Its time for a real economic stimulus for a change!

The New Oil Weapon:
The U.S. Could Put OPEC over a Barrel

By Stuart H. Rodman

This news should come as no surpirse.

In the wake of September 11^th, the economic ripple effect will be severe. Unemployment at 20-year highs, bears, already out of the chute, now run freely on Wall Street. Published reports proclaim that New York's "gilded-age economy” had begun to stumble before the towers fell, with “Silicon Alley to Wall Street bleeding money and jobs". The wound is now a gaping one and the economic damage runs deep.

Still, in testimony before the Senate Banking Committee, Treasury Secretary Paul O'Neill defiantly pronounced, "No evil, no matter how unspeakable, can destroy America's productive spirit."

Truth. American troops are now on the ground in Afghanistan, poised for a protracted war on terrorism. And, meanwhile, on the homefront, Congress has stalemated debating details of an economic stimulus package. Our nation must wage war not only with soldiers on the front lines but on a domestic economic battlefield that has long been recognized as the engine of America's might. Tax cuts, increased spending; what to do about our slumping national economy?

America's plate has filled with tough choices.

Consider a time-honored doctrine of economics. This one simply holds that a dollar spent multiplies itself as it ripples its way through the economy. Give Jack a dollar and he passes it to the butcher, who then uses it to pay his employees. In turn the employees buy clothes for the kids or pay the bill to watch football on their home satellite system. And so on. It's called the economic multiplier effect and it could be America's secret weapon for maintaining economic muscle for the tough times that may lie ahead.

 Terror by the Gallon

What’s not secret though, is that nearly 56% of all the petroleum consumed in the U.S. comes from foreign sources. Considering America uses nearly 8 million barrels of petroleum a day, even at the modest price of $20 dollars a barrel, that's a daily financial hemorrhage of nearly $89 million, a staggering $32,704,000.00 dollars each year!

And we are awakening to new questions.

Do the dollars and cents that we spend simply filling the gas tank find their way into the "charities" and foundations that give aid and comfort to our sworn enemies? The American military wants to know. The War on Terrorism includes intensive effort to "find the money". Without a doubt, though as the value of our energy dollars has been diluted abroad we have been deprived the benefits of any domestic multiplier effect- economic power that is needed now not only to fuel our nation's industry, but to finance an ongoing commitment to battle terrorism worldwide.

If there was no other way to power all the trucks and cars, planes, trains, and industries that currently depend on imported fuel, few would ever question a national addiction to the exportation of dollars for oil. And like with most other addictions we suffer in more ways than one. In recent memory, because of our quenchless thirst for foreign oil, we have allowed ourselves to be blackmailed, seen our economy held hostage, watched as our air and our most precious waterways have become polluted, and even sent our children to war.

History shows that we are a generous nation but also a prudent one. After all, America hastened the defeat of communism when we rebuilt Europe with the Marshall Plan following the Allied victory of World War II.

So, spending $32 billion dollars a year in foreign countries might be justified if we really needed to so. At a time when the nation is searching for an economic spark, and the continued outflow of dollars abroad undermines our domestic fiscal health, do we really need to?

 Experts in private industry and government cast doubt on that assumption. Instead, with the help of America's farmers, and thanks to America's abundance of a little known, domestically produced, clean alternative to imported petroleum, we can begin to say goodbye to price spikes, supply disruptions, and the serfdom, that comes from being a have not.

The New Oil Weapon

If recent action's taken by the United States Department of Energy are any indicator, America may be able to turn the tables on the world's petroleum exporting countries. For decades, our reliance on the importation of their products for diesel and other petroleum based power production has left us vulnerable to the shifting sands of desert politics. Now though, the same family farms of America's heartland that originally built and made this country the economic powerhouse that it still is are quietly poised to flex their muscles again.

Before September 11^th, speaking about the merits of using renewable agricultural products like soybeans, sugar beats, and potatoes to produce economically viable replacements for diesel and gasoline, Energy Secretary Abraham stated,

"Renewable and alternative fuels are a valuable commodity for our economy."

Referring to these domestically grown crops as "biomass", he added,

"The continued use of biomass products, like biodiesel in our vehicle fleets, for power generation and for other products and materials will help the environment and help diversify our energy resources."

In their press release of April 30, 2001 the United States Department of Energy states:

"Vehicle fleets currently required to purchase light duty alternative fueled vehicles under the Energy Policy Act of 1992 will be now allowed to purchase biodiesel fuel as an alternative, according to the U.S. Department of Energy. Secretary of Energy Spencer Abraham has approved a final rule allowing biodiesel fuel to qualify as an alternative fuel for automobile fleets under the Energy Policy Act."

The world's first diesel engine was powered by peanut oil. And there's more.

  The U.S. National Biodiesel Board states,

 "The use of biodiesel drastically cuts harmful emissions such as carbon monoxide, unburned hydrocarbons and particulate matter compared to petroleum-based diesel, and reduces air toxics by up to 90 percent. "

 Studies citied by the Board show that Biodiesel is the only alternative fuel to have completed the Health Effects testing requirements of the Clean Air Act amendments of 1990. Those test results show it is non-toxic, biodegradable, and free of sulfur. 

The National Renewable Energy Lab estimates the cancer-causing potential of biodiesel exhaust is 94 percent less than that of petroleum diesel. Additional US Department of Energy lifecycle analysis shows an 80 percent reduction in CO2, the primary greenhouse gas attributed to global warming. This last fact is not being lost on President Bush, already an advocate of the fuel, but one who may now be rethinking his position on greenhouse emissions and the detrimental role-played in that process by petroleum byproducts.

 And recently, USDA tests corroborated other studies and confirmed that biodiesel is less toxic than table salt and biodegrades as quickly as sugar. Test have also discovered that using biodiesel could result in a 100% reduction in carcinogens, a 95% reduction in ozone harmful hydrocarbons and up to a 94% reduction in particulate matter, thereby reducing cancer risks. In addition, many new laws and legislatures are being passed which mandate either partial or full use of biodiesel.

 Speaking of biodiesel, David Feuerherd, VP of Programs, American Lung Association of Arizona adds, 

 "These studies establish biodiesel as a cleaner and healthier alternative to traditional diesel fuel. The fact that it is the only alternative fuel that can be used in existing engines and fueling infrastructure means that these clearly established health benefits can be realized immediately here in Arizona, or wherever diesel fuel is currently being used."

  San Diego advocate Jim Bell echoes these sentiments,

 "Replacing fossil fuel diesel with biodiesel made from renewable waste kitchen grease and vegetable oils, will greatly reduce the pollution that using fossil fuel derived diesel emits."

And the drain on our nation's financial resources as well. Our ability to redirect dollars to the American heartland at the expense of OPEC might give us a new diplomatic weapon to wield as well.

A Second Independence Day

While biodiesel and even its ethanol based cousin "gasohol" offer clear benefits with respect to our balance of trade and health, the intelligence of a national commitment to adopting their use never made more sense than today.

Biodiesel use has already been receiving widespread industrial acceptance. According to industry statistics, the use of the fuel has gone from a mere 500,000 gallons in 1999 to over 10 million in less than 2 years since!

And biodiesel usage would mean a tremendous boom to the American farmer at a time when the nation is looking for an economic stimulus.

A 1996 economic study published by the USDA Office of Energy predicted that a modest, sustained annual market for biodiesel of 100 million gallons in the US would contribute approximately seven cents to the price of each bushel of soybeans produced in the US. Based on last years harvested crop, the increase could have resulted in a windfall to U.S. farmers, at the expense of OPEC, of more than $168 million directly to the use of biodiesel.

What's more, the U.S. National Biodiesel Board cites the potential for a massive multiplier effect,

 "An important factor that is not usually considered when calculating the costs and benefits of industrial feedstock materials is the macroeconomic effect associated with domestically produced, renewable energy sources.

 Economic benefits of a biodiesel industry in the US would include value added to the feedstock (oilseeds or animal fats), an increased number of manufacturing jobs, an increased tax base from plant operations and income taxes, investments in plant and equipment, improvement of our trade balance, and reductions in health care costs due to improved air quality and greenhouse gas mitigation."

Got Petro?

In truth, we already have the resources to replace the percentage of imported petroleum directed towards diesel production with domestically produced agricultural alternatives. In his Energy Plan submitted earlier this year, President Bush recognized the value of developing Biofuels as a meaningful step towards achieving greater energy independence proposed a multibillion-dollar appropriations plan to support the growing new industry.

Would the economic benefits of retaining those would be petro dollars within our national economy more than offset even the modest appropriation anticipated by both Republicans and Democrats alike? Internationally recognized alternative energy expert and independent organic farmer Mark Snyder says yes,

"The adoption of cleaner, safer fuels will more than pay for themselves not just because of government subsidy or because of their potential abundance in our country. The enormous healthcare savings alone, due to reduced toxic emissions would probably more than offset the cost of any likely appropriation."

And Biofuels may put America back in the driver's seat when it comes to dealing with the financing of overseas-based terrorism. Snyder says,

"By turning our gaze inward to the American farmer, Biofuels well help carry the day. Our domestic agriculture can provide the nation with the thermodynamic power we will need to drive our domestic industry, and with the same stroke produce the meaningful economic stimulus that we need to protect our way of life."

And now there is a new dividend: the diplomatic leverage we need to support our sons and daughters on the battlefields abroad.

O.K. Sheik, so how much did you say you need for that barrel of crude?

Better yet America, just say "NO!"

Learn more about more about Biodiesel at:
The Official Site of the National Biodiesel Board
The Soy Fan Club's Drive-in

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