James and Stephen Eaves in an article in Wapo today
point out the inherent folly in the politician's belief that ethanol as a "renewable fuel" could secure the United States' "energy security." It is simply not sufficient to produce legislation such as "The Renewable Fuels Act" or "The BioFuels Security Act" simply to spray more taxpayers dollars on the farming / ethanol / fuel blenders.
They argue that the technologies and energy markets are incredibly complex, we shouldn't have great confidence that politicians, using billions of dollars in subsidies, will pick the best one.
Even now the ethanol glut is kicking in, Indiana Republican Governer Mitch Daniels declared the small town od reynolds (pop 500) on Sept. 13, 2005, as Biotown USA as Vera Sun was planning to build a 110Mn. gallon a year refinery , Mitch told us at Senator Lugars Summit on Energy Security last fall this would re-energize the town. Vera Sun have just announced it will suspend construction of the refinery due to current market conditions. (Company Press release Oct 1st)
When Verasun IPO'd Lord Patel posted Dot Corn Boom : Vera Sun IPO soars which soared to US$39 from a very full issue price of US$23 , in which he pointed out that ..
"This puts a value on the company of 200 times its annualized earnings from the March quarter 2006. Compare that with (say) 50 for Google."
The share price above tells the story. Look at Pacific Ethanol (PEIX) as well , in which Bill Gates stuck some of his hard earned.
At best , US produced ethanol could only supply 14% of US gasoline consumption - The National Resource Development Council takes a more practical policy by reducing consumption and therefore demand on oil. What they offer requires little legislation but a great deal of public education. The policy outlined below was published in 2001 when gas was less
Long-term Solutions for U.S. Energy Security
Raise fuel economy standards to 40 mpg by 2012 and 55 mpg by 2020. Decades of federal inaction on fuel economy standards and a surge in sales of SUVs and minivans have dropped the average fuel economy of new cars and light trucks combined to its lowest point in nearly 20 years
Require fuel-efficient replacement tires by 2002. Most replacement tires now on the market create more friction as they roll than do original equipment tires. Replacement tires have a 20 % higher "rolling resistance," making average replacement tires about 4 % less "fuel efficient" than original tires on a new vehicle. Requiring better replacement tires would cut the gasoline consumption of all U.S. vehicles by about 3 % when fully phased in.
Enact tax incentives for hybrids and fuel-cell vehicles.
Reinvest in public transit and inter-city railroads.
Promote "smart growth."
Make fuel from farm wastes.
Launch an "Apollo Project" for fuel cells and hydrogen fuel.
Short-term Solutions for U.S. Energy Security
Check your tire pressure.If all Americans kept their tires properly inflated, NRDC estimates the nation would cut its gasoline use by 2 %
Obey the speed limit.
Turn off the car engine while waiting in line.
Use car pools and public transit, and telecommute
Keep cars tuned and use fuel-efficient engine oil.
Buy the most fuel-efficient car that meets your needs.
We pass it on to a thirsty and fuel hungry world.