Last time I heard, E85 was going at $2.19 a gallon, but that was when gas was at $2.65-ish. I think the difference is still about $.50 per gallon. To me that sounds uh,,,,cheaper? We now are paying about $3.00 a gallon for gas and that's before summer drive season and, dare I mention it?...the 2006 hurricane season.
But let's get to the REAL cost of oil:
http://www.ethanol.org/documents/Real_Cost_of_Oil_Aug_05_000.pdfThe International Center for Technology
Assessment (CTA) released a study in December
1998 quantifying the true costs of oil. The study
identified the following federal tax breaks as
directly benefiting the oil industry:
• Percentage Depletion Allowance:
$784 million - $1 billion per year
• Non-conventional Fuel Production Credit:
$769 million - $900 million
• Immediate expensing of exploration and
development costs: $200 million -
$255 million
• Enhanced Oil Recovery Credit: $26.3
million - $100 million
• Foreign tax credits: $1.11 billion -
$3.4 billion
• Foreign income deferrals: $183 million
- $318 million
• Accelerated depreciation allowances:
$1.0 billion - $4.5 billion
Also, the Taxpayer Relief Act of 1997 has
recently added new rules, thus increasing the
likelihood of supplying the petroleum industry
with an additional $2.07 billion per year in
tax subsidies.
In addition to federal subsidies, the oil
industry receives substantial subsidies on the
state level. Many state income taxes are rooted
in oil firms’ deflated federal tax bill resulting in
undertaxation of $125 million to $323 million per
year. Gasoline retailers and users benefit from
state-imposed fuel taxes which are lower than
regular sales tax, resulting in a $4.8 billion per
year subsidy.
“When faced with
spending $65 to $180
for a single fill-up, the
concept of researching
and developing
alternative fuels is
not just an interesting
thought, but a necessity.”
The Real Facts
Last year the ethanol blender’s
tax credit amounted to just
over $1.7 billion, the majority
of which was passed on to
consumers in the form of lower
pump prices.
Source: U.S. General Accounting Office
22 EthanolToday August 2005
“U.S. dependency on oil
from countries that are
either politically unstable
or at odds with the U.S.
subjects the American
economy to occasional
supply disruptions, price
hikes, and loss of wealth,
which have cost us more
than $7 trillion present
value dollars over the last
30 years. That is more
than the cumulative cost
of all of the wars fought
by the U.S. since the
Revolutionary War.”
CTA’s research estimates that the American
taxpayers fund $9.1 billion to $17.8 billion
annually in tax breaks for gasoline production
and use.
In conjunction with tax subsidies, the U.S.
government provides the oil industry with program
subsidies. These subsidies support the extraction,
production, and use of petroleum and petroleum
fuel products. The CTA study cites totals
approximating upwards of $38 billion to $114.6
billion every year.
Some of these expenditures include:
• Research and development subsidies:
$200 million - $220 million
• Export financing: $308.5 million -
$311.9 million
• Support from the Army Corps of Engineers:
$253.2 million - $270 million
• Department of Interior’s Oil Resources
Management Programs: $97 million -
$227 million
• Government expenditures on regulatory
oversight, pollution cleanup, and liability
costs: $1.1 billion - $1.6 billion
A great downfall of these subsidies is that
oil exploration, production, and consumption
decisions become distorted, with the American
public virtually unaware of the true state of the
oil supply situation. This ignorance in leads to a
reduced sense of urgency in developing alternative
fuel sources, intensifies environmental degradation,
and leads to billions of dollars annually at
taxpayer expense.
Oil Defense
The U.S. Department of Energy estimates that
the U.S. will import as much as 68 percent of its oil
demand by the year 2010. This startling figure begs
the question: Are oil dependency, astronomical gas
prices, and war in the Middle East going to be the
norm over the next five years and beyond?
As past and current events have shown, it is
clear that securing and defending U.S. oil interests
have caused the American government to take
dramatic spending measures. Even in peacetime,
the U.S. Defense Department allots $55 billion to
$96.3 billion per year alone toward protecting the
world’s petroleum resources.
Holding approximately two-thirds of the
world’s known oil reserves, the Persian Gulf
region currently supplies the United States with
about 25 percent of its petroleum. According to
the National Defense Council Foundation, “Taken
together, the economic losses, the defense costs,
and oil supply disruption costs bring the total cost
of imported oil to approximately $250 billion per
year, or close to $4.00 per gallon over the current
purchase price of gasoline.”
Now these are real costs. REal costs covered by the Government (paid for by you and me through our taxes, rather than at the pump) which would have to be covered by the oil companies if not picked up by us. IF the oil companies had to cover these costs they would then be included in the price we pay for gas at the pump.
The latest estimates I've heard for the cost of the IRAQ war are on the order of $400 Billion.
OF course this doesn't even address the human cost of oil. So far over 2,400 soldiers have died in IRAQ. Thousands more have been injured. Think about that when you hear people plead the case for the status quo and how "cheap" oil is. Think about that when you are pumping gas into your tank. Actually, corn ethanol is cheap by comparison - oh and yeah, there is the little problem of Global Warming. Ethanol reduces GHGs, something to think about.
Last time I heard, E85 was going at $2.19 a gallon, but that was when gas was at $2.65-ish. I think the difference is still about $.50 per gallon. To me that sounds uh,,,,cheaper? We now are paying abuot $3.00 a gallon for gas and that's before summer drive season and, dare I mention it?...the 2006 hurricane season. 50% of ethanol production is in the hands of cooperatives owned by farmers. The latest data on corn ethanol production is that it is returning over 90% gain on energy inputs (reported by MIchael Wang, The Argonne National Laboratory). This compares with the 65% gain recorded by the USDA study of 2004. Producing gasoline from petroleum is a 19% energy loser(
Argonne National Laboratory study, M. Wang).
OF course, (I have to keep repeating this) corn is the source just until cellulosic ethanol enters the picture in about 5 years.
(See why Vinod Khosla, co-founder of Sun microSystems, is excited about ethanol - he says "it's a No-brainer")
Quoting Khosla: "What could be better than a greener fuel that’s cheaper for consumers, that doesn’t feed Mideast terrorism, yet instead fuels rural America?" BTW EXXON-Mobil just reported record profits last quarter, after a record profits for 2005. THey are not alone (re record profits) in the energy sector. Don't cha just love it??
P.S. here's a guy (Tennessee former moonshiner, probably) selling stills over the internet. He says you can make your OWN ethanol for $.75 a gallon!http://www.kfoxtv.com/automotive/9040469/detail.html People Brew Own Gas To Beat Pump Prices
POSTED: 8:05 am MDT April 27, 2006
WASHINGTON -- Some people have become so desperate to find cheaper fuel for their cars they've begun making ethanol at home.
There are dozens of Web sites explaining how to make ethanol from homemade stills.
Bill Sasher, owner of a Tennessee company that sells ethanol stills and kits, said that once you're set up it costs about 75 cents a gallon to brew your own fuel.
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