Democrats ready to give more subsidies to biofuels

Already, ethanol is an incredibly subsidized product, as is the corn from which most ethanol is derived. Yet, the profit margins for ethanol producers are actually greater than oil profit margins. For many, this isn't a problem because of the belief than ethanol is more green than petroleum, or that ethanol helps reduce foreign oil dependency. Many Democrats in Congress also have the same belief and those Democrats are preparing to roll back tax subsidies for oil companies and use them for biofuels according to the Detroit News.

Still no word, however, on whether Congress is going to do anything to promote hybrid vehicles, including plug-in hybrid vehicles.

GM less fuel efficient today than 10 years ago

While GM claims to have more fuel efficient vehicles on the road today than any other auto manufacturer, GM's fleet is .05 miles per gallon less efficient than it was 10 years ago. Both Ford and Chrysler made slight gains. Toyota, on the other hand, improved fuel efficiency by 1.5 mpg over the same decade.

"Improving motor vehicle fuel efficiency is a win-win-win solution that would not only lower consumer costs and help decrease our dependence on oil, but also improve the future prospects of U.S. car companies," said Mark Cooper, the consumer federation's research director. "It is essential that the new Congress move quickly to approve higher fuel efficiency standards in order for these benefits to be realized."

Additionally the report noted, "It is significant that Ford and GM showed only marginal increases in the percentage of vehicles meeting CAFÉ standards and have suffered severe financial setbacks."

Kind of ironic that the same day the Big 3 and Democrats are blaming Bush for Detroit's problems, the facts seem to paint a bit different story. I thought the Democrats were going to rise above partisanship, end their ties with lobbyists and provide a new direction for America?

Democrats, Big 3 Blame Bush for Detroit's Problems

The Big 3's top lobbyists met with Michigan's top Democrats to prepare for President Bush's meeting with the CEO's of the Big 3. The message: Detroit's problems are not Detroit's fault.

While Bush has told the Big 3 to build more relevant automobiles, the Big 3 have not listened. Instead Detroit blames health care and unfair trade practices.

Regarding relevant automobiles, GM responded, "Five million who bought our cars last year think they're relevant," GM's sales chief Mark LaNeve told The Detroit News in May. "Twenty million owners that we have just in our database probably think they're pretty relevant. The 1.1 million (GM) jobs are also voters and probably think it's pretty relevant."

"There have been no steps taken by this administration to support manufacturing. They need to understand, and I hope the Big Three will be blunt and direct with the administration, that their competitors are not companies overseas. Their competitors are countries overseas," Senator Carl Levin said.

(Source: DetroitNews)

Democrats appear ready to focus on alternative fuels as answer to foreign oil dependency

As I stated earlier today, when it comes to foreign oil dependency, don't expect any real change from Democrats. Rep. John Dingell, whom will become chairmen of House Energy and Commerce Committee in January, has been a strong proponent against increased CAFE standards and he appears to see E85 and alternative fuels as the main solution to foreign oil dependency. (more)

Hopefully, Democrats will extend a few crumbs towards hybrid cars and plug-in hybrid cars, but that might offend the UAW too much, so don't expect any new tax credits for hybrids.

This is the big change America voted for? Excuse me for not being overly excited. When push comes to shove, politicians are just politicians and Democrats aren't really much better than Republicans.

It all comes down to the people. Politicians don't lead revolutions, people do, and voting for Democrats is no revolution.

Some interesting quotes

"In recent years, attempts to increase fuel economy standards have been met with broad bipartisan opposition and we're hopeful that that opposition continues," said Charles Territo, a spokesman for the Alliance of Automobile Manufacturers.

"Energy policy and fuel economy standards for the past 20 years have been a bipartisan failure," said David Friedman, research director for the Union of Concerned Scientists' Clean Vehicles Program. "The next year will tell us a lot about how serious people are."

Stop the Madness: Hybrid Vehicles Not E85!!!!!!!

Last year ethanol producers received subsidies and tax incentives worth more than $5 billion dollars, and those subsidies will probably be much higher next year. Yet, even with those subsidies ethanol isn't cost effective unless gas prices are close to $3.00 per gallon.

So, is ethanol worth the price?

Supporters of ethanol claim that all this investment in ethanol for automobiles will eventually lead to better ways of producing ethanol, such as cellulosic ethanol.

I say it will simply lead to more flex-fuel Hummers and little decrease in foreign oil dependency. I say E85 is a feel-good way of accomplishing nothing, something both Democrats and Republicans love - talk, talk, talk, but do nothing.

Without raising the fuel efficiency of America's automobiles - significantly - America's demand for energy will continue to grow exponentially and it will outpace any reduction in foreign oil dependency produced by ethanol.

More important, even GM is now realizing the that the future of automobiles is probably electric. If this is true, then E85 simply becomes a distraction, even a boondoggle to those ends, at least for American automakers and the American economy.

Today, hybrid cars can increase fuel efficiency by 20 to 30 percent, which is a good start. Add advanced gasoline engines or clean diesel engines and fuel efficiency could be doubled - that's with just TODAY's technology.

But the real advantage of hybrids will be lithium batteries, and the ability to utilize electric power. Within 5 years it is quite possible that you could buy a $30,000 hybrid vehicle that might never have to be filled with fuel if you drive less than 40 miles per day, all it would need is a small electric charge at night.

Within 10 years a small fuel cell stack could be added to these plug-in hybrids and the majority of drivers might never need any other fuel than just a little occasional electricity. More important, all of this could happen much quicker if more incentives were provided for hybrid technology and lithium-ion technology.

Why not give those ethanol subsidies to consumers to purchase these vehicles? Ultimately, a change in consumer behavior is the quickest path to foreign oil dependence and a cleaner environment.

Yet, ethanol is the favored buzzword, the favored recipient of tax incentives and government subsidies.

In the past Honda has already claimed it believes electric cars are integral to the future, and Toyota's hybrid efforts make them a player in electric cars as well. Even GM says the future is electric. Consequently, it is imperative that American automakers lead the way into this automotive revolution, rather than sticking to flex-fuel Hummers and Mustangs.

America's focus should be that in 10 years every American vehicle produced is either fuel-free or that fuel is simply a backup. The technology will be there within 10 years. The Japanese will be there. Will America?

Still, I'm all for ethanol, cellulosic ethanol, as a fuel to produce electricity, just not as an automobile fuel. Ultimately, transporting ethanol simply makes no sense in a liquid form, but in an electric form it makes great sense.

Consequently, E85 could become a distraction, even a boondoggle if it takes the clean energy and foreign oil dependency spotlight, and early talk from many Democrats seems headed in that direction.

The future is now. If we don't dare to dream, we just might wake up to a nightmare. New automotive technology, not alternative fuels, should be the priority for America, and the majority of our tax incentives and subsidies should be given to consumers to buy this new technology.