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Who Pays For New Fuels? Obama says: You Will!
Car and Driver Magazine | June 2009 | Patrick Bedard

Posted on 05/04/2009 11:05:08 AM PDT by MosesKnows

Who pays for new fuels?

Obama says: You will!

By Patrick Bedard, Car and Driver June 2009

Remember last summer when crude oil was bumping its head on $147 a barrel and you were smoking your Visa card as each necessary gallon of regular zoomed skyward of four bucks?

Talk about panic. Public opinion across the nation narrowed to a single uncertainty: Was this a disaster or a catastrophe?

Detroit still says that it was last summer's spike in gas prices that finally pushed the Big Three over the financial cliff. Suddenly, the line for the high-profit rides was none deep-the Tahoes, Navigators, Silverados, and F-150s. Instead, year-old Toyota Prius hybrids were selling for nearly the cost of a new one because the showrooms sold out of the 2008s.

Disaster or catastrophe, no matter which, by August everyone had already decided that life as we knew it was over. Well, not everyone. To the academics cloistered within the ivied walls of academia-the elite who don't drive pickups to work and never punch a time clock…this was merely a "price signal."

A price signal is academia-speak for the market's way of allocating goods and services; a rising price tells consumers to cut back consumption, or find substitutes.

Barack Obama is an academic, and he campaigned on the promise "to send some price signals to change behavior. Americans like to drive their big SUVs and leave the lights on in their houses," he said. "We're going to have to change our habits. We're going to have to cap the emission of greenhouse gases." Moreover, energy suppliers "will pass on those costs to consumers," he went on. "A lot of us who can afford it are going to have to pay more."

That's easy talk for an academic-we rubes out here beyond the beltway get the price signal to pay more at the pump for our carbon-rich gasoline and at the meter for our coal-fired electricity. Hey, no problem. Paying more allows renewable fuels, suddenly cheaper on a relative basis, to bump aside the nasty old carbon-laden fossil fuels. Presto, climate change becomes a worry of the past.

Sorry, folks, but this boat won't float, and I'll show you two sets of numbers that explain why it won't. First, paying a little more won't knock carbon fuels down in the charts because their renewable replacements are extremely expensive. That's why they have to be subsidized. We'll have to pay a lot more.

Subsidies for non-electricity-producing sources such as ethanol from corn and biofuels received $19.52 per megawatt-hour in 2007, compared with 10 cents for the same amount of natural gas and petroleum liquids. Looked at another way, the subsidy to renewable liquid fuels was 195 times that going to fuels we extract by drilling. All of my subsidy numbers come from the Energy Information Administration of the U.S. Department of Energy.

Plug-in hybrids and electric vehicles are this season's favorite idea for weaning us off gasoline. Power for such cars would be electricity taken from the grid. Of course, dirty old coal-fired power plants couldn’t generate that electricity. Solar cells and windmills are the green choice.

Consider: The total subsidy going to electricity from coal is 44 cents per megawatt-hour. The same amount of wind energy requires $23.37 in subsidies, or 53 times that of coal; solar takes $24.34, or 55 times that of coal.

If all we want is carbon-free electricity, nuclear is a much better deal, receiving just $1.59 in subsidies per megawatt-hour, or about four times coal, but nuclear is getting the cold shoulder from the Obama administration. Energy Secretary Steven Chu recently announced that the long-planned waste-storage facility at Yucca Mountain was officially off-limits.

Clearly, cost is the first hole in the boat. The second is a matter of scale, how far we must go to displace carbon. Adding up the 2008 numbers reveal that wind and solar generate about 45,493,000 megawatt-hours. Compare that with the total amount of electricity generated over 12 months, which was about 4.118 billion megawatt-hours. Do the math, and you'll find these favored green sources generate just 1.1 percent of our electricity. President Obama said in his February address to Congress, "we will double this nation's supply of renewable energy in the next three years." Big deal. George W. Bush did that, too, according to EIA numbers reported by Robert Bryce, writing in the Wall Street Journal: Power produced from solar and wind nearly doubled in the 2005-07 period and jumped again the following year. Whoopee, only 98.9 percent left to eliminate, and we'll be carbon free.

Do the math again, and you find that solar and wind sources are providing the equivalent of 76,000 barrels of oil per day. Our total energy use, converted to oil-equivalent barrels, is 47.4 million barrels per day. So wind and solar provide less than 0.2 percent of our energy of our energy consumption.

"We've known for decades that our survival depends on finding new sources of energy," the president told Congress, "yet we import more oil today than ever before." This is the same president, by the way, who opposes domestic drilling.

Ethanol was the favorite idea of 2007, and it now displaces about 1.9 percent of oil if you ignore the crude and other fossil sources that go into producing it. Of course, it carries a price signal from the $19.52 subsidy per megawatt-hour.

Do you get the idea that Obama's plan is more price signals instead of more energy? If recent history is any guide, I see only two possible outcomes-disaster or catastrophe.

TOPICS: Business/Economy; Editorial; Government; News/Current Events
KEYWORDS: fuels; missinglink; obama; pays
I read this article while waiting in a doctor's office and thought it was interesting enough to share.
1 posted on 05/04/2009 11:05:09 AM PDT by MosesKnows
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To: MosesKnows
[ Who pays for new fuels? ]

The same people that pays for everthing else...
Goverment literally pays for NOTHING..

Whoever the government TAXES, pays the tax, plus paying for everything else..
No only do "the people" pay "the TAX" they pay everything else..

The "government" is a VAMPIRE, a parasite.. bleeding the people like a Bat..
Capitalists create the money, socialists bleed that money off..

Every single socialist that dies advances the economy..

2 posted on 05/04/2009 11:15:10 AM PDT by hosepipe (This propaganda has been edited to include some fully orbed hyperbole....)
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To: MosesKnows

Pack full of that good old fashion thing called

3 posted on 05/04/2009 11:23:15 AM PDT by preciousbabies (Psalm 97:10 "Let those who love the Lord, hate evil.")
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To: MosesKnows

I hope you left it permanently folded open to the article... It’s enough to make you sick!

4 posted on 05/04/2009 11:24:26 AM PDT by uncommonsense (liberals see what they believe and conservatives believe what they see)
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To: MosesKnows
"The total subsidy going to electricity from coal is 44 cents per megawatt-hour. The same amount of wind energy requires $23.37 in takes $24.34...Ethanol ... carries a ... $19.52 subsidy per megawatt-hour."

Excellent article.

Does anyone have a link to a breakdown on how the subsidies are paid (tax credit, cash, etc), and if the subsidies come from specific taxes on other items, or simply from the general fund?

Just curious.

5 posted on 05/04/2009 11:53:34 AM PDT by ChicagahAl (Don't blame me. I voted for Sarah.)
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To: MosesKnows

$4/gallon gasoline was about to take Obama and the entire Dimocrat Party down in flames last August, until the Soros financial melt-down miraculously rode to their rescue. I have no doubts that the return of $4 gas will crank up the heat under their pudgy pink posteriors once again.

6 posted on 05/04/2009 11:54:17 AM PDT by Buckeye McFrog
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To: MosesKnows

Rahm Emanuel’s Mandatory Armed Youth Force will make sure you don’t get a way with paying for new fuels:

(this is classic Rahm, so pass it around!!)

7 posted on 05/04/2009 1:09:38 PM PDT by AlanGreenSpam (Obama: The First 'American IDOL' President - sponsored by Chicago NeoCom Thugs)
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To: MosesKnows

The truth is slowly squeezing its way out of the media blockade.

8 posted on 05/04/2009 2:00:22 PM PDT by 1010RD (First Do No Harm)
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