Energy Independence in Brazil

Thursday, June 30, 2011

"In 1974, at the time of the first oil shock, Brazil imported 80 percent of its oil and the United States imported 30 percent. By 1994, as a result of the Brazilian ethanol program on the one hand and the lack of any meaningful energy independence policy in the United States on the other, both countries imported 45 percent of their oil. Since 1993 America's dependence has grown from 45 percent to 60 percent, while Brazil's has declined from 45 percent to zero. Not only that, but in 2006 Brazil became a net energy exporter, independent in oil and earning some $600 million in foreign exchange by exporting ethanol to Sweden and Japan."

- Robert Zubrin (from his book, Energy Victory)

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Cars 2 Hints at Fuel Choice Issue

The following was written by Marty Niland in an article entitled, Cars 2 Has Fun With Energy Issues. "Cars 2" arrived in theaters last weekend.

Like most releases from Disney's Pixar studios, “Cars 2” has treats for both the children in its target audience and their parents. For the kids, it's physical comedy gags and a message about self-esteem and friendship, all set in a James Bond sendup action thriller. For the grownups, there is a compelling plot line all about energy, wrapped in stunning digital animation.

Most of the gang from the original 2006 movie is back for this sequel. Owen Wilson voices the affable race car Lighting McQueen and Larry the Cable Guy is the lovable clown Mater, who becomes the main character this time around by unwittingly getting caught up in an international spy caper involving “Big Oil” and alternative fuels.

That's where the adults get hooked into the story, and it happens from the opening scene, which culminates in a chase through an offshore oil platform. The “bad guys” are all old “lemons” (Pacers, Gremlins and the like), who happen to be part of a gang that owns world's largest oil reserves. Their big obstacle is that Sir Miles Axelrod — an electric-converted, former gas guzzling SUV voiced by Eddie Izzard — has developed an alternative fuel, Allinol. He's using a “World Grand Prix” race series, featuring Lightning and a host of international cars, to promote it.

In the midst of it all comes a plot to make Allinol look dangerous. Two British agents, voiced by Michael Caine and Emily Mortimer, recruit Mater in their mission to find out who's behind it. Is Allinol really a safe alternative to gasoline? Will Lightning survive the race series running on the alternative fuel? And can Mater save his friend's life without getting killed himself in the process?

Viewers find all the answers through an amazing digital animation job that produces incredibly realistic and colorful skylines and landscapes around the world. The film is rated G.



From the Pixar Wikia site, we find a clarification about Allinol:

In Cars 2, it is first believed that Allinol is the result of Miles Axlerod's research to find the renewable, clean-burning energy source of the future. Axlerod is a former oil baron who sold off his fortune, converted himself into an electric car and created the clean-burning fuel of the future: Allinol! He believes it's the fuel everybody should be using. To promote his new product, he organized the World Grand Prix.

It is later revealed that Allinol is, in fact, gasoline engineered to explode when it comes into contact with radiation. During the Grand Prix, he plans on showing the world how unstable and dangerous alternative fuels are. This is part of a plan to turn the world against alternative energy and have them rely on gasoline. Why? Because Miles Axlerod is still an oil barron. He and his henchmen secretly own the largest untapped oil reserves in the world.

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World Oil Celebrates the 4th of July

Wednesday, June 29, 2011

The following is written by Alan Anderson, president of the non-profit National Association of Proficient Renewable Biofuels (NAPRB).

As we look forward to a long weekend patriotically celebrating our nation's independence, we should take the time to remember that there are those who revel in the fact that in one aspect of our lives, we are not independent.

We can celebrate all we want about being free from English rule and having the freedom to make our own laws governing our future, but the harsh reality of the world shows we aren't truly as independent as we use to be. Forces from around the world have conspired to keep us (and most of the rest of the world) in a stranglehold.

The Organization of Petroleum Exporting Countries (OPEC) was founded in 1960 to increase the price of the crude oil produced by their respective countries. According to US government, this year OPEC will break a trillion dollars in earnings for the first time, soundly beating their previous record of $965 billion in 2008.

As of November 2010, OPEC members collectively hold 79% of world crude oil reserves and 44% of the world’s crude oil production, affording them considerable control over the global market. OPEC's influence on the market has been widely criticized since it began to control the world price of oil.

So when you hear American politicians talking about drilling more and lowering prices as the way to "Oil Independence," just remember they don’t control OPEC’s influence on the market, and they can't.

Anne Korin and Gal Luft of the Institute for the Analysis of Global Security define our problem with America's dependence on oil in a way that opens the possibility of a solution. Our attempts to solve the problem have led nowhere because the problem we need to solve is oil's strategic status.

Oil's strategic status stems from its virtual monopoly over fuel for transportation, which underlies the global economy and our entire way of life. The most effective and most efficient way to reduce or eliminate oil's strategic status is to use technologies already available to us — to use vehicles and facilities we already have, to use car manufacturing techniques we already use, to use liquid fuel delivery systems we already have, and to use fuels that come from different sources.

In Fiscal Year 2008, "Americans paid $900 billion for their oil supply," writes Zubrin, "and the world as a whole paid $3.6 trillion. These petroleum costs were up by a factor of ten from what they were in FY 1999, and they represent a huge, highly regressive tax on the world economy." And it continues to increase. Abe Shackleton writes:
Americans paid $80 billion for oil in 1999 and they paid $900 billion ten years later. This is equivalent to a "33 percent increase in income taxes across the board," according to Zubrin.

And 60 percent of that money was handed over to foreign governments. Let that sink in. We're paying a lot more now than we were paying then — for the same product. It doesn't seem like we've been spending that much on gas, but the money we pay for oil doesn't only go into our own car's gas tank. The "income tax" is across the board. Rising oil prices increase the cost of everything shipped somewhere, which means just about everything.

This transfer of wealth from the rest of the world to OPEC nations is terrorism. Al Qaeda has explicitly made attacking oil supplies their goal, calling oil "the provision line and the feeding to the artery of the life of the crusader's nation." From 2004 to 2008, attacks on oil fields in Iraq alone prevented one to two million barrels of oil from entering the world market, which kept the oil market $20-25 per barrel higher than it would have been otherwise.

This extra "tax" on the economies of Europe and the United States from terrorist attacks on oil facilities added up to an additional $65 to $85 billion dollars a year leaving Western economies. Terrorists have attempted to disable Abqaiq (in Saudi Arabia), the largest oil processing facility in the world. Several attempts to drive explosive-filled trucks and planes into Abqaiq were luckily thwarted. Had they been successful, they could have easily sent oil above $200 a barrel for an extended period of time, causing incalculable economic losses and a far greater transfer of wealth to Middle Eastern governments.

So now we see that we can’t drill our way to Energy Independence. The way out is to cure ourselves of our oil addiction. There are two ways to do that. One is to make fuels in America that are non-petroleum based, and the other is to produce vehicles that run on those fuels. We need to use what we have, like large crops such as corn and even more importantly, sugar crops such as energy beets.

If American ethanol production used 50% corn and 50% sugar crops to produce ethanol, it would reduce the price of fuel by nearly 50%. The ethanol business has had its ups and downs in the past 40 years but done smartly it will be the future of our economic recovery.

The second factor is the vehicles we drive. We need a policy that encourages the production of cars that can run on fuels other than gasoline (or in addition to gasoline). Flex Fuel Vehicles (FFV) are an obvious way to begin this transition. FFV technology is being used around the world in cars, trucks, buses, and even OTR trucks.

With both of these solutions in place we would dramatically reduce the strategic status of oil and eliminate it as a strategic commodity. America’s national security would improve and our economy would rebound with increased capital and jobs.

America needs politicians who aren’t afraid to stand up for the American people and not for oil executives that use our oil addiction to profit by financing political careers. Every American needs to tell their state and federal leaders that they support change in transportation energy policy that includes Flex Fuel Vehicles and fuels made from crops grown right here in America. One way to do that is to write your congressional representatives and tell them to support The Open Fuel Standard Act of 2011 (HR 1687).

Someday soon Americans can again call ourselves independent, but not until we kick the oil addiction and free ourselves from OPEC's rule.

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Alan Anderson

Alan Anderson with his wife, Jeanne.
Alan Anderson is a freelance writer focusing on green renewable alternative fuels such as sugar based ethanol and biodiesel. He has written for many online publications including Newsvine.com, The Energy Collective, and EnergyBoom.com.

Anderson is president of the newly formed non-profit organization, the National Association of Proficient Renewable Biofuels (NAPRB), and he's an ardent supporter of the Open Fuel Standard Act of 2011.

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What Were Automakers Thinking?

Tuesday, June 28, 2011

In a public statement a couple weeks ago, automakers asserted their strong opposition to the Open Fuel Standard which you can read about here. The critical sentence in their opposition was: "The tri-fuel vehicle mandate proposed in H.R. 1687 will cost consumers more than a billion dollars per year to buy vehicles for which a limited supply of fuel would be available." It's a clever sentence, sounding like a lot of money on first reading.

It's a strange thing for them to say for a couple of reasons. First, right now consumers pay no sale price difference between flex fuel cars and gasoline only cars.

And even if it costs the industry (not the federal government) a billion dollars, the industry is so large that the difference is only $100 per car in a year with ten million cars sold (a rough average of American car sales).

$100 per car is 0.4% of $25,000, a common car price. The US imports 9 million barrels of oil per day, and the one billion dollar expense asserted by automakers is about one day's worth of US oil imports.

At recent methanol prices ($1.28 per gallon), adjusting for the lower energy density (2.01) of methanol (and assuming gasoline is selling at $3.05 per gallon), fueling the new ten million cars with methanol and driving them the national average of 15,000 miles per year, and assuming the 2011 CAFE standard of 27.3 mpg, the average consumer would save $257 per year, and the US fleet of cars would save ten million times that, or two and a half billion dollars in the first year.

That benefit, paying for the expense in less than six months, would continue for the life of the cars — about eighteen years.

And these numbers are all very conservative. Think of the long term impact and you'll see that this is additive: While the first year of change will add ten million cars with open fuel capability (resulting in two and a half billion dollars in savings), there will be another ten million cars the second year for a total of twenty million cars (resulting in a five billion dollar savings), and so on.

Assuming total fleet replacement (and say the entire US fleet is only 200 million cars) in 20 years, this would equal a fifty billion dollar a year savings to US consumers. On top of the above hard cost savings, there is immeasurable value in developing options for energy sources by removing monopolistic power from petroleum asset owners.

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Fuel Choice in America and the End of Oil Addiction

Monday, June 27, 2011

The following is a 28-minute high-production value documentary that explains why the Open Fuel Standard is so important. It includes clips of interviews and powerful comments by Robert McFarlane, James Woolsey, Frank Gaffney, Anne Korin, Gal Luft, Paul Werbos, Edwin Black, Mark Dubowitz, Megan Ortagas, Bill Holmberg, Donald, Yale, Steve Marshall, Chelsea Sexton, Greg Breukelman, Johanna Mendelson Forman, and Jack Hidary.

This is the video to share with your friends, your family, and your representative:

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Five Ethanol Myths, Busted

Sunday, June 26, 2011

The following was written by Forrest Jehlik, a researcher at the U.S. Department of Energy’s Argonne National Laboratory. In writing this post, Jehlik was not paid by, nor did he benefit from, the ethanol industry or its lobby. His research is energy-neutral and his paycheck remains the same regardless of his findings.

The United States consumes nearly one-quarter of the world’s petroleum production, yet contains a small fraction of its reserves. As other countries’ economies grow, the appetite for this finite energy source increases, placing greater pressure on the resource itself and the environment at large. With inflation and higher energy costs consuming an ever-larger portion of our budget, the need for additional energy sources grows.

We must develop a multitude of alternatives to address our future energy needs. One such alternative is ethanol, which is domestically generated and sustainable. However, there are many myths surrounding ethanol, and I’ve come across a lot of them in my work at Argonne National Laboratory. I’m a mechanical engineer in the lab’s Transportation Technology R&D Center, so I’ve spent a lot of time researching ethanol.

Here are counterpoints to five prevalent myths about ethanol.


Myth No. 1: Ethanol requires more energy to make than it yields.

False. Argonne National Laboratory research has shown that corn ethanol delivers a positive energy balance of 8.8 megajoules per liter. The energy balance from second-generation biofuels using cellulosic sources is up to six times better, according to a study published in Biomass and Bioenergy Journal.

There are two key reasons ethanol is no longer net energy negative.

First, corn production efficiency has increased dramatically: Producers now grow 160 bushels per acre today versus the 95 grown in 1980, and corn yield continues to increase.

Second, ethanol production has become more energy-efficient. Today, more than 90 percent of corn used in ethanol production goes through a dry milling process that uses far less energy than the wet milling process used before. The combination of more corn per acre, coupled with a reduction of energy input to process ethanol, has resulted in a favorable energy output. The gallons of ethanol yielded per bushel of corn has also increased by about 50 percent.

Myth No. 2: Ethanol production reduces our food supply.

False. Only 1 percent of all corn grown in this country is eaten by humans. The rest is No. 2 yellow field corn, which is indigestible to humans and used in animal feed, food supplements and ethanol.

Specifically, a bushel of corn used for ethanol produces 1.5 pounds of corn oil, 17.5 pounds of high-protein feed called DDGS, 2.6 pounds of corn meal and 31.5 pounds of starch. The starch can be converted to sweeteners or used to produce 2.8 gallons of ethanol. DDGS displaces whole corn and some soybeans traditionally used in animal feed. The United States is a large exporter of DDGS to China and other countries.

Additionally, the food-versus-fuel debate has spurred significant research and development of second-generation biofuels like cellulosic ethanol that do not use food crops. Cellulosic ethanol is made from the “woody” structural material in plants that is unusable by humans. Unlike food crops, ethanol crops and cellulosic ethanol crops can grow in any soil that will sustain grass.

Researchers, including Argonne, are investigating using marginal land to grow ethanol crops. Studies from the U.S. Department of Energy suggest the United States has enough non-edible biomass to produce approximately 30 percent of our total transportation fuel requirements by 2030. That could go a long way toward easing our reliance on imported petroleum.

Taken together, the increase in crop yield and the use of marginal lands can enable us to produce food and fuels.

Myth No. 3: Ethanol crops and production emit more greenhouse gases than gasoline.

False. A 1996 EPA study analyzing sources of air pollution confirmed that gasoline vehicles and non-road equipment are the largest contributors to vehicular gaseous hazardous air pollutants. However, another study showed ethanol reduces tailpipe carbon monoxide as much as 30 percent and tailpipe particulate matter emissions by 50 percent (.pdf). And blending ethanol with gasoline dramatically reduces carbon monoxide tailpipe emissions and tailpipe emissions of volatile organic compounds that form ozone.

Finally, a life cycle analysis of ethanol found “at present and in the near future, using corn ethanol reduces greenhouse gas emission by more than 20 percent, relative to those of petroleum gasoline.” Blending cellulosic ethanol with gasoline to make E85 brings the reduction to 63 percent. Some purpose-grown woody crops for next-generation fuels actually increase soil carbon enough to yield over a 100 percent reduction in GHG emissions.

Myth No. 4: Ethanol requires too much water to produce.

False. The amount of water used to make ethanol has declined dramatically. Today, producing one gallon of ethanol requires about 3.5 gallons of water. That’s a little more than it takes to process a gallon of gasoline. Much of the criticism about ethanol’s water requirements stem from the need to irrigate feedstock crops in drier climates. But most ethanol is produced from rain-fed crops grown in the Midwest.

In addition, ethanol is not carcinogenic and doesn’t poison groundwater or the ocean. Ethanol rapidly biodegrades. Concerns over ethanol spills are muted by ethanol’s low toxicity. In fact, you’ll find ethanol in beer, bourbon and other happy-hour beverages you’ve probably consumed.

Myth No. 5: Cars get lower gas mileage with ethanol.

OK, this one’s true. If you completely burn a gallon of gasoline and a gallon of E85, you’ll get 25 percent less energy from the E85. Flex-fuel cars that run on gasoline and ethanol see 25 percent less mileage with ethanol. However, a gallon of ethanol costs approximately 17 percent less than that of a gallon of gasoline. In some, but not all, regions, the fuel-economy deficit is recovered by cheaper fuel costs. As the market grows and matures, production optimization would further drive down ethanol costs.

Research currently underway takes advantage of ethanol’s characteristics in a fully optimized engine that could greatly reduce the energy deficit. Last year, for example, Delphi cut the fuel economy penalty by one-third — while simultaneously increasing power. Downsizing the engine, combined with cheaper E85, would result in cost savings to the consumer, potentially making E85 more favorable than gasoline. On the plus side, ethanol has a higher octane rating than gasoline so it can improve performance.

On a final note, it’s important to take a step back and really look at our nation’s energy position. Currently, the United States consumes 20 million barrels of oil per day, approximately a quarter of the world’s total. Seventy percent of that petroleum is used for transportation.

To meet that demand, we import 65 percent of what we consume. Yet, there are a number of hidden costs associated with the use of petroleum. A study conducted in 2003 showed that the true cost of a gallon of gasoline (including all indirect costs) was $5.28 per gallon. Yet in 2003, the average pump price for a gallon of gasoline was only $1.50. One can imagine what the actual cost is today by factoring in such indirect costs.

We produce about 900,000 barrels of ethanol per day in the United States. That surpasses the volume of petroleum we import from Nigeria and is within striking distance of the amount that we import from Venezuela or Saudi Arabia. Ethanol is making a real contribution to our energy needs and reducing our dependence on imported petroleum.

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Ethanol Policy and Meat Prices: Unspinning the Truth

Saturday, June 25, 2011

The following was written by Geoff Cooper, Vice President of Research and Analysis for the Renewable Fuels Association. In addition to overseeing market analysis and policy research, he provides regulatory support and strategic planning for the association and its members. Geoff also manages RFA programs related to sustainability and ethanol co-products.

Opponents of biofuels are doing their best to spin the results of a new study released by the Geneva-based International Center for Trade and Sustainable Development (ICTSD). Anti-biofuel groups like ActonAid, Oxfam, and the Environmental Working Group selectively promoted certain findings from the study in a last-ditch effort to influence G20 talks in Paris focused on food price volatility. But anyone who took the time to actually read the ICTSD study in its entirety knows that the report’s main conclusions are at odds with the picture that is being painted by anti-biofuels crusaders.

In fact, the study strongly supports the argument that biofuels policy has had almost nothing to do with food price increases in recent years. The study found that “…US ethanol subsidies during this period (2005-2009) had little impact on consumer prices and quite modest impacts on crop prices.” It concluded that the most significant impact of U.S. ethanol policy on retail food prices was a two-cent-per-dozen (1 percent) increase in egg prices in just one of the last five years. Meanwhile, retail prices for beef, pork, and poultry meat were impacted by “much less than 1 percent.” (For graphic representation of these results, click here.)

The ICTSD study was authored by Iowa State University professor Bruce Babcock and it builds upon a recent CARD paper that we wrote about here. Professor Babcock ran a complex economic model to examine how U.S. ethanol policies influenced prices for agricultural commodities and food products from 2005-2009. For commodities, Babcock found that the impact of ethanol policy on corn prices was “modest.” The largest impact on corn prices occurred in the 2007 marketing year when prices would have been $0.30 per bushel (7.1 percent) lower than they actually were, according to the modeling results.

The impact on wheat, rice, and soybean prices “was even smaller,” Babcock wrote.

As for consumer food prices, the impacts of ethanol policy were negligible. The chart below comes from the study and shows actual prices for eggs, broilers, pork, and beef compared to what prices would have been had there been no ethanol policy in place.

Click on image to see larger.

For broilers, the modeling results show that prices wouldn’t have changed by even one penny/pound if we hadn’t had ethanol policies in place. For pork, prices would have been one penny/pound lower (three-tenths of 1 percent) in one year, but identical in the other four years. It’s the same for beef, with prices identical in four years and only one penny (two-tenths of 1 percent) lower in one year. The largest impact was for eggs, where prices would have been two pennies (1 percent) per dozen lower in one year if we hadn’t had ethanol policies in place.

Clearly, based on the study’s results, one can conclude that U.S. ethanol policies have not been a factor in retail food prices in the last five years and have been only a modest driver of commodity prices. In addition, any microscopic impact on food prices that might be attributable to ethanol policy would be overwhelmingly offset by the savings on gasoline prices that results from increased ethanol use.

Not surprisingly, the strategy of flaunting the ICTSD study’s results as evidence that biofuels policy is somehow contributing to food price increases has back-fired miserably for the anti-biofuels crowd. The G20 agriculture ministers wisely didn’t take their bait; they saw right through the bombastic press releases and pithy sound-bites.

It has been widely reported that the G20 group has agreed on an “action plan” that rightly focuses on boosting agricultural productivity, reining in excessive speculation in commodity markets, improving market transparency and information flow, and other activities that can make a real difference.

Much to the chagrin of the extremists at Oxfam and ActionAid, the G20 leaders wisely opted to avoid brash actions on biofuels policies. Instead, they plan to continue to study and monitor the impacts of biofuels on agricultural markets.

Read more about the food versus fuel issue:

The Food Industry's Propaganda Campaign Against Ethanol

BBC: Will Biofuel Leave the Poor Hungry?

Ethanol Policy and Meat Prices: Unspinning the Truth

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OFS Has Another Co-Sponsor!

Representative André Carson
Representative André Carson, a Democrat from the Seventh District of Indiana, joined the list of co-sponsors for the Open Fuel Standard Act of 2011.

If he is your representative, please send him your congratulations, a hearty thank you, and urge him to convince his fellow representatives to join him in his stand for national security, economic revitalization, American jobs, cleaner air, and energy independence.

You can follow Rep. Carson on Twitter here.

If your representative isn't on the list of co-sponsors yet (see the list here or find it anytime in the upper right sidebar of the web site), please call or write, making the best argument you can.

Learn more about calling your representative.

Learn easy ways to write your representative.

Sooner is better than later.

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Ziva Brazil, What Do We Have?

Thursday, June 23, 2011

The following was written by Alan Anderson, a freelance writer focusing on green renewable alternative fuels such as sugar based ethanol and biodiesel. He has written for many online publications including Newsvine.com and EnergyBoom.com.

Brazilian sugarcane
I've never been to Brazil, but I'm told that everyone who visits there is struck by two things relative to energy production: The major progress they've made in building their alternative fuels industry and secondly, how the U.S. appears to be so far behind in comparison.

At the end of 2010, the country was a net exporter of crude oil. That's right: A net exporter. What do they know that we don't?

Both Brazilians and Americans were hit by the same "Arab Oil Embargo" in the early 1970s, but the outcomes look much different almost 30 years later. In the U.S., gas prices skyrocketed from 25 cents per gallon to over one dollar within just a few weeks of the embargo. The American Automobile Association recorded that up to 20 percent of the country's gas stations had no fuel for at least one week during the crisis, creating long lines and lots of distress.

To ease the pain, the Nixon administration launched a series of conservation measures — lowered speed limits, pushed for alternative energy sources, and created the Energy Department, just to name a few of many initiatives.

President Jimmy Carter would later call the oil situation in the 70s "the moral equivalent of war" and it was certainly one of the defining issues of his presidency.

But as oil prices eventually began to ease, American interest in energy self-sufficiency waned and the perception of a "crisis" fell by the wayside. Despite steady growth in alternative energy sources, renewable fuel made up less than five percent of the U.S. energy supply.


Crisis Mentality

Perhaps the crisis just seemed that much more severe south of the border. Brazil's government was already burdened by huge debts to the International Monetary Fund and higher oil prices further complicated recovery efforts. Although the military-ruled government controlled domestic oil production through state oil giant Petrobras, it was unable to keep up with demand, fight inflation, and deal with growing political tensions.

In response to the oil crisis, government leaders launched Programa Nacional do Alcohol (Pro-Alcohol program) to take advantage of Brazil's massive sugarcane production while providing inexpensive fuel to Brazilians. The move toward greater self-sufficiency was a source of great national pride.

"Brazil decided as a national policy they would not be subject to imported oil and mandated that every filling station would have alcohol fuels. The government stepped in to make that happen," says Rick Tolman, CEO of the National Corn Growers Association. He said Brazil saved an estimated $53 billion because nearly 80 percent of the country's energy needs were produced domestically.


Alcohol Ups and Downs

Brazil's initial program was a big success for consumers and lowered the country's dependence on foreign oil imports. But there were a few bumps along the road to energy independence. For example, many car engines had trouble starting on the ethanol-mixed gasoline. Brazil started pouring more money into research, and began producing ethanol-only cars. By 1985, more than 90 percent of the cars produced in Brazil ran on alcohol.

However, the cost to subsidize the alcohol program added to the country's debt repayment problems and put pressure on government leaders to make more changes in their energy strategy. The price of crude oil fell dramatically and stayed down, and the state-owned oil monopoly, Petrobras, wanted to sell gasoline to their own markets, rather than exporting barrels at a loss.

Alcohol shortages in 1989 and 1990 further undermined the popularity of alcohol fuels as demand for the highly popular fuels outstripped supplies. By 1995, sales of alcohol-powered cars plummeted to less than 5 percent of total vehicle sales.


Bi-fuel Cars Spur Rebirth

The successful launch of bi-fuel or "total flex" vehicles by Volkswagen and General Motors in 2003, coupled with rising global petroleum prices, is once again spurring growth in Brazil's alcohol fuels industry. The Brazilian automotive industry is manufacturing cars that can run anything from 100 percent gasoline to 100 percent alcohol, or any mix of the two — and maintaining the same level of vehicle performance.

Today, nearly 50 percent of Brazil's cars run on ethanol only, in addition to the 90 percent of new cars that have "mix-fuel" engines. And Brazil is beginning to produce and use biodiesel — diesel made out of vegetable oils — for its trucks and buses.

Brazil continues to press forward with their alternative fuels program by announcing that starting in January 2010 all the diesel fuel sold in Brazil will be B5 (diesel blended with a mixture of 5% vegetable oil). Several years ago when the B5 blend was first proposed, it wasn't scheduled to take effect until 2013, but they have managed to reach their goal three years ahead of schedule. The B5 blend has lots of advantages for Brazil. It is less polluting than traditional diesel fuel and it generates jobs in the rural areas that grow the feedstock.

Currently, soybean oil accounts for about 80% of the vegetable oil used in the blend followed by tallow and cottonseed oil. The government has set up programs encouraging the use of other oils such as palm oil, nut oil, and castor bean oil, but those programs will take years to mature. In the meantime, soybean oil is going to be the primary feedstock because it has the volume and the logistical support to make it work. As the biodiesel program continues to expand in Brazil, more and more of Brazil's soybean oil will be used domestically instead of going into the export market.


Can We Catch Up?

The World Agricultural Forum provided a great opportunity to point out that the U.S. is really an "underdeveloped country" in terms of what Brazil has done. One way the United States can catch up with Brazil is to have the Open Fuel Standard Act of 2011 enacted into law. The bill would require that starting in 2014, 50% of new passenger and light-duty automobiles sold in the US be vehicles capable of operating on another fuel in addition to, or in place of, gasoline — whether natural gas, electricity, biodiesel, hydrogen, flex fuel vehicles that can run on blends of methanol and ethanol, or others, as well as a catch-all provision for emerging or new and unknown technologies.

In 2016, this requirement goes up to 80% and in 2017 the requirement becomes 95% for every year thereafter. Manufacturers can still choose which type of vehicles or combinations they wish to produce, but if we are going to remove our dependence of foreign oil and secure our nation’s economy we cannot continue to sell vehicles powered solely by gasoline.

There is a big difference between the alternative fuel programs in the U.S. and Brazil. In Brazil, their alternative fuel program is a source of national pride. Virtually everyone agrees with the goal of being energy independent and they are committed to helping the country achieve that goal.

Last year, Brazil passed a major threshold of using more alcohol for fuel than gasoline. Now Brazilians are convinced that they can grow their fuel supply as well as supply alternative fuels to the rest of the world. In a study released in early 2009, the Brazilian sugarcane association estimated that Brazil could replace 10% of the world's gasoline if they increased their sugarcane production by two and a half times.

In Brazil there is unity of purpose when it comes to alternative fuels. I don't think you can say that about the U.S. alternative fuel program.

Together, ethanol, methanol, and biodiesel present a tremendous opportunity to diversify our supply of fuel for cars, buses, trucks, planes, ships, and heavy-duty vehicles. And with The Open Fuel Standard, we the American people can again feel that same sort of national pride Brazilians have for their dedication and hard work beating the Oil Addiction.

Alan Anderson
Carmichael, CA

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Obama Over a Barrel, Decides to Pull Plug Hoping Drivers Forget

Faced with another decision by OPEC not to raise production quotas for oil, and calling the “war” in Libya serious enough to disrupt oil supply, the Obama Administration and dozens of other countries will release oil from strategic petroleum reserves to temporarily lower the world price of oil (and make us more vulnerable to oil's strategic status).

Such action clearly demonstrates that the rhetoric from the Administration to “lessen” our dependency on foreign oil is not backed up by action.

Rather than endorse and work for solutions to increase the variety of domestic fuels and build infrastructure that would lessen America’s dependency on foreign oil, the Administration chooses to play politics with oil, knowing that the price of gasoline drives political public opinion. It is good timing. They can't take this action during an election year.

The fact that they were able to get 23 other countries to go along is amazing. Then again, maybe it's not so amazing, given that our dollar is their currency...and right now our economy is struggling.

If there was ever a doubt that politics and not emergencies led to this decision, Politico headlined a report on June 21, “Obama Not Safe on Gas Prices Yet” saying, “But cheaper gas through the summer won’t ease the pressure on the president, according to Democratic strategists. A year ago, a gallon of gas was almost a dollar less. “Gas prices are where the rubber meets the road at the intersection of foreign and domestic policy,” said pollster Brad Bannon. “Prices have gone down, but voters are still steamed.”

The New York Times highlights the real reason for the drawdown — the “political calendar.” In a report on June 23, they wrote, “One person with knowledge of the decision said it appeared to be driven by several factors: the United States political calendar; the need to bring down prices for advanced economies; the expected increase in demand as the summer vacation season gets under way; and frustration at the failure by OPEC to raise production.

“You don’t get elected with gas at $4 a gallon,” he said. “If you were looking solely at fundamentals, the I.E.A. would have moved after the Libyan crude came off the market.” He added: “It looks like it’s about price management, but you will never hear that from the I.E.A.”

Price management? Nah. Price manipulation. Who should the FTC be investigating now for anti-trust action in the oil markets? How about the political operation inside the White House?

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Converting Non-Food Biomass Into "Crude Oil"

This is an example of the kind of innovation explosion we are seeing more and more as our brilliant minds are turning to the quest for alternative fuels. From Fuel Fix:

A Houston-based biofuels firm named "KiOR" which is backed by billionaire venture capitalist Vinod Khosla, has developed a proprietary technology to convert non-food biomass into a crude oil substitute.

The oil can be further refined into gasoline or diesel blends that can be blended with petroleum-based fuels and “dropped in” to the nation’s existing fuel infrastructure without modifications. In that way, it is different from ethanol, the most widely used alternative fuel in the U.S., which requires separate pipelines, storage and distribution systems to handle it.

KiOR also says its process for producing gasoline and diesel blendstocks emits 80 percent less greenhouse gases than the process used to make conventional gasoline and diesel.

KiOR currently operates a demonstration plant in Pasadena, which the company calls the world’s first to produce renewable crude oil from biomass. At that plant, the firm is converting wood chips into the crude substitute.

The company is planning its first commercial scale plant in Columbus, Miss., with plans to build others in Georgia and Texas at a later date. Several companies including Hunt Refining, Catchlight Energy and FedEx have already agreed to buy fuels produced at the plant.

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Turning Garbage Into Ethanol

Municipal solid waste, new ethanol feedstock
A municipal solid waste-to-ethanol project in Lake County, Indiana will begin producing ethanol and electricity in 2013. Powers Energy of America Inc. has arranged to acquire the solid waste from nearby communities.

Once operational, CEO Earl Powers expects the facility to take in up to 8,000 tons of municipal solid waste per day, 2,000 tons from Lake County and up to 6,000 per day from nearby Chicago.

Lake County has established a collective interlocal purchasing agreement that offers the 19 communities within the county the option to join and pay Powers Energy $17.25 per ton to take their waste, as opposed to about $40 per ton charged by local landfills. “There’s no penalty if they don’t join, however the cost savings is significant,” said Jeff Langbehn, executive director of the Lake County Solid Waste Management District.

The local waste industry has been one of the ethanol project’s largest opponents, according to Langbehn. “That’s because it’s going to take an enormous amount of waste out of the landfills,” he said. “That’s where they make their money and I understand that. [But] from the citizens’ standpoint, it reduces our costs and gives us an alternative energy source, not only in the ethanol but also in the electricity that it also produces.”

Community members and elected officials in Lake County are also in favor of the project because it is expected to provide 400 construction jobs and 400 well-paying, full-time positions when the plant is complete, Langbehn said. “We’re an economically blighted area so there’s a lot of excitement around the plant,” he added.

Powers said the company also plans to begin construction of another facility in Fairfax County, Virginia this year, adding that a company there has agreed to provide 6,000 tons per day of municipal solid waste. Powers Energy’s long-term plan calls for four more plants to be finalized next year and each following year, ramping up to an eventual total of 45 plants producing 2.1 billion gallons of municipal solid waste-based ethanol.

Langbehn said he encourages other waste managers to entertain the prospect of these types of facilities and offered to provide all of the information related to the project to any interested party.

The above is excerpted from the article, It's a Go For MSW-to-Ethanol Plant Near Chicago.

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New Bacteria Could Make U.S. Ethanol Industry Even Greener

Wednesday, June 22, 2011

Greener bacteria.
The following are excerpts from an article on Reuters:

A compost bacteria bred by a British company could be set to transform both the profitability and environmental credentials of the U.S. ethanol industry.

"The application of our technology results in the greening of corn ethanol," Hamish Curran, chief executive officer of TMO Renewables Ltd said in an interview on Tuesday.

The company provides an industrial unit, or plug-in, which can be attached to a biofuel plant to boost output by recycling a by-product of the initial fuel run.

"If they take a plug-in from TMO, corn ethanol becomes an advanced biofuel," he said, referring to biofuels which provide savings of at least 50 percent in greenhouse gas emissions compared with mineral petroleum.

TMO has developed an industrial process built around common bacteria developed from a strain found in compost heaps which can be retro-fitted to U.S. corn ethanol plants.

Curran said the TMO technology uses a by-product of the U.S. corn ethanol industry, distillers' grains, converting it into additional ethanol and boosting production levels by about 15 percent.

He said U.S. corn ethanol plants also currently use large amount of energy drying the distillers' grains before selling it as fodder for livestock.

The TMO process uses the material while still wet, allowing substantial energy savings as well as additional output, raising profit margins by 50 to 60 percent, he said.

Biofuels are currently made mainly from food crops such as grains, vegetable oils and sugar cane, which has led to debate about whether they might help to drive up food prices.

They are seen as a way to reduce emissions of the greenhouse gases believed to contribute to climate change but environmental groups have questioned the green credentials of some processes, including U.S. corn-derived ethanol.

Many firms want to develop so-called second generation fuels which use non-edible products such as corn stover, the stalks and leaves of the corn plant, or even municipal waste.

Curran said 25 owners of U.S. ethanol plants had expressed interest in the process and full-scale industrial trials had been conducted for four of them at the company's demonstration plant in Dunsfold Park, just south of London.

He said TMO was working with ethanol producers to secure federal and state grants as well as loan guarantees for the plug-ins.

Curran said the company had also received interest from China with a delegation set to visit later this month centered around using the TMO process to turn products such as rice straw or wood waste into fuel.

On their web site, TMO says, "Our process is available immediately under licence to the ethanol industry, where it can achieve a dramatic and instantaneous increase in profitability.

"Performing equally well in our own demonstration plant as it did on the laboratory desk, it is ultimately scaleable in the industrial context.

"The organism at the core of our process is thermophilic (thrives under high temperatures), which greatly reduces the energy costs involved in conventional ethanol production.

"The process requires the addition of relatively small quantities of enzyme, and takes hours, rather than days."

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Definition of "Second Generation Biofuels"

Jatropha, a second generation crop
First generation biofuels are made from sugars and starches, easily digested by yeast. Second generation biofuels turn the more difficult-to-digest portions of a plant into fuel. Since a much larger part of any plant is the difficult-to-digest part, second generation technologies can generate much more fuel in a more sustainable way.

Second generation biofuels turn non-food crops, and non-edible parts of plants into fuel. For example, stems, leaves, husks, grass, jatropha, miscanthus, woodchips from industrial waste, skins and pulp from fruit processing, etc.

Many of the grasses used to produce biofuel can be grown on land that isn't good enough to grow crops, and with far less fertilizer and lower consumption of energy to cultivate and harvest.

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Definition of "Biomass"

Biomass means "plant material." As we use it here, we mean vegetation or agricultural waste used to make fuel.

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Definition of "Advanced Biofuels"

An advanced biofuel is a high-energy liquid fuel made from a feedstock that is not used for human or animal food and can be sustainably produced with a renewable source of biomass.

More info: Advanced Biofuels USA.

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New Plans for Facilities to Turn Miscanthus Into Ethanol Fuel

Harvesting miscanthus for fuel.
Farmers in Northeast Ohio and Pennsylvania are being recruited to grow a special grass that can be converted to biofuel energy. Some are already planting miscanthus, a durable grass that won't spread and requiries little fertilizer and care. It can be harvested and converted to energy pellets and biofuels, like ethanol and other kinds of fuel.

Aloterra Energy has plans to build a biomass conversion plant near Ashtabula Harbor and predicts that with support companies, 1,200 jobs will be created. Ashtabula County has lost manufacturing jobs and many farmers in the area have been struggling, so this is welcome news.

Aloterra is partnered in three similar plants in Missouri and Arkansas.

The above is excerpted from an article here, which also has a video news story on the announcement and farmers' reactions to it.

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Large Cellulosic Biofuel Facilities Gaining Momentum

Tuesday, June 21, 2011

Kior’s process turns wood waste into synthetic crude. 
Biofuel startup Kior, Inc. said it could raise as much as $241 million in its initial public offering on the Nasdaq Global Market, almost double the original figure the company gave in April.

Based on the estimated prices, Kior will more than double the $100 million it previously planned to raise in an I.P.O. (initial public offering). If Kior’s shares sell at midrange prices, the company will be valued at $2.3 billion. The company plans to use the proceeds for a portion of the funding needs for its first commercial production facility to be built in Newton, Mississippi by the third quarter of 2012.

Said to be the largest cellulosic biofuels facility in the United States upon completion, Kior expects to spend between up to $70 million over the next 12 months to build the $350 million production hub.

Unlike many biofuel companies, Kior’s process turns wood waste into synthetic crude, the product named Re-crude. Chemically identical to gasoline and diesel fuel, this biofuel produce can be a substitute for fossil fuels rather than just being an additive in the form of ethanol.

Kior uses a catalyst and a technique called fluid catalytic cracking, a process borrowed from oil refining. The company’s synthetic crude reportedly has 92 percent lower carbon emissions footprint compared with fossil fuel-based crude, said Fred Cannon, Kior president.

The company is shooting for an unsubsidized gasoline or diesel production cost of below $1.80 per gallon for its wood chips-to-biocrude technology. Kior said this is $1.10 cheaper than producing a gallon of ethanol.

Kior is planning to have a production capacity of approximately 250 million gallons of biofuel from four large biorefineries, including two Mississippi plants plus sites planned in Georgia and Texas. The Newton facility is designed to process around 1,500 tons of feedstock per day, which is three times the size of the company’s initial-scale commercial production facility in Columbus, Mississippi which started building in the first quarter. The $190 million Columbus plant will be in business by the second half of 2012.

Kior is the third biofuel company to go public since last year, backed by investors at Khosla Ventures’ $1.1 billion clean technology fund. Colorado-based biofuels startup Gevo made its debut on the Nasdaq on February 9 of this year and raised as much as $117.5 million at $16.78 per share. Gevo produces isobutanol.

Amyris Biotechnologies based in Emeryville, California raised $84.8 million in an I.P.O. last September 2010, after a $16 per share pricing. Amyris' technology uses genetically modified yeast that consumes biomass and churns out a renewable fuel similar to Kior’s that resemble fossil fuels in chemical makeup.

The above is excerpted from an article by Oliver M. Bayani. Read the whole thing here.

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A Day My Kids Will Remember Forever

The following was written by Alan Anderson, a freelance writer focusing on green renewable alternative fuels such as sugar based ethanol and biodiesel. He has written for many online publications including Newsvine.com and EnergyBoom.com.

It started out as a normal day like any other. Jeanne and I were going to the pool for our granddaughter's first swim lessons with their mom Tracie. Everything was wonderful at the pool and the kids loved it. We loaded up the car and headed home from the park when I saw the sign at the gas station across the street that seemed to me to be lit up like Broadway on a Friday night. The sign read "E85...$3.25."  I let out a loud yell — “Hell yeah! That’s what I’ve been talking about!”

Every face in the car was now fixed on me wondering what I was talking about. I pointed out that we passed probably 15-20 gas stations on our way to the pool, all with unleaded gas from $3.70-$3.95. They quickly looked and saw the price of E85 and asked, if it’s so cheap, why can’t we all use it? Being the overly passionate one in the family when it comes to alternative fuels, I went into a long story about engines and the EPA and auto companies. Within five minutes everyone was bored with the details, so I dropped the lecture for the rest of the trip home.

Deep down inside I kept this raging fire of patriotic glory the rest of the day. I got home and checked out the pump and gas supplier and sure enough it was that company "Propel" I’ve been hearing so much about out here on the West Coast. Yes! I finally have the fuel I’ve wanted at my corner gas station — E85.

Oh, but wait. I don’t have a flex fuel vehicle yet. Here I’ve been fighting for the change for so long, and I don’t even have a FFV yet! No worries, neither do 99% of my neighbors within a 100-mile radius. We might call this the chicken before the egg syndrome. Then I thought to myself, "I am still fighting for the Open Fuel Standard Act to require American auto manufacturers to produce more Flex Fuel Vehicles for the chance of having true economic freedom from that strategic commodity that has dominated world for over 150 years — OIL.

Thank you, Propel Fuels, for lifting up that American patriotic spirit in me today, and thanks to all the other companies like Propel Fuel that offer us this choice at the pump that we Americans will soon be calling "Freedom Fuel" — grown by Americans, manufactured by Americans, and used to explore America from coast to coast. So why hasn't this American spirit continued on to Washington, D.C.?

Are we going to make a difference in our lifetime? Why not? Why not now? Why not on something as simple and important as the lives of American soldiers? For every barrel of oil we buy to turn into gas we spend a bag of blood, shed by a brave young soldier to defend U.S. oil interests somewhere in the world.

Now is the time to stand up and tell your congressional representative to support freedom, jobs, economic and national security by supporting The Open Fuel Standard Act of 2011 (HR 1687). It's free, it costs the taxpayer nothing, it costs the government nothing but the ink to sign the bill. And your children and grandchildren will thank you someday for standing up for them and changing a 150 year-old wrong done to America.

Alan Anderson
Carmichael, CA

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Energy Independence Myths and Solutions

Monday, June 20, 2011

The following is summary of a colorful, well-written, two-page PDF file you can print out and share with others, entitled Energy Independence Myths and Solutions.

People talk a lot about "energy independence" but they usually fail to make the very important distinction between electricity and fuel. We are already energy independent in generating electricity. But that's not the case for transportation fuel because 97% of American cars, trucks, ships, trains, and planes can run on nothing but petroleum, and we import a good deal of it.

The only thing that can give us energy independence is fuel choice. If most cars were flex fuel vehicles, fuel pumps everywhere would have competing fuels available, allowing us to choose, and every time someone chose something other than petroleum, it would lower the amount of oil we import until that number reaches zero. At that point, we would be energy independent for fuel as well as electricity.

Flex fuel technology already exists. We don't need to wait for any more research. The cars are already being made and work just fine. Flex fuel technology is inexpensive. According to GM, who makes most of the flex fuel cars in America, it costs $70 or less to give a car the capacity to run on ethanol, methanol, and gasoline, and any combination of them in any proportion. Ethanol and methanol can be made from a huge variety of materials from coal and natural gas to biomass and waste.

Right now there are not enough fuel pumps that deliver alternative fuels. That will change when most cars are flex fuel cars. In fact, it will only take about three years to have 30 million flex fuel cars on the road, and that's the magic number. When we reach 30 million flex fuel cars, most fuel stations will be financially justified to install an alcohol pump. Gasoline will then have serious competition. Oil companies will have to lower their prices or lose our business.

Many people think we can solve our foreign oil dependence by either drilling more or using less. Neither of these will lower the price at the pump or stop funding dangerous regimes. When we produce more oil, OPEC produces less, thus keeping the price high. When we use less, OPEC also responds by producing less, keeping prices high.

They can do this because of their monopoly. What will break up the monopoly is competition.

OPEC's manipulation of oil prices has made our trade deficit much worse, has helped to fund terrorist organizations, and helps keep America-hating regimes in power.

Electric cars may be a very important contributor to our continued fuel independence in the long run, but flex fuel vehicles can be done today on a massive scale with almost no money. It is not an either-or proposition. While we're working on making electric cars more affordable, we can achieve complete energy independence. And then we can have plug-in hybrid flex fuel cars and look in the rear view mirror to see OPEC eating our dust.

An estimated $100 billion of the U.S. defense budget is related to oil. The American military protects oil shipping lanes, protects the oil-producing countries, and fights to defend the U.S. and its allies from terrorist groups funded by oil money.

By becoming energy independent, the U.S. will be in a much less vulnerable position when dealing with foreign countries. We must each urge our representatives to pass the Open Fuel Standard Act of 2011 and bring about true and total energy independence. Click here to contact your representative now.

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Your Ticket to Fair Gas Prices and Energy Security

Sunday, June 19, 2011

The following was a bulletin sent out to Act for America members by Kelly Cook, their National Field Director. 

Face it. We’ve been played.

OPEC (Organization of the Petroleum Exporting Countries) is playing a deadly game with America. Their oil price fixing mechanism is legendary in the unjust world of anti-trust schemes.

The fact is that oil prices in the $15 to $20 a barrel range provide plenty of fair and reasonable profits for any oil exporting nation. Then why are oil prices today over $100 per barrel? OPEC is laughing all the way to the bank.

Here’s the game: OPEC, through willingness to price fix among its 12 nation partners, gradually ratchets up the price of oil through secretly agreed-to reductions in supply. They don’t care if they’re not producing as much oil. The skyrocketing prices on the oil they do produce are more than enough to provide for their lavish lifestyles and...their generous donations to worldwide Islamic jihadist operations.

As soon as the American public starts to really feel the pain at the pump and begin to lobby their members of Congress to do something about it, oil supplies “magically” increase and the price of gas settles down just enough to prevent the outrage that was about to boil over. And so the cycle goes — by design!

We at ACT! for America are tired of being played in this deadly game of supplying the enemy with the resources to attack us. This is why we are fully supporting the Open Fuel Standard ACT of 2011. We are calling for Members of Congress to enthusiastically co-sponsor this vital legislation.

Why the Open Fuel Standard Act? Imagine you’ve got a flex fuel car — a car that has been retro-fitted to accept at least 2 different kinds of fuel. You notice the price of regular gas just hit $4.10 per gallon. Because you can also run on methanol (or electricity, natural gas, etc), you check the current price for methanol which is approximately $1.65! Now that you’ve got “Fuel Choice,” you fill up with methanol! Methanol can be produced from natural gas and biomass (common trash, plant wastes, landfill materials, etc). Therefore, it’s a potential environmental winner as well.

What happens when tens of millions of consumers start taking advantage of fuel choice and switch to other fuels? OPEC is forced to bring down its prices in order to compete. Game over. The price of oil per barrel would plummet down to its natural market trading range of $10 to $25 per barrel.

How can we be so sure of this? Brazil has already done it — back in the 80’s and it’s still working for them! Do you know that two of the major car suppliers to Brazil’s flex fuel market are GM and Ford? Brazil’s proven success demonstrates that a single nation can employ this strategy successfully as a solitary nation against the forces of worldwide markets.

Why shouldn’t the U.S. and other major oil consuming countries follow suit? The transition costs are minimal when compared to the tremendous savings and security we all will enjoy through fuel choice!

I know some of you are asking: “What about Drill Baby Drill”? We are enthusiastically in favor of  strategies to disarm OPEC and their deadly allies. We need to develop all forms of energy, especially our unfathomable supplies of oil, natural gas, coal and nuclear energy technologies. Encouraging fuel choice through the Open Fuel Standard ACT of 2011 will only enhance these and other needed developments.

***Action Items***

1) Invest 5 minutes to support fuel choice for your gas tank and for the nation! Contact your member of Congress and urge them to be a co-sponsor for H.R. 1687, the Open Fuel Standard Act of 2011. We are starting to pick up real momentum in this process! Please make sure your member of Congress is a co-sponsor. Click Here to complete this simple process.

2) Check out the amazing new website dedicated to the passage of the Open Fuel Standard Act of 2011. Please sign up for email updates and find out the many reasons we need to actively promote this bill. The resources this site has amassed are considerable. There are many factors involved that we just don’t have the space to cover in a single email. Please avail yourself to this vital information. Click Here for this creative new website!

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Will the Rising Price of Oil Lead to a Double-Dip Recession in 2011?

The following article was written by Neil Goldstein of Energy Alternatives. Originally published here.

When the economy tanked in 2007 – 2008, everyone placed the blame for the crisis on subprime mortgages and the housing bubble, inflation in financial assets in general and the overextension of consumer debt. But, while those economic factors certainly were tinder for the fire, some of us have argued that a run up in oil prices was the spark that set off the blaze. By forcing people to choose between spending money on gasoline, on mortgage payments, or on everyday purchases for consumer goods, the enormous, sudden spike in the cost of energy in 2007 is what drove us over the brink. For an excellent analysis of this impact, see the Brookings paper “Causes and Consequences of the Oil Shock of 2007-2008” by James Hamilton. It should be noted that in a previous study Hamilton pointed out that 10 of the 11 U.S. recessions since WWII have been preceded by an increase in oil prices.

Now that the economy is threatened once again, and consumer retail purchases have dropped for the first time in nearly a year people once again doubtlessly will argue about what caused the drop. If this decline continues, people will look back to this period and ask “What was the cause of the decline of 2011?”

Certainly one cause of that most recent decline may be reduced manufacturing output and another may be lower stock market prices — both of which, in turn, may be a result of the fear of a possible default in Greece, diminished Japanese output after its tsunami, and China’s slowing growth rate. And any such manufacturing decrease and stock market decline have, in turn led to fewer jobs, lower incomes and diminished consumer confidence. We leave it to economists like Professor Hamilton to quantify the impact and determine whether those factors have been greater or less than energy prices in causing the most recent economic decline. But whatever their relative effect, it is undeniable that rising oil prices have once again made it impossible for consumers to spend on other goods and services, and are a significant factor behind the decline. In fact according to Hamilton’s most recent analysis, the increase in energy costs has reduced GDP growth by about 1%.

Of course one cannot fairly blame President Obama or Congress for the tsunami in Japan or for economic conditions in Greece and China. But one can place the blame squarely on their shoulders for a failed U.S. energy policy that has done next to nothing to reduce our dependence on foreign oil and insulate us from the repetition of the oil shocks we suffer time and again.

One of the reasons for that failure is a tendency in Washington to confuse and conflate the contentious issue of Global Warming/Climate Change with the very separate and far-easier-to-address issue of dependence on imported oil. Energy Independence does not require controversial solutions like carbon taxes or cap and trade. And, while there may not be a quick fix for Global Warming, there is a quick fix to painlessly reduce foreign oil consumption by nearly 25% in less than a decade, without harming the economy and while improving environmental conditions. It’s called the Open Fuel Standard (see www.ea-21.org/details.html for a comprehensive discussion of the strategy for reducing our dependence on foreign oil).

So, when future historians ask what caused the economic decline of 2011, the answer will be clear: The failure of Washington leadership to rein in energy prices and offer Americans an alternative to oil, when those in Washington had every opportunity to do so.

Energy Alternatives has a tool that makes it easy to send a letter urging your representative to become a co-sponsor for the Open Fuel Standard Act. Click here to send the letter. Or click on the button below:

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What Happened in the Senate Last Week?

Saturday, June 18, 2011

Senator Tom Coburn
Three significant votes in the Senate on ethanol last week seem confusing at first glance. First they voted against an amendment that would stop tax incentives for ethanol (it's a tax credit oil companies receive for blending ethanol into gasoline, which helps the oil companies, of course, but it also helps the ethanol industry by encouraging oil companies to add ethanol to gas).

Two days later, the Senate voted on the same amendment, but this time in favor of it.

And then a half hour later, they voted to keep federal support for ethanol blender pumps.

So is the Senate in favor of ethanol or against it? The answer is: They are in favor of it. They made the first two votes for other reasons.

Senator Tom Coburn violated some serious protocol Tuesday, and that's largely the reason his amendment was defeated. Thursday, it was passed but for a different reason. The Democrats are hoping to remove tax incentives (subsidies) for ethanol in the hopes that the Republicans would go on record as being in favor of cutting tax incentives, so when the Democrats propose cutting tax incentives for oil companies, it would make the Republicans look bad if they voted to cut ethanol but not to cut the even greater subsidies oil companies get while making obscene profits.

And the Senate voted to keep supporting blender pumps because it will help the ethanol industry grow, and because alternative fuels are an important step toward energy independence, environmental health, and national security.

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Marc Rauch at the American Coalition for Ethanol Conference

The video below is a speech by Marc J. Rauch, the Executive Vice President and Co-Publisher of The Auto Channel. His talk is very relaxed, but he makes a lot of good points about alcohol fuels. He makes some surprising observations about flex fuel vehicles. The video is 43 minutes long.



If you liked that, here's part two (below), which is 18 minutes long.

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The Seeming Impossibility of Energy Independence

From an article entitled, A Declaration of Energy Independence, Dr. Robert Owens quotes eight presidents in a row — starting with Nixon's response to OPEC's first oil embargo — who committed themselves to achieving energy independence for the United States:

Richard Nixon said, “Let us set as our national goal, in the spirit of Apollo, with the determination of the Manhattan Project, that by the end of this decade we will have developed the potential to meet our own energy needs without depending on any foreign energy source.”

President Gerald Ford said, “I am recommending a plan to make us invulnerable to cutoffs of foreign oil…new stand-by emergency programs to achieve the independence we want…”

President Jimmy Carter said, achieving energy independence was the “moral equivalent of war.”

Ronald Reagan, always looking for the free market approach said we should look to, “native American genius, not arbitrary federal policy, to be free to provide for our energy future.”

In 1991, in the prelude to the First Gulf War, President George H.W. Bush announced, “There is no security for the United States in further dependence on foreign oil.”

In 2000, President Clinton said, “The nation’s growing reliance on imports threatens the nation’s security because it increases U.S. vulnerability to oil supply interruptions.”

George W. Bush repeated recent presidential history by insisting, in his 2003 State of the Union address, that one of his administration’s goals was “to promote energy independence for our country.”

Barack Obama continued the chorus saying, “America’s dependence on oil is one of the most serious threats that our nation has faced.”

This list makes the goal seem futile. But we haven't failed utterly. Far from it. We've successfully attained energy independence with electricity production. How? By having multiple sources. We produce almost no electricity from oil. We use coal, nuclear power, natural gas, hydroelectric, wind, solar, geothermal, and biomass to generate electricity in the United States. We are using an ever-growing variety of sources — and largely sources from within our own country — and that is the key to energy independence.

We've done it with electricity. We can do it with fuel. We still only use one source of fuel for 97% of our transportation: Petroleum. The Open Fuel Standard Act could successfully complete the accomplishment and fulfill the commitments of the last eight presidents. Here's how you can help.

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Building Sugar Beet Ethanol Plants From Milford to Pennsylvania

Sugar beet
The following is a report from Diversified Metal Engineering International:

This autumn, Atlantic Canada’s first fuel ethanol plant, a 300,000 litre/year pilot operation at Milford, Nova Scotia, has set out on an important production journey that could see the establishment of a number of profitable energy beet biorefineries throughout Canada and the U.S.

For the next 6-8 months, Atlantec Bioenergy's staff at the $10 million research facility will operate a modular system of integrated equipment — which includes a mobile feedstock cleaning unit, juice extraction equipment, fermentation tanks, process controls, dehydration equipment, an anaerobic digester, and a nutrient refinery.

With a juice-based sugar feedstock, Atlantec’s industrial energy beet system employs fewer processes than starch conversion corn ethanol technology and a lot less energy — 9,700 BTUs per litre of ethanol versus 32,500 BTUs for corn ethanol.

The company intends an energy self-sufficient operation by gassifying pulp for both heat and electricity production. It will also be 100% water self sufficient because beets are 75% water (corn is 15%).

The 2010 growing season saw 240 acres of energy beets grown, producing 35 tonnes of the high sugar yield beets per acre.

Success this year will open the doors to construction of a 20 ML plant in New Brunswick, possibly followed by a 60 MG plant in Pennsylvania, adding jobs, providing clean fuel, and helping to create energy independence for North America.

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Modular Ethanol Production System Wins Award

Friday, June 17, 2011

From an announcement on DomesticFuel.com:

The Future in Review technology conference was held last week and during the event, 11 companies were honored for their “world-changing” technologies. Scientists from around the world submitted more than 1,000 technologies for review and one of the winners was waste-to-energy company Easy Energy Systems (EES). The company’s technology is the Modular Ethanol Production System (MEPS) that turns any organic waste into ethanol. Materials that can be used include waste paper and milk whey. The units are pre-built, small and self-contained and can be shipped anywhere in the world where they are assembled into an ethanol plant.

“To be included as one of the featured companies at this event was a true honor for EES, and we are grateful to have had this opportunity,” said EES chairman and founder, Mark Gaalswyk. “This is an incredible event that does a wonderful job of bringing together the brightest and most innovative people in this industry. We expect to have a big year ahead for getting the MEPS to market, and it couldn’t have started off better than winning this recognition.”

MEPS is different than other large-scale ethanol plants in that it allows farmers, food producers and municipalities the ability to create ethanol from small batches of waste material that would usually be discarded. The patent-pending technology converts soda pop, wood, waste crop residue such as corn corns, food scraps, and more into ethanol.

Future in Review is an annual conference of global leaders, scientists and entrepreneurs aimed at working together to solve world problems.

Read more:

Biofuels company brings 450 new jobs

Modular ethanol system manufacturer expands with an eye on waste

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Biofuels That Don’t Kill Soldiers

The following was written by Alan Anderson, a freelance writer focusing on green renewable alternative fuels such as sugar based ethanol and biodiesel. He has written for many online publications including Newsvine.com and EnergyBoom.com.

Thursday, June 16th, 2011, was a hot day clear across the country. At around 11:00am EST 72 Senators voted to destroy the American dream of being energy independent from oil. It was by all accounts a bad day in American history. This may all seem a bit dramatic to some people. There are millions of workers in the ethanol industry today who might just end up like so many of the rest of us, out of work.

So what is going to happen today, June 17th, 2011? Americans are going to wake up to renewed hope in their government again. Yes, it was a bad 24 hours, but hope is here again. Senators Grassley, Harkin, Johnson, Klobuchar, Franken, Thune and others are going to get together and fix this problem once and for all.

America needs to stop playing with corn as the primary feedstock for ethanol. Sugar-based ethanol from sugar beets, sweet sorghum and switchgrass is going to have to be developed and soon. There is room for the use of corn ethanol as a supplement to our new ethanol system but not more than half. Then we need a mandate for the auto manufactures to produce flex fuel vehicles (FFV) like they already do for Brazil (who also has sugar ethanol as their primary fuel and is not dependent on oil).

Americans talk about how free we are here. Hogwash. We’re addicted to oil and that has taken our freedom away. We support oil, we fight over oil, and oil countries control what we pay for it. That’s not freedom.

Starting today, June 17th, 2011, Americans want our leaders to get it right. We don’t have another 40 years to figure it out. Too many Americans have died for this thing we call oil. Democrats and Republicans need to realize this is our moon shot here in 2011. Get it right and you are heroes; get it wrong and we might as well just give up and invade Saudi Arabia and Iran.

A renewed ethanol business in America can put people back to work and end our country's financial problems. So let’s go senators! And feel free to ask for support from your friends in the Congress; they have a lot of great ideas too. It’s time we work together instead of working against each other. And remember, keep it a free market, so make sure oil companies lose their subsidies just like you did to ethanol. It just wouldn’t look good if you took something from the underdog but not from the bully. If we can get this done then we really are the greatest nation in the world. God Bless America.

Alan Anderson
Sacramento, CA

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How Taxpayers Subsidize the Oil and Ethanol Industries

Oil receives more taxpayer dollar support than ethanol, but ethanol is more dependent on the subsidy dollars for survival. In this piece on oil and ethanol subsidies, Todd Neeley shares the numbers and the sources he examined while preparing this report.

Neeley's report is an extensive and comprehensive detailing of all the supports, tax breaks, and subsidies the two industries receive, and he provides links for verification:


Here's Neeley's summary:

Tallying state, federal and other incentives exclusive to the oil industry, DTN's total comes to $17.9 billion annually. The comparable figure for incentives exclusive to ethanol is $7.1 billion. These figures do not include tax credits and other incentives that both industries share, such as the volumetric ethanol excise tax credit, also known as the blenders credit.

Total subsidies received by the oil industry, not just exclusive subsidies, range between $133.2 billion and $280.8 billion annually. It's a wide range, but a necessary one as many of the studies we looked at are made up of ranges themselves. Also, few if any, recent studies have been completed on many of the support areas we counted.

The comparative total support level for ethanol, not just exclusive subsidies, is at least $16 billion. The final number for ethanol is likely higher, due to the hundreds of state and local subsidies this young industry receives. We could not find a definitive list of such support, nor a firm dollar value for it.

People sometimes say, "If ethanol is so good, why would you have to subsidize it?" Well, if oil is so good, why would you have to subsidize it? Especially when oil companies consistently make obscene amounts of money?

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