Obama’s Energy Plan a Mix of Bad and Good
“America has always risen to great challenges, and our dependence on oil is one of the greatest we have ever faced. It’s a threat to our national security, our planet and our economy. … We must act quickly and we must act boldly to transform our entire economy — from our cars and our fuels to our factories and our buildings.”
So begins “New Energy for America,” a fairly detailed policy statement issued by the Barack Obama campaign as its proposed path for breaking the hold of foreign oil on the United States. In view of the importance of the issue, it is well worth examining.
At the core of the Obama policy is a proposal to tax American oil companies and use the proceeds to fund a variety of initiatives, including a $500 rebate to every adult in the nation to help him or her to make ends meet in the face of high oil prices. This generous program would cost about $100 billion. Since the U.S. oil industry produces about 3 billion barrels per year, this translates into a tax of about $33 on every barrel produced in America, while leaving the 5 billion barrels per year of imported foreign oil untaxed.
As a method of damaging America’s prospects for achieving energy independence, such a proposal is hard to top. It is true that the federal government is facing a $500 billion deficit, so while quite regressive in its impacts, a tax on oil is fair game. But if the goal is raising revenue it would be much less harmful to tax all oil equally, or better yet, do the reverse of the Obama plan and tariff foreign oil while cutting taxation on American producers. Such a plan would raise more money than Obama’s, while stimulating domestic oil production instead of suppressing it.
In addition to the large cash handout to the general public, the Obama plan specifies a long list of targeted expenditures. Some of these are quite good, such as a hefty increase in federally funded research and development in energy technology. Others, such as proposals for federal subsidies for winterization programs to reduce home heating oil use, are reasonable. But others, notably a proposal to use the money taken from American oil companies to help consumers pay their home heating bills, and thus support high petroleum prices with taxpayer dollars, are crazy.
The craziness gets worse when the plan veers from its practical goal of addressing oil prices to its ideological one of trying to change the weather. Global warming can be stopped, says the plan, by cutting America’s carbon utilization to 20% of 1990 levels by 2050. This is a very radical proposal, as it requires reducing the nation’s total carbon use to about the level it was in 1932. In 2050, the USA is expected to have a population of over 450 million people, or roughly quadruple that of the early 1930s. Under the Obama plan, therefore, it is required that Americans’ per capita use of fossil energy in the mid 21st century will have to be reduced to one-quarter of Depression levels. How this is to be done is not explained, but it may be observed that a sustained negative economic growth rate of 4 percent per year for the next 42 years would be sufficient to do the trick.
Or perhaps it would be better if the government geniuses and grifters that gave us Fannie Mae and Freddie Mac stay out of it altogether!
Reducing carbon emissions has negative economic impact. The reason is quite simple. It costs more to run a low carbon business than a high one and the payoff is less carbon dioxide in the air and supposedly lower temperatures. So if you invest capital in your business which has no return on assets (i.e. it isn’t a new product or a more efficient way of making an old one) you have weakened your business. Some will argue that you will use less energy but typically the payback is very long, much longer than the payback of a new product or improved process.
I am not advocating waste of energy. Making your business energy efficient (replacing incandescent lamps with florescent or lowering thermostats etc.)and your life makes sense in these ways. Going for a grand scheme and investing moneys that may never see payback makes no sense.
And if you look at our worldly competition what are they up to? The Japanese have actually cut oil consumption by building dozens of nukes since the late 90′s and the Chinese just keep chugging along under the protection of “developing nation status.”
I doubt an Obama presidency will give us nukes and he is more beholden to the greens than any other president so he will enforce carbon restrictions to the detriment of our economic engine.
Businesses fail for many reasons. Investing substantial money into the wrong thing is a big one.
California is in a financial crisis. Alaska isn’t. It has a budget surplus from oil royalties and pays each citizen $1,200 a year from oil royalties.
Sounds good to me. We should let every Californian, and Floridian and coastal state citizen know that oil companies drilling off shore will pay royalties to the state — and to them.
Obama and the environmentalists want to get us off oil no matter how expensive and painful it will be to the economy. They LIKE high gas prices, something the average joe doesn’t know.
Governor Palin stopped 30 years of squabbling by opening the bids to the natural gas pipeline. She signed the papers and then came down to the lower 48 to run for VP. McCain should promise that that pipeline, offshore drilling, oil shale drilling, natural gas, clean coal, building of nuclear plants will all be fast-tracked by his administration to help us recover economically. All those energy investments would make us energy independent and impoverish our enemies who like to buy weapons with their oil wealth. We climb out of a financial hole, Putin and Chavez fall into one.
The jobs created by a crash energy program would greatly help the economy and eventually perhaps make us a net energy exporter.
Then, we have to acknowledge that we’re broke and can’t hand out billions to every government on the planet. And no more funding for teapot or Gene Autry museums. Government has to become thrifty for the first time in over a century.
We built up the South Koreans. Let them pay for their own defense. We’ll keep our ships nearby but no soldiers on Korean soil. We should let Japan re-arm which will inhibit China’s flexing of its military muscles. That should take Japan about 20 minutes to accomplish.
I would like to send John Bolton to the State Department with a broom. That swamp needs cleaning out. Sarah Palin’s common sense linked to John McCain’s veto pen could drastically shrink the budget of all the accretions of nonsense spending that have built up over the years.
Drill, baby, drill.
Two more things:
The world’s oil powered economy will be with us for 100 years no matter what anyone wants or says. Remember how they predicted that computers would make paper obsolete? So if we don’t open the vast resources we have to oil exploration we will continue to be held hostage by the middle east and Russians.
Corporations don’t pay taxes they just collect them. High corporate tax rates just make companies less competitive. In California the combination of state and federal taxes make it the highest taxed place in the world. And despite all that revenue California is in economic straights.
A real energy solution is to remove taxes from the oil companies and let them drill.
Its more local oil or poverty, take your pick.
I find it dishonest of the author to refer to Zerobama giving a “large cash handout to the general public.”
Any such money given to those already paying taxes [that means NOT those already living off of governmental...ahem..."largesse"] would likely head immediately back to the Federal government under Zerobama, to be paid out to end “global poverty” (…forgot about his $845 billion plan over 13 years already, folks…?!).
R E D I S T R I B U T I O N – O F – W E A L T H = O B A M A.
Socialism? No thanks!
Thank you doctor Zubrin!
This article should be read by everyone.
I am not sure if general public UNDERSTANDS what
METHANOL means
Cap-and-trade is worse than Zubrin outlines. The schemes I’ve read give additional credits to those with properties that absorb carbon dioxide. That means forested area. The private citizen in America that owns the most wild land is Ted Turner. Cap-and-trade, it follows, results in a massive handout to Ted Turner.
Zubrin doesn’t factor in the consequences of allocating farm land from foodstuffs to ethanol.
Yeah, that really paid out like a slot machine when Carter did it, didn’t it? You do remember, don’t you, that this was tried before?
ethanol isn’t the answer
gasoline from corn based ethanol is barely a net energy addition, lowers mpg and clogs engines. the brazilians use sugar cane which is much more efficient
http://www.slate.com/id/2122961/
http://en.wikipedia.org/wiki/Ethanol_fuel_energy_balance
Until they fix the stupidity of the fleet average mpg (it should be gpm), this is going to be an accounting game. And congress isn’t going to fix that, because 95% of them are too dumb to understand why you can’t average mpg, and get a meaningful number.
More attention diverted to playing games rather than reducing fuel consumption.
The 0 C requirement, of course, refers to operation rather than construction.
Incorporating renewable energy (usually geothermal and solar) into the building design along with increased efficiency and insulation are elements of all designs I have seen. Additional elements such as ‘green screens’ and ‘green roofing’ can also contribute. On site energy production can easily be a long term money saver as well.
The real and achievable answer for biofuels is a combination of algae* and mixed prairie grasses**.
That would be the point of the trade part of cap and trade.
* can be grown in greenhouses anywhere (http://gas2.org/2008/03/29/first-algae-biodiesel-plant-goes-online-april-1-2008/)
** can be grown cheaply and easily on land too poor to use for food production (http://www.blackhillsportal.com/npps/story.cfm?ID=2039)
Next time, make an attempt to understand cap and trade before writing about it.
That said, cap and trade is not the way to go. We need a carbon tax with 100% dividend returned to consumers.
How can the public be so gullible? There is no magic bullet out there waiting to be discovered. This has been the Dem’s song for the last 30 years, that somehow a miracle will produce a car or truck that gets 100 MPG and all the need for new oil wells and refineries will go away.
Trust me on this, it ain’t gonna happen.
The only answer is the one Sarah Palin is chanting, “Drill, Baby, drill!”
Why do people who don’t know protons from croûtons insist that they have the answer to questions that don’t yet have answers?
Oil exploration in the US is getting harder and harder. Deeper, more expensive wells to test riskier prospects
Internationally oil is also getting harder to find
new areas (banned) off Florida offer opportunities, ANWR on a desolate tundra 200 miles from the pristine mountain ranges has been off limits for 23 years
oil shales are only profitable with higher prices
In the Gulf of Mexico high drilling costs have made smaller targets uneconomic
America will never get full energy independence without nuclear. Solar etc has long lead times and will only add small amounts. People don’t understand that most electricity comes from fossil fuel sources
we can make a dent but we will never be fully energy independent. McCain knows this and welcomes all sources. Barak uses his politics to come up with a solution that will never work and hold us all guilty while we do it
I’m confused about Ethanol. It costs about $ 0.50 per gallon less than real gasoline, but contains about 2/3 the energy per gallon. So if I want to go a specific mileage, with gas at $4/gallon and ethanol at $3.50 per gallon, I’ll choose gas every time because it is far less expensive, even with the huge subsidies!
How can flex fuel vehicles help us if ethanol is not cost-competitive with gasoline?
D
As long as we’re throwing methanol in the mix, also specify butanol support. The cost-per-vehicle is going to be low, since 85% butanol is fully compatible with unaltered existing gasoline engines; you’re just worrying about ethanol and methanol admixtures and formal warranty support. And it can’t hurt to have another biofuel option in the potential mix, especially one that’s compatible with gasoline pipelines and other infrastructure.
I laugh at the whole global-warming thing. It reminds me of the old saw about the ant crawling up the elephant’s leg, intent on rape. As if we humans could actually affect the overall ecosphere.
Still, I understand the effect of pollutants in my life. Cap and trade is a whole new, needless level of bureaucracy. Just tax the emissions and pollutants. People will then find a way to control the emissins and such to lower business costs. Use the money for pollution clean-up.
And isn’t a proton a crouton made from tofu to add protein?
Must-read for anyone who thinks that any of the currently proposed alternate energy sources (except nuclear) stands a chance of significantly impacting our energy policy for the next 30 years.
http://lonestartimes.com/2008/07/18/den-beste-on-alternative-energy/
The archives of the USS Clueless are here:
http://www.denbeste.nu/archives.shtml
One of the smartest engineering fellows I’ve read debunks the alternate energy hype. Of course, so did Popular Mechanics but not as thoroughly with a lot of math to back it up. Basically, any energy source that cannot reliably on average supply at keast 1% of our annual energy usage (3.3 Terawatts a few years back) isn’t worth considering. Bye bye Wind, Solar.
All in all, a strong argument, which I wish Obama’s supporters would read; but it’s partially marred by your mistaken advocacy of Iowan ethanol.
Ethanol subsidies to Iowa are responsible for soaring food costs which preferentially starve the world’s poor and impoverish even the first world’s lower-middle class. Such subsidies could be easily and immediately replaced by ending our current tariffs on Brazilian ethanol produced more economically from sugar cane; and, in so doing, we would be trading with a relatively decent, democratic society rather than with a hostile theocracy.
In the near future, it ought to be possible to replace both Iowan corn and Brazilian sugar cane with switchgrass, which has the great advantage of not displacing agricultural land and thus incrementally starving people, and which can be improved through modern genomics and reverse genetics.
This issue is understood ONLY if we look at it like this:
OIL imports to USA is about 700 billion $$ a year
Military Budget to secure American defense against oil exporting and agressive totalitarian regtimes like Kremlin or radical Muslims is
around 700 a year
Lets say we keep military but reduce import to zero.
We have 700 billion dollars for the 2009 saved.
To built enough methanol(not ethanol) capacity we need
We need 2000 big methanol production plants to produce 500 billion gallons/ a year of methanol to replace 200 billion gallons of gas/diesel a year
Costs to built 1 methanol plant vary between 100 million and 1-2 billion
depending on feed stock, technology level of funds misuse, capacity
With 700 billion we can built enough
Also if a LAW will be adopted requiring ALL cars to convert to flex(methanol a must) -
ethanol production will increase as well,
because ethanol can be used in methanol equipped cars as well as gas
IS THIS SO COMPLICATED that average Joe with IQ under 100
CAN NOT GRASP IT?
I dont think so
I think, i am SURE that powerful people doesnt want us to be ENERGY INDEPENDENT
So what shouild we do?
I think it gets to us, The People to start acting DIRECTLY
it is not just a PETITION issue
We need DIRECT ACTION
We need to get up of our asses and MAKE government to mandate alcohol fuels
NOW
Marc Malone:
I laugh at the whole global-warming thing. It reminds me of the old saw about the ant crawling up the elephant’s leg, intent on rape. As if we humans could actually affect the overall ecosphere.
That is the sort of American ignorance that makes the rest of the world, and a majority of Americans, shudder. Unfortunately, it is also associated with American Christian Fundies..
Man has had a profound impact on the planet. In 60,000 years since modern Homo sapiens emerged, we have driven half the large animal species to extinction, deforested 63% of the original landmass on Earth covered with trees, turned over a million square miles of landmass into desert in just the last 100 years. We have wiped out 9 of the 13 major oceanic fisheries we found after leaving Africa, and in many regions, have only left pockets of the original ecosystem wildlife is permitted to live in.
The only debate about AGW (and human overpopulation) impacting climate change is HOW MUCH they contribute.
Under Obama and the Democrats, energy policy is going to be driven by some form of adherence to the Kyoto Protocols. The believers in the junk science of man made global warming (the climate stopped getting warmer in 1998)are now in the driver’s seat. All of us will pay for this nuttiness in higher taxes, higher unemployment, stagnant economy and financial markets (let us remember that most of us have retirement savings), and with all of the damage to the nation that those things incur.
Obonga’s scheme makes it less likely that the oil companies will be able to drill our own resources. His taxation scheme directed at the energy companies amounts to de facto nationalization of that industry. When you have the power to punish and snatch like that, the rights of the owners/shareholders are gonzo.
I don’t want that $500 from the government that Obonga wants to pay me. I want people to have jobs, opportunity, prosperity, and a strong country. I want lower energy prices, and Obonga’s scheme does nothing to increase the supply of energy. In the intermediate term there are no breakthroughs which get around the laws of physics. These people are telling us that we have to suffer major economic pain for several decades while they solve the problems with hydrogen fuel, which requires the input of 15 units of conventional electrical energy to produce one unit of hydrogen fuel. My friends in engineering tell me that we are up against the laws of physics on this one, and many decades may pass and still no solution in sight.
These fools want the carbon tax enacted, which is their sly way of wanted to destroy our economy. THAT’S HOW BAD THE SOCIALISTS WANT IT DONE THIS WAY!!
cedarford – Sorry, not buying. Yes we’ve driven out other species and cut down forests. Other species get created. Mother nature wipes out things, too. Whatever happened to the dinosaurs, hmm? Did we do that?
We don’t affect the warmth of the planet. We don’t know what causes it. It could be nothing more than a slight ebb and flow of the sun’s output. It might have to do with Earth’s magnetism, or something else. We are just too insignificant compared to the Earth, and the studies that show otherwise are steadily being debunked.
You missed my point, however, in my earlier post. I’m on your side, because while I don’t buy into global warming, I am keenly aware of the effects of pollution. That gives us the same goal, regardless of motive. Take a chill pill.
Personally, I don’t give a rat’s a$$ how much the rest of the indoctrinated world shudders at “American ignorance”. Most of them can’t balance their checkbooks, much less understand the complexity of the math that deals with this issue. Global warming is just a theory. Hear that? Theory! How can you get so worked up about my ignorance, then rant on about religious fundies, when we’re talking about a theory? Get a life.
If you are going to do ethanol subsidies, it should be done for ALL ethanol, not just for corn-based ethanol as currently done. Algenol is a company that produces ethanol using algae, and they can produce it in much greater volume than can be produce by corn. There are other means of producing ethanol as well (e.g. switchgrass), but right now, the ethanol subsidy is directed to corn-based ethanol, thereby distorting the market, stifling competition, and preventing further growth of the ethanol market.
To make matters worse, tarriffs prevent the importation of sugar-cane based ethanol that could compete with corn-based ethanol and drive down the price even further. This further protects the corn-based ethanol industry at the expense of everybody else.
I fully share Dr. Zubrin’s enthusiasm for the FFV standard and for pursuing an open fuel standard that lets alcohol fuels compete with petroleum based fuels. But the subsidies and tarriffs have got to go, as they only distort the market and are more of an impediment to achieving the open fuel standard while lining the pockets of agribusiness.
If we are going to have any intervention in the market by the federal goverment, require automakers to produce FFV’s, and then get the tarriffs and subsidies out of the way. The market will finish the job.
“How much corn would I need to grow in order to produce enough ethanol fuel to drive my car across the country?.”
22 August 2001.
HowStuffWorks.com.
09 October 2008.
With so much volatility in today’s world oil market, many are seeking out alternative fuels to power cars. Some, including corn producers, have touted ethanol is a possible alternative fuel. Ethanol, or ethyl alcohol, is made by fermenting and distilling simple sugars from corn. Ethanol is sometimes blended with gasoline to produce gasohol. Ethanol-blended fuels account for 12 percent of all automotive fuels sold in the United States, according to the Renewable Fuels Association. In very pure forms, ethanol can be used as an alternative to gasoline in vehicles modified for its use.
In order to calculate how much corn you would have to grow to produce enough ethanol to fuel a trip across the country, there are a couple of basic factors we have to consider:
* Let’s assume that you drive a Toyota Camry, the best-selling car in America in 2000. We know that the Toyota Camry with automatic transmission gets 30 miles per gallon of gas on the highway.
* Gasoline is more efficient than ethanol. One gallon of gasoline is equal to 1.5 gallons of ethanol. This means that same Camry would only get about 20 miles to the gallon if it were running on ethanol.
* We also need to know how far you are traveling: Let’s say from Los Angeles to New York, which is 2,774 miles (4,464.2 km), according to MapQuest.com.
* Through research performed at Cornell University, we know that 1 acre of land can yield about 7,110 pounds (3,225 kg) of corn, which can be processed into 328 gallons (1240.61 liters) of ethanol. That is about 26.1 pounds (11.84 kg) of corn per gallon.
First, we need to figure out how much fuel we will need:
2,774 miles / 20 miles per gallon = 138.7 gallons
(METRIC: 4,464.2 km / 8.5 km per liter = 525.2 liters)
We know that it takes 26.1 pounds of corn to make 1 gallon of ethanol, so we can now calculate how many pounds of corn we need to fuel the Camry on its trip:
138.7 gallons * 26.1 pounds = 3,620.07 total pounds of corn
(METRIC: 525.2 liters * 3.13 kg = 1,642 kg)
You will need to plant a little more than a half an acre of corn to produce enough ethanol to fuel your trip.
If you think you would save any money by using ethanol, guess again. Ethanol is expensive to process. According to the research from Cornell, you need about 140 gallons (530 liters) of fossil fuel to plant, grow and harvest an acre of corn. So, even before the corn is converted to ethanol, you’re spending about $1.05 per gallon.
“The energy economics get worse at the processing plants, where the grain is crushed and fermented,” reads the Cornell report. The corn has to be processed with various enzymes; yeast is added to the mixture to ferment it and make alcohol; the alcohol is then distilled to fuel-grade ethanol that is 85- to 95-percent pure. To produce ethanol that can be used as fuel, it also has to be denatured with a small amount of gasoline.
The final cost of the fuel-grade ethanol is about $1.74 per gallon. (Of course, a lot of variables go into that number.) The average price for a gallon of gas in the United States is about $1.40 as of August 9, 2001, according to GasPriceWatch.com.