The EPA is Poisoning People while Fracking is making People’s lives Better

Posted by PITHOCRATES - April 5th, 2014

Week in Review

There have been a lot of movies showing how fracking is polluting our groundwater.  Giving people cancer.  Causing fire to blow out of people’s water faucets.  Makers of movies appear on The Daily Show and The Colbert Report talking about how horrible and dangerous fracking is.  So the evils of fracking are all around us.  But, strangely, these dangers are conspicuous by their absence in one area.  Actual news stories.

We hear about how global warming is getting worse.  We hear example after example of how Republicans hate the poor and women and want to take away health insurance from everyone.  We are bombarded with news about how the rich aren’t paying their fair share and how Republicans are trying to buy elections.  But we don’t see reporters filming fire shooting out of a water faucet.  And we don’t see the CDC in fracking areas responding to soaring cancer rates.  Or fracking fields being turned into superfund cleanup sites.

It’s odd because when Malaysian Airways Flight 370 went missing 4 weeks ago CNN covered the missing airplane 24/7.  Even though they had nothing to report.  They just brought in experts (and a physic) and theorized about what might have happened.  The other news channels covered the non-news with nearly the same fervor as CNN.  So you would think that if fracking was causing fire to shoot out of water faucets and was giving everyone cancer they would be covering that 24/7.  For most of these news channels are liberal.  And liberals hate fracking.  But they don’t go to North Dakota to report the abject misery fracking has brought them.  Probably because they don’t want to show the economic boom going on in North Dakota.  Where people are going to for jobs.  Where the unemployment rate there (2.6% as of February 2014) is the lowest in the nation.  Perhaps that’s why they don’t report the abject misery fracking is causing in North Dakota.  Because there is none.

So if the media isn’t in North Dakota is the government?  Is the EPA documenting the abject misery fracking is causing the good people of North Dakota?  No.  Instead, they’re purposely trying to give people cancer (see What’s more dangerous to your health than fracking? The EPA, apparently by Ashe Schow posted 4/2/2014 on the Washington Examiner).

An EPA inspector general’s report found that the agency did obtain approval to conduct five “human research studies” exposing “81 human study subjects to” toxic pollutants including diesel exhaust…

So the EPA asked people to expose themselves to dangerous pollutants — some at levels 50 times greater than what is safe — but didn’t tell them about the dangers.

Why would the EPA, which supposedly cares so much about the public’s health, do this, especially to people who already had health problems?

To justify more regulations and funding, of course.

They are desperately trying to kill people by exposing them to something they can later call a toxic pollutant.  So they can “justify more regulations and funding.”  And they will tell the people they kill, “Fear not, you shall not have died in vain.  Your horrible death will bring about the greatest kind of good there is.  It will enable us to expand the size of the federal government.  Allowing it to reach further into your lives.  Well, not yours per se because you’ll be dead.  Thanks to us.  But other people will know the joy of having the federal government intruding further into their private lives.  Until one day there are no more private lives.”

This is what the federal government thinks is good.  Not a 2.6% unemployment rate.  Like they have in North Dakota.  Thanks to fracking.  Which the people living there don’t seem to mind.  As the people moving there don’t seem to mind.  Interestingly, the blue states with higher concentrations of liberals aren’t enjoying such economic prosperity.   The unemployment rate in New York is 6.8%.  In Illinois it’s 8.7%.  And in California it’s 8%.  So they’re doing something right in North Dakota.  And something very wrong in New York, Illinois and California.  Perhaps committing too many resources on liberal policies.  Instead of creating an economic climate that will give people the thing they want most.  A job.

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Despite the Left’s Opposition to Fracking even the Environmental British are Joining In

Posted by PITHOCRATES - August 4th, 2013

Week in Review

One of the reasons the government tells us we must ‘invest’ in clean energy is to wean us off of costly foreign oil.  To give us energy independence.  And so we stop sending out money to nations in the world who don’t much care for us.  That’s why we must spend enormous amounts of tax dollars on things like solar and wind power.  Because we need them.  But because they are such poor business models they can’t operate without government subsidies.  So is there another option to give us that energy independence?  That doesn’t require government subsidies?  While even lowering our energy costs?  Yes there is.  And the British are now trying to play catch up to the United States (see The potential prize from fracking is huge by Michael Fallon posted 7/31/2013 on The Telegraph).

North, south, east and west, shale gas represents an exciting new potential resource for Britain that could contribute to our energy security, growth and jobs.

We only have to look across the Atlantic to see how it has reinvigorated the US economy: gas prices have halved, cutting costs for industry and consumers, and creating thousands of jobs and billions in new investment. Countries from India to Australia have looked on in envy at this boom – and are now joining in.

For its part, this Government is serious about shale. We are encouraging industry to find out how much is recoverable in all parts of the country. Given increasingly volatile international gas and oil prices, and our commitment to helping hard-pressed families with their bills, it would be irresponsible to ignore a new energy source right underneath our feet…

…residents understandably want reassurances that their water will not be contaminated. The facts are that around 2.5 million wells have now been fracked worldwide, more than 27,000 of them in the US in 2011. There is no evidence from America of fracking causing any groundwater contamination.

Other than in Hollywood movies.  And on television shows.  There it’s contaminating groundwater like there’s no tomorrow.  But with all that fracking going on in the United States the news is surprisingly barren of contaminated groundwater reports.  And you know they’d be leading all the news programs if there were.  Because the left hates fracking.  And the mainstream media leans left.  Way left.

That energy boom is a private boom.  It’s not because of the government.  It’s in spite of the government.  Who has launched a war on coal and oil.  Shutting down oil production on the Gulf of Mexico.  And on all federal lands.  Or making it very difficult for those who try.

Much of the global warming nonsense came from the University of East Anglia.  Making Britain near ground zero in the battle against global warming.  And here they are.  Wanting to frack to bring energy costs down for households.  Create jobs.  And reduce dependency on foreign oil.  Pity the United States government doesn’t care enough about the American people to do the same.

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The Europeans are moving away from Green Energy as President Obama moves toward Green Energy

Posted by PITHOCRATES - June 30th, 2013

Week in Review

Europe had gone all in on the green energy bandwagon.  To save the world from catastrophic climate change brought about by manmade global warming.  But they paid a price.  They have increased the cost of electric power.  Which increased the cost of manufacturing.  Making them less competitive on the world markets.  Resulting in anemic economic growth.  And a sovereign debt crisis as tax revenues fell.

Their journey into green energy has been an unmitigated disaster.  They are now reversing course.  And climate change be damned.  If there ever was a problem to begin with.  For let’s face, what good did all of Europe’s green energy efforts do anyway?  The climate doomsayers are still warning us that we must act now before it’s too late.  So apparently whatever the Europeans did had no impact on the climate.  Only their economies (see Europe exits climate money pit as Obama jumps in by RON ARNOLD posted 6/27/2013 on the Washington Examiner).

Myron Ebell, director of the Center for Energy and Environment at the Competitive Enterprise Institute, told me, “The centerpiece of President Obama’s climate plan is a declaration of all-out war on coal. The only affordable way to reduce emissions from existing coal-fired power plants – which now provide 40 percent of the nation’s electricity – is to close them down…”

Ebell added that “Obama is pursuing his anti-energy agenda undemocratically through executive actions that bypass the people’s elected representatives in Congress.”

Autocrat Obama is also doing it without learning from the European Union’s green energy experience: skyrocketing energy prices, a ruinous slide into fuel poverty, solar panel financial meltdown, wind power bankruptcies and the specter of EU disintegration. As a result, the EU suffered an outbreak of realism.

In May, Europe’s heads of state and government at the EU Summit promoted shale gas and reduced energy prices. They would rather promote competition than stop global warming.

Obama just returned from Northern Ireland at the G8 meeting where he evidently didn’t ask why the United Kingdom removed climate change from the agenda.

European carbon markets had collapsed with the price of carbon hitting record lows, wrecking the European Union’s trading scheme for industrial CO2 emissions.

British Gas owner Centrica was buying up shale gas drilling rights in Lancashire for fracking operations. Green investors faced bankruptcy as Spain cut subsidies even further.

Large German companies such as Siemens and Bosch abandoned the solar industry, which had lost them billions, while investments in failed solar companies, including Q-Cells and SolarWorld, destroyed 21 billion euros of capital.

In response, German Chancellor Angela Merkel told a June energy conference in Berlin to expect reduced government spending on energy like wind and solar power to keep Germany economically competitive. Europe’s clean energy economy had become a black hole eating euros.

The United Kingdom is struggling to maintain their National Health Service (NHS) under the pressures of an aging population.  Fewer people are entering the workforce to pay taxes to fund the NHS.  While more people are leaving the workforce and consuming more and more NHS resources as they live longer into retirement than ever before.  A clarion call for anyone considering moving in the direction of a national health care system that also has an aging population.  Yet that is exactly what president Obama did during his first two years in office while the nation was suffering in the worst recession since the Great Depression.  Instead of cutting taxes to put people back to work he put into place massive tax hikes coming our way to fund Obamacare.  Learning nothing from the British.

Now he has an entire continent showing how wrong it is to pursue green energy.  And what does he do?  Ignores the Europeans completely and plunges headlong into the same foolish mistake they made.  Instead of cutting taxes to help put Americans back to work in the worst recovery since that following the Great Depression he plans on raising taxes on energy producers.  To fund green energy.  While increasing regulatory costs on good, dependable coal-fired power plants.  Which will increase the cost of electric power.  As well as the cost of doing business.  Not to mention the higher electric bills coming our way because of his desire to follow the Europeans down the dead-end road of Green Energy.

It’s as if the president is doing everything within his power to destroy the American economy.  Or he is completely clueless on how economies work.  He went to Occidental College, Columbia University and Harvard Law School.  So either these institutions are clueless on how economies work.  Or President Obama is purposely trying to destroy the American economy.  For someone or some institution is responsible for the president’s horrible economic policies.  They didn’t just happen.  There must be a method to this madness.  At least a reason for it.  Some reason for turning us into a failed European social democracy.

Of course, many believe that is the reason.  To turn us into a European social democracy.  To transform the country from the free market capitalism of the Founding Fathers into something closer to the state socialism favored by such anti-capitalists like Karl Marx.  Those on the left ridicule any such claims.  But Obamacare and this new Green Energy policy sure have more in common with socialism than capitalism.  As does the present anemic economy.

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Drilling Rig, Drill String, Rotary Table, Kelly, Drill Collars, Drilling Mud, Blowout Preventers, Casing, Fracking and Sucker-Rod Pump

Posted by PITHOCRATES - September 19th, 2012

Technology 101

The Kelly is the Section of the Drill Pipe the Rotary Table Grips to Spin the Tool

There are places where oil oozes out of the ground.  All by itself.  Because of the great weight of that dirt and rock pressing down on it from above.  But there’s a lot more oil underground crushed by the weight of the earth.  That only needs a pathway up to the surface.  And because we like oil so much we provide that pathway.  By drilling deep holes into the ground.  And when we do that oil will come to the surface all by itself.  Making oil extraction rather simple and straight forward.  But getting to that point is a whole other story.

The drilling rig.  This is where it all starts.  The tall, tapered steel derrick that we see in the movies.  Even in Bugs Bunny cartoons.  This is a lot taller than your average drill because the drill bit is a lot longer.  Or, more accurately, the drill string.  A bunch of 30-foot sections, or joints, of hollow pipe screwed together.  As the drill makes its way underground they stop drilling, pull another joint up the derrick, screw it into the drill string and continue drilling.  Hence the tall height of the steel derrick.

At the end of the drill string is the bit, or tool, that does the actual drilling.  Which they spin with a rotary table back up on the rig platform.  Where the roughnecks work.  Manhandling together joints with giant pipe wrenches called tongs.  They break apart the drill pipe.  Hoist a joint up the derrick.  Screw it together to the drill string.  Then reattach the kelly to the drill string.  The kelly is the section of the drill pipe the rotary table grips to spin the tool.  As the table spins the kelly it slowly lowers through the hole in the rotary table.  Pulled down by a heavy section of pipe just above the tool.  Called drill collars.  That weighs about 10 times as much as a joint.

To get the Oil to Flow up through the Well and not into the Soil on the way up they Place a Casing in the Well

There’s a reason why the drill string is hollow.  Because something flows through it.  And, no, it’s not oil.  It’s mud.  A special kind of mud that they pump down from the rig to the drill bit.  Like oil used during drilling on a drill press this drilling mud provides lubrication for the cutting surface.  And being a thick fluid it does two other things.  Chunks of rock will stay suspended in the mud.  So it will rise up with the mud instead of settling at the bottom of the hole.  And it resists other fluids from seeping into the drill hole.  The pressure of the mud pumping down inside the drill pipe forces it back up the drill hole in the space around the drill pipe. As it exits the drill hole up top they examine the mud to see what’s happening at the bottom of the hole.

Below the rig platform are blowout preventers.  For unlike in the movies they want to prevent any gushers of oil (or anything else for that matter) out of the hole.  Because that would be dangerous.  And costly.  So to prevent a blowout they have a series of valves mounted to the wellhead that exits the ground.  At any sign of a back pressure that could blow out of the well they close these valves.  To continue drilling they make the drilling mud thicker.  Thick enough to hold back the back pressure from blowing out around the drill pipe.

To get the oil to flow up through the hole and not into the soil on the way up they place a casing in the hole.   Which is a steel pipe they line the hole with after they’re done drilling.  They pump cement down into the casing and mud behind it.  Forcing the cement out of the casing and up through the space between the casing and the wall of the earthen hole.  When the cement comes out at the top it fills the void between the casing and the hole.  Surrounding the casing in cement.  Which then sets and bonds the casing to the earthen walls of the well.  Providing a clean pathway down from the surface to the rock containing the oil.

Over Time the Pressure pushing the Oil up to the Surface dissipates as the Oil leaves Voids in the Rock

Yes, rock.  There isn’t a big underground lake of oil underground.  The oil is in the pours of rock.  Like a sponge holding a liquid.  One hole in the rock isn’t going to bring a lot of oil to the surface.  So they bust open some of that rock.  With explosions.  Chemicals.  Or high pressure water.  Once they crack open the rock they hold the cracks open by pumping in some porous material that can withstand the crushing weight of the earth above.  We call this fracking.  Short for fracturing.  Which allows the oil to accumulate around the well.  Where the weight of the earth above will push it up through the well casing to the surface.

This completes the drilling process.  They put a stack of valves on top of the wellhead.  Called the Christmas tree.  They close all the valves and break down the drilling derrick.  Pack everything up and leave the drilling site.  Leaving nothing behind but the wellhead with the Christmas tree on top.  Open a valve and the oil flows.  For awhile, at least.  Over time the pressure pushing the oil up to the surface dissipates as the pumped oil leaves voids in the rock.  Which eventually lowers the pressure to the point it no longer reaches the surface.  So to keep the well working they install a pump.

The pump they use has a rocking beam that is pushed up and down on one side.  The other end has cables draped over what looks like a horse’s head.  These cables attach to a string of sucker rods that enter the well and reach all the way to the bottom of the well.  Hence the name sucker-rod pump.  At the bottom of the well is a cylindrical chamber.  When the beam rocks down over the wellhead the sucker rods descend into the well.  At the same time a valve opens and the cylindrical chamber fills with oil.  When the beam pulls up one valve closes and another opens.  And pulls up the sucker rods.  Drawing up some oil into the well casing.   Forcing the oil further up the well with each pump cycle.  Until it reaches the surface.  Then it’s on to a refinery.  And into our car.

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The Canadians have a Healthy Economy and Housing Sector thanks to Energy Resources they Bring to Market

Posted by PITHOCRATES - April 14th, 2012

Week in Review

The United States still wallows in recession.  For all the talk of the improving economy more people are out of work than ever before.  The Democrats blame George W. Bush for this.  Like they blame him for everything.  But President Obama is about to close out his 4th year in office.  And if you count the 2 years Nancy Pelosi and her Democrats controlled both houses of Congress that’s 6 years of Democrat control of the economy.  Which means the last time anyone can blame George W. Bush for things economic was 2006.  So you can’t blame the last three and a half years on Bush.  Unless President Obama wasn’t the president for the last three and a half years.  But the last time I checked he was.  So is it Obama’s fault?  Or is it simply beyond anyone’s control to fix this economy?  Perhaps we should ask the Canadians (see Resources fuelling B.C. economy and housing demand: economist by Gerry Kahrmann posted 4/11/2012 on The Vancouver Sun).

The resources sector is not only fuelling British Columbia’s economy but also its housing market, the Vancouver Real Estate Forum heard Wednesday…

It’s true that house prices have gone up much faster in Canada than in the United States, where prices are still 25- to 30-per-cent lower than when the recession began, Jestin said…

“Why is the Canadian market red hot? Record levels of employment, lifetime lows in interest rates, more confidence that the Canadian economy can continue in a buoyant way over the next few years,” he said…

“The resource story translates very very clearly into the gains in the housing market,” Jestin said. It’s those provinces too where economic growth will be the greatest over the next few years because of continued demand for resources, he said.

The resources sector covers things like mining, natural gas, oil and other energy and mineral extraction.  Such as all that oil the Canadians are fracking out of their shale deposits.  A nation that, although green, is not stupid.  They know the world runs on energy.  As does a modern economy.  So they are bringing their energy resources to market.  Creating jobs.  Saving the housing industry.  And giving people confidence.  None of which they’re doing in the United States.

The Obama administration is a green administration, also.  But a childlike naive one.  Unlike the Canadians.  That refuses to accept that the modern economy requires energy.   And that America has energy resources.  As proven on private lands where energy jobs are a plenty.  Where they’re fracking oil out of our shale deposits like there is no tomorrow.  And so much natural gas that it’s dirt cheap these days.  Which is what happens when you flood the market with these energy resources.  But they shut down that industry on all federal land.  And in the Gulf of Mexico.  Foolishly believing that windmills and solar panels will power a modern economy.  Not understanding what it takes to move a train or an airplane from point A to point B.  Oil.  Fossil fuels.  Energy resources.  For no amount of wind or solar energy will get a fully loaded 747 off of the ground.  

So, yes, it’s President Obama’s fault.  And his foolish naive green energy policies.  For if we brought our energy resources to market like the Canadians we could have a healthy economy like the Canadians have.  But no.  We have to pour billions of dollars into green energy initiatives and watch them go bankrupt.  Sort of like putting parsley on the people’s plates.  Just so the people can through it away.  And that concept bothered Fred Flintstone.  He got it.  And he was from the Stone Age.  Pity President Obama didn’t get it.  For he will continue to put tax dollars into failed green energy initiatives.  Just so these people can through it away.

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The Private Sector is Investing in Natural Gas because there’s a Real Market for it unlike Solar and Wind

Posted by PITHOCRATES - April 1st, 2012

Week in Review

The environmentalists have finally got something they wanted.  Private businesses choosing a cleaner fuel because they want to.  Not because they were forced to.  Or because they were bribed to.  But because these greedy little bastards can make more money by going green.  They hate the profit motive.  But at least these profits come with a cleaner environment.  You’d think they’d be happy.  But, of course, they’re not.  Because for this cleaner world they’d have to accept something they just hate too much (see Natural-Gas Vehicles Will Run Best Without Subsidies by the Editors posted 3/29/2012 on Bloomberg).

Few areas of American governance have been as incoherent in recent decades as energy policy, which is saying something. But lately, we keep seeing reasons for optimism.

Almost miraculously, the U.S. is both reducing its greenhouse-gas emissions and becoming increasingly energy independent. As Bloomberg News recently reported, the share of U.S. energy demand met by domestic sources increased to 81 percent through the first 10 months of 2011 — the highest level in 20 years — and emissions are expected to decline 12 percent by 2020.

A major factor in both trends is increased use of natural gas, a cleaner-burning fossil fuel now being extracted in abundance across the country. Hydraulic fracturing, a new production technology also known as fracking, has helped push prices for the fuel to a decade low, and has created plenty of jobs in the process…

Natural gas has many advantages — which is exactly why the industry doesn’t need more government help.

Proponents of federal aid argue that the costs of switching to natural gas on a large scale are prohibitive for trucking companies and consumers. But as Bloomberg News has reported, trucking companies are already buying more long-haul natural-gas trucks simply because the fuel is so cheap. Annual savings over diesel can add up to $20,000 for a single truck — so a company can recoup the extra cost of the new technology in about two years…

To meet increased demand, companies are building infrastructure on their own: Clean Energy Fuels Corp., which provides natural gas fuel for transportation, plans to build 70 liquefied natural-gas stations by the end of the year. General Electric Co. and Chesapeake Energy Corp. have formed an alliance to help make compressed natural gas available at more filling stations. Honda plans to install fueling stations at some of its dealerships. Fleets of taxis, trucks and buses across the country are using the fuel in growing numbers.

In other words, market forces are working. It’s not yet clear what will be the most efficient means to get natural gas to power vehicles — many options are on the table — but the private sector is the best place to experiment. Billions of dollars in government subsidies will only further distort the energy sector, threaten to create another industry reliant on Washington’s largesse and drive up prices by artificially boosting demand.

No trucking firms are buying any electric long-haul trucks and installing recharging stations across the country.  For that would be too costly.  And waste too much time.  But time is money for a trucker.  They don’t have time to wait for a battery to recharge every time they need to’re-fuel’.  That’s why they stick to fossil fuels.  Even the change to a cleaner and cheaper fuel is still a change to fossil fuel.  Because there’s no other fuel source outside of science fiction that can do what fossil fuels can do.

Because there is a market for natural gas-powered trucks the private sector is providing the infrastructure for it.  Without any ‘Solyndra’ subsidies or loan guarantees.  There’s money to make so private capital is flowing to where it needs to be to make this a reality.  Without any help from the government.  The way it should be in a free market economy.

This is everything the Obama administration could ask for.  Less fuel emissions.  Less dependence on foreign oil.  And they don’t have to use the power of government to make anyone adopt this technology.  There’s no downside.  Except, of course, the environmentalists.  Who hate hydraulic fracturing.  AKA fracking.  (And basically any fossil fuel in general.)  They say it contaminates the ground water.  So they don’t want it.  Just as they don’t want oil.  Or coal.  Or nuclear.  Or hydroelectric power.  Which basically leaves out every way to generate electricity except solar and wind.  Which can’t come close to producing the amount of electricity the other sources of electricity-generation can.  Which will be a big problem for the environmentalists.  Who want everyone to drive an emissions-free electric car.  Cars that will be very difficult to charge if the environmentalists don’t let us produce any electricity.  And the only things that’ll let us do this are the fossil fuels.  Or hydroelectric power.

There’s no pleasing some people.  Unless we all go back to the horse and buggy days.  Maybe that would make the environmentalists happy.  Having the air thick with horse manure.  With our streets covered in horse poop, pee and swarms of flies.  Maybe that would make them happy.  As it would all be natural.  Then again, this may be a problem with PETA.  Who would rather have the pollution if the alternative meant violating animal rights.  Which we would be violating if we enslaved horses to work for us.

You know who’s not having silly debates like this?  Brazil.  Russia.  India.  China.  And South Africa.  The BRICS emerging economies.  And the reason why they’re emerging and we’re wallowing in recession is that they don’t let their environmentalists sit at the big table with the grownups. 

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Gasoline is better than Liquid Natural Gas or Ethanol

Posted by PITHOCRATES - July 1st, 2011

Liquid Natural Gas and Subsidies

The problem with alternative fuels is that they all require subsidies.  That’s one thing gasoline never needed.  Because it was everything a consumer wanted at a price a consumer could afford.  But there’s a problem.  Although consumers like it, government doesn’t.  So they’ve been pushing ethanol to replace it.  And now liquid natural gas is making a comeback (see Goodbye gasoline? GM gives natural gas cars a boost by Edward McAllister posted 7/1/2011 on Reuters).

The United States has more natural gas than it knows what to do with – up to 100 years of supply, experts say – thanks to a new drilling technique called hydraulic fracturing which releases huge reserves of natural gas trapped in shale rock…

Drivers who fill up with natural gas at the pump saved up to $2 per gallon when gasoline prices hit $4 a gallon. (Graphic: here: r.reuters.com/get42s ).

First of all, the environmentalists are trying to shut down all fracking (busting open rock formations to release trapped oil and/or gas by pumping fluids into cracks and fissures).  They hate it as much as drilling for oil.  Because it’s environmentally unfriendly.  And contaminates the ground water.  Or so the environmentalists say.  New York State is sitting on a lot of natural gas in shale.  But getting that gas is on hold until the completion of environmental studies. 

And that $2 per gallon saving over gasoline?  Don’t count on it.  Because it takes more liquid natural gas (LNG) to go the same distance gasoline will take you.  LNG has only 65.7% of the energy content of gasoline.   Which means it will take 1.5 gallons of LNG to equal one gallon of gas.  Think of it this way.  Say you take a vacation that takes two full tanks of gas.  With LNG, it will take you three tanks.  So, yes, you’ll pay less per gallon at the pump.  But you will have to buy more gallons. 

For example, if you have a 14 gallon gas tank and gas is $4/gallon and LNG is $2/gallon, you’ll save $14 dollars to travel the distance that a full tank of gasoline will take you.  If gas falls to $3.50/gallon, the savings drop to $7.  If gas drops to $3/gallon, there is no savings.  Just the inconvenience of another stop at the filling station.  LNG is only a bargain when gas is closer to $4/gallon.  Or more.  Unless there’s something else to sweeten the deal.

Even if oil prices retreat again, some in the industry say natural gas will remain attractive due to its long-term abundance and the potential for government support…

Much hinges on politics. The Natural Gas Act launched in the House of Representatives in April proposes incentives for purchasing and building natural gas vehicles, replacing a previous bill whose sweeteners for users of the fuel have recently expired.

The proposed incentives include a 50 cent per gallon fuel credit, a purchasing credit that covers up to 80 percent of the extra cost of a natural gas vehicle, and tax breaks for building fuelling infrastructure. The bill has bipartisan support and some say it could pass this year.

Ah, yes.  Government support.  Which tells you one thing.  LNG is not a sweet deal.  If it were the government wouldn’t have to bribe you to use it.

Ethanol and Subsidies

The problem with government getting involved in the fuel business is that it politicizes the fuel industry.  If LNG was a value to the market the market would provide LNG.  But it doesn’t.  The same is true for ethanol.  It has no value in the market.  How do we know this?  Because it takes government subsidies to get it to the market (see Industry warns gas prices would rise 89 cents without ethanol posted 7/1/2011 on PolitiFact).

Those who favor rolling back ethanol subsidies argue that a roughly $6 billion subsidy is unsustainable given today’s rising national debt.

However, the ethanol industry, represented by a group called the Renewable Fuels Association, has made an aggressive counterattack, arguing that ethanol is vital to keeping a lid on gasoline prices — potentially a potent issue for Americans as gasoline hovers between $3 and $4 per gallon.

The trade group’s Metro station advertisement mirrors other information available on the group’s website. It says, “Ethanol reduced gas prices by 89 cents per gallon in 2010. Ethanol reduced the average American’s household gasoline bill by more than $800. If ethanol disappeared, gas prices could rise by as much as 92 percent.”

Now that this subsidy is threatened, the ethanol industry is going on the offensive.  They used some scientific studies for their claims.  Studies they funded.  And they played fast and loose with the facts.  That 89 cents saving per gallon was during the spike in oil prices when gas was around $4/gallon.  Over the decade (2000-2010) the savings was only 25 cents.  But it wasn’t even that much.  Because, like LNG, ethanol doesn’t have the same energy content as gasoline.  It only has 71.7% of gasoline energy.  Which means you need 1.4 gallons of ethanol to equal one gallon of gas.  So when you add ethanol to gas you’re just taking a lot miles out of every gas tank.

PolitiFact goes into more detail and gives Renewable Fuels Association a rating of ‘barely true’ for the accuracy of their advertisement.  They’re not lying.  But they are certainly misleading you.  Because of their selective use of facts and figures.  Which is the point.  Honesty doesn’t sell ethanol.  If you want people to buy it you just can’t tell the whole truth.

The Great Corn Con

And there’s a good reason why they aren’t telling the whole truth.  Because if people understood what was going on in the corn industry, they’d be furious.  Because they’re not saving the planet.  Or cutting our dependence on foreign oil.  No.  The only thing the corn subsidies are doing is making farmers rich.  And making people hungry (see The Great Corn Con by Steven Rattner posted 6/24/2011 on The New York Times).

Even in a crowd of rising food and commodity costs, corn stands out, its price having doubled in less than a year to a record $7.87 per bushel in early June. Booming global demand has overtaken stagnant supply.

But rather than ameliorate the problem, the government has exacerbated it, reducing food supply to a hungry world. Thanks to Washington, 4 of every 10 ears of corn grown in America — the source of 40 percent of the world’s production — are shunted into ethanol, a gasoline substitute that imperceptibly nicks our energy problem. Larded onto that are $11 billion a year of government subsidies to the corn complex.

Using corn for fuel only increases the price of corn.  And anything that uses corn.  Like food.

Corn is hardly some minor agricultural product for breakfast cereal. It’s America’s largest crop, dwarfing wheat and soybeans. A small portion of production goes for human consumption; about 40 percent feeds cows, pigs, turkeys and chickens. Diverting 40 percent to ethanol has disagreeable consequences for food. In just a year, the price of bacon has soared by 24 percent.

So it’s the high price of corn that’s making chicken and hamburger more expensive.  Remember that when you’re shopping for your next BBQ.  Or buying ingredients for that next meatloaf.  Just pick up some extra breadcrumbs to make that hamburger go farther.  It’s not all bad, though.  Sure, we’ll eat less.  But they’ve been saying we’re too fat anyway.  So perhaps a little malnutrition will help get us to a healthier weight.  The important thing to remember is all the good that will come from our sacrifice.  Like using less foreign oil.

Here is perhaps the most incredible part: Because of the subsidy, ethanol became cheaper than gasoline, and so we sent 397 million gallons of ethanol overseas last year. America is simultaneously importing costly foreign oil and subsidizing the export of its equivalent.

That’s not all. Ethanol packs less punch than gasoline and uses considerable energy in its production process. All told, each gallon of gasoline that is displaced costs the Treasury $1.78 in subsidies and lost tax revenue.

So we’re subsidizing the ethanol industry to produce ethanol to use instead of gasoline made from imported oil.  And paying a pretty price to do this.  And then we’re not using the ethanol for the reason we subsidized it in the first place?  The American taxpayer is paying higher taxes so we can provide a cheaper fuel for other countries?  While we still import the expensive foreign oil?  You know what you call this?  Government.

Govern against the Will of their Constituents

When government stayed out of the oil business gasoline was cheap and plentiful.  Didn’t need any subsidies.  And you didn’t have to bribe manufacturers to build a gasoline powered car.  Also, government didn’t have to subsidize the fuel dispensing industry either.  The oil companies built refineries, pipelines and gas stations everywhere.  If there was a road there was a gas station.  If there was a city there was a car dealership selling gasoline-powered cars.  It all worked.  As if by magic.  With no help from the government.

Ethanol and liquid natural gas have never worked.  Despite government spending billions in trying to make them work.  The problem?  The market just doesn’t want them.  Like a dog that doesn’t want to swallow a pill.  You can do whatever you want.  Hold his mouth shut.  Stroke his throat.  Whatever.  He’s just going to spit that pill out once you let go.  And consumers have been spitting back every attempt to put us in alternative fueled vehicles.  We just don’t want them.

But government does.  Because they profit from them.  The corn lobby goes to Washington with cash.  And politicians like cash.  So much so that they will repeatedly govern against the will of their constituents.  And they don’t care if their policies increase the price of food.  Because they’re rich.  They can afford it.  Thanks to those lobbyists.  And those nice salaries and benefits courtesy of the taxpayers.  We may be eating meatloaf made with more bread than meat, but they’ll be enjoying fine corn-fed steak.  Along with some nice corn-fed bacon.

All men are created equal?  Our elected representatives apparently didn’t get that memo.

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