Tag Archives: biofuel

Gas Prices Skyrocket! Obama: Let’s Try Algae

Across the country Americans are paying more at the pump.  A Los Angeles station raised the price ten cents while the reporter was on television.  In Cleveland the price at the pump jumped over 40 cents per gallon in just the past week! Places in Florida are now charging over $5.00 per gallon.  These costs are having a significant impact on the average American’s already strained budget.

In response to questions Friday, Press Secretary Josh Earnest offered that the administration was using an all-of-the-above approach though he indicated there was no simple solution.  Increased need for oil products in growing countries like India and China will likely keep the demand up.  The administration reminds us that the tax break currently being debated by Congress will help with costs, apparently forgetting that these funds are already in our paycheck.  The debate is whether to continue it or lose it…not to increase our take home pay.

One has to wonder how motivated this administration is to stem the rising fuel prices.  The president is known for his green energy solutions.  Senator Obama stated in 2008 that we should “expect electricity costs to necessarily  skyrocket” as a means to accept higher cost alternative fuel sources.  In a 2008 interview with WSJ  Energy Secretary Steven Chu said, “Somehow we have to figure out how to boost the price of gasoline to the levels in Europe.”  In May, 2011 Representative Darrell Issa (R-CA) head of the House Oversight Committee reported that “Rising energy costs were an intentional result of government action.”

Still, with rising oil prices, many were surprised when President Obama announced in a February 22 economic speech, the administration will be backing algae bio-fuels as a way to oil independence.

Algae and many other bio-fuels are unproven ideas.  They may be an effective alternative to oil but will not help with the price of fuel today or even tomorrow.  These budding ideas may show promise but are still in the research and development stage with no expectation of a cost effective product before the next decade.   While some companies are actively committed to investigation of algae as a fuel source others, like Shell, have dropped out of the market.

Increase in cost for crude oil is based on future expectations.  Jack Gerard with the American Petroleum Institute believes this can be lessened through approval of the Keystone Pipeline and re-opening of offshore drilling.  The API is confident through careful planning America can become self-sufficient within 15 years.

In the meantime consumers are feeling the pinch.  Increases in transportation costs will surely be passed on at the market.  If something is not done to slow the price it will impact the faltering economy.  As people scoff at the idea of using pond scum to fuel their cars this cloud over Obama’s head may have significant impact on his reelection.

Fuel Makers Call on EPA to Reconsider Bad Regulation

WASHINGTON, Jan. 20, 2012 — The National Petrochemical & Refiners Association, American Petroleum Institute and Western States Petroleum Association jointly filed a petition today requesting that the Environmental Protection Agency waive the 2011 cellulosic biofuel volume mandate in its entirety, because it appears no cellulosic biofuel was actually produced last year.

The petition notes that EPA’s monthly summary of available volumes of cellulosic biofuels shows that no cellulosic biofuel was produced in the United States from July 2010 through October 2011.

The volume of cellulosic biofuels that EPA required refiners to use in 2011 was 6 million gallons. NPRA and API sent a petition to EPA in February 2011 to reconsider that mandate, but EPA has not yet announced a final decision on the petition.

“Refiners are being ordered to do the impossible – use large volumes of cellulosic biofuels even though none have been being produced,” said NPRA President Charles T. Drevna. “Because they can’t use something that doesn’t exist, refiners are being told to pay $6.8 million to EPA. We don’t even know how the proceeds of this hidden de facto gasoline tax will be used. This mandate is excessive and harmful to consumers and will undoubtedly raise energy costs and could have a negative impact on fuel supplies. The time has come for EPA to approach this issue rationally and use good judgment when making a decision.”

Although the EPA must act on the petition within 90 days, NPRA requests the agency make a more expeditious decision based on NPRA’s prior requests for adjusted cellulosic biofuel targets.

Navy Biofuel Contract: Another Solyndra?

At a time when the military budget is under attack and is being cut, the Department of Agriculture and Department of the Navy announced earlier this month (December, 2011) that the Navy bought 450,000 gallons of biofuel at $26 per gallon, $16 per gallon if the biofuel is mixed with regular jet fuel. That is up to nine times the cost of regular jet fuel. In August, 2011, the Obama administration announced their intentions to spend $510 million during the next three years to buy advanced “drop-in” biofuel for military transportation. The purchase is part of the Obama administration’s “We Can’t Wait” initiative, which involves bypassing Congress when possible. And all of this comes as Obama cancels the Keystone XL oil pipeline that would facilitate access to the estimated 1.7 trillion barrels of oil in North America.

And as is becoming quite frequent while Obama is in office, cronyism plays a part. The Navy entered the contract with Louisiana-based Dynamic Fuels for $12 million for aviation fuel. Dynamic Fuels is a partnership of three firms, Solazyme, Syntroleum (a 50/50 venture with Tyson Foods), and Tyson Foods. Solazyme received $21.7 million from the American Recovery and Reinvestment Act (the stimulus) to build a “biorefinery.” T.J. Glauthier a principle at Solazyme, served on President Obama’s White House transition team, where he focused on energy issues for the recovery act.

The biofuels will all be used this summer off the coast of Hawaii. There, supersonic F/A-18 jets, powered by fuels fermented from algae, will launch from the deck of an aircraft carrier. A 9,000-ton destroyer and a cruiser, using fuel made from fats and greases, will join the aircraft carrier on a voyage across the Pacific. The aircraft carrier itself is nuclear powered. It will be the first demonstration of the so-called “Great Green Fleet” – an entire aircraft-carrier strike group relying on alternative energy sources.

Jared Youing, a spokesman for Senator James Inhofe (R-OK), who has supported biofuel projects in the past, said, “The Department of Defense should not purchase alternative fuels that are priced 9 time higher than conventional fuels – $26.75 per gallon to approximately $2.85 per gallon – because those extra costs will further eat away at other necessary budget items such as operations, maintenance, training, and modernization. In addition, the alternative fuel is less available on the front lines, making its use more restrictive.”

“It’s another Solyndra situation in that they’re trying to keep some of these businesses afloat when the economics just don’t make sense right now. Give them a few million and they will be able to continue to exist,” said Dan Simmons, director of state and regulatory affairs at the Institute for Energy Research. He continued, “Mixing the biofuel with conventional fuel will help keep the price to less than what it could be, say $16 per gallon, but that’s still expensive.”

As part of his energy security goals of March, 2011 in the “Blueprint for a Secure Energy Future,” President Obama ordered the departments of Agriculture, Energy and the Navy to advance “drop-in” biofuel substitutes for diesel and jet fuel so the military will not be dependent upon foreign oil. “Drop-in” fuels do not require any engine modifications in order to be used. But the United States has 1.4 trillion barrels of oil waiting to be exploited, enough to last the military (and civilians) for 200 years. Dependency on foreign oil is not the problem, rather it’s an unwillingness to open up more areas for drilling.

If the US governments stopped subsidizing biofuels, their artificial “profitability” would disappear overnight. Price-wise, they can’t compete with fossil fuels. Subsidizing them while they can’t compete is not a method with any record of success for encouraging price efficiency. What it does instead is create public dependencies (with the American taxpayer footing the bill) and a tremendous opportunities for cronyism.

November, 2012, just can’t get here soon enough.

But that’s just my opinion.