The Absurdity of “Alternative Fuels”

Last week, congressman Markey of Massachusetts was asked “these oil executives, they’re enjoying record profits while we’re paying record prices. You and a lot of Americans say that’s wrong… What can you possibly say or what can happen at these (congressional) hearings that will change things?”

Markey’s reply: “these unjustifiable profits are reflected in how little some of these companies put into renewable energy resources to find an alternative to oil, and the incredible profits which the companies report and it’s time for them to come to explain to the Congress, but more importantly to the American people, what they plan on doing on alleviating this enormous attach upon consumers and upon the American economy, which oil prices represent.”

First off, this business about taking their profits and putting it into renewable energy resources is what is happening in the private sector. There are all kinds of people trying to come up with alternative fuels and ways of creating and using energy. Big Oil is doing it. Last year, Government gave hundreds of billions of dollars in grants to people to find this stuff out. But the point is there isn’t one. We are nowhere near finding something to replace oil. So now everybody hates oil, oil is evil, it’s dirty, it’s destroying the planet and creates obscene profits for these fat cat oil execs…but there isn’t anything else.

As long as there is a free market, we will find the alternative, but lets say for example that today Exxon or some XYZ widget company puts out a press release, “We have developed an alternative source of energy. We have come up with an oil substitute. It really works, really great, it’s going to initially cost $25 a gallon” What? Do you think if somebody announces an alternative to oil today it’s going to be cheaper than oil? Where is the thinking on that? What about all the R&D costs, and testing costs. We will never be able to, in our lifetime, come up with a replacement for oil, in the quantity that we currently use oil. Think of what the process is going to be to manufacture that much. Where are the factories going to be? Where are the warehouses going to be? Do you realize how much oil this planet creates and continues to create? And we’re going to wave a magic wand and come up with something that replaces it? We are going to be able to manufacture billions of barrels a week? What if the process to manufacture this stuff creates pollution or takes more energy to produce? To think that it’s just-around-the-corner possible, and that it somehow is going to be more plentiful and that it is going to be cheaper and cleaner and have no pollution characteristics. There is no utopia. I think it is irresponsible for a member of Congress to sit there and discuss the concept of replacing oil as though it is possible, imminent, and these guys at Big Oil are not doing their share to find it.

The guys at Big Oil don’t set the price. They buy the oil at (as of April 2008) $2.66 per gallon. Refinery and distributions cost $0.18, profit is $0.28 and Taxes are $0.65. The government makes more than twice the profit on a gallon of gas than the oil company. And they don’t do anything to earn it! It’s free money. If you want lower gas prices, ask for lower taxes. Ask for more refineries to be built in the US, more drilling of our own oil reserves to make us less dependant on foreign oil. Big Oil is not the problem; it’s the Government (mostly one side J)