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Author Topic: New Analysis: Ethanol Cutting Crude Oil, Gasoline Prices Back to Topics
gamechanger2011

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Wichita

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Message Posted: Sep 23, 2013 12:44:45 PM

"(September 23, 2013) WASHINGTON — Consumers are saving $0.50-1.50 per gallon on gasoline as a result of increased ethanol production under the Renewable Fuel Standard (RFS), according to a new analysis by renowned energy economist Philip K. Verleger, who served as an advisor on energy issues to both the Ford and Carter administrations.
“The implication for world consumers is clear… [T]he US renewable fuels program has cut annual consumer expenditures in 2013 between $700 billion and $2.6 trillion,” writes Verleger in a short commentary available on pkverlegerllc.com. “This translates to consumers paying between $0.50 and $1.50 per gallon less for gasoline.” The commentary summarizes a more detailed analysis that was included in Verleger’s August Petroleum Economics Monthly newsletter.

New Analysis: Ethanol Cutting Crude Oil, Gasoline Prices

[Edited by: gamechanger2011 at 9/23/2013 12:46:51 PM EST]
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brerrabbitTX
Champion Author Houston

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Message Posted: Sep 27, 2013 2:40:13 PM

After further research on this guy it becomes very unclear where he is coming from. He claims in other writings, and interviews that the reason oil prices are where they are and are going to go lower is the result of lower consumer demand, higher MPG cars, and peoples spending habits changing to account for less fuel purchases. He say this is the new world. He also while not a stock picker suggests that oil production companies are bad investments. He claims companies between upstream and downstream are the best investments. Companies like Valero, and Tesoro. From the interviews I watched of him he is definitely a stream of thought kinda of guy and his ideas change and are molded by day to day events. Not that that is a bad thing just that listening to several interviews with him back to back can be confusing because one minute oil is cheaper because demand is down, in the next discussion it's down because the worlds biggest consummers are not buying to fill their strategic reserves, and in the next one page commentary from his newsletter he says the RFA is the reason oil is cheaper than it would have otherwise been.

He also claimed that California would start switching to hydrogen for their cars while most of the rest of the country would be converting to natural gas soon. So after reading his stuff and watching his interviews, I really don't know where this guy is coming from other than he makes a lot of money with his newsletter, and can be hired to speak to anyone anywhere, anytime. He has no dog in the hunt so to speak other than making a living on his opinions. Sometimes those guys can be more dangerous than the two sides in a war because they have no cause, other than profit.
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brerrabbitTX
Champion Author Houston

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Message Posted: Sep 27, 2013 2:06:49 PM

Via the links provided and the links within the links, yes HOKEM. I don't care who the guy is when he basically says that all this money has been saved by consummers and he is basing that on a model to predict where oil prices would have been absent the RFA and where they actually are and attributes 100% of a contrived differential to renewable fuels without accounting for increased domestic production, lower demand due to higher prices, and overall shifts in global oil flows, then yes I will continue to disagree with his findings. Energy does not live in a vacuum where you can say that only one variable is in play at any time.

From the methodology and data I have found thus far he has presented, I find it to be less than believable.
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darwinfinch
Veteran Author Gasbuddy

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Message Posted: Sep 27, 2013 9:20:53 AM

By the way brerrabbitTX, this guy agrees with you on your favorite topic: RINs
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darwinfinch
Veteran Author Gasbuddy

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Message Posted: Sep 27, 2013 9:20:05 AM

A well-balanced prospective article written by an un-tethered, un-sponsored energy/economic consultant who has been studying this for decades and has successfully predicted the impact of almost every major energy policy in the last 30 years? HOKEM

Any "scientific studies" put out by the American Petroleum Intitute? LEGIT
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brerrabbitTX
Champion Author Houston

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Message Posted: Sep 26, 2013 11:34:09 PM

Without further details from the study this means nothing. Basically the links provided say that ethanol production made oil prices lower. Nice, but how much of the price reduction was based on ethanol vs over all decrease in demand since 2008? How much of it is due to significantly increased domestic and Canadian oil production? What is the basis of the statement "without the RFA oil prices would have reached $180 a barrel"?

I am sorry but these kinds of articles/ studies/ papers are hokem!

Did the RFA lower gas prices? Yes. Did it lower them by as much as $1.50 a gallon? No way, unless you also believe in the Tooth Fairy.

Can anyone here actually read these things with a little discernment and common sense?

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Shockjock1961
Champion Author Illinois

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Message Posted: Sep 26, 2013 11:59:18 AM

So where exactly is this peer reviewed study?

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Chazzer
Champion Author Nevada

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Message Posted: Sep 25, 2013 2:31:03 PM

This is good!
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jacksfan
Champion Author Lincoln

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Message Posted: Sep 25, 2013 10:20:26 AM

Gee shocky, source credibility never has stopped you from citing anything anti-ethanol. Why the sudden angst now?
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darwinfinch
Veteran Author Gasbuddy

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Message Posted: Sep 25, 2013 10:01:27 AM

"Philip Verlege is as anti-oil as they come"

He's also the most even-handed, level-headed economist talking about ethanol today. And he's been watching energy policy for decades. Most of his analysis and predictions are spot-on, now and historically.

He makes criticisms of RINs while supporting the philosophy of clean renewable fuel, ecologically AND economically. He seems like a really smart guy who is willing to change his mind about things as the context changes. He stays on top of things. He is malleable. He's not funded, sponsored, or boosted by any groups on either side.

This guy is no shill. If he is strongly anti-oil and in support of ethanol than I think that says more about oil than Veerleger.

Also: ad-hominem fallacy

[Edited by: darwinfinch at 9/25/2013 10:02:03 AM EST]
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Shockjock1961
Champion Author Illinois

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Message Posted: Sep 24, 2013 3:31:11 PM

Philip Verlege is as anti-oil as they come. He even went so far to claim that the keystone pipeline was a conspiracy set up by the oil company to increase oil supplies and, as an end result would increase oil prices...

You can see how his anti-oil logic would lead him to his lastest piece of propaganda...



[Edited by: Shockjock1961 at 9/24/2013 3:34:13 PM EST]
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gamechanger2011
Champion Author Wichita

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Message Posted: Sep 24, 2013 1:19:56 PM

Exactly Topicalmnn. If Shocky had bothered to read the article he would have opened the link to the study that this article was based on!
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tropicalmn
Veteran Author Minnesota

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Message Posted: Sep 24, 2013 9:27:49 AM

There are plenty of reports that say ethanol and other mandated biofuels have lowered the price of fuel. Most of them are released by the trade groups that are pro-ethanol. So they’re taken with a grain of salt, or at least a kernel of corn. That’s why energy economist Phil Verleger’s weekly report this week was notable. He says definitely that the Renewable Fuel Standard is pushing down prices, and he isn’t getting paid by an industry trade group to say that.
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tropicalmn
Veteran Author Minnesota

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Message Posted: Sep 24, 2013 9:25:51 AM

A source other than RFA
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Shockjock1961
Champion Author Illinois

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Message Posted: Sep 24, 2013 9:00:56 AM

How about a reputable source rather then the biased RFA???

Have you ever noticed that they are the only ones who make these claims? Could it be because they have something to lose as the popularity of ethanol wanes and they have found inaccurate propaganda to be a useful tool to push their agenda?
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Hannie59
All-Star Author Appleton

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Message Posted: Sep 23, 2013 5:06:52 PM

skye,

Ethanol has nothing to do with food prices. They are dependent upon petroleum costs. If ethanol forces oil and gas downward, you may see a food deflation because of decreased transportation costs.

But ethanol raising food costs is more lies, always was, always will be as long as people like you play on emotion and ignore facts.
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skye1212
Champion Author Austin

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Message Posted: Sep 23, 2013 4:43:21 PM

Ethanol may prove to helpful in the cost occasionally in the economic cycle, but
is more than offset typically by the increase in food prices.

We put big tariff's on sugar based ethanol imports from S America for a reason also, because corn based ethanol can't compete and needs price protection.
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krzysiek_ck
Champion Author Illinois

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Message Posted: Sep 23, 2013 3:05:24 PM

ggg452 wrote: "blah....blah.....blah....blah....corn is for food not fuel."

Corn is for both fuel and food.
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ggg452
Champion Author Manitoba

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Message Posted: Sep 23, 2013 1:48:43 PM

blah....blah.....blah....blah....corn is for food not fuel.
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