June 13, 2007
Lugar Names Purdue Professor Wally Tyner Energy Patriot
"Wally Tyner is making enormous contributions to our understanding of the effectiveness of past and current U.S. energy policy as well as the ability for future policy to stimulate private sector investment in renewable fuels and reduce government cost. I am excited about his ongoing research which puts him at the forefront of economic analysis of energy policy," said Lugar.
"As the United States Senate considers energy legislation this week, we have the opportunity to make significant steps to bolster our energy security and national security. Dr. Tyner's research helps inform our own legislative efforts to reduce U.S. dependence on foreign sources of oil."
On Monday, June 4, Lugar presented Dr. Tyner with a certificate of recognition in Washington, D.C.
"I've always been interested in energy issues. What can we do in a policy sense? How do we create the right set of incentives (to support the ethanol industry, but prevent exceptionally high corn prices)? Energy issues are multifaceted. You have to know about technology, institutions, the natural resource base, and economics," said Dr. Tyner.
"Markets alone won't make us more energy secure. When we have something markets can't do, we have to come up with policies to correct these failures. We have to have policies to make us energy secure. I'm an energy economist. My job as an analyst is to do as good a job as I can estimating what the consequences might be of any alternative that policy makers consider," continued Dr. Tyner.
An editorial profile of Dr. Tyner's career is below and may be published in its entirety. A photo of Lugar and Dr. Tyner is also available at: https://www.lugar.senate.gov/energy/links/patriot/.
For more than a decade, Lugar has stressed the strategic importance of energy security and the economic and security risks of dependence on oil. His legislative efforts promote sustainable energy production and use, incentives for renewable fuels like cellulosic ethanol and E85, increased fuel economy in cars and clean coal. The Lugar Energy Initiative at https://lugar.senate.gov/energy highlights the repercussions of America's dangerous dependence on imported oil and provides information on energy legislation introduced by Lugar, commentary by outside experts and information on alternative and renewable energy sources.
Additionally, the energy bill currently being debated in the Senate includes major provisions initiated by Lugar. For more information, read "Senate Energy Bill Includes Many Lugar Initiatives" at https://www.lugar.senate.gov/press/record.cfm?id=276481&&year=2007&
Past Lugar Energy Patriots include: Nancy Ho, Ph.D, Molecular Biologist, Purdue University's Laboratory of Renewable Resources Engineering; Tony George, President of the Indianapolis Motor Speedway; Mike Hudson, CEO I-Power; Bill Keith, President, SunRise Solar Inc.; Charlie Smith, CEO Countrymark Co-op; Kellie Walsh, Executive Director, Central Indiana Clean Cities Alliance; and Marty Sennett, General Manager of CityBus.
Profile of a Patriot
Each month, Senator Lugar profiles a student, professional, scholar, or member of the business community who has demonstrated leadership and initiative in taking concrete action to reduce America's dependence on foreign oil. In addition to the profile posted here, individuals will receive a certificate designating them as a Lugar Energy Patriot and a letter of congratulations.
Dr. Wallace E. Tyner
In his most recent visit to Washington, D.C., Purdue University professor and economic analyst Wally Tyner walked the hallways of Capitol Hill wearing a necktie familiar to his students: The maroon tie, festooned with monetary symbols of the dollar, euro, pound, and yen, hinted to the cost-benefit analysis that puts Dr. Tyner at the forefront of economic analysis of energy policy.
A native of Texas, Dr. Tyner studied chemistry as an undergraduate student and spent two years as a Peace Corps volunteer in India. His experiences in the Peace Corps led him out of the lab and to the study of agricultural economics because he wanted to work "on real world issues and real world problems."
His scientific background, however, gives him the ability to understand the language and world of science, and incorporate it into his economic and policy analyses. It also equips him to work with people from a variety of backgrounds as his research has involved agriculture, natural resources and energy.
"I've always been interested in energy issues. What can we do in a policy sense? How do we create the right set of incentives (to support the ethanol industry, but prevent exceptionally high corn prices)?" said Dr. Tyner.
"Energy issues are multifaceted. You have to know about technology, institutions, the natural resource base, and economics," he continued.
Whether speaking to Rotary clubs, policy makers, the media or at industry conferences, Dr. Tyner reminds his audience that 60 percent of U.S. oil is imported and that this dependence creates a serious national security risk as well as military and economic costs that are not accounted for in the market price of gasoline at the pumps. He goes on to examine the history of U.S. ethanol policy, evaluate the economics of ethanol production and review policy alternatives for the future.
"During the twenty year period from 1983 to 2003, oil cost $10-30 per barrel, and the ethanol subsidy was about 50 cents. As oil prices went through the roof in 2004 to 2006, the subsidy remained the same which led to a gold rush to ethanol," explained Dr. Tyner.
For Dr. Tyner, U.S. ethanol policy to date exemplifies "the law of unintended consequences" where ethanol is highly profitable due to the subsidy and price of oil, and the result is increasing corn prices.
"Markets alone won’t make us more energy secure. When we have something markets can't do, we have to come up with policies to correct these failures. We have to have policies to make us energy secure. I'm an energy economist. My job as an analyst is to do as good a job as I can estimating what the consequences might be of any alternative that policy makers consider."
Another area where Dr. Tyner argues that markets fail is global warming. His research focuses on the policy pathways which can correct these “externalities�? and make progress on energy security and the reduction of green house gas emissions.
In a recent paper presented at the National Agricultural Biotechnology Council Conference, Dr. Tyner laid out the following policy alternatives that would address the twin goals of reducing petroleum consumption and cutting greenhouse gas emissions:
* Make no changes and let the other corn using sectors (particularly livestock) adjust as needed.
* Keep the subsidy fixed but reduce it to a level more in line with crude oil prices around $60.
* Convert the subsidy from a fixed subsidy to one that varies with the price of crude oil.
* Construct a subsidy policy with two components: 1) a national security component (either fixed or variable) tied to energy content of the fuel, and 2) a component tied to green house gas emissions reductions of the liquid fuel.
* Provide higher subsidies for cellulose based ethanol in hopes of accelerating development and implementation of that technology.
* Use an alternative fuel standard instead of subsidies to stimulate growth in production and use of alternative fuels.
* Use a combination of an alternative fuel standard and a variable subsidy.
As a next step, Dr. Tyner hopes to build models that account for price, market and technology uncertainties and simulate what happens under each policy option. His goal is to evaluate how each policy vehicle stimulates investment and reduces cost for the government and the taxpayer.
At Purdue, Wally Tyner is well-respected among faculty and students and known for his personable and interactive classes. On the first day of class, Professor Tyner tells students his objective is not for them to acquire the same passion, but to understand why his interests are so deep.
Dr. Tyner's passion for economic analysis and driving energy policy is evident from his in-depth research that continues to inform students, industry leaders and legislators of the options that exist to address U.S. dependence on foreign oil.
"I'm a firm believer that better information leads to better decisions," said Dr. Tyner.
Senator Lugar agrees. That is why we congratulate Wally Tyner on being our June 2007 Lugar Energy Patriot.