US Energy Policy

Oregon State Senator Doug Whitsett

KFLS Radio Broadcast - From the Floor

December 22, 2008

Political and environmental leaders want to replace our fossil fuel energy with biofuels, and solar and wind energy. This might be a good idea, if it were possible, if it were necessary, and if we did not have to pay for the energy three times.

The first payment is to the government. Extensive tax credits and tax deductions are required to make alternative forms of energy economically feasible. It is necessary to increase every citizen’s taxes, fees, charges and licenses proportionately in order to offset these losses in government revenue. The taxpayers are being charged for these reductions in government revenue created by providing tax incentives for research and development, facility construction and the ongoing production costs of all forms of alternative energy.

The second payment is at the pump and at the electricity meters. The cost of production and distribution for all forms of alternative energy remains much higher than for the fossil fuels that they are alleged to replace. This remains true even after offsetting their cost of production and distribution with obscenely large tax breaks.

The third payment is for increased costs of food and other consumer goods. We pay more for food, and for virtually all other consumer items, because the cost of their production and distribution is directly proportional to energy costs.

The worst offender is ethanol. Tax credits and tax deductions are offered at virtually every step of its production and distribution. Subsidies are included for growing the crops used to produce ethanol, for shipping them to a distillery, for the production of ethanol at the distillery, and for the increased costs of shipping the ethanol. Ethanol must be shipped by truck or by rail because is too corrosive to flow through pipelines. Even the major oil companies receive subsidies for the blending of ethanol with gasoline, and for the distribution of ethanol at retail sites.

After all that subsidization, ethanol remains more expensive per gallon than gasoline. Ethanol also provides one third less energy per gallon than gasoline resulting in lower mileage per gallon. Gail and I experienced a 12% decrease in fuel mileage on both our vehicles when Oregon began requiring 10% ethanol blended fuel.

Producers are rushing to grow more corn and other carbohydrate dense crops used to make ethanol in order to collect these obscene subsidies. As more acreage is used for ethanol production the available land for other crops is reduced. The direct result is the creation of a smaller supply of those other crops.

For instance, the acreage used for hay and small grain production has been drastically reduced. Further, the ethanol subsidies have driven the price of corn, other grains, soybeans and rapeseed much higher. The production costs for meat, eggs, and dairy products have been sharply increased as a direct result of these increases in the cost of animal feed. These increased costs of production must be paid ultimately by the consumer.

The producers of corn, and other carbohydrate dense crops, utilize a great deal of nitrogen fertilizer to enhance production.

During 2007, the price of nitrogen fertilizers more than doubled.

This occurred because the supply could not keep up with the demand for use of nitrogen fertilizers on carbohydrate rich crops used in ethanol production. The cost of other forms of fertilizers increased proportionally.

Farmers that produce other crops experience similar increased costs, and must pass that cost of doing business on to the consumer as well. Increased cost of production, coupled with less supply, will result in increased consumer food prices every time.

The United Nations Food and Agriculture Organization states that global food prices rose 40% in 2007. The World Bank states that the global price of food increased an incredible 83% during the three year period from 2005 to 2008. The United States Department of Agriculture stated in May 2008 that US wheat supplies were lower than at any time since 1948. They noted that 16% of US farmland, formerly planted in wheat and soybeans, is now being used to grow corn for subsidized ethanol production.

The fact of the matter is, no significant free market for ethanol, or ethanol products, would exist without federal and state subsidies and political mandates.

Less than 20% of our nation’s energy is provided by sources other than fossil fuel. After subtracting the carbon free energy produced by hydropower and nuclear reactors, less than three percent of our energy needs are provided by biofuels, solar, and wind powered generation. Less than 2% is supplied by biofuels.

It does not require a mental genius to figure out that increasing our biofuel production to meet all of our needs is flatly impossible. In fact, we could only produce about 15% of our current energy needs if we dedicated all of our tillable farmland to grow corn for ethanol production. The collateral damage would be certain starvation.

The “biofuel energy independence plan” being advanced by President-elect Obama and by our Congressional leadership is an economic con and a scientific deception.

Moreover, the alleged anthropogenic global warming that this scheme is suppose to address is being proven to be farcical as well. Well more than 650 of the earth’s premier physical scientists have now weighed in as either being very skeptical, or flatly disagreeing, that man has any significant role in either global temperature or global climate change. The body of physical scientific empirical data simply do not support the claim that climate is being influenced by the activities of man.

The models that do support anthropogenic influenced global climate change are unable to explain past weather changes. They have been consistently wrong in predicting future global temperature, climate, or ocean levels. They are not even able to predict current temperature and climate patterns.

Meanwhile, the United States has sufficient recoverable oil and natural gas reserves to last for several hundred years. The fact of the matter is that our government obsession with alternative energy is bankrupting our nation, driving our citizens into poverty, and causing unprecedented world wide starvation.

Families in the United States and the European Union spend 10 to 20% of their budgets on food. However, families in poorer nations spend 60 to 90% of their budgets for their staple food supply. Food riots have now occurred in 37 of these countries.

It is biofuel production, not oil prices, that has shrunk our human food supply. It is biofuel production that has caused hunger and starvation among hundreds of millions of people.

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