Your quote is ironic in that a few of the sinister aspects of the “No on 87″ commercials was to hire the head of the firefighters union to then quote economics experts to explain how firefighters might not have enough gas to go fight a fire, and he said it with a straight, authoritative face.

Many of the no-on-87 commercials converted opinions to facts.

I don’t have an argument with some of your points, but you actually hammered on specifics whereas the no campaign made many questionable accusations (and I am being very polite by putting it that mildly) and then just repeated their confusing claims over and over, to the tune of 85 million spent in advertising, almost twice what the yes side spent on advertising,

Even if there was an initial slant towards ethanol, it would not have lasted. The tax would have worked it’s way towards solar, wind, and improved battery capacity. Do you know why the tax would have been beautifully spread around, because of blogs like this one.

Do you think you can have an affect on whether or not Prop 87 passes, but if it passes, you will have no influence to make sure the money is properly spent? Do you really believe your blog only works before the fact, and not during the execution of the initiative in question? I’d call that an inconvenient truth you chose to ignore.

Instead of fighting fair, which you claim the opposing factions are not doing by receiving subsidies, (as if fighting a war in Iraq isn’t an oil subsidy) we have the oil industry and car manufacturers buying up battery technology patents and sitting on them, and any attempt at technology breakthroughs they invest in are for supplementing the burning of fuel, not replacing it.

Why does the oil industry care if they get hit with a very minimal tax that would have worked out to LESS THAN THREE CENTS A GALLON, when we all are slaves to their product, which was pointed out in this very blog. Your quote “I find it very ironic that those who are flying around the country to decry the “evil oil industry” are doing so using jet fuel supplied by the oil industry. They enjoy many conveniences as a result of oil and gas production, but have deluded themselves into believing their lifestyle could be maintained if we all switched to alternative energy”…

So you admit that we can’t do without your product, but if this miniscule three cent tax had been added to every gallon of gas, your industry would have just come to a grinding halt. Somebody is having it both ways, but it’s not the alternative energy folks, it’s the oil industry.

Thanks for another very data driven, informative article. It’s much easier to read these and come to sound conclusions myself, when there are comprised of true facts and figures from reputable sources. I tried very hard to pull something out of Mr. Wendman’s pseudo-rebuttal so I could hear both sides of the fence, but all I was really able to conclude is that he is concerned about pollution in California, the state in which he lives, he firmly believes Ethanol is the answer to his heartburn (although I still haven’t seen any credible data that supports that), and that he really loves Walmart (but evidently doesn’t understand that the “box-stores” business model for selling gasoline is not to make money on it, but to get people to their store to buy the goods they sell inside the store).

The reason I decided to write was to just add a little clarity to the questions surround the Ethanol market in the last 12 months, since there seemed to be a couple of questions about it. Sometimes explaining what drives commodity markets can be difficult, but I don’t think you will find anybody who knows anything about the ethanol market, not know what was driving high ethanol prices in the 4Q ’05 and 1Q ’06. The major driver (so major you, could almost call it the sole driver) was the process of phasing out of MTBE in our U.S. Reformulated Gasoline Markets (RFG). Given the short time frame (270 days after our President signed the Energy bill) the refineries and gasoline blending facilities had to react to the relaxation of the MTBE mandate (that is the Federal Government said they were no longer requiring refineries to blend MTBE into gasoline and therefore once this mandate is released, if oil companies continue to blend MTBE into finished gasoline, the U.S. government will no longer protect you from the long line of money grubbing, class action lawyers standing outside their door waiting to sue someone (with deep pockets) for trace amount of MTBE found in the groundwater throughout the U.S.).

Since there was minimal capital investment required to blend ethanol into finished gasoline at U.S. truck racks, and ethanol provided some similar properties to the gasoline pool as MTBE did; ethanol appeared to be a good solution to take up some of the volume vacated by MTBE. Even though the change effected a small volume percentage (maximum of 10%) of a very small fraction of Motor Fuel (Only a handful of large U.S. Metropolitan areas), the change in ethanol demand was huge. It caused Ethanol prices to go from $2/gal range to the $5/gal range. Mr. Wendman, your comments on Genetic Engineering of Cellulosic Enzymes are intriguing and I would like to know more about it, but if it’s improvements are in parallel with any other genetic advancement (10 to 20% improvement), that won’t even scratch the surface of what type of ethanol production we would need to start even making a dent in our appetite for gasoline here in the U.S.

Where you dismiss Genetic Engineering methods applied to efficient means to produce optimal Cellulosic enzymes, again you are deceptive.

Mark, your responses continue to plumb the depths of irrationality. I guess in hindsight, I should have listened to all of those who e-mailed and told me to ignore you. I don’t know how many times I have to point out to you that I am not now, nor have I ever dismissed the potential of genetic engineering. I am a big fan of genetic engineering. I have pointed this out in responses here, and I have specifically told you this in e-mails. I told you that I advocated genetic engineering as a means to improve the economics of cellulosic ethanol as a graduate student working on this problem. So once again, you are talking to yourself and not rebutting an actual position that I have taken.

I leave it to the reader to decide Wendman’s motivation in constantly misrepresenting me. It has become quite tiresome.

Cheers, RR

Please excuse my tardy response, but I have the flu with fever the past few days.

Nice to see that you completely and conveniently ignore AGRIVIDA’s projected 20% ethanol yield increase from GENETICALLY ENGINEERED, CULTIVATED CORN INCORPORATED CELLULOSIC ENZYMES.

Nice for you to just handwave that one off, as the same dismissing various other points you have done, to denigrate the upside of Cellulosic Ethanol.

Where your prior comments about farmers who merely bespoke of volume alone, increasing efficiencies and productivity (without material changes to the process) – as your intellectual crutch as to why implicitly you think that there can be no material changes – is on the face of it laughable, as are many of your similarly conveniently slanted arguments.

You ignore that many of the ethanol plants recent and in future, can be incrementally upgraded as markets warrant, is quite convenient on your part.

Initially the capital costs for best in class green Ethanol solutions are onerously high for smaller outfits, but the plant and feedstock and distribution upgrades are feasible and will get done as time and money permit.

You conveniently skirt the point about the fact that ethanol is the best method to pragmatically migrate the existing internal combustion vehicle infrastructure to cleaner Ethanol, and in time a greener Ethanol production source.

Increasing Ethanol E85 use will reduce dense urban area air pollution, like in LA and San Francisco regions as two notable examples in California.

You also fail to acknowledge that the Ethanol pricing charts, vis a vis gasoline, are for production prior to many Ethanol innovations that will come to pass, in part assisted by Prop 87.

Moreover, you fail to mention the cost of alternatives to ethanol as clean fueling options. Again convenient to ignore. You avoid acknowledging Mr. Khosla’s explanation why the best compromise for cleaner fuels near term is ethanol. Khosla describes this in detail, enough that even you can grasp it, if you bother to read.

Where you dismiss Genetic Engineering methods applied to efficient means to produce optimal Cellulosic enzymes, again you are deceptive. Genetic Engineering Methods, can produce Cellulosic enzymes inside the very same type harvested plants being cultivated (corn) at almost trivial cost increase overall.

By Genetically modifying the Corn Plant itself to produce the enzyme inside the cellulosic mass of the Corn Stalk and husk, during otherwise normal cultivation of the GM modified corn itself, the enzyme assists in rendering the cellulosic portion of corn able to be transformed to ethanol at greater efficency and with limited external enzyme use in the cellulosics phase.

Since conventional enzyme manufacture and recovery, to produce Cellulosic enzyme (exsitu of the cultivated plants) are very costly, it is immediately apparent that Genetic Engineering Methods can effect a significant paradigm shift in the viability and cost effectiveness of cellulosic Ethanol production.

Except if you wish to prematurely handwave this away as impractical and irrelavent, as you have done and continue to do.

Moreover this same technique of Genetically Engineered in plant formation of Cellulosic Enzymes can be transformational as to the viability of higher feedstock yield cellulosic alternatives such as switchgrass, among numerous other cellulosic feedstocks.

I will acknowledge that this is yet to be deployed, but your dismissive attitude re the future near term prospects is too convenient – intellectually lazy, as have been many or your slanted diatribes.

As to more pedantic issues of ethanol production, cultivation, and distribution challenges, you similarly ignore the obvious upsides with a dismissive attitude. Not everyone will be swayed by your denigrating farmers with your inappropriate quote.

Genetic Engineering methods applied to Cellulosic Ethanol feedstock, will have a material impact on the transformation to a high yield practical cellulosic ethanol process.

You ignore that GM techniques applied to enzyme formation for GM modified Cellulosic advanced Corn Ethanol will be significantly less costly when GM methods produce the cellulosic enzymes nearly for free in the corn itself.

Genetic Engineering Methods are no panacea, but sensible and wise application of the methods of Genetic Engineering / Plant Modification can be usefully applied to cost reduce industrial scale cellulosic ethanol production, even if you conveniently fail to acknowledge this.

Does that account for the actual energy produced from a gallon of gasoline or ethanol?

No. That is just the selling price for 1 gallon of ethanol and gasoline. The $ per BTU price for ethanol is much higher than for gasoline.

Additionally, what energy sources are the ethanol plants using in their production of ethanol?

The primary energy source in most ethanol plants is natural gas (used to distill the ethanol and make fertilizer for corn), although some lately have been turning to coal. One company, E3 Biofuels, is attempting a much more sustainable model than the status quo, albeit at a much higher capital cost.

You mention the $7.24 price point for the net energy equivalent of one gallon gasoline and I would like you to elaborate on that.

That analysis was by Zfacts, but I have done very similar analyses. It boils down to the net energy. When a gallon of ethanol is produced, it takes the energy equivalent of 0.8 gallons of ethanol to produce it. So, the net energy is only 0.2 gallons. What you find is that you have to produce several gallons of ethanol, each one of them subsidized, to displace 1 gallon of gasoline.

Last but not least ethanol is a fossil fuel is it not?

It is in all but name. I have called it a recycled fossil fuel, since the net captured solar energy is such a small portion of the final energy. Much of the energy came from the fertilizer, which is usually made from fossil fuels. The ethanol is distilled with fossil fuels. The transportation is done using fossil fuels. Of course Brazil has done a much better job of creating sustainable ethanol, but we don’t have the climate to grow large amounts of sugarcane.

I am excited about solar and wind power…

I agree. Solar will certainly be left standing after all of the alternatives have competed against one another. I think solar, wind, and biomass gasification, combined with a move to electric transport, is the only real hope we have for averting a Peak Oil disaster.

Cheers, Robert

Question for you on the graph from Nebraska:

Does that account for the actual energy produced from a gallon of gasoline or ethanol? I believe the answer is no and if so, the cost per unit of energy is almost 3x more expensive with ethanol than gasoline. Additionally, what energy sources are the ethanol plants using in their production of ethanol? I’d be surprised to learn if they were all green sources and they transport it to the distribution points and then on to the retail outlets on all ethanol using trucks? It sounds to me like this issue is two fold, one is the cost of gasoline and keeping it ‘low and affordable’ to the consumer and the second is using renewable energy sources. It seems like apples and oranges are getting compared here. A gallon of gasoline doesn’t produce the same amount of energy as a gallon of ethanol so it would make sense to create and measure upon a unit of energy as opposed to a gallon of liquid. You mention the $7.24 price point for the net energy equivalent of one gallon gasoline and I would like you to elaborate on that. If the point of pro 87 folks is to keep the cost of energy lower and they are doing so by comparing the cost of a gallon of ethanol to a gallon of gasoline there would appear to be very questionable logic behind that argument. Am I missing something because that just seems too obvious to not be dwelled on by the oil producers as if this is the case, the environmental trade off if you will, is close to $5 per gallon to use ethanol. That seems expensive to me and goes against the grain of the argument for keeping costs lower.

Last but not least ethanol is a fossil fuel is it not? Should there be a way for someone to snap their fingers and the gasoline industry disappear and be replaced by ethanol wouldn’t we be having this same discussion sooner or later about ethanol and some new alternative fuel source?

I am excited about solar and wind power because those sources allow for the individual consumer to produce their own power and not be so subject to international politics when burn a watt or start the motor on their cars.

As I told you several posts back, if you feel the need to keep responding with incredibly long-winded, non-topical posts, you still don’t get it. Your problem is, despite a long track-record detailing my actual position on energy issues, you can’t accept that. You just “know” deep down that my position is something else. So, you cast aspersions and argue against what you imagine my position to be. You have quite a vivid imagination, and you are wasting everyone’s time.

I think it pretty transparent what specifically you are arguing for (or against) despite your own weak arguments to the contrary.

If that was true, my guess is that you would have devoted some of that long-winded diatribe to actually addressing what I wrote in this essay. Despite writing thousands of words in response, you refuse to do that and instead argue against positions I have never taken. Are you completely incapable of reading for comprehension, or do you merely think your posturing is going to earn you an “atta boy” by Mr. Khosla?

By trying to demean the major spokesman of Prop 87 and specifically the proposal to use Ethanol…

Mr. Khosla demeans himself with his juvenile attacks. I have seen enough mud-slinging in politics to last me a lifetime, and I am sick of it. What I have done is take his claims and rebut them. What you have failed to do, time after time, is to show where my rebuttal is wrong. Instead, you are happy spending thousands of words talking to yourself.

You NEVER answer to my observations re Genetically Engineered Enzyme…

I have let you get away with that a couple of times, but this one is just a lie. Do you want me to embarrass you by posting the specific replies I have given you regarding genetic engineering? But the problem is, since you don’t understand cellulose chemistry, you don’t understand the limitations of genetic engineering. You just think “genetic engineering – problem solved.”

I would also point out to the reader that Mark recently wrote a gushing column over Mr. Khosla’s wonderful new cellulosic breakthrough. But Mark didn’t understand that this was actually biomass gasification, which was the partial inspiration for my essay Cellulosic Ethanol vs. Biomass Gasification. I corrected Mark with a comment following his essay, and he refused to publish it. That tells me all I need to know about how much Mark is actually interested in an honest debate over energy policy. I never censor anyone. I let their views be heard. Mark Wendman wishes to silence those voices he disagrees with, which is sad because he doesn’t even understand the issues. But if you want to have an open debate, come on over to The Oil Drum. We don’t censor views – even those we disagree with.

I will leave it at that.

Will you? Won’t you treat us all to another thousand word diatribe in which you once again throw out personal attacks, ignore Mr. Khosla’s hypocritical arguments, and refuse to address my rebuttals?

Cheers, RR

REGARDING – “Thanks for the analogy. I agree with rest of your arguments which are not _against_ alternative fuels per se, but present the things as they stand. If indeed ethanol costs less to produce and _can_ be sold at higher prices than oil, then market forces will naturally lean towards it (which isn’t quite happening). Why would anybody want to deal with oil (and oil holding nations) anyway, if it costs more?”

I think the actual situation is more nuanced than you imply. And the rational for the present situation and Prop 87 funding is supported by the actual facts.

Your description avoids noting that a notable additional market barrier is automobile conversions to alternative fuel capability and # of fueling stations selling the fuel.

Cost of ethanol is one part of this equation. Part of what Prop 87 is intending to do is to grow the infrastructure of all renewable sources of energy, including ethanol. And grow the infrastructure in a useful manner – up and down the fueling ecosystem of manufacture through end use market. Most vehicles presently on the road are not E85 capable, nor easily retrofittable.

A certain small percentage of vehicles that are not E85 ready, can be retrofitted, but this is small. The jump starting of efforts in ethanol has to comprise a number of disparate parts of the food chain – manufacture and sales of E85 capable / ready vehicles, increasing supplies of the fuel, increasing the number of retail fuel outlets having the necessary E85 pump and tanks for sales, and so on.

One has to also provide unique aspects of fuel supply / manufacturing infrastructure to make the alternative a viable volume alternative, and there is more.

This more complex situation presently does provide an unspoken barrier in the present to pure cost driven sales.

There is more to it than that, but I will also point out that the conversion of large segments of vehicle manufacturing capacity to E85 capable FFV – Flex Fuel Vehicles, is particularly inexpensive compared to ALL alternative renewable fuels at present, especially for Internal Combustion motors that comprise the largest segment of present vehicle manufacture.

That point of an ecosystem of infrastructure for E85 – a very important matter, gets lost in Robert’s selective narrow critiques, as if his reality is merely refining and manufacturing supply centric. Don’t we wish it were so simple.

We might at our desks say that yet another potential vehicle fuel is a better choice for a Renewable type fuel, but so far the implications for changes to the mix of vehicle manufacture presently available from large auto manufacturers, and the ease of implementing E85 retail fueling pumps / stations, is a large reason why Khosla indicates this compromise is the best interim choice. This compromise is in part dictated by the complexities of the entire vehicle fueling foodchain.

I hope that you might begin to understand that theoretical aspects to evaluate a narrow metric of present efficiency of a candidate alternative fuel, is merely one part of the more complex tapestry of criteria.

Notable is that buildout of infrastructure has many ramifications in the viability of any alternative fuel. First order of business is to increase the potential end use market of vehicles, which in almost all alternative renewable fuels is considerably more expensive than adding E85 FFV Flex Fuel capability.

The first job of the infrastructure “sales function” is to convince automobile manufacturers to increase E85 FFV vehicle manufacture significantly. This takes time and is not a step function.

And it does require a sales effort on the part of proponents of the strategy, to the auto manufacturers.

I hope this provides you with a more complete understanding of merely some of the market, manufacture and distribution complexities.

Numerous writings by Mr. Khosla are posted here
http://www.khoslaventures.com/resources.html
and on venturebeat.

Best Regards, Mark Wendman

I will be succinct in quoting your conflicting statements.

“What Enron did was illegal. What we have here is Mr. Khosla flying around the country, hate-mongering against oil companies, while using their products to do so. If I used my telephone to run down my phone provider, I wouldn’t be surprised if they turned my phone off and forced me to find another provider.”

in one paragraph …

and here is the next text of interesting contrast?

“I am not arguing against prop 87, nor have I offered a blanket defense of oil companies. This is not rocket science, fellow. I am arguing against hypocrisy and false arguments that are being used to influence public opinion on energy policy.”

I think it pretty transparent what specifically you are arguing for (or against) despite your own weak arguments to the contrary.

By trying to demean the major spokesman of Prop 87 and specifically the proposal to use Ethanol (initially conventional corn based non cellulosic technology to just merely get infrastructure jump started) you are not what you think you try to portray yourself as.

It is quite clear on the other hand that Khosla has repeatedly indicated that innovations in cellulosic will do what you protest cannot be accomplished. I wholeheartedly agree with Khosla and his efforts. I disagree with your own partial and largely deceptive arguments, no matter how well they are phrased.

This is fundamentally the bone you repeatedly chew at, and to your own detriment. Even if you chew different sides of the bone each time, it is the same bone you chew. You will be proven terribly wrong, and not in time to apologize before you damage a beneficial effort you demean repeatedly.

Typically chemical process industries are slow at innovation, and expectations as such are calibrated too low in relation to the ability of individuals to actually innovate at a conceptual level. At an industry level, this is attributable to a slowing of cross fertilization of techniques and methods between unrelated disciplines, once in industry. IE new ideas tend to diffuse slower in industry than the hodgepodge of academia. This phenomena is normal with exceptions few and far between. A counterpoint is the application of combinatorial techniques, which in specific cases are making unusual advances of particular note. But this is a rare exception.

Those who practice regular innovations recognize this limiting effect of over specialization in industry and act appropriately to compensate. Those who cannot fathom how to speed up substantive innovation, chafe at others success, and demean others efforts.

In your specific case, you have very limited exposure to Genetic Engineering techniques [as applied to enzyme production and in plant GM incorporation for potential application to increasing efficiency of cellulosic ethanol] and its promises and opportunities, and as such you are overly dismissive of such, at a rather basic, wave it away level. Many of the naysayers seem to view from this same perspective as yours, in addition to the canard of the tax itself. There yet remain other innovations less apparent in potential, but possibly complementary to GM techniques.

You deny this as a dynamic coloring your pessimistic and dismissive perspective, and as such categorize the initial Ethanol thrust as not viable based on your own observations and your own failure to actually implement commercial biofuels into large scale commercial auto fueling, and specifically ethanol on YOUR PART. IE if you could not succeed, why let others try, and why might others succeed??

Another variant of the Aussie tall poppies effect. You fail to recognize your own technical limitations and project your actual technical shortcomings upon others you believe incapable of surmounting your own deficiencies. And others of similar lack of technical breadth believe your opinions as truth be told. NIH comes to mind in spades.

Despite your prominence at the OilDrum, you are dead wrong in your prognostications of obtuse and circular illogic regarding mostly small Ethanol limitations as being showstoppers.

You NEVER answer to my observations re Genetically Engineered Enzyme / Cellulase innovations as to tempering your wrong and premature conclusions, and I specifically take issue with your continual aspersions upon others far more accomplished commercially than you will ever achieve in your lifetime.

I speak not of myself, I am merely being polite about your insolence to others, couched in your know it all attitude, when you are merely ignorant about genetic engineering’s potential and make conveniently short arguments about far simpler matters similarly prematurely misinterpreted by you.

I’d personally never let you be responsible for a corporate level R&D project ever. You have neither the temperament of the needed coach, nor the vision to actually identify the trivial advances critical to commercialization, nor the curiosity of that which you do not already know. Your implicit demeaning of farmers comes to mind as something which would never pass muster in a team oriented production plant. Good luck in the North Sea. It is a good place for your temperament and skills with equally stubborn Scotsmen. I know btw…

The specific issue re GM is narrowly framed, and you continually dodge answering. No matter how you wish to word your responses, they are evasive and lacking the very substance you claim I lack.

In fact you have never answered to this specific point of the probable impact of genetic engineering applied to enzymatic predigestion of cellulosic feed stock. Never in any useful manner. You certainly have no material exposure to GM technology, that is self evident both in publications and patents you have. I am far far from expert, but I have familiarity that you seem not to possess the curiosity to gain. I will not comment any further on this.

The other matters you have covered with a broad overreaching swath of limited detail out of your lazy convenience, regarding present low efficiency of infrastructure matters in transport and gathering of feed stock and product, you are merely being quite openly deceptive, even if eloquently written. An example of this follows.

You have repeatedly in the past and recent posts indicated that farmers vainly hope that more production will solve efficiency deficits. That is the obvious lowest common denominator. You have clearly ignored the specifics of the cause and more important the OBVIOUS improvements that one can trivially observe will be brought to bear in all phases of distribution in time, as volume, revenue and experience warrant.

The canard you repeatedly lean upon, of the impossibility of mixing oil and ethanol in a common pipeline, you fail to acknowledge that dedicated Ethanol pipelines at sufficient volumes will address this trivially. Ignored all the time by the tenaciousDNA, who conveniently goes back to dismissing the plainspoken farmer’s paraphrased quote that “volume fixes all”, and conveniently leave the discussion cut short. Well why is this? (please do not tell me about corrosion effects in possible ethanol pipelines as this is being addressed by a new startup’s pipe coating technology)

Well we both know volume does not fix all by being left alone with the same material facts, but we also both know that by changing the facts, the numbers do not remain constant. Therein lies your weak leg, and one of the basic reasons you are far from what you protest you claim to be.

You also NEVER address the root cause of WHY ethanol is a must in the interim as a transitional corn based renewable fuel – that specifically Khosla describes and explains thoroughly in thoughtful painstaking detail. Again you are prematurely dismissive for unspoken reasons.

Technically and financially, the initial viability of Ethanol as a complementary fuel, all comes down to INFRASTRUCTURE (outside of the fuel alone).

The hardware implications of either biodiesel, or hydrogen or other conceivable renewables can not cheaply leverage off the present infrastructure of internal combustion, largely gasoline fueled IC vehicles with liquid non pressurized fueling. And yes I am reasonably familiar with conversion requirements for E85 in gasoline internal combustion motors. The costs are very modest for E85 conversion, which is why this is actually viable…

So where you are claiming deception, I call your kettle Black.

You ignore all the real nitty gritty details in infrastructure up and down the food chain of automobiles, that affect an overall decision properly and thoughtfully biased towards the sensible compromise of an incremental renewables migration strategy, ie one that is actually pragmatic from a business sense and able to be widely proliferated at minimal disruption to the existing infrastructure / food chain in fueling and automobile manufacture.

The larger the differences of an innovation in fueling technology is in details, and the larger the hurdle to practical and timely implementation. I figure that is pretty obvious, at least to some who have conducted any business up close and personal. It does not take an MBA in marketing to understand this in the least, but some folks have conceptual challenges nonetheless.

If you were to properly and sensibly address the BUSINESS realities in renewables for automotive fueling, and YOU might have some credibility, which you presently do not have in the least, despite your surface eloquence.

Although it is apparent that many thoughtful folks take your word as truth, some can actually see the gaping holes in your selective logic. This is the sign of a decent debater, I grant you that, but you are encountering someone calling your repeated bluffs, of partial and faulty facts you improperly represent as truth.

This is your mode of operation, and while you try to condescend – out of habit from your position on the OilDrum, your arguments are far weaker than what you claim of others weaknesses to be.

Your narrow perspective of the overall BUSINESS and Technology challenge to implementation of renewables, is immature, incomplete and too narrowly perfectionist to have half a chance of succeeding in the real world which includes factors both in and outside of drilling and refineries.

I take issue with your claims technical, your aspersions upon others actually deserving of your respect (I am not referring to me), and your naïveté in matters of establishing new markets and businesses. It is profoundly apparent you are too wonkish, too nerdy, but oddly limited actual intellectual curiosity in areas related to implications of leapfrog innovations even in your own purported expertise.

You are hardly deserving of this succinct response to your continual evasions and misrepresentations of minor challenges as being insurmountable, aside from your obvious pessimism regarding things you are clearly unfamiliar about.

I will leave it at that.

Good Luck Robert.

What Enron did was illegal. What we have here is Mr. Khosla flying around the country, hate-mongering against oil companies, while using their products to do so. If I used my telephone to run down my phone provider, I wouldn’t be surprised if they turned my phone off and forced me to find another provider.

Most people have no appreciation of the conveniences they enjoy as a result of oil companies, and they naively believe that alternatives can fill our insatiable desire for energy. I will say again: Not without a massive conservation push.

What I would like to see Mr. Khosla do, if he is going to criticize oil companies in order to push his agenda, to at least get his facts in order, and stop the rampant hypocrisy and juvenile name-calling.

But to the overall prop-87 question: why is it that Alaska, Texas, New Mexico and Louisiana can charge royalties, but California can’t? Are Californians getting cheaper oil because of this?

Two points. First, you are arguing about Prop 87. Again, I don’t care if it passes. I don’t care what royalty you charge. But at least root the debate in fact. California oil companies pay higher prices than any of the other states you mentioned. That’s a fact. They pay much steeper income tax rates, and much higher property tax rates. So, when proponents use that tired line “they aren’t paying their fair share”, they are really being disingenuous. A number of your papers in California have pointed this out in editorials. See my comment to Bill Jolitz in my previous essay, where I quoted several of them. Simple question: Would you agree to the overall tax arrangement that Texas has with the oil companies? Think about that, given that it would reduce the taxes oil companies pay in California.

To Mark Wendman – Once again, you show your failure to comprehend the argument, so you dig into the depths your intellectual arsenal and again go for the ad homs. As another poster pointed out, feel free to continue marginalizing yourself.

You are telling me how good apples are, in response to a comment about why I don’t like oranges. I like apples, so you are just talking to yourself. You are still whacking away at that straw man. I am not arguing against prop 87, nor have I offered a blanket defense of oil companies. This is not rocket science, fellow. I am arguing against hypocrisy and false arguments that are being used to influence public opinion on energy policy. If you want to address, let’s say, whether Khosla is being a hypocrite when he complains about oil companies using political clout to get subsidies (ADM, anyone?) then that’s a topical subject. None of yours are, and at this point I am starting to get the impression that you aren’t very bright to be unable to figure this out.

Cheers, RR

There never was an energy crisis in California. It was artificial, and largely by collusion of Oil and Gas Interests, on a scale far far larger than you are accusing the folks who are supporting Prop 87, let’s say by an order of magnitude larger than the unsubstantiated “conflicts” of interest here for Prop 87 (versus the collusion which transpired in California’s purported crisis).

Things like recurring artificial energy plant shutdowns (somehow we never hear of these anymore?) and purchase and shuttering of 1 of only 2 gas pipelines from Texas to California, are merely scratching the surface.

Nevermind the illegal structuring of public services gas & electric supply contracts as closed bids. I can go on if you’d like.

Hypothetical conflict of interest by the VCs backing the effort to jump start renewables here, pales by comparison. And so far hypothetical I might add.

By contrast, you’d be hard pressed to explain me how anything in the root causes of California’s prior artificial energy troubles benefitted the public in ANY way.

Where were you, when some were cooking the artificial energy crisis in California? Conveniently silent ?

Where were you all when the AEI, funded and lead by the brilliant commodities arbitrageur Bruce Kovner of New York’s Caxton Trading, was paying shills to produce reams of AEI Foreign Policy whitepapers that lead to the present mess in the mideast?

Caxton, Mr. Kovner’s commodities trading firm, merely benefits from commodities markets he indirectly manipulated by crafting long term Foreign policy whitepapers.

AEI drove long term policy thusts now implemented as US foreign policy often by former AEI members. Where is the conflict of interest there? Where is the public interest in all of this? [Where is Matt when we need him when many hundreds of bilions are involved?]

Are there huge implications to commodities markets and Mr. Kovners profits, due to the ill advised AEI Foreign policy whitepapers being implemented as near defacto US mideast foreign policy?

And what magnitude is this, that you ignore it relative to your empty accusations?

What are the exact costs to us?

A billion here or there for the right of way for the little known Afghan oil pipeline?

A billion here or there to gain rights to Iraqi oilfields?

Not even close.

More like direct and indirect costs in the range or a Trillion public dollars for all expenses paid and due in the future, success or not.

What chance is it, that it is far larger cost to our population than a mere billion here or there?

And what chance does it seem that Iraninan Shia will largely end up controlling Iraq, in all but name, and the money and blood spent trying to gain control of the oilfields of Iraq might turn out for naught?

It is quite probable we’ll see a big fat ZIPPO return of public funds on a scale that dwarfs anything you quote as purported convenient facts.

Misadventures of the conflict of oil interests?
Or Interest of conflicts?
Your call.

Might we need an indigenous renewable energy policy ? Might that start be Prop 87? I will let the readers figure that one out.

Might Kovner/AEI be a far larger actual conflict of interest far far larger than anything both of you accuse the excellent VCs of Menlo Park of, in hypothetical conflict of interests?

Everything is relative after all.
What is another few zeros in front of the decimal point?

I guess it is a merely engineering error on your part Robert? But after all you are tenaciousDNA, with answers for everthing trees included, soothsayer to the oil industry.

I kept talking about Robert’s inability to see the forest for the trees, or in this case to see the Close to Trillion dollars of conflict of interest (in favor of Oil Interests at the expense of the public at large) versus the issues surrounding Prop 87, as imperfectly as it might be accused of being crafted (ie in your case, not helping the glutonous oil industry).

Hmmm. I’d call a potential as yet unrealized billion here or there spread over 5 or more years, chump change compared to the implications of Kovners misadventures implemented as US mideast foreign policy, largely benefitting commodities traders and the oil industry in various ways and means.

SO FOLKS (as an Oil Drummer might put it)…

Everything is Relative, and some things are just a few orders of magnitude More Relative than others. And yet some folks cannot get it… “Tenacity in DNA” after all is of little help in something as pedantic as common sense.

But Robert is Tenacious as can be, even if lacking in common sense, or in transparency of his motives.

Small errors / weaknesses of Prop 87 if one might call it, are merely chump change in the greater scheme of things. With beneficial spinoffs in the broader economy you largely conveniently ignore. And will upside to Ethanol you repeatedly dismiss and denounce.

And Yes Robert, while you write reasonably eloquently, you conveniently and purposely avoid the main issues relevant to the purpose of Prop 87 – policy crafted to wean California from non-renewables by some means faster than private sector can do alone, and faster than the public sector might do alone.

Prop 87 (even with the thrusts in Ethanol) has far greater chances to benefit the public at large, than other oil misadventures of your benefactors.

While you and others harp on trumped up Ethanol somkescreens and conveniently ignore the real potential in near term innovations in Cellulosic Ethanol (innovations leveraging Genetic Engineering techniques you never applied in your prior Biofuels misadventures) it is far easier to hurl pinpricks that obviously miss the forest, and hit the tree branches.

Hardly credible, and hardly getting it, Mr Rapier et al.

Imperfect as Prop 87 or Ethanol might be, there is a decent cross section of interests aside from the oil industry, supporting this well crafted policy, even the ethanol component.

Like any public policy, Prop 87 is a compromise and yet overall, has very good prospects of generating numerous sucesses for the benefit of the public at large. That is what public policy is intended to do.

Unless one has more nefarious conflicts of interests from the Oil Industry, left unspoken?

Consider, for example:
“I find it very ironic that those who are flying around the country to decry the “evil oil industry” are doing so using jet fuel supplied by the oil industry.”

By your argument, noone on the Internet should have been allowed to criticize Enron for price-gouging, because they would be using electricity?? Just because you use oil products in daily life, does it mean you can’t criticize their practices?

But to the overall prop-87 question: why is it that Alaska, Texas, New Mexico and Louisiana can charge royalties, but California can’t? Are Californians getting cheaper oil because of this? Last time I checked at the pump, this was certainly not the case.

Regarding the cost of ethanol versus gasoline, there is only one point I am trying to drive home. Mr. Khosla says that it is cheaper to produce ethanol than gasoline. As you can see, the selling price for ethanol has been higher than for gasoline for 25 of the past 25 years. Therefore, is it not hypocritical to complain about oil company profits, when this would mean that ethanol company profit margins are significantly higher?

Cheers, RR