PrintJuly 9, 2007
Magical Thinking on Energy Policy
A recent article from the French news agency AFP highlights the international concern over US gasoline refining. The lack of refining capacity in the US is beginning to affect the world oil markets. While US holiday driving season was in years past simply a US domestic concern causing temporary gasoline price increases over peak driving periods, it now has international repercussions. The global impact and concern reflects the long-developing US gasoline refining shortage created by liberal Democrats pandering to environmentalists by legislating onerous regulations and delays, which have had the effect of blocking construction of any new refineries on US soil for over 30 years.
House Speaker Pelosi has promised to address the energy policy of our country. However, as we examine her proposals, we see she has not addressed this issue in any comprehensive manner. What we hear from her point man, Rep. John Dingell (D) of Michigan, chair of the House Energy and Commerce Committee is just more pandering to the environmentalists through increasing CAFÉ [Corporate Average Fuel Economy] standards and ethanol production, in addition to the populist hype of removing tax breaks from the oil companies to drill for oil.
None of these feel-good measures address the energy independence issue, much less accomplish anything to meet growing demand. While increasing the miles-per-gallon of any vehicle is a laudable exercise in conservation, we simply cannot save or economize our way to energy independence. More stringent CAFÉ standards may reduce the growth of demand, but only very slowly, as it takes 12-15 years for the entire auto fleet to be renewed, and few Democrats would have the stomach to ban the gas-guzzling aging beaters that provide basic transportation for the less affluent among us. That would force a more rapid turnover in the auto fleet, such as the 7 - 8 year fleet renewal cycle in Japan, where a rigorous inspection system forces older cars off the road. Only then would the CAFE standards take effect more quickly. Then there is the "paradox of fuel efficiency" -- the tendency of consumers to drive more miles when they acquire a more fuel-efficient vehicle. Face it, we love our mobility, and can't get enough of it.
There is an even more fundamental reason why we simply cannot provide sufficient ethanol to displace enough gasoline via the existing refineries to meet the increasing demand of a growing population. Ethanol can't be combined with gasoline after the refinery process is over, in a simple mixing process. Unfortunately, the combining of ethanol and gasoline is integral to the refining process; therefore the maximum capacity of fuel production is limited to the existing refinery output.
For every grade of gasoline, whether E10 (10% ethanol), E85 (85% gas) or straight gasoline, there is a specific process that must be performed after the initial refining. All gasoline mixtures must go through the Reforming process to specifically adjust the Octane level prior to adding the final specific amount of ethanol. One can not simply take straight gasoline and mix in 90%, or 15% or 5% ethanol to sell at the pump. In fact modern electronic ignition engines will use 28% MORE fuel with ethanol. As this site notes:
For example, the flex-fuel Chevrolet Impala equipped with a 3.5-liter V-6 engine gets an EPA-estimated 23/31 mpg (city/highway) on gasoline and 16/21 mpg when burning E85.
Hence, if you use E85, the mileage you get will be significantly lower than the EPA figures advertised on the window sticker. For each grade there is a reduction of mpg:
"The three vehicles averaged only 1.5% lower mileage with E10, 2.2% lower mileage with E20, 5.1% lower mileage with E30, and increased mileage of 1.7% when using the specially denatured E10 blend."
We must consider if cutting gasoline with 10% ethanol and getting 1.5% less mileage actually contributes to overall fuel supplies when tying up refinery capacity to make these various lower grades. Only the E85 mixture, where gasoline is essentially the additive, actually contributes to the overall gasoline supply. Bio-diesels do not have this problem, to my understanding, leaving us with the only current viable options of E85, Bio-diesel, and possibly the hybrid and electric car using lithium ion batteries, which bring with them problems of energy consumption during manufacturing and the necessary recycling of the expensive and hazardous batteries.
Setting aside the contentious role of immigration in population growth and just addressing the fuel demand situation, it should have been obvious to liberal Democrats and environmentalists, that the increasing energy demand of a 20% growth in population must necessitate some proportional increase in vehicle mileage traveled. Vehicle miles driven on the U.S. highway system have increased five-fold over the past 50 years, from 600 billion vehicle miles traveled (VMT) in 1956 to 3 trillion VMT in 2006. [Bureau of Transportation Statistics 1960 to 2000] Within about the next twenty years (year 2025) the Census Bureau is forecasting another 20% rise in population (350 million) if nothing changes in the growth rate.
The last thing any national energy policy should do is ignore the facts by pretending that ethanol or mileage improvements can possibly offset any reasonable estimated increase in annual vehicle mileage. Such policies might have had some chance for success if the vehicle mileage traveled were stagnant for the next few decades. But this is simply not in the cards, so the premise fails in light of the facts.
Thus the nostrums of the Democrats' policy are doomed from the start, and will result in an upcoming preventable crisis, one which will fall upon the backs of the poor and middle class, whom the Democrats pretend to champion. But it won't be only the poor of the US who will be negatively affected by higher fuel prices however. It will also be the poor of the rest of the world. A shortage in the US means a shortage world wide, and therefore higher prices for the entire world. What we do here has consequences for others, gone are the days when we foolishly just affected ourselves with our adherence to magical thinking about the economy, social policy, and energy.
Thus the nostrums of the Democrats' policy are doomed from the start, and will result in an upcoming preventable crisis, one which will fall upon the backs of the poor and middle class, whom the Democrats pretend to champion. But it won't be only the poor of the US who will be negatively affected by higher fuel prices however. It will also be the poor of the rest of the world. A shortage in the US means a shortage world wide, and therefore higher prices for the entire world. What we do here has consequences for others, gone are the days when we foolishly just affected ourselves with our adherence to magical thinking about the economy, social policy, and energy.
We must address the oil production and gasoline refining issue as a national security issue. Any energy policy that does not address population growth, the resulting increase in demand, and the effects of petrodollar terrorism, will result in a predictable failure. We need to dissuade the leadership of this nation from engaging in magical thinking for political purposes, hoping some new technological development will save them from the consequences of inaction.
Congress needs to remove and streamline regulations to promote new drilling and refineries, not discourage them as they have done in the past. An increase in supply is the only rational response to an increase in demand, in the face of a rising population. Then there is the question of the source of our projected population growth. But that's another article.
