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Monday, February 2, 2009

Gusher of Lies: The Dangerous Delusions of “Energy Independence.”

Al Gore recently called for a ten-year plan to phase out all electric plants powered by fossil fuels and replace them with windmills and other “renewable” energy sources. While the media fawned over Gore’s speech, I decided to read Robert Bryce’s Gusher of Lies to see if the speech made sense.

It doesn’t. Bryce’s book has a big dose of something that Gore and his followers ignore: reality. Indeed, a reader of this book is going to receive mega-doses of reality.

Those who believe the political classes in this country have created a colossal mess in the energy industry will find Gusher of Lies very helpful. At a time of volatile energy prices, it pays to be informed.

It is important to note that Bryce is not a person of the right. While he is critical of the government’s oil price-control policies of the 1970s (unlike most political liberals, who supported them), this book is not an apology for oil companies. He is especially contemptuous of the Bush administration and its neoconservative political allies for the invasion of Iraq. Bryce’s political “liberalism” gives the book even more credibility, since he can’t be easily dismissed as yet another right-wing shill.

Bryce is an oil expert, and he gladly passes on much of his own knowledge and expertise in his book. He provides a good history of oil production both in the United States and abroad, giving this book a vast scope.

Two crucial points leap out, however. One is the fraud of “alternative” fuels, and especially corn-based ethanol, which Bryce rightly calls a “scam.” The other is the larger issue of understanding our economically dependent world.

Most important, Bryce writes that the mantra of “energy independence” is ignorant at best and delusional at worst. “Energy independence,” he shows, is just a cheap political slogan to con people into accepting a terribly interventionist stew of policies to subsidize alternatives to oil.

Bryce devotes more than 50 pages to Chapter 12, “The Ethanol Scam,” filling it with fact after fact showing clearly that the real scammers have been our elected officials and people tied in with the corn industry. He begins by declaring, “Ethanol isn’t motor fuel. It’s religion. And America is divided into two camps: the believers and the heretics.” Exactly.

Other gems include: “Mixing morality and politics can lead to bad policies. But mixing morality and motor fuel makes for a truly lethal cocktail. And few politicians dare look too closely at the ethanol moonshine.” And this: “If America is ‘addicted’ to oil, then it’s equally true that the corn ethanol industry is a world-class junkie when it comes to subsidies.”

Besides Congress and the late Bush administration, Bryce points a finger at Archer Daniels Midland (ADM), the self-proclaimed “Supermarket to the World.” Bryce goes through the billions of dollars in subsidies ADM has received for producing ethanol—and the millions it has given to politicians, both Republican and Democratic.

Bryce does not stop with the political payoffs. He deals with the economic and scientific issues that make corn-based ethanol a loser. First, the “net energy gain” that comes with producing ethanol is vastly inferior to that of petroleum; second, when one considers the economics of ethanol, one finds that it costs more to make the fuel than it can bring in revenues on a free market. Without subsidies, ethanol would soon die.

In a refreshing change from the political rhetoric of “energy independence,” Bryce calls for engagement of the Arab and Muslim world instead of promotion of the climate of fear that American politicians are sowing. He writes, “The continuing use of fear as a political tool—along with the constant drumbeat of terrorism—has become part and parcel of America’s demented approach to energy policy.”

That engagement includes Iran, the very country the Bush administration has tried to isolate. Furthermore, Bryce points out that China is going to continue growing economically, and that means Americans must pay attention to that country and work with it, not against it.

While Gusher of Lies is not an entirely free-market book, it exposes the folly of government central planning in the energy industries and demonstrates that the political class is perpetrating a massive deception. This is cold comfort, given the hardcore statism that dominates our politics, but it is good to know that at least one energy expert has blown the whistle on this scam.