Tar Sands Oil

To our Political Advisers:

     One of our Political Associates sent me an apparently widely distributed article by the Sierra Club. In the article, the Sierra Club implies a requested boycott of Coca-Cola, Pepsi-Cola, and Dr Pepper by asking customers to write those companies asking that they cease use of DIRTY tar sands oil in their hundred thousand vehicles.
   
    I replied to our Associate as follows:

    This article by the Sierra Club is completely misleading.
    For a more complete understanding of what tar sands are, see http://en.wikipedia.org/wiki/Oil_sands.    However, I will give you a short description to put things into the proper perspective.
    We run our automotive fleets with gasoline and Diesel. The federal government has spent billions of taxpayer dollars on subsidies to convert the fleet to electric power, which would be generated by wind or solar source. The federal program has so far been ineffective, primarily because wind and solar power sources are considerably more expensive than the use of gasoline and Diesel.

    The cheapest source of petroleum is from extensive pools belowground. I'm sure you have seen some of the old movies showing oil drilling and subsequent gushers of oil. These gushers involved striking a pool. After the initial pressure is past and the well is no longer a gusher, oil still still can be pumped from the pool in significant quantities at low cost. This is happening with many wells in the US and most of the Middle East. New exploration and drilling techniques have also been developed to find and produce oil from new pools.
    However, pool oil is not the only available source. Oil is also mixed with shale and with sand and when the oil is extracted from the shale or sand, it is respectively called shale oil and sand tar. Petroleum oil from pools is not uniform. The chemical composition of the material varies from light hydrocarbons to heavy molecular weight hydrocarbons. Tar from sands is the high molecular weight type, which does not flow, and which is similar to tar which is used in roofing or mixed with crushed stone to form road asphalt.
    The separation of oil or tar from shale or sand is more expensive than merely pumping oil from an underground pool,, but under certain conditions it can be economical.
    Whether the hydrocarbons are from an oil pool, shale, or sand, they have no use in the crude form. They must be refined, for which reason we have oil refineries to produce usable products, such as gasoline, jet fuel, Diesel, lubricating oils, etc., from the crude. Refineries operate on the basis of distillation and cracking. Distillation is merely a separation technique to obtain the lighter fractions for direct use as fuels. The heavier components are changed chemically to a lighter fuel fraction by a cracking process. The heavier the hydrocarbon, such as in sand tar, the more cracking must be involved to obtain the fuel components. But, in the final analysis there is always a residue, which cannot be economically converted to fuel, and which is then used for road asphalt.
    With that description of materials and process, perhaps you can now tell me what is dirty about the automotive fuels made from sands, as claimed by the Sierra Club.
    Employees of the Sierra Club know well the information which I have given above. However, their intention is to develop within you an emotional reaction such that you and others will combine to boycott the identified soft drink companies to force a shut down of sand tar mining . This position is consistent with that already held by the Administration. The question is really why do they take this position? Do they want to preserve sand tar for possible future use? Are they concerned that the mining will disrupt the environment? Note that they do not say.
    My own opinion is that US environmental groups, including the Sierra Club, have been infiltrated by Communists, who have the intention of destroying capitalism in the US and reducing the US to the economic capacity of a third world power.

Eliminate Mandates and Subsidies for Ethanol & Biodiesel

Open email to Rep. Fred Upton (MI), Chairman of the Committee on Energy and Commerce:

Dear Rep. Upton,
    This concerns gasoline and ethanol.
    I emailed you yesterday on this subject and included a message concerning gasoline pricing from one of my Associates. That same associate has come back with additional information as follows:  

 

    "A couple of days ago, I commented on the perverse forces driving up the price of gasoline.  It turns out that these same misguided federal policies are significantly affecting food prices as well.  Phil Nye reports that the price of farm land in Illinois has reached $15,000 per tillable acre - an all time high.  At the same time, corn and soy bean prices are at all time highs. The relationship of crop prices to farm land prices should be obvious.  That  apparently is not the case with Obama and this Congress who continue the destructive renewable fuel policies - ethanol from corn and biodiesel from soy bean oil.  At the same time, we are watching crude oil and natural gas production continue to grow.  Simply ask yourself the question:  why do we need renewable fuels subsidized with tax dollars when crude oil and natural gas production is rising rapidly?  The only answer is wrongheaded energy policies.

     Of course, the other consequence is the escalation of food prices.  Food crop and energy prices are the foundation of food prices.  According to Obama and the Federal Reserve, price inflation is modest.  Anyone who shops for food knows that prices have risen substantially.  This morning I stopped at MacDonalds to buy breakfast.  Less than a year ago my usual breakfast cost about $6.  This morning it was about $10.  Whom do you believe: the Federal Government or your pocketbook? " 

 

    Rep. Upton, please eliminate mandates for use of ethanol and biodiesel and eliminate all subsidies for production and use of same. Those promotions are not needed with respect to the present automotive fuel supply, and they are doing damage to the general economy, particularly in higher food prices and exaggerated farmland prices.

High Motor Fuel Prices through Ethanoll

Open email to Rep. Fred Upton (MI), Chairman of the Committee on Energy and Commerce:

Dear Rep. Upton,    The following concerning gasoline is from one of my Associates:
" You may or may not have noticed that gasoline prices are going up.  Normally, gasoline prices follow the price of crude oil because of the accounting rules that refiners use for valuing inventory. (That's another story)  However, the price of crude oil has been fairly stable.  What's going on?

    It turns out we are being victimized by the federal government. Are you surprised? The problem is the federal mandate for ethanol in gasoline. The Congress in its wisdom has decreed increased volume of ethanol for motor fuel at a time that the volume of gasoline is fairly stable.  That means that the percentage of ethanol in gasoline would have to increase beyond the current levels of about 10%. However, automotive automobile companies have warned that such a move might damage some engines and refiners are reluctant to expose themselves to lawsuits for engine damage.

    Therefore, they use another provision of the mandate to buy an exemption from the EPA rule.  But the price of those exemptions keeps rising because the demand exceeds the supply. (Econ 101).  Therefore, the refiners simply pass that increasing cost along to their customers.

    The use of ethanol in gasoline back in the 1980s had a marginal positive effect on unburned hydrocarbons from gasoline engines.  That problem was eliminated when catalytic converters were added to engine exhausts.  At this time there is absolutely no need for ethanol, and the price of gasoline would fall if its use were eliminated.

    Unfortunately, the federal government under Obama is not driven by economics but by catering to the farm states; the ethanol lobby and the environmentalists.  There is some fantasy that ethanol reduces carbon dioxide emissions.  It is a total fantasy.            

    However, it fits their narrative that ethanol in gasoline reduces the rate of global warming.

    Would you like to buy a bridge in Brooklyn?"

    I say additionally:

    New oil discoveries in the US, improved drilling techniques, and the recently improved process of oil recovery from shale have contributed considerably to Continental US oil reserves. Those oil reserves can now be developed for public use to significantly decrease and perhaps eliminate importation of crude oil. Conservationists say that because the quantity of oil reserves has a reasonably definite life, it should be conserved. With your help, the Obama Administration seems to be following that philosophy by denying permits for drilling and even prohibiting construction of a pipeline from Canada for more than a year. This latter is not a US conservation matter, but rather a method to deny crude oil availability in order to promote wind and solar energy at great public expense, through subsidies.
    Some years ago, when we were especially vulnerable to the variability of Middle East oil imports, Congress established a program of mandating ethanol usage in gasoline in order to extend the automotive fuel supply. This was also associated with subsidies to producers of ethanol from corn and an anticipation that ethanol would ultimately be produced from cellulosic biomass.
    Representative Upton, the energy world has changed. Crude oil is now available on a worldwide basis at higher production than ever before, and as I said previously, US reserves have increased tremendously. We no longer need ethanol to augment our automotive fuel supply. We have the oil reserves and private industry only needs permission to drill and produce from the vast holdings of federal land. The mandate requiring any ethanol addition to build a fuels, either from corn or cellulosic biomass, should be eliminated and subsidies for production of ethanol by those roots should be immediately discontinued. If ethanol can compete cost-wise with gasoline, without its various subsidies and mandates, and private industry wishes to add it to gasoline, I have no objection.
    While we are on the general subject of energy, I again request that the Congress eliminate the Department of Energy, which has probably done more damage to the United States economy and its development than any other agency.