$3.65-A-Gallon for Gas!?! Tell Your Legislators You're Tired of Getting Bilked

Saturday, February 25, 2012

The Associated Press reported on February 25 that the national average for gasoline is $3.65/gallon, the highest on record for this time of year. In California the price has risen above $4/gallon.

Economists attribute high prices to fears over growing tensions with Iran, the third largest supplier of oil to the global economy. The Washington Post further notes that “available crude resources can barely keep up with growing demand worldwide.”

According to analysts cited by AP, “every 1-cent increase in the price of gasoline costs the economy $1.4 billion.” Since December, gas prices have risen 29 cents per gallon.

With elections approaching, the Obama administration is facing partisan attacks over his alleged obstruction of oil drilling permits.

While increased oil drilling could have a temporary, limited impact on gasoline prices in the short-to-medium term, neither a Democratic nor Republican administration would have any power to order OPEC to sustain an increase in production to create a larger buffer between supply and demand and thereby substantially reduce gasoline prices.

And absent some brilliant stroke of diplomacy between Iran, the United States and Israel or the nonviolent overthrow of the Iranian government, tensions will continue to mount over Iran’s pursuit of a nuclear weapons capability.

President Obama is right to state that there are no “quick fixes” to high gasoline prices but he could strengthen his record on economic growth and energy security in an election season by championing flex-fuel vehicles (FFVs) through legislation designed to stimulate free market competition.

The Open Fuel Standard Act, H.R. 1687/S. 1603, would stimulate private investment in economically competitive alternative fuels such as methanol by establishing a flex-fuel standard in the automotive industry.

Rather than being restricted to refueling your vehicle with gasoline costing $3.65/gallon or more (Californians must be envious of Americans who pay that price), you would be able to select at the pump whichever fuel is cheapest.

The energy equivalent of $3.00/gallon for methanol sounds much more appealing than current gasoline prices, which are only projected to increase due to rising demand from China and India.

Tell your elected representatives you want a bi-partisan solution to the problem of high gasoline prices and that The Open Fuel Standard Act, H.R. 1687/S. 1603, deserves their vote.

Thomas J. Buonomo is an Energy Policy Advocate for the Open Fuel Standard Coalition. He holds a Bachelor of Science in Political Science and Middle East Studies from the U.S. Air Force Academy and has spent the past six years researching U.S. energy and national security policy.

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Upcoming Event Reminder

Friday, February 24, 2012

The Open Fuel Standard Coalition is hosting a panel discussion February 29th at 1:00 PM. The title of the event is "Opening the Fuel Market: A Key to Economic Recovery."

Time: 1:00 PM until 2:30 PM.

Location: 2168 Rayburn House Office Building (the Gold Room), Washington, D.C.

Speakers include Jim Woolsey, Frank Gaffney, Wesley Clarke, and Robert Zubrin.

Anyone can attend. Urge your members of Congress to be there. Here's how to contact your MOCs.

Click here or here to download a full-color, two-page PDF flyer for the event. For further information about the event, or to RSVP (preferred but not a requirement), contact Kellie Dunlap at 303.339.7932 or kdunlap@pioneerenergy-usa.com.

The Open Fuel Standard will open the fuel market to non-petroleum alternatives, introducing a competitive restraint on the price of oil. This will stimulate economic recovery and protect the United States from OPEC's arbitrary and self-serving oil prices.

Once the OFS is in effect, hundreds of billions of dollars will remain here at home, contributing to American businesses and workers, stimulating job growth while slashing our deficit. Let's make it happen.

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Rising Oil Prices Threaten Economic Crash

Saturday, February 18, 2012

From The Washington Times by Robert Zubrin:

IN RECENT DAYS, oil prices have climbed above $100 per barrel. As chaos spreads through the Arab world, we could soon see much worse.

According to recent testimony given to Congress by Federal Reserve Chairman Ben S. Bernanke, the current soaring oil prices are no reason for concern. According to the stock market, which has dropped hundreds of points each time oil prices have edged up another dollar or two, the situation is a five-alarm emergency. Who is right?

The likely impact of a new oil-price rise is shown in the graph below, which compares oil prices (adjusted for inflation to 2010 dollars) to the U.S. unemployment rate from 1970 to the present. It can be seen that every oil-price increase for the past four decades, including those in 1973, 1979, 1991, 2001 and 2008, was followed shortly afterward by a sharp rise in American unemployment.


The distress to American workers caused by such events is manifest, but the economic damage goes far beyond the impact on the unemployed. A sustained oil price of $100 per barrel will add $520 billion to the U.S. balance-of-trade deficit. Furthermore, there is a direct and well-established relationship between unemployment rates and the rates of mortgage defaults. Thus, the $130-per-barrel oil shock of 2008 didn't just throw 5 million Americans out of work, it made many of them default on their home payments and thus destroyed the value of the mortgage-backed securities held by America's banks. This, in turn, threatened a general collapse of the financial system, with a bailout bill for $800 billion sent to the taxpayers as a result. But that is not all. The destruction of spending power of the unemployed and the draining of funds from everyone else to meet the direct and indirect costs of high oil prices reduce consumer demand for products of every type, thereby wrecking retail sales and the industries that depend upon them.

Indeed, the world today is already in deep recession. Yet as a result of the systematic constriction of oil production by the Organization of Petroleum Exporting Countries (OPEC), which is limiting its production rate to 1973 levels of 30 million barrels per day, petroleum prices stand at more than four times what they were in 2003. This has imposed a tax increase on our economy of $500 billion per year, equal in economic burden to a 20 percent increase in income taxes, except that instead of the cash going to Uncle Sam, it will go to Uncle Saud and his lesser brethren.

These governments, however, are said to be our "friends." As current events in the Middle East should make clear, there is every chance that someday — perhaps soon — we could wake up and find that the world's oil is under new management, even less concerned with our well-being than the gang in charge today.

This is a fundamental threat to the American economy. We need to take action to protect ourselves from it now, before it is too late. How can we do this?

From looking at the data in the graph, it is clear that "cap-and-trade" plans or alternative methods of carbon or fuel taxation are not the answer. Indeed, by increasing the cost of energy even beyond those imposed by OPEC, they will only make the economic situation worse.

The only way out of this mess is forcefully to expand production of liquid fuels from sources outside OPEC control, particularly our own. That means unleashing our own domestic oil supplies through expanded drilling and also opening our vehicle-fuel market in a serious way to alternative fuels, such as methanol, which can be made cheaply from coal, natural gas or biomass and used in flex-fuel cars.

It may be too late already to stop the crash that will follow the current oil price run-up, but we still have to get started without further delay. Otherwise, while the crash itself will bring down world fuel demand and thus oil prices for a while, they will just rise once more when the economy begins to recover and slam us right back down again. And again. And again.

The time for action is now.

Robert Zubrin is president of Pioneer Astronautics and author of Energy Victory: Winning the War on Terror by Breaking Free of Oil (Prometheus Books, 2007).

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Instability of Top U.S. Oil Supplier Reinforces Need for Open Fuel Standard

Wednesday, February 15, 2012

Nigeria, the fifth top oil supplier to the U.S. as of September 2011, is experiencing increasing political instability as Boko Haram, an Islamist terrorist group with alleged ties to Al Qaeda, continues attacks against police, military and government targets as well as civilians throughout the country.

The group recently claimed responsibility for a suicide bomb attack on Nigeria’s army headquarters in Kaduna, a northern city divided between Muslims and Christians.

Last month Boko Haram attacks produced more than 185 fatalities in the northern city of Kano.

Endemic poverty, corruption and repression have fueled religious conflict in a country whose energy resources are vital to the global economy.

The significance of the threat posed by Boko Haram and its interactions with international terrorist organizations prompted a congressional hearing as well as a report published last November by the House Committee on Homeland Security’s Subcommittee on Counterterrorism and Intelligence.

Oil Pipeline Attacks

A second militant group, the Movement for the Emancipation of the Niger Delta, has resumed attacks on oil infrastructure in protest against the central government’s neglect of the region’s economic development as well as environmental damage wreaked by international oil companies. MEND’s most recent attack targeted a major oil pipeline operated by Italian company ENI, which announced that it has lost 4,000 barrels of oil per day as a result.

At the height of its activities in 2006 MEND succeeded in cutting up to 25% of Nigerian oil production.

Energy Security

While the symptoms of these problems can be temporarily suppressed through law enforcement measures or military force, the long-term challenge is to address the endemic corruption, poverty and political disenfranchisement plaguing Nigeria as well as other vital oil exporters such as Iraq and Saudi Arabia. U.S. officials can press for political and economic reforms directly and through multilateral institutions such as the World Bank and IMF but ultimately these changes must come from the citizens of these countries themselves.

On the domestic front we can reduce our risk of exposure by reducing our reliance on the energy resources of such unstable states. This would create a greater buffer to protect against surges in oil prices caused by anticipated or actual disruptions to supply. A more substantial buffer between energy supply and demand would protect American consumers and provide policymakers with more time to analyze and respond effectively to complex national security events. This would reduce the risk of overreaction that analysts such as Jean Herskovits sagely warn could contribute to a self-fulfilling prophecy further galvanizing the global Islamist militant movement against the West.

The Open Fuel Standard Act would create this buffer by ending the oil industry’s monopoly over the transportation fuels market.

Imagine if, instead of being forced to pay $3.50 or $4.00/gallon of gasoline caused by speculation arising from instability in the Middle East, Africa, or Latin America, you could fill up your vehicle with domestically produced methanol at an equivalent energy cost of $3.00/gallon or less.

The United States possesses abundant energy resources to achieve this and alternative fuels such as methanol are cost-competitive with gasoline today. The barriers are not technological or economic; they are political.

Removing these political barriers will require you to make your voice heard in Congress. Contact your elected representatives today and ask them to support H.R. 1687/S. 1603, the Open Fuel Standard Act of 2011.

It is up to us to challenge the oil industry’s increasingly precarious hold on our nation’s future.

Thomas J. Buonomo is an Energy Policy Advocate for the Open Fuel Standard Coalition. He holds a Bachelor of Science in Political Science and Middle East Studies from the U.S. Air Force Academy and has spent the past six years researching U.S. energy and national security policy.

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Event Announcement

Tuesday, February 14, 2012

The Open Fuel Standard Coalition is hosting a panel discussion February 29th at 1:00 PM. The title of the event is "Opening the Fuel Market: A Key to Economic Recovery."

Time: 1:00 PM until 2:30 PM.

Location: 2168 Rayburn House Office Building (the Gold Room), Washington, D.C.

Speakers include Jim Woolsey, Frank Gaffney, Wesley Clarke, and Robert Zubrin.

Anyone can attend. Urge your members of Congress to be there. Here's how to contact your MOCs.

Click here or here to download a full-color, two-page PDF flyer for the event. For further information about the event, or to RSVP (preferred but not a requirement), contact Kellie Dunlap at 303.339.7932 or kdunlap@pioneerenergy-usa.com.

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Now That's the Way to Make a Comment!

Saturday, February 11, 2012

One way you can help get the word out about the Open Fuel Standard is by making comments on articles and posts. Below is a good example. It is informative, to the point, and provides links for further information. Excellent. After an article on JihadWatch, someone named "Traeh" made the following comment:

HOW TO BREAK OIL'S MONOPOLY ON THE TRANSPORT SECTOR

By asking your representative in the U.S. House of Representatives to help pass the bill H.R. 1687 — the Open Fuel Standard Act of 2011 — you do something very practical to resist sharia and jihad.

The bill currently has over a dozen Republican and Democratic co-sponsors in the House of Representatives. Get your rep to co-sponsor it too!

The Open Fuel Standard Act of 2011 (HR 1687) would require a rapidly increasing percentage of new cars sold in the U.S. to include a small change that would cost only $100 a car. The fix would allow cars to run on any fuel and any mix of fuels (including methanol, ethanol, bio-diesel, or gasoline). The fix would break OPEC's power over the price of transport fuel. It would create price competition among fuels and increasingly allow drivers to choose at the pump which fuel they want to buy. The Open Fuel Standard Act of 2011 (HR 1687) is supported by a coalition of strange bedfellows who normally might not agree with each other: former national security officials, environmentalists, military bigwigs, evangelicals.

To see why to support the Open Fuel Standard Act of 2011 (HR 1687), check out this video featuring Frank Gaffney, Robert McFarlane, James Woolsey, Anne Korin, and others:

America's Fuel Choice: Breaking Oil's Monopoly on the Transport Sector

And check out this website: http://www.setamericafree.org

Set America Free is a coalition including Daniel Pipes of the Middle East Forum; Frank Gaffney of the Center for Security Policy; former CIA head James Woolsey; former National Security Advisor Robert McFarlane; former secretary of Energy Admiral James Watkins; former commander of the U.S. Pacific Fleet Admiral James Lyons; Orson Swindle, Former Commissioner of the Federal Trade Commission and Vietnam POW; and others.

See also this website: http://www.openfuelstandard.org

You can contact your representative to support the Open Fuel Standard Act of 2011 (H.R. 1687) by email if you go here:

http://www.actforamerica.org/index.php/contact-congress

But a thousand times more effective than email is to telephone your representative.

1) Click here to get your representative's phone number:
http://www.congress.org/congressorg/directory/congdir.tt

2) When you get to that website, just put your zipcode in the box, hit enter, then images of your representative (and your two senators) will appear.

3) Then click on your representative's picture, and several tabs will appear, including a "contact" tab.

4) Click on the contact tab and you'll see phone numbers for your representative.

If you telephone, politely ask the name of the staffer who handles flex fuel issues or energy issues, then ask to speak to that staffer. Politely tell the staffer you support passage of the Open Fuel Standard Act of 2011, HR 1687.

And have a look at this page: How to Influence Your Representative

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The Milk Man’s Lesson: Car Choice Can Work

By Christopher Ruddy in NewsMax

CAN THE UNITED STATES create jobs, lower the price of fuel, reduce emissions, and become energy-independent all at the same time?

The answer is, “Yes — and rather quickly.”

The simple answer correlates with a rather simple solution being evangelized by Marc Goldman, a former milk company executive from New Jersey.

Marc is not a household name, but he once made big headlines in New York for taking on the state’s powerful dairy interests and a system that kept milk prices artificially high by limiting competition among dairies.

Marc spent a small fortune and considerable time in court challenging that system, and in January 1987, won the right for his Farmland Dairies to sell milk in all of New York City and its suburbs — a victory that led to a sharp drop in milk prices for many New Yorkers.

The milk story really has nothing to say directly about energy, but it does have something to say about Marc, who has sold his milk company and now lives in Boca Raton, Fla.

Today, Marc spends his time on another worthy crusade — promoting the Open Fuel Standard Act of 2011, known in the House as H.R. 1687 and in the Senate as S. 1603.

The proposed bills create a “free market for fuel,” just as his victory in New York created a free market for milk, by requiring car manufacturers to give owners a choice in the fuel they use in their vehicles.

The bills call for “fuel competition” to reduce the nation’s dependence on foreign imports through greater use of domestic energy sources, and for an annually increasing percentage of automobiles sold in the UnitedStates to be flex-fuel capable.

This new law would require vehicles to be manufactured flex-fuel ready, adding less than $100 to the cost of each car, which would allow drivers to easily change the type of fuel their engine uses — from gasoline to other types of fuels, such as methanol or ethanol.

Such an option is available today in most cars in Brazil, where massive production of sugarcane ethanol has made Brazil the world’s first sustainable bio-fuel economy. It’s no accident that Brazil’s economy has been booming in recent years as the United States’ sags under high petroleum costs.

Rightfully, critics have complained that if the United States sharply increased the production of ethanol, made from corn or sugar, food prices would skyrocket globally.

This would be bad for everyone, and especially harm the poor.

But Marc points out that the United States has huge reserves of natural gas — by some estimates over 2,500 trillion cubic feet of recoverable reserves. He notes that natural gas is easily converted into methanol, and methanol use could save drivers at least 80 cents per gallon for the same energy a gallon of gasoline today provides.

Marc’s point here is that once the fuel option opens up in Americans’ cars, the free market will work to meet the demand. Natural gas will boost demand and spur other forms of biomass fuel to be mass produced. And, as demand for oil drops, the fall-off in petroleum prices will be catastrophic for suppliers.

Today, the lion’s share of global oil reserves is under the control of OPEC, a cartel with many member states that are openly hostile to American interests.

As for environmental concerns, experiments show that methanol and ethanol fuels yield fewer hydrocarbon and nitrogen oxide emissions than gasoline.

It’s a win-win for consumers, the environment, and the country.

To the bills’ opponents, perhaps energy expert Dr. Robert Zubrin, an aerospace engineer and author, puts it best in a National Review article:

“In whose interest is it that Americans should continue to be denied fuel choice, that America’s vast natural gas, coal, and biomass remain unusable as a source of liquid fuel, that America continues to give hundreds of billions of dollars each year to foreign potentates bent upon our destruction, instead of paying our own people to make fuel out of our own resources, that a foreign cartel retains unlimited power to raise the cost of our fuel?

“We can set ourselves free, but action is required.”

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New Co-Sponsor!

Saturday, February 4, 2012

Steve King, a Republican Representative from Iowa, is the newest co-sponsor for the Open Fuel Standard Act. If he is your representative, please give him a hearty acknowledgment. Rep. King is a fiscal conservative, and he knows the Open Fuel Standard Act will cost taxpayers nothing and yet strongly boost our economy and create American jobs.

Reach him on Facebook or Twitter.

If your representative hasn't yet co-sponsored this bill, it is time to get her or him on board. Start here: What You Can Do.

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Market-Based Future for Ethanol

Friday, February 3, 2012

By Gal Luft in The Washington Times

FOR YEARS, ETHANOL has been the fuel free marketers loved to hate. Much of this is for good reason. Ethanol represented what most Americans dislike about Washington: undue government intervention in the free market, abuse of taxpayer dollars and political favoritism. The result is that for many people, ethanol is identified with pork and corruption rather than with energy security.

But as of January 2012, Congress has ended the 30-year practice of putting $6 billion a year,known as the Volumetric Ethanol Excise Tax Credit, into the pockets of big oil companies for the ethanol blended into our fuel. Also finished is the 54-cent-per-gallon import tariff on Brazilian sugarcane ethanol. Now that ethanol has lost these protectionist measures, intellectual consistency warrants that free marketers continue to make wrong right. Unsubsidized ethanol should be able to compete with unsubsidized gasoline, methanol and other fuels at the pump so consumers can choose to purchase the cheapest fuel. Today, this cannot be done since most of the cars sold in the United States are blocked from burning anything other than gasoline.

At current oil prices, ethanol is more costly than gasoline while the alcohol fuel methanol, primarily made from natural gas, is cheaper than gasoline on a per-mile basis. But the comparative per-mile economics of ethanol could easily improve if, as a result of a war in the Persian Gulf, the fall of the House of Saud or collapse of Nigeria, oil prices were to soar into uncharted territory. Ethanol contributes more to the U.S. automotive fuel market than the oil we import from Saudi Arabia since the industry sustains nearly a half-million high-paying American jobs.

Aside from that fact, ethanol should be viewed as an insurance against economically devastating oil shocks that will hit us again sooner or later. According to Merrill Lynch, by adding supply to the fuel market in the summer of 2008, when oil reached $147 a barrel, ethanol was responsible for keeping the price of oil 15 percent lower than where it would have been otherwise. The savings to the U.S. economy that year alone far outweighed the subsidies the industry had enjoyed.

Congress should remove barriers to fuel competition so a variety of fuels, including ethanol, can be blended at any ratio consumers wish to pour into their tanks. An open fuel standard would ensure new cars sold in the United States have flexible fuel engines designed to run on any combination of gasoline, ethanol and methanol. According to General Motors, adding fuel flexibility to a new gasoline-only automobile costs about $70. All that it takes is a fuel sensor and a corrosion-resistant fuel line, since alcohol is more corrosive than gasoline. For such a minimal cost, consumers would be able to shift to competitive fuels on the fly next time oil prices go through the ceiling.

Ethanol trading also deserves the benefit of free competition. Congress did the right thing in removing the import tariff, opening the U.S. fuel market to ethanol made in friendly Brazil, as an alternative to petroleum from hostile countries. Lawmakers should now take on the equally scandalous environmental shell game that forces U.S. ethanol producers to export their product to Brazil rather than sell it domestically.

The United States exports ethanol to Brazil while Brazil exports it to the U.S. This paradox stems from a ruling by both the U.S. Environmental Protection Agency and the California Air Resources Board that producing sugarcane ethanol results in lower greenhouse gas emissions than producing corn ethanol. As a result, California, the largest ethanol-consuming state outside of the Midwest, imports sugarcane ethanol from Brazil rather than corn ethanol from the Midwest. In turn, corn ethanol from the Midwest is shipped to the Gulf of Mexico by rail and then to Brazil via tankers to replace the volume Brazil sends to the U.S.

Even if the EPA is correct that the production of sugarcane ethanol emits less greenhouse gas, the ruling results in burning a gigantic amount of marine fuel in the process of shipping corn ethanol 6,200 miles from Houston to Brazil while a roughly equal amount of sugarcane ethanol travels 8,400 miles in the opposite direction from Brazil to California. The EPA's flawed accounting scheme, therefore, results not only in an unnecessary and costly exchange but also in much higher emissions. Removal of this discriminatory ruling would reopen the California market to Midwest ethanol, shortening the transportation distance from plant to market by more than 7,000 miles, hence cutting consumers' refueling costs.

Ethanol is not a perfect fuel, but neither is gasoline. Let's open the market to a variety of liquid fuels and let consumers decide which to use in their tanks. Now that ethanol opponents have achieved victory, it remains to be seen whether they can maintain their commitment to free markets. They can do so by fighting policies that discriminate against ethanol with the same vehemence they employed in fighting those measures favoring it.

Gal Luft is director of the Institute for the Analysis of Global Security and an adviser to the United States Energy Security Council.

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