Free Market Will Inevitably Encourage Alternative Fuels



As gasoline prices hover around $3 per gallon, and our government and their media lackeys point at the nasty old oil companies (admittedly no saints), the following are worth noting:

The federal bureaucracy does not allow recovery of oil from federally-owned lands, thus leaving us dependent upon foreign sources at whatever prices and quantities they determine. Federal and state regulations have obstructed the construction of new U.S. refining capacity necessary to meet current high demand (both U.S. and the growing economies of China and India), leaving us also dependent on overseas sources for the bulk of our refined petroleum, again, at their quantities and prices.

EPA requirements force tailoring gasoline formulations to different regions of the country at various times of the year, drastically increasing fuel costs (at least 24 cents per gallon, Congressional Research Service estimate) while contributing to shortages as these refining changes have to be incorporated.

One fed-favored "solution" to these fuel supply problems is ethanol. Ignore for a moment the incomprehensibility of burning our food for fuel, and increasing the costs of meat, milk and eggs, production of which currently consumes 70 percent of corn supplies, and consider only economics. According to Cornell University agricultural scientist David Pimental, the total energy required to produce and convert corn for one gallon of ethanol is 131,000 BTUs. One gallon of ethanol can produce 77,000 BTUs of energy. Thus, every gallon of ethanol produces a net energy loss of 54,000 BTUs. It costs approximately $1.74 to produce one gallon of ethanol from corn, as opposed to $0.95 for a gallon of gasoline.

Producers of ethanol are only in the market because federal and state governments provide roughly $1 billion a year in subsidies (primarily to large corporations, especially Archer Daniels Midland) to offset the fact that ethanol is otherwise not an economically feasible alternative to gasoline.

The agencies that have caused high fuel prices will not provide a viable alternative. The solution is to demand that state and federal agencies cease obstruction of domestic petroleum production and refining, and leave selection and development of alternative fuels to the free market.

Terry L. Putnam, Young

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