That being said, I like any perspective on the economic crisis that introduces an element of hope. As a psychologist, my take on this phenomenon is that it is psychological, based on fear.

The loss of the economy, as we knew it prior to this recent crash, involves a grieving process that I believe will culminate with recovery.

The catalyst for that recovery is hope. Follow the message contained in these songs and you’ll understand what I mean.

Everything is Fallin’ Apart

Dr BLT

words and music by Dr BLT copyright 2008

http://www.drblt.net/music/EveryThingIsDemo2.mp3

Dr BLT altered cover of Blue Oyster Cult classic

http://www.drblt.net/music/DontFearDem2.mp3

and as I said in my totally original Dr. BLTune…

Spread Some New Year Cheer

Dr BLT

copyright 2007 Frosty Rock Records

http://www.drblt.net/music/SpreadDemo2.mp3

BTW, great predictions for a…

Future 2 Behold

Dr BLT

words and music by Dr BLT copyright 2008

http://www.drblt.net/music/future3.mp3

That being said, I like any perspective on the economic crisis that introduces an element of hope. As a psychologist, my take on this phenomenon is that it is psychological, based on fear.

The loss of the economy, as we knew it prior to this recent crash, involves a grieving process that I believe will culminate with recovery.

The catalyst for that recovery is hope. Follow the message contained in these songs and you’ll understand what I mean.

Everything is Fallin’ Apart

Dr BLT

words and music by Dr BLT copyright 2008

http://www.drblt.net/music/EveryThingIsDemo2.mp3

Dr BLT altered cover of Blue Oyster Cult classic

http://www.drblt.net/music/DontFearDem2.mp3

and as I said in my totally original Dr. BLTune…

Spread Some New Year Cheer

Dr BLT

copyright 2007 Frosty Rock Records

http://www.drblt.net/music/SpreadDemo2.mp3

BTW, great predictions for a…

Future 2 Behold

Dr BLT

words and music by Dr BLT copyright 2008

http://www.drblt.net/music/future3.mp3

I did not “take the very lowest estimates by Friends of the Earth and EIA”, I mentioned the EIA (and noted that I thought their estimates were too low) and cited the actual FoE estimates, not the low end of any range from them. The FoE study is a forward-looking analysis, counting the major subsidy and tax-programs supporting U.S. oil production, and is therefore appropriate for comparing against the value of the volumetric ethanol excise tax credit.

But I’m delighted that you’ve cited Earth Track’s stimates, as I have great respect for their work.

Two things: First, I guess you missed on the Earth Track website the two reports that Doug Koplow, President of Earth Track, wrote that were highly critical of current support programs for ethanol and biodiesel. The most recent one can be downloaded from here:

http://www.earthtrack.net/earthtrack/library/BiofuelsUSupdate2007.pdf

In that study, which considers a wider range of support programs for ethanol than just the VEETC, Koplow arrives at a total estimate of subsidies to ethanol of $1.05 to $1.25 per gallon, or $1.45 to $1.75 per gallon of gasoline equivalent (i.e., adjusting for its lower heat value).

Nowhere will you find in any of Earth Track’s studies on ethanol any statement supporting Urban Lehner’s view that the VEETC is a subsidy to the oil companies. Indeed, the VEETC is the largest element in Earth Track’s ethanol-subsidy estimates. Pure and simple, the VEETC is a tax credit that, while paid to blender, basically allows ethanol producers to sell their product at a higher price than they would be able to otherwise.

The Renewable Fuels Association — no friend of the oil industry (or so they say) — has fought vigorously to retain and extend it. If the oil companies and not the ethanol industry were the main beneficiaries, why would it bother? The RFA and others in the industry also defend the $0.54/gallon import tariff on Brazilian ethanol because they say that it is necessary in order to compensate taxpayers for the fact that Brazilian ethanol is also eligible for the VEETC. But if the VEETC were only benefiting oil companies, why should the domestic ethanol care?

And are you going to tell us that you would be happy for Congress to let the VEETC expire? Somehow I doubt that. Or, is your (and the rest of the industry’s) real agenda to get the VEETC for corn-ethanol converted to a producer payment, like the $1.01 producer tax credit that will go into effect for cellulosic ethanol at the beginning of next month?

Let’s return to the question of the value of government support for the oil industry. Of the various estimates you cite, only Earth Track’s allow for an apples-with-apples comparison with ethanol. Greenpeace’s estimates include such items as government expenditure for “construction and protection of the nation’s highway system.” Well, if that counts as a subsidy for petroleum, then it should also count (suitably pro-rated) as a subsidy for other transport fuels, including fuel ethanol. The source you cite for the Cato study is a secondary one. My reading of it is that Cato calculated that the US spent between $30 billion and $60 billion a year safeguarding oil supplies in the Middle East during the 1990s; the higher numbers ($78 to $158 billion) are from some other source, not attributed. (It could be the 1998 study by the International Center for Technology Assessment, which also counted road-building costs, as well as externalities such as noise pollution, which again are equally applicable to cars run on biofuels as to cars run on petroleum fuels.) Your quote of Clifford D. May quoting former CIA director James Woolsey as saying that U.S. oil companies receive preferential tax treatment worth more than $250 billion a year seems to be a case of Chinese whispers. Woolsey said nothing of the sort. What he said, in testimony before the Senate Committee on the Judiciary on 28 February 2006 was that: “[W]e continue to borrow a billion dollars every working day, about $250 billion per year, to import oil ….” That is not the same as a “preferential tax treatment worth more than $250 billion a year”.

http://judiciary.senate.gov/hearings/testimony.cfm?id=1770&wit_id=5227

The question of whether, and how much, of the cost the U.S. military presence in the Middle East can be attributed to protection of oil-supply lines, and of U.S. oil supply in particular, is a contentious one. But lets take Earth Track’s estimate of $39 billion a year as the best estimate of subsidies to the oil industry that includes some of that cost. Whereas the FoE estimate ($10 billion per year) relates to support for domestic production of oil and gas, Earth Track’s applies to total supply of oil consumed by the United States, which is a much large number. According to the EIA, it was 7.55 billion barrels in 2007, or 317 billion gallons:

http://tonto.eia.doe.gov/dnav/pet/pet_cons_psup_dc_nus_mbbl_a.htm

Dividing $39 billion by 317 billion gallons (i.e., ignoring natural gas production) yields a subsidy rate of $0.123 per gallon. That is far less than the rate of subsidization of ethanol and biodiesel, each of which exceeds $1.00 per gallon.

Happy Holidays.

I did not “take the very lowest estimates by Friends of the Earth and EIA”, I mentioned the EIA (and noted that I thought their estimates were too low) and cited the actual FoE estimates, not the low end of any range from them. The FoE study is a forward-looking analysis, counting the major subsidy and tax-programs supporting U.S. oil production, and is therefore appropriate for comparing against the value of the volumetric ethanol excise tax credit.

But I’m delighted that you’ve cited Earth Track’s stimates, as I have great respect for their work.

Two things: First, I guess you missed on the Earth Track website the two reports that Doug Koplow, President of Earth Track, wrote that were highly critical of current support programs for ethanol and biodiesel. The most recent one can be downloaded from here:

http://www.earthtrack.net/earthtrack/library/BiofuelsUSupdate2007.pdf

In that study, which considers a wider range of support programs for ethanol than just the VEETC, Koplow arrives at a total estimate of subsidies to ethanol of $1.05 to $1.25 per gallon, or $1.45 to $1.75 per gallon of gasoline equivalent (i.e., adjusting for its lower heat value).

Nowhere will you find in any of Earth Track’s studies on ethanol any statement supporting Urban Lehner’s view that the VEETC is a subsidy to the oil companies. Indeed, the VEETC is the largest element in Earth Track’s ethanol-subsidy estimates. Pure and simple, the VEETC is a tax credit that, while paid to blender, basically allows ethanol producers to sell their product at a higher price than they would be able to otherwise.

The Renewable Fuels Association — no friend of the oil industry (or so they say) — has fought vigorously to retain and extend it. If the oil companies and not the ethanol industry were the main beneficiaries, why would it bother? The RFA and others in the industry also defend the $0.54/gallon import tariff on Brazilian ethanol because they say that it is necessary in order to compensate taxpayers for the fact that Brazilian ethanol is also eligible for the VEETC. But if the VEETC were only benefiting oil companies, why should the domestic ethanol care?

And are you going to tell us that you would be happy for Congress to let the VEETC expire? Somehow I doubt that. Or, is your (and the rest of the industry’s) real agenda to get the VEETC for corn-ethanol converted to a producer payment, like the $1.01 producer tax credit that will go into effect for cellulosic ethanol at the beginning of next month?

Let’s return to the question of the value of government support for the oil industry. Of the various estimates you cite, only Earth Track’s allow for an apples-with-apples comparison with ethanol. Greenpeace’s estimates include such items as government expenditure for “construction and protection of the nation’s highway system.” Well, if that counts as a subsidy for petroleum, then it should also count (suitably pro-rated) as a subsidy for other transport fuels, including fuel ethanol. The source you cite for the Cato study is a secondary one. My reading of it is that Cato calculated that the US spent between $30 billion and $60 billion a year safeguarding oil supplies in the Middle East during the 1990s; the higher numbers ($78 to $158 billion) are from some other source, not attributed. (It could be the 1998 study by the International Center for Technology Assessment, which also counted road-building costs, as well as externalities such as noise pollution, which again are equally applicable to cars run on biofuels as to cars run on petroleum fuels.) Your quote of Clifford D. May quoting former CIA director James Woolsey as saying that U.S. oil companies receive preferential tax treatment worth more than $250 billion a year seems to be a case of Chinese whispers. Woolsey said nothing of the sort. What he said, in testimony before the Senate Committee on the Judiciary on 28 February 2006 was that: “[W]e continue to borrow a billion dollars every working day, about $250 billion per year, to import oil ….” That is not the same as a “preferential tax treatment worth more than $250 billion a year”.

http://judiciary.senate.gov/hearings/testimony.cfm?id=1770&wit_id=5227

The question of whether, and how much, of the cost the U.S. military presence in the Middle East can be attributed to protection of oil-supply lines, and of U.S. oil supply in particular, is a contentious one. But lets take Earth Track’s estimate of $39 billion a year as the best estimate of subsidies to the oil industry that includes some of that cost. Whereas the FoE estimate ($10 billion per year) relates to support for domestic production of oil and gas, Earth Track’s applies to total supply of oil consumed by the United States, which is a much large number. According to the EIA, it was 7.55 billion barrels in 2007, or 317 billion gallons:

http://tonto.eia.doe.gov/dnav/pet/pet_cons_psup_dc_nus_mbbl_a.htm

Dividing $39 billion by 317 billion gallons (i.e., ignoring natural gas production) yields a subsidy rate of $0.123 per gallon. That is far less than the rate of subsidization of ethanol and biodiesel, each of which exceeds $1.00 per gallon.

Happy Holidays.

I did not “take the very lowest estimates by Friends of the Earth and EIA”, I mentioned the EIA (and noted that I thought their estimates were too low) and cited the actual FoE estimates, not the low end of any range from them. The FoE study is a forward-looking analysis, counting the major subsidy and tax-programs supporting U.S. oil production, and is therefore appropriate for comparing against the value of the volumetric ethanol excise tax credit.

But I’m delighted that you’ve cited Earth Track’s stimates, as I have great respect for their work.

Two things: First, I guess you missed on the Earth Track website the two reports that Doug Koplow, President of Earth Track, wrote that were highly critical of current support programs for ethanol and biodiesel. The most recent one can be downloaded from here:

http://www.earthtrack.net/earthtrack/library/BiofuelsUSupdate2007.pdf

In that study, which considers a wider range of support programs for ethanol than just the VEETC, Koplow arrives at a total estimate of subsidies to ethanol of $1.05 to $1.25 per gallon, or $1.45 to $1.75 per gallon of gasoline equivalent (i.e., adjusting for its lower heat value).

Nowhere will you find in any of Earth Track’s studies on ethanol any statement supporting Urban Lehner’s view that the VEETC is a subsidy to the oil companies. Indeed, the VEETC is the largest element in Earth Track’s ethanol-subsidy estimates. Pure and simple, the VEETC is a tax credit that, while paid to blender, basically allows ethanol producers to sell their product at a higher price than they would be able to otherwise.

The Renewable Fuels Association — no friend of the oil industry (or so they say) — has fought vigorously to retain and extend it. If the oil companies and not the ethanol industry were the main beneficiaries, why would it bother? The RFA and others in the industry also defend the $0.54/gallon import tariff on Brazilian ethanol because they say that it is necessary in order to compensate taxpayers for the fact that Brazilian ethanol is also eligible for the VEETC. But if the VEETC were only benefiting oil companies, why should the domestic ethanol care?

And are you going to tell us that you would be happy for Congress to let the VEETC expire? Somehow I doubt that. Or, is your (and the rest of the industry’s) real agenda to get the VEETC for corn-ethanol converted to a producer payment, like the $1.01 producer tax credit that will go into effect for cellulosic ethanol at the beginning of next month?

Let’s return to the question of the value of government support for the oil industry. Of the various estimates you cite, only Earth Track’s allow for an apples-with-apples comparison with ethanol. Greenpeace’s estimates include such items as government expenditure for “construction and protection of the nation’s highway system.” Well, if that counts as a subsidy for petroleum, then it should also count (suitably pro-rated) as a subsidy for other transport fuels, including fuel ethanol. The source you cite for the Cato study is a secondary one. My reading of it is that Cato calculated that the US spent between $30 billion and $60 billion a year safeguarding oil supplies in the Middle East during the 1990s; the higher numbers ($78 to $158 billion) are from some other source, not attributed. (It could be the 1998 study by the International Center for Technology Assessment, which also counted road-building costs, as well as externalities such as noise pollution, which again are equally applicable to cars run on biofuels as to cars run on petroleum fuels.) Your quote of Clifford D. May quoting former CIA director James Woolsey as saying that U.S. oil companies receive preferential tax treatment worth more than $250 billion a year seems to be a case of Chinese whispers. Woolsey said nothing of the sort. What he said, in testimony before the Senate Committee on the Judiciary on 28 February 2006 was that: “[W]e continue to borrow a billion dollars every working day, about $250 billion per year, to import oil ….” That is not the same as a “preferential tax treatment worth more than $250 billion a year”.

http://judiciary.senate.gov/hearings/testimony.cfm?id=1770&wit_id=5227

The question of whether, and how much, of the cost the U.S. military presence in the Middle East can be attributed to protection of oil-supply lines, and of U.S. oil supply in particular, is a contentious one. But lets take Earth Track’s estimate of $39 billion a year as the best estimate of subsidies to the oil industry that includes some of that cost. Whereas the FoE estimate ($10 billion per year) relates to support for domestic production of oil and gas, Earth Track’s applies to total supply of oil consumed by the United States, which is a much large number. According to the EIA, it was 7.55 billion barrels in 2007, or 317 billion gallons:

http://tonto.eia.doe.gov/dnav/pet/pet_cons_psup_dc_nus_mbbl_a.htm

Dividing $39 billion by 317 billion gallons (i.e., ignoring natural gas production) yields a subsidy rate of $0.123 per gallon. That is far less than the rate of subsidization of ethanol and biodiesel, each of which exceeds $1.00 per gallon.

Happy Holidays.

Your figures on oil and gas subsidies are way off. You take the very lowest estimates by Friends of the Earth and EIA which are way under the majority of other estimates. The most accurate methods for figuring energy subsidies are at Earthtrack. Their method averages a range of high and low studies. In 2006 they say Oil and Gas got $39 Billion (52%); Coal got $8 Billion; Nuclear got $9 Billion; Mixed Renewables got $6 Billion; and Big Oil got most of the $6 Billion worth of Ethanol Blending subsidies:

http://www.earthtrack.net

Urban Lehner says:

“Whenever ethanol subsidies are discussed and the 51 cent blenders credit in particular, I would argue that this is not a subsidy to the ethanol industry but rather it is another subsidy to the oil companies. It is my understanding that the blenders credit accrues to the people that do the blending of the ethanol which is primarily the fuel distributors (oil companies). The purpose of the blenders credit was to help offset the additional investment for them to store, blend, and distribute ethanol blended fuels. I have yet to see “blender credit income” on an income statement from my local ethanol plant. It does indirectly benefit my ethanol plant by opening up markets for more ethanol. But make no mistake; this blenders credit provides an incentive for the oil companies to utilize more ethanol, because they can make a lot of money doing it.”

http://www.dtnprogressivefarmer.com/dtnag/common/link.do?symbolicName=/ag/blogs/template1&blogHandle=editorsnotebook&blogEntryId=8a82c0bc1cb6339b011cc2cfc5af0095

A Greenpeace study puts oil and gas subsidies between $15 Billion and $35 Billion a year:

http://cleantech.com/news/node/554

The Cato Institute estimates Big Oil subsidies at between $78 Billion and $158 Billion a year:

http://www.treehugger.com/files/2008/07/hidden-big-oil-subsidies-stop-them.php

Clifford D. May says:

“Former CIA director James Woolsey estimates that U.S. oil companies receive preferential tax treatment worth more than $250 billion a year — and that doesn’t include the military costs necessary to keep oil supplies flowing around the world.”

http://www.unionleader.com/article.aspx?headline=Clifford+D.+May%3A+OPEC's+sheiks+must+think+Americans+are+stupid&articleId=99df355b-cedf-44eb-8bf1-66b277bd3262

Your figures on oil and gas subsidies are way off. You take the very lowest estimates by Friends of the Earth and EIA which are way under the majority of other estimates. The most accurate methods for figuring energy subsidies are at Earthtrack. Their method averages a range of high and low studies. In 2006 they say Oil and Gas got $39 Billion (52%); Coal got $8 Billion; Nuclear got $9 Billion; Mixed Renewables got $6 Billion; and Big Oil got most of the $6 Billion worth of Ethanol Blending subsidies:

http://www.earthtrack.net

Urban Lehner says:

“Whenever ethanol subsidies are discussed and the 51 cent blenders credit in particular, I would argue that this is not a subsidy to the ethanol industry but rather it is another subsidy to the oil companies. It is my understanding that the blenders credit accrues to the people that do the blending of the ethanol which is primarily the fuel distributors (oil companies). The purpose of the blenders credit was to help offset the additional investment for them to store, blend, and distribute ethanol blended fuels. I have yet to see “blender credit income” on an income statement from my local ethanol plant. It does indirectly benefit my ethanol plant by opening up markets for more ethanol. But make no mistake; this blenders credit provides an incentive for the oil companies to utilize more ethanol, because they can make a lot of money doing it.”

http://www.dtnprogressivefarmer.com/dtnag/common/link.do?symbolicName=/ag/blogs/template1&blogHandle=editorsnotebook&blogEntryId=8a82c0bc1cb6339b011cc2cfc5af0095

A Greenpeace study puts oil and gas subsidies between $15 Billion and $35 Billion a year:

http://cleantech.com/news/node/554

The Cato Institute estimates Big Oil subsidies at between $78 Billion and $158 Billion a year:

http://www.treehugger.com/files/2008/07/hidden-big-oil-subsidies-stop-them.php

Clifford D. May says:

“Former CIA director James Woolsey estimates that U.S. oil companies receive preferential tax treatment worth more than $250 billion a year — and that doesn’t include the military costs necessary to keep oil supplies flowing around the world.”

http://www.unionleader.com/article.aspx?headline=Clifford+D.+May%3A+OPEC's+sheiks+must+think+Americans+are+stupid&articleId=99df355b-cedf-44eb-8bf1-66b277bd3262