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By Robert Rapier on May 9, 2014 with 44 responses

How Fossil Fuels Subsidize Us

Meet Nate Hagens

A good friend of mine said something to me the other day that I thought was profound. Nate Hagens is a former editor for The Oil Drum, and has written and lectured extensively on the risks of resource depletion. Nate holds a Master’s Degree in Finance from the University of Chicago and a PhD in Natural Resources from the University of Vermont. In his previous life Nate was a Vice President at the investment firms Salomon Brothers and Lehman Brothers.

Today Nate sits on the Board of Directors of Bottleneck Foundation, Post Carbon Institute, Institute for Study of Energy and Our Future, and Institute for Integrated Economic Research — and he farms in Wisconsin. He described his personal journey from Wall Street to Wisconsin in one of the last articles ever published on The Oil Drum: Twenty (Important) Concepts I Wasn’t Taught in Business School.

Fossil Fuel Subsidies

We were discussing the topic of fossil fuel subsidies on Facebook. The background is that two years ago I wrote an article for Forbes called The Surprising Reason That Oil Subsidies Persist: Even Liberals Love Them. The article is neither a defense of subsidies, nor a dig at liberals, but it became the most highly read article ever on Forbes Energy Source. Today the article still generates some rabid comments, often by people who obviously didn’t take the time to read much beyond the title before offering their opinion on the article. I had just responded to a recent comment and posted that comment to Facebook, and thus began the discussion.

The gist of the Forbes article is that the reason subsidies persist is that people don’t understand the sorts of things that are classified as subsidies. They think of them as cash payments from the government to oil companies. In reality, most are things like assistance for low income households so they don’t freeze to death in the winter.

Now I know this is not what most people have in mind when they say “Eliminate oil company subsidies” — but the fact is that there are all sorts of programs like this that are included in the various tabulations of fossil fuel subsidies. In fact, 87% of the “hundreds of billions of dollars in fossil fuel subsidies” targeted by the great “Twitter storm of 2012” and that activists like Bill McKibben decry when wearing one hat and defend when wearing another (see the breakdown here) are consumption subsidies that help people afford fuel.

There is no doubt that these are indeed subsidies, as these programs make it possible for fossil fuel companies to sell more product. But this isn’t an article about fossil fuel subsidies. I have written plenty of those. See the Forbes article above, or my article Getting Even With ExxonMobil for a more detailed discussion of subsidies.

The Amount of Work in a Barrel of Oil

But as we were having the discussion, what Nate wrote that I thought was profound was “The subsidies we give fossil energy companies are a rounding error relative to the subsidies fossil energy give to society.”

Don’t misunderstand what he is saying. I know Nate, and we have had numerous discussions on this topic. He isn’t saying that fossil fuels are a wonderful gift to be celebrated. Like me, he has lectured and written plenty on the dangers of building a society on the basis of depleting resources. He is saying, rather, that the subsidy that fossil fuel gave to society was allowing us to overextend and overpopulate. This subsidy has enabled huge numbers of people to enjoy a standard of living that was out of the reach of even royalty 100 years ago. And we very much take all of these things for granted, and we don’t recognize how badly this story could end once these finite fossil fuel reserves — in particular oil because it will be the hardest to replace — head down the back side of the depletion curve.

I believe that Nate was the first person I saw describe oil in terms of equivalent human labor. A barrel of oil has an energy content of about 5.8 million British thermal units (Btu). A trained athlete can output about 750 Btu/hr of work over a period of several hours (Source). Thus, 1 barrel of oil has the energy content of 7,733 hours of labor by a trained athlete. At an average US hourly wage, that would equate to $188,000 worth of labor for a $100 barrel of oil. That is the subsidy Nate meant. We are greatly subsidizing our human labor with the ancient energy of fossil fuels to drive productivity and create wealth.

Or, in Nate’s words “Cheap energy, not technology, has been the main driver of wealth and productivity” and “Energy is almost everything.” (For more on this theme, see Nate’s article Complaining about mosquito bites while a crocodile bites our leg).

An Environmentalist’s Epiphany

Most of us never take time to look around and realize how much easier our lives have become as a result of fossil fuels. Author Amanda Little describes her own energy epiphany in her book Power Trip: The Story of America’s Love Affair with Energy. Little calls herself as an environmentalist who had “one major blind spot” in her understanding of energy:

There was virtually nothing in my office—my body included—that wasn’t there because of fossil fuels… I had understood this intellectually before—that the energy landscape encompasses not just our endless acres of oil fields, coal mines, gas stations, and highways…. What I hadn’t fully managed to grasp was the intimate and invisible omnipresence of fossil fuels in my own life…. I also realized that this thing I thought was a four-letter word (oil) was actually the source of many creature comforts I use and love—and many survival tools I need. It seemed almost miraculous. Never had I so fully grasped the immense versatility of fossil fuels on a personal level and their greater relevance in the economy at large.”

Many environmentalists never seem to have this epiphany. Amanda Little would readily admit that her “blind spot” made her naive prior to writing a book about energy. I think if more people tried to live a brief period of time without any products derived from oil, they might still view oil as a “four-letter word”, but they would also understand why it is extremely critical to manage our transition away from oil. And they might better understand why I think many environmentalists are naive in their quest to hastily shut down all of our fossil fuel production, or to make an extremely rapid transition to renewables. I submit that they can’t begin to envision what that world would look like.

The Price of Dependence

Of course neither Amanda Little, nor Nate, nor myself fail to acknowledge the price we pay and the risks we are taking by growing our dependence on depleting resources. Another friend of mine named Hannes Kunz told me a story a few years ago that also illustrates this point well.

Once a truck carrying a load of nuts crashed into a tree. A family of squirrels living in the tree discovered this new resource and began to live the high life on the nuts they had just found. But as their population grew, so did their demand for nuts.

But that truck crash was a one-time event, and the squirrels were depleting their nut windfall as their population grew, and they were making a mess by leaving their discarded nut shells everywhere. The squirrels failed to adequately plan for the day that there were no longer enough nuts to feed everyone. Recently, they were able to frack open a hidden compartment in the truck to find a few more nuts, but being squirrels they failed to use this brief reprieve to plan for a future without as many available nuts.


Sometimes people get a distorted view of my position on fossil fuels. They believe that because I am very aware of their role in our modern lives, that I believe we should continue to grow their consumption. That’s not it. I am aware that we will continue to need them for years to come, because society would collapse if they are rapidly removed (either by policy changes or by geology). Thus, I am aware of their current importance to modern society. So my position is that we don’t have the luxury of opposing all fossil fuel projects unless we want to see lots of people starve to death, or at a minimum face energy prices that are unaffordable. I would argue that the impacts of having our fossil fuel supplies drastically cut would be far swifter and far more severe than the climate change impacts if we manage a slower transition.

At the same time, we need to do everything in our power to manage demand, but more importantly to bring new energy supplies online that are more sustainable than what we have. This won’t happen overnight, but needs to be done with a sense of urgency. Even then it’s unlikely that we can replace the energy content of 90 million barrels of oil, but the closer we come to meeting this, the better off we will all be in the long run.

Ultimately that’s a position that sooner or later alienates people on both sides of the political spectrum. On that note, I will close with one more thing Nate said to me: “Truth is a path with fewer friends.”

Link to Original Article: How Fossil Fuels Subsidize Us

You can find Robert Rapier on TwitterLinkedIn, or Facebook.

  1. By JCG on May 9, 2014 at 5:31 pm

    I agree with this perspective, that the high energy content of the conveniently transported and used substance called “oil” has allowed (subsidized) the modern (20th and 21st Century) civilization and economies to flourish to their high-tech state. The highly developed economies (25%) are at their peak and the rest of the world (75%) is trying to rapidly catch up. The problem is there is nothing to replace this magic substance called oil. Cheap energy from oil subsidizes a lot more than just our personal transportation, heating and electricity. It powers the huge scale of the raw material engine, the mining, the drilling, the refining, the manufacturing, etc. of all the other materials required in a technology-Driven world: harder-to-get minerals, rare earths, fertilizers, water, sewage, etc. The disappearance of cheap, easily transportable energy resources means not only unsustainable growth, but an unsustainable current state for the 8+billion haves and have-nots – unless a substitute is found. Let’s be frank, what I’ve just said is so much hand waving, qualitative talk. So, is there a quantitative, comprehensive model that can predict pathways the global (or a national) economies might take given quantitative inputs on resources, etc? I believe a number of models are under development which, when developed further, can provide quantitative substance to these hand waving predictions. One of the best (and newest) I have seen so far is HANDY (Human and Nature Dynamics model ( ). Although broad brush in current form, it appears to form the basis for future models incorporating quantitative time-dependent trends in renewable and nonrenewable (nature) resources and their time-dependent impact of economies and civilizations (population, wealth, resources, etc.).
    Note: when reading this model, try to avoid ideological predispositions for specific words such as elite, commoner, etc. Think male drone ant and worker ant. Also: Because of circumstances I’m can’t stop by here very often (last time I looked at TheOilDrum or related blogs was last July!); please don’t be offended if I take a long time to respond to anyone.
    And, finally, I had a chance to talk one-on-one with Bill McKibben the other day for 15 minutes or so about the future of energy (as opposed to CO2) and was quite surprised to hear how relatively uninformed he was. Later during a public lecture I decided he has been too focused (perhaps too ideological?) on his person-based global awareness agenda to have taken the time to contemplate the big picture in this direction.

    • By Robert Rapier on May 9, 2014 at 8:23 pm

      “I had a chance to talk one-on-one with Bill McKibben the other day for 15 minutes or so about the future of energy (as opposed to CO2) and was quite surprised to hear how relatively uninformed he was.”

      This does not surprise me. I have read a lot of his writings, and I concluded a long time ago that he was either naive, uninformed, or dishonest. I prefer to give people the benefit of the doubt, so I don’t think he’s dishonest. But some of the things he writes about are fairly disconnected from reality. Others are huge distortions.

      • By JCG on May 9, 2014 at 8:41 pm

        Robert, (even though I said I am unlikely to respond, I got an notification on my phone, so …). I got to hear Al Gore’s presentation in Honolulu (U Hawaii) a few days before I talked with Bill M. Two different personalities: revival meeting proselytizer vs. Ivory Tower organizer. I didn’t get a chance to talk directly to AG, but little matter, his message came through loud, clear and very animated. From what I gather from my vignette and limited readings, Bill M is more of the small-liberal-arts-college Ivory Tower intellectual tainted with the arrogance of tenure and a following of somewhat naive, well-educated, well-financed, undergraduates. Both are important players, maybe not striking at the heart of the beast. Each knight to his own part of the dragon.

        • By Robert Rapier on May 9, 2014 at 8:53 pm

          “I got to hear Al Gore’s presentation in Honolulu (U Hawaii) a few days before I talked with Bill M.”

          Oh, wow, small world. My daughter was at that talk.

  2. By Forrest on May 9, 2014 at 6:09 pm

    Sad were reflecting back on the power of oil, alas, energy is the much needed commodity to propel standard of living and bye the bye the best of humanity. The environmentalist have fantasy notions of happy utopian ideals walking afoot to meet cheering inebriated friends sitting at table of grow local. This the curse of watching to much PBS and Disney cartoonery , but for us living upon reality; BTUs matter. The first energy source was wood heat and animal fat candle light. Such energy accomplishments as to educate the genius of Lincoln, Washington, Jefferson, Madison and Adams. Not to shabby of accomplishment. Second level of energy was the sperm whale and incredible energy upon the head of it’s skull. This was the envy of modern world and reason number one why we won the revolution. Petrol came to the rescue as our modern ship processing centers for whale blubber unmatched. We almost ran the sperm whale to extinction. Thank the Dutch whom modern day revolution of efficiency aboard ship was unmatched and earned hefty incomes for eastern U.S. shores. This was the equivalent of silicon valley back in the day.
    Now, compare btu of barrel of oil to athletes if you will, but it should be compared to horse power chopping away at hay. Petrol was amazing as the energy source raged upon diesel engine gun ships of WWII. Compare this to modern nuclear subs operating for years without fill up. Ouch!
    The truth is solar as incredible power, wind has incredible power, and old fashioned bio mass and bio fuel has incredible power. Also, consider the varied and all so powerful unlimited energy of nuclear…I’m not pessimistic of society losing force per oil depletion. Just another chapter.

  3. By Tom G. on May 9, 2014 at 8:12 pm

    There are only a few people on the web that I respect and enjoy reading their perspectives. Robert is of course one of those individuals.

    However, in about the last 2 or 3 years I have noticed what might be considered a troubling trend. More and more of the peoples writings I value seem to be saying many of the same things. Even though we are told we have lots of oil, natural gas and coal [forget costs for a moment] maybe we really don’t when you look into some near term future.

    There seems to be this underlying belief by some authors that maybe things aren’t really all that rosy. To some, it seems that we are only about a decade away from some form of social collapse. For still others, we might have 20-30 years but collapse will happen unless significant changes are made.

    We talk about exporting oil while still importing oil. We talk about exporting liquefied natural gas when our own supplies were drawn down to dangerously low levels this year due to an unusually cold winter. Its like walking on the edge of a cliff isn’t it? Make one mistake and it’s all over but the shouting.

    Does anyone else see these aspects of our energy system as a troubling trend? There are of course other authors I follow and one such individual is Gail Tverberg who blogs at Our Finite World.

    Some of her writings are very interesting and hard to dispute.

  4. By Shiggity on May 9, 2014 at 9:32 pm

    The silicon age will be after the oil age. The transition is going to be brutal though. The sun is the only resource abundant enough to get us close to the standard of living oil gave us.

    Oil abundance is a lie the media tells society so society doesn’t freak out. Let’s face it, no one truly wants to hear that oil is really running out.

    A lot of people think nuclear will save us, but a mass transition to nuclear would create wars over uranium instead of oil. There’s plenty of silicon to go around.

  5. By Edward Kerr on May 10, 2014 at 8:40 am

    Like you I have argued that in order to transition to a sustainable energy production paradigm we will need the subsidies from fossil fuels that you outline here. The problem is that, as a species, we are attempting to hold onto the halcyon days past and are not serious about making the needed change. As you note, when the oil/coal go into rapid decline (not too long from now) mankind faces severe consequences. Trying to compare that to the damage that climate change will inflict is a useless argument as we will be hit with both at the same time here in the real world.

    To have a negative emotional response to this issue is understandable but those who call for immediate cessation of burning fossil fuels without offering a clear alternative are almost as dangerous as those who completely deny reality and desperately hold onto BAU.

    The issue of FF depletion and climate change is, in my mind, the overriding problem of today. Certainly there are a whole host of problems facing mankind from war to pollution, human rights to the senseless killing of animals. Water ranks right behind coal and oil but all of those problems will be rendered moot if we fail (and it look like we are going to) on the energy issue.

  6. By sunweb on May 10, 2014 at 9:08 am

    This essay was written in 1998. I uploaded it to my blog in May of

    Understanding this essay will not make you
    happy. It will challenge our
    beliefs and lifestyles. Energy, so
    intricate to our survival, does not simply appear at the gas pump or the flip
    of a switch. The gas pump, the
    power lines, the grocery store are deceptive teats that we blissfully suck with
    infantile expectations. If we
    choose to remain ignorant of energy’s pervasiveness in human affairs our future
    is threatened. I will briefly
    examine the role of energy in population growth and pollution; energy’s
    physical laws; and some of the psychological, moral and spiritual factors
    blocking the changes facing us.


  7. By sunweb on May 10, 2014 at 9:22 am

    Energy and Human Evolution
    by David Price

    Another great one.

  8. By Joe Clarkson on May 10, 2014 at 12:22 pm

    Two minor quibbles Robert.

    1. I don’t think the heat content of oil should be compared to the heat value of the work output of an athlete. A better comparison would be between the amount of electrical or mechanical energy available from oil to that of human (or animal) labor. This would reduce the dollar value of the oil-based work by the amount of the heat conversion inefficiency of the oil using device (typically 60-80%). That said, the subsidy from fossil fuels is still gigantic. A few dollars worth of gas in a chainsaw will cut far more wood than a man working all day with a crosscut saw. Another commonly used example; try pushing your car to work in the morning to see how many “energy slaves” are required for your daily commute.

    2. I think that environmentalists would be more aware of the way fossil energy permeates our industrial culture than the general population. That anyone would ever be able to call themselves an environmentalist without understanding the importance of energy to all life, including human beings, beggars belief. It may happen, but rarely, I think. Just google “school of energy and environmental studies” to see how many institutions combine both topics. I know that this is merely anecdotal ‘evidence’, but until you present a study that shows otherwise, I’m staying with it.

    • By Robert Rapier on May 10, 2014 at 12:30 pm

      “I know that this is merely anecdotal ‘evidence’, but until you present a study that shows otherwise, I’m staying with it.”

      My anecdotal evidence on this is that I engage them every day, and then number of people who have had the Amanda Little type epiphany are few and far between. Those who haven’t have these very naive beliefs about why we are hooked on oil, happily attributing it to oil company lobbying instead of their own desire for cheap energy.

      • By Alex Johnson on May 15, 2014 at 6:03 pm

        Well and its not just cheap energy, its cheap chemical feedstocks. That leads to cheap plastics, synthetic fibers, and medications to name a few. If people have to realize they’re not just hooked to fuel side of oil but its chemical side too. I had a O-Chem professor once who told me future generations were going to curse us for burning the cheap, easy to get oil in our cars and factories since many of the hydrocarbons will be harder, and more energy intensive, to synthesize from natural sources. It can be done, its just not easy.

  9. By Forrest on May 10, 2014 at 1:05 pm

    I don’t think we have much to be concerned with. It’s not like petrol is going to suddenly vanish. Coal reserves are 950 billion short tons, more than natural gas and petrol combined. Our equipment steadily becoming more efficient. Biodiesel fuel a ready substitute for diesel and we have much land mass to produce the fuel i.e. Africa has enormous potential. Tropic and subtropic grow zones great for sugar can, palm oil, and sorghum base fuels. Cellulose ethanol has enormous growth potential as conversion rates of 100 gallons per ton and growth rates of 20 ton per acre appear credible. So, efficient auto’s need only 1/4 acre land mass for annual fuel needs. Solar energy will no doubt play a big role. Wind energy is massive. Nuclear will always be with us and will no doubt play a big role. Fusion energy will be enormous and we have an enormous fuel supply on moon of H3. Same with methane natural gas crystals in deep water. Hydrogen fuel cell is expected to expand horizon of energy needs. Personally, I don’t think we have to be concerned much with CO2 global warming phenomena either, as the natural shift in energy supplies will automatically solve the problem.

  10. By kristian wik on May 10, 2014 at 1:28 pm

    On that note, I will close with one more thing Nate said to me: “Truth is a path with fewer friends.” – True that, but I would also like to add better friends!

  11. By Forrest on May 10, 2014 at 5:24 pm

    I haven’t read much of Nate, but the links typical of his ilk. They make a fortune and claim an epiphany once bankrolled and purchase a farm in Wausau. They hide fortunes and claim humanity is wretched and only they know the truth. This guy a prof at Madison…you know the birthplace of Wilson Progressiveness. People eat up this stuff and attribute religious zeal to his philosophy. Quite the desire to portray the problem per cartoon of Elephants. Not much value to religious principles (he is way beyond phony religion) just reference to evolutionary animal character to screw grandchildren. Folks, this guy is not enlighten…he talks of financial ruin and easy credit (a bad habit of current administration) but unjustly awards the CIC to warming public of global warming. CIC is such a nice fellow doomed to failure as he is stricken to keep economy afloat and will fail per the attempt. Oil is the juice of humanity to increase standard of living per substitution of animal energy. Were living on borrowed time as the oil is increasingly expensive to extract from a millenniums of Mother Earth processes. Were such a selfish population, just fools thinking it will last forever and screwing grandchildren. Renewable energy can only extend the oil false economy of higher standard of living per oil. We have old institutions (young people are smart), non enlightened population (were smart their stupid) and hopeless situation that will drag us down to low standards of living. Yuck…this guy is out of touch and no amount of clever poetry is going to make him prophetic. I’m sure the sperm oil whale ship captains had the same attitude once quitting and retiring with fortunes in hand.

  12. By mk1313 on May 10, 2014 at 6:25 pm

    The effects may indeed be far swifter, that they would be more severe is laughable BS. The loss of fossil fuels woud force us to rethink our role not as the masters and destroyers but as an element of the environment around us. The slaughter coming from AGW is a so massively beyond that of removing oil from the equation it isn’t funny because it doesn’t just include Homo sapiens in it’s grasp. That disruption will also mean the human effect is much greater. Your analysis and that of your friend is flawed!

    • By Robert Rapier on May 10, 2014 at 6:42 pm

      “The loss of fossil fuels woud force us to rethink our role not as the masters and destroyers but as an element of the environment around us.”

      I think we would be plenty busy trying just to survive. Many people have estimated the carrying capacity of the earth without fossil fuels, and it’s a fraction of today’s population. There will be a lot of upheaval from a 2 or 3 degree C increase in the earth’s average temperature, but I expect it will take more than that for the death toll to amount to billions.

      But if you suddenly removed fossil fuels from the equation, I have no doubt there would be a multi-billion person death toll in just a few years. There isn’t a big camp of people who expect that level of calamity from climate change. There are some, but it certainly isn’t a widely held belief.

      • By mk1313 on May 11, 2014 at 5:16 pm

        Robert, you haven;t been reading a lot of the AGW catastrophe papers then. And it’s not as if we’re talking the oil disappears tomorrow. Just get them out of the equation as fast as possible and stop subsidising them either directly or indirectly. And truth is, there are too many people as it is. We live in an era of mass extinctions, they aren’t natural, they’re due to our greed!

    • By Russ Finley on May 11, 2014 at 2:37 pm

      Global warming is often used as an excuse to promote any number of given ideologies or energy schemes. Do we drop efforts to end poverty, disease, the extinction event, or to improve women’s reproductive rights, etc, etc and focus purely on AGW?

      1) There are uncounted problems that must all be worked in parallel.
      2) Many of the problems on the list are just as concerning as AGW, population growth, poverty, loss of biodiversity and on and on, in part because they contribute just as much in the aggregate as the combustion of fossil fuels.
      3) Our own National Renewable Energy Lab has concluded that the combination of wind, solar, hydro, biomass etc can’t do the job alone.

      Hansen himself once concluded that we could continue to use oil if we could end the use of coal. It’s just too valuable to leave in the ground for the foreseeable future and has no replacement as yet. Coal, on the other hand, has many competitors, including nuclear.

      • By mk1313 on May 11, 2014 at 5:10 pm

        Russ, familiar with the idea of having too many irons in the fire? Of all the concerns mentioned only AGW has the potential to destroy virtually all of humanity not to mention the other species in the world. Fix that then you have the time to deal with the others. Oil is only “too valuable” because those controlling the resource want it to be that way. We have other options and if we concentrated on this problem it would be solvable. Trying to do everything will mean doing nothing, exactly what the fossil fuel people want.

        • By Russ Finley on May 17, 2014 at 10:53 am

          AGW got its start when humanity began changing the biosphere with agriculture and the consumption and combustion of forests (carbon sinks). Oil, coal, and natural gas took the place of wood for fuel. Half of AGW is caused by the destruction of the biosphere. Population growth also exacerbates AGW and on and on.

          If you want to make a dent in AGW, you have to halt (and reverse) the destruction of the biosphere (create carbon sinks) in parallel with reducing combustion as a source of energy. Low carbon energy sources that also directly destroy ecosystems are one step forward, one step back.

          All academic. Once you get a feel for what it would take to stop the worst of AGW, you have to conclude that some kind of mitigation is inevitable.

          • By Forrest on May 17, 2014 at 5:49 pm

            What you talk of the biosphere…I was watching a TV program on globalization and the 3rd world poor attempting to make a living. The basic fuel source and a meager attempt of selling valuable commodity for profit…was charcoal. Yes, the incredible damaging to biosphere charcoal. So, the wealthy countries spend billions to reduce GW pollution by 1% and watch as poor countries do most of the damage per basic $1 needs.
            I read an analysis of GW and U.S. government expenditures per solar power as compared to lowly pellet stove. Pellet stove had 3x the impact and received no government incentive. Also, read an analysis of biggest polluters to GW gas was open air fires popular with the 3rd world countries. The argument within the article was wealthy nations could do 10x bang for the buck by assisting 3rd world countries achieve better fuel sources. Alas, such solutions wouldn’t be empowering upon our politics. Algore incorporated would be useless with such common sense solutions.

          • By mk1313 on May 20, 2014 at 12:52 pm

            If anything we find out daily that models UNDERESTIMATE the effects. I am aware of all the factors you mention and of the degree of difficulty in making the necessary changes. Truth is we can do it for ourselves or nature WILL do it for us. If we go the latter route you go from nasty to disasterous!

  13. By Forrest on May 11, 2014 at 5:03 am

    This doomsday talk is popular, with inevitable death and destruction cure for evil human race than can’t foretell the future. A large segment of population full of such depressive and defeatist thoughts rubbing off on youth and their future prospects. This the price for progressive thought upon college campuses? These people talk of driving the economy off the rails per present day excuses as just the cure to drive population problems and standard of living inequity adjustments. Meanwhile their greed drives them to grab while the grabbing is profitable. The profit from such talk and inflict a tremendous carbon footprint or financial damage doing so. They buy gold, silver, commodities, and utilize cheap money gains to purchase farmland to stay away from public and hopefully feed themselves. They utilize tons of fossil fuel and probably store 1,000s of gallons of the stuff and get paid to tell public how vicious and destructive their animal instincts are. Reminds me of English royalty living with outrageous inbred wealth benefits then these bloats turn around to warn us commoners of the danger in attempting anything likewise. Were to go away quietly and leave them alone to enjoy. BTW anyone realize our current fascination of the executive royality since JFK is equally wasteful and excessive. It takes more wealth to maintain our CIC than the Brits spend on royality. That was before separate tropical 747 entourage vacations of spouses and unlimited helicopter golf outings. Ya, he needs to warn us this is unsustainable, but wait until he gets full benefit before action.

  14. By Forrest on May 11, 2014 at 7:03 am

    Just read the Department of Energy estimates of available U.S. biomass for energy needs…close to two billion tons per year. That would equate to 200 billion gallons cellulosic ethanol. Corn ethanol, present day could produce 30 billion gallons with out much disruption. European low land mass availability and resulting high prices and property tax load for farming occupations have led to high utilization of hydroponic practices. Such practices result in prolific food growth per square foot land mass. Recent popularity of grow tunnels multiply food production, as well. Fish ponds and tanks remarkably proficient in protein production. Back yard organic farming practices have become popular hobbies to supplement food budget with extremely tasteful and healthy eggs, meat, fruit, nuts, and produce. Intensive farm practices have proven a livelihood for proficient enterprising talent. Nitrogen cost have led to farmers back to alternating crop practices that dramatically lower cost of fertilizer. Experiments with biochar soil amendments have equally reduced fertilizer needs. Urea is gaining popularity as the nitrogen source if handled per modern day understanding, a superior form as compared to petrol fertilizer. Much potential gone untapped per animal and human sources, calculated to meet needs of entire corn crop. A present day company is working on developing wind turbine to ammonia process that farmers forming cooperative business plan upon needs. Natural gas can be produced so quickly by nature the fuel source is renewable. Also, anaerobic digester process equally capable. Much of the poorest regions of world have highest potential to produce ethanol, biomass, and bio-diesel fuel supplies. That is a good development for humanity. Hydrogen fuel source poised to replace petrol. Hydrogen has multiple pathways per production and highly attractive energy carrier for ultra low pollution and exceptional high efficiencies. Nuclear power plants and reprocessing of fuel have tremendous future fuel capability as well.

  15. By Benjamin Cole on May 11, 2014 at 11:24 pm

    Good post…but. Sure, fossil fuels were a gift from nature, and we are consuming it. But there are so many substitutes for liquid fuels that when the gift becomes too expensive to commercially use anyone, other techniques will gradually replace the gift.

    The price signal will likely make this transition a lot easier than the doomers say. And we see that already. The world is extracting oil now at $100 a barrel, and that is curtailing demand—-we may be at Peak Demand btw.

    We already know that battery cars will work, the only question is will they work well enough? They are getting very close to being commercially feasible. That done, you free huge fleets from liquid fuels, and put them onto the grid, which can be powered by nukes, coal, natural gas, wind, hydro, geothermal, even biomass.

    I won’t even mention the natural gas to methane route. Many biofuels seem to pan out in the $5-6 a gallon zone, so there is a ceiling there too, on liquid fuel bills.

    If anything, I think there is a possibility of a a much cleaner and more prosperous future. I would prefer a city in which battery cars are the norm, and the air unpolluted and streets quieter. This is bad?

    • By Forrest on May 12, 2014 at 8:02 am

      Your figures for biofuel are out of date. Refer to Bloomberg Financial article per cost study of ethanol.

      But the data captured for 2012 economics and already out of date as the technology and cost better than projected. The report suggest cellulosic ethanol per enzymatic hydrolysis process will be on cost parity with corn and sugar ethanol by 2016. “It’s dangerous to assume that it will not be competitive this decade.” Corn and sugar ethanol already competitive per btu basis. Largest cost of capital, feedstock, and enzymes have steadily decreased (enzyme cost down 72%). Pretreatment costs improvement per mechanical equipment, financial assessments attracting lower cost capital of which make up 45% of total cost. Cost per liter for construction dropping from $3 to $2/L per economy of scale and decrease of over engineering. Feedstock costs 34% is decreasing per logistics, supply improvements, and better material handling. The industry transitioning from tech-enhancement to logistics suggest industry is maturing.

      I follow the biofuel industry news and find it heartening to have such good news within fuel market when the petrol followers all full of doom and gloom. I think that Nate Hagens teachings should be put to pasture, especially when we realize he is working his prejudices upon minds of mush. The profs haven’t changed much. Back in the 70 the same doomsday teachings. Oil cost and depletion will panic unfed overpopulated masses breathing toxic fumes. Back then like today the most dire and forewarning of the bunch will achieve praise and become highly awarded per politics. We have a generation that grew up on catastrophic environmental science and have much experience to hold the science suspect.

      Also, if these fellows believed their ultimate catastrophe scenario, they would cheer on alternative energy efforts. No, they just want to dwell in defeatism and agonize. If one truly understood the petrol dilemma, then of course it’s a good thing to bring E15 on board. Same with E30 super high test fuel to subsidize the oil markets, decrease pollution, and offer a great fuel to automotive to maximize efficiency. Isn’t that common sense?

      • By Optimist on May 12, 2014 at 4:00 pm

        “The report suggest cellulosic ethanol per enzymatic hydrolysis process will be on cost parity with corn and sugar ethanol by 2016.”
        Wait: is that the same cellulosic that currently produces roughly 0 bbl/year? Let me guess, the new process will be named after its inventor, one Mr. S Claus?

        BTW, I share your views on Nate Hagens, Paul Ehrlich and Robert Malthus. Wrong for 200 years, but just you wait, the next 20 years will prove them right…

        The future is secure. No thanks to ethanol.

      • By Benjamin Cole on May 13, 2014 at 3:38 am

        Thanks for your response. I look forward to expanded use of biofuels, if validated by the market. Palm oil-diesel too!

        But I think battery cars and perhaps natural gas to methanol is a better route. But I say let the price signal decide, not me, you or the government (some national security and environmental questions do have to be handled at the government level).

        I agree with you on the big point: The price signal obviates disaster outcomes. We adjust continuously. We may have hit global Peak Demand for liquid fuel already, even as multiple new sources are opening up, and incredible new technologies are coming on stream to cut demand. What if China mandates PHEVs, as they have motorcycles? What if India follows suit?

        Europe has puzzled me, in that they have gone to high mpg diesel (and mass transit) instead of PHEVs. Maybe the time will come yet….

        I think the future is incredibly positive…except for what man does to man, and that ain’t pretty.

        Best of luck my friend.

  16. By Optimist on May 12, 2014 at 4:16 pm

    “He is saying, rather, that the subsidy that fossil fuel gave to society was allowing us to overextend and overpopulate. This subsidy has enabled huge numbers of people to enjoy a standard of living that was out of the reach of even royalty 100 years ago.”

    Wait a second. Those two sentences pack quite a punch. in response:
    (1) By whose count are we overextended? How do you define “overextended”?
    (2) By whose count are we overpopulated? Evidence for overpopulation is what?
    (3) A raising standard of living = progress, not right? This should be celebrated.
    (4) The reference to royalty is troubling. Let’s hope we do away with all forms of royalty soon. Now that would be progress.

    “The squirrels failed to adequately plan for the day that there were no longer enough nuts to feed everyone.”
    Fortunately, there is a big difference between squirrels and people.

    “Recently, they were able to frack open a hidden compartment in the truck to find a few more nuts…”

    Fracking became a good investment because oil prices stay in the vicinity of $100/bbl. In general terms, an increase in oil prices lead to a new technology and a jump in recoverable oil reserves. Is there any reason why this pattern would not continue to repeat itself into the future, as it has in the past? There is a lot of currently unrecoverable oil out there, waiting for the right combination of technology and market.

  17. By Forrest on May 14, 2014 at 9:00 am

    Your conclusion statement “I would argue that the impacts of having our fossil fuel supplies
    drastically cut would be far swifter and far more severe than the
    climate change impacts if we manage a slower transition.” is on target. Algore made the news lately per statements of radical change in energy required. He continues discourse per conspiracy of allowing super rich to pollute and destroy earth. Wow, this guy almost claimed the executive office. Apparently, he would have destroyed the U.S. economy and reeked much misery upon citizens per his personal biases! We have to temper the hyperbola of radical environmentalism fear mongering and manage our resources carefully. The global warming fears can be exploited by politicians and power seekers to herd populace to disastrous solutions. The natural economics and supply forces will do the heavy lifting to transition to alternative energy. No heavy handed encompassing government control of our lives needed. It is good to prepare, invest, and support promising energy sources to make the transition less painful. The future can not be accurately determined and reason number one to avoid determining winners and losers per government fiat. To that end it is good news that wind, solar, and biofuel doing well. Ethanol has 13 billion gallon annual production with 13 b gallons more under construction. It’s just a small portion of transportation needs, but good to have. Cellulosic costs appear good, but again it will be slow growth and not disruptive to need of fossil fuel, but very good development. It will take time, investment, infrastructure change, technology, etc to improve each energy sector including coal and nuclear. We need all the above solutions and need to shy away from hyperbola of easy solutions and break the bank investments strategy. We need best bang for the buck investments. Also, the doomsday scenarios utilized to scare public are most disgusting and popular upon those wishing to manipulate public and youth.

    • By Optimist on May 14, 2014 at 6:16 pm

      Lots of interesting observations there:
      1. Al Gore would indeed have been a disaster as president. Guy makes W look like pure genius, and that takes some doing. Which is why W narrowly won in 2000. Can you say “Thank you, Florida!”?
      2. When it comes to scare tactics, both sides are piling on as much as they can. The Tea Party is probably the current masters of the art.
      3. You talk out of both sides of your mouth when you say first “No heavy handed encompassing government control of our lives needed” and then celebrate 13 billion gal of ethanol a year as if it happened thanks to market forces. You should at least acknowledge that without the heavy handed government, there would be no ethanol in our fuel supply. As will eventually be true again.

      4. Cellulosic = unicorn, as described by RR before.
      5. Your comments on American celebrity being worse than royalty (elesewhere) are particularly accurate.

      • By Forrest on May 15, 2014 at 7:30 am

        Robert’s Unicorn comment appeared to me directed to Range Fuel type processes that made claims of inexpensive cellulosic oil or fuel. Processes that utilized magic catalytic processes to convert bio syn gas to fossil fuel. Fluidized bed gasifier type or lower oxygen pyrolysis oil processes of old. The enzymatic hydrolysis process for ethanol appears within trajectory of estimates. The Tea Party is all about excess government spending….hard to argue with that. Every evaluation of projected cost of entitlement spending is dire as well as our continued fed solutions to poverty and social welfare politics. Our government stimulus spending is on uncharted water. No economist is certain of benefit. Historical trouble free waters limit fed debt to 60% of GNP. Were approaching 2x that with little discernible benefit to economy. Just the usual grandstanding to proclaim it could have been worse. Japan has been attempting the same stimulus and dangerously close to blowing up their economy. They will create inflation or break the bank. Not good.
        Ethanol has only the RFS to assist in stabilizing market share, but what’s not to like with ethanol tainting our petrol? Consumer’s save 50 cents to $1.50 per gallon of fuel last year. Reduction of $48 billion oil imports. Greenhouse gas reduction equivalent to taking 7.9 million cars off the road. Increase in 86,000 direct and 300,000 indirect jobs. This is small potatoes as compared to the new found oil and natural gas resources, but nonetheless a wonderful development. It’s not ethanol or fossil fuel.

        • By Optimist on May 15, 2014 at 4:49 pm

          Thanks for the standard ethanol hogwash. The facts are somewhat different:
          1. At least some of the time ethanol makes gasoline more expensive, not less expensive:
          2. Ethanol does not in fact reduce the demand for (or price of) gasoline:
          3. If ethanol is so great, why doesn’t Iowa burn its own ethanol and supposedly save itself a ton of money?

          Robert’s unicorn metaphor had everything to do with the government mandating the use of (so far non-existent) cellulosic ethanol, which he compared to riding a unicorn to work. It did not discriminate how the non-existent cellulosic ethanol was produced.

          Enzymatic is better than thermo-chemical? Let’s try doing it the other way round: “Processes that utilized magic enzymes to convert cellulose into ethanol.” Sound familiar?

          Welfare spending is indeed a problem. The problem, however, is how much of it is hogged by the rich. What % of the spending in Washington is going to the poor? How much is going to the rich? How much of social security and Medicare is going to rich retirees who’d be comfortable without it? But, given that these are people who bother to vote…

          And then there is the general bailout of Big Auto, Big Labor, Big Banks and Big Ag. The latter has an extremely wasteful byproduct: ethanol.

          Suggested further reading:

          • By Alex Johnson on May 15, 2014 at 5:52 pm

            I take issue with a couple of your sources Optimist. I don’t disagree that in 2006 and 2007 ethanol prices were higher, relatively speaking, and cellulosic ethanol by means of enzymatic hydrolysis was expensive. However, a lot of things change in 7 years.

            Ethanol is selling on the board today for $2.16 a gallon. I just filled up today and E30 was selling for $3.18 a gallon, while E10 was going for $3.40. Remember, thats the price without the federal tax breaks (which expired in 2011). So how is ethanol not making gas cheaper? Since the change from MTBE in 2006 I can’t think of another time ethanol was more expensive than gasoline. Now before you mention the MPG differences, I’ve been tracking my mileage as I run E10, 20 and 30. I get 23 MPG on E10 and 22 MPG on E30. Thats definitely worth $0.22 a gallon. So if I’m getting the same mileage, at a lower cost, running 30% less gasoline, how does that not reduce the demand? I know I’m not the only person who has experienced these results, I’ve talked with many people who have.

            And you keep on talking about this cellulosic “unicorn”. What will you call it in the coming months as 80 million gallons come online over the summer (Abengoa, DuPont, POET). Yes, in 2007 enzymatic hydrolysis didn’t make financial sense. But with 7 years of research comes better enzymes, more efficient processing, and overall cheaper production. Yes Kior and Range Fuels failed, and I’m not surprised based on what they were trying to do. But its not as if cellulosic ethanol is a complete mystery. There are already several commercial facilities running in Europe. Borregaard has been running their process for many years now. Granted, their target is the lignin, but they’re still producing the magical cellulosic ethanol as a byproduct.

            I guess I just don’t understand writing off ethanol when it has the ability (when the engine is tuned correctly) to be a superior fuel to gasoline, keeps the wealth in the US (or brings it in from other countries as we export it) and reduces carbon emissions all at the same time. Now, can ethanol replace the entire gasoline market today? No. But with cellulosic coming, and higher corn yields coming along as well, it can continue to grow and displace fossil fuels.

            I would love it if we could keep our ethanol here in the midwest and tune our cars to fully utilize it just as the past RR article states. However, the auto manufactures don’t seem interested in facilitating that market yet. So in the meantime we’ll have to settle for marginal gains and flex fuel cars that are optimized for E-Zero.

            • By Optimist on May 15, 2014 at 6:50 pm

              Interesting numbers, Alex.

              They sell E30 over there?

              Factoring in that ethanol has ~2/3 the energy content of gasoline, you’re still paying marginally more for E30 ($3.53/gal gas equivalent) than for E10 ($3.52/ GGE). Of course, as you point out, mileage is where the rubber meets the road. Using your numbers E30 is slightly cheaper: $0.145/mile vs $0.148/mile for E10. The difference may well go the other way if your E10 mileage is really 23.1 for example. Suffice to say, there appears to be no significant difference in the direct costs. That’s why I say ethanol is not saving any of us money.

              There are, of course, many indirect costs to the heavy hand of Uncle Sam mandating ethanol’s use. Corn prices are higher, thanks to ethanol, so we all pay more for a number of corn affected products, from steak to corn flakes. And taxes to support that mandate-policing bureaucracy. That’s why ethanol is probably costing us all some money.

              I guess I will keep comparing cellulosic ethanol to a unicorn until it starts to materialize. I note your use of future tense in this regard. Careful – the future ain’t what it used to be.

              For the record, I suspect KiOR and Range have the better process. Enzymes have their place, and I don’t think it is the high throughput, low value fuel supply system. We’ll see.

              If you’d love to keep ethanol in the midwest, please write the governor. Ask your senator about it. Surely the car companies based in the midwest would have to fall in line with popular support. If there is popular support. I suspect you’ll be surprised to see how many people disagree with you. But again, please go ahead. I’d love to see the ethanol stay away from my pump.

            • By Alex Johnson on May 16, 2014 at 10:45 am

              Yeah there are quite a few flex pumps around the area that offer E10, 20, 30, 50 and 85. Unless there is a pretty good discount, at least a $1 a gallon, I don’t use E-85 much. Last summer it was a $1.20 lower than E-10 for a period of time and I used it all the time then. And yeah, i usually calculate mine by dollars/mile. I feel thats should be the way to compare them. As long as its within a couple cents (per mile that is) i go with the ethanol blend because I come from a farming background and support that industry.

              Yeah, corn prices are higher and you could blame anything from increased exports to the drought but in all honesty that was kind of the idea from the beginning. Farmers began forming co-ops and financing ethanol plants because the low prices of corn were bankrupting them. I remember growing up and every farmer relied on govt programs to break even each year because corn was selling for $2 a bushel. The farm programs handed out billions every year to keep guys afloat. With prices where they have been for the last 4-5 years those government payments have stopped. Outside of the $7 spike we saw for corn during the drought I’d say corn is closer to its fair market value than it has been for many years. To put it in perspective, what else could you buy 56 lbs of for $5? Outside of water softener salt there isn’t much. Now consider the feed value/energy value of that corn. $5 is a steal for that material. Because the american farmer is extremely efficient we’ve all come accustomed to cheap grain. However, that cheap grain wasn’t sustainable.

              Yes I agree, basing assumptions on “future” claims can be misleading. I’m just pointing out that we’re closer now than we ever have been. This big difference i see between Range/Kior and the Abengoa, DuPont, POET work is that both Range and Kior were solitary startups. The other three have very large corporate operations behind them which wouldn’t take the risk if they didn’t believe it was viable. I guess we’ll have to diagree on the “better process”. I’m not a big believer in gasification or pyrolosis processes but we’ll just have to wait and see if Kior can get back on track.

              The car companies have dabbled in ethanol tuning. Buick released a model of the Regal a couple of years back that borrowed a variable vein turbo from SAAB that actually gave better HP and mileage with higher ethanol blends. ( but they ran with a paired down model. It doesn’t give you all the extra HP the SAAB model did, instead it helped just enough to recoup some of the MPG losses from using E-85. However, I haven’t seen them advertise it recently so I don’t know if they stopped production or not. In the rural areas there would be plenty of support. Go down main street of any farming community and you see flex fuel badges on the back of most of the cars. The trouble is the major population centers are more heavily influenced by what I would call scare tactics by fossil fuel companies. I just don’t know what else to call it. Everytime I hear a negative ad about ethanol its talking about ruining small engines and boats. But in Minnesota they have E-10 statewide and they have millions of boats. I’m pretty sure lawn mowers and motorcycles run just as well there too. I even run E-10 in my old 1970 Buick and I’ve never had a problem with it so I just don’t understand the ads where they tell everyone that even E-10 is harmful.

            • By Russ Finley on May 17, 2014 at 1:16 pm

              Your link to the SAAB article is almost a decade old and does not claim ethanol improved mileage.

              I’m not making the argument that government support of ethanol is good or bad, I’m just saying that claims of cost competitiveness can’t be proven when consumption is mandated.

              The true test would be to remove the mandate and see what happens.

            • By Alex Johnson on May 19, 2014 at 11:39 am

              The fact that the SAAB article is of technology thats almost a decade old is what frustrates me the most. GM obviously has this tech since they’ve installed it in their Regal. Why not install it in all Flex Fuel vehicles so they don’t experience the MPG loss from utilizing E85? I’m not trying to claim some grand conspiracy, I just really don’t understand why they wouldn’t install it and eliminate one of the biggest drawbacks of taking advantage of your flex fuel badge.

              I’m sorry if I implied that you would get superior mileage. It just points out that you don’t suffer the loss in mileage usually seen when using E85 in the SAAB motor. At the same time, you gain HP and torque. Now, knowing this, the engineers could make the engine smaller, thus cutting down on overall weight, and improve mileage that way. This is very similar to what Ford has done with the Ecoboost motors. However, Ford simply keeps the motor at a single compression ratio, it does not have the ability to take advantage of different octane levels at higher ethanol blends.

              And yes, I have to agree, the true test would be the elimination of the mandate. But, there has to be equal market access. I’m not saying oil companies have to pay to put in ethanol pumps, there are plenty of groups that offer grants and low interest loans for that already. What needs to stop is when the refineries take advantage of their franchise contracts which hinder the rollout of fuels when the gas station franchise owners want to sell higher ethanol blends. This happened two different ways last summer. Early on the oil refiners refused to deliver the correct blendstock to stations that wanted to sell E15. ( As you can see in the article it wasn’t a matter of not having the blendstock, they simply wouldn’t deliver it so the owners who had been setup to sell E15 were out of luck. Then, later in the summer, some oil companies told franchise owners that they HAD to sell premium fuel. Especially in smaller areas, this is not a fuel thats in incredibly high demand so forcing them to keep it on hand is basically taking money out of their pocket. Even more so if the owners know they could be selling more fuel in the form of E15. ( So long as the oil companies stop trying to pressure station owners not to offer higher ethanol blends I’d love to see it on the open market. I think it would thrive. But everyone has to be playing by the same rules.

            • By Forrest on May 19, 2014 at 4:51 pm

              Let me throw a few more thoughts out their per your reply.

              I think ethanol over sold their cellulosic ethanol production and fuel supply to auto companies. Also, auto execs enthusiasm to build flex vehicles has abated per cost of government regulation certifications and low consumer demand. Consumers know ethanol will hurt gas mileage and require more dreaded fill ups. Add to that limitation, petrol companies teamed up with live stock producers and small engine manufactures to put a big hurt on ethanol image. Low information auto owners, whom spend a blinking fortune on new wheels, will not put anything in the tank other than approved fuel per marketing ads. Also, much of the public thinks ethanol is costing taxpayers a fortune and only exists per government fiat much like IRS regulations.

              But, all of the negative blow back is waning as consumers spend time becoming familiar with the attributes of the fuel and gaining understanding the fuel and debunk the bunk. An ever increasing percentage of motoring public view ethanol as good fuel. A fuel that makes gasoline perform better with less pollution and lower cost. They watch competition race engines do better with ethanol. But, as you say ethanol would be exonerated once a ethanol optimized vehicle was introduced to consumers.

              Here are the thoughts-

              Some proponents are strident to push flex vehicle production and E85 claiming status of alternative fuel. They believe this is the path to directly compete with gasoline fuel for light vehicles.

              Other proponents say its easy, faster, and better value to motoring public to offer E15 as the fuel will quickly be absorbed into most valued status. Same can be said for a super premium grade E30 that would allow modern autos to achieve max efficiency with no loss of mileage per ethanol use. A fuel blend that will accomplish most value per unit of ethanol including reducing emissions.

              I’ll put another idea out there that regulators could have achieved public desires of ethanol technology improvements by allowing “craft brew” industry to flourish per after market manufacturing of ethanol high performance vehicles. It could have been low volume, low regulated, vehicle production that would have given opportunity to push the technology ahead. Maybe ultra light weight, high mpg vehicle or high horsepower sport cars. Either the race engine image or like the car that won the “X” prize for two passenger mpg…both exploit ethanol to maximum. It could, also, be a standard vehicle with after market engine and transmission mods. Make that alliance profitable or keep liability at bay to make it possible.

  18. By Forrest on May 16, 2014 at 7:53 am

    Your point of environmentalists- are
    naive in their quest to hastily shut down all of our fossil fuel
    production, or to make an extremely rapid transition to renewables. I
    submit that they can’t begin to envision what that world would look
    like. Also, your comment on intelligently managing the eventual transition away from fossil fuel, of crucial importance.

    Yes, the importance of managed transition to minimize cost to society disruption should be a primary concern. But, one must realize the petrol business will naturally work to maximize value of their product. Last weekend I had a conversation with life long oil company investor that totally understood the business. This investor understood oil revenue increased with sales, but also upon the unique reliance of single source consumers. He was joyous that motoring public had no alternatives and easily victimized upon supply problems. “What business can you think of that get paid more for screw ups?” Ethanol works as a catalyst to inhibit this unsavory habit of fuel supply miss management. This reason the petrol companies hate ethanol. They can’t control the small business character of independent fuel supply. This is reason number uno for citizen’s need to stand behind ethanol and to offer support to ensure the fuel supply maintains its independence from large international corp control. This fuel supply is upon a completely independent supply chain. It acts to counterbalance supply problems and price spikes. Ethanol’s small fraction of fuel supply belies it much bigger influence to keep cost of fuel down. Ask yourself why big oil is spending so much on damaging ethanol image? Realize ethanol transition is working, cost effective, and available. Enemy to business as usual.

    • By Forrest on May 16, 2014 at 8:04 am

      Also, to the point above, citizens have to understand the business politics attempting to change EPA regulation know as the RFS. The RFS is necessary because the highly consolidated, vertically integrated oil industry is not otherwise going to allow market access for renewable fuels.The recent complaints by oil companies of the RFS blend requirements claim the nation has inadequate supply of ethanol. But the interpretation of the word ‘supply’ is corrupted to mean the ability of current infrastructure to deliver renewable fuel blends to consumers. A big issue is that this interpretation of inadequate supply has the practical effect of handing the future trajectory of the RFS to the oil industry by virtue of the fact that the oil industry itself controls the distribution of fuel to consumers. The threat being oil companies could simply lie down on the RFS to avoid obligations. This would increases supply-chain risk for new projects. This is not good since 90 percent of future blending obligations under the RFS are for advanced biofuels.

  19. By Glen McMillian on August 18, 2014 at 1:52 pm

    Most environmentalists who are serious thinkers and leaders of the environmental movement appreciate the necessity of our using oil and other fossil fuels without any shadow of a doubt. But expecting them to say so in so many words in public is naive. Public relations are based on drawing sharp distinctions between the two sides of any opposing issue. Joe Public has a very short attention span and it is basically a waste of time trying to reason with him until after a few reality bricks catch him upside the head.The people who are the spokesmen for both sides understand this fundamental truth about the public and the publics attention span.Nobody who understands modern day society should expect any spokesman for any position to talk to the public in a reasoned and moderate way except perhaps in forums such as this one.Reasoned discussion is not going to happen on talk radio or tv or in any except a very very few mainstream publications of any kind.

    As a matter of fact most environmentalists these days excepting maybe some unwitting foot soldiers recognize ethanol laced gasoline as a major mistake.

    There is no doubt in my mind that we would be substantially better off if we had put the resources into conservation and efficiency that we have basically wasted on ethanol.

    People at the economic fringes are literally starving every day in some parts of the world because so much grain and farm land have been diverted way from food production to the manufacture of moonshine.Most of us in places like the US just don’t understand that people who barely have enough staples and no luxury foods to get by are just not able to handle a big increase in the price of flour or rice or beans or cooking oil.They have to skip meals and a lot of them were skipping meals even before the ethanol industry really got rolling.Some of them are skipping enough meals to kill them.

    Beyond the humanitarian aspects of burning food doing unnecessary driving in unnecessarily over sized cars there is a grave environmental risk involved. We are already over extended in terms of farming too much land and leaving too little in a more or less natural state to maintain the natural ecosystems that keep all of us- including even the Koch brothers and the Saudi royal family- alive and healthy.

    There is a dead zone near the mouth of the Mississippi that is already bigger than some states and the primary reason for it being there is excess fertilizer runoff from farms followed by inadequate treatment of sewage.In another decade or maybe two we are going to be in a bad fix for the phosphate minerals we need to manufacture the fertilizers that enable us to grow enough food to feed seven billion people. We may be in a bad fix even sooner for cheap natural gas needed to manufacture the ammonia that is used to manufacture the nitrates we put on our crops to maintain yields. Distilling moonshine consumes a hell of a lot of gas and raising the extra corn consumes a hell of a lot of fertilizer and diesel fuel.

    Now as it happens I am only a well informed layman when it comes to the oil industry but I am a well trained and open minded professional when it comes to agriculture and agricultural markets.

    Ethanol and other biofuels intended for large scale use as motor fuels are an economic and environmental disaster in actuality or in the making except for the very small number of people who are making big profits out of the biofuel industries. These people include a lot of my fellow farmers here in America and the business people they support such as farm equipment dealers and car dealerships.

    There may eventually be a sustainable way to produce motor fuels from biomaterials but it has not yet been demonstrated to the satisfaction of anybody who understands big picture agriculture and is also an impartial observer.

    All the rest of us are paying a big price for their newfound business success and we will sooner or later regret it bitterly.

    Now insofar as the major oil companies being ” scared” of ethanol this is a joke. Depletion alone is all the guarantee they will ever need of a lucrative market for all they can produce.

    But it is true that mixing ethanol into gasoline creates a lot of headaches for oil companies and for car companies and for owners of a damned near anything that uses gasoline these days. I have personally spent over a thousand dollars on just replacing alcohol corroded fuel system components on my own vehicles in the last year and this is for parts alone.My older truck and car would have probably gone to the scrapyard if I had to pay the going rates for shop labor.

    And just about any mechanic who works on small engine powered equipment will tell you true stories all day about how many times he has repaired or trashed engines ruined by ethanol laced gasoline.

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