Ethanol, the Perfect Home Remedy for a Saudi Oil Fever

By Marc J. Rauch
Exec. Vice President/Co-Publisher
THE AUTO CHANNEL

Marc Rauch

Yesterday's drone air attacks on Saudi Arabia's oil facilities are threatening to disrupt the status quo of the world's oil markets and push the price of oil back to $100 per barrel, or perhaps higher. Oil prices on Friday were around $54 per barrel, therefore a rise to $100 is basically a doubling of the price. Shortly after the attacks, Robert Rapier wrote a story for Forbes.com titled "Attacks In Saudi Arabia Are A Recipe For $100 Oil." I think Robert could be correct on the prediction.

This is disconcerting news for more than just the obvious end result of driving up the price of gasoline to consumers. A report I read says that the attacks will force of cut of the Saudi production to 50% of it's normal supply. The same report says that Saudi Arabia supplies 5% of the world's oil. If this is true, it means that just 2.5% of the worlds supply is effected (half of 5% is 2.5%, right). Yet, this small 2.5% could lead to a 100% increase in price.

This sure seems overdone. Why would such a small impact have such a huge rippling impact?

The answer is because the oil industry is a highly manipulated monopoly; manipulated by OPEC and by commodity speculators. If the price goes up tonight (Sunday night, for Monday's bidding) as expected, it will all be because of speculators and OPEC, not because of reality. Robert Rapier used the term "fear premium" in his editorial to describe the situation. I think this is a good term to use.

An attack on oil facilities in Saudi Arabia, or Kuwait, or Iraq, or Venezuela, or the Russian oil fields should mean nothing to the rest of the world. It should warrant a passing remark on local news broadcasts, like a 10 car pile-up accident on the other side of the globe, but nothing more. And certainly, the incident shouldn't be the cause for any heightened U.S. military action...but you know this won't be the case.

Once again, the world is at the mercy of the oil industry.

And once again, ethanol is the perfect home remedy to the fever caused by this "fear premium."

Ethanol can be produced practically anywhere, from a variety of resources. Fortunately for America, we have a pretty great ethanol industry that's ready to supply the remedy to the fever. Fortunately for the rest of the world, they can have easy safe access to American ethanol if they're not already producing their own ethanol now.

We know that E27 is safe and economical for all internal combustion engine vehicles; Brazil has proven this. We know that E30 can be just as safe and even more economical than E27. Tests conducted over the years have proven this.

One result of the 1973 Oil Crisis was the federal legislation that ordered highways driving speeds restricted to 55 mph. That was a dumb move because what it really restricted was commerce. A great piece of federal legislation right now would be to require all gasoline to contain 30% ethanol. Canada should do the same, all of Europe should do the same, Australia and New Zealand should do the same, the rest of Asia should do the same.

Two things would happen if we moved to E30: America and much of the rest of the world would get out from under the fear caused by foreign oil domination, and the air we breathe would get much cleaner.

Wait, one other thing would happen: the national economies of those countries producing their own domestic ethanol would improve.

It's funny how a little alcohol has been a great remedy for thousands of years.

For a lot more information about ethanol fuel you can read my 641-page book, THE ETHANOL PAPERS. It's available to read online for free by CLICKING HERE.