Friday, December 07, 2007

Energy Bill Woes

This looks to have started out as a fairly good bill. The Cafe standards changes were probably needed, since it's quite obvious that the public at this time doesn't want to demand that type of thing right now. The additions of requiring 15% of energy be from renewable sources and if states can't meet that requirement that gets them punished with extra taxation of their energy, strikes me as ludicrous.
The bill's highlight is the fuel economy standard of 35 m.p.g. by 2020, the first increase in such standards by Congress since 1975, with stiff guidelines for how federal regulators can set new efficiency rules for cars and trucks.

Automakers and environmental groups backed the increase, with the UAW and Toyota Motor Corp. both lobbying for the bill's passage.

To help meet the standards, automakers could draw upon loans of up to $25 billion for engineering and building vehicles with advanced technologies, although the provision was pushed more by the UAW than the companies.

The package also calls for a boost in renewable fuel output to 36 billion gallons by 2022, and requires 15% of electricity production by 2020 to come from renewable resources.

To pay for a variety of new tax credits and some $2.1 billion in lower gas taxes from the fuel economy rules, the bill would add $21 billion in new tax revenues, $13 billion of which would come from repealing a tax break for the five largest U.S. oil and gas companies.

I'm still trying to find out what states can't meet the 15% renewable energy requirement. Considering hydro electric isn't on the list, I'm guessing that is going to cause some issues. By defining "renewable" so tightly I think they have made a major issue with many states.

The ethanol requirement is just stupid. I still don't see how anyone thinks this is an advance. I've read several articles that state that the energy usage to make ethanol is nearly as high as it is to just burn the oil. Anyone who understands how a still works would understand that. Not to mention the vast quantities of water that it takes to make that much ethanol. This article quotes 15:1 ratio.
A longtime analyst of ethanol production disagreed with Martin and questioned his figures, saying it takes an average of about 15 gallons of water to produce a gallon of ethanol much higher than the roughly three gallons of water per gallon of ethanol Martin cited.
And that doesn't include the water for irrigation of corn which is the primary material used to make alcohol. Should we also point out that the vast quantities of ethanol must be trucked to refineries because pipelines for one don't exist, and two ethanol is corrosive and can't be piped in normal oil type lines?

I also enjoy the reasoning on how they are going to pay for parts of this. Not that the Oil companies won't be passing those taxes onto the consumer or anything. I don't believe oil companies should be receiving any tax breaks or subsidies at all, but trying to push the costs onto the oil companies and not expect an impact on the consumer is just pathetic.

This doesn't strike me as a "shot heard round the world." Just a shot in the dark.

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