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The fight over E15 is not over yet

The Environmental Protection Agency has given the approval for retailers to sell 15% ethanol blended fuel. The fuel we purchase at most gas stations around the country today already has 10% ethanol mixed in. The EPA and other supporters of the plan have wanted to add an additional 5% ethanol to the fuel mix for cars built after 2001.
 
"Today, the last significant federal hurdle has been cleared to allow consumers to buy fuel containing up to 15 percent ethanol (E15)," said Agriculture Secretary Tom Vilsack. "This gets us one step closer to giving the American consumer a real choice at the pump. The public has a right to choose between imported oil and home-grown energy and today’s action by the Environmental Protection Agency (EPA) advances that goal."
 
The goal of the plan is to help reduce the dependence on foreign oil by using ethanol derived from corn.
 
“In the eyes of the federal government, E15 is a legal fuel for sale to cars, pickups, and SUVs made since 2001,” said RFA President and CEO Bob Dinneen. “With all i’s dotted and t’s crossed as far as EPA is concerned, our undivided focus will turn to addressing state regulatory issues, identifying retailers wishing to offer E15, and paving the way to greater use of domestically produced ethanol."
 
There are still other issues that have to be overcome before E15 makes it to pumps. These issues include pending litigation and threats from Washington. The U.S. House of Representatives has previously threatened to block the EPA's plans to force E15 sales at stations around the country. Many still argue that the use of E15 could cause millions of dollars in damage to engines in vehicles around the country.
 
One of the organizations opposing the rollout of E15 is the Outdoor Power Equipment Institute or OPEI. According to OPEI, government tests show that E15 is harmful to outdoor power equipment, boats, marine engines, and other non-road engine products. Adding an additional option at the pump could confuse consumers leading to misfueling and damage of engines according to OPEI.
 
"For the first time in American history, fuel used for some automobiles may no longer safe for any non-road products. It may, in fact, destroy or damage generators, chain saws, utility vehicles, lawn mowers, boats and marine engines, snowmobiles, motorcycles, ATVs, and more," says Kris Kiser, President and CEO of the Outdoor Power Equipment Institute, one of the industry groups who have been sending warnings to the federal government about E15.
 
Keiser added, "[The] EPA purports to educate tens of millions of Americans using hundreds of millions of engine products, asserting it will educate these users with a 3 inch by 3 inch pump label. It's frighteningly inadequate."
 
Some major automakers also argue E15 could harm engines in cars and trucks as well.

Sources: Autoblog, Wisconsin Ag Connection



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RE: retarded
By gamerk2 on 6/19/2012 10:32:34 AM , Rating: -1
quote:
This is that little "nudge" Obama and co believe you need to choose what they've determined to be the right car. Look what cash for clunkers did, it proved supply and demand economics. The supply of used cars fell dramatically, along with the spare parts they contained were all destroyed. Fewer cars higher prices.


Which then forced car companies to create more cars to fill the gap in supply (in order to maximize total profit), creating several hundred thousand jobs in the process (both direct and indirect).

Frankly, we need people in Congress to remember that demand creates its own supply in a free market economy. If people have money to spend, and they want a product, SOMEONE will make said product and make a good deal of profit. Basic market economics in action. Once Congress remembers the middle class (and not business) drives all economic activity, then maybe the past 40 years of economic mismanagement (going back to Ford) will finally end.

Housing, for example, can be best expressed as an oversupply driving down prices, making to not economically viable to create new housing. Farther, the expectation of farther prices drops is causing the price to drop even farther. As such, the fix is obvious: Start tearing down vacant houses to reduce supply, then sell the left over material back to home builders and other industry for a tidy profit. Either that, or wait about 10 years for demand to remove the glut from the market...


RE: retarded
By 91TTZ on 6/19/2012 11:47:41 AM , Rating: 4
quote:
Which then forced car companies to create more cars to fill the gap in supply (in order to maximize total profit), creating several hundred thousand jobs in the process (both direct and indirect).

As such, the fix is obvious: Start tearing down vacant houses to reduce supply, then sell the left over material back to home builders and other industry for a tidy profit.


I think that this concept is a bit misunderstood. A few of the fundamentals are there to make it work but the logic is messed up. I think that this reasoning benefits those looking to make a profit while hurting the public that's trying to buy affordable housing. It favors the wealthy who own multiple homes and those who already own homes.

I already own a house. If my house is worth $300k and I sell it tomorrow and get $300k for it, I can buy a similar house for a similar price. If we tore down a bunch of old houses to reduce supply and it raised the value of my house to $600k, it doesn't really hurt me since I can sell my house for $600k and then buy a similar house for $600k.

However it hurts those who are looking to buy their first house. If they're having trouble securing a loan to buy a $300k house, how in the world will they afford a $600k house?

By the same reasoning, I can create jobs and improve my local economy by littering. Since someone needs to clean up the mess, I can create jobs by dumping my trash on the ground. If I dump enough trash on the ground, everyone in my town can be employed picking up my garbage.

But trying to create jobs like that is like trying to generate electricity using perpetual motion. You're always going to lose out somewhere. Jobs like landscaping that needed to be done previously will go unfulfilled because everyone will be picking up my trash- something else that otherwise wouldn't be needed. Trying to improve the housing market by demolishing houses is much the same way. You're raising prices by reducing supply, but the consequence is that you're pricing people out of the market. The same thing goes for Cash for Clunkers- people that couldn't afford a new car but could afford a cheaper used car were suddenly priced out of that market, too, since the price of used cars went up.


RE: retarded
By NellyFromMA on 6/19/2012 12:44:29 PM , Rating: 2
economics will ALWAYS favor those who have amassed wealth. You have to scrutinize the means with which they ammassed said wealth to decide whether it was appropriate or 'fair' depending on how you wish to define that, but simply saying a scenario favors someone with more wealth than those without is simply stating something obvious that could apply to 99.9% of reality. It's like a car with more HP is going to make it up a hill faster and work less to do so.


RE: retarded
By 91TTZ on 6/19/2012 1:34:30 PM , Rating: 3
quote:
economics will ALWAYS favor those who have amassed wealth. You have to scrutinize the means with which they ammassed said wealth to decide whether it was appropriate or 'fair' depending on how you wish to define that, but simply saying a scenario favors someone with more wealth than those without is simply stating something obvious that could apply to 99.9% of reality. It's like a car with more HP is going to make it up a hill faster and work less to do so.


I'm not arguing against the basic fact that economics favor those who have amassed wealth, I'm arguing against taking drastic steps such as bulldozing functioning houses in order to artificially reduce supply, inflating the value of the houses left standing. Basically those with money/power are lobbying the government to take action to manipulate the market to give those special interests more money/power.

Just about any system will have an upside and a downside. You have to take the good with the bad. But they're privatizing the gains and then socializing the losses. The auto industry wants to sell more new cars? Get the government to crush old cars to remove that option from the public. By making used cars more expensive that makes people more likely to buy new cars.

I'm surprised that they don't just ban the sale of used items altogether. I'm sure they can make the argument that allowing the public to purchase used, working items harms the manufacturers profits, reduces tax income, threatens jobs, is bad for the economy and therefore threatens national security. Really it's just a subsidy for the rich.


RE: retarded
By polishvendetta on 6/19/12, Rating: 0
RE: retarded
By gamerk2 on 6/19/12, Rating: -1
RE: retarded
By Ringold on 6/19/2012 6:29:06 PM , Rating: 2
Huh? That's exactly what happened; the government and Fed-inflated bubble burst, and the market corrected itself. People like the ride up but never the ride down, but we should think of that as a society before we create conditions conducive to asset bubbles, even if the ideas behind those policies are seemingly well-intended.

In the long run, markets always self correct, be it in the form of the housing crash, or in the form of the USSR falling apart, or the fall of Rome. The more the manipulation, the bigger the implosion.


RE: retarded
By 91TTZ on 6/19/2012 3:47:54 PM , Rating: 3
quote:
If a family cant afford a $300k then maybe they should look at $200k homes, hell you can get a pretty decent house for around $150k in my area. And if after all that they still cant get a house then... just wait longer?


But if they bulldoze houses, then the price of ALL houses goes up. A pretty decent house in your area for $150k would no longer be $150k since bulldozing houses limits options and artificially raises prices.


RE: retarded
By gamerk2 on 6/19/12, Rating: -1
RE: retarded
By Lerianis on 6/19/2012 2:50:38 PM , Rating: 2
Little problem there: The free market economics you mention only work the way that they are supposed to in a perfect world.

In the real world, with mechanization and robotization of industries, it's more like "supply decreases, prices go up, business sticks that money into their pockets, does not use it to hire but to build more cheaper robots, takes more money out of the economy and socks it into a bank account where it does NOTHING for the economy". NOW, rinse and repeat.


RE: retarded
By Ringold on 6/19/2012 6:31:55 PM , Rating: 1
That wouldn't at all be profit-maximizing behavior, not that you'd understand that.

Furthermore, if you think money deposited in bank accounts does nothing for the economy, then you know ABSOLUTELY NOTHING about economics. Bank deposits are like the plankton or sunlight of the economy, the base or central part upon which almost all other economic activity is built upon or ultimately supported by. Go back to school.


RE: retarded
By 91TTZ on 6/19/2012 4:11:16 PM , Rating: 4
quote:
Heres where you analogy falls apart: A ~$500k house in NY equates to about ~$250k in Florida, due to cost of living adjustments. So you sell your house in NY for ~$500k, purchase a ~$250k house in Florida, and boom, sunny beaches, no income tax, and +$250k in your bank account.


My argument doesn't fall apart there. If the government instituted a policy of bulldozing houses to reduce supply, then the effects would be felt everywhere that they do it. It's not like they're only going to bulldoze houses in Detroit while leaving unsold houses standing everywhere else. Sure, some areas will always be more expensive than others, that won't change. And selling your house in an expensive area and then buying a house in a cheaper area isn't really an option for most people, since that's a one-time profit that leaves your family living in a cheaper area that pays proportionately less.

quote:
That's free market economics in a nutshell. Demand goes up, supply decreases, price spikes, business hires, production increases, demand settles down, new equilebrium reached, with a slightly higher employment rate. Rinse and repeat as needed.


That isn't the free market in a nutshell. That's a best-case scenario of the free market in a nutshell. More realistically, what happens is this: Demand goes up, supply decreases, price spikes, business hires cheapest labor available, money invested in production robots, production increases, demand settles down, business lays people off, new equilibrium reached, with a slightly lower employment rate. We're trying to achieve that best case scenario by artificially manipulating the market. The problem is that the manipulation has unintended consequences which then must be fixed.

It really is like a sub-par engineer trying to create a perpetual motion machine. In a futile effort to override the fundamentals of physics, the engineer makes the system more and more complicated until it confuses him into thinking it will work.


RE: retarded
By Ringold on 6/19/2012 6:36:34 PM , Rating: 1
quote:
It really is like a sub-par engineer trying to create a perpetual motion machine. In a futile effort to override the fundamentals of physics, the engineer makes the system more and more complicated until it confuses him into thinking it will work.


And that right there is Marxism in a nutshell. It never works and it never will but, by god, they'll want to try until it does or until they fool themselves in to thinking it does, like this great myth of the Scandinavian socialist economies (which in some aspects is more free market then the US).


RE: retarded
By Lerianis on 6/19/2012 2:46:25 PM , Rating: 2
With all due respect, demand DOESN'T always create it's own supply in a 'free market' economy. Many businesses will cut down on supply for essentials (of which gasoline in the real world is one) so that they can price-gouge people.

It's time to realize that a free market doesn't work without proper regulation. Now, that said, I think that going to E15 fuel shouldn't be done. There are too many vehicles out there that just cannot use that fuel, even ones bought in the last 5 years.


RE: retarded
By bah12 on 6/19/2012 3:48:42 PM , Rating: 3
quote:
It's time to realize that a free market doesn't work without proper regulation.
You do realize what a colossal oxymoron that sentence is right? How can a regulated market be...free?


RE: retarded
By BluntForceTrama on 6/26/2012 7:55:23 PM , Rating: 2
You're confusing free markets with anarchy.


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