The Ethanol Papers - Paperturn manuscript - Flipbook - Page 560
The need for some governmental controls and oversights in the energy arena
certainly can benefit from this analogy.
However, in the discussion of gasoline versus alternative fuels, I like to use a
different analogy of why we need the government’s involvement and how it
should be applied. This analogy is horse racing. In order to make a horse race
fair, there are strict regulations concerning the breed of horse running, the
weight that the horses must carry, and the implements and substances that can
be used to affect the horses’ performance.
The oil and gasoline industry received enormous benefits from government intervention over the past 150 years. For example, there was the previously mentioned $2+ per gallon tax imposed on alcohol production during the Civil War,
which was never rescinded until more than 40 years later. Then there was the
imposition of prohibition that made all alcohol production illegal for 14 years.
And there have been the billions and billions of dollars in continuous subsidies,
allotments, allowances, and tax incentives that continue to this very day, even
though the oil industry is hugely profitable. The Big Oil lobby likes to complain
about and overdramatize the subsidies given to various alternative energy and
fuel sources, and then deny or ignore the fact that they have been the biggest
recipient of government subsidies.
There’s also another incredible financial break that the oil industry gets from the
American people and our government: a free security service in the form of the
U.S. military. I’ll be discussing this issue in greater detail later on, but suffice it
to say, we have spent trillions of dollars to protect the oil industry.
So, for alternative fuels to enter the horse race for consumer acceptance great
adjustments must be made to make the race fair, or just fairer. I’ve come across
a large number of people who consciously or unconsciously support Big Oil by
repeating what they heard some oil industry wag say about subsidies to ethanol
and CNG: “The government should just let the free market take over and remove the alternate fuel subsidies. Then we’ll see how competitive ethanol (or
CNG) is.”
Paradoxically, they are correct, the government should remove all subsidies,
but it should be the other way around. Remove all the petroleum oil and gasoline subsidies and make the oil industry foot the bill for our military and then let’s
see how uncompetitive gasoline and diesel really are. If all oil industry-related
subsidies were removed and they had to pay for the military protection, gasoline
in America could be as high as $15 per gallon.
