The EPA has finalized label requirements for E15, backing down a bit from initial proposal which included the word ‘caution.’ The new label, as you can see, is a slightly less alarmist ‘attention.’ I will note that the new label does not point out in any form that ethanol will provide fewer miles per gallon for your vehicle. Adjusted for energy content, ethanol is more expensive than gasoline. However, if you do not adjust for energy content, ethanol costs less than gasoline. Being that the label doesn’t point this out, it seems that consumers might fill up with E15 as it will be slightly cheaper than E10, as few are aware that they will be reducing their fuel economy when moving from E10 to E15. I suspect that the government would be taking action if a private company were to do this.
The Corn Grower’s Association has weighed in, and they are unsurprisingly less than thrilled despite the fact that the EPA kowtowed to their demands:
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Today The New York Times ran two dueling opinion pieces featuring Robert Bryce, author of a number of books, and Tom Friedman, who chose this column to unleash his inner Paul Ehrlich. The latter column will make regular NYT readers anxious and depressed, the former will make them angry.
Bryce argues that though wind and solar farms do not produce emissions, they require a whole lot of land, significant natural resource inputs, and new transmission lines. He believes that these shortfalls are under appreciated by renewable energy proponents, and the scaling of renewable energy might have other environmental consequences. California appears to have plenty of land, but that is to meet a 33% renewables goal, which is unlikely to satisfy environmentalists, and California has much more land than other states. The takeaway is that all energy choices have their tradeoffs:
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On May 17, the Senate voted 52-48 for S. 940, the Close Big Oil Tax Loopholes Act, sponsored by Sen. Robert Menendez (D-N.J.). The bill would selectively hike taxes on the nation’s five largest oil companies (Chevron, Shell, BP America, Conoco Phillips, and ExxonMobil).
The bill failed of passage, falling eight votes short of the 60 required to overcome a filibuster.
But that was just one skirmish in the protracted political war against U.S. energy production. A majority of Senators voted for the bill and gasoline prices could hit new highs in the summer driving season. So expect more anti-oil demagoguery from the World’s Greatest Deliberative Body in the very near future.
Demagogues feed and exploit public ignorance and frustration. Nobody likes paying $4.00 a gallon for gas, and self-styled progressive politicians, pundits, and activists claim Big Oil is “price gouging,” reaping “windfall profits,” and not paying their “fair share” of taxes. They claim we’d all feel less pain at the pump if Big Oil felt more pain on April 15. This popular narrative has no basis in fact or economic logic. [click to continue…]
Energy blogger Robert Rapier has an excellent post about the naive hatred shown towards the fossil fuel industry by what he calls Democrats. I’m not completely convinced that its a position held by all of those on the left (rather than environmentalists, a subset of the left) but the knee-jerk anti energy sentiments tend to aggregate more on that side of the isle. Read the whole thing, especially his thoughts on clueless celebrity activism. He quotes an environmentalist who struggled to come to this realization:
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.
Comfort, check. Survival, check. And this is a common phenomena by many who engage in similar types of activism against fossil fuels. The individuals who have worked to make our lives, while often getting rich in the process, are reviled by a good portion of the population. A prime example is the newest assault on the Koch brothers by Henry Waxman (D-Calif.): [click to continue…]
This week Philips Co. showcases its newest success at capturing rents produced by government mandates: it has produced a 17-watt LED bulb that functions as equivalent to a 75-watt incandescent bulb. The catch: they will initially cost around $50.
The announcement contains the usual boilerplate about how in just a few more years these light bulbs will be the cat’s pajamas, and everyone will be buying them. Go get in line. Lynne Kiesling comments:
This week Philips is releasing a mass-market LED light bulb with a physical and lumens-delivering profile to mimic incandescents at a fraction of the energy use. But they’ll still be priced at $40-45, which is a bit steep for customers who are accustomed to cheap, short-lived bulbs, so their market success will require some education and adaptation of expectations. They will also have to overcome the hurdles of the failed expectations of compact fluorescent bulbs, which have not demonstrated the required longevity/price tradeoff to make them economical (in addition to their other shortcomings). I may buy one to test, but I don’t plan on fitting out my whole house in these LEDs any time soon, based on my CFL experience.
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Al Gore, Greenpeace, and the “consensus of scientists” tell us that global warming endangers agriculture and global food security. A study published last week in Science magazine finds global warming has taken significant bites out of potential global corn and wheat production since 1980.
The study also finds, however, that climate change has not adversely affected U.S. corn and wheat production. How so – because of Yankee ingenuity? Not according to the study. The explanation, rather, is that America has been a “notable exception” to climate change. The USA “experienced a slight cooling” during the study period (1980-2008).
This is bizarre. Here we have an alarmist study that finds a “lack of significant climate trends” in the USA for the past 30 years. If true, that makes hash out of all those dire pronouncements by Gore and others that global warming is already contributing to hurricanes, tornadoes, snow storms, forest fires, floods, etc. in the USA. Are the study’s authors aware of this implication? Are the editors of Science? Apparently not.
How do the authors know that climate change is depressing corn and wheat production globally, even if not in the USA? The biggest loss in wheat production, according to the study, is in Russia. Do they adjust Russian crop yields for the Russian economic meltown and financial crisis of the 1990s? As far as I can tell, they don’t. I would not bet the farm on the validity of this study. [click to continue…]
With the current partisan fighting over oil subsidies (and energy policy more generally), its worthwhile to look at energy legislation that has found bipartisan support: the New Alternative Transportation to Give Americans Solutions Act of 2011 (the NAT GAS Act, often called the Boone Pickens bill). It currently has 180 cosponsors, split roughly even between Republicans and Democrats. Joe Nocera likes it.
True fiscal/small government conservatives understand the danger of using the tax code to steer the economy. It has brought us ethanol, subsidized home ownership for the wealthy, etc. Populist conservatives-in-name-only don’t actually care about applying consistent principles, or often let their concern be overshadowed by campaign donations.
Which is why I was surprised to see Representative Ron Paul, principled libertarian/free-market extraordinaire, as a cosponsor. I spoke to someone in Ron Paul’s office, and they explained (roughly) that support for tax credits (i.e., industries paying less in income tax relative to the status quo) is consistent with Ron Paul’s support for lower taxes.
This YouTube clip seems to explain Paul’s position (he was asked about a bill to end tax credits for the oil industry):
PAUL: Well, how do you define a subsidy? I don’t consider any tax break as a subsidy. That was not a spending bill, that was not a grant.
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I never vote to increase any taxes. I vote to always give tax credits, and I always cut spending. I’ve never voted for a real spending bill, so, I don’t think that is in the category of something I’d consider a spending bill.
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High Court Offers Sense in Global Warming Battle
Bob Tippee, Oil & Gas Journal, 2 May 2011
The One “Big” You Can’t Escape
Eric Peters, American Spectator, 2 May 2011
Paul Krugman’s Convenient Lie about Global Warming
Joseph Klein, FavStocks.com, 30 April 2011
The Truth about Green Jobs: A Recruiter’s Perspective
Doug Thorner, Denver Post, 29 April 2011
Fear of Climate Change Falling Precipitously
Joe Wolverton, American Thinker, 29 April 2011
Natural Gas: A Better “Climate” Fuel?
Chip Knappenberger, MasterResource.org, 29 April 2011
Let’s Sunset the Ethanol Subsidy
Diana Furchtgott-Roth, RealClearMarkets.com, 28 April 2011
How Oil Profits Are Good for Americans
Nicolas Loris, The Foundry, 28 April 2011
Professor Cornpone, Inc.
Wall Street Journal editorial, 27 April 2011
The Climate Gospel According to Gore
Larry Bell, Forbes, 26 April 2011
Here is an excellent overview (by Robert Rapier) of taxes and the oil industry. The basic takeaways are that a simpler tax code is much preferable to what we have now, that ending these deductions without reforming the tax code will be damaging, and the oil industry’s profit margins are actually lower than many other industries. The whole thing is worth reading, but below are a few excerpts.
The biggest ‘oil company subsidy’ — amounting to $1.7 billion per year for the oil industry — is a manufacturer’s tax deduction that is explained in Section 199 of the IRS code. This is a tax credit designed to keep manufacturing in the U.S., but it isn’t limited to oil companies. It is a tax credit enjoyed by ethanol companies (have you ever heard anyone call it an ethanol subsidy?), computer companies (we are subsidizing Microsoft and Google!) and foreign companies who operate factories in the U.S.
One never hears of proposals to entirely do away with Section 199. Apparently, since this tax credit was designed as an incentive to keep manufacturing in the U.S., many would feel that eliminating it for all companies would provide less incentive for them to keep their factories in the U.S. Some of the same people apparently don’t believe this reasoning will apply with the oil industry.
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In case you haven’t checked recently, gas prices are high again. Fear not, because the DoJ is on the case: “High gasoline prices prompt Justice department to eye energy industry.” From the article:
Attorney General Eric Holder made no secret the move is a direct response to public angst, not to current evidence of any illegal conduct.
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While promising official vigilance, the attorney general acknowledged regional differences in gasoline prices, and said, “It is also clear that there are lawful reasons for increases in gas prices, given supply and demand.”
At least give them credit for admitting that they’re wasting taxpayer dollars on a bunch of nonsense. If public conern is the only metric for a DoJ bureaucratic task-force, there are a number of other issues American’s are inappropriately worried about. I’d be shocked if the Department of Justice was interested in wasting its time on those issues.
There was a good piece in Forbes explaining the (lack of) evidence that speculators have been driving the price of oil by Jerry Taylor and Peter Van Doren.
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