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Like two ships passing in the night, or better yet two graph lines crossing on a oil company profit chart (PDF), the U.S. economic stimulus package once again seems to be slipping back into the hands of those with record setting profits and record-setting oil prices.
Let’s look at the math.
- The Government is going to give $168 billion back to taxpayers . Maybe we can consider this a simple gasoline rebate?
- Most taxpayers will receive a check of up to $600 for individuals and $1,200 for couples, with an additional $300 for each child. People earning too little to pay taxes but at least $3,000 — including elderly people whose only income is from Social Security and veterans who live on disability payments — will get $300 if single, or $600 if a couple.
- Crude oil prices just passed $100 per barrel, and the average price at the pump is $3.13 for a gallon of regular gasoline, almost 75 cents higher than a year ago. The average taxpayer gets about 20 MPG and buys 592 gallons of fuel per year. That gasoline usage plus the price increase would equal $444 per individual. This will get much closer to $600 rebate if projections of $4.00 per gallon come to fruition this spring.
That’s one way to look at it. But the oil companies do not get all of it. The Department of Energy’s Oak Ridge National Laboratory had another view:
“Higher prices for petroleum mean increased expenditures on motor fuel and a direct transfer of wealth from U.S. household, business and governments to oil exporting economies. The average U.S. household purchases approximately 1,000 gallons of gasoline each year to power its cars and light trucks for 21,000 miles (Davis and Diegel, 2007, Table 8.7). Because vehicle use is relatively unresponsive to fuel prices (CBO, 2008), households are now spending $3,000 instead of $1,500 per year on fuel [there goes the rebate]. Because almost 60% of the petroleum we consume is imported, roughly $900 of the increased cost of gasoline is a transfer of wealth from American consumers to oil exporting countries.”
– Dr. David L. Greene, Corporate Fellow, Engineering Science and Technology Division, Oak Ridge National Laboratory, Feb. 14, 2008, in Testimony to the U.S. House of Representatives Committee on Appropriations.
Now for the other side of the ledger.
- To pay for the rebates — which are estimated to cost about $117 billion (it appears $51 billion is already missing) over the next two years — the government will have to borrow more money, enlarging the budget deficit. This number is amazingly similar to the profits of the top five oil companies in 2007 (PDF).
- In 2006 alone, the 27 largest energy companies earned $219 billion in pre-tax income, according to the U.S. Energy Information Administration. If they pay my tax rate – we would be about even and not have to borrow any money.
Exxon, the world's largest publicly traded oil company, said fourth-quarter net income rose 14% to $11.66 billion, or $2.13 per share. That's up from $10.25 billion, or $1.76 per share, in the year-ago period. That tops Exxon's previous quarterly profit record of $10.7 billion , set in the fourth quarter of 2005, which also was a record for any U.S. corporation.
While some recent oil and gas industry radio advertisements are touting “30% of Americans own oil and gas stocks” – 70% do not.
According to a Bloomberg October 2007 report:
"There's a steady liquidation of the world oil industry... Exxon is buying back about $30 billion of its shares each year. If that continues, Exxon will have repurchased all its stock by about 2024."
According to a Rice University November 2007 report:
“The handwriting is on the wall. The oil majors used 56% of their cash flow on share repurchases… they are not replacing reserves. It’s as if they’re slowing liquidating their long-term asset base.”
Based on the supply/demand charts and record oil prices I would have to bet they are not investing in new oil production either.
What are you going to invest in with your gasoline rebate check? Put a down payment on a flexible fuel vehicle, purchase some E85, or put it back in your gas tank? Some in Congress are asking citizens to do just that -- invest their rebates in renewable energy and energy efficiency.
A resolution recently introduced by Congressman Baird in the U.S. House of Representatives calls on Americans to use their tax rebate checks to purchase renewable energy and energy-efficiency products and services.
The resolution, H. Res. 987, cosponsored by Reps. Jay Inslee (WA-01), Earl Blumenauer (OR-3), Greg Walden (OR-02), and eighteen other House members, also urges retailers and service providers to offer promotions that will encourage Americans to purchase products and services that will help conserve energy and reduce greenhouse gas emissions.
“When the Administration and Congress first proposed the stimulus package, I urged them to take this opportunity to address the link between our current economic situation and our energy crisis by investing immediately in conservation and renewable energy initiatives,” said Congressman Baird. “With the cost of gasoline, electricity, and home heating oil rising dramatically in recent years, it’s time for Americans to think outside of the box and reduce their energy use. If consumers choose to invest in energy conservation, they’ll experience a win-win-win situation by saving on energy bills, helping to lower energy costs, and joining in the effort to help our country reduce greenhouse gas emissions.”
“I hope Americans make their rebate checks go green by investing in energy-efficiency upgrades or clean-energy technologies that will help them save on energy costs in the long run,” added a co-sponsor of the resolution, U.S. Rep. Jay Inslee (D-Wash.), who serves on the House Energy and Commerce Committee and the Select Committee on Energy Independence and Global Warming.
“The price of oil has doubled since President Bush took office, exacerbating the stress on Americans’ already stretched wallets,” said Congressman Blumenauer. “Last week Congress passed an economic stimulus package that will boost our troubled economy, and it is my hope that we can begin making personal decisions to spend these checks on energy efficient products. By investing in renewable energy and energy-efficient goods, consumers can reduce their electricity bills and spur new innovation in a sector that is vital as we confront a warming planet, rising oil costs and new security concerns.”
“Consumers in the Pacific Northwest have long made a commitment toward renewable energy, recycling and conservation. Here’s a chance to do even more by investing the rebate check into more efficient energy uses, such as replacing incandescent light bulbs with fluorescent bulbs, or further weatherizing around doors and windows. Reducing energy consumption saves money and helps the environment, too,” said Walden, who serves on the Committee on Energy and Commerce and the Select Committee on Energy Independence and Global Warming.
Additional cosponsors of the resolution include Co-chairs of the House Renewable Energy and Energy Efficiency Caucus, Reps. Mark Udall (CO-02) and Zach Wamp (TN-03), along with Reps. Rick Larsen (WA-02), Adam Smith (WA-09), Bart Gordon (TN-06), Patrick Murphy (PA-08), Diane DeGette (CO-01), Chris Murphy (CT-05), Vernon Ehlers (MI-03), Chris Van Hollen (MD-08), Joe Crowley (NY-07), Bob Etheridge (NC-2), Carolyn Maloney (NY-14), Allyson Schwartz (PA- 13), Fred Upton (MI-6).
Being true to our blog mission, we wanted to keep you apprised of developments with the national Renewable Fuel Standard (RFS).
February 19, 2008 – RFS -- month two
Passage of the Energy Independence and Security Act of 2007 (EISA07) was nothing short of historic and heroic. The passage of EISA07 represents Congressional courage and their belief in the technological prowess and entrepreneurial sprit of the United States. This legislation also provides all us an insider glimpse (If-we-only-knew-what-they-really-knew-basis) of how desperate things must be on our energy front for Congress to reach such a fast bipartisan agreement that would make significant progress in fighting oil imports and greenhouse gases. With the ink hardly dry on the President’s signature (December 19, 2007) there are already new hearings (below), new anti-biofuels/ethanol studies appearing in the media, threats of throwing safety nets and hitting off ramps, technical corrections, and new legislation to amend the definition of renewable feedstocks. As the “Oil lobby looks to delay deadlines for new renewable fuels standard” ethanol and renewable fuel proponents are responding to keep the debate open and progress on the new RFS moving forward.
Regarding article, “Oil lobby looks to delay deadlines for new renewable fuels standard,” Feb. 13.) Biofuels are critical and necessary alternatives to environmentally hazardous fossil fuels. Concerning the frenzy over the recently released studies regarding biofuel cropland and its impact on greenhouse gases, it’s important to note that the energy bill of 2007 and its renewable fuel standard has specifically addressed these issues. The bill, signed into law, sets life cycle global warming pollution reduction standards for all new biofuels. The architects of the legislation anticipated hurdles and created mechanisms for addressing them.
As far as delaying implementation of the 2009 usage levels, we will have plenty of production in the U.S. to easily meet those requirements. Many more studies have revealed the potential of biofuels, including a joint study released in January by the U.S. Department of Agriculture and the University of Nebraska indicating that greenhouse gas emissions from switchgrass-derived ethanol were 94 percent lower than emissions from gasoline. While we must continue to research best practices and methods moving forward, it’s simply premature and foolish to write off biofuels and their potential to satisfy our nation’s energy, economic and environmental needs.
THE HILL, By Douglas A. Durante, Executive Director, CFDC, February 14, 2008
The Senate Committee on Energy and Natural Resources RFS Hearing
The Senate recently held an oversight hearing to discuss the new RFS. Senators Tim Johnson (SD) (co-chairman, of the Ethanol Across American education campaign), Larry E. Craig (ID), and Ken Salazar (CO) joined Committee Chairman Jeff Bingaman (NM) and Ranking Member Pete V. Domenici (NM) to address concerns industry and government are having about the final language contained in the EISA07.
Ranking member U.S. Senator Pete Domenici said that the recently passed RFS may need changes in order to be effectively implemented. Domenici identified a number of areas that may need attention, including very broad waiver authority given to the EPA Administrator, limits on what type of land can be used to cultivate crops, and definitions in the RFS which preclude materials from forest thinning to be used as biomass. In addition, Domenici said he wants to ensure that the RFS is not weighted against new technologies, such as biocrude derived from algae.
Highlights from testimony from The Honorable Alexander Karsner - Assistant Secretary for Energy Efficiency and Renewable Energy, U.S. Department of Energy
- One important feature of the President’s proposed Alternative Fuel Standard was the economic safety valve (proposed to be $1.00 per gasoline-equivalent gallon). This safety valve sought to improve the likelihood that the program would not impose unreasonable costs on consumers or result in unreasonable profits for alternative fuel producers. The safety valve in Title II of EISA does not provide the same level of protections to obligated parties or consumers. DOE, EPA, and USDA will coordinate on analysis needed to support the rule making to implement the new RFS program, including an assessment of what gaps, if any, exist in the incentive system in EISA, taking into account the costs of conventional (corn-based) ethanol, and cellulosic biofuels
[It makes you wonder what the safety value is for consumers when gasoline goes up $1 per gallon?]
- In addition to concerns about the waiver/safety valve, the Department recommends that the definition of woody biomass in Section 201 be modified in order to parallel the definition contained in the Administration’s Farm Bill proposal. This revision would allow us to more readily meet the renewable fuel standard set forth in the law since it encourages producers to use materials from federal lands or non-industrial private forest lands. Thanks for the recommendation, it was a fun and informative read. The Energy Independence and Security Act of 2007 officially put the lid on this food vs. fuel concern. Corn is the bridge technology to cellulosic ethanol; one would not and will not exist without the other. Some suggested reading.
- On November 6, 2007, [CFDC Member] Range Fuels, Inc, became the first of the six companies selected by DOE last February, as a part of the EPACT 2005 integrated biorefineries solicitation, to break ground on a commercial cellulosic ethanol plant, one of the first in the nation. The plant is located near the town of Soperton, Georgia, and will draw on gasification technology to convert wood and wood waste from Georgia's pine forests and mills into 20 million gallons of ethanol per year during its first phase of operation. Construction of the first phase is expected to be completed next year.
Ms. Carol Werner - Executive Director, Environmental and Energy Study Institute
- A report by the Union of Concerned Scientists (UCS) reinforces the widely-accepted average direct life-cycle emissions reductions (compared to gasoline) of 20% for ethanol from corn starch and 80% for cellulosic ethanol. These statistics immediately suggest two things - A) that the emissions screens in the current RFS can be met and B) that cellulosic fuels have the potential to dramatically reduce our greenhouse emissions compared to either gasoline or corn-starch ethanol. Depending on choice of feedstock and agricultural practices, some cellulosic renewable fuels have the potential to substantially exceed the average 80% emission reduction found by UCS. A 5-yr field study jointly undertaken by the USDA Agricultural Research Service (ARS) and the University of Nebraska found a 94% reduction in direct life-cycle greenhouse emissions from switchgrass-based ethanol compared to gasoline.
- In closing, I feel that it is important to stress that renewable fuels are one piece of the solution to transportation emissions, but not a complete solution. Renewable fuels will be ONE part of a larger strategy, but so will increased vehicle fuel efficiency, expanded public transit, and “smart growth” practices (enabling more transit, biking and walking). In addition, technologies such as E85 engine optimization and plug-in hybrids will allow us to get more out of each gallon of fuel.
Mr. Bob Dinneen - President and Chief Executive Officer, Renewable Fuels Association
- According to a report set to be released in late February from economist John Urbanchuk of LECG, LLC, the American ethanol industry is a job creating engine. The increase in economic activity resulting from ongoing production and construction of new ethanol capacity supported the creation of 238,541 jobs in all sectors of the economy during 2007. These include more than 46,000 additional jobs in America’s manufacturing sector -- American jobs making ethanol from grain produced by American farmers. The 9 billion gallons of ethanol we will produce in 2008 will reduce greenhouse gas emissions by more than 14 million tons, or the equivalent of taking 2.5 million vehicles off the road (Air Improvement Resources, Inc., February 2008). Specifically, expansion of the U.S. biofuels industry will:
- Add more than $1.7 trillion (2007 dollars) to the gross domestic product between 2008 and 2022;
- Generate an additional $436 billion (2007 dollars) of household income for all Americans between 2008 and 2022;
Support the creation of as many as 1.1 million new jobs in all sectors of the economy by 2002;
- Generate $209 billion (2007 dollars) in new Federal tax receipts; and,
- Improve America’s energy security by displacing 11.3 billion barrels of crude oil between 2008 and 2022 and reduce the outflow of dollars to foreign oil producers by $817 billion (2007 dollars) between 2008 and 2022. (Source(Economic Impact of the Energy Independence and Security Act of 2007, Renewable Fuel Standard, by John M. Urbanchuk, Director, LECG LLC January 2008).
- A recent report by the U.S. Department of Commerce’s Bureau of Manufacturing and Services, Energy in 2020: Assessing the Economic Effects of Commercialization of Cellulosic Ethanol, noted the commercial viability of cellulosic ethanol will strengthen the competitiveness of many domestic industries and have a positive effect on the U.S. economy. In fact, the report found that annual benefits for American consumers would total $12.6 billion if cellulosic ethanol production increased; U.S. crude oil imports would fall 4.1 percent if 20 billion gallons of cellulosic ethanol were produced in 2020, which is approximately 40 percent of current crude oil imports from Venezuela; and, the global price of oil and the domestic U.S. fuel price would be 1.2 percent and 2.0 percent, respectively, lower than projected.
Mr. Brian Jennings - Executive Vice President, American Coalition for Ethanol
"According to the National Commission on Energy Policy, the combination of the new RFS schedule and landmark corporate average fuel economy (CAFE) requirements in EISA 2007 will achieve numerous economic and environmental benefits:"
- Reduction of transfer of wealth abroad of $73 billion per year in 2020 and $129 billion in 2030, using current prices ($90 per barrel oil, $3 per gallon gasoline)
- Reduction in U.S. oil use of 2.8 million barrels a day by 2020, and 5 mbd by 2030.
- U.S. consumer fuel savings of $71 billion per year in 2020, and $161 billion in 2030, using approximate current prices.
- Reduction in U.S. CO2 emissions by 320 million metric tons in 2020, and 675 mmt in 2030.
- Reduction in passenger vehicle emissions by 15 and 30 percent, respectively, under what they otherwise would be.
- Reduction in 2020 of approximately 4 percent of projected total net U.S. CO2 emissions versus what they would otherwise be.
The testimony of Mr. Charles Drevna - President, National Petrochemical and Refiners Association
was very similar to the rash of anti-ethanol stories that appeared in the media during the EIAS07 debate. The speech was also hauntingly familiar to past testimony provided by NPRA during the phasing out of leaded gasoline, the creation of the oxygenated fuel standard in carbon monoxide non-attainment areas, the reformulated gasoline program for ozone non-attainment areas, and in response to efforts by EPA to reduce the volatility and sulfur content of gasoline, and Congressional hearings during the creation of the RFS in the Energy Policy Act of 2005 and expanding the RFS in the EISA07.
Mr. Robert Meyers - Principal Deputy Assistant Administrator for Air and Radiation, U.S. Environmental Protection Agency also provided testimony for the Committee.
The recent studies reported in Science and discussed in the New York Times article Biofuels Deemed a Greenhouse Threat (NY Times, subscription) could be more harmful than greenhouse gases. These studies actually risk creating more alarmist fodder about biofuels and could lead to serious and perhaps intended consequences – no research and development into new biofuels. Thankfully, there have been some smart and rational responses to the studies by organizations like NRDC and 25x25 to help frame the issue properly.
The United States is on the verge of tremendous scientific and technological breakthroughs driven by the new renewable fuel standard (RFS) contained in the Energy Independence and Security Act of 2007. Recent advancements in cellulosic biofuels technologies will provide the country with a real alternative to oil - in an effective, safe and environmentally responsible fashion. It's important that these technologies (and their corn-based predecessors) receive the support required to bring them out of the research box and into the market place in order to fully develop. If we don't do it soon it is very likely there won’t be anyone left in a financial community to spur biofuels investment, or consumers that can afford to buy it.
It appears that every time a study of this nature becomes public everyone is quick to forget why we are researching and developing alternatives to our current oil nightmare. Interestingly enough, there always seems to be a missing argument against oil use in the studies. Please do yourselves a favor, every time you see a new study like this, ask yourselves "compared to what?". More oil?
An excerpt from the Times article:
Together the two studies offer sweeping conclusions: It does not matter if it is rain forest or scrubland that is cleared, the greenhouse gas contribution is significant. More important, they discovered that, taken globally, the production of almost all biofuels resulted, directly or indirectly, intentionally or not, in new lands being cleared, either for food or fuel.
"When you take this into account, most of the biofuel that people are using or planning to use would probably increase greenhouse gasses substantially," said Timothy Searchinger, lead author of one of the studies and a researcher in environment and economics at Princeton University. "Previously there's been an accounting error: land use change has been left out of prior analysis."
Land use has most certainly not been left out of prior analysis. Appropriate protections against the land use issues raised in the studies have already been addressed in the recently passed RFS.
Somehow greenhouse gases and credits do not calculate very well when compared to emissions of war in the Middle East and death of our soldiers, the threat of world terrorism fueled by oil, Iran's nuclear program, peak world oil and lack of oil alternatives, world energy demand outpacing supplies, record oil company profits and the increasing rates of poverty and starving children without health care (in the United States too) – much stemming from high oil prices and the lack of alternatives. These moral issues always seem to be left out of the anti-biofuels argument and therefore are unfairly "deemed" not valuable.
Growing energy demand and lack of oil are going to force many countries to choose alternatives to oil. Coal, tar sands, nuclear – you pick, because you may not have a choice. Researchers should start thinking outside of their "what if" box and turn their tremendous brain power to the "what can be" box and help get biofuels technology out of the lab. I am confident technology can once again lead the way to evolutionary progress in our thinking and fuel mix. Technology has led to the solutions of many moral and economic problems we have faced in every other sector and at every other time in our history – with the exception of oil and gasoline.
Creating yet another hurdle with these types of studies in the effort to demand the "perfect silver bullet" that has to be 50% better that oil before it can replace oil -- at this time should be considered catastrophic to future investment and development of biofuels. Today's biofuels have cracked oil's 100-year stranglehold on energy policy and gasoline markets. Biofuels are making progress towards sustainability in many ways and politicians are demanding ways to make biofuels accountable and sustainable. Today's biofuels solutions, even if they are version 1.0, need to be let out of the box before coal; oil, nuclear are unleashed by environmentally and morally bankrupt economies that could care less about anything other than supplying their energy needs. Biofuels need to be an option.
The world is at war. That war is fueled by oil. The alternatives to biofuels are environmentally reckless in comparison and are controlled by many that do share the same virtues as those of our researchers. It is simply not responsible or virtuous to begin placing roadblocks on technologies so early in the development game – unless there is another end-game in mind. With regard to one of the proposed solutions, just relying on more "sugar" (food) cane ethanol from Brazil (the one with the rain forests) is not a long-term solution to our oil problems or the future of biofuel development.
Burl Haigwood, CFDC
Director of Program Development
Freedom From Oil: How the Next President Can End the United States’ Oil Addiction, by David Sandalow, was free from the normal bounds of the few books in the new energy genre. It was far from the traditional dry technical and policy wonk content that normally goes with this very complex and serious issue. David Sandalow got out of the box and used his imagination to solve problems and write a book. He created a "novel-approach" to describing the current energy predicament of the United States, and what the President would need to say and do to help the nation crawl out of its energy rut and get up to speed for a successful sprinting finish.
Sandalow takes a very innovative story telling approach mixing real facts and some fiction (although a very traditional political approach in Washington) to create a fascinating view from inside the White House, for which Sandalow has some experience. The reader gets the close-up and personal inside scoop on the research, cooperation, collaboration, compromise, and political risk that it takes in Washington – just to write a speech – much less make new policy. I grew up in Washington area and I have been following energy issues for the past 30 years. I still gained many insights, I was entertained, and I got some needed inspiration from Sandalow’s success in hitting the publishing mainstream with this topic. Public energy illiteracy may be the biggest hurdle standing in the way of Sandalow’s vision for some shock and awe-inspiring Presidential leadership to solve our nation’s energy woes.
Sandalow accumulated and presented an innovative and sobering laundry list of solutions (which included ethanol, biofuels, E85, cellulosic ethanol, and flexible fuel vehicles) the United States would have to implement to make progress towards ending the nation's oil addiction. Some books in the new energy genre pick a favorite technology and ride it hard (e.g., nuclear, hydrogen, fusion, etc.) and/or leave out the consumer or government in the equation. Sandalow throws everything at the problem including the one cleaning the kitchen sink. Telecommuting, smart buildings/traffic/cars/consumers, diplomacy, domestic policy, batteries and biofuels, as well as un-plugging and plug-ins. In typical State of the Union fashion, Sandalow even throws in some bows from the House Chamber balcony by real life people working everyday to kick nation’s oil habit. The footnotes are great, I found it to be a fun and fast read, and very informative. While the primaries are not over, I cast my vote -- David Sandalow for President[ial speech writer].
This book would make a great inaugural gift.
A few other Freedom from Oil book reviews.
Apollo’s Fire, Igniting America’s Clean Energy Economy
Congressman Jay Inslee and Bracken Hendricks traded in their traditional Washingtonian politically correct handcuffs for some golden glove boxing. The authors come out swinging against the status quo energy champion with every policy & technology combo they could muster. In a Rocky-style fight of courage and conviction, Inslee and Hendricks showed Apollo Creed (i.e., fossil fuels) the way to retirement. According to the story-line, the weak and old fossil fuel carbon–laden champion is washed up and clean energy is the new reigning champion of the nation’s fast emerging energy efficient economy.
From the beginning to the middle of the book I could not get the Rocky movie theme song out of my head. I was too young to remember President Kennedy’s speech and later I was much more concerned with me going to Vietnam than men going to the moon. Then in the middle of the book the Apollo’s Fire theme got me. The frequent Apollo moon mission analogies got me hooked on the feeling the excitement the nation must have been experiencing at the time and the swelling of pride all Americans must have had when they beat the bad guy to the moon. The Apollo moon mission and Apollo clean energy vision are now much more synergistic.
The book is hard hitting, points fingers, and assigns blame – then it moves on. Congressman Inslee and Bracken Hendricks provide the reader with some great context and perspectives, interesting analogies, and some funny one-liners that help the reader swallow this really serious problem. They do not dwell on the past mistakes. The authors spend much more time invoking optimism and plans for our energy future. They give plenty of credit due to many of their colleagues on both sides of the isle. Apollo’s Fire recognizes many of the high profile entrepreneurs that are helping to ignite the new clean energy economy as well as the average citizens that are playing a role in fanning that fire everyday.
Apollo’s Fire is realistic glimpse into our energy future. Although it was printed before the passage of the Energy Independence and Security Act of 2007, both writings sound hauntingly familiar. They have compiled over 300 footnotes that attack the old energy myths and blaze a research trail that validates the need for a future of new energy policies. Ethanol, biofuels, and flexible fuel vehicles were all included in their policy and technology suggestions – with some caveats.
What's missing in the Apollo Moon vs. Apollo Energy mission? What could be another compelling event the nation could celebrate and remember? Like the first man on the moon – maybe the nation could celebrate the last soldier coming out of Iraq. That would be a true Rocky ending we could all enjoy.
Many have asked the question, how can we go to the moon in 10 years and not be able to reduce oil imports in 30 years? I do not recall anyone in America that didn’t want us to get to the moon, even the man on the moon looked welcoming.
What do you think is standing in the way of the Apollo Clean Energy Vision?
When compared to the urgency of the Presidential Stimulus Package, the downturn in the stock market and the upturn in unemployment, hard to swallow gasoline prices and "softer consumer spending" – the $40 billion in economic activity generated from ethanol production should be some long over due good news for the nation.
A new report, sponsored by the Clean Fuels Development Coalition (CFDC) and released by the Ethanol Across America Education Campaign, illustrates how US ethanol production facilities are generating hundreds of millions of dollars to local, state, and federal governments through direct and indirect economic generation -- and saving billions in US taxes.
"When indirect and induced jobs are considered, along with capital spending and investment, the ethanol industry is adding more than $40 billion of gross output to the US economy," said US Senator Ben Nelson (D-NE), Senate Agriculture Committee and Co-Chairman of the Ethanol Across America education campaign. Download a PDF copy of the Economic Impacts of Ethanol Production report here.
The media is full of articles discussing how consumers will be spending then sending their presidential/congressional stimulus check -- overseas. Clothes from Taiwan, toys from China, and of course gasoline from OPEC. Show the US the money! With all the recent debate about the ethanol tariff, I can assure you, if you buy ethanol or E85 the majority of your money is going to stay in the US.
Let’s see where your money would be going if you invested in some ethanol/gasoline blends or E85:
- Your money is going to help ethanol plants buy corn from US farmers. US farmers stand to gain $1.4 billion in net farm income resulting from the recently passed Energy Independence and Security Act of 2007. This new demand for ethanol was also responsible for saving you and the federal deficit $6 billion by lowering farm support program payments – just last year. Farmer…OPEC…Taxes…you finally get to choose.
- The corn will be processed into ethanol at one of the 134 US ethanol plants that are located across 26 states. Many of those companies are also listed on the US stock exchange.
- Those US ethanol plants were likely financed by a US bank (Economic Impacts of Ethanol Production, page 8) or other public US financial institutions.
- Those US ethanol plants employ about 200,000 US workers, based on the projected production of 9 billion gallons per year of ethanol production expected in 2008. (Economic Impacts of Ethanol Production, page 10)
- The ethanol would be blended at 10% levels and sold at thousands of US gasoline stations across 46 states.
- If you buy some E85, there is a 99% chance you are driving an American made in the US (Chrysler, Ford, General Motors) Flexible Fuel Vehicle (FFV). You may have one and not know it – you should find out -- the job you save may be your own. The E85 you purchased would have been sold by the 1,400 US gasoline station owners that have mad the investment to bring Americans what they say the want (more renewable fuels, and yet another choice). Don’t forget to get some made in the US of A Twinkies.
And Wait – There’s MORE !!
With that entire ethanol economic stimulus package, you get some additional items – included with your ethanol purchase.
The Economic Multiplier
Don’t Forget to Support the US Troops!!
“Energy security and the related economic and environmental issues should be the most important topic of the 2008 presidential election. Whoever is sworn in as president in 2009 must elevate energy security to the status of a core national goal and must directly engage the American people in the solution. If the next president addresses energy through the same old ideological prism, the chance to strengthen US national security and economic prosperity will be lost.” -- US Senator Richard Lugar (R-IN) The Hill, 1.22.08, Ranking Member, US Senate Commitee on Foreign Relations Committee, and co-chairman of the Ethanol Across America education campaign,
Who's in your wallet?
A Rebate from OPEC?
According to one statistic in the study, OPEC got their raise. Since 9/11 the rise in crude oil prices from $25/barrel to “$70/barrel” (the market price of oil when the quoted study was completed) OPEC revenues have increased from $70 billion per quarter to $280 billion per quarter from 2004 to 2006 -- costing the US $2.25 TRILLION since 9/11.(Economic Impacts of Ethanol Production, page 4)
“And these benefits are not limited to the cornfield states – ethanol projects are being developed from California to New York, and we are on the verge of technologies breakthroughs that can truly reduce our dependence on oil. As a member of the Senate Energy Committee, I am acutely aware of the perils of this dependence and it is critical that we stem the flow of hard-earned American dollars being used to buy foreign energy. – US Senator Tim Johnson (D-SD), Senate Energy Committee, and co-chairman of the Ethanol Across America education campaign (Economic Impacts of Ethanol Production, page 2), www.ethanolacrossamerica.net
With the last staple or our old economy finally showing signs of a slow down (e.g., McDonalds Hamburgers), its time for US to invest in the new energy economy of the future?
Which economy are you going to stimulate?