March 13, 2008

Valero CEO Speaks Out Against Ethanol



Valero CEO Bill Klesse Blames Ethanol For High Food PricesValero CEO Bill Kless spoke out against ethanol at a National Petrochemical and Refiners Association conference in San Diego.

(Reuters) - Using corn to produce ethanol will make food so expensive in poor countries that it will cause more misery than global warming, the chief of the biggest U.S. refining company claimed this week.

"Corn and ethanol production and the resulting high prices will impact the world in a much more acute negative way than greenhouse gas emissions and climate change ever will," Valero Energy Corp Chief Executive Bill Klesse said on Tuesday at a refining conference in San Diego.

Many economics have noted that rising energy prices can have a larger impact on retail food prices than rising commodity prices. The report published by the Federal Reserve earlier this week outlines the extent to which energy prices effect food prices.

Historically, food prices have surged during times of higher crude oil prices. Moreover, research shows that energy prices are quickly passed through to higher retail food prices, with retail prices rising 0.52 percent in the short-term for every 1 percent rise in energy prices (Reed et al.). As a result, a 10 percent gain in energy prices could contribute 5.2 percent to retail food prices.

Given the recent pace of crude oil price increases and the fact that energy costs play into rising food costs, the attempt to shift blame away from the oil companies and on to ethanol is understandable.

But I don't think that is really what this is all about. Yeah if you read the article he is mad that the oil companies have been getting a lot of negative attention lately, but I think the real issue here is that ethanol is cutting into their profits and lowering gasoline demand. Valero's stock price has dropped by about a third since July 2007 and they are considering selling off about a third of their North American refineries.

In other words, ethanol lowered gasoline consumption in 2007, and according to the EIA petroleum consumption is expected to drop by 90,000 barrels per day in 2008, and the petroleum industry doesn't like it. And they are coming out swinging.

18 comments:

mattklump said...

I think it's great that an oil company is standing up against this ill-advised ethanol movement. Corn ethanol is creating so many more problems for the US population as well as the rest of the world than just gasoline consumption/production. Consumption of fuel is not decreasing by any means. The cost of the fuel is inhibiting some from traveling as much, but people still have to travel to work.

Look at the chicken production company. It's profits are shrinking wholly due to corn ethanol production and rising oil costs. When ethanol is produced at such a rate as today, it increases demand for corn. The rise in demand raises the price. When so much corn is used for fuel, it takes away from the animal feed industry. This keeps prices for corn/feed up and, in turn, increases production costs which are passed to the public.

Once the public realizes this government's misguided efforts and speaks out, there will be a bust in corn ethanol. Personally, I don't believe ethanol is evil. It should be used if it can cleanly and efficiently produced from other non-food sources. However, that is currently not the case.

Anonymous said...

Does Valero put ethanol in their gas??

Anonymous said...

Many of the repair services say that Ethanol is eating up the plastic parts of boats and lawn power tools. I have had most of mine need fuel line replacment recently. Thye say etahanol is eating up the lines and carbs.

mus302 said...

Mercury Marine, a leading manufacturer of outboard engines and stern drives for boats, maintains a section on their website devoted to ethanol. This is what they have to say about it's effects on fuel lines and carburetors.

Are older fuel lines prone to failure? What about gaskets?

During the 1980s, many rubber components for use in fuel systems were developed to withstand exposure to fuels containing ethanol. If rubber components in a fuel system are suspected to be of this vintage or older it may be advisable to replace them with newer ethanol-safe components before using fuels containing ethanol. Check with the manufacturer for advice or frequently inspect these fuel-system components for signs of swelling or deterioration and replace if problems are noted.

Can ethanol-blended fuels affect the performance of traditional carbureted two-stroke outboards?

Two-stroke outboards should experience little or no decrease in performance due to gasoline fuels containing up to 10-percent ethanol when operated according to Mercury's standard recommendations.

Mercury Marine

Anonymous said...

I see this ethanol push as another uneducated tree-huger attempt to save the environment, they should spend more time educating themselves, if they spent as much energy actually thinking about the overall effects on the world as making noise about things they don't even take the time to research they would see that they are as misdirected and short-sighted as the people and issues they complain about.Short-sighted uneducated people with the right to vote is far more dangerous to this world than any oil company has ever been or ever will be. And I grew up in Iowa with corn growers, so they should stick some ethanol their corncob pipe with whatever else they are smoking in it,ethanol is currently a product that takes more energy to produce than it saves not even to mention the side effects it has on our economy and the overall cost society has to bear. I urge anyone to do the research and the math if you can open your mind enough to look at the big picture that this planet faces. Good luck and good day!

mus302 said...

Care to debate ethanol with me? If all ethanol supporters such as myself are as uneducated as you think then here is your chance to prove it.

Anonymous said...

Oh lets see, for starters thank you for helping make my point. But luckily an education is an acquirable thing,even though is doesn't compensate for believing everything you hear, even if it is from your so honest politician that obviously has nothing to gain. So let the educational debate begin with questions since the best education starts with questions.
If ethanol produces less power and decreases mpg is it using more energy or less to use ethanol?,if the avg price of ethanol is $3.00 per gallon, and gas is $2.85 avg, (before mixing),is is lowering fuel cost or increasing them?, if ethanol cannot be transported by pipeline but must be shipped by vehicles, how much more energy does that consume?,if even 25% of farmers switch from growing wheat to corn because of subsidies and a loaf of bread cost $20 how much will that save us?, how many people in the US have a new enough car,lawn mower, or weed whacker to not be affected? if they have to make repairs how much will that cost us?, if we could run our stuff on 180 proof grain alcohol without side-effects don't you think rednecks would have been doing it for a long time now? (I use the term redneck with the utmost of affection, I happen to be one from Iowa as I eluded to earlier, but don't be misled, the nations schoolchildren have been tested based on the standards set by Iowa, but that is a whole other debate)I could go on and on, but my point is that currently it is not efficient or saving the planet, it is most likely just going to continue to drive up the cost of things and does not help society as a whole. Maybe if the energy balance were greater it would be more worthwhile and offset some of these costs but currently I don't believe it is when the balance is 1.3 to 1 (that is with recent technology also, in the past it was about .73 to 1), and gasoline is about 5 to 1.
Do you even have any concept of how petroleum products improve your daily life? But that is another debate. I have heard that a product can be made from corn husks not the kernel,(cellulose) or a product from sugarcane that has a balance of 8 to 1,(that includes the fossil fuels to irrigate,fertilize, grow,transport, and refine.But currently one place to get that is Brazil and government regulated tariffs designed to increase US production of ethanol prevents that. Don't forget that is not taking into account the cost of getting your lawn mowed going up when some working man has to replace fuel lines on his equipment, repair his old truck because his carburetor is fouled up again or he has to buy bread for $20. Please don't be offended if you fall into the uneducated or misled portion of society, after all I didn't say you all were stupid. I am a redneck, tree hugging, God fearing red blooded American, who loves this planet dearly, but ethanol in it's current form is not the answer, it is a political move that is propagated by getting support from people who don't want to think for themselves but want others to do it for them, but may not have their or the worlds best interest at heart.
Petroleum fuels may not be sustainable forever but they are in no way the enemy, just do some research and think for yourself, it was put on this planet for a reason, there is no denying the positive things produced by it or the idea that it can be the vessel to get us to where we are going.
If the people who misuse power to line their own pockets can convince us that tapping into our food source is the answer to our current problems then maybe we are stupid enough to deserve what we get.
I would love to hear more debating on this subject, as you can see I am quite passionate about it. Thank You

Anonymous said...

DO THE RESEARCH

mus302 said...

Your welcome. I guess school is in session then.

"If ethanol produces less power and decreases mpg is it using more energy or less to use ethanol?"

You should probably check your references on this one since ethanol won't reduce power it will increase it. Most every engine is limited in the amount of air it can take in not the amount of fuel. Since ethanol contains an oxygen molecule it has the effect of increasing the amount of air an engine can take in. Ethanol is somewhere around 23% oxygen which roughly means that 100% ethanol will make about 23% more power than gasoline.

Ethanol does decrease mpg. That too has to do with the oxygen molecule. But in E10 the difference is about 3.5% less BTU than that of gasoline and most people would never even notice that small of an amount since other variables such as tire inflation and seasonal gasoline blends can change mileage as much or more.

I think what you are asking is there an energy gain from using ethanol once the loss in mileage is factored out? The answer is yes. If a 10% blend loses 3.5% in mileage the gain is 6.5%. So every gallon of ethanol displaces .65 gallons of gasoline.

"if the avg price of ethanol is $3.00 per gallon, and gas is $2.85 avg, (before mixing),is is lowering fuel cost or increasing them?"

Well of course that would raise fuel cost. That is the current situation, ethanol costs more than gasoline. But it wasn't that way just a few months ago when gasoline prices were higher. And even now once the fuel is blended and the subsidy applied the two are right at the same price.

"If ethanol cannot be transported by pipeline but must be shipped by vehicles, how much more energy does that consume?"

The same energy it costs to transport gasoline by vehicles. According to the American Petroleum Institute 68% of petroleum products are shipped by pipeline, the rest by barge, rail and truck. If you do the math that means that there is several times more gasoline than ethanol being shipped by means other than pipelines. So tell me how much more energy does that consume?

And I guess you haven't heard that Kinder Morgan is shipping ethanol through it's pipeline that runs from Tampa to Orlando.

"if even 25% of farmers switch from growing wheat to corn because of subsidies and a loaf of bread cost $20 how much will that save us?"

When do you suppose that is going to happen since the number of wheat acres have gone up the last two years? Have you spent any time on the USDA website looking at the actual crop data? You know most of the issues that you bring up I have covered at different times here on this blog.

"how many people in the US have a new enough car,lawn mower, or weed whacker to not be affected?"

All cars since the mid 1980s have been able to run on E10. And I have a chainsaw I bought used in 1993 that is doing just fine on E10 as well. So I don't know how many people have stuff that is at least older than that?

"if they have to make repairs how much will that cost us?"

If they have to make repairs, it won't cost us anything since they are not us.

"if we could run our stuff on 180 proof grain alcohol without side-effects don't you think rednecks would have been doing it for a long time now?"

Isn't that what Brazil is doing? When Henry Ford designed the Model t he designed it to run on either gasoline or ethanol. What about when Germany needed fuel during WWII didn't they run equipment on ethanol? I know the V2 rocket was propelled by ethanol.

And just as Hitler learned during WWII that your energy needs can lead to your downfall, the Europeans are again learning that your energy needs can leave you vulnerable with the current natural gas conflict with Russia. And of course we had the oil price shocks of the 1970s and the most recent run up to $147 oil and still we think we can continue to rely on other countries for our energy needs.

Funny that you should mention energy balance since a new study hit the news today. I did a post on it earlier. But the point you probably haven't considered is that that energy balance of 5:1 for gasoline is slipping. As more oil has to come from harder to recover deposits (oil sands, tar shale, etc.) the energy balance of gasoline will continue to go down.

"Do you even have any concept of how petroleum products improve your daily life?"

Yep, I sure do. If we had more we could probably even have a ski resort in the middle of the desert and beach resort with chilled sand so that are feet don't burn just like they do in the middle east. Petroleum has improved our lives but it also is responsible for transferring our wealth to other countries that don't much like us.

"But currently one place to get that is Brazil and government regulated tariffs designed to increase US production of ethanol prevents that."

Here again another area that I have talked about before. If you have a subsidy you have to have a matching tariff to stop foreign countries from exploiting it. Check out how well that situation has worked with biodiesel. Google "splash and dash".

"Don't forget that is not taking into account the cost of getting your lawn mowed going up when some working man has to replace fuel lines on his equipment, repair his old truck because his carburetor is fouled up again or he has to buy bread for $20."

Actually that is what I do for a living. I own a lawn care company. I think you have blown this whole issue up too much in your own head. I could replace every fuel line on all the equipment for less than what one mower blade costs. I bet that I have spend 50 times more on Slime (tire sealant) than I have on fuel lines in the last few years.

"Petroleum fuels may not be sustainable forever but they are in no way the enemy, just do some research and think for yourself, it was put on this planet for a reason, there is no denying the positive things produced by it or the idea that it can be the vessel to get us to where we are going."

I may be outside the norm but I don't consider any inanimate object to be my enemy. And you may find this hard to believe but I don't really have that much of a problem with petroleum in general. It is the imported petroleum that makes us reliant on other countries (and some of those don't have out best interests at heart) that I don't like.

Anonymous said...

OK

If you are familiar with small gas engines or otherwise then you should know that it is proper air to fuel ratios that are needed to produce efficient HP which newer cars with sensors are compensating for. And current efficiency is what one concern is. And if ethanol is 23% oxygen then does that mean you pay 100% cash for 77% product, because luckily I don't have to pay for the oxygen my car uses, so far.
If E10 creates 3.5 % less then 100% will not create 23% more power, consider the math.

And seasonal gas generally has been ethanol enhanced, as you obviously know it is not a new discovery, just a new angle of getting more pennies from people which ad up to a lot of dollars. 3.5 is also a very generous and probably fictional #, fill your car up with E10 and take a road trip and set your trip meter then try it with some 92 octane fuel, write down the difference, get out your calculator, and don't forget to air up your tires.

Have you ever gotten "bad gas" in the past or known someone who has? maybe had to drain a gas tank, change a filter? Probably trying to save a buck at a cheaper fuel station and didn't notice or make the connection to the E10 sticker. Chances are the fuel was fine but the water the ethanol attracted didn't make it run to well. My car doesn't run on water yet either.
That has been the problem with pipelines. Especially in places with more moisture.

I have a chain saw also but it gets good enough mpg not to be a concern and I don't think it would even if I were a logger. My chainsaw doesn't cost tens of thousands of dollars like most vehicles, or cost hundreds to repair and I don't commute 300+ miles a week in it so the math on that means little to me but maybe I will ask a logger.

And I am pretty sure there are people out there with vehicles older than 93, we are just 2 of the more fortunate ones. And I don't know what your definition of fine is exactly.

Even if it is off subject, I must say that my experience with slime is not a good one. I don't think it is to environmentally friendly and can ruin a tire and rim and the cost as you have mentioned. I do know that the guys at the tire shop despise it and recommend using a cheap plug and glue insertion until it can be properly patched. Which my local tire shop does for free if it is a tire I bought from them, or sometimes even if it is not theirs because I am a consistent customer.
My point being quick short term solutions such as ethanol are not always the best overall for everyone.

When I use the terms "they" and "us" I am referring to us all as a society, maybe you understand that shoplifting increases the price of goods for us all. And if you understand supply and demand if we all start replacing fuel filters and gas lines you can bet the price will go up.

Why aren't we all using 100% ethanol if Mr. Ford made it that way. Are you serious. Once again efficiency and reality. Big picture stuff again.

I agree that relying on other countries (especially unfriendly ones) for our energy needs sucks as much as our deficit, but both are products of bad management decisions made by corrupted government officials which is what I have been trying to say about this ethanol push. You can't solve a problem with another one, it takes a stronger solution to overcome a big problem.

Yes I am aware of the slipping oil energy balance, hence to term not sustainable.
But the math is solid you cannot replace 1.anything with 5 to 1 and get a positive number.No matter how you calculate your mpg.

The number of acres of wheat or corn is a matter of supply and demand (high school economics) and is not greater than the population increase or projected increase, so why tap a food source, don't forget the big picture.

Petroleum is not responsible for transferring our wealth to other countries, politics is. Not exploring other options sooner is also, which is rooted in politics. And so is this ethanol push, once again politics.

Are you sure you deal in lawn care and are not a lobbyist? You need to come a little stronger to debate, or do you just enjoy reading what you write as long as it is safe.
Do you really care about the future of this great nation and the world economics and environmental issues or are you just going to continue parroting things you read on the internet and putting slime in your tires because it's easier for now like this ethanol push, I think that kind of mentality is what is got us in the current predicament.

I honestly mean you no personal offense by my somewhat harsh and passionate words, but I am most seriously concerned that there are many more like minded souls out there and it wasn't the tip of the iceberg that brought down the Titanic.

Is there anyone else out there with an opinion? I have not been on this blog until now and I am not familiar with any previously covered issues.

Iethius said...

Recently my car was not running as well as it should be even though it has less than 30k and I do all the scheduled maintenance on it at the dealer and have the oil changed, I even upgraded the plugs to 4 post platinum, and tuned it up ahead of requirements. It was still hesitating and cutting out but it checked out OK at the shop.
I became suspicious of the gas I was putting in but didn't think that would be it because I have been going there for more than 20 years.
That is when I noticed the new sticker that said "this fuel may contain up to 10 percent ethanol" I searched all over town and they seem to be everywhere except at the Valero station which is how I found this website.
I have run less than 2 tanks of Valero gas through my car and it is purring again and has pep like when I bought it new.
I live in WA state, does this gas not have any ethanol? Is there a connection? There sure seems to be to me. Or is this gas just better? Does anybody know?

mus302 said...

"If E10 creates 3.5 % less then 100% will not create 23% more power, consider the math."

You are confusing fuel mileage and power. E10 will give about 3.5% fewer miles per gallon due to the fact that it has a lower BTU content than gasoline. That has nothing to do with the amount of power your car can make.

"And seasonal gas generally has been ethanol enhanced, as you obviously know it is not a new discovery, just a new angle of getting more pennies from people which ad up to a lot of dollars."

Summer blend gasoline has a higher BTU content than winter blend gasoline whether or not it has ethanol in it or not.

http://www.epa.gov/orcdizux/rfgecon.htm

"3.5 is also a very generous and probably fictional #, fill your car up with E10 and take a road trip and set your trip meter then try it with some 92 octane fuel, write down the difference, get out your calculator, and don't forget to air up your tires."

I wrote about ethanol and fuel mileage in a past post.

http://www.americanfuels.info/2008/03/ethanol-and-fuel-mileage.html

"Have you ever gotten "bad gas" in the past or known someone who has? maybe had to drain a gas tank, change a filter? Probably trying to save a buck at a cheaper fuel station and didn't notice or make the connection to the E10 sticker. Chances are the fuel was fine but the water the ethanol attracted didn't make it run to well. My car doesn't run on water yet either.
That has been the problem with pipelines. Especially in places with more moisture."

I have gotten water in my gas before but didn't have to drain the tank or anything. That was years before ethanol was available in this area. I have written a couple of different posts on ethanol and Phase separation.

http://www.americanfuels.info/2009/01/ethanol-phase-separation.html

"And I am pretty sure there are people out there with vehicles older than 93, we are just 2 of the more fortunate ones. And I don't know what your definition of fine is exactly."

I am sure there are too. There are still cars and trucks out there built to run on leaded gasoline also.

But you must have missed the point about all cars have been able to run on E10 since the mid 1980s. The reference to 1993 was for the chainsaw. And to me fine means starts, runs, and makes me money.

"Even if it is off subject, I must say that my experience with slime is not a good one. I don't think it is to environmentally friendly and can ruin a tire and rim and the cost as you have mentioned. I do know that the guys at the tire shop despise it and recommend using a cheap plug and glue insertion until it can be properly patched. Which my local tire shop does for free if it is a tire I bought from them, or sometimes even if it is not theirs because I am a consistent customer."

When you mow for a living, stopping to get a tire plugged or patched is no a very good option. So for me slime has worked pretty well. And I know that it isn't good for a tire but in my case I wear the tread off long before the slime can kill it.

"My point being quick short term solutions such as ethanol are not always the best overall for everyone."

Advancements have always been and always will be a series of improvements. Small steps from one place to another. We don't know what the ultimate solution will be but ethanol is one small step away from dependence on fossil fuels.

"When I use the terms "they" and "us" I am referring to us all as a society, maybe you understand that shoplifting increases the price of goods for us all. And if you understand supply and demand if we all start replacing fuel filters and gas lines you can bet the price will go up."

If we all start replacing fuel filters an gas line? Ethanol has been in the fuel supply in places such as Minnesota for many years. And even now it is in about 70% of the gasoline across the country. If it hasn't happened yet it most likely isn't going to.

"Why aren't we all using 100% ethanol if Mr. Ford made it that way. Are you serious. Once again efficiency and reality. Big picture stuff again."

Big picture without a firm grasp of history. Ethanol had a $2.08 per gallon tax put on it to help fund the Civil War that wasn't removed until 1906. Ford started producing cars in 1903. So gasoline use was able to expand without competition. If everything was really about efficiency wouldn't we all be driving diesels now since diesel has a higher BTU content than gasoline and diesel engines get much better fuel mileage?

"I agree that relying on other countries (especially unfriendly ones) for our energy needs sucks as much as our deficit, but both are products of bad management decisions made by corrupted government officials which is what I have been trying to say about this ethanol push. You can't solve a problem with another one, it takes a stronger solution to overcome a big problem."

And what would your solution be?

"Yes I am aware of the slipping oil energy balance, hence to term not sustainable.
But the math is solid you cannot replace 1.anything with 5 to 1 and get a positive number.No matter how you calculate your mpg."

When we run out of oil 1.anything will look real attractive won't it?

"The number of acres of wheat or corn is a matter of supply and demand (high school economics) and is not greater than the population increase or projected increase, so why tap a food source, don't forget the big picture."

In the last year we produced 9.0 billion gallons of ethanol, exported a record amount of corn and increased the year ending stocks. On top of that the number of acres planted in soybeans last year was a record and the number of wheat acres increased by over 1.5 million acres. So how do you figure that we can't keep up with the demand for both food and fuel? Go to the USDA and look around a little bit.

"Petroleum is not responsible for transferring our wealth to other countries, politics is. Not exploring other options sooner is also, which is rooted in politics. And so is this ethanol push, once again politics."

Petroleum makes up about 80% of our trade deficit. So it is buying products made from petroleum that is transferring our wealth to other countries. Politicians will do what they will but I can do what I can to keep my money in this country by buying a fuel made in this country.

"Are you sure you deal in lawn care and are not a lobbyist? You need to come a little stronger to debate, or do you just enjoy reading what you write as long as it is safe."

Lawn care is good enough to provide me enough income over the season that I can do what I want during the winter.

"Do you really care about the future of this great nation and the world economics and environmental issues or are you just going to continue parroting things you read on the internet and putting slime in your tires because it's easier for now like this ethanol push, I think that kind of mentality is what is got us in the current predicament."

I think that you may have the wrong viewpoint on slime. To you it is a quick fix. If you depend on your equipment working so that you can make money it is more like a necessity. And if it weren't for the slime I would probably have to have a tire plugged or patched at least once a week.

And getting away from petroleum is also a necessity. I hear you complaining about ethanol but as of yet haven't heard what would be a better solution.

"I honestly mean you no personal offense by my somewhat harsh and passionate words, but I am most seriously concerned that there are many more like minded souls out there and it wasn't the tip of the iceberg that brought down the Titanic."

I am not a person that is easily offended. And you may be right that there are more like minded people out there but does consensus make something right. If so the world must be flat since 600 years ago that was the consensus.

mus302 said...

Iethius

"I live in WA state, does this gas not have any ethanol? Is there a connection? There sure seems to be to me. Or is this gas just better? Does anybody know?I live in WA state, does this gas not have any ethanol? Is there a connection? There sure seems to be to me. Or is this gas just better? Does anybody know?"

That I couldn't answer for you. There are no Valero stations in my area. And there are many reasons why this could happen such as getting some leftover summer blend gasoline in the winter and the car not wanting to run right on it. It could be temporary thing at that one station or signs of a bigger problem with your car. Only time and some experimenting will tell for sure.

Anonymous said...

If you are not in politics you really should be because you are very good at not answering or addressing the actual questions. AS A Team member of American Bio fuels I expected a more informative debate.

You say ethanol failed because it was taxed and gasoline was not, really.

Yes I know the difference in seasonal blends but in my area ethanol has only been added seasonally until recently.Now it's everywhere and it is not making fuel cheaper or the deficit go down.

I don't know of anyone who commutes to work in a v2 rocket but thanks for that bit of info instead of addressing the point which is that this current ethanol push is not the answer to our problem anymore that the last several failed attempts that were supposed to solve our problems such as nuclear power, natural gas, etc.

We are not all driving diesels because anyone who has ever been behind a dump truck or even a school bus can see or smell that is not the solution.

Tire plugs can be carried in you pocket with a small tube of glue and tires can be aired up with a cigarette lighter but that was not my point, but whatever works for you, we all have different solutions. Once again I think you missed the point.

Most people do know by now that the earth is not flat, but they don't know where their tax $ goes when it comes to solutions, some people have their suspicions though, especially when they support something such as ethanol and results are not produced.

No I do not have a solution, if I did I wouldn't spend my time here debating this with you, I would be working on it with a team of scientist.

My point is that this is not a viable enough solution to deserve such a massive push without proper result producing research.

"Advancements have always been and always will be a series of improvements. Small steps from one place to another. We don't know what the ultimate solution will be but ethanol is one small step away from dependence on fossil fuels."

This has to be the most intelligent thing you have written, who did you quote?

I do not know if ethanol will end up being a viable solution in the long run but that doesn't account for the current push. There are obviously deeper issues that you cannot grasp or will not address.

Do you work for the government in biofuels in the winter months when you are not mowing lawns?

mus302 said...

"If you are not in politics you really should be because you are very good at not answering or addressing the actual questions. AS A Team member of American Bio fuels I expected a more informative debate."

American Biofuels is an author that sometimes posts on this blog. I am not a member of any team, organization, or government body. Nor am I or do ever want to be a politician.

I did notice though and just have to point this out that you yourself didn't answer any of the questions I posed in my last comment. There were a couple that you missed. I will list them again for you.

When we run out of oil 1.anything will look real attractive won't it?

So how do you figure that we can't keep up with the demand for both food and fuel?

"You say ethanol failed because it was taxed and gasoline was not, really."

We can test that theory by taxing gasoline an additional $2.08 per gallon and eliminating the subsidy on ethanol and see which does better under those circumstances.

"Yes I know the difference in seasonal blends but in my area ethanol has only been added seasonally until recently.Now it's everywhere and it is not making fuel cheaper or the deficit go down."

Economists would disagree with you. A quote from an earlier post.

"Francisco Blanch, a commodity specialist for Merrill Lynch, today told The Wall Street Journal that as a result of increased biofuels output, oil and gasoline prices today are about 15 percent lower than they would be otherwise."

Look around this blog and you will find other economic studies that show the same thing but really all a person has to do is look at information on petroleum refinery margins to see that the competition with ethanol has lowered prices.

Refinery margins for gasoline in December 2008 were 0.7% of the prices of a gallon of gasoline. In December 2007 it was 8.1%, December 2006 12.9%, December 2005 13.5%.

So unless you have some other numbers to refute these the only thing that I can conclude is that ethanol has caused the price of gasoline to go down. And anytime that you buy and American made product (ethanol) in place of an imported product (oil) it is a positive in terms of trade deficit.

"I don't know of anyone who commutes to work in a v2 rocket but thanks for that bit of info instead of addressing the point which is that this current ethanol push is not the answer to our problem anymore that the last several failed attempts that were supposed to solve our problems such as nuclear power, natural gas, etc."

If you think that nuclear and natural gas are failed attempts you should try living in a world without them. The same goes for ethanol.

As you have mentioned at other times supply and demand has a profound influence on prices. Yet you advocate removing ethanol from the fuel supply. What happens when you lower supply but demand stays the same?

Keep looking for that one perfect energy solution and let me know when you find it. While you are looking I will be taking what small step I can now to move forward.

"We are not all driving diesels because anyone who has ever been behind a dump truck or even a school bus can see or smell that is not the solution."

Actually I drive a diesel. All the gasoline I buy goes into the equipment not an on road vehicle. You do know that the emissions standards for light duty vehicles and dump trucks and buses are different don't you?

But it is good to hear you acknowledge that energy content and fuel mileage aren't the only things that determine it's worth as a fuel.

"Tire plugs can be carried in you pocket with a small tube of glue and tires can be aired up with a cigarette lighter but that was not my point, but whatever works for you, we all have different solutions. Once again I think you missed the point."

I have plugs in the console of the truck and two portable electric compressors and one manual pump behind the seat. I even have alligator clips so that I can hook the compressor to the battery of the mowers for when I have a problem away from the truck. All that is for problem after they occur, slime helps prevent problems from occurring in the first place. But considering how much money downtime costs me I don't want to have to spend even 5 minutes here and there fixing problems if I don't have to.

And I understand what your point is but don't see either slime or ethanol as a quick fix. I see both of them as a necessary part of the solution. Not the whole solution but a part.

"Most people do know by now that the earth is not flat, but they don't know where their tax $ goes when it comes to solutions, some people have their suspicions though, especially when they support something such as ethanol and results are not produced."

Where is your proof that results are not being produced? Just because you can't see it doesn't mean that it isn't there. Remember because people couldn't see for themselves that land went on beyond their sight plane, that is how the flat earth theory cam about.

"No I do not have a solution, if I did I wouldn't spend my time here debating this with you, I would be working on it with a team of scientist."

Then you are a defender of the status quo. Hurry up and wait for the perfect solution to come about. In the meantime I will continue doing what I can with what is available.

"My point is that this is not a viable enough solution to deserve such a massive push without proper result producing research."

So you are saying that it is a solution just not one that is viable enough. Getting you to admit that it is a solution is the first step of my 12 step program to turn you into an ethanol supporter.

"This has to be the most intelligent thing you have written, who did you quote?"

Even a blind squirrel finds a nut every now and again you know.

"I do not know if ethanol will end up being a viable solution in the long run but that doesn't account for the current push. There are obviously deeper issues that you cannot grasp or will not address."

Step two is of course was getting you to doubt your previous position on ethanol. Ten steps to go.

"Do you work for the government in biofuels in the winter months when you are not mowing lawns?"

Nope I make enough during the mowing season to take the winter off.

Anonymous said...

How ironic!!!! Klesse bashes the ethanol industry and then bids on some VeraSun plants.

Anonymous said...

Yes- but Valero understands that with oil for every btu of crude input they only get 0.75- 0.80 btu out (and that is the easy to get crude- not tar sands or unconventional oil). Ethanol at it's worst is 1 btu input yielding 1.3 btu out and newer plant like Valero bid on and the agriculture around them are more like 1 btu in vs 1.65 out. Valero is also painfully aware of how difficult it is getting to source enough crude. But yes- it was ironic, unless that was Valero's backhand way of devaluing an asset they wanted to buy cheap.

1outlaw

mus302 said...

At the time that Klesse made those comments the percentage of the price of gasoline that went to refining was 8%. That compares to 23.6% in March 2007 and 21.7% in March 2006. Ethanol restricted refiners ability to manipulate the gasoline supply. If they cut production to boost prices, ethanol companies produced more and took up the slack. So no wonder they didn't like ethanol. I don't think the fact that Valero bid on VeraSun assets represents any warming to ethanol but is most likely a way to regain their former control over the fuel supply in the regions that they operate.

Post a Comment