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ADM is doing for soil what Exxon has done to air

Amid all the hoopla over President Bush's State of the Union address, Archer Daniels Midland's quarterly report (PDF), released Tuesday, got little attention outside of Wall Street -- where it drew cheers, sending ADM's share price to an all-time high.

At the company's conference call with analysts, the Wall Street Journal reports, John M. McMillin of Prudential Securities "likened [Archer Daniels Midland] to Exxon Mobil Corp., which just announced its own record-breaking profit and jokingly suggested the company might be called upon to explain its profits."

Actually, McMillin's comparison isn't all that comical. Just as ExxonMobil clawed its way to the top of the corporate heap by peddling an environmentally ruinous commodity whose real costs don't burden its balance sheet, ADM's "blowout" profits can be traced directly to government largesse. Oh yeah, and both companies owe much of their surging profitability to making fuel for cars.

Bush didn’t mean he’d literally reduce Middle East imports

Well, turns out all the doubt, debate, and discussion about Bush's oil pledge was beside the point:

One day after President Bush vowed to reduce America's dependence on Middle East oil by cutting imports from there 75 percent by 2025, his energy secretary and national economic adviser said Wednesday that the president didn't mean it literally.

Let it sink in ... give it a second ... don't fight it ... theeere it is.

It was just a figure of speech! An old saw. An aphorism, you might call it. You know, like how they say.

Not that kind of 75%-by-2025, the kind you were thinking, with the 75% and the 2025. More like a metaphor.

With good reason

Here at Gristmill David has already raised questions about the president's stated goal "to replace more than 75% of our oil imports from the Middle East" (which accounts for less than a quarter of imported oil) as opposed to trying to reduce total imports, let alone reduce total consumption.

Tom Doggett, a business reporter for Reuters, looks at projections from the Department of Energy and wonders if even that goal would be achieved by the president's current proposals:

U.S. ethanol supplies will be just 783,000 barrels a day in two decades -- a drop in the bucket compared to the more than 26.1 million barrels per day of crude and petroleum products the country will consume, according to the EIA, which is the Energy Department's analytical arm.

Even if ethanol production were to increase by 2025 to levels sought by the administration, it would not necessarily displace crude oil from the Middle East, because the region has the lowest costs for producing oil in the world and U.S. companies would continue to seek the cheapest source of energy, according to EIA analyst Anthony Radich.

"When I speak of expanding ethanol production it's not at all clear that it's going to reduce import dependence," Radich said.

"Barring some (government) policy that explicitly discourages oil imports, even if we do find cheaper ways to produce cellulose ethanol, the imports from the Middle East are among the last to go," he said.

Two quick thoughts: First, if Venezuelan or Mexican or Canadian oil remains more expensive to extract than Saudi Arabian oil, we would simply import less from those countries.

Second, if the goal is to achieve energy independence, then seeking alternative supply channels ("technology!") without addressing demand is a bit like picking a fight with one hand tied behind your back. Your left hook better be really good.

SOTU: Corrections and updates

All right, I've been blogging on the fly since the SOTU speech, and in my haste I've gotten a couple of things slightly off. Boring corrections and updates below the fold.

Hybrid myths

BusinessWeek covers the "Top Ten Hybrid Myths."

Excuse me, but do people still think you have to plug hybrids in? Clearly I'm out of touch with mainstream American here in my elite coastal bubble, 'cause I mean c'mon.

Contest winner leans green

This just in: A conservationist (and a local one at that!) has won the Since Sliced Bread contest I mentioned in October. His idea: taxing polluters to fund environmental efforts. The runners-up suggested connecting the minimum wage with the cost of living and reforming public education. Hey, why didn't we think of that?

The unofficial ones were better than the soporific official response

Virginia governor Tim Kaine's Democratic response to the SOTU was not, as far as I can gather from reading around, very well-received. And it's not hard to see why. Even aside from his wandering eyebrow and the bizarre Colonial Grandma stylings of the background, he focused on the deadly boring themes of "good management" and "results." Zzzzzz ...

This was his devastating critique of Bush's conduct of the "war on terrorism":

Our commitment to winning the war on terrorism compels us to ask this question:  Are the President's policies the best way to win this war?

Woah, that's gonna leave a mark!

As for the energy stuff ... sigh. It seems that the Dems can hardly wait to hand this issue to the Republicans:

Mixed

Here are three reviews of the speech: From a professional TV critic, from average folk on the street, and from a conservative.

Guess which one this assessment came from?

George W Bush is arguably a better public speaker now than were Presidents Eisenhower, Johnson, Nixon, Ford, Carter, and George H. W. Bush in their prime. ...

...

... His smirks are gone. The squinting has disappeared. The nervous rushing through a speech is a distant memory. Tics are nonexistent. The first half of his speech was completely devoid of any stumbles whatsoever. ... Indeed, Bush was devoid of Bushisims.

Bush exuded confidence through his steady eye contact and his lack of head jerking. He conveyed emotion without seeming exasperated. For once, he seemed to have spent more hours in a week rehearsing his speech than at the gym. ..

... Unless you were a die-hard Bush hater, he didn't seem smug or arrogant. Instead, his tone was conversational and relaxed.

Hazard a guess, anyone?

Maybe oil from elsewhere?

In an earlier post, I calculated (based on 2004 figures -- I may update them shortly) that Bush's "great goal: to replace more than 75 percent of our oil imports from the Middle East by 2025" would involve lowering U.S. oil consumption by 10.5% over 19 years. Not very ambitious.

But it's worth noting that even there I may be giving Bush too much credit. I'm assuming that he means to "replace" the Middle Eastern oil with alternatives -- biofuels, electric cars, hydrogen cars, whatnot.

It's at least possible, though, that he means to replace Middle Eastern oil with non-Middle Eastern oil. I'm no oil geologist, so I don't have a good sense of whether this is possible. But it's not outrageous to think we could cover that amount (10.5% of our oil use) by increasing imports from Canada, Mexico, Venezuela, and Nigeria -- and by increasing domestic production (read: drilling in Alaska and off the coasts). Since Canadian tar sands are under furious production, it's likely that Canadian imports are going to rise anyway.

So, it's possible that Bush's "great goal" could be accomplished without reducing U.S. oil consumption at all. We could, to use his own addiction metaphor, get our fix elsewhere.

But even I'm not that cynical.

A disinformation-cycle case study

A fascinating bit of forensic bullshitology by Tim Lambert, about chromium-6 in drinking water.