Friday, June 10, 2022

Biden’s Food and Fuel Crisis — It’s the Policy, Stupid - Author: Tom Luongo

 So, how about those fuel prices? Fun ain’t it to spend more on filling up your tank than it costs for a decent meal at a second-rate restaurant?

So you thought you could afford that $45,000 truck and the $700/month payment.

Guess again.

After suckering everyone in with low monthly payments for obscenely overpriced clunkers, the Biden Junta spent 2021 setting up to let you out of your house because COVID was over, only to ensure you couldn’t afford to drive anywhere.

It was policy, folks. It’s always been policy.

Everything else they tell you is a lie.

High gas prices are NOT just a function of high oil prices, supported by purposeful disruptions to the market thanks to the slap-happy sanctions machines in DC and Brussels.

High gas prices are NOT even a function of more than 2 million barrels per day of refining capacity taken offline during the unnecessary and terminally-damaging COVID lockdowns.

High gas prices are most certainly NOT a function of Russia’s military operation in Ukraine.

All of these things can be overcome by the ingenuity of human beings in times of chaos. If there’s one thing I have faith in is people’s ability to re-route their behavior and find workable solutions.

The natural response to an arbitrage opportunity always brings out the best in people, as they find ways to supply the things you demand to live your life.

The only thing standing in the way of that, invariably, is your government. In the case of the U.S., the Biden Junta has done everything possible to ensure that not only would gas prices rise to a completely unacceptable level, but that they would stay there until what’s left of the middle class is left broke and out of gas by the side of the road.

A couple of months ago there was a little announcement that the Biden administration would raise the cap on ethanol blending into gasoline stocks beyond the 10% limit in order to alleviate the ‘gas shortage.’

On the surface that idea made a kind of simplistic sense, along with the releases from the Strategic Petroleum Reserve, if we were no longer going to buy crude oil from the Russians.

But, there’s only one problem with that, namely there isn’t enough ethanol to blend into the gas. Oh, and that SPR release? It all went to Europe while prices rose here.

Moreover, that same fuel needed to produce nitrogen fertilizer which is also needed to produce the corn is part of the same supply shortage that we’re supposedly trying to help overcome.

We’ve been trained to laugh at such profound government ineptitude. But this is no laughing matter. They are the ones laughing at us for thinking they are just stupid.

They aren’t stupid, well, except for Elizabeth Warren.

Lastly, it takes more energy to produce the fertilizer to grow the corn to convert to ethanol to blend into the gasoline than it takes to just crack the crude oil in the first place, put it on a truck and deliver it to the corner gas station.

There is this thing called the Gibbs Free Energy equation, and it’s kinda important.

But it was just an allowance… a request.

Instead of looking at this crazy scheme that we could live with when gas was cheap, food plentiful and the economy not broken and scrapping it…

…Yesterday Biden and the Trotskyites made that allowance a mandate.

Mike Shedlock (link above) covered this from the most obvious angle, that it is nothing more than welfare for corn growers (who btw, are way behind the curve in planting this year thanks to the weather and lack of fertilizer).

Mike’s conclusions are as follows, to keep it brief:

1. 30% higher corn prices with other crops rising by 20%, according to the National Academy of Sciences. 
2. Growing more corn for ethanol causes increased amounts of water pollutants from U.S. farms
3. Expect more fertilizer use when fertilizer costs are soaring
4. More summer smog
5. E15 erodes older car engines, gas pumps, storage tanks and pipelines.
6. Small refiners will suffer and some will go out of business allowing Elizabeth Warren to moan about the concentration of “Big Oil”.

Lather, RINs, Repeat

But there’s a point embedded in his analysis that is the true 800 lb. gorilla in the room, the Renewable Identification Number or RINs. RINs are blending offset credits that refiners have to buy in order to sell fuels into the market, which enforces the blending limits imposed by our brain-dead, Climate Change obsessed government.

Those RINs costs are passed on directly to you, the fuel buyer. It’s so simple even Elizabeth Warren can understand it.

Mike’s point above about small refiners seems weird when oil prices are this high and gas prices along with them right? Not when you factor in that they have to go into the market to buy RINs in order to ship fuel.

And here’s the worst part, it won’t matter if the supply and demand forces within the gas and diesel markets balance, because the blending requirements mandated by Congress have ballooned the cost of RINs to ensure that fuel prices remain high.

One look at the 3-year chart of the various RINs prices will tell you the story in stark, if not, infuriating detail.

D3 (blue line) fuels are ‘cellulosic blends,’ i.e. corn (see insert below). Note that the price of D3 RINs went from around $0.80 to more than $3.00 since Fungal Joe and the Trotskyites took power.

Now, why is this? Well, because god-dammed Congress mandated it. That’s why!

Do you still think this isn’t deliberate? Do you still think the Dems are the good guys saving the world from Climate Change and the GOP are a bunch of greedy corporatists? Did you miss the note about ‘small refiners’ are going out of business and the Biden administration denying hardship exemptions to 36 of them?

No, you didn’t. If you’re so green you think this is a price worth paying then why don’t you pay my fair share. While the rest of us try and figure out how to rebuild what you’ve already destroyed.

You, the odd greenie reading this screed, realize that not only are you upside down on your car loan, that car you’re driving to get to the job you can’t afford to go to is now also like a Nexus-6 android from the movie Blade Runner — with programmed accelerated decrepitude?

Because while Ethanol is a great fuel which burns hotter, but has less energy density than gasoline, which means fewer miles driven per gallon burned. It also burns more corrosively, because one of the by-products of burning ethanol is water.

At the temperatures and pressures inside an IC engine, water is an aggressive acid, which your car wasn’t designed to handle the increased amount of getting produced while you drive. That’s why some cars are E85 rated and some aren’t.

There is no ECM tuning that can overcome this for most of the cars on the road.

So, there you go, your car will cost you more per mile to go fewer of them while the only thing it goes through faster than it did before is its depreciation curve.

But, of course, that is exactly the point. If they can’t persuade you to buy a shitty electric vehicle, they’ll just destroy your existing car faster with sub-standard fuel and then outlaw IC’s in the future.

Can’t make an omelet without breaking a few cylinder heads I guess.

And just in case you think my anger is misplaced here, where do you think this corn is going to come from that the vandals in DC just mandated?

According to the USDA’s May 9th crop report, on average over 18 corn-planting states, just 22% of the acreage planted in 2021 has been planted so far, versus 64% planted in 2021, and just 50% of the previous five-year average.

Folks there ain’t no corn to blend now and there won’t be tomorrow.

Liar, Liar, Pols on Fire

So, even if the War in Ukraine ends, Venezuela comes back online and the refiners are allowed to operate without restriction, there still won’t be any movement in the price of gas or diesel fuel because as the amount of fuel shipped increases, the demand for RINs increases as well, keeping the price of them high, which translates directly to prices at the pump most of you can’t afford to pay.

But, Elizabeth Warren will save us all from these greedy oilmen, right? On top of all of this insanity, this paragon of virtue and champion of the lower classes wants to introduce a windfall profits tax on the oil industry to make them pay for the misery she helped cause.

And if you believe her, well, not only do you get what you deserve, but you better get reacquainted with those long-unused bike-riding skills.

Their next talking point will be they fomented this dual crisis in food and fuel to solve the obesity epidemic and bring down health care costs.

Remember, it’s never their fault.

The truth is folks that if these people didn’t lie they wouldn’t ever open their god-forsaken pie holes.

I can forgive Lizzy Slapaho here because she’s too obviously stupid to understand half of what I’ve written here. I wouldn’t ever want to be thought of as abusing the handicapped.

But the rest of the Biden Junta is clearly in on the grift here as Transportation Secretary Pete Buttigieg did the Sunday talk show circuit to disavow any complicity by the administration in this mess.

Let them eat EVs, I guess.

They aren’t stupid, they are just liars and vandals. It’s intentional. Personnel is policy.

They not only want you angry and screaming at each other, but they want you doing so from home so they know where you are when they come to silence you.

It’s long past time we’re silent about this green nonsense.