Thursday, July 10, 2008

"You can't GROW your way out of this problem."

"This call for drilling in areas that are protected is a hoax, it’s an absolute hoax on the part of the Republicans and this administration” Pelosi said at her weekly press conference. “It’s a decoy to punt your attention away from the fact that their policies have produced $4-a-gallon gasoline.”
Thank you Speaker Pelosi. Please explain the Obama-Reid-Pelosi plan to increase energy supplies and reduce the price of that $4 gasoline.

Right-oh, windmills and biofuels. That'll get 'er done Nan.

The EPA Ethanol Plan is Failing

After last night's Schadenfreude wore off, it occurred to me that the only major government energy promotion program created in decades is failing (Has there been anything else since the Atomic Energy Commission was created under Eisenhower?). Nevermind the resource limitations of corn, new ethanol plants are not being built to meet EPA's Renewable Fuel Standard mandate goals because they cannot be profitable. In fact, existing plants are closing.

On February 14, the EPA amended the 2008 ethanol standard.
In this notice we are publishing an RFS 7.76% for 2008. This standard is intended to lead to the use of 9 billion gallons of renewable fuel in 2008, as required by amended section 211(o). This standard supersedes the 2008 RFS that EPA published on November 27, 2007, before enactment of the EISA.
But the latest agricultural report warns.
Conclusion. The bottom line is that in 2008, U.S. ethanol production will probably not reach the 9 billion gallons called for the RFS mandate; ethanol production capacity will not increase much if at all this year; and corn usage for ethanol production will be closer to 3 billion bushels than the forecasted 4 billion bushels.

The 2008 RFS mandate will not be met.
Why isn't this news?

Even with government subsidies, heavy promotion of biofuels and a huge disruption of the feeder corn market; this year's mandate will not be achieved. No amount of flex-fueled vehicles can help when producers cannot sell ethanol for a profit.

The mandated goal was established only 5 months ago. What are the chances of the U.S. meeting EPA goals in one, five or fifteen years?

Here is a hint. I wrote earlier this year that there was not enough acreage in the U.S. to meet long-term corn-based ethanol goals. I was too conservative. It is happening now, way sooner than anyone expected.

The 8.5 billion gallon ethanol yield achieved in 2007 may be the U.S. limit when using corn. Producing the 2022 goal of 36 billion gallons of ethanol cannot be achieved using corn. Forget Peak Oil, we have achieved Peak Ethanol.

Biofuels will not save us. What solutions are the Congressional Democrats willing to approve? Nancy Pelosi has a plan.
"Democrats have a commonsense plan to help bring down skyrocketing gas prices by cracking down on price gouging, rolling back the billions of dollars in taxpayer subsidies, tax breaks and royalty relief given to big oil and gas companies, and increasing production of alternative fuels."

- Nancy Pelosi, April 24, 2006. Gasoline priced at $2.91/gallon.
Good job Nancy. Your policies have made $3 gasoline seem like stealing the stuff.

H/T - Don Surber & Michelle Malkin

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