How can America achieve greater energy independence?

(an ‘other voices’ feature by Jason Hill, in the Star Tribune newspaper)

In the long term, renewable electricity and next-generation biofuels from nonfood sources hold the most promise for reducing our dependence on foreign oil. At the same time, more fuel-efficient vehicles, as mandated by government standards, will help reduce overall fuel demand.

Yet widely available electric vehicles and next-generation biofuels are years off, and major gains in vehicle efficiency are unlikely to be seen right away because it currently takes nearly two decades for our national automobile fleet to turn over completely.

Yet, our immediate concerns are pressing. Rising oil prices threaten to derail our economic recovery.

The path we have taken so far to reducing dependence on foreign oil — producing more ethanol — has been largely ineffective. It has also come at great cost to another thing we hold dear — food security.

We now use 40 percent of the corn we grow here in the United States for ethanol, but this is only enough to offset a little under 4 percent of our transportation needs. Last week corn hit an all-time high price of nearly $8 per bushel.

What if, instead of trying to grow our way out of our foreign oil dependence, we were to accelerate our need for less?

Amazingly, simply by increasing the average fuel efficiency of the cars and trucks we drive from 20 to 21 miles per gallon we could offset an amount of gasoline nearly equal to the 13 billion gallons of ethanol we are on track to produce in the country this year.

Americans support corn ethanol through a variety of state and federal mandates, as well as with a 45-cent-per-gallon tax credit.

Our Take:
Beware simple solutions to complex problems. The first ‘Cash for Clunkers’ program was an economic disaster that instantly devalued the entire fleet of American used cars. Used car inventories are a significant source of revenue for car dealers across the country. The Twin Cities and many other locales saw a raft of auto dealers go bankrupt. It was the last straw in the midst of an economically difficult time.

As to ethanol’s effectiveness–it replaces ten percent of the nation’s gasoline. Hill must be including diesel in his calculations, which, with better incentives (Congress zeroed out the biodiesel tax credit) and mandates could be offset by quite a bit more biodiesel. These are solutions available today, and not in some misty tomorrow. What is required is the gumption to pass and maintain laws that actively take apart the century-old monopoly of gasoline on our transportation system.

Next generation, farm-based ethanol is almost here. It promises to double the bite that renewable fuels take out of Big Oil, and the way to ensure that can happen is two things: keep the ethanol incentive–it will encourage the build out of cellulose ethanol now that grain ethanol has reached its maximum capacity. Secondly, put a blender pump in every gas station in America. Such pumps are capable of blending ethanol at various higher graduated levels and give the consumer the choice of how much ethanol and how much gasoline to use. They can choose on price alone, or they can choose based on the benefit to air quality, or the benefit of buying something made in America, or they can choose the amount of ethanol based on the clear demonstration by Indy Racing (where E100 is used) and NASCAR (where E15 is used) that ethanol is actually, despite everything Hill and company assert, a high performance fuel, adding oxygen and octane that equals power. Talk to someone who uses an E85-powered pickup about the difference in torque when they are towing a trailer.

Those two things alongside Detroit’s promise to ramp up flexible fuel vehicle production, will lay the groundwork for steadily weaning ourselves from the oil that Hill rightly blames for nearly scuttling our economy.

And a word about food security. Corn producers do not want prices that its customers can’t afford to pay–that should be obvious. But corn producers do not set the price. To lay $8 corn at the feet of the ethanol industry is more simple-minded pabulum that reflects zero knowledge of the behavior of the commodity markets over the past five years. Corn has been everywhere between $4 and $8 a bushel while ethanol has been steadily producing billions of gallons of fuel. The legally required minimum use of ethanol is well known and commodity trade analysts incorporate the need for more corn in their reports, and farmers have responded by growing more corn.  Grain ethanol plays a limited role in corn price–why should ethanol alone be sacrificed in an attempt to reduce price? UN and other quasi governmental bodies believe ethanol may exert ten percent of the upward pull on prices. The price of oil and the role of speculators in the commodity markets exerts a far greater role in this inflated price.

And Professor Hill would have us believe we are saving energy by retiring millions of perfectly serviceable vehicles, with all the embodied energy it takes to produce the steel and other materials and assemble them into working vehicles. Either he wants to prove that stupid people don’t have a corner on the stupidity market, or he is putting on the straw boater of Professor Harold Hill and telling us there’s trouble in River City, and the solution is buying new cars that can run on only one fuel–gasoline. Explain how does that help us get off gasoline, again? Must be the “Think” method.

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