The Ethanol Papers - Paperturn manuscript - Flipbook - Page 307
whose knowledge of market actions and demands come from textbooks or a
laboratory-protected environment that never had to face real supply and demand or competitive issues because they were able to simply buy their way into
a prominent market position. The price of gasoline has nothing to do with the
common definition of “supply and demand.” It is a highly regulated and rigged
market. It is no more subject to legitimate supply and demand forces than is the
Diamond industry under the complete dictatorial control of DeBeers.
But my biggest objection to what you wrote above is that without the government stepping in to correct the unfair advantages that have been given to the
oil/gasoline industry since the mid-1800s, “market actors” will never get the
chance to prove that ethanol cannot only compete with gasoline, but overcome
it.
4. You wrote, “The oil industry’s reluctance to use high blends of ethanol
in gasoline absent a government mandate, build ethanol delivery infrastructure to supply service stations, or provide E85 pumps are often marshaled as evidence that oil companies are unfairly strangling an economic
competitor in its bed. The existence of this self-serving oil cartel is said
to explain why this otherwise commercially attractive transport fuel – ethanol - requires government subsidies and consumption mandates. Yet, as
of 2007, 38 percent of the retail fuels market was composed of independent service stations, not vertically integrated franchises, and another 13
percent of grocers and other hypermarkets. Only 49 percent of retail fuel
was sold by stations associated with major oil companies. Likewise, 56
percent of the refining market was composed of independent, vertically
de-integrated refining companies (Lowe, 2008). Big Oil is simply incapable of keeping ethanol out of service stations if profits are to be made by
selling ethanol to motorists.”
At best, this is just another example of your naïve understanding of commerce
and any market. But since you are “among the most widely cited and influential
critics of federal energy and environmental policy in the nation,” I must conclude
that it is really just another dishonest attack upon ethanol.
Why, and how could fueling stations sell anything but the product that is provided to them, and for which they have customers? You make it sound as if
station owners can control the marketplace. Perhaps in 1915, an abundance of
fueling stations with a particular affinity for one fuel over another could have
influenced which vehicles their local neighbors might buy, but those days are
long gone.
