Posts

Landon Hall

Yet more evidence that air pollution harms health

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Research announced this week at the University of Pittsburgh is only the latest to suggest a link between air pollution and a higher risk of children developing autism.

Motor vehicles – cars, trucks and SUVs – account for about half the air pollution in the United States, the EPA says, with much of the rest coming from industrial sources and coal-fired power plants.

Smog levels are much worse in urban areas than rural ones: According to the American Lung Association’s State of the Air 2014 report, 47 percent of the nation — 147.6 million people — live in places where pollution levels make it dangerous to breathe.

Air toxics, as they’re called, can contribute to asthma and other respiratory problems; heart disease. Experts think that these toxics can have a particularly devastating impact on babies when they’re in the womb, and when the children are very young.

Although much of the science on these effects has only been conducted in the past decade, a 2008 report at UCLA’s Institute of the Environment and Sustainability says: “Recently this research has begun to focus on one specific source of modern-day air pollution – traffic exhaust.”

The study, led by Dr. Beate Ritz, goes on:

“These studies largely focused on potential mortality impacts of airborne particulate matter small enough to penetrate into the human respiratory tract, referred to as PM10 (particulate matter less than 10 microns in aerodynamic diameter) and more recently have examined PM2.5, even smaller size particles which can penetrate deep into the lung. Most findings from this research indicated infants living in areas with high levels of these types of particulate matter had a greater risk of mortality during the first year of life, particularly from respiratory causes.”

Autism Spectrum Disorder (ASD), a neurological disorder whose symptoms can range from having trouble fitting in with peers to repetitive behaviors to a complete lack of communication and even seizures, now affects an estimated 1 in every 68 U.S. children, a 30 percent increase since 2012. Little is still known about the causes, but many experts believe genetics or environmental exposures, or a combination, are to blame.

The University of Pittsburgh report, led by a health professor of epidemiology named Evelyn Talbott, found that children who were somewhere on the autism spectrum were 1.4 to 2 times as likely to have been exposed to air pollution during their mothers’ pregnancies, compared with children who did not have an ASD. The affected children showed higher levels of styrene, cyanide and chromium.

Irva Hertz-Picciotto, a UC Davis researcher not affiliated with the Pitt study, told the Pittsburgh Post-Gazette that this and other studies like it “do suggest some kind of a link where a family who has children with autism were living usually closer to areas with higher [air toxic] measurements.”

In Utah, where some regions have very poor air quality in wintertime, the incidence of autism is 1 in 47 children, far higher than the national average. Earlier this year, a Harvard study showed that “exposure in the womb to diesel, lead, manganese, mercury, methylene chloride and an overall measure of metals was ‘significantly associated with autism spectrum disorder,’ with the highest association from exposure to diesel exhaust,” according to a story in the Provo Herald Extra.

Given the significant adverse health effects that result from gasoline when it’s combusted inside engines, it makes sense to incorporate cleaner-burning fuels into the nation’s fleet of vehicles. The EPA says as much, saying replacement fuels, including “natural gas, propane, methanol, ethanol, electricity, and biodiesel” can be ” cleaner than gasoline or diesel and can reduce emissions of harmful pollutants.”

(Photo: Los Angeles air, via Shutterstock)

Arctic Leaf

James Bond, low oil prices, the Russians and OPEC

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Calling Miss Moneypenny…we need you to get to James Bond quickly. Urgently! According to respected sources, there is a conspiracy in place on the part of the U.S. government and the West to both foster the increased production of shale gas and to drive down demand for gasoline in order to decrease Middle Eastern and Russian oil prices to levels well below production and distribution costs. The effort is aimed at breaking up OPEC, keeping the Saudis in line regarding present levels of production and hurting Russia until it comes to its senses concerning Ukraine. Can you put me in touch with Bond? He could be helpful in determining whether there is manipulation of the market? He’s just the best!

Paranoia has set in on the part of some in the media. The “glut” of oil on the market and low demand has made new drilling an “iffy” thing. The production costs of oil per barrel have not kept pace with revenue from sales. Prices at the pump for gasoline have decreased significantly.

How can we explain the phenomena, except by the presence of manipulation? Indeed, it’s enlightening to see (assumedly) planned, tough, provocative statements from so-called experts that often make headlines followed by weak “No it cannot be true” statements by the same experts to protect their credentials. Being bipolar is, in these instances, seemingly a characteristic.

Thanks to CNBC, here are some summary comments.

Patrick Legland, head of global research at Société Générale, recently said that it was an interesting coincidence that the two events — a drop in oil prices and lower demand — suggests that the U.S. could be deliberately manipulating the market to hurt Russia. Is it lower demand or is the U.S. clearly maneuvering? Legland goes on to indicate lack of in-depth knowledge. Timothy Ash, head of emerging markets research at Standard Bank suggested the U.S. would obviously deny any accusations of manipulation and there is no evidence to suggest that this is the case. “It’s very had to prove. I have heard such suggestions before. It is clearly useful for the West as it adds pressure on Russia” (and, I would add, on OPEC).

Oh, there is more, Jim Rickerts, managing director at Tangent, in a courageous and clear-cut example of ambiguity, stated that manipulation is plausible, although we have no evidence.

Clearly, the manipulation assertions, even though there is little evidence, sell more papers, build a bigger audience for cable news and provide fodder for Twitter and politicians. To the tune of “Politics and Polka,” sing with me, “apparent correlation is not causation, correlation is not causation.”

Oil prices are on a downward spiral, while production and distribution costs are going up in the U.S. and much of the West. It is implausible that the government is behind these trends. Consumer demand is down, even with lower prices at the pump, because of the economy. The government has relatively few tools, except the public and private bully pulpit in the short term, to leverage prices. The current boom in oil shale and resulting surpluses result from decisions made by an extended group of people often years ago — for example, oil companies who recognized that the era of easy-to-drill and cheap oil was coming to an end, speculators who led the market in trumping the benefits in investing long in oil shale and waiting for assumed value to catch up, consumers who seemed to be on a high concerning use of gasoline and technological breakthroughs that made oil from shale seem more amendable to cost benefit calculations.

While there are examples of government manipulating prices of goods (e.g., price controls), most have led to unpredictable and often negative results. The U.S. government, whether controlled by Republicans or Democrats, has not shown itself adept at price setting and manipulation. Nor is it good at keeping things secret — something necessary if it engaged in international manipulation. The New York Times would already have a leaked copy of the strategy and unsigned emails would have been given to the Washington Post. Public discussion of the strategy probably would risk sometimes fake, sometimes real approbation-depending who gets hurt or will get hurt. The U.S. would face copycats, as they have in the past, like the Saudis and OPEC and, maybe someday, Russia. They would say, “well, if the U.S. can do it, why can’t we?” The U.S. would calmly respond, No we are not manipulating oil markets. You give us too much credit and assume to many skills. Also, remember, the U.S and the oil companies believe in free markets. Don’t they? Well maybe, but clearly, not all the time with respect to the government and almost none of the time with respect to the oil companies? (Try getting replacement fuels at the pump of an oil-company franchised “gas” station.)

Okay, Miss Moneypenny, I changed my mind. We don’t need James Bond nor do we want to pay for the Bond girls. (Besides, the last Bond looked like President Putin when his shirt was unbuttoned and Sean Connery is on Medicare.) What we need is prayer and penitence for the experts for travailing in rumors. It is not terribly helpful when trying to sort out complicated issues related to oil prices and demand. If the government is somehow manipulating the market, many, even very pro-market advocates, will give it credit for a strategy that, should it be successful, might limit Russia’s desires concerning Ukraine and OPEC’s efforts at price fixing in the past. While the word has an evil sound, perhaps legitimately, manipulation would likely be judged better than war. But before credit is offered, look at the data and well-reviewed studies. Don’t fret, there is very little evidence that government manipulation has occurred in the recent past or is occurring at the present time.

Arctic Leaf

“Methanol Mania” Hits The Gulf Coast

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Lane Kelley of ICIS Chemical Business calls it “methanol mania” and he probably wasn’t exaggerating. Last week Texas and Louisiana underwent an explosion of activity, promising to turn the region into a world center for methanol.

Earlier this month, Louisiana Gov. Bobby Jindal announced that Castleton Commodities International LLC (CCI), a Connecticut firm, will be building a $1.2 billion methanol manufacturing plant on the Mississippi River in Plaquemines Parish. The plant is expected to produce $1.8 million tons of methanol a year.

“This plant will help our children stay in Louisiana instead of leaving the state to find jobs,” said Jindal. “My number one priority it to make Louisiana a business friendly place.”

But that’s not even half of it. The Environmental Protection Administration (EPA) just gave its final approval to a $1 billion methanol plant to be built near Beaumont, Texas. The facility will be operated by Natgasoline LLC, a subsidiary of a Netherlands-based company that already employs 72,000 people in 35 countries. It will employ thousands of construction workers and carry a $20 million payroll when it begins operating in of 2016.

Does that sound like a lot? Well, don’t forget Methanex Corporation, the country’s largest manufacturer of methanol, is in the process of moving two plants back from Chile to Louisiana. One plant is scheduled to open in a few months. And ZEEP (Zero Emissions Energy Plants), an Austin-based company, has just raised $1 million for a proposed plant in St. James Parish, La.

Does that sound like a full plate? Well, it’s still just the beginning. The Connell Group, a government-supported operation, announced long-range plans for what would be the largest methanol plant in the world — even if only half it gets built. The first unit, located in either Texas or Louisiana, would produce 3.6 million tons a year, twice the current world record holder in Trinidad. Together, the two units would produce more than the current U.S. demand, 6.3 million tons a year. The term “Gigafactory” soon may be standard vocabulary.

So what’s going on? Well, the plan is for nearly all this Texas and Louisiana methanol production to be exported to China. The widening of the Panama Canal for supertankers, scheduled to be completed in early 2016, will be a bit part of the puzzle. Believe it or not, China also has plans to build three more plants in Oregon and Washington. But they run into trouble there, of the West Coast’s dislike of fossil fuels.

So China is planning to use American natural gas as a substitute for its own coal, in producing large amounts of methanol. It’s no different from the Chinese buying up farmland in Brazil and Ukraine in order to grow crops.

But the Chinese have other things in mind as well. Zhejiang Geely Holding Group Co., Ltd, Chery International, Shanghai Maple Guorun Automobile Co., Ltd. and Shanghai Automotive Industry Corp. all produce methanol-adaptive cars, which now accounts for eight percent of China’s fuel consumption. Israel is also experimenting with methanol from natural gas as a substitute for imported oil.

Methanol produces only 50 percent of the energy of gasoline, but its higher octane rating brings it up into the 65 percent range. It produces 40 percent less carbon dioxide and other pollutants and would go a long way toward helping China improve its pollution problems. As far as methanol production is concerned, China sees only see an upside.

So what’s going on in this country? Well, so far we have the world’s largest reserves of natural gas, we are on the verge of becoming a world center methanol manufacturer — yet we still have a set of rules and regulations and sheer inertia that prevent us from powering our cars with methanol. For some strange reason, the United States is about to become a world center for the production of methanol, yet we still haven’t figured out how to put it to one of its best uses.

Sounds like an opportunity for somebody.

Arctic Leaf

Life is becoming tough for oil companies and oil nations

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Wow. Over the last few days, the nation has seen the possibilities inherent in a transportation-related energy and environmental policy. No, Washington has not become more functional. It’s still a mess! Happily, Congress is out! (They weren’t doing much.) While they’re still being paid, we can at least turn down the thermostat in both the Senate and House Chambers. No new holidays have been created, and no new articles are being put in the Quarterly that cater to requests from constituents. Leaving town is consistent with one part of the Hippocratic Oath that guides doctors and at least vacations for congressman and women … do no harm!

The light in the energy-policy tunnel, or the canary in the policy mineshaft, results from the seeming collapse of the oil market. The price of Brent crude oil has fallen more than 20 percent since June, and on Friday it rose a little to $86.16 a barrel. The four-month drop in oil prices, caused mostly by an oil glut, falling demand and speculation related to both, likely will continue the recent trend toward lower gas prices at the pump, at least for the next few months. The U.S. average is now near $3.16 a gallon, reflecting a drop of about 15 percent since early summer.

The unseen hand of the marketplace — in this case, the actually relatively transparent hand of the marketplace — may provide a substitute for Congressional inaction concerning the presently complicated and sometimes weak policies that ostensibly protect sensitive global and U.S. land and water from harm. At $82 a barrel, oil producers and their investor colleagues have little incentive to invest heavily in tight shale oil. It just costs too much to get to and take out of the ground (or water). If the negative “opportunity costing” concerning decisions about future exploration and rig development become tougher, folks concerned with the environmental well-being of the Arctic Circle and the Monterrey Shale, etc. may end up smiling. They will see less drilling, fewer rigs, less GHG emissions and less non-GHG pollutants!

Apart from environmental benefits, falling oil prices will cause not-so-friendly and even sometimes-friendly Middle East nations to make difficult choices. They are reflected in the current dialogue within OPEC. Should OPEC and its member states sanction the production of more oil and contribute to the global surplus or lessen oil production targets to secure higher prices?

Both decisions, once made, have high risks. Raising prices by lowering production could lead to less market share and ultimately less revenue. Keeping prices low (and lower if the surplus continues to grow and demand continues to fall) could also mean less revenue and an earlier arrival of the time when production costs are near to, or exceed, returns for hard-to-get-at oil. Some Middle Eastern nations may not have a choice. Easy-to-drill oil is becoming increasingly hard to find, even in the once-productive oil-rich desert, and production costs are increasing, as they are around the world. It will be difficult to keep prices low. Yet if countries raise prices, they lose market share. Perhaps another compelling fact of life that Middle Eastern nations must look at is the increase in domestic needs brought about by the Arab Spring and the yearning for a better life among their citizens. Indeed, in this context, both lower prices and higher prices may limit their competitive abilities and result in declining revenue for national budgets. It will present them with a conundrum. Translated into political realities, countries in the Middle East may have less to spend on social welfare programs, exacerbating tension that already exists in the Middle East.

Low prices for oil, resulting from market variables, could well also provide another important international impact: Russia, already hit by sanctions, faces increased budget constraints because of the fall in oil prices. According to The Wall Street Journal, “Economists say falling oil prices could kill off Russia’s flagging economic growth, forecast at no more than 0.5% this year.” Apparently, some Russian economists see $90 as their economic tipping point.

Short-term projections of U.S. oil production suggest a continued (but more modest) decline of oil imports and dependency. But will U.S. oil surpluses and lower costs transfer into oil independence? No! The oil industry is pushing hard for, and is likely to secure, an increased capacity to expand crude oil exports from the federal government. However, trafficking in oil is, and will remain, a two-way street. Price, as well as profits, will be the determining variable. Imports now contribute about one-third of the oil used in the country. The number will hover around 30 percent at least for the near future.

Who knows? We might wake up one morning to find out from public television that we are selling oil to the oil-needy Chinese, while still buying it from countries in the Middle East and maybe even Russia.

There is another possible scenario (we cannot say probable yet) at least to consider in thinking about oil’s future. Because of the likelihood of increasing economic tension between objectives related to drilling for hard-to-get-at oil and its cost, we may go to sleep one night in the not-too-distant future, after hearing again on public television (of course) that oil companies are moving in a big way into the replacement fuel business and lessening their focus on oil. Assets will be sold and bought, followed by media attention suggesting that a major structural shift is occurring in the oil industry. Let’s anticipate what oil CEOs might say: “It’s tough to make the balance sheets work. Drilling for tight oil, really most of the oil left, is just too damn expensive in light of the uncertainty of prices and demand. While still only a small percentage of the overall fuel market, replacement fuels, including natural gas-based ethanol and renewable fuels, seem to be catching on. Detroit, our earlier partner in crime (not literally, of course) in restricting consumer choices to gasoline, hasn’t helped either, recently. It is producing more and more flex-fuel vehicles. Besides continuing to make money, we would like to get off the most disliked industry lists in America.”

Stranger things have happened!

Arctic Leaf

Europe says yes to alternative vehicles

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Things have always been a little easier in Europe when it comes to saving gas and adopting different kinds of vehicles. The distances are shorter, the roads narrower, and the cities built more for the 19th century than the 21st.

Europeans also have very few oil and gas resources, and have long paid gas taxes that would make Americans shudder. Three to four times what we pay in America is the norm in Europe.

Thus, Europeans have always been famous for their small, fuel-sipping cars. Renault was long famous for its Le Cheval (the horse), an-all grey bag of bones that’s barely powerful enough to shuttle people around Paris. The Citroën, Volkswagen and Audi were all developed in Europe. Ford and GM also produced models that were much smaller than their American counterparts. Gas mileage was fantastic — sometimes reaching the mid-40s. A big American car getting 15 miles per gallon and trying to negotiate the streets of Berlin or Madrid often looked like a river barge that had wandered off course.

More Europeans also opt for diesel engines instead of conventional gasoline — 40 percent by the latest count. The overall energy conversion in a diesel engine is over 50 percent and can cut fuel consumption by 40 percent. But diesel fuel is still a fossil fuel, which have a lot of pollution problems and don’t really offer a long-range solution. So, Europeans decided that it’s time to move on to the next generation.

Last week the European Union laid down new rules that will try to promote the implementation of all kinds of alternative means of transportation, making it easier for car buyers to switch to alternative fuels. The goal is to achieve 10 percent alternative vehicles by 2025 over a wide range of technologies, removing the impediments that are currently slowing the adoption of alternatives. If everything works out, tooling around Paris in an electric vehicle within a few years without suffering the slightest range anxiety would become a reality.

By the end of 2015, each of Europe’s 28 member states will be asked to build at least one recharging point per 10 electric vehicles. Since the U.K. is planning to have 1.55 million electric vehicles. That would require at least 155,000 recharging stations, which is a pretty tall order. But members of the commission are confident it can be done. “We can always call on Elon Musk,” said one official.

For compressed natural gas, the goal is to have one refueling station located every 150 kilometers (93 miles). This gives CNG a comfortable margin for range. With liquefied petroleum (LPG) it will be for one refueling station every 400 kilometers (248 miles). These stations can be further apart because they will mainly be used by long-haul trucks travelling the TEN-T Network, a network of road, water and rail transportation that the Europeans have been working on since 2006.

Interestingly, hydrogen refueling doesn’t get much attention beyond a sufficient number of stations for states that are trying to develop them. There is noticeably less enthusiasm for hydrogen-powered vehicles than is expressed for EVs and gas-powered vehicles. All this indicates how the hydrogen car has become a Japanese trend while not arousing much interest in either Europe or America.

At the same time, Europeans are planning very little in the way of ethanol and other biofuels (they also mandate 20 percent ethanol in fuel). Sweden is very advanced when it comes to flex-fuel cars. They have been getting notably nervous about the misconception that biofuels are competing with food resources around the world — Europe does not have its own land resources to grow corn or sugarcane the way it is being done in the United States and Brazil. Europe imports some ethanol from America but it is also now developing large sugar-cane-to-ethanol areas in West Africa.

Siim Kallas, vice president of the European Commission for TEN-T, told the press the new rules are designed to build up a critical mass of in order to whet investor appetites for these new markets. “Alternative fuels are key to improving the security of energy supply, reducing the impact of transport on the environment and boosting EU competitiveness,” he told Business Week. “With these new rules, the EU provides long-awaited legal certainty for companies to start investing, and the possibility for economies of scale.”

Is there any chance that the public is going to take an interest in all this? Well, one poll in Britain found last week that 65 percent would consider buying an alternative fuel car and 19 percent might do it within the next two years. Within a few years they find the infrastructure ready to meet their needs.

Arctic Leaf

Natural Gas, Corn Stover And The Restricted Ethanol Market

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The nation is lucky to have Gina McCarthy as the head of the EPA. Her background is exquisite, her intellect is superior and her sensitivity to and understanding of the environmental issues facing America is second to none. She has been a fine EPA Administrator.

Then why am I worried when we have such a surfeit of riches in one individual leader? Long before McCarthy became Administrator, the EPA began working on a new set of guidelines governing the amount and use of ethanol in gasoline sold at the pump. The guidelines, more than likely, were ready in draft form simultaneously with Gina McCarthy’s appointment and the pressure to release them was intense, given earlier promises.

Because the positives and negatives of an increase or decrease in the RFS concerning ethanol use are imprecise, no real precise judgment can be made as to the final numbers, except the admonition, similar to the Hippocratic Oath: they do no harm and, do what the EPA suggests they probably will do, improve the economy, the environment and open fuel choices to the consumer. Sounds simple, but it isn’t! The EPA is considering modification of relatively recently determined RFS.

I understand the position of the oil companies to reduce what are effectively ethanol set asides. They have a financial stake in selling less corn-based ethanol with each gallon of gas, particularly when the content of ethanol rises to E85. Declining gas sales and prices make them eager to secure lower total annual ethanol requirements. Although the data is mixed, I also commiserate with the cattle growers who indicate they have had to pay, at times, higher prices for corn because of ethanol’s reliance on corn. Similarly, I am sensitive to environmentalists who worry that the acreage for corn-based ethanol is eating (excuse the pun) into conservation land and that total greenhouse gas emissions from production to use in vehicles of corn-based ethanol is not, generally, a good deal for the environment. I am not trying to be all things to all groups, but I am trying to weave my way through an intellectual and practical thicket.

The corn farmer’s advocacy of ethanol appears rational from an opportunity-cost standpoint. Corn-based ethanol seems, to them, to support higher prices for corn. They have done well in most recent years. While the facts remain unclear (credible researchers, such as those in the World Bank, have wavered over time on their position), the arguments made by groups and individuals concerned with what they believe is the relationship between corn-based ethanol and food supply should be debated fully. I, also, am inclined to believe those in the security business who feel that increased use of ethanol will reduce our dependency on important oil and lessen the nation’s need to fight wars in part to assure the world and the U.S. a share of global oil supply. Weaning ourselves from oil dependency is national need and priority.

It is tough to judge the efficacy of projections of ethanol sales, because of uncertain economic factors and the constraints put on consumer fuel choices by the oil industry’s almost-monopolistic restrictions at gas stations (just try buying safe, less costly alternative fuels at most gas stations) and federal regulations governing alternative fuel use as well as the sale of conversion kits. There is no free market for fuel.

Responding clearly to the conflicts over the value of corn-based ethanol and the annual total requirements for ethanol is not easy and should suggest the complexity of the involved issues and their presumed relationship to one another. Maybe increased use of corn stover and certainly natural gas-based ethanol for E85 would reduce food for fuel conflicts and lessen possible environmental problems. Nothing is perfect, but the production of ethanol using alternative feedstocks, such as stover and, hopefully soon, natural gas, could make a difference in providing better replacement fuels than just the use of corn based ethanol. Like a Talmudic scholar, I frequently, instead of counting sheep, find myself saying “on one hand, on the other hand” while trying to fall sleep. (I haven’t slept more than three full hours a night since Eisenhower was president.) I end up agreeing with the King in the King and I — “It’s a puzzlement!”

The EPA’s job is a tough one. Its lowering of the total amount of ethanol required to be used with gasoline may or may not have been the right decision. I know the EPA is considering modifying its initial estimates upward. We will have to wait and see what the Agency produces and then take part in a reasonable dialogue as to benefits and costs.

I am a somewhat more concerned about the basis used by the EPA to decide to lower ethanol requirements, at this point in time, than the new rules themselves. The rationale for the amended guidelines will become embedded in rulemaking and decisions could well generate unnecessary policy and constituent conflicts.

The Agency explained its recent decisions, in part, in terms of the absence of infrastructure and the possible harm that higher ethanol blends can do to vehicle engines. “EPA is proposing to adjust the applicable volumes of advanced biofuel and total renewable fuel to address projected availability of qualifying renewable fuels and limitations on the volume of ethanol that can be consumed in gasoline given practical constraints on the supply of higher ethanol blends to the vehicles that can use them and other limits on ethanol blend levels in gasoline (the ethanol blend wall).” Note that for the most part, the EPA does not dwell on environmental, economic or security issues in its basic rationale.

The EPA seems to mix supply and demand in a rather imprecise way. Ethanol is ethanol. Traditional infrastructure (e.g., pipelines) is not readily available now to transport ethanol from corn-based ethanol producers to blenders of gasoline and ethanol. But trains and heavy-duty vehicles are accessible and have provided reasonably efficient pipeline alternatives. Indeed, their availability, assuming modifications for safety concerns, particularly concerning trains, extends strategic options regarding the location of refineries/blenders and storage capacity to lessen leakage of environmentally harmful emissions.

The EPA’s argument for lowering ethanol requirements appears to rest, to a large degree, on a somewhat unconventional definition of supply. As one observer put it, the EPA’s regulations “muddle” the definition of supply with demand. There is an ample supply of ethanol now, indeed, a surplus. The EPA’s decision will likely increase the surplus or reduce the suppliers.

Demand for higher ethanol blends really has not been fairly tested in the analytical prelude to the recently changed regulations. Detroit and its dealers seem unwilling to clearly inform consumers of the government-approved use of blends higher than E15 in the flex-fuel cars that they are now producing and or are committed to producing in the future. Oil company franchise agreements limit replacement fuel pumps at their stations, often to off-center locations…somewhere near the men or women’s bathrooms, if at all. Correspondingly, the EPA’s regulations appear to mute the Agency’s own (and others) positive engine testing on E15 and its approval of E15 and E85 blends, within certain restrictions. Earlier, EPA studies were a bulwark against recent sustained attacks by the oil and, sometimes, the auto industry, as well as their friends on ethanol and its supposed negative affect on engines.

The EPA’s analysis of demand seems further blurred by the fact that if the Agency increased the supply of approved conversion kits, increased numbers of owners of existing vehicles would likely convert from gasoline to less-expensive ethanol-based fuels.

The EPA’s background rationale for the new RFS regulations understandably does not reflect the ability to produce ethanol from natural gas, a fuel in plentiful supply, and a natural gas to ethanol conversion process that may relatively soon be available. To do so would likely require an amendment to the RFS because natural gas is not a renewable fuel. The benefits include lower costs to the consumer, reduced import dependency and likely a decrease in pollutants and emissions. It appears a reasonable approach and provides a reasonable replacement fuel until renewable fuels are ready to compete for prime market time. Natural gas-based ethanol, as well as, as noted earlier, possible use of corn stover, would lessen the intensity of the food vs. fuel debate and the environmentalist concerns.

The EPA has tried hard to develop regulations that secure the public interest and appeal to varied constituencies. I respect its efforts. It’s a complicated task. I remember being asked by the U.S. Department of Housing and Urban Development (HUD) to develop a report on simplifying its regulations for diverse programs. If I remember correctly, my report was over 600 pages long. Sufficiently said!

Arctic Leaf

What Do Religious Patents And Pope Francis Have To With Reducing Oil Dependency?

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Israel has more patents per capita than any other nation in the world. Despite wars and tension at its borders, international investor interest remains high, particularly in high-tech industries. Indeed, high-tech industries continue to grow faster than any other industrial sector.

Okay. I have a serious question for questioning minds. The Jerusalem Post stated that pollution levels dropped by 99 percent on Saturday, Yom Kippur, a key Jewish religious holiday. The article indicated that nitrogen oxides decreased by 99 percent in the Gush Dan and Jerusalem regions and that other serious pollutants that affect health and well-being also dropped significantly. (Truth in advertising compels me to say that Israel has another holiday called Lag B’omer, where folks light bonfires to celebrate a wise sage in Israel’s past. Many also travel to the sage’s tomb. Both activities make air quality terrible. But understanding, apology, patience and penitence may result yet in friendlier environmental options.)

Wow, could Israel patent environmental behavior based in religion to secure a healthy environment? What would they patent? Perhaps, activities resulting from seeking forgiveness for previous driving and fuel related sins generating harmful pollutants. Asking forgiveness and apologizing are what Jews are supposed to do on the Holy Day. Or should they try patenting the environmental God, Himself or Herself, to make sure we have a major partner with respect to minimizing pollution in the environment. Here, they could include other possible partners like the scientists busy at work in Switzerland on the “God particle” in their patent.

Maybe Israel’s success with Yom Kippur behavior would lead Catholics, Protestants, Muslims, Hindus and Mormons to define and patent Holy No Drive Days or better yet, because of lessons learned from Israel and possible Israeli involvement, lengthier environmental behavior days, weeks, months or years. Because of the negative impact on the global economy, international security and the environment of the world’s present dependency on oil and oil’s derivative gasoline, perhaps all the major religions and even the minor ones could agree on a range of environmentally friendly behavior changing initiatives, particularly related to one of the largest pollutants of them all…oil. Each patent would be based on prescriptions written or derived from religious interpretation of each religion’s environmental norms and tenants and holidays. Here’s one: Just say no to gasoline and yes to use of replacement fuels. Tithings from believers or congregants would support the effort. Figure it out, enough long holidays and the world might begin to reduce levels of pollution and likely GHG emissions, as well as oil-based wars and tension. Maybe we could develop a whole set of religious patents, that once patented, would be capable of being used by any nation or religion and any group or individual free. You know, building good, Godly behavior.

No government subsidies, no new government regulations. If behavioral changes stick, based on religious initiatives, our grandchildren and their grandchildren could live in a better world. While, likely impossible and the idea of patenting good behavior is more humorous than real, the thought seems worthy of a prayer or two and lots of meaningful sermons as well as interfaith action.

Collaboration by churches, synagogues and mosques could influence governments to jump in and also play a leadership role. Clearly, religiously inspired guilt is often aspirational and motivational — sometimes politically. Combined with religiously inspired individual commitment concerning grassroots activity, it could secure secular support for the development and implementation of comprehensive fuel policies concerning environmental, security and economic objectives — like social justice.

Where might we go with this? Probably not very far. But think of it. We spend much time arguing about God, and often much less time achieving godliness through reforming institutional and our behaviors as good stewards of the world. If we could marshal (excuse the pun), the leaders of some of the major religions of the world to help reduce harmful pollution from gasoline, GHG emissions and wars related to oil, over time, amendments to individual and group activities could help “convert” the bleak forecasts concerning climate change and increasingly dirty air for the better. Additionally, such an effort could also lead to a reduction of tension in areas like the Middle East, and global and national economic growth based on the development and distribution of both transitional replacement and renewable fuels.

I don’t expect invitations to discuss the matter from religious forums or meetings. But seeking collaboration from the religious community to end dependence on oil is something to think about in terms of the “what ifs.” Maybe in this context, a respected celebrated religious leader like Pope Francis could be asked to try to bring together religious leaders and even some secular ones to at least begin to discuss initiatives across man- or women-made national boundaries.

The proposed agenda would link short-term coordinated strategies to use transitional replacement fuels such as natural gas, ethanol, methanol and biofuels with longer-term plans (with immediate efforts) to increase the competitiveness of electric and hydro fuels. For my religious colleagues and secular friends, it seems to me that beginning these discussions is a moral and practical imperative.

Arctic Leaf

Pete Seeger And Building Consensus For Transitional Fuels

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I have a love for folk music. I recently heard the cantor sing “Where have all the Flowers Gone?” at a service for the Jewish High Holidays. It brought back a lot of memories concerning the ‘60s: a period of hope, achievement and tragedy in America.

Excuse me if I take one line from the song by Pete Seeger, perhaps out of context, to explore the current intellectual and real politic difficulties we have in weaning the nation off of oil. Remember the continuous refrain in every stanza concerning the human costs of war, “Oh, when will [we] ever learn?”

I think we should ask the Seeger question now, in addition to thinking about war, about the issues involved in America’s transportation sector’s continued dependence on oil and the nation’s inability to come up with a coherent transition to a renewable fuel.

Look, I hope that we can make the switch from fossil fuels to renewable fuels as soon as federal policy, technology, design and costs make the renewables and cars competitive for most folks. The sooner the better! But even when the market penetration of non-fossil-fuel powered vehicles is double, triple or quadruple what it is now, the percentage of such cars on the road will be infinitesimal compared to the cars fueled by gasoline — a derivative of oil. Think about it! 254 million vehicles exist in America. Fewer than 100,000 renewable fuel powered cars, primarily electric and electric hybrids, were sold in 2013. Given the average life span of cars, it will take a long, long time before the fleet is predominantly gasoline free. Given these facts, establishing a national strategy that, through research and development, makes renewable fuel-powered vehicles cost efficient and marketable to most Americans as soon as possible, and that, simultaneously, encourages the use of transitional fuels in flex-fuel vehicles, while far from perfect, makes common sense. The dual-linked approach is better for the economy, the environment, the consumer and the country’s security. (Ain’t going to have go to war no more…or at least less war based on oil needs.)

What is it that makes many America’s leaders in the public, nonprofit and private sector unable to act even semi-rationally concerning alternative fuels? Sure, Washington is dysfunctional and partisanship as well as special interests have prevented the development of consensus around fuel policy, but to some extent, we as citizens have not become “energized” to advocate for change. Push alternative fuels, including those derived from renewables, and the oil industry demurs with shrill “earth is flat” type lobbyists; advocate for flex-fuel automobiles, and you get both the oil industry and some in the auto industry leveraging their often negative weight in Congress and in state capitals. Try building strong bipartisan coalitions around development of choice at the pump and you are seen as a dreamer, and subject to the often challengeable absolute wisdoms shouted by different interest groups and their leaders.

Sit back and take it all in! The dialogue, or what purports to be the dialogue, concerning fuel choice often reminds me, at least, of the religious arguments about whose God is better. I don’t think anyone has recently had a direct line to God! The tolls are too expensive. Federal regulations in light of separation of church and state prevent it. Similarly, I do not know any respected analyst who finds complete truth in his or her numbers supporting one fuel over another. We hope for perfectibility, not perfection, in analytical theology.

But repeating the dysfunctional “woe is us” analysis over and over again becomes boring and seems to be an excuse for political inertia or failed leadership in all sectors — public, private and nonprofit. Paraphrasing the Pogo comic strip, we have met the enemy and he is us.

So, “when will we ever learn?” that making love is better than making war with respect to building an agreement on alternative fuel strategies? The oil industry, according to recent analyses, has reason to want to think about the future before it continuously tries to restrain our choices at the pump. Prices per barrel may soon reach the level where drilling for tight oil may be too expensive and alternative fuels may be worthy of investment. (Nothing like the profit motive to bring folks to the table!) The auto industry recently has been increasing production of flex-fuel vehicles and CAFE standards, combined with a successful push for open fuel standards and lower cost fuels, could induce even higher production levels of flex-fuel vehicles. Many environmental groups, some of whom already support a dual strategy leading to expanded transitional fuel choices and support for a faster path to renewables, seem willing to discuss a road less traveled, that is, continued use of fossil-based transitional fuels until renewables are ready for prime time. Maybe all we need now is a leader or leaders supported by informed constituencies who will bring relevant groups and individuals together around a consensus building learning table.

Thank you, Pete Seeger!

Arctic Leaf

API and ethanol — A musical match made from memory

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Every time I get depressed about the world — and there is plenty to get depressed about — API (American Petroleum Institute) issues a silly press release that, in its confusing presentation and content, brings back a romantic song from my past. Because of API, over the last few years I have been reunited with Berlin, Gershwin and Bernstein, etc.

API has done it again. Its press release accusing the EPA and the administration of playing politics with RFS guidelines concerning ethanol, a release published even before the EPA has released its amended proposals, is nothing short of clairvoyant. I knew API had strange powers and was funded by the oil industry that, itself, has often been accused of confusing magic with facts.

API’s most recent press release brought joy to my heart. Without recognizing that I was doing so, while trying to sleep, I started to remember, paraphrase and sing a memorable tune from a top-ten best song list, published in the early sixties, “What kind of fool am I” (Leslie Bricusse et al.) to hope for wisdom from API. It has often run counter to facts and analysis concerning the benefits and costs of alcohol fuels and instead reflected the organization’s support from its patron oil company, Medicis.

API now contends that EPA is about to increase the renewable fuel targets for ethanol. Wow, a revolution! Call out the National Guard! To API, EPA’s action, if it occurs, would defy market place experience. E15 and E85 is not selling well. Oh, E15 and assumedly E85 is harmful to car engines. EPA’s assumed new rules would result in wasted resources and skew the market away from their favorite American-made product, gasoline (over 30 percent of which is not made in the U.S., but is imported). Not only would America be ruined but Adam Smith would turn over in his grave. Previous API releases indicate, in rather shrill tones, that ethanol is harmful to marriages, causes cigarette smoking and sexual dysfunction (just kidding).

It’s hard to respond to API’s release (or releases). Yes, the market for E15 and E85 has been relatively slow to develop, but API’s funders — oil companies — have been a, if not the, key factor causing the gap between demand and expectations. Not only has the industry tried to kill the chicken, it has also tried to kill the egg. Let me count the ways (sorry, Elizabeth Barrett Browning):

1. Oil company franchise agreements rarely allow the franchise to locate an E85 pump in their stations. If they do, many times, it must be situated apart from the other pumps in the side of the station. At the present time, there are only 3,354 E85 stations in the nation. So much for the supply side.

2. Oil companies have not been fans of open fuel legislation. They have used their lobbyists and their own political power to help kill it every time it comes up in the Congress. So much for their collective belief in consumer choice.

3. Until recently, the carmakers in Detroit — historically, the allies of the oil industry — have been slow to respond to consumer and policymaker interest in flex-fuel cars — cars that can use more than gasoline and the conversion of existing cars to FFV status. While Detroit is now producing more flex-fuel vehicles every year, the oil industry still remains a backbencher and a naysayer with respect to producing or supporting alternative fuels and conversion options, new or old. So much for competition.

4. API’s research concerning the impact of ethanol on vehicle engines, funded, again, mostly by the oil industry, has not qualified it for applause and extended readership regarding methodology or content. Its relatively recent analysis of E15 was panned, justifiably, by the EPA and other researchers because of insufficient sample numbers and lack of relevant sample characteristics. But it apparently did what it was supposed to do: put fear in the minds of drivers concerning ethanol use. So much for independent and thorough research.

5. API seems to suggest that the RINS subsidy built in to the RFS is anti-market and anti-God and country. Maybe we should look at all subsidies granted fuels by the U.S. government and complete something like zero-based budgeting process to see which ones fit the public interest and which ones primarily line the pockets of the receivers. Government help, whether direct or indirect, whether visible or imputed, should be premised on articulated and transparent public objectives and should not substitute for private sector resources which would be available without subsidy. In this context, the range of oil subsidies, now on the books, clearly needs review and justification. They far outweigh the dollars that assist newer ethanol companies. Given resource constraints, perhaps we should put oil and ethanol support on a transparent evaluation table, and, after a fair debate, allow the public to decide. Et tu, oil companies and API!

API is an easy target. They shouldn’t be. With uncertainty concerning demand and price of oil and its derivative gasoline, I would think its bosses from the oil industry would put them to work reviewing the nation’s future menu of fuels and possible partnerships with alternative fuel companies and advocates. Apart from possible pro-forma benefits, many Americans who view the oil industry and its representatives through negative filters might begin to change their mind and see the industry as increasingly pro-choice, better on the environment, pro-consumer and pro-security. Hope springs eternal. The oil industry, up to now, has been living in a fool’s paradise for a long time — cheap oil, high demand and income growth. It’s the American way. But, given a changing economy, tight oil and relatively slow and uneven U.S. and global growth, continued reliance on an old oil industry monopolistic model will cause nightmares for wise men and women. API, what’s my next song? How about “I Can Dream Can’t I” or “High Hopes!”?