Like you, I don't typically champion government involvement in the free market. It is beneficial at times to have government support for certain industries until they mature enough to run on their own. If the government can boost the energy industry for a couple years until there is enough competition available to create a dynamic and innovative free market envirionment, then I think it is good for the country.

Imagine, the US as the world leader in energy technology. HUGE! People want to cry about all the jobs going overseas? Well if we have the world buying all it's energy from the US, no one will have to worry about not having a job available. Silicon valley would be almost a drop in the bucket compared to a world-wide energy industry...

The plain fact of the matter is that gasoline at $3 a gallon is only a bit higher, adjusted for inflation, than it was in 1965

Mark, you need to move to Indiana. I filled up yesterday for $1.85 (minus another $.09/gal. that I saved with my Marathon credit card.) And that's up from last week when I saw it as low as $1.74. We do, however, have wild, unexplainable swings that I have not heard reported anywhere else. I filled up about 10 days ago for $2.05. The next day it dropped to $1.99 and continued to drop over the next few days to $1.74. Then, in one day it jumped back to $2.05. Two days later it was back down to $1.85. All that happened while I was still on the same tank-full. Has anyone else seen those kinds of gyrations anywhere else in the country?

There is an unintended consequence of the current emphasis on ethanol. I feed the deer in my woods, and I buy a lot of shelled corn. In the last 6 months, the price of corn has gone from $5.00/cwt to 7.75/cwt, or a 55% increase. The price of oil during that same time frame has dropped from around $78/bl. to $50. Even with the jump in the last couple days back up to around $55, the price of oil has dropped 30%. In terms of the economic viability of ethanol, that's a huge swing. I believe the cost to produce the 85/15 mix of ethanol/gasoline exceeds our current price of $1.85 for unleaded regular. If that trend continues, I wouldn't want to have a lot of money invested in the dozens of ethanol plants that are sprouting up like mushrooms around the midwest.

I mentioned in an earlier thread that Ricorun and I e-mail back and forth on a variety of topics. For those of you who don't know, Rico is a pretty smart guy. Our most recent exchange started out about global warming and evolved into a discussion about alternative energy sources, including biofuels, prompted by an interesting interview that I ran across on another blog with Congressman John Dingell, which, in turn, linked to a couple more articles about biofuels includingthis article about cellulosic ethanol.

There is some interesting R & D going on out there that is not making it into the mainstream press. I doubt if there is a single B4B reader who wouldn't love to eliminate our reliance on foreign oil. As the President alluded to in the SOTU, there is nothing that America cannot accomplish if we set our minds to it, but it's going to take setting our differences aside and all pulling together. Becoming energy independent is probably the single biggest blow we could strike against global terrorism, since so much of the terrorists' efforts are financed by oil revenues. I have to believe that that's something everyhone here can agree on -- well, OK, maybe not Wade, but probably everyone else.

At any rate, I'll be shelling out that money to my fellow Americans, so at least the cash is staying here.

That's the hole in the argument - it's the same hole that's in 'supply-side' economics. The assumption that money not spent directly to foreign interests somehow, magically gets applied to the US economy, as though we were a completely closed system. That money doesn't "stay here" - it gets invested in foreign companies and socked away in offshore (tax-free) bank accounts, and does precious little to the benefit of any Americans.

That money doesn't "stay here" - it gets invested in foreign companies and socked away in offshore (tax-free) bank accounts, and does precious little to the benefit of any Americans.

That's a pretty cynical perspective, legion. Do you have some facts to back it up?

Spook:
Legion doesn't have facts to back him up, because he's fallen for the protectionist BS the Democrats have been preaching the last few years. See, they need to blame someone for SOMETHING, so they can blame nameless, faceless foreign companies taking over the WORLD.

But here's the truth, a trade deficit benefits the United States. Why? Because our trading partners are paid in United States currency. Those businesses/countries then have large quantities of US CASH that they must do something with. More often than not, that money is used to reinvest in their business in the United States OR is used to purchase US bonds.

Again, we can tweak the trade balance, but to suggest the United States should retreat from the international market is like suggesting we could just loose North America to Nuclear Bombs and the world wouldn't suffer ANY consequences.

But Legion, what country has produced a better result that supply-side/free markets? Ummm... how's the Soviet Union doing? East Germany? Yugoslavia? How's North Korea? Cuba?

The nation is either gone today OR they certainly aren't classified as economic ANYTHING.

Spook,
You mean hard numbers? No. My cynicism is driven by watching years of high-end tax cuts and ever-increasing corporate profits & executive salaries putting money into the "top end" of supply-side econ, but seeing precious littles ever "trickle down" to the middle & lower classes. I do recall seeing some studies on wage stagnation, but I don't have the time just this second to dig them up...

The truth of the matter is that we, on our own land, are sitting on a sh*tload of oil that is waiting to be extracted, save for the environmental whackos who stand in the way, ostensibly to save the spotted whale-darter moonbat (or insert other obscure animal here).

The fact is, we as a nation of over 300,000,000 have the capacity to walk and chew gum at the same time.

We can rely on extracting our own reserves while at the same time develop alternatives. To say that it is an either/or proposition is pure foolishness.

Adler says: "I also question the envuronmental wisdom of artifically increasing the demand for biofuels, which will mean thousands of acres will remain (or be converted to) crop production that would otherwise revert to (or remain in) wildlife habitat."

That would be true if the crop in question was corn. But other, more interesting alternatives include fast growing trees, wood and pulp residues, and especially switch grass. One of the things that makes switchgrass particularly attractive is that unlike other sources such as corn or sugar beets, switchgrass actually returns quite a bit more carbon to the soil than is released into the atmosphere during the entire processing and use cycle. In other words, it actually helps to reduce atmospheric CO2. So it has the potential to mitigate two big problems at once. In addition to that: (a) switchgrasses are native to the US and Canada and can be grown almost anywhere, in almost any kind of soil (including those not suited for much of anything else), don't require much in the way of fertilizer or pesticides, and are far more drought resistant than sugar beets or corn; (b) you don't have to replant them every year, harvesting can be performed with conventional machinery, and isn't very labor-intensive; (c) they actually regenerate the soil they're grown on, so they are great companion crops for corn, etc.; (d) they serve as forage for livestock, a habitat for birds, and they are very good at preventing erosion; (e) the price point is now down to about $3/gal, and could go as low as $1/gal. Apparently the primary technology in question is the development of genetically modified bacteria that could collapse the distillation process from three steps to one. Finally, one estimate I read lately indicates that with recent improvements in technology, switchgrass yeilds about four times the energy required to process it into ethanol. The stuff can also be processed into pellets and used along with coal in coal fired generators, not to mention coal-fired heaters. It's also cleaner burning than coal.

Some of the info I just presented is in those articles that Spook cited (we've been tossing this issue around together). They are really worth a read because they also discuss the techological, capacity, and political hurdles. All in all it sounds like a promising approach to me.

But Leo's right -- it can't be just one approach alone. And we have to be careful not to trash the economy in the process.

Great minds think alike, Rico. I just finished rereading that article and was going to post excerpts from it until I read your post. For those of you interested in becoming more informed about this topic, this article has more links, including the one that Rico references.

Imagine, the US as the world leader in energy technology. HUGE! People want to cry about all the jobs going overseas? Well if we have the world buying all it's energy from the US, no one will have to worry about not having a job available.

Sorry, Chris, I didn't see your post before. (sign up for TypeKey, and it will post immediately) You're absolutely right. Any of you young entrepreneurs out there, especially you Libs who are always complaining about lost jobs and low-wage jobs in this country -- here's an opportunity to get in on the ground floor of a potentially explosive growth industry.

high-end tax cuts and ever-increasing corporate profits & executive salaries putting money into the "top end" of supply-side econ, but seeing precious littles ever "trickle down" to the middle & lower classes.

We've heard this complaint before, such as back in the 80's, when only "the rich" allegedly benefitted from Reagan's tax cuts. In 1984, he was re-elected with almost 60% of the popular vote. That margin could not have been possible if only the rich voted for him, since they are relatively few in number. The rest of the votes must have come from the middle and lower classes. This would not have been possible if they didn't believe to some extent that they were benefitting from Reagan's economy. How do I know? Look what happened to Bush Sr. in 1992, when the economy was in worse shape (although starting to recover.) Again people voted their wallets, but with the opposite decision.

I do recall seeing some studies on wage stagnation

These types of studies generally show an average wage over time, but present an incomplete picture. What happens is that new workers enter the job market, making minimum wage or entry-level salaries; older workers retire after receiving the highest wage or salary of their careers; and everyone not just entering or leaving gradually works their way up. Thus, while the average wage may stay the same for years, the wage earned by any given worker generally increases throughout his/her career. In this way, the average worker does indeed benefit from the "trickle-downs".

The truth of the matter is that we, on our own land, are sitting on a sh*tload of oil that is waiting to be extracted

And also under the sea, which we've put off limits as well. Wasn't there some large oil field newly discovered under the Gulf of Mexico?

Yes, we need a multi-basket program to put our eggs in. Throw off our phobia over increased domestic production, and develop alternatives where possible, with the goal of reducing our consumption of imported oil. If nothing else, I'd like to get to the point to where we can tell Chavez to cancel our order and stick his oil you know where.

"I'm entirely with the President on this one - and his proposal to vastly increase the size of the strategic petroleum reserve."

Geez, what a surpise! I can never guess which way you'll choose Mark.

More rhetoric. Period. Yeah buddy, we'll buy even more oil from the middle east to fill them big salt holes we have here. The when the shortage comes, we'll just dole out what we need for our lawnmowers. In the mean time nothing changes for the rest of this administration. Oh we got plans alright. Oh we got R&D alright. Man you should see what we're working on.

More propaganda and more useless rhetoric.

Action now. Actionable items now. Do something real.

Mandate immediate improvements to auto gas mileage.

I remember when we instituted a 55 mph limit to reduce consumption in the arab embargo eons ago. Resume and enforce that now. Mandate 55 mph governors on engines. No more tickets for speeding because we can't go over the speed limit.

Fricken outlaw gas lawnmowers, noisy ass blowers, push one of those old fashioned ones. Grap a rake. Bring back clothes lines in the back yard. A drop in the bucket? So? Its actionable and doable. Set the example.

In the arab oil embargo we had odd and even gas days. Bring 'em back now.

Offer tax breaks for fuel saving cars, boats, planes and trains. Tax the crap out of gas guzzling road hogs.

I know where we can get a billion dollars a week for R&D. Don't you?

My point is we can do something NOW. If we aren't will to sacrifice then the rest is just more of W's hot air.

Rhetoric. Propaganda.

Spare me the B.S.

"I'm entirely with the President on this one - and his proposal to vastly increase the size of the strategic petroleum reserve."

Geez, what a surpise! I can never guess which way you'll choose Mark.

More rhetoric. Period. Yeah buddy, we'll buy even more oil from the middle east to fill them big salt holes we have here. The when the shortage comes, we'll just dole out what we need for our lawnmowers. In the mean time nothing changes for the rest of this administration. Oh we got plans alright. Oh we got R&D alright. Man you should see what we're working on.

More propaganda and more useless rhetoric.

Action now. Actionable items now. Do something real.

Mandate immediate improvements to auto gas mileage.

I remember when we instituted a 55 mph limit to reduce consumption in the arab embargo eons ago. Resume and enforce that now. Mandate 55 mph governors on engines. No more tickets for speeding because we can't go over the speed limit.

Fricken outlaw gas lawnmowers, noisy ass blowers, push one of those old fashioned ones. Grap a rake. Bring back clothes lines in the back yard. A drop in the bucket? So? Its actionable and doable. Set the example.

In the arab oil embargo we had odd and even gas days. Bring 'em back now.

Offer tax breaks for fuel saving cars, boats, planes and trains. Tax the crap out of gas guzzling road hogs.

I know where we can get a billion dollars a week for R&D. Don't you?

My point is we can do something NOW. If we aren't will to sacrifice and CHANGE,then the rest is just more of W's hot air.

Rhetoric. Propaganda.

Spare me the B.S.

And Raker wishes it were 1979 again.

So you want the economy of Carter... I assume you support the foreign policy of appeasement and bribery that took place by Carter to Iran.

Who cares if Americans are held hostage for 444 days... just offer the Ayatollah billions of dollars and no consequences and yet Iran still balked at returning our people.

Man, Raker, you're definitely not an economist, nor are you a human being based with a perception of reality.

So, without making any change, any sacrifice, you expect things to change right? We can't even meet the timetable for implementing HDTV, let alone some wishful "mandate" for 2017.

Very, very simple. If we don't change, then NOTHING will change. We could quintuple the strategic oil reserves. What would change?

Is there a real reason we aren't scootin around in those dinky fuel efficient euro cars? "If you build it they will come".

Change is difficult. No one really likes change. Face it, we aren't making plans to change.

Ooohhh scary thought, change may affect our economy. WE WILL TAKE THE OIL FIRST. BY FORCE.
Rather than change, we grab.

Americans can adapt and change if asked to do so for the honest transparent truth. We have done it before.

W's speech last night was more of the exact same. NOTHING.

Oh wax on and on about switch grass and ethanol. We can do things starting now. R&D yes...but, its time to bite the bullet.

STARTING NOW. 2017 my arse.

The more I think about it. W's right. More strategic oil. We gotcha covered.

Now...go shopping.

Thank you raker for your Pollyanna views on the world. It's always refreshing when someone that is completely clueless about technology allows the rest of us in on their concepts of how to move forward. The law of supply and demand in the free market will get us to the optimal solution much faster and for far less expense than anything Congress is likely to do.

Raker,

What you propose would cause a massive dislocation in the economy which wouldn't benefit anyone. Change, as any conservative will tell you, has to be gradual.