Will Washington state take on Big Oil?
The front-page story for the Seattle Weekly tells us that Washington State is going to take on Big Oil and that:
The sexy star of the industry is biodiesel. Although there is only one biodiesel refinery in the state, which employs 12 people, and no biodiesel crops are grown commercially in Washington, biodiesel has captured the media’s, the public’s, and the politicians’ imaginations.
Part of the plan includes a new law that will require the use of up to 10 percent biofuels to run vehicles in the state. This reminds me of how the old Soviet Union ran its economy (into the ground). “You will produce and buy whatever the state tells you to produce and buy regardless of cost because we know what is best for you. The free market is for capitalist pigs.” Nevermind that much of this biofuel will eventually be coming from big oil, or at least its equivalent. Turns out that Shell Oil has invested in a company building a cellulosic ethanol plant just one state over.
Has Shell invested in ethanol to save the planet or to capitalize on the money to be made when a state mandates usage of a given product regardless of cost, insuring a captive market for that product? I wonder.We are reminded of how the big energy companies have taken advantage of us:
Hurricanes Katrina and Rita disrupted oil and gas supplies, driving prices higher, and created opportunities for profiteering by big energy companies.
Why does the author think that profiteering will end if you replace oil with biodiesel or ethanol? A drought-induced crop failure has just as much potential to send the price of ethanol or biodiesel through the roof. Also, most successful small companies eventually become large companies either through growth or by being bought out by the competition. Now, we can fix that problem with yet another law that makes it illegal to become a big company. But wait a minute, since when are small companies less likely to profiteer than big companies? This is my point. Government interference in free markets can be highly detrimental, as can government decisions that send us to war by accident.
Which leads me to the next problem with this piece. The author makes repeated references to the Iraq war to bolster the importance of biofuels (biodiesel in particular). It has been pretty well established that the U.S. gets only about 10 percent of its oil from the Middle East. Let’s face it, our intellectually challenged president did not go to war to protect our supply of oil. He did it to protect us from “terists.”
The disastrous invasion of Iraq, of course, has highlighted the military and political costs of dependence on oil from the Middle East …
… the nightly news brings flesh-and-blood reminders of the cost of our reliance on Middle East oil.
… but if we need any flesh-and-blood reminder of how disastrous our nation’s current energy policy is, just turn on the nightly news and be reminded of the cost of our reliance on Middle East oil. While a clean-energy future seems a challenge, it’s unimaginable that a dirty, blood-soaked energy future will be possible to bear.
Now, I voted for Governor Gregoire, but this comment lowered my left eyebrow while raising my right one:
“We are a coastal state fighting desperately against global warming.”
The article did contain brief periods of lucidity:
In the short term, all of this protest and recognition of problems isn’t going to do anything to change the high cost of energy or dependence on foreign oil. “Americans will spend over $200 billion more on energy this year than they did last year,” says Cantwell, a member of the Senate energy committee.
Biodiesel’s big disadvantage is that it costs more to buy than conventional diesel. Last week, at Laurelhurst Oil, a University District gas station, conventional diesel was selling for $2.79 per gallon, while biodiesel cost $3.17.
This might explain why my neighbor’s diesel Jetta is not being driven as often as the gas Honda.
Remarks like this always get me:
The idea is that if the United States can produce its own energy instead of relying on imported fuel, there will be geopolitical benefits, too.
The lion’s share of U.S. CO2 production does not come from imported fuel, it comes from coal. It is our transportation that uses oil, which produces only 25 percent of our CO2. It is not possible to grow enough of our own transportation fuel “domestically” to make a dent in this (let me know if you want to see the math). In addition, biodiesel will eventually be made from soybeans grown in the Amazon or from palm oil grown in Indonesia because that is where the cheapest sources will be because that is where the rainforests are that can be converted to more cropland. Using biodiesel is not going to reduce our reliance on imported fuel. It will only change whom we are reliant on.
The author first defends the free market:
Our national government is a pipeline of corporate welfare for environment-besmirching oil and gas companies.
He then turns right around and enthusiastically tells us about our state government’s plan to provide a pipeline of corporate welfare for jungle-, land-, and crop-consuming biodiesel companies:
Democrats agree there will be a host of tax breaks for everything connected to biodiesel, but some legislators want to go further.
House Capital Budget Committee Chair Hans Dunshee, D-Snohomish, wants to use state money to build the big, expensive crushers that convert oil-seed crops into oil. Since the state constitution prohibits direct payments to private industry, Dunshee says the money would likely go to an eastern Washington port district or some other governmental entity.”
The author tries to reassure us that this show is not being run by a bunch of liberal environmental nutjobs:
… the industry is not one of anticapitalist ecotopians. The fuel’s source is produced by agribusiness cooperatives in the Midwest that grow soybeans conventionally and have banded together to build refineries to supply a new market.
In other words, the industry is being run by capitalist anti-ecotopians.
The company started two years ago when commercial airline pilot John Plaza, now the company’s president, mortgaged his home, sold his boats and cars, and borrowed against his 401(k) plan to get the alternative fuels venture up and running.
What are the odds that when Shell, BP, or Exxon, eventually buys these guys out they will skip to the bank blowing raspberries at every environmentalist they meet?
The bottom line is this. Biodiesel is all about making money. Which is fine with me as long as you don’t destroy anymore of the face of the planet to make that money. Biodiesel cannot provide meaningful amounts of fuel without usurping existing cropland and creating more cropland out of rainforests. It does not make sense from an environmental perspective. Like nuclear, it will create more environmental problems than it solves. The problem is that no one has told the politicians this yet. They are looking at it less from an environmental perspective than from a political one:
The alliance believes such an undertaking would create 2 million to 3 million new, high-paying, permanent jobs …
Washington politicians are giddy about biodiesel. It’s easy to see why. Gov. Gregoire quotes John Steinbeck: “The bank is more than men; it is a monster.” Says the governor, “Replace bank with foreign oil.” She sees biodiesel as an opportunity to tear down the Cascade Curtain and unite the red and blue parts of the state. “This is an opportunity for us to work together as a state,” she says enthusiastically. Washington has the agricultural potential east of the mountains to grow oil-seed crops. Mustard seed and canola seed (aka rapeseed) are the most frequently mentioned. Oil-seed crops can be grown in rotation with others — wheat, for instance — throughout eastern Washington. Western Washington consumers, with their liberal politics and environmental values, represent a great market for the product — even if it’s more expensive.
That part about environmental values will change once word finally gets out that biofuels are anything but environmentally friendly. My other hope is that some technological breakthroughs will come along in time to crush this thing before it does any more damage. New battery technology could finally usher in viable electric cars. I’m just keeping my fingers crossed. But hey, other than these few problems, I thought it was a great article.