EnergyConservationinTransportationandtheBushSpeech.pptVIP

Energy Conservation in Transportationand the Bush Speech on High Gas Pricesby Dennis SilvermanDepartment of Physics and AstronomyU. C. Irvine President Bush’s Speech was Given to the Renewable Fuel Association April 25,2006 Excess or Windfall Profits? Oil industry profits were $100 billion last year. President Bush always used words of investigating “market manipulation”, which is illegal and includes price fixing, but never used the words “excess profits” as being something he would stop or tax. Repeatedly used the words “high cash flow” rather than high profits. Only once at the end did he say the words “price gouging”. In a capitalist economy, in a non-regulated industry, does “excess profits” have any meaning? Perhaps consumers just have to lower demand to the supply to stabilize or bring down prices. Corn or Other Crops? The President praised corn innumerable times. Once mentioned other crops might be better. Once mentioned sugar in Hawaii. Once mentioned corn husks, straw grass. Said corn also needed for food and for feedstock. Talked about 10% ethanol, 85% ethanol, 100% ethanol. Current 4 billion gallons of ethanol a year is 100 million barrels of ethanol, or about 11 days of US consumption. Since ethanol is in short supply but is a mandated additive and also needed in the switch from MTBE, it may be one cause of high gas prices. In waiving such a requirement, is the President telling the farmers: I came to praise Corn, and to bury it. Farm income last year was $83 billion, with $23 billion in subsidies. Ethanol is subsidized at 50-60￠ per gallon. Bush solution to high gas prices Stop filling strategic reserve (only save 70,000 barrels a day out of 20 million barrels a day oil consumption). Drilling ANWR would have lowered price 50￠ a barrel, (which is only 1￠ a gallon, and is at least 10 years off). (Actually a refinery shortage as a few percent still down from Katrina, and a few percent being maintained after being on to make up for Katrina.) Waive ant