THE BLOG

The NY Times, The Oil Patch's Faithful Cheerleader, Trashes Ethanol

05/25/2011 12:15 pm ET
  • Raymond J. Learsy Author, 'Ruminations on the Distortion of Oil Prices and Crony Capitalism'

Perhaps it was inevitable -- the New York Times with its 'rose tinted glasses' reporting on the world oil industry, standing shoulder to shoulder together with Hugo Chavez (please see post "Hugo Chavez Flirts With Hypocrisy and Ethanol" 04.23.07) and his well rehearsed sense of victimization, bashing "ethanol", happy to undermine ethanol's growing challenge to oil's perfidious hegemony over our lives.

Hugo's self interest is clear. Use more ethanol and you use less of his oil. The Times' motivations are a little harder to fathom, forever mouthing oil industry pablums, absent any insightful nor questioning reporting on the acceleration of world oil oil prices other than oil patch handouts. Perhaps the corn growers and the Agricultural Cooperatives don't have the massive advertising budgets that the oil companies do, or maybe it's just a lack of market sophistication. But the bottom line is that for Hugo and the New York Times it makes clear good sense, according to their reckoning, to pay $80 plus for a barrel of oil and get on with global warming. Corn at $3.85 a bushel is highway robbery. That it is fine to strangle economies and freeze households in winter with exorbitant fuel costs caused by manipulated oil prices (that's what OPEC does, folks) so the that the good royals over in Saudi land can roll around in their Rolls Royces and fund madrassas throughout the world, or have Iran's President Ahmadinejad play with his erector set building nuclear bombs. But the minute you make otherwise abundantly available food products a touch higher in price, so our farmers can buy a new John Deere, that becomes a grievous sin and a misallocation of economic resources. (As to the staggering disparity in feedstock prices -- oil is at $80/bbl plus, having risen 800% over the last decade with production costs significantly less than $20/bbl throughout the industry or in the case of Saudi Arabia less than $1.50 a barrel or a margin of over 6000% vs that of corn at $3.85/bushel on which our farmers are doing well if they have a 50% margin).

Aha! You will say, but oil is a finite resource while corn is a renewable resource. If for some reason you don't say it the oil boys will be quick to remind you. But consider this. For corn, sugar or whatever crop, to grow the crop with sufficient yields to meet the world's needs (think 'Green Revolution') it requires vast inputs of such fertilizer elements such as phosphates, potash and nitrates all of which, as with oil, are finite as well, and without which food shortages would have become commonplace years ago.

Last Wednesday the New York Times in a lead editorial ("The High Cost of Ethanol") instructed us on the shortcomings of ethanol as an alternative fuel. Warily, they warned us that grain prices have been pushed higher and are threatening social unrest (no mention of the social unrest in Myanmar caused in large part by escalating energy prices and culminating in riots this weekend). They go on, cherry picking their references in order to present us with an array of always impressionable and emotionally charged buzz words cautioning that growing corn and biodiesel feedstocks is "threatening natural habitats and imposing other environmental costs."

In my post, "The Energy Solution That Dare Not Speak Its Name" 07.17.07, I reported that at an Aspen Institute Energy Seminar, attended by senior oil industry officials, it became chillingly clear that those with a vested interest in oil or oil production, oil and energy distribution, and oil governance, are all for conservation and protecting the environment as long as it does not negatively impact the price of oil or fossil fuel derived energy. To quote the former Senate Majority Leader Tom Daschle from his article "Myth vs Reality" in the current issue of Foreign Affairs, "As the public's attention has begun to focus on the need for alternatives to oil, the major oil companies have become concerned. Unsurprisingly warnings of a looming food-fuel tradeoff have crept back into the national debate".

What better platform to further the cause, than on the editorial page of the evermore slumbering 'Old Grey Lady'. The Times' relentless oil-patch-friendly propaganda has elicited previous posts from this writer commenting on the Times' take on issues of oil's production and price and their unwillingness to discuss accountability, namely: "The New York Times, Mouthpiece for the American Petroleum Institute" 07.23.07"; "The New York Times' Paroxysm of Mutual Self Congratulation With The Oil Patch" 08.06.07; "The New York Times Shamelessly Shills For OPEC" 09.12.06".

Corn Farmers throughout the world grow corn to meet market needs, unlike oil, with its peak oil doomsayers (please see "Peak Oil Theorists Gush Obfuscation!" 06.29.07) and the production constraints imposed by OPEC and cheered on by the international oil companies and other major oil producers like Russia. According to Daschle the U.S. corn crop alone, has increased from approximately seven billion bushels in 1980 to nearly 12 billion in 2006. Compare that to OPEC's oil production of 31 million barrels a day in 1979 to barely 30 million barrels/day today, and that includes the production of its recent newest member Angola, and that of Iraq where production once again is edging toward pre-war levels. OPEC's constraint of oil production is not because there is less oil but rather to manipulate higher prices. OPEC's acknowledged reserves today are significantly higher than they were in 1979, with Saudi Arabia alone revising its reserves from some 260 billion barrels to over 700 billion barrels now (see post: "Peak Oil" RIP. Official Obit Frontpaged in the NY Times" 03.08.07).

Two additional points of particular significance, and I quote from Daschle's article, "An interesting analysis released by the Natural Resources Defense Council last May showed that corn-based ethanol out performs gasoline when the two fuels' full production and use cycles are compared. Innovation in the the biofuel industry is leading to even greater greenhouse gas reductions, regardless of the feedstock".

He later continues, "An acre of corn, one of the rare plant species to use carbon-dioxide efficient photosynthesis system, removes more carbon dioxide from the atmosphere than does an acre of mature Amazonian rain forest, and next generation of biofuel technologies -including those using non cellulosic feedstocks - will increasingly contribute to the goal of reducing ... humans' carbon footprint."

It is clear that the "oiligopoly" and their allies such as the New York Times will do all they can to deflect our focus and confuse our goals to divest ourselves from our dependence on fossil fuels. Yes, some of the current government programs supporting bio/ethanol fuels are overly generous. The 54 cent gallon import duty on Brazilian sugar-based ethanol is a particular blemish, especially in that gasoline can be imported duty free. But, in all, they do not compare to the government's largesse extended to the oil patch, from near giveaways of oil drilling rights on federal land and offshore, to tax 'incentives' that are costing us billions before we even get to the pump.