Big Lies

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This surprises me not at all. Bill Clinton telling lies about how Brazil achieved energy independence. Bill says it was by developing ethanol. In fact, it was by drilling offshore and getting oil. Investors Business Daily explains:

Clinton is hawking the idea that taxing offshore oil drilling companies, from 1% to 6% — a 600% hike for some — and then turning the spoils into a new government bureaucracy for ethanol development is the way to end California's dependence on imported oil.

"Imagine if we stop being dependent on foreign oil. Brazil did it. They made a simple switch to their cars. Switched to ethanol, grown from their own crops. And it's 33% cheaper than gas," Clinton said, neglecting one key detail: cars must use three times as much ethanol as gas.

"With Proposition 87, we can switch to cleaner fuels, wind and solar power," he says in a political ad, "and free ourselves from foreign oil. If Brazil can do it, so can California."

But as a matter of fact, that's not what Brazil did.

It launched a crash program of offshore oil drilling in the late 1990s, working with a Manhattan Project-like determination to develop its own natural resources.

In 1997, Brazil opened its oil sector to foreign competition, encouraging companies like Royal Dutch Shell to explore and drill for oil in its offshore waters for the first time. It offered incentives — like tax cuts. It also turned its inefficient state oil company, Petrobras, into a for-profit company run like a real business instead of a government cash cow, forcing it to compete on an international-standard level. In short, it got out of the way.

Net result, lots more oil for Brazil — enough to enable the once-oil-dependent country to actually export some, all from fewer energy reserves than the U.S.

Brazil's new P-50 rig has boosted output to an average 1.9 million barrels of oil a day, a bit more than the 1.85 million Brazil consumes.

By contrast, ethanol output in Brazil, the world's biggest producer, is only a small share of its energy consumption.

Last year, the country squeezed out just 282,000 barrels a day mostly using sugar, a more efficient and clean-burning energy source than the corn-based stuff produced in the U.S. But sugar-based ethanol still isn't as efficient as gasoline.

There is, of course another long term problem here. By taking food crops and turning them into motor fuel, somewhere down the road, people are going to starve as a result. A big push to go to ethanol will actually hasten that day. There is not magic bullet here, folks. It will take more than one incremental thing to cure the need for oil. There may be a bunch of those incremental things we can do, but not of them is a cure-all. And we really need to consider the long term implications of some of these proposals.

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2 Responses to Big Lies

  1. crosspatch says:

    While ethanol sounds great in theory, it might not be wise to adjust your economy in such a way that a major drought can kill your fuel supply.

    Also, increases in taxes on petroleum fuels hit the working poor the hardest. While someone with the gas guzzling SUV might pay the most in absolute dollars in tax, they are also paying the smallest percentage of their income on the tax. The single working mom just barely making ends meet is going to be hit the hardest. It is a shame that so many voters in urban areas get a Marie Antoinette “let them take the bus” attitude when in most cases there is no public transportation available outside of major urban areas.

    The simple fact is that petroleum fuels are still the cheapest and most efficient to produce and all of these measures are simply designed to introduce market inefficiencies that attempt to favor one fuel over another. In reality, all attempts by man to manipulate markets in this way are doomed to eventually fail. Eventually the market will out and the river of economics will return to the path it wants to take. Often leaving much economic wreckage in its wake.

  2. burnitup says:

    Hey, while he’s busy spinning stories for a gullible audience maybe Bill Clinton could plug embryonic stem cell research as an alternative fuel source. ESCR after all is the end-all-be-all of fix its for everything.

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