Landon Hall

Make a fuel choice resolution for 2015

/in , , /by

Resolution time, people: Forget the gym, forget cleaning out the garage, forget writing that novel.

Resolve to start small in helping the economy and helping the environment in 2015: Sign the “fuel choice resolution” on the Fuel Freedom website today.

No. 1 on the list is: Watch PUMP the movie, of course. The documentary is coming to iTunes on Jan. 13, and is available now for pre-order. If you happen to be in Omaha, Nebraska, on Feb. 2, you can also catch a special screening put on by the Nebraska Ethanol Board.

No. 2 among the resolutions: Sign our petition asking that major independent fueling retailers like Costco and Walmart make ethanol available at their locations.

No. 3: Shopping for a new or used vehicle? Look for one that’s branded as flex-fuel. Then you’ll know it’s ready to rock with ethanol blends.

No. 4: Come up with your own idea about how you can promote fuel choice in the new year. Something that means a lot to you.

Go to the page on our website for the full list of resolutions, then share your pledge on social media.

Thanks, and Happy New Year! Let’s all work together in 2015 to make a diversified transportation fuel market one step closer to reality.

 

 

Fuel Freedom Staff

Not even a Libyan oil fire can stop price slide

/in , /by

Oil prices briefly spiked Monday, in apparent reaction to a fire at the Libyan oil port of Es Sider the past few days.

But prices settled down again, to their lowest levels since May 2009, after the blaze was put out in three of the six oil tanks, Bloomberg reported.

Libya was pumping about 352,000 barrels of crude a day until a rocket attack at the port on Christmas Day reduced production to 128,000 barrels a day. In 2010, Libya was pumping about 1.6 million barrels a day, but that was before the overthrow and killing of longtime ruler Muammar Gaddafi in October 2011, an event that unleashed a civil war.

The attack at Es Sider was enough to prompt an early rally in the commodity Monday, but by the end of the trading session Brent crude was down $1.57, to $57.88. The U.S. benchmark, WTI, fell $1.12, to $53.61. That’s the lowest level since May 1, 2009.

Reuters reported:

The rally followed by the steep drop showed the market’s fears about oversupply are not going away, said Gene McGillian, senior analyst at Tradition Energy in Stamford, Connecticut. “Every time the market tries to pick itself up, it’s just another wave of selling,” he said.

Tim Evans, an energy analyst at Citi Futures Perspective in New York, told Bloomberg that neither the violence in Libya, nor the reduction in the growth rate of U.S. drilling, was enough to make a dent in the worldwide glut of oil. “We’re looking at a significant supply-demand surplus through the first half of 2015,” Evans said.

Bloomberg added:

“The loss of a couple hundred thousand barrels from Libya will have a minimal impact on the global supply balance,” Bob Yawger, director of the futures division at Mizuho Securities USA Inc. in New York, said by phone. “There’s about 2 million barrels a day of excess production right now, so this will just tighten things a little.”

Landon Hall

Meet the PUMP players: Phil and Cheryl Near, selling ethanol as God’s work

/in , , /by

One of the most compelling moments in the documentary PUMP comes when we’re introduced to Phil and Cheryl Near, who own two gas stations called Jump Start in Wichita, Kansas.

They’re not ordinary stations, however: They could be the fueling stations of the future, because they sell ethanol as well as traditional gasoline.

Phil Near, 51, has worked in the gasoline business virtually his entire adult life, and only a few years back discovered that there were alternatives, like ethanol. Now he and Cheryl offer it to customers, spreading the word about the benefits of fuel choice. “Once they try it, they usually come back and buy it again,” Phil says in the film.

More importantly, he says selling ethanol “is a moral obligation. We feel like we’re doing the Lord’s work.”

To learn more about the film, visit PumpTheMovie.com, and just in time for Christmas, you can give the gift of thought-provoking debate by pre-ordering your digital copy on iTunes prior to its Jan. 13 launch.

Until then, here’s a Q&A we did with Phil and Cheryl recently about their work and their passion:

Fuel Freedom: People who believe in alternatives to oil were caught off guard by the drop in oil prices. How do you handle it when people say: “Gas is so cheap, so why do we need to consider alternatives?”

Phil: People who have made the decision to use E85 are going to do that, as long as it doesn’t cost them more money. Some will use it no matter what. I think that having a lower price, where the economics are better for the consumer, will continue to drive new customers as they acquire cars that are flex vs. cars that are not. (The price) is inverted right now: It actually costs us more money than gasoline does now. So we’re losing margin today because we feel like we have to be competitive between the two products to maintain our customer base. That’s not necessarily a good place to be, but it’ just kind of a reality of the fuel business. … Sometimes you just have to bite the bullet, and you don’t like it, but you’ve got to just fight the fight.

FF: How much do you pay for the ethanol you sell?

Phil: At one store we sell E85, and then we have the three grades of gasoline (87, 89 and 91). At the second store we have 87 and 91, then we have E15, E30 and E85. Our cost today on unleaded is a little over $2, retails $2.28, which is an abnormally large margin because the price is falling faster at the rack than the street, but it’s catching up. E85, we’re matching the unleaded price, $2.28. But it’s costing us about 15 cents a gallon more than that.

FF: What needs to happen to move the needle to create more flex-fuel vehicles, or create more stations?

Cheryl: One of the big things is education. My daughter had a car worked on at a dealership in town. I was talking to some of the service guys … and I talked about what we do, (that) we sell E85. And this guy goes, “Oh, I tell all my customers, ‘Don’t put E85 in your car. It’s bad for your car; it burns hotter.’ “ And I go, ‘Well, actually, it burns cooler, and higher octane is good for your car.’ “ But the oil companies have spent so much money with all this negative propaganda, and a lot of people have fallen into it. Car dealerships are the worst. They are telling their people not to use E85 in their flex-fuel vehicles, from the experiences that I’ve had.

FF: It’s amazing that a dealership would tell someone not to put E85 in a flex-fuel vehicle when it’s built to run on it.

Cheryl: And in the state of Kansas, there’s a $750 tax credit, if you use 500 gallons in a calendar year. And the dealerships aren’t telling people, they’re not promoting that. So people could be using E85 and getting that tax credit, and they’re just leaving it on the table, because the dealerships – whether they don’t know about it, or they just don’t want to tell people about it – it’s not being promoted.

FF: In the film you talk about selling ethanol being “the Lord’s work.” What does that mean to you?

Phil: At one time I had one of the largest fuel-distribution companies in the Midwest (Crescent Oil Co.). And it really wasn’t until I was out of that company that I understood how much control not only do the oil companies have on what happens here in the U.S., but how much control there is worldwide on energy. And I have a real passion for the fact that I feel like our great country is being stripped of its wealth for energy, and our jobs are going away. We’re right on the edge of Oklahoma, so during the oil heyday, we saw what that did economically for the communities and the people. And when the oil business went away, it really damaged a lot of towns in Oklahoma, and southern Kansas, and Texas. Back in 2006, I started learning a little bit about E85 and kind of the push, with a few ethanol plants being built in the Midwest. I saw what it does as far as creating opportunities. In small towns, these rural towns where these plants are being built, it’s a major impact on the communities.

But what most people don’t even think about every time they fill their car up with gas is, we’re sending the money we pay for energy out of our country. I call it “stripping the wealth.” Obviously, renewables is what I really feel like we’re supposed to be doing. Obviously it’s better for the economy, it’s better for the environment. We’re stewards of this Earth, and we need to be taking care of it. Oil is dirty energy; coal is dirty energy. These things that pollute the environment, as well as really hurt the financial position of our great country.

Cheryl: As a female and a mother, my biggest fear is that we’ll be a generation (or maybe the next generation) that completely depletes all of the fossil-fuel reserves, and then we’re leaving great-grandchildren, great-great-grandchildren, in a mess. This generation, if we don’t start working on this, we’re leaving a really big mess for future generations. I really worry about that. In the Bible, it says we’re supposed to be stewards of the Earth. God left it for us to take care of. I say it in the documentary: “I think we’re messing up.” I don’t think we’re doing a very good job.

Phil: I was taught something that really hit home, and that was: You can’t create energy; you can only transfer energy. Only the Lord created energy. And whether you transfer it from oil, or from wind or solar, or ethanol, from corn or whatever you may, we’re all missing the boat. It’s all transfer, it’s not created.

Cheryl: That actually came from my father (Ray Jones), who’s an engineer. But he was teaching us that: He said, ‘You can’t make energy, you transfer energy. And you lose a little energy every time you transfer it.’ We’d never really heard that before. We were kind of fascinated by that.

Phil: He was one of the design engineers on the NASA moon buggy; he was a pretty smart cat. But he taught us that. And every source (of energy) was one the Lord gave us.

I spent my whole career in the industry, and most people don’t stop and think, and I didn’t for a long time, that our economic model for the world is all controlled by energy. Everything. You can’t get food without energy, you can’t move goods and services. Everything is driven off energy, and we’ve been sending soldiers to war for a long time to protect energy that we don’t even own.

Fuel Freedom Staff

Pope to publish rare encyclical on climate change

/in , /by

Pope Francis will issue an encyclical, a message to the world’s 1.2 billion Catholics, urging them to take action on climate change, The Guardian reported.

The publication will follow the pontiff’s trip in March to the city of Tacloban, in the Philippines, which was devastated in 2012 by the super Typhoon Haiyan. Months later, the pope will address the UN General Assembly in New York.

The Guardian reports:

The reason for such frenetic activity, says Bishop Marcelo Sorondo, chancellor of the Vatican’s Pontifical Academy of Sciences, is the pope’s wish to directly influence next year’s crucial UN climate meeting in Paris, when countries will try to conclude 20 years of fraught negotiations with a universal commitment to reduce emissions.

Francis has addressed global inequality and environmental depredation in recent months, arguing that economies needn’t harm the ecosystem to provide opportunity for citizens. In October, he spoke at the World Meeting of Popular Movements in Rome:

“An economic system centered on the god of money needs to plunder nature to sustain the frenetic rhythm of consumption that is inherent to it. … The monopolizing of lands, deforestation, the appropriation of water, inadequate agro-toxics are some of the evils that tear man from the land of his birth. Climate change, the loss of biodiversity and deforestation are already showing their devastating effects in the great cataclysms we witness.”

Slate.com science writer Phil Plait said it’s “wise” for the pope to issue his statement on climate change after visiting Tacloban:

… people there are still recovering from the incredible power of super Typhoon Haiyan … and it’s known that cyclones like that one are becoming more powerful due to global warming. It will present a strong and clear message of the urgency of this issue.

I have no doubt that the deniers in Congress (and in the usual venues) will bloviate, creating sound and fury over this. But what they are doing is flailing, trying to delay the inevitable.

Fuel Freedom Staff

Explaining all the nutty conspiracy theories about oil

/in , /by

The Washington Post has a good explanation why so many leaders — including Vladimir Putin — might believe that other players are conspiring to set oil prices low, putting pressure on nations like Russia that rely so much on the high price of oil to balance their budgets.

To understand this particular conspiracy theory, one must look at the nature of conspiracy theorists, and here WaPo cites some knowledgeable experts on the subject:

… the psychological research suggests that conspiracists don’t just believe one conspiracy theory. They often believe lots of them. And many of the conspiracies have similar structures — suggesting there are deeply powerful but unseen players working behind the scenes to shape world events.

“A lot of conspiracy theories take as their premise that there’s a small group of people who are plotting to control something, to control the government, the banking system, or the main energy source, and they are doing this to the disadvantage of everybody else,” says University of California-Davis historian Kathy Olmsted, author of “Real Enemies: Conspiracy Theories and American Democracy, World War I to 9/11.”

It might be natural for some people to believe in oil conspiracies, because oil itself is so vital a commodity around the world, and oil producers — notably OPEC — do, in fact, collude to keep their prices at a certain level. That’s the reason they formed the cartel in the first place.

But another motivator is that “struggling leaders need somebody to blame.”

In Putin’s case, finally, we must recognize that a conspiracy theory like the one above is politically expedient — especially in newly perilous economic times. “Governments use conspiracy theories in order to convince their people to support them,” says [University of Utah history professor Robert Alan] Goldberg. There’s no better way to rally support than to suggest to your people that outside forces — not supply and demand, but malicious schemers — are out to get them.

Fuel Freedom Staff

General: Dependence on oil a ‘serious’ national security threat

/in , /by

With gasoline prices at five-year lows, it’s easy to lose sight of the realities of U.S. dependence on oil. We’re still beholden to other nations for much of our supply; we still have to expend much energy and resources defending the free flow of oil around the world; and we still need the long-term solution of alternative fuels to keep prices low.

One person who’s done a lot of thinking about this is retired U.S. Air Force Gen. Ronald Keys, who lays out the argument for reducing our consumption of oil in a guest piece for The Hill. Keys, who spent 40 years in the Air Force (and flew combat missions in Vietnam), is now chairman of the Military Advisory Board at the CNA Corporation, a nonprofit military research group.

Keys writes:

Our nation’s over dependence on oil is a serious threat to our national security—militarily, diplomatically, and economically. It limits our ability to act on the world stage and increases the likelihood that we will send Americans in uniform into harm’s way. It leaves us open to impacts from wildly gyrating prices …

And:

Importing less oil will loosen the bonds that tie us to regimes that don’t always have our nation’s best interests at heart. That will make it easier for the United States to act in its own national interest on the world stage, and make it less likely that we will have to send troops to defend the free flow of oil.

And:

Oil prices will always fluctuate, but the need to cut our nation’s oil dependency will endure. This need doesn’t get any less urgent just because pump prices tick downwards for a while.

Fuel Freedom Staff

The military pays an astonishing amount of money for gas

/in , /by

At the base rate, the U.S. military pays about the same as the rest of us for gasoline, under $3 a gallon. But the costs quickly escalate when you factor in the expenses related to getting fuel where it needs to go, and the often rugged, isolated places American forces need to use their vehicles.

According to an illuminating story by Eric Chemi on CNBC.com, the U.S. is:

… paying 100 times the price the rest of us are. The total cost of getting fuel where it needs to be is skyrocketing the cost for military gas. At a burn rate of 300,000 barrels of oil per day, the Department of Defense consumes 1.5 percent of total national consumption, and is the largest user of energy in America. As a result, it is the biggest proponent of clean energy. Even a total cost of $100 per gallon would be a steal for the military. That’s because its calculations on energy costs are very different than for a regular consumer.

It makes sense, therefore, that the U.S. Defense Department is far ahead the game when it comes to pursuing alternative fuel sources:

Some current projects include a way to produce localized energy on site, creating a mobile energy system and better integrating generators and batteries. There are dozens of projects already underway at military bases globally and multi-decade, long-term plans to find efficiency. Some of the projects include focusing on green power, renewable jet fuels and changing the culture around energy awareness in day-to-day operations.

Fuel Freedom Staff

Bloomberg: Can Brazil get its ethanol mojo back?

/in , /by

Mac Margolis at BloombergView has a good analysis of Brazil’s ethanol industry, which details how “clever sugar and ethanol makers” have been hamstrung by the country’s bureaucracy.

Some 60 ethanol plants have shuttered this year alone and “blue slips,” Brazil’s unemployment notices, are multiplying: Nearly half of the more than 36,000 industrial jobs erased last month were in the sugar and alcohol industry, reports Valor Economico.

What’s worse, they are victims of the wonks and activist bureaucrats whose good intentions to goose growth and contain inflation have only compounded their troubles. The road to ruin was paved by the government of President Dilma Rousseff, a micro-manager who converted state-run companies into the useful idiots of misguided economics.

The piece notes that ethanol took a back seat to oil after the discovery of a huge cache of oil was found under four miles of sea, sediment and salt in 2007.

To restore the balance, and guard against the volatility of oil prices, Brazil might increase the proportion of ethanol blended into gasoline, as well as increase a gasoline tax.

That won’t make Brazilians happy: They already pay one of every three reais they earn to government. But with pressure on emerging market nations to fight climate change by slashing greenhouse gas emissions, a levy on dirty fuels in favor of cleaner-burning ethanol might draw more sympathy.