Reply #10: This is NO "appeal to authority" did all you conservatives read the same ad?: [View All]

[JohnWxy]

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MY 'APPEAL' IS NOT to AUTHORITY IT IS TO SCIENCE. All you conservaties are the same. You think it's all a matter of rhetoric. The important thing is do your research and let genuine science and facts be your guide.



NOw, The Science has ALWAYS supported ethanol from the beginning.. NOW, with more efficient plants in operation making ethanol the case is just stronger (51% less GHGs for Ethanol vs gasoline). And it will get even stronger as more efficiencies are gained.


As for "pouring money into their pockets" the Petroleum Product Excise Tax Credit to blenders of ethanol of $.51 for every gallon of Ethanol (a non petroleum fuel) cost about $4.6 billion in 2008 (9.3 billion gallons of Ethanol blended). Since ethanol provided roughly 6.3% of the fuel supply and thus decreased the demand for gasoline by 6.3% (with one third of that or 2% of the entire supply of fuel, being new supply for 2008) that reduced the price of gas by about a third (because of something called the Elasticity of Price (with respect to Demand) for gasoline which measures how much a price changes for a given change in demand for gas).

(From Evidence of a Shift in the Short-Run Price Elasticity of Gasoline Demand, Hughes, Knittel and Sperling)

Based on the price income interaction, simultaneous equations and recession data models, the estimated price elasticity of gasoline demand is between -0.21 and -0.22 in the period from 1975 to 1980 and between -0.034 and -0.077 in the period from 2001 to 2006.

NOte that the Elasticity of Price with respect to demand is the inverse of the Price Flexibility. Taking the most conservative end of the range mentioned in the source (0.077) this gives you a Price flexibility of 13% for every 1% change in demand. Now just using the short term change (reduction) in demand for gasoline due to the supply of ethanol in 2008(2% of totat fuel supply) yields a 24% decrease in the price of gasoline (this would be the $4.10 peak we experienced in June 2008). This means that without the ethanol meeting 6.35 (2% new demand reduction in 20080 of the demand for gas, the price of gas would have risen 32% {(1/(1-.24) = 1.32}.

NOw applied to the total gallons of fuel consumed that would mean that ethanol could have saved us over $300 Billion or almost 65 times the "cost" in terms of Petroleum Product excise taxes not collected. {Of course, most would say that since ethanol is NOT a petroleum product the tax should not be levied on blenders in the first place and they would be right. But for sake of argument, I am willing to pretend this tax was due the government and therefor giving it up was a "cost". Even so the lowered cost of gasoline would have been about 100 times greater than this "cost".}

The reason I say ethanol "could have" saved us that much in reduced gasoline costs is that without ethanol the price of gas would not have risen a full 32% (1/(1-.24) = 1.32). My guess is, somewhere around $4.50 a gallon, gas usage would have been cut so severely and the impact on businesses would have been so severe - we would have been skidding into a depression. So the savings in the cost of gas would have been limited to perhaps $74 Billion ($4.50 - $4.00). Still this is about 16 times the "cost" of the Petroluem Product Excise tax "given up".

So by keeping the price of gas down ethanol not only saved us a say $70 Billion dollars in lower gas charges, it also prevented a depression (unfortunately, the Republican Deregulation Disaster drove us into depression anyway - ethanol could not do anything about that - except to make matters less severe then they have turned out to be).

The bottom line is producing ethanol saved us more than it "cost" and saved us from a gasoline cost induced depression or at least made our current Deregulation Depression less severe than it would have been.

AS FAR as your opinion about the sensibleness of the decision by the Calif Air Resources Board - I'll take the opinion of the 100 scientists and researchers in this field over yours (that's an EASY choice! LOL).

But look at it this way, I took my time to answer you. That I'm sure makes you feel good, important ("oh boy")! (of course, in reality I'm using your responses to shoot down the typical drivvel that one hears as criticism of ethanol. For that opportunity I guess I should thank you.)