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Thursday, June 22, 2006 07:44 pm

Shell’s game

Complaints about ethanol may have merit

Not surprisingly, Shell Oil Co. president John Hofmeister isn’t a fan of ethanol. Appearing on NBC’s Meet the Press on June 11, along with two other Big Oil execs, Hofmeister explained that when it comes to ethanol, he prefers the blended variety, which contains 5 to 15 percent of the corn-based fuel, to E85, which is 85 percent ethanol. If consumers begin demanding more ethanol, Hofmeister argued, they can expect the price of eggs, bacon, hamburgers, Doritos, and Fritos to start climbing. “There’s only so much corn to go around,” Hofmeister said. It’s a strange argument, to be sure, given the current price of gasoline, and it’s unlikely to resonate in Illinois, where there’s almost no room left on the E85 bandwagon. Republican House Speaker Dennis Hastert and Democratic U.S. Sens. Dick Durbin and Barack Obama have all boosted the fuel, and it’s hard to think of any candidates who haven’t sworn allegiance to King Corn. Many scientists, however, aren’t ethanol fans, either. David Pimentel, an ecology expert at Cornell University, calls ethanol production a “loser” because it uses up too much energy and requires too much of a taxpayer subsidy. Whatever Big Oil’s stance on ethanol and biofuels, you can be sure that it won’t miss an opportunity to make a buck. In Chicago, Shell is taking on a pilot project with the world’s No. 1 automobile maker, General Motors, to gauge consumer interest in alternative fuels — including E85. Henry Banta, a longtime oil-company watchdog and Washington, D.C., lawyer, believes that it makes sense for the automotive industry to develop vehicles that run on flexible fuels. As far as what Shell hopes to gain from the Windy City endeavor, Banta says, that’s anybody’s guess. Is this effort akin to tobacco companies’ halfhearted anti-teen-smoking public-relations campaigns? Banta says he doesn’t like to ascribe motives to people, not even oil-company execs, for whom he rarely has a kind word. Banta concedes that Shell’s Hofmeister may be right that ethanol isn’t all it’s cracked up to be. “Their position on that is probably correct,” Banta says, adding, “I can’t believe I’m being quoted saying something good [about them].”
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