Author Archives: admin

Ending Ethanol Subsidies

The Senate voted 73-27 to repeal the $5 billion annual subsidy, just two days after rejecting an identical measure. The tax credit provides 45 cents a gallon to oil refiners who mix gasoline with ethanol, a renewable, liquid fuel additive that comes mainly from corn in the U.S.

The Senate voted last week to end $5 billion in subsidies for corn ethanol. This is a good thing.

I’m all for alternative fuels. I’m all for biofuels. But corn ethanol in America is a propped up industry that is raising the price of corn. This rise in corn feed is creating a rise in prices for other types of grains. The states is only seeing this through a few extra cents on a loaf of bread. But in the middle east (where I currently live) I’m seeing prices of bread double (the bread only costs a few cents in the first place).

Government subsidizing of corn ethanol has had so many unintended consequences it should have been stopped a long time ago. Let me name a few:

  • Grain prices are now tied to the volatility of fuel prices
  • The massive increase in corn planting (a row crop) is created more soil erosion
  • Row crops also allow a far larger amount of nitrates to entire the watershed

    • We need to be exploring sustainable forms of alternative fuels and biofuels. Boeing is doing just that.

    A final excerpt:

    The measure passed Thursday would end the tax credit immediately. It would also repeal a 54-cent-a-gallon tariff on imported ethanol, which restricts imports, mainly from Brazil.
    “The best way for ethanol to survive is to stand on its own two feet, without spending something we don’t have to get something we’re going to have anyway,” said Sen. Tom Coburn, R-Okla.

    Coburn nailed it. I sure hope this passes in the House as well.

    Amtrak Growth in California

    A continued thought from my previous post: allow Amtrak to drop it’s high-loss transcontinental routes that can’t compete with planes and allow them to focus on the high-growth/profitable corridors.

    On a side note, I didn’t realize that Amtrak in California has a partnership with Caltrans. Seems like a great way to give the State some input in how rail service is delivered.

    Northeast Corridor Privatization

    Representative John Mica (R-Florida) and Representative Bill Shuster (R-Pennsylvania) have proposed opening Amtrak’s Northeast Corridor route to the private sector.

    The short story is that the Northeast Corridor would be taken away from Amtrak and taken over by the USDOT. In turn, the USDOT would lease the corridor to a newly created Northeast Corridor Committee. This Committee would then take bids from interested private-sector parties to operate and develop the corridor. This is basically taking the template for private operations of a toll road and extending to a rail line. I think there are some merits to the idea. It brings an element of competition to the corridor. It ensure further development, improvement, and efficiency along the corridor.

    The proposal does not give a lot of specifics… and there are a lot of specific questions that need answering before moving forward with something like this. Here’s a few from Yonah Freemark at The Transport Politic:

    How would intercity rail operators interact with the freight and commuter railroads that also use the tracks, in the Northeast and elsewhere? If a PPP were implemented, how much would the government agree to commit to pay for improvements?

    I’m all for trying to put as much of our transportation infrastructure into private operation as possible. However, it needs to be a well-thought-out action. I see how the Northeast Corridor Committee is going to be structured (see page 10, starting with line 4) and it’s clear to me that politics will trump solutions.

    I’m afraid though that this proposal will be scorned by Democrats (who in general think its a bad thing to place “public” services into private hands) before its even give much thought. Rather than just shooting it down why not give it some thought? Poke some holes in the idea and let Mr. Mica and Mr. Shuster try again.

    Even Ray Lahood is pretty much dismissing this:

    At present, we believe Amtrak is the entity most capable of taking the next steps to modernize rail service in the Northeast Corridor, which is why the administration has serious concerns about any proposal to privatize Amtrak’s Northeast Corridor. The administration also has the responsibility to ensure that taxpayer investments are protected and well-managed.

    Is Amtrak currently an example of well-managed taxpayer assets? Let’s be honest. The system currently in place is broken. Amtrak, as it stands now, is not the solution to our countries rail-transportation needs.

    I’d actually favor the reverse of what Mr. Mica proposes. Lets allow Amtrak to quit operating all their routes that generate massive loss. Lets give them the chance to focus on the routes they can make profitable. Make them the Northeast Corridor Committee.

    Photo – C130’s

    With all the links to aviation news, it’s about time for another plane-related photo:

    C130apron

    This is a shot I took on one of my projects for work. You may have already noticed I have a crop of this shot in the rotation of header images I use.

    iPads to Save Jet Fuel?

    American and its parent AMR Corp. estimate that using the iPad over paper could cut its fuel bill by roughly $1.2 million a year because of its lighter weight.

    What I love about this quote is that it illustrates American Airlines’ laser-focus on cutting fuel consumption. Have you ever noticed how American Airlines’ planes are polished instead of painted? That’s also for fuel savings. Year’s ago they did a cost analysis on the weight of the paint on planes and determined how much they could save by not painting… and now their planes are polished.

    I still can’t stand their lack of customer service though.