Gasoline at Wholesale, is Climbing... - Page 2

Scottie · #11 05-18-2007, 06:13 AM

Quote:

Originally Posted by WagnerX5

Well there ya go. UK and and such trying to compare their prices to the US is like Texas comparing food prices to Hawaii.

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rebound · #12 05-18-2007, 09:16 AM

Or, we could just increase the use of bio-fuels, like ethanol.

But wait? What's that? You say the cost of corn is rising due to the increase in ethanol?

As I've said before, an increase in ethanol will result in an increase in food cost to the consumer. Here in the U.S., we can afford to absorb the change - other parts of the world aren't economically able to do so. Sure, the cost of gas will be such that you can afford to fill up your big ol' SUV and drive to the supermarket. Too bad that when you get there, you can't afford to buy any food...

Ethanol's Bitter Taste
Congress is choking on corn-based fuel.

BY KIMBERLEY A. STRASSEL
Friday, May 18, 2007 12:01 a.m.

It was a scant two years ago that Georgia's Saxby Chambliss voted with 73 other giddy senators for an energy bill that required the nation to use 7.5 billion gallons of ethanol. Georgia's farmers loved corn-based ethanol; Georgia's agri-businesses loved corn-based ethanol; and all that meant that then-Agriculture Committee Chairman Chambliss loved corn-based ethanol, too.
Earlier this year, Mr. Chambliss introduced a bill calling for even greater ethanol use, though with one striking difference: The bill caps the amount of that fuel that can come from corn. Turns out Georgia's chicken farmers hate corn-based ethanol; Georgia's pork producers hate corn-based ethanol; Georgia's dairy industry hates corn-based ethanol; Georgia's food producers hate corn-based ethanol; Georgia's hunters hate corn-based ethanol. And all that means Mr. Chambliss has had to find a new biofuels religion.

The shine is off corn ethanol, and oh, what a comedown it has been. It was only in January that President Bush was calling for a yet a bijillion more gallons of the wonder-stuff in his State of the Union address, and Iowa's Chuck Grassley was practically doing the Macarena in his seat. And why shouldn't Mr. Grassley and fellow ethanol handmaidens have boogied? They'd forced their first mandate through Congress, corn farmers were rolling in dough, billions in taxpayer dollars were spurring dozens of new ethanol plants--and here was the commander-in-chief calling for yet more yellow dollars. All in the name of national security, too!
Corn ethanol seemed unstoppable, but a remarkable thing happened on the road from Des Moines. Just as the smart people warned, the government's decision to play energy market God and forcibly divert huge amounts of corn stocks into ethanol has played havoc with key sectors of the economy. Corn prices have nearly doubled, which means livestock owners can't afford to feed their animals, and food and drink manufacturers are struggling to buy corn and corn syrup. Environmentalists are sour over new stresses on farmland; international aid groups are moaning that the U.S. is cutting back its charitable food giving, and many of these folks are taking out their anger on Congress.

Call it a case study in how a powerful lobby can overplay its hand. While many members are still publicly touting corn ethanol, privately they are quietly backing away from another round of corn-mania. The most extraordinary sign was the Senate Energy Committee's recent ethanol bill, hailed by Sens. Jeff Bingaman and Pete Domenici as "bipartisan" legislation for more "homegrown fuels." What the committee didn't mention in its press release was that it had built the legislation around Mr. Chambliss's cap on corn ethanol (at 15 billion gallons), and that the rest of the 32 billion-gallon-a-year mandate would have to come from other (still imaginary) sources, say switchgrass. The bill passed 20-3.

It's taken politicians a while to catch on to these anti-ethanol vibes, but they've now got the picture. At an agriculture conference in Indianapolis last fall, Indiana Gov. Mitch Daniels, Agriculture Secretary Mike Johanns and EPA Administrator Stephen Johnson spoke, delivering their usual fare about how ethanol was the greatest thing since sliced corn bread. They expected warm applause; in the past the entire ag community united around helping their brother corn farmers make a buck. But now that ethanol is literally taking food from their beasts' mouths, much of that community has grown less friendly. According to one attendee, Messrs. Daniels, Johanns and Johnson were later slammed with snippy ethanol questions from angry livestock owners, much to their dazed surprise. Word is that even the presidential candidates--who usually can say no wrong about ethanol while touring the Midwest--are having to be more selective about where they make their remarks.

Things are even hotter in Washington, where lobbying groups are firming up their positions against corn ethanol. The hugely influential National Cattlemen's Beef Association has gone so far as to outline a series of public demands, including an end to any government tax credits (subsidies) for ethanol and an axe to the import tariff on foreign ethanol. Put another way, the cattlemen are so angry that they are demanding free markets and free trade--a first. Maybe ethanol really is a miracle fuel. In any event, expect the ethanol call to get harder for Plains state senators such as Max Baucus, Ben Nelson and Byron Dorgan.
The National Turkey Federation estimates its feed costs have gone up nearly $600 million annually and is surely letting loose on members from turkey states such as Minnesota and Missouri. The National Chicken Council, which represents companies that produce, process and market chickens, has been hitting the southern political caucus, putting pressure on senators from big poultry states such as Georgia, Arkansas and Alabama. Chicken giant Tyson's, the second largest employer in Arkansas (after Wal-Mart), even felt the need to warn about the effect of rising corn prices on its business in its first quarter earnings statement. Food and drink manufacturers, which rely heavily on corn and corn syrup for their products, are also making the Washington rounds. The Grocery Manufacturers Association this week called for Congress to undertake a study before it imposed a bigger ethanol mandate. Soft-drink companies such as Coca-Cola (of Mr. Chambliss's Georgia) are also up in arms.

From the other side, green groups are grousing about the environmental consequences of intensive corn farming. International aid organizations are complaining that ethanol is raising the overall cost of food and diverting grain from poor countries. Ducks Unlimited, part of Washington's "hooks and bullets" conservation lobby, sported a recent article in its magazine complaining that farmers are taking idle land out of conservation programs--land currently home to ducks--and using it for corn farming again.

All this pressure is beginning to hit home. Ethanol isn't going away anytime soon; you can't unring a bill. But senators are said to be readying amendments to offer to the new ethanol bill that would use triggers or waivers to further water down the corn element. Turns out there are huge economic consequences to Congress micromanaging energy policy, and all to aid its campaign donors in agribusiness. A lesson the U.S. is now learning the hard way.
Ms. Strassel is a member of The Wall Street Journal's editorial board, based in Washington. Her column appears Fridays.

Copyright © 2007 Dow Jones & Company, Inc. All Rights Reserved.

WSJ Link

rebound · #13 05-18-2007, 09:22 AM

Quote:

Originally Posted by Eric5273

I've got a brilliant idea. Why don't they make the cars with better fuel efficiency. Not 2 mpg better, or 5 mpg better, but how about 50. They can do it if they want. Just take a look at areas of technology where they actually spend big money on R&D. Intel can double the speed of their processor every 2 years, my cell phone can last about 50 times as long on its battery than it could 10 years ago (and it's now smaller than it used to be), yet the car companies cannot increase gas milleage of their cars anything significant since 1920.

Finally now you see Toyota taking the lead on this one, and their profits show it. My dad just traded in his Jaguar last month for a new Prius. He gets about 500 miles on a tank, and it costs $20 to fill it up. I hear the next generation Prius will get over 100 mpg. The solution is not to pollute the world more. Just as they can get my cell phone to last 50 times as long on a single charge as it did 10 years ago, they can get a car to go much much further on a tank of gas. They just have to put in the effort.

I don't doubt that if they spend the required money on R&D, we will see 1000 mpg in a normal size car in my lifetime. Or better yet, maybe gasoline won't even be required.

Remind us all again, in what specific field is your engineering degree?

I'm not necessarily questioning whether or not we can make cars that can achieve those numbers - I'm questioning whether I would want to drive one.

Look at your sainted Prius. Small car (deadly in an accident), enviromentally destructive materials/processes used to make it, and let's not even discuss performance. But if it works for you, knock yourself out. Darwinism at its finest.

the head · #14 05-18-2007, 09:33 AM

THe cost of corn has gone up but far from it's peak in the early 90's plus we had a lot of excess grain from the past few years...its good that it is being put to use...while it is true that we donate less grain to those outside of our country when has the average american given a shit about that anyway? Most of the new ethanol plants are biomass based (as opposed to grain based) which means they use corn stalks, leaves and switchgrass (which along with sugar beets have a larger energy quotient per bushel then any other crop) as for the land bank stuff only 3% of Land bank fallow reserves have been put back into use over the last few years...as for the more intensive farming comment well these people are stupid...you can plant one crop per year and every two years a corn field is replaced with Soybeans to replenish the Nitrogen pulled from the soil farming is no more or less intensive, you plant seeds seeds grow you harvest plants...you cannot plant more seeds in the same area to increase the yield or anything...it once again proves that on the whole the news media has it wrong...again

GUINNESS · #15 05-18-2007, 09:44 AM

Hey I have an even better idea... why doesn't our wonderful government step in to say enough is enough. Why don't they start standing up like leaders of the past have when others have tried to poop on us with this type of crap. I'm sick of hearing the refinery bullshit, which is what it is... bullshit. This is wrong with the pipeline, that is wrong with the pipeline. Katrina may have impacted some supplies, but that was the total scape goat for everything we are seeing now.

Station owners are getting raped by the big companies, we're getting raped by the big companies, the government and big companies are getting their pockets lined more... and Ryan pointed out something very interesting comparing prices with certain countries. It's all bullshit. What can we do about it, nothing... cause there's not one person out there that will stop driving.

rebound · #16 05-18-2007, 09:56 AM

Quote:

Originally Posted by GUINNESS

What can we do about it, nothing... cause there's not one person out there that will stop driving.

Which is exactly what I said in the "boycott" thread.

sondek · #17 05-18-2007, 10:08 AM

You know the best thing about owning an X5, you can run over a prius and not even feel it, and better still if yourdoing it in a nice 4.6 V8 you don't hear it either.

Wagner · #18 05-18-2007, 10:16 AM

Quote:

Originally Posted by GUINNESS

Hey I have an even better idea... why doesn't our wonderful government step in to say enough is enough. Why don't they start standing up like leaders of the past have when others have tried to poop on us with this type of crap. I'm sick of hearing the refinery bullshit, which is what it is... bullshit. This is wrong with the pipeline, that is wrong with the pipeline. Katrina may have impacted some supplies, but that was the total scape goat for everything we are seeing now.

Station owners are getting raped by the big companies, we're getting raped by the big companies, the government and big companies are getting their pockets lined more... and Ryan pointed out something very interesting comparing prices with certain countries. It's all bullshit. What can we do about it, nothing... cause there's not one person out there that will stop driving.

Special Interest groups pay politicians far to well now to have them regulate fuel costs. Figure you're paid $150-175K from the 'people' and $1.4M from the SI, who are you supporting?

Eric5273 · #19 05-18-2007, 11:32 AM

Quote:

Originally Posted by rebound

Remind us all again, in what specific field is your engineering degree?

Electrical Engineering. Was that supposed to be a sarcastic question? If so, I guess it backfired. Yes, I do indeed have an engineering degree from the University of Buffalo.

Quote:

Originally Posted by rebound

Look at your sainted Prius. Small car (deadly in an accident), enviromentally destructive materials/processes used to make it, and let's not even discuss performance. But if it works for you, knock yourself out. Darwinism at its finest.

Actually, my dad was concerned about the safety, but the Prius gets 4 stars in the crash safety tests. Not as good as a X5, but as good as just about all midsize 4-door sedans.

As for performance, they can work on that. The hybrid does not hurt performace. It keeps performance level, but increases fuel economy and lowers pollution. Look at that Lexus hybrid someone posted about yesterday. That thing puts out over 400 hp, and gets double the gas mileage of other cars of similar size & power.

This is just the beginning with hybrids. Give it some time. If they spend money or R&D, it will get better over time. They've only been out for a few years now. How much horsepower did the combustion engine put out when it had only been around for 5 years?

The Cleaner · #20 05-18-2007, 11:46 AM

If 50 miles per gallon vehicles were fun and interesting they would sell. The reality is the are small slow and underpowered.... just what everyone wants.

I welcome 5 dollar a gallon gas, it's will thin out traffic and retire many low mileage cars. Getting commuters off the roads is going to save far more energy that 50 mile per gallon toxic battery loaded cars.

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