Oil's Monopoly Promotes Terrorism

Monday, April 29, 2013

The mosque attended by the bombers.
Saudi oil money was used to fund the Boston mosque the two Boston bombers attended, according to this article in USA Today. It cost more than 15 million dollars to found the mosque. Over half of it came from Saudi sources, which gives them influence over what agenda is promoted in the mosque.

Saudi Wahhabis have used their oil money, which they are illegally obtaining by price-fixing, to fund over 90 percent of all Islamic institutions worldwide, promoting their fundamentalist, intolerant, and violent agenda around the world, including mosques all over the U.S.

The high price of oil is a direct result of Saudi Arabia's influence on OPEC, which is exploiting the fact that the United States is a one-fuel economy, which is held in place by automakers, who have so far been reluctant to make their cars capable of allowing fuel competition, something they could do easily and inexpensively.

The Open Fuel Standard would change that, and change the world.


Secretary of Energy Nominee Understands Fuel Competition

Sunday, April 28, 2013

In a recent report from the US Energy Security Council (read more about them here), we have some very good news for our cause:

Below see a portion of the record from the April 9th Senate Committee on Energy & Natural Resources hearing on the nomination of Dr. Ernest Moniz to be Secretary of Energy.

The answers reflect Dr. Moniz's understanding of the importance of tri-flexible-fuel vehicles and stronger penetration of natural gas-derived liquid fuels. The US Energy Security Council is looking forward to work with Dr. Moniz toward achieving these goals.

SEN. CANTWELL: As I understand it, today the U.S. produces roughly 280 million gallons of methanol, primarily from the steam reformation of natural gas, and by 2015 that number will increase to one billion gallons. On the ground that means three methanol plants will be reactivated in Texas and a fourth will be moved from Chile to Louisiana to take advantage of today’s lower natural gas costs. In a study published in 2010, researchers at the Massachusetts Institute of Technology concluded that methanol was the ‘liquid fuel most efficiently and inexpensively produced from natural gas,’ and they recommended methanol as the most effective way to integrate natural gas into our transportation economy.

Dr, Moniz, I would appreciate knowing if you were involved with this study and your personal views as to the potential of using methanol to power our transportation system given America’s now abundant supplies of cheap natural gas. I understand that at today’s natural gas prices methanol costs about 35 cents a gallon to produce, and for the past five years the wholesale price for natural gas-derived methanol has ranged between $1.05 and $1.15 a gallon. How do you think the price of methanol will change over the next decade as the price of natural gas changes?

DR. MONIZ: I was the co-director of this study. Its findings and recommendations were achieved by the consensus of the 19 faculty and senior researchers involved in the study. The U.S. has significantly increased domestic natural gas and oil production over the last several years, with important implications and possible opportunities for diversifying the nation’s transportation fuel mix. This diversification remains an economic and national security imperative. The President’s All-of-the-Above Energy policy supports more choices for Americans among available modes of transportation and types of fuel.

There are many conversion routes for deriving liquid fuels from natural gas.

Methanol is simplest and, like ethanol, needs modest engine modifications for flex fuel operation (possibly even tri-flex-fuel). More complex and costly conversion could yield “drop-in” fuels. If confirmed, I am committed to exploring the safe and environmentally sustainable development of all economically viable transportation fuels to increase consumer choice, reduce prices, improve our balance of trade, and enhance national security. Clearly higher natural gas prices would increase methanol costs, and conversely for lower prices. While I won’t speculate on the future price of methanol, I appreciate both the economic and diversity benefits of methanol as a transportation fuel, as well as the challenges it poses to both fueling infrastructure and vehicle design, especially in the context of ability to meet future environmental emissions standards over a wide range of tri-flex-fuel operation.

Senator Cantwell, who sponsored
the OFS bill last Congress.
SEN. CANTWELL: The seminal Massachusetts Institute of Technology Institute report entitled “The Future of Natural Gas 2011” found that “methanol could be used in tri-flexible-fuel, light-duty (and heavy-duty) vehicles in a manner similar to present ethanol-gasoline flex fuel vehicles, with modest incremental vehicle cost. These tri-flex-fuel vehicles could be operated on a wide range of mixtures of methanol, ethanol and gasoline. For long distance driving, gasoline could be used in the flex-fuel engine to maximize range. Present ethanol-gasoline flex-fuel vehicles in the U.S. are sold at the same price as their gasoline counterparts. Adding methanol capability to a factory 85% ethanol blend (E85) vehicle, to create tri-flex fuel capability, would require an air/fuel mixture control to accommodate an expanded fuel/air range with addition of an alcohol sensor and would result in an extra cost of $100 to $200, most likely at the lower end of that range with sufficient production.” Dr. Moniz, were you involved with this study and do you generally agree with its conclusions? What can DOE do to promote greater adoption of tri-flexible-fuel vehicles?

DR. MONIZ: I was the co-director of this study. Its findings and recommendations were achieved by the consensus of the 19 faculty and senior researchers involved in the study. Flex fuel vehicles were also a topic discussed in detail at a MIT symposium last year. Such vehicles may help enhance US energy security by diversifying our sources of liquid fuels. If confirmed, I would recommend that this technology pathway be examined in the Quadrennial Energy Review.


Somebody Has to Be First

Monday, April 22, 2013

We watched "42" today — the movie about Jackie Robinson, the first African American baseball player in the major leagues. It was a great movie. The reason Robinson is remembered with so much respect today is not just because he was an extraordinarily talented ball player, and not just because he was first, but because he took all the hostility and discrimination the world could throw at him and he didn't fight back with hostility or discrimination. He fought back by being gracious and gentlemanly in the face of intense racism (and by being an outstanding athlete).

I see great posts on the Fuel Freedom Facebook page, but often they get hostile responses. The same thing happens on the Open Fuel Standard web site and Facebook page. The hostility is mild compared to what Robinson had to endure, but it still it sometimes discourages me. I somehow keep foolishly expecting it to be easy. I keep expecting people to instantly recognize the beauty and practicality of fuel competition and rally to the cause. But it doesn't usually happen that way.

When you talk to people about fuel competition, what do you get back? I'll bet sometimes you get hostility. People will tell you that ethanol will cause food shortages, methanol is poisonous, or that we need to solve the oil monopoly by drilling even more oil, and so on. And many more people have this point of view than those who understand the foolishness of maintaining a monopoly for the most vital commodity on earth (transportation fuel).

The Australian oil man, John Masters, said, "You have to recognize that every 'out front' maneuver is going to be lonely. But if you feel entirely comfortable, then you’re not far enough ahead to do any good. That warm sense of everything going well is usually the body temperature at the center of the herd."

When you run up against resistance, when it seems everyone is ignorant and you feel alone in your understanding about the promise and potential of breaking oil's monopoly in America, please recognize that you are simply out front — far enough ahead to do some good — and press on.

Many people were against African Americans playing in the major leagues. But now that seems backward and pathetic. Many people (and powerful monied interests) were against women getting the vote in America. But now that also seems backward and pathetic. And some day people will remember back when almost all our cars were built to run on only one fuel and it will also seem backward and pathetic. People will look back and wonder what we were thinking. Why would we ever do something so self-defeating?

Let us commit ourselves to making that great day come as soon as possible. If you're ready to get to work, start here.


Elephant? What Elephant?

Saturday, April 6, 2013

In The Week Magazine, they often excerpt the opinions of the most well-known pundits around the country on a single issue. A few weeks ago, the issue was gas prices. There were quotes from famous pundits from NationalReview.com, NationalJournal.com, The New York Times, The Post, Mother Jones, and The Washington Post.

Lots of talk about the cause of high gas prices. But not one word about OPEC!

Have you ever been to a family gathering where people talk about everything except the trumpeting elephant in the middle of the room?

OPEC is a large enough cartel that its output determines the world price of oil. If they agree among each other to lower their collective production, oil becomes scarce on the world market and prices rise. When discussing the rising price of oil, it would be understandable if every once in awhile someone didn't mention OPEC. But for all of them to talk about everything but OPEC seems surreal.

I'm sure there are many reasons why such an obvious cause is not being addressed, but one of these days we're going to have to come out and say it. I've been wondering why all these well-informed and well-respected pundits did not mention OPEC or the Open Fuel Standard. Here are some possibilities:

1. Oil companies advertise in newspapers and magazines. I know of at least one direct intervention by an oil company to block public knowledge of an alternative fuel (read about it here). So I suppose it's possible this is happening routinely, and any stories that might mention the bare facts of the issue might not make it into print.

2. Oil companies have also spent a lot of money publicizing information about alternative fuels that makes it appear unattractive or unworthy of considering, and perhaps they've done such a good job trying to complicate and confuse the issue that these pundits really and truly have no idea OPEC is the wizard behind the curtain.

I'm sure there are more possibilities. What do you think?


When Oil Has a Monopoly on Transportation Fuel

Friday, April 5, 2013

In an article on The Oil Drum, Perk Earl clarifies the connection between high oil prices and the U.S. economy. Here are some excerpts:

It's been going on a long time.
Spikes in oil prices tend to be associated with recessions. 

Economist James Hamilton has shown that 10 out of the last 11 US recessions were associated with oil price spikes.

When oil prices rise, consumers tend to cut back on discretionary spending, so as to have enough money for basics, such as food and gasoline for commuting. These cut-backs in spending  lead to lay-offs in discretionary sectors of the economy, such as vacation travel and visits to  restaurants. The lay-offs in these sectors lead to more cutbacks in spending, and to more debt defaults.

Airline Industry as an Example of Impacts on Discretionary Industries

High oil prices can be expected to cause discretionary sectors to shrink back in size. In many respects, the airline industry is the “canary in the coal mine,” showing how discretionary sectors can be forced to shrink.

In the case of commercial air lines, when oil prices are high, consumers have less money to spend on vacation travel, so demand for airline tickets falls. At the same time, the price of fuel to operate airplanes rises, making the cost of operating airplanes higher. Business travel is less affected, but still is affected to some extent, because some long-distance business travel is discretionary.

Airlines respond by consolidating and cutting back in whatever ways they can. Salaries of pilots and stewardesses are reduced. Pension plans are scaled back. New more fuel-efficient aircraft are purchased, and less fuel-efficient aircraft are phased out. Less profitable routes are closed. The industry still experiences bankruptcy after bankruptcy, and merger after merger. If oil prices stabilize for a while, this process stabilizes a bit, but doesn’t really stop. Eventually, the commercial airline industry may shrink to such an extent that necessary business flights become difficult.

There are many discretionary sectors besides the airline industry waiting in the wings to shrink.  While oil prices have been high for several years, their effects have not yet been fully incorporated into discretionary sectors. This is the case because governments have been able to use deficit spending and artificially low interest rates to shield consumers from the “real” impacts of high-priced oil.

Governments are now finding that debt cannot be ramped up indefinitely. As taxes need to be raised and benefits decreased, and as interest rates are forced higher, consumers will again see discretionary income squeezed. New cutbacks are likely to hit additional discretionary sectors, such as restaurants, the “arts,” higher education, and medicine for the elderly.

It would be very helpful if new unconventional oil developments would fix the problem of high-cost oil, but it is difficult to see how they will. They are high-cost to develop and slow to ramp up. Governments are in such poor financial condition that they need taxes from wherever they can get them–revenue of oil and gas operators is a likely target. To the extent that unconventional oil and gas production does ramp up, my expectation is that it will be too little, too late, and too high-priced.

The answer to a high-priced monopoly is competition. You can help bring it about. Start here.


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