Judging from President Bush’s State of the Union message on Jan. 23, the administration’s new energy policy can be summed up in one word - ethanol.
Bush wants to sharply increase production of ethanol and other alternative fuels while raising fuel economy standards for passenger cars and light trucks. The idea is to reduce US gasoline consumption by 15% in the next 10 years by increasing the consumption of ethanol and other alternative fuels dramatically over that timeframe. This, he reckons, would amount to about 35 billion gallons of ethanol or similar fuels.
This plan must sound pretty darn good to Midwestern corn producers and giant agri-corporations like Illinois-based Archer Daniels Midland, which has been a prime recipient of US government largesse in the form of subsidies and tax breaks. With government-mandated ethanol consumption as well as those subsidies, this might not be a bad time to get in the farming business.
Although research is being done to test the commercial viability of cellulosic biomass (ethanol from non-traditional feedstocks such as wood chips, wheat straw, corn stalks, and other plant waste) as transportation fuels, the prospect of generating enough refined product to supply a rapidly growing industrialized nation like the US is unlikely.
Flex-fuel automobiles designed to run on a mixture of 85% ethanol and 15% gasoline (the E85 formula) see about a 27% reduction in fuel economy, according to Consumer Reports. This is because ethanol has a lower energy content than gasoline (75,670 BTUs/gal compared to 115,400 for gasoline). Consequently, you have to burn more fuel to generate the same amount of energy.
While we should all encourage energy conservation and efficiency, we should not over-rely on biofuels such as ethanol to improve our energy security. Even the ethanol industry admits that it would be hard-pressed to produce more than about 14 billion gallons of ethanol in the next 5 to 8 years - hardly the 35 billion gallons the Bush plan calls for.
The oil and gas industry has its hands full trying to respond to Democrats in Congress who want to repeal what they incorrectly refer to as “big oil subsidies.” Now the industry has to listen to administration hype about how alternative energy sources will take the place of oil and gas in fueling our economy.
Mike Linn, chairman of the IPAA, put it best when he recently commented: “The majority of the nation’s oil and natural gas remains off-limits [to development]. Nearly 85% of the nation’s offshore resources are restricted by the government for exploration. These reserves could replace Persian Gulf imports for the next 50 years. And an overwhelming amount of oil and natural gas resources in the Intermountain West remain unavailable due to government restrictions.”
He added, “Our best defense against foreign oil dependency is the vast oil and natural gas resources we have here in America. This energy is our true, strategic petroleum reserve, and government policies should encourage its development.”
Amen.
Don Stowers
Editor-OGFJ
