$2 or higher gas - Can ethanol make a comeback? Message Board

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Non-Tech : $2 or higher gas - Can ethanol make a comeback?

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Oct 31 9:30 AM EST

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To: Think4Yourself who wrote (2331)	2/24/2007 11:04:38 AM
From: robert b furman	Read Replies (1) of 2801

Hi John Q, Keep the balance in mind. North American oil consumption has gone up 1 to 1 1/2 % each year for the last several years. Global demand for oil is growing much faster in the emerging nations. Global demand is what drives the futures markets and has caused the doubling of oil prices ever since we had a supply crisis in North America ( Hurricanes Karina and Rita - which destroyed much infrastrucure in Louisianna and Texas). The supply imbalance has now been normalized - but global growth has perpetuated. If North American demand can be kept at 1 to 1 1/2 growth and we reduce the need for importing external oil by 5 % the supply excess will create inventory imbalances. When inventory is at a "maximum top off" the global thirst for oil will become selective. When source selectivity can be implemented, with out causing a spike in prices - the geopolitical premium of oil will also come out - as in sanctions can be applied. As we utilize technology we will actually reduce demand - hybrids in urban areas (I have two technicians who are already trained in servicing GM hybrids that are on the street now and will come in larger volumes in late 07 and early 08). This does not even count on the plug and run hybrids that are in exixtence, but will not become entrenched until lithium battery technology proves its durability. Active Fuel management (which cuts v-8s to v-4s when only speed maintenance is needed) is yielding a legitimate 15% -20% actual fuel efficiency/savings. As these new technology vehicles blend into the overall fleet of North American vehicles it is not a stretch to envision an actual decline in oil consumption. My bet is we'll see it 2-3 years out and much quicker if a recession hits. At that point the USA will be on the decline in oil consumption/importation. Last but not least, NON Opec oil production is growing faster than most give it credit.Global exploration utilizing 3D siezmic is not a guessing game - IT IS ON THE MONEY! We are far from running out of oil - in fact we are running into it - at a much more eficient rate than ever before. It is however more expensive to find and get out of the ground. Technology and environmentalism all are superior ways of production ,but both are costly. One last note of clarification.GM has over 3 million flex fuel vehicles on the roads and none of them are more expensive. The flex fuel engines have been standard equipment in many larger trucks since 2003. GM was simply way ahead of the E85 rage that many are just learning about. One last note about the rising cost of corn - perhaps one of the very best side effects of this new cash crop is the land value of America has once again begun to appreciate. I live in Texas and grew up in Wisconsin.Farmers will get my dollar of energy - even if subsidized or more expensive than oil. I would much rather see a hard working citizen of the USA benefit from energy production than a sheik whose only claim to fame is membership in the "lucky sperm club". Wealth to the few fosters resentment by all. It is the fundamental jealousy and hatred built into the middle east that makes me think we should take our purchasing power elsewhere The cornfields of America is as good a spot as I can think of. JMHO Bob

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