E85 Boondoggle of the Day: Peak Oil is Food for Fuel's Friend

by Robert Farago

Published: August 5th, 2009

e85 boondoggle of the day peak oil is food for fuel s friend

The Renewable Fuels Association (RFA)—the ethanol producer’s bestest best friend—is in a fight for its life. As the Wall Street Journal [sub] reports “The Environmental Protection Agency dealt a big blow to the ethanol industry earlier this year when it decreed that the corn-based fuel doesn’t have a much better carbon footprint than gasoline made with crude oil.” While the RFA lobbies the hell out of congress to subvert/get an exemption from the EPA’s final decree on the subject, they’re “counting the angels on the head of a pin” (quoth RFA CEO Bob Dinneen). Less poetically, what if peak oilers are right? If the supply of easily-extracted light sweet crude dries up, then it’s oil shale for us! And if you compare corn/theoretical sawgrass for fuel, well, then, huzzah! The RFA just happens to have a study that proves that ethanol beats the snot out of shale, carbon footprint-wise [ download pdf here]. Unless you count the carbon needed to produce the tires of the tractor harvesting the corn. Unwind that!

Robert Farago

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4 of 17 comments

D002 on Aug 06, 2009

Shale oil has a lower carbon footprint then ethanol ? You're hilarious mate !

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Don1967 on Aug 06, 2009
They’ve solved the Global Warming problem. They’re going to move the planet to a higher orbit. Priceless! If this story were written today, I'd say it was the Nasdaq 5000 of the climate change bubble.

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John D on Aug 06, 2009

I have often said that there is one thing that has almost universal agreement with regard to domestic energy policy - and gas for our toys. That is that no one really wants to send our money to unstable and often hostile foreign countries. Sure we are happy with Canada, possibly Mexico and Brasil, and the North Sea producers. But sending vast sums to the rest of the pack is the worst near term issue. Secondly, the long term [50-100 years]availability of affordable transportation fuel is not assured. So the alternatives today are limited and are being explored - unfortunately with a lot of political meddling. If - and its a big if - we in the US and other developed countries can keep our eye on the goal of reducing dependence on petroleum for transportation and incentivise the market to achieve that goal, we will end up having efficient and effective solutions and possibly avoid future energy crisis. Taxing/import duties or cap-and-trade programs are not incentives, they are politically driven wealth distribution programs wearing a disguise.

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Rada on Aug 06, 2009
Taxing/import duties or cap-and-trade programs are not incentives, they are politically driven wealth distribution programs wearing a disguise. But wealth distribution is what all incetives are - we take finite capital resources, such as money, time, labor - and redistribute them to areas that need attention. Taxation and import duties are precisely incentives/disincentives, it's just that outcomes of a policy imposed on an otherwise liberal market can be hard to predict. Our dependence on oil is caused by decades of incentives the auto and oil-and-gas industries received from the American people. Our numerous bases in Middle East, our worldwide militarism, our huge public capital investments in the highway system - all are incentives to use cars that run on dead dinosaurs. Current ethanol subsidies are a drop in the bucket compared to what we already have spent and continue to spend on oil subsidies.

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