we will see you tomorrow. ♪ john: what do you know about gasoline? ze oil companies? >> wait too much. jo: i am told at the mall will help. >> a new hero is rising. saving our future. john: it does increa smiling. >> you can add miles. john: a lot of myths. that is our show tonht. ♪ >> and now john stossel. [applause]

john: planning s car trip? warmer weather means driving season. we all have opinions about the price of gas, what might be don about it, but it turns out some much of what we think that we know is not so. and one reason we get it wrong is that companies and interest groups like to ask. politicians, well, like maybe too harsh a word. they mislead. they pretend that was a few law they can make everything better. president obama's says gas cost too much and he feels our pain. >> the serious blblow to your budget. getting hit with a new tax coming right out of your pocket. john: the president took action. >> we have taken steps to softe the blow by making sure that ou cars use less gas. we put in place the toughestto economy standards in history. over the life of a new car the average family will save more than $8,000 at the pump. john: it sounds good. he does not want to save $8,000.

but the magic of fuel economy standards is just one more myth that politician sell us. here to tell us the truth, susa dudley who runs the regulatory studies center in george washington university and james taylor who studies energy for the heartland institute. so what is the problem? president obama just said he explained that he saved the $8,000. >> the problem is, we have hybrid cards and lovehem. we drive them, commute, take them on vacations. wheels of a pickup truck that w use around the firm. now, for are hybrids we value fuel economy. we like gas mileage. from a truck we value different things. the problem with the government rule is that they are ignoring all those other president -- precedents.

the only thing of value is fuel economy. >> 78% favor requiring beeter fuel efficiency, but the car dealers say that this will make cars cost $3,000 more. >> and the government's own estimate is that the most recen rules the you just mentioned, $60 billion to a achieve those. john: these are popular. >> and consumers right now if they want can purchase these automobiles ght now. i am wondering why we're doing is of oil and sticking your nos and other people's business. in order to makecars more fuel efficient of the manufacturers are making tm smaller, using lighter materials and are less crash worthy. your seeing thousands of people dyg on the roads right now that should not be and would no be if we did not have these requirements to our regulations restrictions. john: more people die, but we get more mileage. next read, people is in the aut industry its regation. fights it intensely, but i noticed something weird when th

fuel standard bill was announced . then heads of 13 car makers wer their shaking the president's hand and smiling. everybody looked so happy. what is that about? >> people team that tiara peopl tend to think that industry doe not want regulation but in this tree often supports regulation because it gives them competitive advantage. in this case there are a few of the automaker's there were in support of the rule. also, i think the industry, the face the threat oo different regulations in 50 different states, so this might have been a lesser of two evils. even if it is a $60 billion cost , if everyone had to do it, they could pass it on to consumers. john: just like with other industries, when you're heavily regulated, if you are a large company already making a profit you can assure those costt. at the same time you know the smaller companies, those who have get ideas and innovate cannot afford these costs.

>> gives the big as a advantage. it is a way that they absorb th cost and say it is a necessary evil because we can keep that market share to ourselves. we don't get these innovative products, innovative companies that are be done by regulations. john: a few weeks ago i reporte on another example of tough regulations. check out this cooler amphibiou vehicle. oh, no. i amriving in the water. wait a second. i press a button and the wheels roll up. now i have a real boat. and the company makes even more useful amphibious vehicles. it's terrific rescue vehicle. places where thereeare lots of lak and rivers. this suv-sized one. the company says american regulation makes it very

difficult to get these things approved in america. one reason is that big automakers are so uncomfortle with the current regulations that they join the government. it has no air bag. but you cannot put air bags and above because every time it's a way of the thing would go ff. >> frequent pace planting, but as adults unless the manufacturers ofhese innovative vehicles are affirmatively hiding something from us, why shouldn't w be able to make the interest jack. >> and of passing beyond the. john: do not take on the oil companies. i am td they opposed in energy and, the competition. they don't want to follow the green lead. i assume that is true. laurel is not green, would you say this is a myth. >> absolutely. exxon mobile invested

$600 million an ounce to research for biofuels. they see an opportunity to make money, especially if the government is going to man thei subsidized. they're not opposed to that. john they are, in effect, the biggest investor of green stuff. >> people don't know that, but the auto companies see an opportunity to have more subsidies, more port thrown their weight. why not get on board. john: next, electric cars. great for the environment. i want this totally free thanks to a government subsidy. then a subsidy is nowone. the electric must be better for the trip because congress still subsidizes the electric vehicle. this is a myth? >> electric is not better because we have to get electricity from somewhere, so if the justification is we are reducing emissions, well, now w just a power plantmissions, bus the batteries.

if you put them in automobiles as well, they're also a very significant and our mental problem in terms of recycling and what have you. thank you for that segment. i watch it. i got onof those golf carts myself. may be used -- maybe a little bit of a hypocrite the government justified by saying we are reducing emissions. it is not like to be driving al over the neighborhood. it is just a toy. john: next, democrats regulate and republicans deregulate. you were a republican regulator. >> i was the overseer of the regulators. john: regulatory affairs. >> that's right. and the evidence just does not support that. if you look at the number of regulations that were issued by a george h. w. bush, clinton, and george w. bush, on over their term they ised this same number. president obama has been

regulating more. s record is about 20 percent more than any of his three previous. plus, the notion that president bush was of the regulator, i would say that is a myth. he issued some of the most far reaching regulations on air quality, food labeling, and -- john: heired 95,00new regulator said. did you fight him on this? did you resist? >> the pressure to regulate is intense. and as we've ted before, even in this tree is pressuring. so when everybody wants, regulation can give you some competitive advantage everyone pushes f it. there is no one pushing for epping back to give people more fedom of choice. john: we are on this program. when we talk about gas and oil and what they cost, think about this. over here, this barrel of oil. so let me ask the audience.

of the oil in this barrel, how much of it becomes gasoline? all of this? most of it? don't answer because you're too smart. you are my audience. i ask people in times square. how much of that becomes gasoline? >> all of it. >> i would say about maybe 60-70 % is probably converted into gasoline. john: chief economist. he should know. so what percent of a barrel becomes gasoline? >> it varies by refinery and crude type. john: can you guess what is?

>> the computer. john: the volleyball. >> styrofoam cups. john: aspirin. and not talking about the bottle , but aspirin itself. how about class? okay. you got a right. this is the only thing not made with the oil. and why do you say this is important for people to know? >> it is important because if you're looking around your hous virtually everything that you have ttere is either made from oil or shipped by oil. john: it does not need to be. we could be shipping things of power. >> well, you could. you could. john: if we stop using oil we would not be able to have all o these things. >> there is no question. we have been around for 150 years.

how much new while we have been able to find. john: i am glad you keep findin it. when we retu, more minutes. our real wayo save money and gasoline.

♪ john: whenever gas prices go up they appear to make your car burn less gas. they are all garbage. automakers would install it because it would give them a sales advance. however, there is a way to save on gas without driving less at does work. it is called hyper myelin. special correspondent kennedy does it. >> let's go. come on. john: she lives in los angeles and drives a lot and has mastered for techniques. the first i you have heard of before. lighten up on the gas pedal. >> which means when you're at a stoplight and you are about to go, do not just jam on the gas. yoo're wasting fuel. start slow and just get going

cruising. my drive the people behind you crazy, but who cares. he is that happy because i'm no going as fast as you'd like. john: the next technique controversial, said shifting into neutral and coasting. >> i shifted into neutral. you cannot go in neutral when you're going downhill in california, but it is okay because they're going uphill. you ought to coasted to a stoplight. and i can stay neutral. john: it is against the law to coast the downhill in many states but it does save gas. >> effective and fun. of a sudden you get even addict to putting your car in a true whenever you can. john: filling tires to the recommended level also makes a difference. the robber manufacturers association says 50 percent of americans do this.

another controversial technique is drastic, closely following another car, better yet a truck breaks the wind and creates a little vacuum. there is danger we are told not to tailgate. the hyper mileage techniques to work acc is it on the this will be derek carr. >> i can see the range of my ca for run of gas. youcan see it go up and you can add miles on to the range in just a few short miles i have already added 10 miles to my range. >> you are saving a couple of bucks but risking your life tailgating these people. i risk my life every weekend. i will get to the particulars, but less to say that we're not missing any of that. driving itself as the most dangerous thg the we do. i know until a semis.

full i let them break the wind to give you a little bit more fuel efficiency. john: california said he should allow for feed for miles-per-hour. the 65 miles-per-hour, supposed to be too moderate and 60 feet, 17 car lengths back. no one does that. 3 feet, 13 car lengths. >> in new hampshire is-2 car lengths. john: that was a joke. >> that's not true. john: this does save you some money. testing is illegal down el. >> you kind of slingshot. you accelerate, get going, and put it into neutral. you essentially have to do it i the right hand granma lane. that is the real danger. john:us consider how much money you can save doing this. the average person's nancy

thousand $200 gasoline per year. u in our test saved 60 and a half percent. though the three ended $67 per year. did you come to like it. karzai am addicted. i started doing it in 2008. gas prices have really gone up. i've tried to find a way to not buy a hybrid. i wanted to keep my feet. [applause] this was the only way to do it. john: but you're saving hundred of dollars. is it good for us? we debate that next. [applause] ♪

>> ramp up the availability of ethanol. >> politicians are telling us that ethanol will solve our problems. it sounds right. after all, the main ingredient is corn. corn is grown right here in america. we did things like this commerci. john: of want to be a hero. his group promotes ethanol, though it did not make that commercial. james taylor who added to the heartland institute of environmental climate newslette

is back to ay his argument is absurd. >> it is absurd that we will save money and make our country bett through ethanol. right now ethanol is substantiay more expensive than gasoline, has been. in order to get from a to b we have ted spend more money for fuel. that, of course, hurts the ecomy and reduces our standard of living. john: what do you mean a cost more? >> of the pump you're not seein the difference in the mileage. other words, for ethanol you have to multiply the price by one-half to get the true price comparison with gasoline becaus it is not as concentrated cause the have to use more. john: bob. >> well, he is just wrong. $0.50 below the price of gasoline at the terminal, and i is saving consumers money. john: is a bit lower priced because taxpayers are throwing money you?

>> not all. ii fact, the ethanol industry ceives no tax incentives will soever. the oil industry does. they get plenty of tax breaks. they get more than we do. the ethanol gets nothing. >> i love my friend, bob, but the fact of the matter is it at the mall was less expensive tha gasoline, and others would not have to go to the government telling them, you must pass a law to make people buy our product. [applause] john: wire you pay at the publi trough. >> if there was anything like a free market in energ today we would not need to. oil companies denied marketplac access to at all. they do not allow marketers to sell other blends. john: have a they have the powe to stop the? >> franchise agreements. they absolutely control what is sold. they have control of the gasoline infrastructure, and th only thi that is broken in the

dynamic that has allowed at the mall to be used anywhere in thi country is the renewable fuel standard, a policy that says, you know what, there are important economic energy and i our mental benefits. we want to reduce our dependenc on imported oil. some refiners going to have to use some easure of ethanol. john: they locked him out. >> the at the top companies can set up their own distribution network and have their own franchise agreements. no one from the oil industry or anyone else is going to state legislatures, congress and sk pass a law locking them out and forcing people to file we have. john: second point, i was told is not oil is corn. it is cleaner for the air. >> it is, indeed. reducing the bacteria. carbon monoxide, toxi that are in gasoli, and it is the only liquid transportation fuel that we have that will reduce greenhouse gas emissions. is a great bargain for the

environment. >> if that is true why is almos every environmental group including the ones that support you turned against it. >> it is not really at the oliveira against. they do not like direction mariculture. those are different issues. %-recognize that ethanol is reducing carbon today. theact of the matter is it is renewable. it is the only resource that we have today that is addressing that issue. hn: ii is grown in america. isn't that good for us? >> wireless grown in america as well. regarding the assertion that is better for the environment, it is essentially neutral when compared to gasoline and we're talking missions, carbon. but what bob does not bring up is the fact that growing corn for ethanol is very land intensive. right now 60,000 quare miles of land is developed for etnol production. that is an amount of land equ to the state of hawaii and the

state of new jersey in the stat of delaware in the state of rhode island, the state of connecticut, the state of massachusetts. john: all of this land for ethanol that i could eat. so food costs more. someone is going to start. well you get all the goodies. >> in fact what is happening is farmers are becoming far more efficient, growing more on each acre of land. my graduate from high school we3 got another 84 bushs per acre. today we are getting 160 bushel per acre. so we don't have to expand in orders to give more of the know. john: fd is not cost more? >> it sure doesn't. >> the fact of the matter is ethanol diverts more than 40 percent of the nation's corn crop away from food for humans, feed for cattle ranchers, poultry farmers. that has a negativempact on prices. -in the sense that we pay more as a result.

john: thank you. i say pay for your own ethanol and stop asking me for special deals. coming up, greedy oil companies. i say they actually do a wonderful thing for us. we should thank them. you've disagreed. but next, energy independence. how can that not be good? one of my next guests says independence is meaningless. [applause] ♪

♪ [applause] john: rate is america give most of our oil? >> the middle east and the gulf

of mexico. >> do we help fund terrorism? >> it pumps money intf how is your financial security. john: we should become energy indepeent. we agree wit that, but the cato institute says independence is nonsense. it would increase the price of the middle east. a commodity, energy independenc is not protect you against bad

stf that happens abroad. >> there is no correlation. the gimmick of the day and find it. there's no coelation whatsoever. >> i would argue that if you denominate energyndependence in terms of oil, if you want to change the game entirely in denominated d will we might call fuel choice. you had a segment about ethanol.

yeah of the abundant source and turn it into ethanol which when available to the consumer as an opon in addition to gasoline, in addition, perps, to ethanol use only create conditions that actually can destroy opec. there is a mosque that was in boston that was an incubator fo the attack there. that has its financing from saudi arabia. that makes a real difference. >> i believe almost everything that caters suggests. >> bad idea. john: stop throwing money to these madrasahs. >> they are here. >> if the united states did not send money to saudi arabia for crude, where we get about 10 percent of our crude that's a we just got it from th north sea.

it would not matter mu. we displace the customers d then buy from the saudis. the idea is that our actions somehow enrich them beyond what otherwise would be is to simply not true. >> unless you actually are usin another fu in the mix. this is the point. you guys like consumers to have a say. this i know. sit-down. this requires the government saying we would like the consumer to have skills. this is an important point. what has happened here is thank to the mandate in brazil we hav seen of manufacturers as catche making cars that can hughes alcohol based fuels.

they just don't market and the way in our country. >> they wa as lo as there are exclusively configured to use gasoline. if and when you don't need to mandate it. >> is the cheapest fuel available. you're right about one thing. compressed natural gas, the problem as you understand that it would take hundreds of billions of dollars to invest i the infrastructure necessary to get from gas stations to delivery pipelines. the reason you don't make that is it is not clear it cane profitable ten years from now. if you actually open the market my guess is you'll find the cos

of methanol dramatically declining in that is what the economists think. john: that has not been used on new of four. and i should answer the questio i asked for, is our crude oil come from? 43% from america, next is canada . in saudi arabia, mexico is fourth, venezuela. delirious to go back and listen to politicians promise energy independence. alwaysbout to happen. >> this intollrable excessive dependence. >> they promise. >> burning as closer to energy independence to our country by 1980. >> 1985. >> and ten years. hn: i don't know about ten years, but now we are told that pinkston fracking for natural gas it may happen. >> it could happen if we actually allowed to happen. he us get fuel choice an

exercise that option at the gas price. >> what kind of cars to build a maintenance to put in the cars. >> but i don't know in the future whether it will be most efficient, by valdez so, electric power. we'll know what the most efficient fuel will be we know that it will deliver if it make economic sense. but frank is talking about is the govnment forced transition . >> here is what i'm saying. since 2006 american automakers among others have been manufacturing cars to sell brazil. they have had to make them flexible fuel because governmen there has a mandate.

nonmanufacturing a wholeew car that would be government imposed . this is using the cars that we have by and large. john: thank you. coming up, and i don't know. more. and the audience gets to grill our guests.

♪ [applause] john: we are back th your questions for my guests. jerry tlor from the cato institute, james taylor, not th singer. >> i am the original. john: from the heartland. frk gaffney of the center for security policy. first from my facebook page. what a way to unshackle the energy so that it could be produced more efficiently. >> obviously you can open up federal lands for drilling wher they're currently not allowed, for instance the arctic nationa wildlife refuge in the gulf of mexico is a simple thing that w could do, but the reality is hydraulic fracturing giving as to additional million barrels per day which is a pretty big %-government interference for t

most part, producing -- john: in new york is bay and. >> but most of the reserves right now in north dakota are producing flat out. private lands are producing a tremendous amount of crude. we are seeing another surge fro california. john: the audience. >> you heard the term because oil, and i am wondering if that is a myth. >> we are opposing the point. we are all going to freeze in the dark. >> most people don't appreciate onl 35 percent of the crude-oil we have an upper -- reserves ever gets put into the market. and technology changes allows t be more economic. if we were to me from 35% extraction to 40 percent extracti, iwould be like getting the most to saudi arabia's to e global food market. we will people are saying is we hae hit a dead end and biotechnology and will never innovate and find cheaper ways

to get some of the sons of the market. you know how dubious that proposition is. if current trend continues we wille a larger producer of crude oil and even the saudis b around 2020. >> did you mentioned a government mandate is in place now. wouldn't it make more sense if the solution was to try to you rid of the mandate we already have instead of piling a new on on top of it? >> it is not a government mandate. it is what has developed over the years. developed an entire industry around using gasoline. people who sell it and people who drive their -- build their cars. we have a choice. the industry did choose a long time ago. it is not the government. now we have cell phones. we have an industry that focuse on one particular problem. it does not mean there and less as a practical matter the institutional interests say.

>> right now we have automobile fuel efficiency standards inthe united states that tell other companies of fuel-efficient car have to be. that is forced. they get credit for beating the standard if they produce vehicles. there are millions of cars on the road today that are not fle fuel. the reason, the only reason tha detroit makes this stuff is because they get regulatory preferences to build this stuff. >> is up slightly not true. >> the number of cars in the united states that are marketed as flefuel vehicles does follow that pattern. john: i cannot even fall you guys. aughter] >> they're making a brazil. john: stop. >> yes, ssr. >> today we don't have a truly free market for anything. if we had a truly free market for energy how would that chann the energy we use. and what a lot of the alternative energy be used, eve feasible unnaturally free-market . >> that is a great question.

first of all, energy would be cheaper. how would that she the market? that is a fantastic question because that gets to the heart of the issue which is, i cannot determine, some government bureaucrat cannot determine, even the best energy economic expert in t world cannot tell us what will be 20 or 30 years from now the most efficient, economical energy source. that is why governments to allo the free market to work and therefore entrepreneurs will bring to market those products and technologies that work best. >> you say you want the government to create a mandate to give us more choice in the market, but we already have a choice. we can choose to buy or not to buy products. are you really is saying you don't like the choices we have made? >> i know think so. what i am saying is you could have much more choice. we are talking about why the prices are so high. it is that our vernment controlling the prices. it is the saudi government. when they decide that are producing too much and it is going to reduce their profit,

they drive down the amount of that opec supplies. that is so we can do it we hhve to. >> the fact that they make decisions about how much crude oil to produce is a fact of lif like the fact that the sun rise in the morning. there's nothing we can do about it. the best that we can do is provide for an efficient marketplace that allows for the right amount -- the right marke response. in the government tries to respond jimmy carter wanted to e better fuels. george bush, the second george bush wanted freedom cars run by fuel cells. you don't hear that being discussed today. we heard promises of methanol being cheaper than gasoline in the 70's, and it is still a dollar a gallon more expensive in the latest version is methanol. if and when this is competitive believe me, people want to and will make tons of money. john: on that note, thank you. coming up, what i say every tim we get to the gas station we

ought to think of oil companies. ♪ we went out and asked people a simple question: how old is the oldest person you've kno? we gave people a sticker and had them show us. we learned a lot of us have known someone who's lived well into their 90s. and that's a great thing. but even though we're living longer, one thing that hasn't changed much is the official retirement age. ♪ the question is how do you make sure you have the money you need to enjoy all of these years. ♪

♪ john: to final minutes. first, better for your car if you buy premium gas. it must be. it costs more. >> i guess it keeps your engine cleaner. >> when i put regular in my car it runs out faster.

>> i feel like it is safer to put in more premium gas. john: it is not safer or better. the few cars with high compression engines like tories and corvettes need -- need higher octane, but for 90 percent of the cars it is no better. just waste your money. now, the men's wear most of you probably don't figure with me, most everyone says gas costs to much. >> today was over $4. that is ridiculous. much too much. >> wait too much. >> how low is the american public supposed to afford. john: and here we keep close track of gas prices. >> t 16th straight day. john: the most popular anchor tells me. >> zero companies are by your friend. we are getting hosed at the pump . john: those? of many of you agree with bill o'reilly? a few of you. all right this is a "stossel" audience. the majority of your right. we would be oking to get an

equal hong when we pay for health care or college tuition because gas is cheap. we should think those companies. think what they do to bring us gallon ofgas, such debt of the ground sometime from moral to the war zones are deep beneath the notion. drills now been then dig sideways through as much as 7 miles of earth. what they find is then delivere through long billion-$ pipeline and put in monstrously -- monstrously expensive tankers to ship across the ocean and then refined into several types of gasoline, transported and trucks that cos and is a thousand dollars until finally it gets here to your gas station. and even after all that the gasone per ounce still costs less than the ball rather that they sel at those gas stations. vernment produced gas it would cost $50 per gallon, and there

would be shortages. people complain about oil company profits. we should be glad that they mak lots of money. profit is what gets them to fin more oil so that we have supplies tomorrow. and just how much profit to the make? well, apple's profit margin is about 24%. mcdonald's, about 20%. exxon mobile, the biggest oil company, a 11%. how much profit is that per gallon of the pump? people think it is a dollar or two, but exxon clears about $0. per gallon. governments, by contrast, gabba -- grab an average $0.27, the average gas tax. if anyone is greedy it is government. oil companies cannot be too greedy because they have competition. that is our show. we will have another new "stossel show next thursday nanette 9:00 p.m. on that fox business network. thank you for watching. ♪ [applause]

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