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Amber Waves of Ethanol
The world food crisis is highlighting tragic stories of multitudes on the brink of starvation. Nonetheless, this crisis is likely to encourage a surplus of another kind: market fundamentalism. Its advocates believe that if only markets are allowed to do their thing, economies can easily accommodate weather catastrophes or shortages of agricultural inputs. The U.S. is portrayed as the beneficent advocate of free and open markets while too many "underdeveloped" nations -- and those socialist Europeans -- subsidize their farmers to the detriment of market efficiency.
These narratives beg several important questions. In our recent history, have we ever had a free market for food? Could or should the market for basic foodstuffs ever be free of all regulations and economic incentives? Late last month, the Washington Post's Anthony Faiola summarized these ideas: "In recent years, there has been a ... push to liberalize food markets worldwide -- part of ... the 'Doha round' of world trade talks -- but resistance has come from both the developed and developing worlds. Perhaps more than any other sector, nations have a visceral desire to protect their farmers, and thusly, their food supply. The current food crisis is causing advocates on both sides to dig in."
U.S. trade negotiators are major advocates of what the Post calls liberalized food markets. But at the same time, U.S. negotiators push France, the European Union, and less developed economies to end agricultural tariffs and subsidies, Congress has been working on a multibillion dollar farm bill rife with subsidies to our biggest factory farms. Haitians are starving not because Haiti closed its market to cheaper imports but because it has opened those markets to competition with subsidized U.S. rice growers. Its predominantly agricultural work force has become impoverished and can't afford rice at the world price.
Rice is one of the United States' most heavily subsidized crops. The Cato Institute reports that it has benefited from three different subsidies together averaging over $1 billion a year since 1998. U.S. rice growers also enjoy a direct tariff barrier of 3 to 24 percent.
In addition to its rather selective encouragement of "open markets," U.S. policy encourages large-scale technologically "advanced" farming both here and abroad. The emphasis is on monocropping, production of a few foodstuffs for export in world markets. Government-funded agricultural research is skewed toward petrochemical agriculture, with the recent emphasis on genetically engineered seeds as the latest incarnation.
This agriculture depends on cheap oil both for its petrochemical inputs and for the transportation of its product.
It is purported to be efficient, but its economic success here in the U.S. has been directly dependent on massive government subsidies to the largest producers. Cheap oil, the linchpin of the system, has itself been sustained by government policies that do not tax oil and petrochemicals for the massive military costs needed to assure access to oil and the environmental costs of our current transportation mode.
The burdens of this agriculture-petrochemical-transportation mix are coming home to roost. Haiti could once feed itself, but it now depends on imports from the U.S. of crops the cost of which have been driven up by turmoil in the oil markets and a long-standing Australian drought, perhaps the result of climate change. In a final irony, food prices worldwide increase as more land is devoted to corn for subsidized ethanol production. Thus another layer of subsidies is now solidly entrenched in an effort to sustain the subsidized corporate petrochemical agriculture complex.
It is tempting to argue that governments should simply scrap all regulations and subsidies. Yet the workings of the world market in basic food stocks suggest the limits of that perspective. Cargill and Archer Daniels Midland dominate the grain trade. Having virtual monopoly control of the market (few buyers and many sellers), they reduce the price to producers even as they push prices up for consumers.
More broadly, agriculture confronts boom-and-bust cycles occasioned by weather and other unpredictable factors, leading to market-distorting forms of economic consolidation. These are then often translated into demands for political favoritism. In addition, agriculture inevitably entails huge ecological implications. The case for proactive policy is strong.
Attempts by free marketeers to convince the public to remove all subsidies often succeed only in harming those who need assistance the most while leaving in place corporate protectionism. The Nation columnist John Nichols correctly argues that family farmers "should be able to count on good prices for growing the food Americans need." Public policy could fashion "a strong safety net to survive disasters, economic incentives for crop rotation and conservation, production for local markets, and a strategic grain reserve similar to the strategic petroleum reserve to guard against food-price inflation."
Trade policies could also help developing countries regulate markets in ways that would assure some degree of self-sufficiency in food. At the state level, we could support university research on sustainable agriculture as well as consumer emphasis on farmers markets. Both our health and our local economy will benefit in the long run.
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32 Comments so far
Show AllI don't find anything wrong with this article, except the title indicates an attack on ethanol which is not present here. The culprit IS corporate industrial agriculture, as he says. Subsidies ARE a big issue, especially those given to oil companies, but yes, big agribusiness is always the biggest beneficiary. Food produced for export and not to feed people within countries IS a problem. It's all about money to buy food, not about inability to produce food. We do need to push for food self-sufficiency in countries around the globe wherever possible.
Subsidies, BTW, were given out to farmers for not growing anything. With the demand for corn, now land is being used so subsidies there have decreased. And the subsidies there get invested inside this country. Oil companies don't invest in this country and so their subsidies fly away forever.
Plenty of evidence to support this can be found at
http://www.alcoholcanbeagas.com?bid=2&aid=CD8&opt=
We can produce all our food needs through organic means. Fuel too. Small scale permaculture, a polyculture of crops, heal the land with sensible practices. A proactive policy is called for indeed.
Since truly "free markets" don't exist, we have no way of knowing how they would work.
The market fundamendalists' definition of "free markets" is a global economy with trade agreements and tax policy structured to enrich a few large, wealthy players, at the expense of everybody else.
What I don't understand is why more is'nt done to encourage the recyling of the used corn oil from fastfood deep-fryers. Using any fuel from what could be viable food products is deplorable.
With the Oil Companies and Speculators creating havoc with oil prices, truckers, commuters and other users are being strangled. Our daily bread is seriously affected!
So where is our government to put an end to this fiasco? In England and France, the truckers ,with assistance from other citizens ,are at this very moment, showing their resentment and fury to the high prices of fuel.
But not in the United States. We are PATRIOTIC! We don't raise our voices or show discontent with our government. We are schmucks! We trust our leaders. It isn't their fault that over 4000 service people are dead and over 20,000 have been wounded and at least 7000 are having difficulty coping with everyday functions. ,The enemy just isn't playing fair.
It's time for demonstrations to show our objections and seek control of Private Interests in this country. It's also time to get rid of those in government that are dishonest and refuse to obey our Constitution.
I'm pissed!!!!!!!!
FEAR FEAR FEAR
remember you could build your own still at home and make your own fuel for about 50$ a barrel. Plus you don't have to use food to do it.
You know, hemp would be a far better biofuel than corn-based ethanol. However, I won't interrupt you from all that biofuel bashing. Once again, as the fake "left" falls for another rightwing frame trap, the "Right" RAPES the "Left" !
"over 4000 service people are dead and over 20,000 have been wounded"
Frank...its well over 30,000 and counting, not 20,000.
We could make all the gasoline we need from coal if we choose to. Food inti Biofuel is a fools game.
It's hopeless, hopeless, hopeless. The government doesn't care. I believe the general reference word used in D.C. to define The People is "Yucks," as in "The Yucks won't do anything." We're well on the way to serfdom and starvation. Frank Lieb is right - we need some kind of revolution. It won't come from the politicians, not even those who profess to want change. It must come from us or we're doomed.
We don't need oil. Time to move to alcohol fuel - pronto!
I saw a program on TV this past weekend ... in Brazil they use sugar cane to make ethanol. I think the show said they get more than twice as much ethanol per acre of sugar cane than we get per acre of corn.
There's a very nice wikipedia entry about it:
http://en.wikipedia.org/wiki/Ethanol_fuel_in_Brazil
Can't we grow sugar cane here in the US ?
Having farmed for 30 years, I have seen and been involved in many different government farm programs. In retrospect they had little to do with actual food, and everything to do with corporate profit, trade policy and large scale high tech agriculture. Did you know farmers are actually penalized if they take acreage out of commodity crops (corn, soy etc) and plant vegetables? That is considered a violation of the Farm Service Administration contract.
So don't kid yourself, farm bills, subsidy programs, research, government policy in general have little to do with food production for people either here in the US and perhaps more specifically in developing countries.
Hemp....
have been reading about Hemp in the local paper they other day. You are right it is the way to go. I talk about the AIR car but no one listens they are to wrapped up in read my posting not yours. mmm got a farm wonder what it would take to legally grow the stuff?
A short poem
Corn or Ethanol
corn fuels people-- people are surplus.
ethanol fuels machinery-- machinery is an investment.
INDUSTRIAL HEMP for ethanol and biodeisel. There are more crops than food crops to covert into fuel.
ACTING LOCALLY means growing and producing your own fuel, or a community or co-op.
Legalize indistrial hemp and plant green waves of ethanol!!!
END WAR FOR FOREIGN OIL PRODUCE YOUR OWN ENERGY!
This is pertinent. We need to re-focus our thinking and accept that our "way of life" is doomed. Adaptation is what is required. The following is posted at Information Clearinghouse:
Wake Up, America. We're Driving Toward Disaster.
By James Howard Kunstler
26/05/08 "Washington Post" -- - Everywhere I go these days, talking about the global energy predicament on the college lecture circuit or at environmental conferences, I hear an increasingly shrill cry for "solutions." This is just another symptom of the delusional thinking that now grips the nation, especially among the educated and well-intentioned.
I say this because I detect in this strident plea the desperate wish to keep our "Happy Motoring" utopia running by means other than oil and its byproducts. But the truth is that no combination of solar, wind and nuclear power, ethanol, biodiesel, tar sands and used French-fry oil will allow us to power Wal-Mart, Disney World and the interstate highway system -- or even a fraction of these things -- in the future. We have to make other arrangements.
The public, and especially the mainstream media, misunderstands the "peak oil" story. It's not about running out of oil. It's about the instabilities that will shake the complex systems of daily life as soon as the global demand for oil exceeds the global supply. These systems can be listed concisely:
The way we produce food
The way we conduct commerce and trade
The way we travel
The way we occupy the land
The way we acquire and spend capital
And there are others: governance, health care, education and more.
As the world passes the all-time oil production high and watches as the price of a barrel of oil busts another record, as it did last week, these systems will run into trouble. Instability in one sector will bleed into another. Shocks to the oil markets will hurt trucking, which will slow commerce and food distribution, manufacturing and the tourist industry in a chain of cascading effects. Problems in finance will squeeze any enterprise that requires capital, including oil exploration and production, as well as government spending. These systems are all interrelated. They all face a crisis. What's more, the stress induced by the failure of these systems will only increase the wishful thinking across our nation.
And that's the worst part of our quandary: the American public's narrow focus on keeping all our cars running at any cost. Even the environmental community is hung up on this. The Rocky Mountain Institute has been pushing for the development of a "Hypercar" for years -- inadvertently promoting the idea that we really don't need to change.
Years ago, U.S. negotiators at a U.N. environmental conference told their interlocutors that the American lifestyle is "not up for negotiation." This stance is, unfortunately, related to two pernicious beliefs that have become common in the United States in recent decades. The first is the idea that when you wish upon a star, your dreams come true. (Oprah Winfrey advanced this notion last year with her promotion of a pop book called "The Secret," which said, in effect, that if you wish hard enough for something, it will come to you.) One of the basic differences between a child and an adult is the ability to know the difference between wishing for things and actually making them happen through earnest effort.
The companion belief to "wishing upon a star" is the idea that one can get something for nothing. This derives from America's new favorite religion: not evangelical Christianity but the worship of unearned riches. (The holy shrine to this tragic belief is Las Vegas.) When you combine these two beliefs, the result is the notion that when you wish upon a star, you'll get something for nothing. This is what underlies our current fantasy, as well as our inability to respond intelligently to the energy crisis.
These beliefs also explain why the presidential campaign is devoid of meaningful discussion about our energy predicament and its implications. The idea that we can become "energy independent" and maintain our current lifestyle is absurd. So is the gas-tax holiday. (Which politician wants to tell voters on Labor Day that the holiday is over?) The pie-in-the-sky plan to turn grain into fuel came to grief, too, when we saw its disruptive effect on global grain prices and the food shortages around the world, even in the United States. In recent weeks, the rice and cooking-oil shelves in my upstate New York supermarket have been stripped clean.
So what are intelligent responses to our predicament? First, we'll have to dramatically reorganize the everyday activities of American life. We'll have to grow our food closer to home, in a manner that will require more human attention. In fact, agriculture needs to return to the center of economic life. We'll have to restore local economic networks -- the very networks that the big-box stores systematically destroyed -- made of fine-grained layers of wholesalers, middlemen and retailers.
We'll also have to occupy the landscape differently, in traditional towns, villages and small cities. Our giant metroplexes are not going to make it, and the successful places will be ones that encourage local farming.
Fixing the U.S. passenger railroad system is probably the one project we could undertake right away that would have the greatest impact on the country's oil consumption. The fact that we're not talking about it -- especially in the presidential campaign -- shows how confused we are. The airline industry is disintegrating under the enormous pressure of fuel costs. Airlines cannot fire any more employees and have already offloaded their pension obligations and outsourced their repairs. At least five small airlines have filed for bankruptcy protection in the past two months. If we don't get the passenger trains running again, Americans will be going nowhere five years from now.
We don't have time to be crybabies about this. The talk on the presidential campaign trail about "hope" has its purpose. We cannot afford to remain befuddled and demoralized. But we must understand that hope is not something applied externally. Real hope resides within us. We generate it -- by proving that we are competent, earnest individuals who can discern between wishing and doing, who don't figure on getting something for nothing and who can be honest about the way the universe really works.
James Howard Kunstler is the author, most recently, of "World Made by Hand," a novel about America's post-oil future.
JH May 27th, 2008
I was just going to his webpage to read his weekly comment.
He could not have said it better.
Great article.
cherimoya: good quote from the redoubtable Kunstler. We have lots of people wishing on a star. "If only the bitch slap the greedy rich, we can continue happy motoring" etc. Lets cut oil/gas taxes, so we can continue to consume our childrens oil before they are old enough to drive! How about some sensible policies, like raising the gasoline tax by several dollars per gallon, so that people will move away from profligrate oil consumption. But instead, we cling to silly ideas like corn to fuel, and hydrogen cars. The only tech fix, that makes any sense is electrification, hybrids, and plug in hybrids. But that change will take many years, and crunch time is fast approaching.
The more abstract problem needs our primary attention because it affects all sectors about the same: The elites are perpetrating a relentless class war against the people and they must be stopped dead in their tracks ASAP. If instead we throw a giant monkey wrench into their "free market" capitalist machine that would wake up the hoards of human cogs in that machine, who are participating without regard to consequences, and this would amount to a short term fix BUT the elites will simply turn and build different machines, with different rules, trumpet the improvements through their propaganda channels, and proceed to play the same old game of lies, deception, murder, enslavement, theft and plunder for profit.
But we could instead leave the elites' machines intact and go straight for the jugular, figuratively of course. That is, we dictate that the scene will be framed as the class war that it is, and we dictate that the elites unconditionally surrender, and go assume their proper role as regular people like all the rest of us. The machines can be fixed, dismantled or replaced at this point - in all sectors. Ok? Ready to win the class war, people? Start by shifting all of your individual exchange/association away from the power centers and toward your local community.
What I cannot figure out is why the methanol fuel cell has been shelved in preference to the mystical hydrogen fuel cell.
Ethanol is a dog, and the hydrogen economy is just a venture capital/perpetual motion machine joke.
But the methanol fuel cell is a way better idea than distilling ethanol.
Fuel cells in general would be a better way than distilling ethanol. Use of hydrogen in fuel cells would produce heat, electricity and water. Other substances used would produce heat, electricity and carbon dioxide. That would be one advantage of hydrogen. A hydrogen economy could evolve but there are many hurdles to overcome. One recent advance is a vastly reduced cost in the production of solar cells which could be used to split water into its hydrogen and oxygen components. The hydrogen could be burned (thus recombining with the oxygen to reproduce water) or it could be used in fuel cells to produce heat, electricity and water. The "left over" oxygen could be used for any purpose it is used for today. Personally I'd like to see it just "boiled off" and used to simply replenish the atmosphere.
As a step in putting the brakes on soaring gasoline prices I support the Boston T. Party BOYCOTT OF EXXON-Mobile / BP-Amoco : until a TARGET of $ 2.50 a gallon for Premium is obtained. People will not give up gasoline, people can easily give up one BRAND of gasoline. Supply is organized, demand is not. We don't need to turn America into a dustbowl wasteland of starving Tom Joads in order to get clean alternative energy. We can organize demand and get lower gas prices to make people's lives easier as we transition into hydrogen, hemp, ethanol,or other alternative fuels.
Just some numbers regarding oil. World oil consumption is 28 billion barrels per year. This is a cubic mile of oil. It also means that each year a 28 bn barrel oil field has to be discovered and eventually developed. Otherwise, we will be drawing down the known oil reserves which are the equivalent of 40 years supply at the present rate of consumption. Growing demand by China and India will put further stress on production and reserves.
One major problem in switching from oil to a substitute is that there are trillions of $$ invested in the production, processing, and distribution of oil products. If the substitute energy form cannot utilize this infrastructure then it will probably be written off and a different infrastructure will have to be developed.
hemp for victory, good to see your post here! In the meantime the gov should buy massive amounts of stored surplus sugar and turn that into ethenol, but when did the gov do anything good for the people anyways? This gov has been riding the backs of hardworking Americans for too long, time to abolish the income tax, reduce out of control property taxes, and replace that income with the massive generation of money that INDUSTRIAL HEMP would provide
HEMP FOR FUEL, HEMP FOR FIBER, HEMP FOR FOOD!!!!!
simple as that.
One of the major issues with hydrogen is that it's made from fresh water, which is itself an increasingly scarce resource. Does anyone know how much the marginal or energy cost of producing it would be increased if desalinated ocean water were used? Am curious, but have not been able to find any reliable information. If ocean water could be used economically, a vast source of potential H would be available.
Goodman
Excellent post!
"atheist May 27th, 2008 7:52 pm
I saw a program on TV this past weekend … in Brazil they use sugar cane to make ethanol. I think the show said they get more than twice as much ethanol per acre of sugar cane than we get per acre of corn."
Correct and we could import their ethanol except that there is a 59 cent a gallon tariff on it to make it more expensive than our ethanol.
I wanted to share part of an article in the paper this morning so you would know that there are prople doing their part to conserve energy.
Under the title "The Scooterists"
"Kim Hale figures sometimes you have to spend money to save a money.
So, a few weeks ago, as her T-Rex-sized GMC Denali continued to chew through $100 bills at the gas station, the Flower Mound stay-at-home mom decided to submit to the economy of scale.
She and her Porsche-driving husband, Jim, bought scooters.
Not any scooters, mind you, but trendy, Italian, I-shop-for-sushi-with-a-burlap-bag Vespas. With custom paint, the pair cost just north of $15,000. The environmental panache came free.
"We figure they'll pay for themselves in no time," said Mrs. Hale, 40. "It cost $14 to fill them both up and they get 60 miles per gallon."
The fuzzy math goes something like this – Mrs. Hale spends about $400 a month quenching the thirst of her SUV. This summer, she plans to roll around Flower Mound on her Vespa instead. She said the savings should make the payment on their scooters.
Last weekend was a good example. She and her 43-year-old husband took the scooter to the grocery store, to dinner and to Target.
"I was joking with my husband," she said. "We probably saved $30 this weekend in gasoline alone, and that's just driving around town"
It was even worse when I noticed they are making payments on the scooters. Sometimes I wonder.
Not to mention the harm that high fructose corn syrup has and is doing. This stuff is in an incredible array of food products found at your grocery. I know the argument about avoiding processed foods, grow your own and all that. However, most of us are not equipped to be purists to that extent. I avoid this stuff, however.
I'm surprised that a couple who owns a Denali and a Porsche would need to finance a couple of Vespas ... unless they are also financing their Denali and Porsche. (I'm imaginging a big beautiful house with no furniture inside.)
But you know what ? If the ultimate goal is reduction of dependence on imported fuel, and the secondary goal is the more personal one of saving money, then they have at least they have contributed. :-)
perhaps I was not specific enough on methanol.
Ethanol from corn is not viable.
However, methanol is much easier to produce from a variety of organic substances. Moreover, you don't have to burn it, the methanol fuel cell works good.
The hydrogen economy and the hydrogen fuel cell is just a bogus dream that will never happen. However, the methanol fuel cell is practical.
Ethanol, Fossil Fuels, Nuclear Energy is the wrong way to go. This is all about Wall Street and special interests destroying the world for profit! It takes too long and too much money to build nukes, it is a place that becomes open to attack, there isn't any safe place to store the waste, and those resources could be used to find ways to power transport particularly the public variety quickly. If everyone in the USA cut back on fuel consumption, went wind and geo-thermal with heavy duty conservation quickly, we might have a chance. instead? Ethanol and let the world go hungry so that mom can go to the mall with her SUV.
It is amazing that there are those here given the impending environmental collapse as a result of burning fossil fuels would cry about a cut-back in driving their monster machines. I hope the price goes to $6.00 per gallon soon or more so that Americans are forced to look at public transportation and fuel efficient vehicles.
It is time for both the United States and China — the world's two biggest polluters — " start playing a more constructive role " in vital new negotiations on tackling climate change but the meetings recently didn't hold much promise. George Bush has been tolling the bell for the environment since he assumed office. He supports big oil and many of the Repugninant party hold his view. Nuclear Energy occupies the same odious position. New sources of energy are possible, stop sending Mars landers for a while and invest the money in energy renewables than we would not have to look for places to go but the fix the one that works.
This current primary given voice to candidates adopting the obvious but few with the exception of Obama have begun to spell out the implications on economic as well as the environmental changes that will be necessary. The new IPCC report, which is designed to give impetus to the negotiations, highlights the little-known acidification of the oceans - the ocean is losing its ability as a means to absorb carbon dioxide. Carbon dioxide — the main cause of global warming — have already increased the acidity of ocean surface water by 30 per cent, and threaten to treble it by the end of the century. My friends we don't have the end of the century to change our ways, we have ten years to make major changes
Achim Steiner, the executive director of the United Nations Environment
Program (UNEP), said recently: "The report has put a spotlight on a threat to the marine environment that the world has hardly yet realized. The threat is immense as it can fundamentally alter the life of the seas, reducing the productivity of the oceans, while reinforcing global warming."
Scientists have found that the seas have already absorbed about half of all the carbon dioxide emitted by humanity since the start of the industrial revolution, a staggering 500 billion tons of it. This has so far helped slow global warming — which would have accelerated even faster if all this pollution had stayed in the atmosphere, already causing catastrophe — but at an increasingly severe cost.
Does anyone really believe that the corporate nightmare will end? Does anyone think that that the profit motive as it is constituted in the "Free Market System" will somehow be modified by the need to save the planet? We are entering a phase of the final meltdown of the planet. The poles are beginning to break up but that has not deterred the oil market or has it lead to the kind of conservation necessary, at the speed necessary, in the face of this catastrophe taking shape. Science is way behind reality because it must be certain therefore all the claims one hears 
are woefully conservative.
There are still people out there, like George Will and the Republican menace that will continue the objection to scientific reality, some of the scientists saying that we are already in feedback mode the above is clearly one of the examples as well as the softening tundra and the release of Methane fifteen times as potent a greenhouse gas. 

James Lovelock says that there will be about 500 million left at the poles for a few hundred thousand years until the planet rights itself and begins to cool or it might continue to heat until all life is finished. This small period of time in Earth's evolution and geology and climate has been set in motion for another life extinction episode.
This time we are the catalyst for our own extinction. The Chinese are producing more coal plants that will substantially diminish their fresh water supplies as well as adding to the globes greenhouse gasses, is a grand example of this environment be damned global economy. The ethanol versus food production shows us that the chance to change rapidly is out of our grasp. We have all done it!
Who has turned off their life style or their 401ks? America's selfish opportunism has turned love to stone? Will we spin to oblivion on a dead planet, probably? Where is the profit to be found here can someone from Wall Street explain this? 
Their is a fundamental feedback problem between the economic style that Americans are trying to get the world to accept; a consumer disposable auto centered existence, and its affect on continued life.
Lester Brown has been saying this for to many years with no one really taking him seriously. I have been fighting climate change in my work since my film, about Acid Rain, produced in 1980. Its the same problem, for the same reasons that has now become the basis for this catastrophe now impacting on humanity.
All the above, while the nations of the world argue about who will have the Lion's share of the oil and gas reserves in the waters now opened by global warming in the Arctic. This is the absolute absurdity, the absolute paradox no one cares about anything else but money, it's all about greed and money, the future generations be damned!
The USA lifestyle is not negotible. The economic model ignores damage to the envirornment. The objective of the economy is to maximize the transformation of natural resources into consumable goods. There is no attention paid to the waste accompanying this process. Entropy is also being maximized.
pundit, I definitely agree with you that the current and long-running economic model is exactly as you describe. But I think it CAN be changed. I think it's actually becoming "cool" to conserve. The coolness factor should not be underestimated.