From: Ray Marshall [raymarsh@mninter.net]
Sent: Wednesday, May 03, 2006 9:45 AM
To: John L. Sweeney
Subject: RE: This morning's Ethanol message
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Good thoughts and comments, Jack!
Another lobbying group that should be getting together with the automobile industry is the Airline industry. I’m not sure what common ground they have, but maybe planes could fly on ethanol too? Or by taking the automobile demand away from the oil company supply, the price of “kerosene”, or whatever it is that jets burn, would drop.
Right now virtually all of the majors are actually in bankruptcy or have just come out of it and their problems are not over yet. And the smaller, feeder airlines are going into bankruptcy because their “major airlines” are squeezing them dry.
I have a friend through Polish genealogy who is the Chief Federal Bankruptcy Judge for Minnesota. He is hearing a Mesabi Airlines case right now that has become the longest trial in the history of his court. Northwest is in its own bankruptcy hearing in Delaware where its corporate papers are filed, but it’s headquartered here.
Most of the airlines problems relate to the price of gas, but they also have WILLINGLY negotiated contracts that are costing them much more for wages and fringes than the newcomers like Southwest how hire employees to the lowest bidders.
If Minnesota lost Northwest as a headquarters, we’d probably lose 10,0000 jobs here. That would be the biggest hit we would have ever taken. We’d still have a “hub” but there is a lot of management in an airline.
-----Original Message-----
From: John L. Sweeney [mailto:sweelab@enter.net]
Sent: Wednesday, May 03, 2006 8:17 AM
To: Ray Marshall
Subject: This morning's Ethanol message
Good Morning Ray:
Highlighted areas are my messages for this morning.
Jack
Gas-price surge strains oil-auto pact
By Jim Snyder
The high price of gasoline and the growing call for congressional action are undermining the gentleman’s agreement under which the oil and auto lobbies do not attack each other.
Tyson Slocum, an energy specialist at Public Citizen, said the two lobbies have benefited from a “non-aggression pact.” But as pressure mounts on Capitol Hill against the oil industry, which has been reporting huge profits, the truce may be ending, Slocum said.
“The oil industry is feeling lots of pressure,” Slocum said. “They are not used to this. They want to break the détente,” to shift some of that pressure to the auto industry.
Sources in both the oil and auto camps say there is no split yet. But several lobbyists acknowledged that tensions appear to be rising in a political environment where even some Republicans, long oil-industry allies, are calling for what the industry considers to be punitive measures.
One oil lobbyist said he and his colleagues have discussed more aggressively challenging the auto industry, which for years has fought increases in gasoline-mileage standards, known as corporate average fuel economy, or CAFE. In particular, some oil lobbyists say Detroit has pushed too hard for the development of alternative fuels, such as ethanol.
“The pile-on factor is pretty enormous at this point,” the oil lobbyist said.
Dozens of bills have been introduced in recent weeks as gasoline prices have risen and angry motorists demand their members to act.
What makes oil lobbyists especially red in the face when discussing the auto industry is the recent embrace of E85, a fuel type that is 85 percent ethanol, which is made primarily from corn.
“If the oil industry learns that the autos are using political pressure to force E85 on the industry as a branded fuel with no liability, then, yes, we very much think it is fair play to raise CAFE standards,” said Don Duncan, a lobbyist for ConocoPhillips.
Here is some tangible Bullshit, “tangible” in that a whole country has been using ethanol for about 10 years [Brazil] without such dire results. The exhaust from an ethanol fueled internal combustion engine is water. What is a catalytic converter for when this is the case? What part of H2O is a pollutant?
Duncan said the two industries cooperate on the development of new fuels but the oil industry believes in general that E85 is not ready for widespread use. He said there is evidence that E85 can corrode a car’s catalytic converters, for example. A gallon of E85 is also less efficient — it produces less energy — than a gallon of gasoline, he said.
Michelle Kautz, a spokeswoman for the National Ethanol Vehicle Coalition, said that there are no corrosion issues when E85 is used in a compatible car. Coalition members include ethanol producers and vehicle makers, according to its website.
She said the oil industry has not done enough to build the infrastructure necessary for the 6 million E85-compatible vehicles now on the road. Only 681 stations sell E85, Kautz said.
How naïve! Can anybody really NOT comprehend that it is un-American to build an infrastructure, on your property, with your money so your competitor can make a buck. Ethanol could be sold at a refueling place that does not sell oil products at all. How long would it take to FORCE the retail outlets now selling gasoline to ALSO sell ethanol based fuels. And FORCE via the almighty dollar is what is required so I can drive my Saturn, get a fill up of ca. 10 gallons of ethanol for ca. $20.00 rather than filling up with 10 gallons of gas for $30.00 at any existing gas station.
Again, FORCE not “pressure” gets results. Duncan said he has heard that some auto lobbyists have urged the White House and Energy Department to put pressure on oil companies to build more infrastructure, namely gas stations, that offer alternative fuels.
But overall, he said, he doesn’t believe that auto executives are taking a position in opposition to his industry.
To the extent that there is a feud, oil lobbyists point to a blog entry posted by the vice president of communications for DaimlerChrysler’s American division as the starting point. According to a story in The Wall Street Journal, the entry criticized oil companies for not doing enough to reduce the cost of gasoline.
An auto-industry source said oil companies fired the first shot, however, when ExxonMobil ran advertisements in newspapers that some saw as suggesting the auto industry was too reliant on large, gas guzzling sport utility vehicles.
The source said the oil industry has not developed the infrastructure to support alternative fuels, although executives say publicly that they support their development.
“It would be helpful if oil companies could identify what exactly they are doing on alternative fuels,” the source said.
Oil-industry officials say they spend millions of dollars to develop new energy sources.
If tensions are rising in Washington, several lobbyists stressed that war hasn’t been declared.
“The two big goliaths can tend toward canceling each other out and forcing [members of Congress] into having to take tough votes,” one oil lobbyist said. “Because both sectors require a degree of cooperation in making each other’s products commercially viable, there is no joy taken by either side in having to go to war.”
The story is one of increasingly divergent fortunes.
Indicative of oil companies’ good fortune recently, ExxonMobil reported $36 billion in profits last year, a record for an American company. In contrast, the U.S. auto industry is losing money and laying off workers.
One advantage domestic carmakers say they have is in the development of so-called “flex-fuel” vehicles that run on oil or ethanol or other alternative fuels, such as E85.
President Bush, meanwhile, has asked Congress to allow him to raise standards for fuel economy. That gives environmentalists and consumer advocates that have challenged both the auto and oil lobbies hope — as does rumors of frayed relations between the two.
