refinery capacity is certainly an issue, which needs addressed, but what drives me bananas is that the oil companies are reporting record profits during all this.
It's basic economics. If they weren't making record profits, there would be no incentive to invest in new refining capacity. When demand outstrips supply, price goes up. The people supplying the resource make more money. The extra profits draws more suppliers into the market. The price settles down to an equilibrium.
Take the profit out, and producers have no economic incentive to produce more. The end result is a shortage, which means saying hello to gas lines again.
The retailers are the only ones not owned by the large oil companies, though they are bound by franchise agreements.
Oligopoly pricing works exactly be reducing supply. For instance when Prudhoe bay went down due to the pipeline problems. BP lost production capacity, but increased profits.
The article assumes that there is a perfectly competitive market when there isnt anything close to a perfectly competitive market. If there was, then refinery problems wouldnt have any effect on gas prices[by definition, a market is perfectly competitive when no buyer or sell by single action can affect the equilbrium price of the good].
He will blame everything in the world for gas prices but REFUSES to see any reason why anyone should try and conserve let alone *gasp* CONSIDER ALTERNATE FUEL SOURCES FOR THE FUTURE!!!1!
If anyone (*ahem* me) mentions hybrid cars, he goes into a spiel about how if the government didn't keep prices artificially fixed he wouldn't have to worry about it. They're trying to control his life! There's no need to think beyond using more gas because it's awesome.
John Stossel is an idiot, basicially every point he makes is false or can be alieviated such that the majority of energy allocation in ethanol production is solar and that costs in fossil fuels are lower than output.
Ethanol doesnt suck so long as you make it with a high density energy crop[I.E. high calorie]. Such as sugar beets or sugar cane[or some algaes, but i dont know much about that, but what i do know is that corn is very low density and we arent making ethanol out of it because its a good option].
You can see the benefit in Brazil, and would be able to see the benefit here... But with such a powerful corn lobby and subsidies, as well as tarrifs on sugar based ethanols it doesnt happen.
I am not sure what pointing out that its not perfect, and that one companys wildly optimistic claims[claiming production numbers 3 times larger than the theorhetical realistic maximum] are false has anything to do with the discussion.
Your link claims that under "real optimimistic"[as opposed to really optimistic] conditions we could supply the U.S. with oil using 2.3% of the current land used for agriculture in the U.S.
If we are off by 10 times that is still a bagain.[Because we have plenty of food, and because meat production consumes so much of U.S. agricultural land]
The majority of the ethanol issues are not due to problems with ethanol, but due to corn, sugar, their subsidies and tarrifs.
I dont think anyone rational is claiming its a miracle cure, but we are claiming its beneficial to U.S. interests abroad, and that much of the costs are offset through externality reductions.
Such comments as "Ethanol sucks" with a link to John "crazy fucking libertarian without a clue what he is talking about" Stossel are worthy of derision and correction.
The 2.3% number i gave you was not the estimation of the SA algal biofuel company. Their estimation would have produced numbers of .76%. Their quoted yield was 3 times greater than the number required to hit 2.3. The number that produced the 2.3% estimate was an estimate by U.S. scientists working for the federal government and was a top end estimation of what could be done in the U.S. The guy doing the numbers in the link confirms this should be possible, though unlikly
And Yea, that definitly is scaleable. And it definitly is a decent option in light of the current state of hydrocabon based technologies having permiated the market. Not that a more direct solar based electricl generation isnt better for general power[instead of coal or other non-renewable sources], its not a complete energy solution.
As for "omg we dont have enough food". I think the answer is "bwa ha ha ha ha ha ha ha ha ha"
We have so much land for food we are able to subsidize it at ridiculous rates. We have so much land for food it is more efficient to refine foods[using more acre/calorie] instead of selling them whole. We have so much land for food that meat is not a luxuary[livestock is 10 times less efficient in a land/calorie ratio than even low yield crops like corn]. We have so much land for food that we can produce enough food to drive producers in other countries out of business[and/or into cocaine/heroin production] because they cant compete with the subsidized products with such little demand, and they live in areas with DIRT cheap labor.
The U.S. is the most arable land rich nation on the face of the planet. With a little conservation, and care, we wont run into these problems you describe.
Being able to subsidize to the level that we do certianly means we have tons. Why? Beucase subsidies increase the quantity produced. Which means that we have enough land[because land is essentialy hard cap on production] to fuel such production.
The 2.3% number was based on THE TOTAL AMOUNT OF CURRENTLY USED LAND RIGHT NOW, AS IN THIS YEAR, we can substitute the ethanol for the natural gas and diesel for farm equipment and feedstock/fertilizer production.
The world has had grain shortages because developing nations cant produce at a profit because of... you guessed it, food subsidies in the U.S. being so strong they cant make money producing staple foods.
We have always had major battles over water rights in the midwest and west, we will always have major battles over water rights. That doesnt mean that we dont have a lot of arable land, it means we have shortage of water due to lots of production.
No, the basic thrust of the article is that the specific claim that the company was making was unlikly. It does not address any other claim, it does not go into capital costs of such ventures[though it does ask the question of what they would be]. But it does cite numbers that would be able to produce substantial biodiesel/ethanol using a fraction of the total land used for agriculture, and does not dispute these numbers
You then use this attack on an unrelated venture to state that ethanol and biodiesel are worthless. Which is a false dichotomy. It does not need to be perfect to be worthwhile, it just needs to be worthwhile.
Net energy gain on ethanol is perferable[not better, but preferable] to all forms of non-sustainable oil production as well it is very favorable when produced in a sustainable manner. Its carbon neutral, its domestic, its not controlled by monopoly/oligopoly interests, it can conform in production to market economies, and its not a natural resource you can fight over[not well at least]. As well, the major reason that ethanol production is so inefficient is because all agriculture production is terrible inefficient, about 100 times less efficient than it was in the 50s.
Your point that there are some basic constraints we are going to be working at is stupid because we are so far away from hitting those restraints that sensible policy can keep us away from the edges. There is literally no way we can even come close to using all the land unsustainably if we cut the subsidies.
And the reson that food prices have shot up recenty? Its not anything to due with shortages, its because the food is grown so damned far from your house, they have to ship it in. And those shipping costs increase as oil price rises. Localy produced food prices have remained very stable.
![[community profile]](https://www.dreamwidth.org/img/silk/identity/community.png){kind=small}
![[identity profile]](https://www.dreamwidth.org/img/silk/identity/openid.png){kind=small}
![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png)
timeasmymeasure
no subject
Date: 2007-05-23 09:34 pm (UTC)m'lady doth protest too much, methinks
no subject
Date: 2007-05-23 09:38 pm (UTC)Take the profit out, and producers have no economic incentive to produce more. The end result is a shortage, which means saying hello to gas lines again.
no subject
Date: 2007-05-24 06:49 am (UTC)Though they do take steps to intentionally hamstring it, since such actions increase the cost of gas which directly affects them.
See: Alaskan Pipeline rupture[where they knew about the problem for years, but didnt fix it until it was a convienient time to reduce supply].
California refinery shut downs and restrictions. Shit, refinery shut downs freaking everywhere.
no subject
Date: 2007-05-25 12:24 am (UTC)The things that the article doesnt mention.
The retailers are the only ones not owned by the large oil companies, though they are bound by franchise agreements.
Oligopoly pricing works exactly be reducing supply. For instance when Prudhoe bay went down due to the pipeline problems. BP lost production capacity, but increased profits.
The article assumes that there is a perfectly competitive market when there isnt anything close to a perfectly competitive market. If there was, then refinery problems wouldnt have any effect on gas prices[by definition, a market is perfectly competitive when no buyer or sell by single action can affect the equilbrium price of the good].
no subject
Date: 2007-05-23 11:37 pm (UTC)He will blame everything in the world for gas prices but REFUSES to see any reason why anyone should try and conserve let alone *gasp* CONSIDER ALTERNATE FUEL SOURCES FOR THE FUTURE!!!1!
If anyone (*ahem* me) mentions hybrid cars, he goes into a spiel about how if the government didn't keep prices artificially fixed he wouldn't have to worry about it. They're trying to control his life! There's no need to think beyond using more gas because it's awesome.
no subject
Date: 2007-05-23 11:50 pm (UTC)Incredible.
no subject
Date: 2007-05-24 12:51 am (UTC)http://www.townhall.com/columnists/JohnStossel/2007/05/23/the_many_myths_of_ethanol
no subject
Date: 2007-05-24 06:56 am (UTC)Ethanol doesnt suck so long as you make it with a high density energy crop[I.E. high calorie]. Such as sugar beets or sugar cane[or some algaes, but i dont know much about that, but what i do know is that corn is very low density and we arent making ethanol out of it because its a good option].
You can see the benefit in Brazil, and would be able to see the benefit here... But with such a powerful corn lobby and subsidies, as well as tarrifs on sugar based ethanols it doesnt happen.
no subject
Date: 2007-05-25 12:49 am (UTC)Your link claims that under "real optimimistic"[as opposed to really optimistic] conditions we could supply the U.S. with oil using 2.3% of the current land used for agriculture in the U.S.
If we are off by 10 times that is still a bagain.[Because we have plenty of food, and because meat production consumes so much of U.S. agricultural land]
The majority of the ethanol issues are not due to problems with ethanol, but due to corn, sugar, their subsidies and tarrifs.
I dont think anyone rational is claiming its a miracle cure, but we are claiming its beneficial to U.S. interests abroad, and that much of the costs are offset through externality reductions.
Such comments as "Ethanol sucks" with a link to John "crazy fucking libertarian without a clue what he is talking about" Stossel are worthy of derision and correction.
no subject
Date: 2007-05-25 04:47 am (UTC)And Yea, that definitly is scaleable. And it definitly is a decent option in light of the current state of hydrocabon based technologies having permiated the market. Not that a more direct solar based electricl generation isnt better for general power[instead of coal or other non-renewable sources], its not a complete energy solution.
As for "omg we dont have enough food". I think the answer is "bwa ha ha ha ha ha ha ha ha ha"
We have so much land for food we are able to subsidize it at ridiculous rates. We have so much land for food it is more efficient to refine foods[using more acre/calorie] instead of selling them whole. We have so much land for food that meat is not a luxuary[livestock is 10 times less efficient in a land/calorie ratio than even low yield crops like corn]. We have so much land for food that we can produce enough food to drive producers in other countries out of business[and/or into cocaine/heroin production] because they cant compete with the subsidized products with such little demand, and they live in areas with DIRT cheap labor.
The U.S. is the most arable land rich nation on the face of the planet. With a little conservation, and care, we wont run into these problems you describe.
no subject
Date: 2007-05-28 06:58 am (UTC)The 2.3% number was based on THE TOTAL AMOUNT OF CURRENTLY USED LAND RIGHT NOW, AS IN THIS YEAR, we can substitute the ethanol for the natural gas and diesel for farm equipment and feedstock/fertilizer production.
The world has had grain shortages because developing nations cant produce at a profit because of... you guessed it, food subsidies in the U.S. being so strong they cant make money producing staple foods.
We have always had major battles over water rights in the midwest and west, we will always have major battles over water rights. That doesnt mean that we dont have a lot of arable land, it means we have shortage of water due to lots of production.
no subject
Date: 2007-05-28 09:04 am (UTC)You then use this attack on an unrelated venture to state that ethanol and biodiesel are worthless. Which is a false dichotomy. It does not need to be perfect to be worthwhile, it just needs to be worthwhile.
Net energy gain on ethanol is perferable[not better, but preferable] to all forms of non-sustainable oil production as well it is very favorable when produced in a sustainable manner. Its carbon neutral, its domestic, its not controlled by monopoly/oligopoly interests, it can conform in production to market economies, and its not a natural resource you can fight over[not well at least]. As well, the major reason that ethanol production is so inefficient is because all agriculture production is terrible inefficient, about 100 times less efficient than it was in the 50s.
Your point that there are some basic constraints we are going to be working at is stupid because we are so far away from hitting those restraints that sensible policy can keep us away from the edges. There is literally no way we can even come close to using all the land unsustainably if we cut the subsidies.
And the reson that food prices have shot up recenty? Its not anything to due with shortages, its because the food is grown so damned far from your house, they have to ship it in. And those shipping costs increase as oil price rises. Localy produced food prices have remained very stable.
no subject
Date: 2007-05-24 01:30 pm (UTC)