A Free-Market Energy Blog

Ethanol Opponents Launch Counterattack (the Left/Right ‘FollowTheScience’ coalition)

By Robert Bryce -- August 9, 2010

For months, the corn ethanol industry has been pushing the Obama administration for permission to increase the amount of ethanol that can be blended into the U.S. gasoline supply.

But the ethanol industry’s opponents are launching a counterattack. And it’s a big one. Last week, a coalition of 36 groups sent a letter to the leaders of the Senate asking them to reject “any attempt to attach a mid?level ethanol authorization amendment during the Senate’s consideration of energy legislation in the coming weeks and months. Such an amendment would be bad for consumers, bad for safety, bad for the environment, and, by placing politics over sound science, bad public policy.”

FollowTheScience.org

The group, which has dubbed itself FollowTheScience.org, may be the oddest coalition in modern American politics. Indeed, the ethanol scam is so offensive that it has united groups ranging from the American Petroleum Institute and the National Petrochemical & Refiners Association, to the Natural Resources Defense Council and the Sierra Club.…

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The Ethanol Tax Credit – It’s Worse Than You Think

By Harry de Gorter and Jerry Taylor -- August 6, 2010

[Editor note: Harry de Gorter is Professor in the Department of Applied Economics and Management at Cornell University; Jerry Taylor is a senior fellow at the Cato Institute specializing in energy and environmental policy.]

The nonpartisan Congressional Budget Office (CBO) recently issued a report on how the corn-ethanol tax credit costs $1.78 to reduce one gallon of gasoline consumption and $754 to reduce one ton of greenhouse gases. The Wall Street Journal immediately noted that “to put that [latter] number in perspective, the budget gnomes estimate that the price for a ton of carbon under the cap-and-tax program that the House passed last summer would be about $26 in 2019”.

While this study is being used by critics of the tax credit – which will cost about $30 billion over the next five years and is up for reauthorization this year – the CBO nonetheless severely underestimates the true costs of the ethanol tax credit in their calculations because:

(1) It ignores the existence of the ethanol consumption mandate (the Renewable Fuel Standard);

(2) It assumes each (energy equivalent) gallon of ethanol produced due to the tax credit replaces a gallon of gasoline;

(3) It ignores the fact that with an ethanol consumption mandate, the ethanol tax credit subsidizes gasoline consumption instead, and

(4) It erroneously suggests that the ethanol consumption mandate has not been binding in the past.

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Arctic Energy Production: Let’s Move Forward, Not Backwards

By Maureen Crandall -- August 5, 2010

A new frontier for the world energy market is atop the world where thawing sea ice (a positive externality in this case) has opened up the possibility of major energy and other mineral production. The U.S., Canada, Russia, Denmark (via Greenland), and Norway have stakes in the Arctic domain:

Arctic Sea Ice Extent in September 2008-200dpi

Estimated potential resources are substantial (see below). The challenge is to turn potential resources in proven and probable reserves of both oil and gas.

Arctic Reserves

New Developments: One Bad, One Good

Unforeseen events can have an enormous impact on the development of new markets and on public policy. Two such events occurred in April 2010.…

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Smart Grid Problems Revealed: The NERC Study

By Kent Hawkins -- August 4, 2010
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Comments to the InterAcademy IPCC Review: Is It Time to Start Over?

By Chip Knappenberger -- August 3, 2010
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Climate Alarmism vs. the IPCC (did Manzi get what Romm missed?)

By Robert Murphy -- August 2, 2010
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Open Letter to Senator Brownback on His Support for a Federal Renewable Energy Standard

By Thomas Stacy II -- August 1, 2010
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Milton Friedman on Mineral Resource Theory (remembering a giant of social thought)

By Robert Bradley Jr. -- July 30, 2010
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New Mexico: Raising Rates for Bad Energy in a Poor State

By Marita Noon -- July 29, 2010
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Why Cap-and-Trade Is Politically Failing: Cost, Cost, Cost (The Chamberlin study and his response to Michael Levi, Council on Foreign Relations)

By Robert Bradley Jr. -- July 28, 2010
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