Energy Bill To Conference: Now The Tough Work Begins

Lynne Kiesling

The Senate approved its version of the energy bill, which differs substantially from the House version. That means that the hard work remains to be done in conference.

Many of the electricity provisions are common to both, so are unlikely to change. I have no great objections to the electricity provisions; I am least enthusiastic about the mandatory reliability standards, but was comforted last week by a Congressional staffer who gave me some details of how the standard-setting is described and the detail and precision to which the standards themselves are defined in the legislation (happily, not detailed). In other words, I was concerned that the mandatory provision would enshrine the expensive construction of “gold-plated” transmission networks, and while I remain concerned that we are too focused on building our way to reliability instead of being creative and bringing demand resources and new technologies to bear, it’s not as bad as I feared. And I believe that both versions retain the repeal of PUHCA, which is long overdue.

But the gold rush to the ethanol rent seekers persists, in both versions, and more emphatically in the Senate version. The Senate continues to labor under the delusion that ethanol from corn is a clean fuel that produces a net positive amount of energy. The House does too, but the delusion is less backed with dollars flowing to the industry there.


5 thoughts on “Energy Bill To Conference: Now The Tough Work Begins

  1. Paraphrasing Gun’s and Roses, I suggest that if one can use your delusion to fuel your car, perhaps it is not delusional.

    The math is mind numbingly simple, yet there are about 3 editorials a week from otherwise sensible people claiming that ethanol is a net loser in fuel value, which is flat out wrong the last time I did the math (2004 growing season).

    I will offer a $100 wager to anyone willing to take it. Let’s track 5 farms/farmers for the 2005 growing season and see if the marginal input fuel (Gas, Diesel, Nitrate etc) necessary to grow corn is greater than the marginal output fuel value of ethanol and publish the results.

    Don’t get me wrong, the energy bill is a boondoggle. But the ethanol math is not complex. Any takers?

    JBP

  2. (last post was chopped, sorry)

    OK,

    If you actually believe Pimentel, (that it takes 1000 gallons of diesel to farm an acre of corn), then you should have confidence in your wager.

    $100; 5 Farmers; Take the average of marginal fuel outputs/marginal fuel input. If the number is > 1, I win. If the number is (last post was chopped, sorry)

    OK,

    If you actually believe Pimentel, (that it takes 1000 gallons of diesel to farm an acre of corn), then you should have confidence in your wager.

    $100; 5 Farmers; Take the average of marginal fuel outputs/marginal fuel input. If the number is > 1, I win. If the number is

  3. Isn’t this a simple thing? If it were really energy efficient and cost efficient, then wouldn’t it be happening without legislative support? Have we/they evaluated the externalities? I’m sure there are some, but they MUST be substantial or else we wouldn’t be having this conversation. Or is this just more legislative junk? It’s a legitimate question, but obviously we have no clue.

  4. PUHCA repeal is long overdue? I do wish you’d supply more detail. Is that an ideological position? Or is it based on some clue about what repeal of PUHCA would do to the industry? If the latter, I hope you will go on the record here with your prognostications.

    An ideological position would rest, I assume, on the idea that less regulation is always preferable to more. Regardless of what change it may bring, sudden removal of one set of regulations amongst the web of other regulations in this complex system will naturally put pressure on other (presumably bad) regulations that will be the next to fall. So all gets better with time? Are you sure?

    A reasoned position would presumably rest on some idea of what will happen with PUHCA repeal. I would love to know. It appears to me that removal of this constraint from this extremely complex system could have consequences that we can’t imagine. Given the frequency with which the US enacts major energy legislation (10y+), will we be able to react as needed? Will the changes necessarily be for the good? So, with PUHCA repeal and no rational reaction to the consequences for, say, 15 years, what will PUHCA repeal actually do?

    Prognostications? Or ideology?

  5. Come on, it’s only $100. The energy security of the nation is at stake. How about getting at least 5 verifiable data points? That alone must be worth $100.

    The skills necessary to calculate the efficiency involves calling 5 farmers. This will give 5 data points, which is 5 more data points than are available now. After that the conversion factors are pretty well established (bushel of corn to gallon of ethanol).

    The offer of wager stands. Any takers?

    JBP

Comments are closed.