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Politics : Foreign Affairs Discussion Group -- Ignore unavailable to you. Want to Upgrade?

To: Keith Feral who wrote (185729)	4/27/2006 8:12:33 AM
From: jttmab	Respond to of 281500

Adding government regulation via ethanol standards was a severe blow to the supply chain this year. I read it about it a few months ago. It's starting to creep up on everyone. Honestly, the refining margins have to take a severe blow at some point with this kind of regualtion. I'm glad Bush is letting mtbe back into the market before things get bad. If you read about it a few months ago, it would have been a predictive statement rather than a statement of fact as the switch to ethanol is a spring event. It's not clear to me that using ethanol is a federal mandate to begin with. CA went to ethanol two years ago and there are states that don't require ethanol. As I showed in the earlier link the spot shortages are due to scheduling/delivery issues rather than the availability of ethanol. If I were you, I'd be arguing the stupidity of using ethanol to begin with. It's less effecient [lower gas mileage], it consumes more energy to produce ethanol than the other oxygenates and it probably produces more air pollutants than does mtbe. Brazil learned that crops such as corn as the wrong crops to use. Hence, Brazil uses sugar cane for ethanol production. The US doesn't have the right climate for sugar cane. The history of ethanol production in the US is truly a sad commentary. Depending on the mood of a few years, a lot of ethanol production facilities are either created or go out of business. IF the oil industry switches to mtbe this summer you have to ask about the availability of mtbe to do that. It wasn't planned for, I don't expect that it's a simple matter of turning on the mtbe spickets and everyone is happy. But if you could, what happens to all that corn that is being grown for ethanol. Are you going to torch the crops? Are we going to see a tax relief package for the farmers and ethanol plants? There's a lot to be said for ethanol not being used at all. But while Bush is easing environmental regulations to allow mtbe, he's also promoting the use of ethanol to be more energy independent. I'll bet you two twinkies and a pork burrito that you can trace the "need" for ethanol to a single source; the members of Congress that represent the corn producing states and those businesses that produce corn [along with their lobby money - see ADM]. It's a left-handed version of pork. And of course, Bush is going to promote ethanol because there are some Bush supporters in those corn producing states. IMO, when it comes to regulation we would have been a lot better off mandating improved fuel efficiency standards. I noticed a big change in driving habits last fall when gas hit record prices. I think that demand this summer will fall way back. You may be right. Which will result in a hit on the tourist industry. But maybe people will be going more to Home Depot and doing home improvement and it'll be a plus for the DYI sector. If there's anything that's constant about the American consumer, it's that they will find a way to spend money. Forget savings. jttmab

To: Keith Feral who wrote (185729)	4/27/2006 9:42:54 AM
From: jttmab	Read Replies (1) \| Respond to of 281500

Delayed reaction...it occurred to me that I wrote an implied question and to be clear I should be explicit. I wrote. It's not clear to me that using ethanol is a federal mandate to begin with. CA went to ethanol two years ago and there are states that don't require ethanol. As I showed in the earlier link the spot shortages are due to scheduling/delivery issues rather than the availability of ethanol. Bush has eased environmental regulations but CA has it's own regulations that required the use of ethanol. Does the easing of EPA regulations override CA regulations? jttmab