Palaver from Persimmon Crossing — Ethanol and the Private Market
|December 16, 2004||Posted by Staff under Progress Report, The Progress Report|
Palaver from Persimmon Crossing
with Warren Faulk In a recent Progress Report article, we took a swipe at the corrupt ethanol industry’s reliance on corporate welfare handouts. We consider it anti-patriotic, anti-market and anti-commonsense. But that’s not the final word on the subject, and the topic is a broad one; we’re always ready to shed additional light on any topic, and today that light comes from our columnist Warren Faulk.
Ethanol and the Private Market
The “market” hasn’t got a chance where the introduction of any of several alternative fuels in competition with petroleum based gasolines is concerned. I believe ethanol to be a direct, immediate and viable threat to oil interests. Ethanol … in fact … no alternative fuel has ever had anything like a level field in competion with gasoline in my memory. Oil and other industries control the motor fuel industry from well to pump, to retail and government consumer alike. The US Defense budget outlays that assure foreign oil derived gasoline will continue to be delivered …as long as it lasts… may well be the biggest, longest lasting subsidy there has ever been. This underwriting of the oil industry may also turn out to be the worst investment we have ever made in terms of national defense, the environment and sound energy practice in the long run. We are approaching the end of that long run.
I figure the first $2.00 per gallon of the actual retail value of gasoline to the oil companies is free. Government, supported by ill informed or apathetic citizens, is saying it is acceptable for the oil companies to have a huge competitive advantage over any alternative fuel … at taxpayer expense. I don’t think it is realistic for us to expect any private company to compete in a market place that is so rigged to insure its failure.
I do not favor additional subsidies to companies for the development of improved ethanol. Fact is, I don’t think they were ever necessary. Useful forms of alcohol fuels have been around for decades. Certainly it may be possible to improve them. Gasoline can probably be improved upon as well, but the oil companies have no particular need to improve their competitive advantage. That’s being guaranteed by external forces. And ethanol research is basically pointless unless and until some external happening allows it to emerge from the competitive prison we have placed it in. Even if ethanol were a perfect fuel and cheap to manufacture it would not make it into the present retail fuel market.
So, as is my way, I have been turning this one over in my mind. My thoughts do not necessarily result in a conclusion as to how to proceed … so far. Maybe you can help. Here are my ramblings:
a. The fuel situation in the world and particularly in the USA is not rational. Government tweaking and consumer attitudes aren’t capable of righting it, at least by the small adjustments we seem willing to make from time to time.
b. Big business no longer cares about America like I do. Big business is not tied to any particular land or water mass. “It” just flows toward the best situation it can find. Big business will use the military forces that it can get to serve in acquiring resources … whereever it finds them. Who gets hurt does not matter to the bottom line. Right now the leading forces fly the American flag but it could just as easily be China, Russia, or some combination of Euro or Muslim forces.
c. The REAL American dream is to do whatever you want to do, when you want to do it, regardless of the consequences … and there are now and will continue to be worsening consequences to our continued use of fossil fuels.
d. It does not make sense to exhaust all of the crude oil resources of the world. If someone wants to throw around the word “stupid” … this would be a good place to start. Who could possibly know what may come up in 200 years that would actually require natural crude oil or some derivative of it, in resolving a problem. There is no guarantee that a synthetic will be able to replace everything forevermore.
e. As custodians … we Americans are the worst the world has ever known, which is a contributing factor in the growth of terrorism.
f. Hardly anyone wore hunter orange until made to do so by government regulation.
g. Hardly anyone used seatbalts in cars until made to do so by government regulation.
h. Those who are content to see America slide into oblivion as a result of our longstanding and very faulty approach to fuel production and consumption should be … well … content.
i. As long as the “market” is so artifically $kewed in favor of gasoline there is no hope for the competition. The usual market forces are dead in the water, consigned to drift around until some major event jolts everything in a new direction. This could result from the total consumption of all the major oil reserves in the world ( we are on a crash course toward this destination.). It could come about by our losing MidEast, African and even our own Alaskan oil resources militarily (No nation of 280 million people can hold out against “the forces of evil” if those forces turn out to be the rest of the population of the planet trying to save itself from we the gluttonous.). It could be caused to happen by some rational combination of consumer awareness, government awakening to its capabilities and responsibilities and the reemergence of American oriented business practices but I see no assurance of that happening. It may not happen at all. Why? All the information that any reasonable person should need to figure out what needs doing has been in plain sight for decades … but we keep smoking and drinking and guzzling fatty foods and gasoline. Other democracies have failed for a variety of reasons. This is ours.
— Warren Faulk
Warren Faulk has written a book called “Still Looking For My Hinny,” an online book about animal husbandry, fishing, hunting and war. Available from authorhouse.com
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