February 10, 2006

Ethanol- the energy that will drive our future

By Lou Ann Hammond

The BRIC countries (Brazil, Russia, India and China) are all in search of new streams of energy. Russia’s leader Vladimir Putin is sending clear messages to western Europe about who owns the oil Europe is dependent on. Russia is creating a pipeline under the Baltic Sea to circumvent future problems with the Ukraine and Poland. China is putting a pipeline into place from its natural gas origin all the way to Shanghai. India is a thriving automobile industry bringing in new automotive brands monthly. Brazil is not only getting off the dependence of foreign oil by using its sugar cane to create an ethanol blend as a fuel for vehicles, but they are also able to create another revenue stream for their farmers.

What this means for these countries is self-reliance for their country. It also means more domestic revenue streams inside their own country and less dependence on foreign oil. Brazil is able to pay off their debt to the International Monetary Fund (IMF) earlier than thought. After that Brazil will have the money to afford more development in their own country and to keep more of their money in their own country. Within a couple years Brazil will not be importing any foreign oil.

Oil companies are starting to invest money in technology ventures. Chevron, Pacific Ethanol, General Motors and the state of California have a demonstration that has quadrupled the number of E85 gas stations in California. This may sound great, but it takes California from one station to 4 stations. Chevron has invested 1/3 of 1 percent of the net income of their first nine months of profit. If Chevron sneezed wrong, they would spend more money than that.

Back in the late ’70s The National Highway Traffic Safety Administration (NHTSA) ordered automobile makers to find ways to increase their Corporate Average Fuel Economy (CAFE). The goal was to make America less dependent on foreign oil. The most obvious way of doing this was to increase the miles per gallon a car could get. Or at least NHTSA thought so. All one has to do is look at the sprawl of suburbia and you can see that we haven’t decreased the amount of fuel we are using.

Another way of doing this was to allow a credit for “flex-fuel” vehicles — meaning that those vehicles can run on gas or a blend made up of 85% ethanol, called E85 — a corn based fuel (sugar cane in Brazil) that opens up a revenue stream for the farmers in the mid-west.

There are over 5 million flex-fuel vehicles on the road today that could use E85, but the fuel is not available. If McCain and Kerry were serious about CAFE’s goal, they would submit a plan to get E85 in the corner gas station and our diesel fuel as clean as Europes diesel fuel. Diesel fuel gets about 25 percent better miles per gallon. Ethanol is homegrown and allows us to use 85 percent less foreign oil. If you spend $50 on gasoline to fill up your tank, on a well-to-wheel basis, that $50 starts in the middle east and goes to the oil company and into your tank. If you spend $50 on E85 blend $42.50 *85%) of that money starts in a farm, goes to the producers here in the states and ends up in your tank. All $42.50 stays in the United States.

The automobile business is not the only industry that is subject to ups and downs. Oil companies have not always enjoyed the types of profits they are making today. Twenty years ago General Motors was just as fat as sassy as the oil companies are today. If, just like General Motors, the oil companies don’t start listening to the market and what their customers want, their customers will find different avenues to get what they need. And just like General Motors, Chevron has health care and pension costs.

Worried about traveling out of a certain radius of your home for fear of no hydrogen? There are cars that are being brought to production right now that are bi-fuel; they can take gasoline or hydrogen.

I would submit that most people are not so against the profits that oil companies make. What they are against is the blatant disregard of the oil companies in listening to what the consumer wants; to get off the dependence of foreign oil and to bring more revenue streams back to the United States. There is a great fear in Americans that they are losing all of their high paying jobs to foreigners who will do the job cheaper.

We are a great country. We have intelligence and technology that we could deploy if we would only send all the lobbyists, or warlords, packing out of 1600 Pennsylvania Ave. It is completely disingenuous for President Bush to understand that Brazil is doing better financially because of E85 and not demand that it at least be supplied to 40 percent of the gas stations.

Reprinted from Carlist.com (http://www.carlist.com/).

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