Tuesday, August 27, 2013

How Much More Money Would You Have if the Open Fuel Standard Passes?

How much would the average American family save if the Open Fuel Standard bill passes into law? Kelly Cook, the National Field Director for ACT! for America, has done the following calculations:

The price of gasoline and diesel has dropped 40 to 50 cents since those figures were used from the $4.00 level.

I’ve just used the following math, which is pretty indisputable and it would be instructive to your readers to follow the math...their potential savings.

The auto experts I’ve been seeing all seem to come in around the 12,000 to 15,000 average miles per year per car and/or pickup in the U.S. I’m sure this could be narrowed down with a little research.

Average family owns: 2.28 cars or pickups (source). The ratio nationwide is 55% cars and 45% pickups (source).

Average fuel mileage nationwide for cars is: 24.6 mpg.

Average fuel mileage nationwide for pickups is: 16 mpg.

Weight the number slightly to the favor of the cars since they have 55% of the total and I come up with an average of 22 mpg for cars and pickups.

13,500 miles per year average divided by 22 mpg =  614 gallons per year per vehicle.

Multiply 614 X 2.28 cars per family = Average U.S. family burns 1,400 gallons per year for all the family vehicles.

Current national average of gasoline / diesel (weighted towards gasoline) = $3.60.

Current price of natural gas refined methanol per gallon is $1.30.  (Raw cost = 30 to 40 cents + profit and taxes).

Plus add in the 60% range of methanol to gasoline = $1.83 equivalent range adjusted price to gasoline.

$3.60 minus $1.83 = $1.77 savings per gallon.

$1.77 X 1,400 gallons per year per family = $2,478 annual savings.

If the price were still at $4 for gasoline, the annual saving would be:

$4.00 minus $1.83 = 2.17 per gallon.

$2.17 x 1,400 gallons = $3,038.00 annual savings per year per family.

So we can reasonably say that the average family could save between $2500 and $3000 per year for their average 2.28 vehicles depending on how “generous” OPEC is at any given time.

Although the math is flawless here, it might not work out exactly like this. It might be not quite as good. It might be significantly better. As Mr. Cook says, "At best, this is a moving target because everything about the variables of my calculation are moving targets. Nothing is static – the price of oil, the price of methanol, MPG of cars and trucks, average cars per family — nothing."

But it's a very good rough estimate, and would create more discretionary income for us all, and that's always good for the economy. Two of the things Mr. Cook didn't try to factor in could also be significant: The continually rising cost of oil, and the petroleum costs on just about every other commodity. Because of the Save the King Foundation and many other factors, it is almost certain that oil prices will continue to rise in the foreseeable future. And since almost every product has been shipped, the rising cost of oil raises the price of everything else.

Each of us could have more money in our pockets every year. Let's pass the Open Fuel Standard and make it happen.

Thursday, August 22, 2013

Oil Prices, Oil Futures and Speculation Webinar

Did you miss Fuel Freedom's "Oil Prices, Oil Futures and Speculation" webinar last week? It’s not too late to join the discussion!

Click here to listen to Fuel Freedom co-founder and oil expert Eyal Aronoff share his insights about the ongoing debate surrounding high oil prices. You can also download the PowerPoint presentation, or view some of the topics discussed in the Oil Speculation webinar.

The presentation was very interesting. One of the results of the way oil futures impact the market is that Saudi Arabia, by raising their oil production right before an American presidential election could actually influence the outcome of the election (and may have done so). When gas prices are high, the incumbent tends to lose the election. And Saudi Arabia has enough oil capacity to raise their production whenever they want (they keep their production constrained to keep world oil prices high).

If you've ever wondered how speculation influences oil prices and how OPEC manipulates the process, we highly recommend this webinar.

Fuel Freedom will have another webinar on Wednesday, October 2, to discuss the Myths and Realities of American Energy Independence. Mark your calendars.

Watch last week's webinar here: Oil Prices, Oil Futures and Speculation.

Sunday, August 18, 2013

Your Representatives Are Probably Home

Congress is out of session and won't be back on the Hill until September 9th. You can see a PDF of the House calendar by clicking here (days in session are shaded dark on the calendar).

While your Representative is home, it's a perfect time to pay a visit. Find out how here. Also, find out if your Representative is having a Town Hall meeting, and participate. The goal is to get as many Representatives as possible to co-sponsor the bill.

The Open Fuel Standard will move the United States closer to fuel independence, limit money going to dangerous women-oppressing regimes, lower the amount of lobbying and influence the oil industry enjoys today, revitalize the American economy, improve our national security, help solve our garbage and landfill problem, help people in developing nations rise out of poverty, help prevent mental illness, and reduce the amount of pollution and greenhouse gases that are sent into the atmosphere, into the ocean, and into the ground.

This simple bill will have enormous positive consequences. Visiting your Representative could tip the scales and make the difference. Learn how to successfully influence your Representative here.

Tips for Being An Effective Grassroots Advocate

The following was written by a professional lobbyist. While it is written about interactions with federal legislators, the guidance is applicable, for the most part, to all elected officials. You can download a PDF version of these guidelines by clicking here.

1. Reach out to your representative. Contact him or her and schedule a mutually convenient time to stop by the local office when Congress is not in session, and your representative is back home in your district, to introduce yourself. Click here to find ways to contact your representative. And click here to find out when the House of Representatives is in or out of session.

You can also introduce yourself at events where your representative appears, including Town Hall meetings. Look on your representative's web site for scheduled events.

2. Face-to-face meetings. Attend the introductory meeting either by yourself or with others. If you go with others, keep the group small. If you will be attending the appointment as a group, get together beforehand to “practice.” For example, one person could talk a little about the bill and reasons it is worthy of support, another could talk about how it could help the local economy, and another could “close” the meeting.

Stay organized and focused during the meeting to make the best use of your time. You will, in all likelihood, have between 15 minutes to a half hour. Don’t try to say everything in the first meeting. Remember, this is an introductory meeting and the goal is that you will have more conversations in the future.

3. Meeting handouts and materials. Keep it light. Giving too much material is overwhelming to your elected official and/or her or his staff, and the likelihood of all of it ending up in the trash is high. There is only so much written material that a congressional office can hold onto or read each day. Remember, they get information from many constituents and organizations.

A good idea is to bring a one-page informative sheet about the Open Fuel Standard Act. Click here to get a PDF Fact Sheet for just such purposes. Giving your representative that fact sheet is good enough for a first meeting. You can always provide more material down the road.

4. Get to know your representative's staff. Remember, congressional staff are the ones who have been tasked to take in all the information provided and digest it for the Member of Congress. It’s their job to get the detail for their bosses, who simply don’t have the time to research every issue about which they must be aware. Therefore, it is critical that you not only get to know the staff of your representative in the district office, but in the DC office as well.

Suggestion: Call the DC office and get the name of the staffer (“Legislative Assistants” or “LA’s”) who will handle the Open Standard Act. Different staffers handle different categories of issues. For example: National Security; Judiciary; Immigration; Energy; Defense. The Open Fuel Standard Act is both National Security and Energy. It might be called "Energy Security."

In all likelihood, more than one staffer will be involved. Get the correct spelling of the staffer’s name. Staffers of a representative will have an email address as follows: [First Name].[Last Name] @mail.house.gov.

5. Develop a working relationship with congressional staff. Either call the staffer (leave a detailed message if you get voice mail, which you frequently will), or send him or her an email introducing yourself and requesting a convenient time to speak on the phone. Always note that you are a constituent because Hill offices get a tremendous volume of phone calls each day. They can be from other Members of Congress or their staff, vendors, lobbyists, constituents, and people who are not constituents, but may have heard the Member of Congress make a statement on CSPAN that upset them – or that they support – and call in about it.  It’s critical that the constituents who call in are weeded out for the staff.  Letting the person who answers the phone know that you are a constituent should immediately put you at the top of the pile, as your representative is there to serve you.

Start a working relationship with him or her. Periodically send articles of interest (but don’t bombard the staffer every day). You want to be viewed as a credible “go-to” person about the Open Fuel Standard.

Start the relationship gently. If you are viewed as too aggressive, or angry, or not credible, you probably won’t get a second chance and that’s a wasted opportunity.

6. Always be respectful, professional, and polite – regardless of how supportive your representative is. You’ll find many Members of Congress who might not be able to support you on one issue, but will on others.

Always remember that elected officials are just ordinary citizens like you. They depend on receiving reliable information from people who visit them in their offices. Think of your visits as educational sessions. Try to explain the Open Fuel Standard in the clearest, most compelling way possible.

Download a PDF version of these guidelines by clicking here.

Saudi Influence on the U.S. Government

Saudi oil billionaires have hired American law firms and lobbying organizations to promote their agenda within the U.S. political system. They keep these powerful groups on their full-time payroll. The Saudis alone have 100 lobbyists in Washington (the NRA, considered one of the most powerful lobbies in Washington D.C., has 28 lobbyists). According to Open-Secrets.org, the total number of lobbyists reported for the year 2012 who were working for the oil and gas industry is 736! But let’s just focus on the Saudis for now.

They not only have 100 lobbyists who spend their time persuading our politicians to adopt their point of view, but the Saudis influence individual politicians directly through the incentive of money, and it’s all perfectly legal.

In chapter three of Robert Zubrin’s book, Energy Victory, he details the amazing system of Saudi oil-money payoffs to American politicians. I’ll give you a few highlights here.

Many of the ways money directly influences politicians are officially declared as such. But there are “innumerable other influentials who accept well-paid consultancies from the Saudis and who chose not to make the connection public,” wrote Zubrin. “One of these appears to be former secretary of state Henry Kissinger, who had to resign from his position as head of the September 11 investigative commission when he was asked to disclose his client list.”

He wasn’t the only one. Senator George Mitchell, former Senate majority leader, had to quit his position as vice chair for the same reason.

Another way Saudis influence American politicians is by spending big money for weapons made by American companies. The Saudis have spent about 100 billion dollars on sophisticated weapons they have not used (because Saudi Arabia is protected by the United States military). Their purchases give them influence — what the defense contractors’ say to politicians can be manipulated by the Saudis.

And since big defense contracts create lots of jobs, the Saudi influence spreads to the politicians in whose districts those jobs will be created.

Another way to legally give money to influential American politicians is through making a politician a board member of a corporation, and generously paying them for their “service.”

Here’s how it works: Saudi funds are used to create a business partnership. An important political figure is then invited to sit on the board. The business then pays the politician a fantastic sum for basically doing nothing. For example, according to the New York Times, former secretary of state James Baker has received 180 million dollars for his board membership in the Carlyle Group, an investment firm funded largely by Saudis.

This is not an isolated case. Far from it. According to former CIA counterterrorism case officer Robert Baer, author of Sleeping With the Devil, “…almost every Washington figure worth mentioning has served on the board of at least one company that did a deal with Saudi Arabia.”

Another legal way money is transferred to politicians is to invite influential people onto the board of a corporation and give them stock options in the company. The politician serves on the board for short time, and then cashes out the stock options, often reaping huge profits.

The above is an excerpt from the book, Fill Your Tank With Freedom.

Friday, August 16, 2013

Fuel Competition in New Zealand

Zana Nesheiwat explains how New Zealand has been responding to oil's virtual monopoly of transportation fuel. Her article was originally published in Oil Price.

"The island country began its alternative-fuels program in 1979. Financial incentives given by the New Zealand government to citizens for converting their cars to run on replacement fuels, combined with incentives to industry for developing a fueling network, enabled 140,000 vehicles to be converted to CNG or propane through 1985. Unlike Brazil’s alternative fuel program, which placed an emphasis on newly manufactured vehicles, New Zealand relied on vehicle conversions...

And through a cooperative relationship between businesses and government, New Zealand has made real progress toward greater fuel competition. "This is not to say that the U.S. or any other government must introduce costly and unreasonable incentives to drive the transition to alternative fuels and gain consumer acceptance. Rather, the government’s role is to enable an open fuel market — one in which new businesses will compete, prices will fall and innovation will drive efficiency and quality...

"Providing consumers a choice between fuels when filling up their gas tanks will ignite competition that will bring down fuel prices. The safe and efficient use of fuels, such as ethanol and methanol, can be used to expand consumer choice and would require slight modifications to existing vehicles..."

One quick way to this goal is to pass the Open Fuel Standard. Click here to help us make it happen.

Read the whole article here: A Lesson From the Kiwis.

Tuesday, August 13, 2013

Fuel Freedom Webinar This Thursday

From the good folks at Fuel Freedom:

Factivist: an evidence-based activist.

According to the legendary rock star-turned philanthropist, Bono, the marriage of transparency and factivism has been the driving force in helping to solve the world’s most serious problems.

At Fuel Freedom we aim to do just that — solve the world’s oil problem through transparency and facts. We vow to continue to arm you with facts through our ongoing webinar series.

In our next webinar on August 15, 2013 at 2 p.m. EDT, Fuel Freedom co-founder Eyal Aronoff will provide insights on “Oil Prices, Oil Futures and Speculation.” He’ll explain how oil prices, rather than being set by free market principles, are actually set by a few key players. After detailing the intricacies of market manipulation, he’ll address how diversifying the fuel market could create true choice and competition that would end this injustice.

Every month, Eyal will host a webinar focusing on a different relevant and timely topic to help you continue to be a part of the movement for lower fuel prices. Other webinars in the series will feature distinguished guests that are experts on issues such as national security, oil and the economy, the promise of natural gas as a transportation fuel and so on — all with the goal of saving Americans money at the pump. 

More about the webinar: 

The ongoing debate surrounding the cause of high oil prices is guided by the belief that prices are set by the free market. In reality, the lack of competition in the fuel market allows a few key players to determine prices—not the “free market.” While many believe that there is nothing that can be done about this, Fuel Freedom Foundation is working to diversify the fuel market, encourage fuel competition and provide choice at the pump.

Join Fuel Freedom Foundation co-founder, Eyal Aronoff, in a discussion of the fuel market, and learn:

  • Who determines the price of oil and gas
  • How is the price of oil determined
  • Who is “the market” and what does that actually mean
  • Market manipulation
  • Cases in history where there were divergences
  • How oil is the new gold
  • The Saudis are the central bank
  • What other forces are at play

Join the conversation today by registering!
Limited space is available.

Thursday, August 8, 2013


The following article was written by Gal Luft and published in The National Interest. Luft is senior adviser to the United States Energy Security Council and co-author of Petropoly: The Collapse of America's Energy Security Paradigm.

It happened to potash. It can happen to oil.

Last week marked the collapse of one of the last remaining cartels in the world economy — the potash cartel. Potash is a critical ingredient in the production of the fertilizers that help grow our food. For decades, the global potash industry has been dominated by Belarusian Potash Company (BPC), a joint venture between the Belarusian Belaruskali and the Russian Uralkali, together producing about a third of the world’s potash supply. On July 30th Uralkali broke away from BPC and directed its exports to China, consumer of one fifth of the world’s supply, via its own distribution channels. The announcement rocked the potash industry. Potash miners worldwide lost a third of their share value, and the commodity’s price is projected to slump by thirty percent. The breakup of the potash cartel should soon translate into lower fertilizer prices, which should in turn lower wholesale food prices. But as a new World Bank report confirms, the biggest contributor to increases in food prices over the last several years was neither the price of potash nor, as many still mistakenly believe, demand for biofuels, but rather the price of oil. Oil products go into every part of our food supply chain, from packing materials to fuel for the agricultural machinery and the trucks, planes and ships that transport food products from farm to plate. So when crude-oil prices rise, as is the case now, we pay more for our food. While the price of potash is no longer set by a cartel, the price of crude still is.

Owning seventy percent of the world’s conventional oil reserves but constraining its production capacity to the point that it supplies just a third of the world’s oil use, OPEC has been dictating global petroleum for nearly half a century. Only last week it announced its intention to cut production by the most in seven months, in response to the current burst in oil production in the United States. In this, OPEC reduced its collective production to the level it was at forty years ago — 30.2 million barrels per day. This is a scandalous figure considering the fact that in the past forty years the world economy has grown by leaps and bounds, and global oil demand has almost doubled. Vexing as OPEC’s strategy of reducing supply in order to offset increasing non-OPEC production may be, it is also understandable. Just like the potash cartel did until last week, OPEC sticks to a price-over-volume strategy — meaning producers prefer to sell less product at a higher price per barrel — and all of its members depend on high oil prices for their economic well-being and, in most cases, political survival. Saudi Arabia’s fiscal break-even price per barrel — this is the price needed by the government to meet its fiscal obligations — stands today at $98. Venezuela’s is $112. Algeria and Nigeria’s is $125. Iran’s is $144. This means that double-digit oil prices are no longer acceptable to the cartel’s members. As a recent letter by SaudiArabia’s Prince Alwaleed bin Talal reveals, the U.S. oil boom is perceived to be an imminent danger to the Kingdom’s oil dependent economy; hence the response of an OPEC supply reduction to prop prices.

Unlike with potash, the oil cartel is not likely to be dismembered by a sudden exit of one or more of its members. After all, they’re all in the same boat, and holding on to the cartel is their only way of remaining economically viable and maintaining domestic stability. But OPEC’s ability to manipulate oil prices would be greatly reduced if oil faced competition in the sector from which it derives its strategic status — transportation fuel. As long as cars are made to run on nothing but petroleum fuels, OPEC will continue to be able to set world prices through its price-over-volume strategy. But coal, biomass, uranium, renewables and natural gas can all be converted into or used to generate transportation fuels. Should cars be open to a variety of fuels, petroleum included, oil would be forced to compete against these other energy commodities for transportation-fuel market share, and this competition would force the price of oil downward.

Today American natural gas is among the cheapest in the world. Yet only one percent of it is used to produce automotive fuel. Natural gas can be used directly in compatible cars as compressed natural gas. It can be used to generate electricity, which can power plug-in hybrids and pure electric vehicles. It can be converted into methanol, a liquid fuel that costs a dollar less than gasoline on an energy-equivalency basis, and used to power flexible-fuel vehicles that cost manufacturers an extra $100 to make compared to gasoline-only cars. If vehicles were open to at least some of these fuels the U.S. would be able to pit a cheap and abundant commodity against one whose price is inflated and controlled by a cartel, and the oil cartel would meet the same fate as the potash one.

Editor's note: This scenario is exactly what the Open Fuel Standard would accomplish. The consequences would be tremendous for the United States. Help us make it happen. Start here.