

Biodiesel producers rejoice at new mandate for 2013



Source: Desmoines Register

Comments     Threshold


RE: Unlike E-85, Biodiesel makes sense
By Solandri on 9/19/2012 2:53:27 PM , Rating: 2
Just like Brent crude oil is $108 a barrel. Any subsidy that US government pays the farmers is included in that price, just like the subsidies we pay the oil companies ($8B a year, last I checked) is included in the price of crude oil.

The U.S. uses about 7 billion barrels of oil a year, so a $8 billion subsidy works out to $1.14 a barrel, or less than $0.027 per gallon of petroleum distillate (like gasoline). Compare that to fuel taxes which amount to about $0.46 per gallon.

Using your $108 per barrel price, oil gets a 1.06% subsidy. Renewables like wind and solar typically get a 30%-50% subsidy relative to price of energy produced. Not that I think there's anything wrong with that - it makes sense to subsidize developing technologies more heavily. But you're completely off the mark if you're trying to argue the $8B indicates we subsidize oil too much and renewables not enough.

When comparing things with different quantities, you want to be comparing percentages, not absolute amounts. Otherwise I could claim a homeless shelter wastes money because it spends $100 a day on food while I spend just $10 a day. Never mind that the shelter is feeding 100 people while I'm just feeding myself.

RE: Unlike E-85, Biodiesel makes sense
By dlapine on 9/19/2012 3:20:07 PM , Rating: 2
Pretty sure you're comparing apples to oranges.


Kinda like how the Navy pays extra to have 2 manufacturers of aircraft carriers or submarines available now. It would be cheaper to just pay the best one, but it's in the public interest to keep two for various reasons.

There's absolutely no reason to pay profitable oil companies extra money to continue doing what they already do.

The appropriate quantity to compare here is how much money it will take to keep these industries in business for the duration of public need. For the Oil companies, that amount is $0. For the newly formed renewable energy companies, that amount is not $0.

The issue of subsidies is moot to this article anyways, as the article is about the mandated use of American-produced bio fuel.







Related Articles
