As the pushback from ethanol mandates becomes fiercer, the winning argument seems to be wrapping the biofuel industry in the Stars 'n Stripes under the guise freeing us from dependence on "furrin orl". This seemed unlikely last year, and even more so today.
While this is all fashionably xenophobic, not only is there no evidence to suggest we are decreasing our oil imports from bad people by making more ethanol, it would seem we are doing THE OPPOSITE.
|Crude Oil Imports (Top 15 Countries)|
(Thousand Barrels per Day)
|Country||May-07||Apr-07||YTD 2007||May-06||Jan - May 2006|
Please compare the last column with the third. If we lump Saudi Arabia, Iraq, Algeria, and Venezuela (I forget - is Russia on our side now or not?) together as "nasty oil" then we are importing 3.458 million BPD now compared to 3.400 million BPD during the same period last year. Other interesting notes:
- we are getting less from Iraq than in 2006
- we are getting more from Russia
- we are getting more from Algeria
- Saudi Arabia has replaced Mexico as #2
- Mexican production is slumping seriously.
Other observers with more intellectual heft than this minor-leaguer are drawing similar conclusions.
This is nonsense. As my colleague Robert J. Samuelson demonstrated this week, biofuels will barely keep up with the increase in gasoline demand over time. They are a huge government bet with goals and mandates and subsidies that will not cure our oil dependence or even make a significant dent in it.
Even worse, the happy talk displaces any discussion about here-and-now measures that would have a rapid and revolutionary effect on oil consumption and dependence. No one talks about them because they have unhidden costs. Politicians hate unhidden costs.
There are three serious things we can do now: Tax gas. Drill in the Arctic. Go nuclear. [More]
The numbers may not matter in the short run. Ethanol seems like it should reduce our need for imports, so if we keep saying it long and loud enough, maybe a miracle will happen. But every year as we re-examine our oil import numbers, the illusion will be harder to support.
For producers, the key to maintaining support for mandates could be to install a large and powerful political base in as many states as possible and to keep the costs hidden.
That's pretty much a mirror of our farm program political strategy. And it is hard to argue with the success of that political effort.
Hence my cash rent bids.