Friday, February 2, 2007


Much has been written about the President's state of the union address in regards to alternative energy including yours truly. The press on alternative energy will only increase, especially since the release today of the UN Global Warming warning. But let us focus on things we can do now and not dwell on the speech. Sure he outlined goals and policy, but as a guide line. Let's take the ball and run. Move forward and discuss the issues as they warrant and not keep falling back and using his speech like a gym wall during a dodge-ball foray.

Also there has been much criticism aimed at big oil and its effort to promote alternative energy technology. Recent commercials and monetary incentives handed out by BP have been looked at with askance. It is in big oil's best interests to proceed in this direction. When looking at the very long run, they are involved in a waning industry. If we had looked at IBM in the 1950's with this same attitude, maybe we still would be communicating with an IBM Select and using message runners.

Much critique has been dealt to the use of corn in the production of ethanol. World hunger is not in jeopardy nor will we run out of cornflakes and hush puppies. The market will sift out the weaker links here as well as drive motorist to their fancy. Who cared about the droughts in the past and waning water tables that affected corn futures. Nobody in my neighborhood.

I read about motorist complaining they can't get the same fuel economy with ethanol. Ok so what. One guy wrote that he travels across state to get away from his local gas mixture so his mileage will improve. Figure that one out. One stately newspaper wrote about the use of pesticides for use in growing corn. If we had a breakthrough in more comfortable underwear would we complain about spraying for cotton aphids?

Let us concentrate on the bigger issues such as the reduction in carbon particle emissions. If we compel our government to mandate stricter emission standards, the market will work itself out. Survival of the species isn't restricted to the iguana. Give government the chance to become forward looking. And it will. Incentives given towards our technology base will allow the information flow to propagate and become integrated into industrial solutions. We also need independent oversight, and not a, but a dot.commission. If we look upon that report on global warming, as we did on bank failures in the early 1900's, we would immediately form a body of stewardship, much like the Federal Reserve, for our governance of progressive energy solutions.

So it's time to move on. I will here on this blog.


Ron Wikoff said...

I agree we need to move-on I am just not sure that ethanol is the main area we should emphasize. In all due respect for your opinion, I do not agree that we are not yet being impacted by the emphasis on corn for making ethanol.

Hog farmers are already going out of business and selling their hogs early because of two things. They are being impacted by the cost of feed which has doubled and the low margins of profit on each hog. They are finding it better to sell their hogs early and cut their losses rather than continue to pay the high cost of feeding them They will flood the markets with pork which will be temporarily good but the prices will soon rise substantially when shortages come from lack of supply and they will come. That is one example of the impact of corn prices so don't kid yourself, the rising prices are impacting in other areas and you can bet it is in our corn flakes too.

Secondly, ethanol raises the price per gallon we pay for fuel and with rising corn prices will come even further costs to the fuel, not to mention everything else in our food supply that depends on corn and its by products.

I am just not sure that ethanol is the area that should be our main emphasis. How about cleaner burning diesel engines that are available right now? Not the old smoke belching ones but the newest and best in the technology which have less emissions than gasoline engines. Corning (GLW) has a new technological tailpipe in their pipeline that will strip even more emissions from these new cleaner burning engines. That will require little change to our marketing system for fuel and can be implemented right now while we consider other things such as solar/battery power and other forms of power generation such as nuclear and concentrate more heavily of fuel cell perfection and cost reduction.


Vestor22 said...

Thank you for the feedback Ron. Yes there are other types of fuels on the market and new ones will be added. The military is presently looking at liquid natural gas. Prior to WW11 two american companies helped Hitler convert Germany's coal into diesel for their war machine. The original engines for our automobiles in the early 1900's, were engineered to run on alcohol (ethanol). Yes, corn-feed has hurt many livestock producers. The commodities associated with ethanol have risen, but not from our consumption of ethanol. The same futures that act as crop insurance during low price margins are the same ones that help farmers prosper during high margins. Many grain co-ops are storing large quantities of corn as a hedge and exacerbating the situation. My position is that corn prices are on a bubble and the price will pop as soon as market forces say so. Hula hoop prices are lower now than they were on 1962. Without brushing off the ag situation, I feel our emphasis should be on the environment. The market forces will dictate what fuels will be used.