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Bill USA

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Member since: Wed Mar 3, 2010, 05:25 PM
Number of posts: 6,436

About Me

Quotes I like: "Prediction is very difficult, especially concerning the future." "There are some things so serious that you have to laugh at them.” __ Niels Bohr Given his contribution to the establishment of quantum mechanics, I guess it's not surprising he had such a quirky of sense of humor. ......................."Deliberate misinterpretation and misrepresentation of another's position is a basic technique of (dis)information processing" __ I said that

Journal Archives

Economist says RFS saves drivers up to $1.50 per gallon - Biofuels Digest


In Colorado, economist Philip K. Verleger, Jr. says Had Congress not raised the renewable fuels requirement, commercial crude oil inventories at the end of August would have dropped to 5.2 million barrels, a level two hundred million barrels lower than at any time since 1990. He says the US renewable fuels program has cut annual consumer expenditures in 2013 between $700 billion and $2.6 trillion. This translates to consumers paying between $0.50 and $1.50 per gallon less for gasoline.

Commentary: Renewable Fuels Legislation Cuts Crude Prices(emphases my own)


In 2007, the US Congress passed the Energy Independence and Security Act (EISA), which amended the renewable fuels program to raise the use of ethanol and other renewables as alternatives to petroleum. These fuels have replaced a significant volume of petroleum consumed in the United States. EISA increased the required renewable fuel amount by four hundred thousand barrels per day in 2010 and 2011, five hundred thousand barrels per day in 2012, and nearly seven hundred thousand barrels per day in 2013. The total amount blended into the petroleum mix from 2008 to 2012 was seven hundred million barrels.

Had Congress not raised the renewable fuels requirement, commercial crude oil inventories at the end of August would have dropped to 5.2 million barrels, a level two hundred million barrels lower than at any time since 1990. The lower stocks would almost certainly have pushed prices higher. Crude oil today might easily sell at prices as high as or higher than in 2008. Preliminary econometric tests suggest the price at the end of August would have been $150 per barrel.

The implication for world consumers is clear. As noted in the August 2013 Petroleum Economics Monthly, the US renewable fuels program has cut annual consumer expenditures in 2013 between $700 billion and $2.6 trillion. This translates to consumers paying between $0.50 and $1.50 per gallon less for gasoline.

NOTE that this is quite consistent with the estimate by Merrill Lynch several years earlier I referred to here: http://www.democraticunderground.com/?com=view_post&forum=1127&pid=54461

NOte that we are currently making considerably more ethanol than we were in 2008 when Merrill Lynch made their estimate. This no doubt explains the range given by Verleger going above that est. price computed based on estimate of ML.


About: Philip K. Verleger

Dr. Philip K. Verleger, Jr. is president of PKVerleger LLC and a Visiting Fellow at the Peterson Institute for International Economics. Dr. Verleger’s research has focused on the study of energy commodity markets and, more recently, the amazing transformation of the US energy sector.

During his long and distinguished career, Dr. Verleger has correctly anticipated most of the major structural changes occurring in the oil industry over the last 25 years. In 1986, he was the first economist to fully comprehend and explain the appearance and development of energy commodity markets. Dr. Verleger has chronicled the evolution of these markets since then and has been a leading figure globally in driving their growth. In 2012, he was the first economist to write extensively on the United States’ emergence as an energy exporter. His latest papers have chronicled the economic implications of this unexpected tectonic shift.

Dr. Verleger earned his Ph.D. in Economics from MIT in 1971. He began his work on energy as a consultant to the Ford Foundation Energy Policy Project in 1972. He then served as a Senior Staff Economist on President Ford’s Council of Economic Advisers and Director of the Office of Energy Policy at the US Treasury in President Carter’s administration.

Dr. Verleger has been a Senior Research Scholar and Lecturer at the School of Organization and Management at Yale University and a Vice President in the Commodities Division at Drexel Burnham Lambert. He is now Owner and President of PKVerleger LLC. From 2008 to 2010, Dr. Verleger served as the David E. Mitchell/EnCana Professor of Management at the University of Calgary’s Haskayne School of Business.

Mileage (mpg) Using Ethanol Seen 20% Higher Than EPA Says - Bloomberg


A tweak to an automobile’s engine software can improve by as much as 20 percent the estimated fuel efficiency when using gasoline with ethanol or methanol, according to a non-profit group pushing gasoline alternatives.

A Fuel Freedom Foundation study showed that setting the engine to run at an optimal setting for the higher octane in so-called alcohol fuels can cut the greenhouse gases emitted on average by 17 percent to 20 percent, making it better for the environment than estimated by independent analysts and the Environmental Protection Agency.

“Alcohol fuels are not getting a fair treatment,” Eyal Aronoff, a founder of the non-profit group and co-author of the study to be released soon, said in an interview. With the correct analysis, “the greenhouse-gas emissions look really, really appealing.”

Fuel Freedom is an independent non-profit based in Irvine, California, that doesn’t have financial ties to the ethanol industry. It advocates for policies to build a distribution system for alternatives to gasoline in order to cut drivers’ costs and spur economic growth.

link ti the study: http://www.fuelfreedom.org/white-papers-temp

USDA privatizing meat inspections with program that allowed ‘chunks’ of feces

The Department of Agriculture (USDA) is planning to roll out a meat inspection program nationwide that will allow pork plants to use their own inspectors, but it has a history of producing contaminated meat at American and foreign plants.

The Washington Post reported on Monday that documents and interviews showed that a plan to allow hog plants to replace federal USDA inspectors with their own private employees had produced “serious lapses that included failing to remove fecal matter from meat” in three of the five plants that had participated in a pilot program for more than a decade.

more at: http://www.democraticunderground.com/112753728

I thought that this was important enough to crosspost to. (I suspect many people don't go to E/E except infrequently)

Distribution of Household Income since 1968, top 20% increased 37%, middle went down -19%

The second highest fifth increased their share by 20%, while as said above, the middle fifth's share of income went down 19%.

This makes it pretty hard to achieve a strong, growing economy. When most of the people have less money to spend, then companies will find it harder and harder to grow sales and make money ...resulting in depressed jobs growth and stubbornly high unemployment.

The economy doesn't grow based upon business investment. Businesses invest when they have growing sales and profits. Businesses hire more workers when they have growing sales. IT all starts with the aggregate buying power of the greatest portion of your population. IF people aren't getting a share of the productivity growth it's inevitable that businesses will gradually find it more difficult to grow sales, make more profits.

Wages for the first three fifths (from the bottom) of the income scale have stagnated since about 1970 (in real terms - i.e. taking into account inflation) while the profits of corporations and the incomes of the two top fifths of the county (in terms of income) have shown strong growth.

check out chart in this CRS report:

The U.S. Income Distribution and Mobility: Trends and International Comparisons

Businesses are like sailing ships at sea. No matter what the skippper of the boat thinks, Consumer spending is what fills their sails and enables them to go anywhere. Without that wind -- consumer demand --- business won't go anywhere - and there will be no need for sailors to operate those ships.

Sequestration Ushers In A Dark Age For Science In America



A feeling of despair has taken hold within research communities like Dutta's, Top officials at academic and medical institutions have grown convinced that years of stagnant budgets and recent cuts have ushered in the dark ages of science in America.

"It is like a slowly growing cancer," Steven Warren, vice chancellor for research at the University of Kansas said of sequestration at a recent gathering of academic officials in Washington, D.C. "It's going to do a lot of destruction over time."

If sequestration is a cancerous tumor inside the world of science, how far has it spread?

In 2013 alone, NIH, the primary federal spigot for projects impacting human health, will be forced to cut $1.7 billion from its budget. Government agencies across the board are making similar reductions in their research budgets as well. The length of some grants have been shortened, while others have decreased in size and still others have been eliminated altogether. Though they aren't supposed to do so, university officials have begun siphoning money from funded projects to those feeling the pinch, in hopes that if they hang on long enough, help will eventually come.
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