The senate votes to end ethanol subsidies...

In a vote of 73 to 27, the senate voted to end the ethanol subsidy. The house probably won't take up the issue so the senate vote will wind up being symbolic.

For as much as I think dianne feinstein is a moron, I have to agree with her on this. If ethanol can't stand on its own, it should be allowed to fail. Ethanol production has led to higher corn prices. Higher corn prices have led to higher food prices. When farmers have to pay more to buy corn to feed cattle (or other critters) they pass those increases on to us, the consumers.

Cars get less fuel mileage on ethanol. Sure, it may be cheaper than straight gasoline, but if your car gets 20% less fuel mileage what have you really saved?

An industry that intends to be viable has to have the ability to stand on its own in short order. Ethanol has been subsidized for at least 10 years!

Here is a little piece of an article from Slate dated July 19, 2005. Read the rest at the link.

The stickiest question about ethanol is this: Does making alcohol from grain or plant waste really create any new energy?

The answer, of course, depends upon whom you ask. The ethanol lobby claims there's a 30 percent net gain in BTUs from ethanol made from corn. Other boosters, including Woolsey, claim there are huge energy gains (as much as 700 percent) to be had by making ethanol from grass.

But the ethanol critics have shown that the industry calculations are bogus. David Pimentel, a professor of ecology at Cornell University who has been studying grain alcohol for 20 years, and Tad Patzek, an engineering professor at the University of California, Berkeley, co-wrote a recent report that estimates that making ethanol from corn requires 29 percent more fossil energy than the ethanol fuel itself actually contains.

The two scientists calculated all the fuel inputs for ethanol production—from the diesel fuel for the tractor planting the corn, to the fertilizer put in the field, to the energy needed at the processing plant—and found that ethanol is a net energy-loser. According to their calculations, ethanol contains about 76,000 BTUs per gallon, but producing that ethanol from corn takes about 98,000 BTUs. For comparison, a gallon of gasoline contains about 116,000 BTUs per gallon. But making that gallon of gas—from drilling the well, to transportation, through refining—requires around 22,000 BTUs.

In addition to their findings on corn, they determined that making ethanol from switch grass requires 50 percent more fossil energy than the ethanol yields, wood biomass 57 percent more, and sunflowers 118 percent more. The best yield comes from soybeans, but they, too, are a net loser, requiring 27 percent more fossil energy than the biodiesel fuel produced. In other words, more ethanol production will increase America's total energy consumption, not decrease it. (Pimentel has not taken money from the oil or refining industries. Patzek runs the UC Oil Consortium, which does research on oil and is funded by oil companies. His ethanol research is not funded by the oil or refining industries*.)

Considering that ethanol takes more energy to create than it contains and that without subsidies the industry couldn't exist, is this really the smartest way to spend $5+ billion dollars a year? Probably not...

Claire McCaskill Hates the Middle Class

Otherwise, why would she be stumping to raise the price of gasoline, oil, and other petroleum products?  I got an e-mail from her office, always good for making smoke come out of my ears.  Some choice excerpts:

If we cannot end subsidies to the five most profitable corporations in the history of our planet, then I don’t know how Congress will make the truly difficult decisions about how to reduce the deficit.

Every year, billions of our tax dollars are given away to companies that made $36 billion in profits during this year's first quarter alone. It’s a practice that must stop. That money could be used to pay down our deficit.

A proposal I announced last week will take away $2 billion in annual taxpayer-provided subsidies from the five biggest oil companies and apply every dime to reducing the deficit. It is the essence of low-hanging fruit. This is the kind of idea that should receive unanimous support in the Senate. It’s common sense.

The big oil companies don’t need the money. Over the last ten years, they've raked in nearly $1 trillion – that’s $1,000,000,000,000 -- in profits. They've broken their own records for the most profitable quarter in economic history several times.

My response:

OK, once you get past the fact that they're not really subsidies...I can forgive that lie for the sake of argument.  I love the idea of doing something to make gasoline prices higher!  Doesn't everybody?  But I don't mind eliminating these tax deductions, as long as we eliminate the HUNDREDS of billions of dollars worth of subsidies for ethanol, wind, and solar, which are nothing but massive boondoggles for programs that would never be able to compete in a free market, simply because they cannot live up to their claims. 

The profits "Big Oil" makes are no different, percentage-wise, than most other companies.  Some companies, such as Apple, have much higher profit margins.  Why aren't you demonizing them?  Why aren't you going after their tax deductions?  What do these oil companies do with their profits?  Do the executives just fill rooms up with cash and roll around in it, like Scrooge McDuck?  No, those profits are used for future exploration and as a safety net for when bad times come--and anyone who lived through the early '80s in the oil industry can tell you, they DO come.  The oil exploration and refining business is expensive. You might have read an article published this week in the Houston Chronicle about Shell's new liquid natural gas drilling and processing platform.  Just building this rig is going to cost them $10 to $12 billion.  That's just one rig.

If two or four billion dollars really concerns you, you could start by eliminating the massively failing organizations created by Jimmy Carter--namely, the Departments of Education and Energy.  But it's not really about saving money, is it?  It's about punishing the companies that provide us with our country's very lifeblood.

I'm sure it'll go straight into the "Deleted Mail" folder.

Oil "Subsidies" and Stupid Liberal Petitions

I got this petition in my e-mail today:
End Big Oil Subsidies!

Some of the crap from the e-mail:

"Dear Friend,

As Americans continue to struggle with outrageous, unstable gas prices, big oil companies continue to benefit from them.

Exxon Mobil announced Thursday a first-quarter profit of $10.6 billion — a 69% increase from last year, and a number so astronomical, Exxon executives felt the need to issue defensive statements in advance.¹ Also unveiling massive earnings were Shell ($6.3 billion, up 30%), ConocoPhillips ($3 billion, up 44%), and of course, BP (7.1 Billion, up 16%). In all, the five largest oil companies have reaped nearly $1 trillion in profits in the last 10 years.

But more outrageous than jaw-dropping oil company profits, is the fact that our government actually rewards these companies with even more of our money for maintaining this disastrous system — to the tune of $4 billion a year in tax credits and subsidies. It's time for that to end." 

My response:

"Big oil, such as Exxon/Mobil, Royal Dutch-Shell, BP, etc. doesn't get these subsidies!  They are specifically excluded from receiving these tax deductions for depreciation (not subsidies, actually).  Only domestic producers, not the big multinationals, get them, so naming Exxon/Mobil, ConocoPhillips, and BP is either a deliberate attempt at misdirection or an indication that you don't know what you're talking about.  I don't oppose eliminating that $4 billion in tax deductions for depreciation as long as we also eliminate the $100 billion in subsidies the green energy scammers get. 

Also, in the world oil markets, the "Big Oil" companies are very small players compared to the nationalized oil companies of Saudi Arabia, Russia, and Venezuela, and have minimal influence on oil prices.  So you're barking up the wrong tree.

The current prices of oil are caused by the same thing that is causing the price of other commodities, such as gold, silver, and cotton, to skyrocket--the weak dollar caused by the economic policies of the Obama administration.  So why not create a petition to fix the REAL problem?"