storm, there would have potentially been enough oil taken off the market to cause shortages. The current release is nothing more than a political ploy. And if this is the sort of precedent that is set — i.e., that we start to make releases when oil prices spike due to some minor interruption around the world — it won’t be long before we have no SPR because one could always make the excuse that there has been a disruption. OPEC won’t raise rates? That’s a disruption; let’s send them a message.

    And I understand that it has been used for political purposes in the past. My point is that it should not be. There are far greater real emergencies lurking out there. If one of those happens, we are going to look at the current release as an exercise in stupidity.

    RR

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  27. By rrapier on July 22, 2011 at 2:05 pm

    Eddie Devere said:

     

    Robert,

    What do you think about selling US gold reserves in order to cut the deficit?

    I did a quick calculation and estimated that the US stores ~$400 billion in gold (at today’s gold prices) either at Fort Knox or under Manhattan.

    Do you see the gold reserves differently than you see the SPR?

    Best,

    Eddie


     

    Eddie, I don’t really understand enough about the implications of a gold shortage to comment on that. I am not sure what the impact would be, nor am I familiar with who much of our gold is imported. If we are importing a lot from unstable parts of the world — and getting those imports cut would cripple the U.S. — then I would view it in the same way. I just don’t know enough about it to know if that’s the case.

    RR

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  28. By Wendell Mercantile on July 22, 2011 at 2:11 pm

    By the time they scaled up, and built a “real” refinery, and got their feet on the ground they’d be looking in the $3.50 – $4.00 range.

    Rufus~

    You’re just guessing. As I said above, the compelling question is whether it can be scaled up. Right now, we don’t know; and so far, the record of biofuel plants scaling up from concept, to lab experiment, to pilot plant, to a commercially economical full-scale plant is not very good.

    I do hope it works out though.

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  29. By rufus on July 22, 2011 at 2:20 pm

    Wendell, it’s just a biodiesel plant. We have a couple of hundred of those operating, now. Camelina is just another crop. The yield/acre isn’t anything like Palm Oil, but it can be grown in the Northern Plain States, and I think it probably has qualities that make it superior to oil palm, or soy oil for Jet Aviation.

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  30. By addoeh on July 22, 2011 at 2:26 pm

    Judy said:

    The purpose of the SPR is NOT to provde insurance, no matter how many times you say it. “The Strategic Petroleum Reserve exists, first and foremost, as an emergency response tool the President can use should the United States be confronted with an economically-threatening disruption in oil supplies.” It says this right on DOE’s webpage (http://fossil.energy.gov/progr…..wdown.html), first line. You may WANT it to be for insurance, but in fact, DOE has arranged the SPR for other purposes, namely, to mitigate the effects of high oil prices. The SPR was released because oil prices were going through the roof due to the LIbyan oil disruption and OPEC’s lack of response in February to that disruption.


     

    When the SPR was released on 6/23, oil pricies were actually going down.   In early May, oil prices were around $115.  On 6/21, prices were around $94.  So in a month, prices went down about $20.  This was before oil from the SPR was released.  Prices were around $92 on the day it was annouced it.  The prices fell that day to around $89.50.  By the middle of the next week, prices were back up to $94.  So it didn’t take long for the market to forget about the release.  As RR’s post earlier in the thread highlight, the IEA admits the release didn’t do anything to the price.  Prices are now back up to $100. 

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  31. By Wendell Mercantile on July 22, 2011 at 2:40 pm

    …it’s just a biodiesel plant. We have a couple of hundred of those operating, now. Camelina is just another crop.

    Rufus~

    Why then did that jet fuel made from camelina cost $30 per gallon?

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  32. By rufus on July 22, 2011 at 3:08 pm

    Oh, I don’t know, Wendell. I haven’t followed it. I suppose they paid someone to go out and plant them some camelina, and then they built a little facility, and a Research facility, and they experimented with different blends, or ways of crossing their fingers, and then they paid someone a couple of hundred thou to “write it up,” and then they deducted the blue sueders’ mercedes, and porsches, and slipped in his kid’s braces somewhere along the line, and then multiplied by, say, three, and sent the bill to the guvmint. You know how these thing work.

    In the end, it’s just biodiesel made from camelina.

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  33. By art on July 22, 2011 at 3:16 pm

    Thanks  RR,

     

    for the update about the IEA turning away from sale of spr….i still wonder why they did it in the first place,  congress may be dominated by politics and “stupid white men” (Michael Moore) but ho the heck did they get  IEA in?

    not enough understanding of this global process to sort out who calls the shots here..

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  34. By paul-n on July 22, 2011 at 3:28 pm

    Given that $30/gal is more than the price of extra virgin olive oil from Italy, there must have been a lot of “sugar” involved in that deal.

    Using camelina grown in marginal country is a good concept, but if that is the price, or anything close, then there are a lot of other options for fuel.  It would be cheaper to electrolyse water to hydrogen and make fuels from there.

     

    Hopefully the military will now say “that works, and its great, and when you can supply it for the price of jet fuel +$2/gal, then we’ll buy it”

     

    Otherwise, $30/gal, or anything even close, is consuming far more resources (taxpayers money) than can be afforded.  The biodiesel industry needs to do much better than that.

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  35. By rrapier on July 22, 2011 at 3:29 pm

    Rufus said:

    In the end, it’s just biodiesel made from camelina.


     

    What the military wants isn’t biodiesel, it’s hydrocracked diesel. That requires much more costly equipment, and thus needs to be done at bigger scale than your typical biodiesel plant.

    But my understanding is that camelina itself is a fundamental problem here. The yields aren’t great enough to warrant the expenses of producing fuel from it. I have read several reports that indicate this. It would be like saying that algal fuel should be cheap, because “It’s just fuel made from algae.” True, but the algae don’t give up their oil without a fight.

    RR

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  36. By Wendell Mercantile on July 22, 2011 at 3:47 pm

    …but the algae don’t give up their oil without a fight.

    RR~

    I like that. After all, it takes Mother Nature millions of years to turn algae and phyto-plankton into oil. That’s the main reason no one has yet made the big cost breakthrough with algal oil — it takes lots of energy and money to compress a process that naturally takes millions of years into one that is a matter of only days or weeks.

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  37. By DownToTheLastCookie on July 22, 2011 at 3:51 pm

    total of 1.77 million barrels of crude oil sold under the U.S. emergency sale has been shipped from the Strategic Petroleum Reserve as of Thursday, the Energy Department said. Valero Energy Corp. (VLO) received 750,000 barrels, while Plains All American Pipeline LP’s (PAA) Plains Marketing LP got 520,000 barrels and Shell Trading (US) Co., a unit of Royal Dutch Shell PLC (RDSA, RDSA.LN), received 500,000 barrels. Deliveries scheduled for the week of July 17-23 total 4.52 million barrels, the data show, with 8.74 million barrels set for delivery in July. The remaining 21.9 million barrels will be shipped in August. On July 12, the government awarded contracts to 15 companies–including major refiners, trading houses and banks–to buy 30.64 million barrels of crude oil in the emergency sale. The sale was part of a coordinated move among consumer nations in the International Energy Agency to place about 60 million barrels in the market to help cover a shortfall in supply caused by the civil war in Libya. On Thursday, the IEA said its goal of bringing more sweet crude oil to the market through the release has been largely achieved and it is “not now seeking the release of additional stocks.” The IEA said it will continue to monitor the market and stands ready to act again, if conditions warrant it.

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  38. By rufus on July 22, 2011 at 4:27 pm

    Okay, I haven’t studied that process At All; so, I’m going to shut up until I know more. I’ll just echo Wendell, and Paul, and say, “here’s to’em, let’s hope they get’er done.” :)

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  39. By Bogwood on July 24, 2011 at 8:33 am

    A recent mantra has been the “private profits,social losses”. It is not just the banks. The government takes the strain off all corporations from birth to death, transportation,health care,education, nothing fully covered by corporations. The technical visa program is one small example. The corporate employer should pay the host government a large compensating fee. With less energy/higher costs they make desperate moves like rating the SPR. We will be returning to a Scrooge-like era.

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  40. By biocrude on July 28, 2011 at 10:23 am

    @ Rufus, regarding the military and their Biojet fuel, RR is spot on.  I believe the camelina jet fuel or SPK (Synthetic Paraffinic Kerosene) was produced by Targeted Growth (Camelina Growers in WA) and Biojet Corp with technology supplied by UOP, you can see more about UOP’s Ecofining process here: http://www.uop.com/processing-…..el-process  

     

    It is definitely more intensive and expensive than traditional biodiesel refining, but the advantage is that it is a drop in fuel.  No fuel filter or modifications necessary, as Boeing is not going to change their 30,000 commercial planes in use around the world. The jet fuel market has stricter regulations for emissions under the EU, and furthermore it was just approved for a 50% blend of Biojet by ASTM.  Also, because the volumes aren’t too outrageous (~80 billion gallons/year) it is a market that is easier to make a dent than the global diesel market.  

     

    Now, what Rufus was talking about with regards to offsetting some of the poppy fields in Afghanistan with camelina, now that is a great idea.  However, once the Taliban figures out that farmers are growing biofuels to power the infidels Hummers and generators instead of financing their own operations, you can bet what the Taliban is going to do to that farmer….

    Solar and simple oil for generator and low blends of biodiesel over there makes sense.   

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