GUSHER OF LIES - Review and Reply to Robert Bryce Pt. 2

I guess I’m still having trouble wrapping my mind around Bryce’s comments that he believes in the U.S. Constitution and Bill of Rights; that he is very thankful to the Saudis and Emiratis; and that he philosophically moved from believing there should be major government involvement in energy to now believing that the government should “quit meddling in the energy market.”

I mean, I got the picture (excuse my Brooklyn-ese) about him taking a fabulous trip to Saudi Arabia and UAE. I’m sure he was very impressed by what he saw. I’m sure the accomplishments of what trillions of dollars in oil revenue can do for desert nations that had no money just a short 6 or 7 decades ago is absolutely breathtaking. Good for them, but what does that have to do with us?

When I travel and see fabulous things it inspires me to want all of that for America. Don’t get me wrong, we have a tremendous amount of fabulous things already, but my love for the Constitution and the Bill of Rights, and other things American, doesn’t make me want to sacrifice what we have to make life better for people who are diametrically opposite to us in so many ways. If they can be as successful as us without it infringing on our ability to be successful I’m okay with that, but I’m not okay with turning America into a second rate nation just to feed their gluttonous appetites. The images of a modern Dubai are indeed wondrous; wouldn’t it be great if we could make Detroit and the South Bronx look that good?

Maybe I’d feel different if they sent me and my wife on a fabulous tour of Dubai. Well, not my wife, she’s not that crazy about all that gender inequality stuff and I really prefer her with her hair down and flowing. I get no thrill of her walking a couple of steps behind me (in fact, I like walking a bit behind her, the view is much better if you know what I mean).

Incidentally, while writing this section I came upon a video on YouTube that I thought brought great clarity to this point. Finding it when I did was completely coincidental, almost like an epiphany. Check it out by clicking the window below:

See, the thing is that if we found the national determination to end our dependence on foreign oil, we would keep hundreds of billions of dollars in America every year. This would be pretty great for our economy. And if we could find the grit to do that, then we might also find the resolve to make some other things happen, such as regulations that require every vehicle sold in America to be made in America by American citizens; every refrigerator, every TV, every computer, every dishwasher, every washer and dryer sold in America to be manufactured in America, by American citizens. The manufacturing companies can be foreign owned, and I hope they would be wildly profitable to encourage more investment. However, all jobs must be filled by American citizens.

What this would do is take the $400 billion (approx) per year that we don’t have to send out of the country and cycle it around several times in the process of buying American goods that make more money available to Americans to buy more American-produced items that are built by Americans, etc., etc.., etc. It would give us an annual stimulus of a few trillion dollars. If the $800 billion TARP stimulus program in 2008 was supposed to be good for our economy, just imagine what an annual $3 trillion stimulus would do every year for 5 years, 10 years, 25 years?

So, to me, instead of all the time that Bryce devotes in his book to using arcane figures and charts to show us how gasoline is cheaper today than 100 years ago, I think this process is a far better direction for America. And I think that if you are an American libertarian who believes in the United States Constitution and the United States Bill of Rights that this is the only way to go.

By the way, I hope you’ve noted that I didn’t even figure in how much we would be saving by not using our military to defend the world’s oil…Did I say “the world’s oil,” and not just American oil? Yes I did. We’re even protecting the oil of countries that hate us.

I do have to admit, however, that if I had received a fabulous trip to Saudi Arabia and other oil producing foreign countries and then pushed this kind of agenda, I’m sure the Arabs wouldn’t be very happy with me. I’m not suggesting that they would do something violent – I’m really not. But I don’t think they would want to spend that kind of money on me again.

To be frank with you, it’s disappointing to me that Robert Bryce and other patriotic Constitution-loving Americans like him don’t readily understand this approach and haven’t already jumped on the bandwagon.

I’m disappointed, but not surprised.

Why am I not surprised? Because this goes back to the other “thing” I have, the thing about the need to understand business; to really understand business. I don’t think that Robert Bryce has ever had any real business experience. I don’t think that Pimentell has had any business experience. I don’t think that Taylor or Searchinger or Rahn or David Fridley from Lawrence-Livermore Labs ever had any business experience. They may have studied business for a time in school, but that’s like reading about sex and then not ever engaging in it. Clearly Bryce consulted “business experts” from some universities and/or his Manhattan Institute, and they gave him some graphs and formulas to explain what they read about in school – but never put into practice. So what do I think this means to Robert Bryce’s business observations? I think it means that he not only didn’t read about and engage in sex himself, he relied on someone else’s interpretation of reading about sex without their ever engaging in it. Incidentally, this is not a challenge for Mrs. Bryce to come to her husband’s defense.

By the way, again, I hope you’ve still noticed that I haven’t even included in the cost for our military to defend the world’s oil, and I haven’t calculated in the incalculable cost of the lives of our military service personnel and American civilians. I will, but I’m saving it for later.

INSIGHT INTO BRYCE’S THOUGHTS

In the 1970’s there was a very popular TV weatherman on WABC in New York by the name of Tex Antoine. One night Tex’ forecast was preceded by a news story of a young girl having been raped. Tex made the unfortunate mistake of beginning his segment by saying, "With rape so predominant in the news lately, it is well to remember the words of Confucius: If rape is inevitable, lie back and enjoy it.” I remember the incident as I was still living in NY at the time. Tex was fired either immediately after the news show or the next day.

So why does this little piece of nostalgia have any bearing on a book about fuel that was written 30 years later, you are probably asking yourself. In fact, if Robert Bryce is reading this right now he is probably also wondering what the heck I’m talking about.

In the sub-sections of the chapter titled, “The Emotional Appeal of Energy Independence,” Bryce does a pretty good job in detailing the history of oil-related terrorism and American military involvement because of our reliance on foreign oil (although he does omit the First World War). In any event, I was very glad to see that he didn’t ignore this issue or try to mitigate the impact of our involvement as Jerry Taylor from CATO Institute has done. He doesn’t shilly-shally about why we were “there,” wherever the “there” had been. We were “there” for the oil.

However, he concludes the topic by writing:

In other words, Bryce is telling us to just lie back and continue to accept the screwing we’ve been getting, because the screwing will continue. Tell the women in your life to learn to love the fashion style of the burka, because they may be wearing one some day.

THE NITTY GRITTY

While I still have much to say about GUSHER OF LIES, we have now come to the crux of the matter, or what my people call “tuchas afen tish” – which translates to the bottom line.

What most people don’t understand, and what the oil lobby desperately doesn’t want you to know, is that regardless of how much more drilling for oil is done in America, regardless of how much fracking goes on, regardless of how many pipelines are built from Canada to the Gulf of Mexico, America will never be free from dependence on foreign oil. Control of our primary engine fuel, the fuel that has been dictating our buying and driving decisions, is in the control of foreign regimes. For as long as it continues we will never have gasoline prices that are truly cheap; the best we will ever be able to say is, “Well, it’s not so bad, remember last year when it was over $___ a gallon.”

By Robert Bryce’s own words, and based upon….what, - a fabulous trip he took to Dubai and his intentional ignorance of fossil fuel alternatives - we will never be free from oil-sponsored terrorism. We will never have energy independence, ever.

I agree with Bryce that we will never, ever have energy independence; our military will never abandon the Middle East… for as long as we use gasoline as our primary engine fuel. The solution, therefore, is to change the paradigm. The solution is to make a non-fossil fuel our primary fuel, and that fuel is ethanol.

My business partner, Bob Gordon, recently wrote an editorial titled “When All American Drivers Use Non-Exportable Domestic Fuel, MPG Hysteria Will Go Away.” On this very point, Bob writes, “There are no our American oil companies, there are no American companies pricing our domestic oil and its products at a home town price.” He's right, ethanol can give every American community a home town price, like eggs and milk. As Bob points out, Venezuela has a home town price on its oil, as does Saudi Arabia and Iran on their respective oil. Why not us?

Bryce goes into long discourses on the mechanics of oil trading and how it’s a marvelous method by which, he says, “a fair price” is arrived at. It costs the Saudis perhaps a dollar or two to lift a barrel of oil out of the ground, and the Saudis think that $75 per barrel is fair. As a consumer I wouldn’t call that fair. I’m a for-profit kind of business guy but I would say that 7,000% profit is a tad excessive, by about 6,700%. Reading the machinations of oil trading are like listening to someone try to explain and justify derivative investing. Hey, Robert, oil is a commodity, like an apple, the world doesn’t need to be betting on the size of the seeds inside the apple, we just want an apple that tastes good.

Bryce says that our fixation on oil dependency is also based on our fear and/or loathing of their religion. He writes that things are changing in the Muslim world: elections are sometimes being held, women are being allowed to attend school, banks are staying open later and giving out toasters when you open an account (I embellished this point based on his comment about banks becoming more liberal). Good for them, welcome to the 18th century. Oh wait, this is the 21st century.

Bryce complains about the views extolled by writers like Thomas Friedman of the New York Times who think we need to change Muslim societies. Bryce uses this commentary to return to the concept that slavery isn’t all bad, that we can learn to live with it. Robert, I thought you were leaning towards libertarianism. If you are, then know this: Us real libertarians don’t want to nation-build at all, whether it’s Friedman’s vision or your vision of letting them run-amuck and all over us. I may not like what I’ve seen from Islam, but I personally have no interest in who or what they want to worship, as long as they don’t want to chop my head off because I choose not to worship the same way.

ENERGY INDEPENDENCE IS POSSIBLE

Now, my dear readers, this is where I will finally address what Robert Bryce refers to as GUSHER OF LIES, and why I sent that email to him.

But first, these words:

Bryce spends a fair amount of time then discussing PEAK OIL and CLIMATE CHANGE. Other than a brief mention of ELECTRIC VEHICLES, which is almost not even worth mentioning, he doesn’t write about them. But for the heck of it I’m gonna throw that into the mix because it has great significance in any discussion of the overall energy picture.

I have no interest in discussing the subjects of Peak Oil and Climate Change. I feel they are irrelevant to energy independence. That may be disappointing to some, but here’s why: First, if we had a viable solution(s) to fossil-fuel fuels it doesn’t matter if or when the world runs out of oil or if production capability is maxed-out. Second, I never believed that the world would run out of oil. I didn’t believe it in the 1970’s when it was very fashionable to do so, and I don’t believe it now; certainly not after learning about huge fossil fuel deposits discovered off the coast of Brazil, in the Gulf Mexico, in the Mediterranean off the coast of Israel and Lebanon, and so on.

Interestingly, the fear of eventual global oil depletion goes back more than 100 years (Bryce references this fact, too). There were many responsible people who have been alarmed at various times about the possibility, not just some luddites, but the answer was always rather simple: just invent new methods to detect and get at the deposits. They did, and so they did.

Climate Change, or man-made global warming, is completely immaterial to how I view the entire energy issue. To begin with, I don’t believe in the “Al Gore” science. I also didn’t believe in the man-made global cooling theories that were rampant a generation ago. But more importantly, I already support a rapid end to the use of gasoline and diesel. I already know that ethanol is a cleaner fuel. I’m already doing everything I can to shut off the flow of the “gusher of lies” that emanates, not from the ethanol industry, but from Big Oil’s propaganda machine.

If man-made global warming is real, fine, as I said I’m already doing what I can to get everyone to reduce those harmful emissions. If catastrophic man-made global warming is a fraud, it doesn’t change my opinion about ending our dependence on oil. Vehicles that run on gasoline and diesel definitely cause pollution, whether the result will be the end of mankind or not. Because I am a great lover of clean skies and clean water, lowering the amount of pollution that spews from our internal combustion engines is a worthy goal.

I have always disagreed with combining the issues of energy independence and global warming, and I have counseled global warming believers to do the same. Ending our dependence on foreign oil has sufficient justification without having to rely on something that even the most ardent GW alarmists are not quite certain about. If, and I believe when, the theory of global warming is finally disproven, it will shut down whatever alternative energy efforts were begun simply because of the alarm. That would be very unfortunate for alternate fuels. The battle for the use of ethanol as a viable alternative to oil should be fought on it own merits; and as you will read, it is fully armed to do so.

Electric vehicles are a wonderful promise, and when the time comes that technology and cost of production make it possible for the car manufacturers to profitably produce them in sufficient quantities it will be a boon to mankind. However, the technologies are not yet here and the cost is way too high. So maybe in 20, 30, 40 years, or 80 years – according to some reports – electric vehicles will have a great impact on our reliance on any liquid fuel. But for now and the foreseeable future they are what my business partner, Bob Gordon, long ago dubbed as merely “a diversion, not a solution.”

More to the point, Bob has written extensively that electric cars are just a diversion sponsored and used by the oil industry as a divide-and-conquer tactic. As long as the public can be dazzled and bamboozled by the glitz of electric wizardry, our minds will be taken off the deployment of existing non-fossil fuel alternatives. I completely agree with Bob on this point (actually, Bob and I agree on almost everything including pizza, bagels and wine – I guess that’s why we’ve been great friends and business partners for almost 30 years).

Every time we learn of another electric vehicle company closing its doors we are only more certain of our position on electric vehicles.

But wait, I’m not done with this point yet. As if I would have ordered it up from room service, Robert Bryce helps to prove the point that the oil industry and its shills are backing electric vehicles as a divide and conquer scheme. About a year after Bryce finished the final edits on the first edition of GUSHER OF LIES, he added an “Epilogue To The Paperback Edition.”

Throughout the original book and the epilogue Bryce has nothing good to say about any non-fossil fuel or any alternative energy solutions, which includes wind energy and solar. Needless to say he is against all subsidies given to the alternative solutions. He dislikes everything and rips them to shreds to the best of his ability. It doesn’t matter if the data he relies upon is right or wrong, he has nothing good to say.

Except that in the middle of the epilogue he slips in two positive mentions about electric cars - what a coincidence.

His first quip is, “While the continued calls for energy independence and the increased use of corn ethanol are distressing, 2008 also brought some positive news on the energy front. Several automakers announced plans to develop and sell electric cars in the U.S. market by 2010.”

A few pages later he writes, “Meanwhile, numerous battery companies, both in the U.S. and abroad, are continuing to develop better batteries. All of those developments leave me optimistic about our potential to meet the energy challenges that face the U.S. and the rest of the world.”

Whether you’ve read GUSHER OF LIES or not, you’ll see when I get to his comments on subsidies that Bryce is ‘Mr. I Hate Subsidies.’ He never mentioned subsidies to electric vehicle manufacturers in these two quips. Doesn’t that seem odd? The entire modern electric car movement has been about government subsidies, unproven technologies, insufficient production capabilities, unrealistic purchase prices; everything that Bryce rails against when considering non-fossil fuels.

Suddenly, he is optimistic. All the subsidies that the government has given to this particular non-fossil fuel alternative is good; he now understands why a government subsidy can be a good thing to encourage innovation and to provide a little bit of leveling of the playing field. I guess he was swayed either by GM’s promise that they would produce 7,000 Volt electric cars for 2011, or one of the handlers at BIG OIL R US gave him the secret sign it was okay.

In case you were wondering, about 12 million new cars and trucks were sold in the U.S. in 2011, so he was optimistic about sales that represented less than 0.7% of the new vehicle market. Well, if that made him happy, then he would probably be delirious to know that a few 2011’s are still available and he can have his pick of color.

THE GUSHING TRUTH ABOUT ALTERNATIVE FUELS

In 2008, around the same time that Robert Bryce published GUSHER OF LIES, I wrote another very long article that was published on The Auto Channel website (owning a media outlet really comes in handy when you have a lot of opinions). This article was titled “NO NEW GASOLINE-POWERED VEHICLES IN THE U.S. BY 2014...Can It Be Done?” Naturally it’s still available on TheAutoChannel.com if you choose to read it.

The article suggested a plan whereby the U.S. would become free from foreign oil in a rather short period of time. I didn’t fantasize the flipping of a switch at midnight and then expect a complete and total change by dawn the next morning. It called for a gradual, but aggressive switch to alternative fuels. It also didn’t call for the prohibition of all domestic oil production – unlike the 18th Amendment to the Constitution, which stopped all legal distillation of alcohol.

My plan understood the need to keep existing domestic oil and gasoline jobs fully functioning, the need for petroleum-based fuels for older vehicles, as well as for the myriad other products that require petroleum-based chemicals. I reviewed and commented on the various possibilities, from compressed air to algae to propane and CNG to ethanol.

I’m telling you this because I understood then, and I understand now, that technologies change and improve and evolve: it happened with powered flight, with the telephone, with television, with refrigerators. If there had been in 2008 a national imperative to make an alternative fuel our primary fuel – and if Barack Obama had been serious when he gave his August 4th Energy Policy speech, I have no doubt that the technology used today, just 5 short years later would have shown considerable improvement over the technology that was used in 2008 to produce which ever of the alternatives was selected.

Let me illustrate this point further: In 1994, when TheAutoChannel.com was just in its infancy, we knew then that the new media called Internet would one day converge with television. That was our vision and in an effort to make that vision a reality we sought out technological solutions. One day I visited a teleconferencing exposition in Anaheim, California. I approached one particular video teleconference vendor and told him what we had in mind, and asked if his service could be used by us. The vendor became angry and he began yelling at me. People in the surrounding exhibit booths stopped what they were doing and turned their attention to the commotion. The vendor shouted, “What are you stupid, it will never be possible to send video over the Internet; the fastest that data will ever travel over twisted-pair copper wires is 28k.” (This was in the days when 9600 baud modems were considered high-tech and only a relative handful of geeks had 14.4k connectivity.)

So I said to the irate exhibitor, “The fact that you are saying right now that there will never be a way to transmit video over the Internet means that there are people in garages and basements at this very moment figuring out ways to make transmission faster and to compress the data smaller.”

A month later we found a company that had an Internet streaming video solution, three months later we became to first website in the world to deploy streaming video, and less than one year after that we were streaming live video and broadcasting the first live motor sports event on the Internet. Today the Internet has HD video, 3-D HD video, and there are also some examples of 4k super HD.

In GUSHER OF LIES, Robert Bryce never anticipated technological improvement in the production of alternative non-oil based fuels – except to expressly discount its possibility. He locked himself into a by-gone era, as if he was Amish. He repeats and presents data that was based on information that was out-of-date probably from the day it was created. To make matters worse, some of the information was never correct even when it was created, and the passage of time didn’t magically make it accurate.

I presume some readers will take me to task for these comments by saying that I purposely chose an easy target to go after: a book originally written five long years ago. But remember, I didn’t choose the book to read, Robert Bryce did. If he had something more up-to-date or pertinent I think he would have suggested the more current item. Let me add that immediately before sending my email to him, I read an article he wrote just a few months ago for The Daily Beast on “the myth of energy independence.” The article contained no new information compared to the book, as far as I’ve been able to tell.

Before I delve into what Bryce labels as ethanol lies, let me add that I think he greatly tipped his hand to being just another shill for the oil industry by not including dedicated non-fossil fuel proponents when he did his research for GUSHER OF LIES. The people he thanks in the acknowledgement section of the book seem to all be homers for Big Oil. I sent a follow up email to Bryce asking if he had spoken with any specific ethanol proponents. So far, he hasn’t replied.

BRYCE’S SHELL GAME

The five primary lies told about ethanol relate to:

1. Energy content and MPG of gasoline vs. ethanol
2. Ethanol causes engine damage
3. Corn ethanol deprives starving people of food & causes food prices to increase
4. Producing ethanol requires more energy to make than it puts out (EROEI)
5. Government Subsidies

There are other lies as well, most of which are variations on a theme but a couple are stand-alone lies. Bryce uses them all, and I’ll try to dispose of them in the flow that Bryce presents them. Keep in mind that these are not Bryce’s fabrication, these lies were conceived and honed over the years by people working in or for the oil industry. Bryce has merely repackaged them to fit his writing style.

As he moves in to begin his attack on ethanol, Bryce warns the reader that “the discussion contains quite a few numbers…(and that) getting a grip on basic production numbers is an essential part of understanding why biofuels and alternative fuels cannot replace fossil fuels.” This warning reminds me of the shell game conmen plying their trade around Times Square in New York to pull in the suckers. But it makes me laugh because Bryce has been the victim of the scam; he’s the one who never got a grip on what the numbers mean.

ENERGY CONTENT

At the heart of the energy content lie are BTUs (British Thermal Units). Gasoline has a rating of about 116,000 BTUs, and ethanol has a rating of about 76,000 BTUs. As a simple mathematical calculation will show you, this means that ethanol has about 33% fewer BTUs than gasoline, or another way to look at it is that the energy content of ethanol is about a third (33%) less than gasoline.

Bryce uses this difference in energy content in three ways. First, he says that 1 gallon of ethanol equals only 0.66 gallons of gasoline. Second, that because of the lower energy content that ethanol will deliver fewer miles per gallon (MPG) than gasoline. And third, he uses the lower BTUs to compute how many bushels of corn will be required to produce the ethanol needed to replace gasoline. When combined with incorrect data about available land, water requirements, CO2 emissions, and overall energy needed to grow the crops, he assumes his sleight-of-hand technique is undetectable.

Bryce gets really good mileage (pun intended) out of the energy content issue as he charts what the comparative numbers look like, and then writes paragraph after paragraph about how this principle, almost by itself, negates any sensible consideration of ethanol as a replacement for gasoline. Indeed all ethanol opponents widely use this simple formula to create flashy algebraic equations and other graphical displays of what they think is irrefutable proof of ethanol’s inferiority to gasoline based upon the law of physics.

There’s one problem, and it is a major one: The so-called energy content of ethanol and gasoline is irrelevant when it comes to internal combustion engines. The law of physics, in this case, is out of its jurisdiction.

BTU measurement is used to explain and calculate how much energy is required to heat water. If we were discussing a steam powered engine, heating water is a significant issue. But internal combustion engines are not dependent on heating water.

Using ethanol in a typical gasoline-powered engine will produce fewer miles than gasoline because the engine is optimized to run on gasoline, not because there is a difference in BTUs. Using ethanol in a similar engine that is optimized to run on ethanol will deliver at least the same mileage along with greater horse power. This principle has been known and understood for more than a century. For example: