TRUTH ABOUT ETHANOL - Review and Reply to Robert Bryce's GUSHER OF LIES
A Book That's Aptly Named for What It Is
By Marc J. Rauch
Exec. Vice President/Co-Publisher
THE AUTO CHANNEL
In 2008, Robert Bryce wrote a book titled, “GUSHER OF LIES: The Dangerous Delusions of Energy Independence.” The book attacks the notion of America’s quest for energy independence and Bryce attempts to discredit “green” alternative solutions as the answer to our dependence on oil - foreign and domestic.
Judging from all the complimentary and congratulatory testimonials in the first few pages of the book, as well as those used online for promotion, it’s obvious that Mr. Bryce has friends in high places who know how to write endorsements.
I did find it amusing that the very first testimonial on the Praise Pages shown at the beginning of the book was written by “R-Squared Energy Blog.” R-Squared Energy is Robert Rapier, who is typically identified similarly to Robert Bryce as an “energy expert.”*
Coincidentally, this Robert (Rapier) has used some of my writing about CNG on his blog for the past few years to explain why there is such a high cost to convert existing gasoline-powered engines to CNG in the United States. I’ve gotten to know Robert Rapier better in the past year because The Auto Channel has been featuring some of his videos on our broadcast TV network. In my personal conversations with Robert he’s told me quite a bit about his strong support for ethanol and how he feels his advocacy has been misunderstood by some because he worked for several years in the oil industry. When he sent me his latest video on ethanol he included the following comment: “If Midwestern governors would follow my suggestions, the entire Midwest could be energy independent.” The suggestions he makes in the video pertain, of course, to ethanol, and the energy independence he refers to is becoming independent from oil (gasoline). He makes it clear that he supports the Renewable Fuel Standard (RFS) and the use of American farmers to grow crops from which ethanol can be produced.
The significance in my telling you this is that Robert Rapier’s position, as you will learn, is patently different than Robert Bryce’s abhorrence to ethanol and other alternative fuel solutions as he sets forth in GUSHER OF LIES. So you can understand my amusement over the juxtaposed use of the R-Squared Energy Blog testimonial that leads off the book. Click on the video window just below if you would like to watch Robert Rapier’s video.
HOW THIS BOOK REVIEW CAME ABOUT
I’ve come across Robert Bryce’s name over the past few years as I’ve researched aspects of the oil industry and alternative fuels. I’ve read a couple of his articles and heard him interviewed on radio. But it wasn’t until a recent radio interview with Mark Mills, a colleague of Mr. Bryce from the Manhattan Institute of Policy, that I really took notice of what Manhattan Institute and its “experts” were saying about oil and alternative fuels.
In the past I’ve had considerable disagreement with some of the folks at the CATO Institute, another organization that professes right wing-ish, conservative, open market, libertarian perspectives like those generally espoused by Manhattan Institute. As I’ve chronicled on The Auto Channel website, I’ve found that CATO’s Jerry Taylor and Richard Rahn support an energy policy that to me is as far from being “open market” and libertarian as Earth is from the Andromeda galaxy. So I wanted to see how Manhattan Institute’s policies compare with CATO.
I was unaware of GUSHER OF LIES until the other day when I received a reply from Mr. Bryce to an email I sent him. In my email I wrote:
“I'm wondering if you've ever had the chance to actually research what you say about ethanol and E15 or if you are merely repeating the information points sent to you by one of the oil industry public relations groups. I realize that it might appear as if I am simply being confrontational, but I'm not trying to be. I'm seriously asking how you have come to the opinions that you have.
“In my own experience with covering the automotive world for nearly 30 years I didn't start out with any agenda regarding fuels…But in my personal research of ethanol, which includes purchasing a non-flex fuel vehicle so that I could experiment with using various blend levels of ethanol-gasoline, I can tell you that the problems you write about are false.
“In addition, your apparent recitation of issues related to using corn for the production of ethanol lacks basic business acumen. Perhaps business has not been a focus for you, and therefore the principles of production have not been apparent. But if you're going to attack the use of corn you should make an attempt at understanding the business side.”
If you’ve ever read any of my editorials or news articles you might recognize some recurring themes. For example, I put great stock in personal hands-on experience. Studying someone else’s work is fine, but there comes a time when you have to get out there and get your hands dirty. You’ve got to kick some tires, wipe sweat from your brow, and spill some of your own blood.
I also have this thing about understanding business, but not the kind of understanding that comes from just reading textbooks and listening to lectures at college. I’m talking about hands-on production and management experience in real world situations where your personal efforts and decisions are the difference between whether you and your co-workers will have the carfare to get home that night and back to work the next morning. So when I read certain accounts and hear people talk about the business aspect of some issue, if I don’t detect any evidence that they have enjoyed the experience of “working in the field,” I become very suspect and critical of their position.
In the brief research I did on Robert Bryce before writing my email to him, I didn’t come across any information that indicated he had any experience as a dirty-handed “field tester” or in day-to-day product production and distribution. So that’s why I asked Mr. Bryce the questions I did, in the manner I did. I’ll come back to this whole matter of real world experience at various times later in this review.
Happily, I received a rather quick response to my email; sometimes I never get any responses to my emails. Robert Bryce wrote:
“I am fundamentally opposed to use of food to make motor fuel. Further, my opposition to biofuels is based on simple math and basic physics. The power density of biofuels is too low to have it make any sense from a public policy standpoint. I have never been given any "information points" by PR firms on ethanol. My work on ethanol is my own.”
“… Further, I suggest you read my third book, GUSHER OF LIES, of which about 20 percent is devoted to the ethanol scam.”
So based upon his suggestion that I read his third book, GUSHER OF LIES, I plunked my ten bucks down on Amazon for the Kindle version, and this project got under way.
Going in, I had to say that there’s a lot that Robert Bryce and I seem to share. His personal bio indicates that he leans towards libertarianism; I consider myself to be a conservative libertarian. He doesn’t believe in the man-made global warming alarms, and neither do I. And he “believes wholeheartedly in the U.S. Constitution and the Bill of Rights,” just like me.
But then we take divergent paths. In the “Author’s Note” section of the book after the Praise Pages, Bryce talks about his change in perspective from thinking there should be major government involvement in energy to now believing that the government should “quit meddling in the energy market.”
As a conservative libertarian I would normally eschew all government involvement in any enterprise. However, to now call off government involvement – and its built-in political attachments – after all the government and political tutelage that made the petroleum oil industry so dominant and petroleum oil-based fuels our primary engine fuels, is either terribly naïve or horribly disingenuous. Gasoline didn’t become so prominent because it was the best fuel; it became the primary fuel because of intentional (or unintentional-that-became-intentional) government intrusion with alcohol in the form of onerous taxation, followed by protection from alcohol in the form of national prohibition for 14 years. These 14 years were perhaps the most critical years in the development and growth of the automobile industry, which became and remains the largest and most important industry in the world.
For Bryce or anyone arguing the anti-alternative fuel position to now declare that the government should back off from providing help that would allow domestically produced alternative fuel solutions to compete on the very lopsided field that government involvement created to favor the oil industry, is comically dishonest.
It’s not only comically-dishonest, it’s comically-unrealistic. Does Bryce really expect that politicians who have watered at the money trough of the oil industry for so many years will willingly go cold-turkey? It’s completely unlikely.
There’s an often used analogy for why certain government controls and intervention is necessary, and it’s an analogy that even the most strident libertarians have trouble arguing with. The analogy is the necessity for traffic stop lights. It goes like this, if it wasn’t for the orderly control of any thoroughfare there would be mass confusion and the free-flow of traffic would come to a grinding halt because of accidents blocking the road. It is only by applying certain controls that we can insure a generally freer traveling experience.
The need for some governmental controls and oversights in the energy arena certainly can benefit from this analogy.
However, in the discussion of gasoline versus alternative fuels, I like to use a different analogy of why we need government’s involvement and how it should be applied. This analogy is horse racing. In order to make a horse race fair, there are strict regulations concerning the breed of horse running, the weight that the horses must carry, and the implements and substances that can be used to affect the horses’ performance.
The oil and gasoline industry received enormous benefits from government intervention over the past 150 years. For example, there was the previously mentioned $2+ per gallon tax imposed on alcohol production during the Civil War, which was never rescinded until more than 40 years later. Then there was the imposition of prohibition that made all alcohol production illegal for 14 years. And there have been the billions and billions of dollars in continuous subsidies, allotments, allowances, and tax incentives that continue to this very day, even though the oil industry is hugely profitable. The Big Oil lobby likes to complain about and overdramatize the subsidies given to various alternative energy and fuel sources, and then deny or ignore the fact that they have been the biggest recipient of government subsidies.
There’s also another incredible financial break that the oil industry gets from the American people and our government: a free security service in the form of the U.S. military. I’ll be discussing this issue in greater detail later on, but suffice it to say, we have spent trillions of dollars to protect the oil industry.
So for alternative fuels to enter the horse race for consumer acceptance great adjustments must be made to make the race fair, or just fairer. I’ve come across a large number of people who consciously or unconsciously support Big Oil by repeating what they heard some oil industry wag say about subsidies to ethanol and CNG: “The government should just let the free market take over and remove the alternate fuel subsidies. Then we’ll see how competitive ethanol (or CNG) is.”
Paradoxically, they are correct, the government should remove all subsidies, but it should be the other way around. Remove all the petroleum oil and gasoline subsidies and make the oil industry foot the bill for our military and then let’s see how uncompetitive gasoline and diesel really are. If all oil industry related subsidies were removed and they had to pay for the military protection, gasoline in America could be as high as $15 per gallon.
Some of the oil industry shills, like Jerry Taylor, claim that America’s service stations are primarily or only selling gasoline and diesel because that’s “what the public wants.” Taylor likes to say that most filling stations are now independently owned and operated and that the oil companies have no control over what they sell. Taylor cites this as an example of the free and open market that we have. This is an entirely untrue situation, so either he is a complete liar, or he’s the ignorant pompous fool that I believe him to be, or both.
Yes, it’s correct that most filling stations are independently owned and operated, but most are under contractual obligations to their gasoline provider to not sell any type of fuel product that they don’t produce or distribute. So if a particular oil distributor doesn’t offer an ethanol blend, such as E85 or E15, then in most instances the independent owner-operator cannot accept another distributor’s ethanol product without the filling station owner paying a burdensome fee to do so. This is not a free and open marketplace.
Intervention to insure fair competition is necessary. As a libertarian I agree that it’s unfortunate that the intervention has to be from the government, but who else would be capable of applying and enforcing competition regulations that are designed to be fair?
Bryce also talks about, and thanks, various Arab oil-related people for a trip he took to Saudi Arabia and the United Arab Emirates, which helped him “…understand the Arab world and the on-going trend of globalization…” of the energy sector.
While I don’t want to make too much of the “help” that Bryce might have received from the Arabs, particularly because I have no access to his bank records, I also don’t want to make too little of it.
If you recall, as I stated above, in my email to Robert Bryce I asked if he is “…merely repeating the information points sent to you by one of the oil industry public relations groups.” And Bryce emphatically replied, “I have never been given any information points by PR firms on ethanol.” Well, let me draw this connection: Saudi Arabia’s public relations firm in the United States is Edelman Public Relations. Edelman is also the PR firm for the American Petroleum Institute (API), which is the primary mouthpiece for the oil industry in our country. Three weeks ago I received an email from Edelman setting forth these “informational points” about ethanol:
“As travelers plan to journey an average of 690 miles (on the Memorial Day holiday weekend), those filling up on high ethanol-gasoline blends like E85 (up to 85% ethanol), or mid-level ethanol blends such as E15 (15% ethanol), will notice that they’ll need to stop at the pump more often. Ethanol contains 33% less energy than traditional gasoline (and is more expensive when adjusted for this), meaning consumers will get fewer miles per gallon. Unfortunately, 95% of consumers surveyed by AAA were not familiar with E15 meaning that travelers could unintentionally fill up on the fuel, and end up spending more on gas and potentially wrecking their engines.
“More and more ethanol is being forced into U.S. gasoline every year as a result of the Renewable Fuel Standard (RFS) ¬ a policy that is diverting 40% of all U.S. corn to use in fuel instead of food. The RFS is also increasing prices for meat, poultry and dairy products, and will make Memorial Day cookouts more expensive. Since the RFS was expanded in 2007, prices for cereal and bakery products have risen 77%; prices for meat, poultry, fish and eggs have increased 78%; and prices for vegetable oil and fats (e.g., butter) are up by 444%.”
The email from Edelman offered to arrange for me to speak with representatives from various Big Oil advocacy groups about these points.
Some readers will know that I challenged Edelman on these points, item by item, in an editorial that The Auto Channel published on May 23, 2013; “Why Does AAA and Big Oil Feel They Must Lie to America?”. (Click the link to read that editorial).
These same basic anti-ethanol information points are the essential anti-ethanol information points that Edelman and other oil lobbying organizations have used for many years.
Not surprising is that these anti-ethanol points are the basic anti-ethanol points used in GUSHER OF LIES. Yes, Bryce does add in subsidy issues and the issue of “power density.” But these extra issues are not new or unique anti-ethanol points that were discovered by Bryce; they just were not included in that particular Edelman message. The ethanol subsidy issue and the power density issue are typically included in oil industry sponsored anti-ethanol messages and reports created by others such as David Pimentel, Tim Searchinger, and the aforementioned Jerry Taylor.
Is it just a coincidence that Bryce uses the same informational points to tee off from in his arguments against ethanol, or is it a concerted effort by Big Oil to make all anti-ethanol arguments consistent?
I clearly acknowledge that my pro-ethanol arguments follow a consistent pattern; a pattern that is not just consistent in how I respond, but in how other ethanol proponents make their case for ethanol. Indeed, the single most important reason that I purchased a dedicated CNG-powered vehicle and then a non-flex fuel gasoline-powered vehicle was so that I could experience first hand the benefits or problems, if any, in using CNG or ethanol.
This goes back to what I wrote earlier: I find it crucially important to have personal hands-on experience. I was never comfortable in just repeating what someone else said about an alternative energy solution, I felt I must live it. I’ve done it, and continue doing it with various high-level ethanol-gasoline blends in a wide variety of vehicles, and in particular with the testing I’ve done in my own dedicated non-flex fuel vehicle over a long term. I wondered if Bryce would respond to my email by saying that he arrived at his conclusions because he tried using various ethanol-gasoline blends in his personal vehicle(s) and that by doing so that he “wrecked” the engines, just as the oil industry claims have warned. He offered no insight to any personal experimentation one way or the other in the email, and none in the book.
In wrapping up this particular section let me say this: The email I received from Edelman was not sent to me exclusively, nor is it the first time that they and others in the oil lobby have sent such messages to journalists and media personalities. It is a normal part of their propaganda efforts. As Robert Rapier confirmed to me in a phone conversation I had with him last Fall, he used to receive informational messages like this from the Big Oil propaganda machine, and that if he was to write an article that contained the information, and get it published, that there would be some financial remuneration for doing so. I believe that there is a great likelihood that Bryce has received anti-ethanol information points from the oil lobby, even though he says he hasn’t. Frankly, it’s irrelevant because the truthful and factual responses to the anti-ethanol points are the same either way.
Moving past the opening praise pages, expressions of gratitude, and acknowledgements, Bryce’s next couple of chapters treat us to a sermon he titled “WHY WE THINK WE WANT ENERGY INDEPENDENCE.”
Or let me suggest another title that he could have used, “Why struggle with freedom when slavery has so much to offer?”
Bryce’s discourse reminded me of two things: First, the slave owner who says to his slaves, “What’s the big deal about freedom? If I free you, you’ll just have to go out and struggle to find a job, then a house, then clothes to wear, and food to eat. If you get sick, you have to pay the doctor’s bills. Why not stay here and I’ll take care of those things for you? What’s a little whipping every so often, and occasionally I’ll rape your wife or daughter or son; but so what? They’ll probably even learn to enjoy it?”
The second thing concerns those Russians who were unhappy when the Soviet Union collapsed and they were faced with the prospect of independence and self-reliance. Between communism and life under the Czars, Russians had never experienced freedom – I’m talking about hundreds and hundreds of years. The newly free Russians were lost; they had no direction, they didn’t know how to adjust to a life where they could make a decision. Of course those who had been in the black market had no problem with entrepreneurship, but they were in the great minority.
Bryce says “Americans are fixated” on the issue. I think there’s truth to that. However, I don’t think we’re fixated enough on the issue. He makes the picture look cheerful by telling us that we’re paying less for gasoline now then we did in 1913, based on adjusted numbers for inflation, improvements in lifestyle, Gross Domestic Production figures and other arcane comparisons. He attempts to alleviate our concerns when he writes that oil isn’t the only foreign product we depend on. And that’s true, too.
I think it’s distressing to know or feel that we are incapable of producing steel nuts and bolts to build a new SF Bay Area Bridge, and that we need clothing factories in Bangladesh to manufacture $100 jeans for our malls to sell, and that we need China to build solar panels that don’t work sufficiently. It’s sad, but I’m still not getting the connection between our production inabilities and why it’s okay to be reliant on foreign sources for our engine fuels.
Bryce also reminds us in GUSHER OF LIES that we’re not the only country enslaved to foreign oil; our two greatest allies in World War II, the Germans and the Japanese, are also locked in oil chains.
Wait, did I just write “our two greatest allies in WWII, the Germans and the Japanese?…”. Oh, my gosh, weren’t they our enemy in WWII? Didn’t we win the war and they lost it? Didn’t we spend billions of dollars to rebuild their societies? Didn’t we get pulled into that war specifically because Japan went on a campaign of aggression to conquer oil producing countries in the Far East and we objected to it? Did we do all that just so we can bring ourselves down to the level of defeated nations?
Now I get it. Hey, everybody it’s okay that we’re enslaved to oil that comes from people who hate us because it’s the new cool thing to do!
Slavery is easy; it’s simple; it doesn’t require troublesome decision making…. If only there weren’t those occasional lashings and rapes….Hmmm.
Alright, I hear you; I’m telepathically hearing you ask me, “What occasional lashings and rapes are you talking about?”
Getting American service men and women blown up on the other side of the world, for one; having a bomb blow up at the finish line of a marathon, I’d say that’s a pretty good screwing; having a fully loaded jet fly into one of our office buildings; having an American doctor who is overseas trying to help poor people kidnapped and killed; owing other questionably-friendly nations trillions of dollars; you know, just those little everyday nuisances.
* Robert Bryce's status as an energy expert at the time of GUSHER OF LIES' publication is questionable. Mr. Bryce spent several years as a general reporter for The Austin Chronicle where he wrote about many subjects outside of the energy industry, and then spent only a short period of time working for EnergyTribune.com (now defunct), and then five months working for Institute For Energy Research. Robert Rapier, by comparison, is a chemical engineer with many years of experience working directly with energy related entities.