Friday, December 27, 2013

The CO2 Advantage of Methanol

Question: If we had a sizable number of cars on our roads burning methanol rather than gasoline, would it put less CO2 into the atmosphere? If so, how much less? We haven't yet seen any studies that directly answer the question, but we've found enough clues to make the answer quite clear.

Let's start with the creation of the fuel. Refining gasoline produces considerable CO2 emissions. To produce one gallon of gasoline puts 2.45 pounds of CO2 into the atmosphere. (Source)

Methanol is a little more difficult to determine because there are many ways to create methanol, and each method creates different amounts of CO2. But all the methods produce less CO2 than refining gasoline. Fuel Freedom writes:

"Studies indicate that methanol produced from natural gas is somewhat less greenhouse gas intensive than gasoline produced from conventional oil, and substantially better than high carbon, non-conventional gasoline.

"Oil refining impacts air and water quality, produces toxic solids and sludge, and is the most energy intensive industry in the U.S. On the other hand, methanol produced from natural gas requires only a simple gasification process that avoids the toxic byproducts of oil refining." (Source)

That's methanol from natural gas. In a technical paper entitled, Large Scale Methanol Production from Natural Gas, the authors say it makes the process more productive to add CO2 to the syngas. Most methanol is created by heating up natural gas until the molecules separate, producing "synthesis gas" or "syngas." The authors of the technical paper write: "The addition of CO2 permits optimization of the synthesis gas composition for methanol production. CO2 constitutes a less expensive feedstock, and CO2 emissions to the environment are reduced. The application of CO2 reforming results in a very energy efficient plant. The energy consumption is 5-10% less than that of a conventional plant." (Source)

That was technical jargon, but what they're saying is that you get more methanol from the same amount of natural gas if you add CO2 to it — and it's less expensive to make because CO2 is cheap. It's an industrial waste.

But some new technologies are even better. In an article in the Wall Street Journal, Nobel laureate George Olah explains how he and Surya Prakash created a breakthrough that won them a million dollars for their innovations:

"Thanks to recent developments in chemistry, a new way to convert carbon dioxide into methanol — a simple alcohol now used primarily by industry but increasingly attracting attention as transportation fuel — can now make it profitable for America and the world to reduce carbon-dioxide emissions.

"At laboratories such as the University of Southern California's Loker Hydrocarbon Research Institute, researchers have discovered how to produce methanol at significantly lower cost than gasoline directly from carbon dioxide. So instead of capturing and 'sequestering' carbon dioxide...this environmental pariah can be recycled into fuel for autos, trucks and ships." (Source)

Olah and Prakash are not the only ones working on using CO2 to produce methanol. In Iceland, the company Carbon Recycling International captures CO2 produced by industrial processes and makes renewable methanol using geothermal energy. Their CEO, K.C. Tran, says, "We often describe our technology as liquid electricity because we store the electricity in the form of liquid, for consumption in today's internal combustion engine based cars. It is similar to storing electricity in a battery. We capture CO2 and turn it into renewable methanol for gasoline blending in the US and EU." (Source)

Describing the Icelandic company's commercial scale plant, Wikipedia says, "Initially the major source will be the CO2 rich flue gases of fossil-fuel-burning power plants or exhaust from cement and other factories. In the longer range however, considering diminishing fossil fuel resources and the effect of their utilization on earth's atmosphere, even the low concentration of atmospheric CO2 itself could be captured and recycled via methanol, thus supplementing nature’s own photosynthetic cycle. Efficient new absorbents to capture atmospheric CO2 are being developed, mimicking plants' ability." So methanol could be made directly from CO2 in the air.

"Methanol may be viewed as a compact way of storing hydrogen," says Wikipedia. "Methanol has a high octane rating, making it a suitable gasoline substitute. It has a higher flame speed than gasoline, leading to higher efficiency..." (Source)

A method for creating methanol using CO2 and sunlight, developed at the University of Texas at Arlington, uses very little electrical power and can be "scaled up to an industrial scale to allow some of the CO2 emitted from electrical power plants to be captured and converted into" methanol. This would make electric cars even greener because the CO2 generated for electricity is captured and used. (Source)

Researchers are innovating other ways to convert CO2 into methanol using very little energy. A team led by Professor Frédéric-Georges Fontaine at Université Laval has accomplished a very efficient method. As Science Daily puts it, "the results have been spectacular." They're now working on ways to make it profitable. (Source)

In an article in Forbes, a Nobel Prize winning physicist, Carlo Rubbia, says natural gas has the most promise as an abundant, clean fuel that can help reduce global warming. He said one of our most important goals should be to convert the transportation sector from gasoline to methanol. "Natural gas can be integrated into human society more quickly and easily than nuclear, solar or wind," Rubbia said, "and because of global warming, speed is of the essence."

"For transportation, he suggests producing methanol liquid by recombining hydrogen with CO2 that has been removed from the atmosphere. Cars burning methanol would still produce CO2 emissions, but as long as the fuel is made with captured CO2 they would not increase existing CO2 levels.

"Because methanol can be handled like ethanol or gasoline is now, society could avoid several of the obstacles it would face if it tried to convert transportation to hydrogen, including the need for new storage and transportation infrastructure and the need to switch from internal combustion engines to electricity-producing fuel cells." (Source)

Another important consideration about the CO2 impact of methanol made from natural gas is that flaring natural gas (burning it just to get rid of it) now produces a huge amount of CO2 without any benefit whatsoever only because methanol is not allowed to compete with gasoline at the pump. If that natural gas was converted to methanol and burned as a fuel instead of flaring it, the methanol could displace billions of gallons of a much more polluting fuel (gasoline) that is now being burned for transportation. The methanol which is being flared would be used instead to propel cars down the road and billions of gallons of gasoline now being burned for transportation fuel would not have to be burned, considerably reducing total CO2 emissions. 

A report by GE stated: "Gas flaring [in America] emits 400 million metric tons of CO2 annually, the same as 77 million automobiles, without producing useful heat or electricity. Worldwide, billions of cubic meters (bcm) of natural gas are wasted annually, typically as a by-product of oil extraction." (Source)

A report by Ceres says, "At current market rates, oil is approximately 30 times more valuable than natural gas. As a result, producers have chosen to flare much of the gas they produce, rather than invest in the infrastructure necessary to collect, process and market it...

"The practice of natural gas flaring has generated significant public attention after recent NASA satellite images revealed that North Dakota’s gas flares can be seen from space, burning nearly as brightly as the city lights of Minneapolis and Chicago." (Source)

In a New York Times article by Clifford Krauss, he writes, "With cheap (natural) gas bubbling to the top with expensive oil, the companies do not have an economic incentive to build the necessary gas pipelines, so they flare the excess gas instead.

"Flaring is environmentally less harmful than releasing raw natural gas into the atmosphere, but the flared gas still spews climate-warming carbon dioxide into the atmosphere." (Source)

Reuters reports: "The World Bank estimates that the flaring of gas adds some 360 million tonnes of carbon dioxide (CO2) in annual emissions, almost the same as France puts into the atmosphere each year or the equivalent to the yearly emissions from around 70 million cars." (Source)

With the passing of the Open Fuel Standard, we would soon have a large percentage of cars on the road capable of burning ethanol and methanol as well as gasoline, and there would be a profit-incentive for waste-into-fuel plants to spring up in every town and city, further cutting the greenhouse gas emissions. Rather than municipal waste being dumped into a landfill where it leaks tremendous amounts of methane into the atmosphere — a greenhouse gas far worse than CO2most of the waste could be turned into fuel, as one facility is now doing in Vero Beach, Florida. And turning the trash into fuel reduces the bulk going into landfills by 90%. (Source)

The production of methanol is one factor in its CO2 emissions, and it easily wins that competition with gasoline because methanol production creates substantially less CO2 than refining oil into gasoline. The other factor, of course, is burning the fuel in vehicles. This is a more straightforward thing to measure. Robert Zubrin, president of Pioneer Energy and an accomplished engineer, discovered during his methanol experiment that methanol produces less CO2 when burned than gasoline. "Carbon dioxide emissions were reduced by 35 percent," he writes. In a recent paper of his, he graphs the results of testing M100 (pure methanol), M60 (sixty percent methanol, forty percent gasoline), and E10 (normal gasoline, containing ten percent ethanol). Here are the results:

Read more about it here. So using methanol for fuel instead of gasoline would lower CO2 emissions from vehicles by 35%. Methanol is a high-octane, clean-burning fuel and gasoline should have to compete with it in a free market. This could happen quickly. It was not difficult for Zubrin to adjust his regular gasoline-only car to be able to burn methanol. The only part he had to replace was a fuel pump seal that cost him 41 cents. Methanol could very well be the silver bullet everyone has been searching for. At the very least, it could cut CO2 emissions from our existing cars immediately while new technologies like electric cars have a chance to gain a larger share of the market. A few relevant points about methanol from Wikipedia:

"Methanol is in fact toxic and eventually lethal when ingested in larger amounts. But so are most motor fuels, including gasoline and diesel fuel. Gasoline also contains many compounds known to be carcinogenic (e.g. benzene). Methanol is not a carcinogen, nor does it contain any carcinogens.

"Compared to gasoline, however, methanol is much safer. It is more difficult to ignite and releases less heat when it burns. Methanol fires can be extinguished with plain water, whereas gasoline floats on water and continues to burn. The EPA has estimated that switching fuels from gasoline to methanol would reduce the incidence of fuel related fires by 90%.

"An accidental release of methanol in the environment would cause much less damage than a comparable gasoline or crude oil spill. Unlike these fuels, methanol, being totally soluble in water, would be rapidly diluted to a concentration low enough for microorganisms to start biodegradation. Methanol is in fact used for denitrification in water treatment plant as a nutrient for bacteria." (Source)

Fuel Freedom has this to say about the possibility of methanol as a transportation fuel:

"Development of methanol as a fuel source has suffered from a lack of physical and legal infrastructure. Steps that could make methanol more viable as an alternative fuel include:

1. Passage of the Open Fuel Standard that would mandate that new cars sold in the U.S. support multiple fuels, not just gasoline;
2. Government protocols for the conversion of existing cars to flex-fuel vehicles capable of running on high concentrations of methanol and the installation of flex-fuel pumps at gas stations so consumers can choose between competing fuels and blends;
3. Construction and streamlined permitting for new plants, initially to convert natural gas and coal to methanol, and later to convert more sustainable feed stocks such as biomass. Because methanol is so easily produced, facilities could be small and decentralized, located near to gasoline stations." (Source)

If you would like to see a cleaner, safer, cheaper alternative to gasoline at the pump — a fuel that releases less CO2 into the atmosphere — start here: First Things First.

Author: Adam Khan, the co-founder of and co-author of the book, Fill Your Tank With Freedom. 

Thursday, December 26, 2013

Top Seven Myths About the Open Fuel Standard

MYTH #1: The bill favors one fuel over others. The Open Fuel Standard allows fuels to compete with each other by enabling regular gasoline-only cars to burn not only gasoline, but methanol and ethanol too. It would allow us choice at the pump. It is an inexpensive improvement to the car, and methanol and ethanol can be made from a huge variety of feedstocks. The bill doesn't favor any of them.

MYTH #2: It will make food more expensive and lead to food shortages. The largest influence on rising food prices for the last fifty years has been rising oil prices. Ethanol production has had a miniscule effect on food prices. And the Open Fuel Standard would make cars capable of burning methanol as well, which can be made inexpensively from municipal waste, natural gas, coal, etc. These, of course, would not raise food prices — they would lower prices as transportation fuel becomes less expensive.

MYTH #3: The bill will cost taxpayers. The bill itself will cost taxpayers nothing, and it subsidizes nothing. Flex fuel cars are sold at the same price as gasoline-only cars. By allowing other fuels to compete with gasoline, the price for fuel will come down, saving drivers money. Right now, both ethanol and methanol could be sold for far less than gasoline, and that is in the absence of a large market and the economy of scale. And both can both be made from material abundant within the United States, creating millions of jobs, strengthening the American economy and reducing our trade deficit.

MYTH #4: It will interfere with a free market. Just the opposite is true. The fuel market is not free today. The Open Fuel Standard would create a free market. Oil enjoys a virtual monopoly over the transportation fuel market, held in place with political contributions, influence over automakers (because oil interests invest in car manufacturing companies), blocking access to alternatives at fuel stations, funding propaganda against competitive fuels, and lobbying. Saudi Arabia alone has a hundred full-time lobbyists in Washington, D.C. OPEC’s price-fixing cartel is illegal, but international bodies are outside the reach of our judicial system. The Open Fuel Standard is a way to get around these barriers to a free market.

MYTH #5: We can solve our problems by drilling more American oil. We cannot end oil’s monopoly by drilling more oil. We cannot end OPEC’s ability to manipulate world oil prices by drilling more oil. American oil companies sell their oil at the world’s going oil price, which is set by OPEC. Many new sources of oil have been discovered over the years. OPEC responds by cutting their production to keep oil prices high. They collectively produce over 40 percent of the world’s annual oil production, which is enough to make a small drop in their output significantly raise the price per barrel of oil worldwide. One country alone cannot control world oil prices. That’s why Saudi Arabia joined together with the eleven other oil producing nations of OPEC.

MYTH #6: We can solve our problems by using less oil. When we use less oil, there should theoretically be more oil available on the world market, which should lower world oil prices, right? Unfortunately, when this has happened, OPEC responded by cutting its production to keep oil prices high. The demand for oil is so high (and continually growing) that OPEC doesn’t have to cut their production very much to raise prices.

MYTH #7: Alcohol fuels are bad for car engines. Alcohol dries out rubber, and cars used to have rubber fuel lines. Without additives, gasoline is low in octane, so lead was added for seventy years. In 1987 lead was made illegal, and ethanol replaced it as an octane booster, so automakers began using ethanol-compatible fuel lines. Brazil has been using ethanol in their cars for decades (cars made by Ford, GM, Toyota, etc.), and they’ve found that car engines burning ethanol typically last as much as three times longer, for two reasons. First, ethanol burns much cleaner and leaves no carbon deposits when it burns. Alcohol also burns cooler. Engines heat up and cool down thousands of times, and an engine that doesn’t get as hot creates less stress on the engine's components over time. Alcohol fuels are good for car engines.

Oil’s monopoly of fuel leaves America’s economy vulnerable to oil price hikes. Every time oil prices have spiked since World War II, America experienced a recession. OPEC’s exploitation of oil's monopoly has generated vast funds, some of which is used to fund terrorism around the world. The two most important members of OPEC are Saudi Arabia and Iran, both of whom are spending their oil money on terrorism and the expansion of fundamentalism. Iran funds its nuclear program and supports the terrorist army, Hezbollah. Saudi oil financially supports the Taliban, Al Qaeda, and the building of mosques and madrassas all over the world that promote fundamentalist, intolerant, militant Wahhabi Islam.

As OPEC’s income has risen over the years, so has the scale and pervasiveness of Islamic fundamentalism and terrorism. The Open Fuel Standard would make America economically stronger and physically safer. Let’s make it happen:

Tuesday, December 24, 2013

Something Spectacular is About to Happen

Fuel Freedom has been getting their ducks in a row for a long time. And in the year 2014, they will demonstrate their painstaking preparation. Are you ready to see something amazing?

In 2014, the Fuel Freedom Foundation is going to launch several state demonstration projects showing how existing cars can easily be converted to run on alcohol fuels such as ethanol or methanol.

Through these state pilot projects and a public awareness campaign, Fuel Freedom will demonstrate the path to fuel choice and competition, to economic dynamism, to a new era in national security, and to breaking oil's stifling monopoly once and for all.

Sign up for their updates here, like them on Facebook, and share their posts with your friends. And if you have money to donate, send it their way. This could be the year that changes everything.

Saturday, December 14, 2013

Alcohol's "Gasoline Gallon Equivalent" Measurement is Higher Than Predicted

The oil industry has done its best to discredit alcohol fuel for over a hundred years, and one of the criticisms they've leveled most consistently against ethanol is that it has less energy per gallon than gasoline, as measured in BTUs (British Thermal Units — a measure of heat). But people who frequently use ethanol to fuel their cars, such as drivers in Brazil, have long noted that the mileage they get from ethanol is better than what is predicted by BTU measurements.

The Fuel Freedom Foundation decided to find a definitive answer this question for both ethanol and methanol. In the introduction to their white paper entitled, Is the Gasoline Gallon Equivalent an Accurate Measure of Mileage for Ethanol and Methanol Fuel Blends?, Eyal Aronoff and Nathan Taft wrote:

A presentation composed by Henry Joseph Jr. — the Product Technology Emissions Laboratory & Engine Test manager of Volkswagen Brazil — for the Brazilian Vehicles Manufacturers Association claims that ethanol performance in Brazilian vehicles is nine percent higher than predicted by energy content. Meanwhile, a study conducted by the University of Riverside claims despite a lower energy content, higher efficiency is obtained from ethanol in optimized engines.

Alcohol gets better mileage than we have been led to believe. This is an important point for many reasons. On the other hand, it may be less important for individual drivers because proponents of fuel competition are not suggesting we do away with gasoline. Once the U.S. has achieved fuel competition, whenever a driver wants to buy a fuel with greater energy density (for a longer trip or fewer refuelings, or for whatever reason), the driver will be able to put gasoline in the car (or butanol, when that becomes available).

This is one of the biggest advantages of cars that allow true fuel competition: They allow the driver to choose. If you would like to see fuel choice and competition in America, there are many things you can do to help. Here are some ideas.

Read more: Gasoline's Greater Range.

Thursday, December 12, 2013

Methanol Fuel In China...And America?

There are now more than a million methanol cars on the road in China and estimates show the fuel substitutes for 5-8% of gasoline consumption — about the same proportion that corn ethanol provides in the United States.

In this country, the proposal has been that we derive methanol from our now-abundant supplies of natural gas. California had 15,000 methanol cars on the road in 2003 but curtailed its experiment because natural gas supplies appeared to be too scarce and expensive! Instead, the main emphasis has been on tax incentives and mandates to promote corn ethanol.

China has vast shale gas supplies and could benefit from America’s fracking technology. We could benefit strongly from China’s greater experience in developing methanol cars. The pieces of the puzzle are all there. Perhaps George Olah’s proposal may be the catalyst that puts them all together.

Ironically, all this began with a Chinese-American collaboration in 1996. At the time, China had little knowledge or interest in methanol but was persuaded by American scientists to give it a try. Ford provided a methanol engine and China began ramping up its methanol industry and substituting it for gasoline. As a result, China is now the world’s largest producer of methanol, with about one-quarter of the market.

A year ago the Chinese national government was about to mandate a 15% percent methanol standard for gasoline when it ran into opposition from executives in its oil industry. Those leaders have since been deposed, however, and the 15% mandate may go ahead this year. In the meantime, provincial governments  have developed their own standards, with the Shanxi province west of Beijing in the lead.

Ironically, because methanol is only half the price of gasoline, many local gas stations are diluting their gasoline with methanol anyway in order to shave their costs. As a 2011 Energy Policy article by Chi-jen Yang and Robert B. Jackson of Duke University’s Nicholas School of the Environment reported, “Private gasoline stations often blend methanol in gasoline without consumers’ knowledge… In fact, its illegal status makes methanol blending more profitable than it would be with legal standards. Illegally blended methanol content is sold at the same price as gasoline. If legalized, standard methanol gasoline would be required to be properly labeled and sold at a lower price than regular gasoline because of its reduced energy content. Such unannounced blending is now common in China.”

So both countries are feeling their way toward a methanol economy. As Olah points out, the problem in the U.S. is that the various advantages given to ethanol have not been extended to methanol. “One means of addressing this inequity would be for Congress to pass the bipartisan Open Fuel Standard Act of 2013, which would put methanol, natural gas, and biodiesel on the same footing as ethanol (but without subsidies and without telling consumers which one to choose) for use in flex-fuel cars.”

The above is excerpted from the article, The U.S. and China on Methanol: Two Roads Converge by William Tucker.

Sunday, December 8, 2013

Gasoline is the Junk Food of the Fuel Market

Gasoline needs additives* to make it palatable to an engine (which will knock or fail to run without the additives). And many of those additives are carcinogenic. And even with the additives, gasoline burns dirty, creating smoke and grime. Gasoline is potentially cheap, and once other fuels can compete with it, its cheapness will be its only advantage.

Pure methanol or ethanol can be used by an engine without any additives. They are both naturally high in octane and burn clean with high performance.

* Benzene, toluene and xylene are added to gasoline, among other additives.

Author: Adam Khan, the co-founder of and co-author of the book, Fill Your Tank With Freedom. 

The Joy of Gouging

Unlike other commodities (that compete in the marketplace) the world price OPEC sets for oil has no relation to what it costs to produce the oil. Oil companies could make a handsome profit at 20 or 30 dollars a barrel. In 1999, Saudi Oil Minister Ali al-Naimi publicly admitted that the all-inclusive cost of producing a barrel of oil in Saudi Arabia — which has the easiest-to-produce oil in the world — is $1.50. That is not a typo. A buck fifty. The world price is over $100 a barrel, and the country that has the most influence on that price is Saudi Arabia.

Worldwide, it costs most oil producers about $5 to produce a barrel of oil.

The oil industry is shamelessly gouging.

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

OPEC's ability to illegally raise global oil prices allowed them to make over a trillion dollars two years in a row

Fuel Competition Will Change the World

Fuel competition 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, drastically improve our national security, help solve our garbage and landfill problem, help people in developing nations rise out of poverty, help prevent mental illness, put fewer military personnel in harm's way, and reduce the amount of pollution and greenhouse gases that are sent into the atmosphere, into the ocean, and into the ground.

Sunday, December 1, 2013

How Will Oil Prices Respond to the Iran Deal?

The Huffington Post ran a story last week entitled, Why Oil Prices Will Rise Despite Iran Deal. Here's why: Iran and Saudi Arabia are enemies, and Saudi Arabia will probably cut their oil production drastically in order to punish the U.S. for making the deal with Iran.

So even though Iran will add over a million barrels of oil per day to the world market (which would lower oil prices if nothing else happened), Saudi Arabia could drop their production by two million barrels a day, which would raise oil prices and hurt the world's economy, including America's.

The United States doesn't import much oil from Saudi Arabia, but that doesn't matter. Oil sells for the global price, no matter where it is produced, and a higher global price depresses and slows the American economy (and the rest of the world's). When oil prices rise, so does America's unemployment rate.

Saudi Arabia can deliberately threaten the U.S. economy, and deliver on the threat — not because they produce a large percentage of the world oil supply, but because in our fuel market, gasoline has no competition. Saudi Arabia does, in fact, produce a large percentage of the world's oil, but that's not the reason they can inflict damage on the American economy.

Even though it would be very easy and inexpensive to introduce robust fuel competition in America, we have failed to do so and that is the only reason we are vulnerable to Saudi Arabia's threats. If we had fuels available to compete with gasoline at the pump when Saudi Arabia raises the price of oil, drivers would simply switch to other fuels like methanol and ethanol, both of which are made in America from abundant American resources and could sell for far cheaper than gasoline right now.

Is it okay with you that the economy of the greatest country on earth is subject to the whim of a small, backward, misogynistic monarchy? I hope not. Our intolerable vulnerability can be completely eliminated, and within a very short time. The answer to oil's monopoly is fuel competition. The fastest way to achieve it is with the Open Fuel Standard. Please let everyone know. We need to make this happen quickly.

Author: Adam Khan, the co-founder of and co-author of the book, Fill Your Tank With Freedom. 

Saturday, November 30, 2013

A Demonstration of Why Drilling or Fracking More American Oil Will Not Lower Gas Prices

It seems obvious that if American oil companies produced more oil in America, gasoline prices for Americans would come down.

But that isn't the case.

Why not? Oil is sold all over the world. And oil prices are set by OPEC (here's how that works). So every oil company — including every American oil company — sells its oil at the going rate. That is, they sell it at the world market rate, no matter who they're selling it to.

In the midst of our recent Great Recession, with people driving much less, with more fuel efficient cars on the road (in other words, Americans were buying less gasoline) the second-largest American oil company, Chevron, enjoyed "a 43 percent jump in quarterly profit," according to a New York Times article.

"The numbers released on Friday were the latest in a string of huge profits from the industry, which got a lift from the highest oil prices in nearly three years...Chevron’s profit rose to $7.7 billion...from $5.4 billion...a year earlier."

In other words, this American oil company benefits greatly from the global high price of oil that OPEC sets. The oil Chevron pumps from American oil fields is sold to Americans at OPEC's price, which generated obscene profits at a time Americans were suffering financially. They didn't sell their oil at "competitive prices" as they could easily do. They didn't give Americans a better deal than they could get anywhere else. They sold it at OPEC's prices, which was so high above their costs for production, their profits runneth over. And they were not alone.

Drilling or fracking more American oil will not lower gasoline prices at the pump.

This is not to say it will be any cheaper to import it from somewhere else. Yes, as long as we are using oil, we should drill it in America. It will at least improve the trade deficit and create American jobs. But if we want to pay less at the pump, gasoline needs competition. Drilling more will not provide that.

But the Open Fuel Standard will.

Author: Adam Khan, the co-founder of and co-author of the book, Fill Your Tank With Freedom. 

Tuesday, November 26, 2013

A Free Market For Fuel

Fuel is not sold in a free market. In the last hundred years, the oil industry has shut down, smeared, discredited, and blocked competing fuels. Right now, methanol could be sold for half the price of gasoline. But because of a pointless EPA regulation, it’s not sold as a fuel in the United States. Normal gasoline-only cars can efficiently burn methanol, which can be made inexpensively from three resources America has in abundance: coal, natural gas, and municipal waste (among many other resources).

Ethanol is another example. Oil companies have blocked ethanol from being sold at most gas stations. Petroleum interests have also been trying to discredit ethanol as a fuel for literally a hundred years.

Petroleum has a monopoly, and OPEC has been exploiting it. OPEC was created to raise world oil prices, which they’ve successfully done since 1973. The OPEC nations produce 40 percent of the world’s annual oil supply, which is enough of a percentage that they can (and they do) regularly decide to lower their production to raise the world price of oil.

OPEC is an illegal price-fixing cartel, and if they were operating within our borders, they would be prosecuted for it. What they are doing is also illegal internationally, but nobody is likely to prosecute them because OPEC could, and probably would, retaliate by stopping their production, which would cause a worldwide depression.

Free trade and the economy as we know it completely depend on transporting goods from place to place. When the price of transportation fuel rises, the price of everything rises. Every time oil prices have spiked since World War II, we’ve had a recession in America.

It is our complete reliance on oil that creates our economic vulnerability. What can we do about it?

The solution to a monopoly is competition.

But how can we create free trade in the fuel market when the problem is outside our borders? The Open Fuel Standard is the solution. The bill now in Congress says half the cars sold in America must allow fuel competition — if the car can burn gasoline, it must also be able to burn gasoline, ethanol and methanol in any proportion. This is technically simple and surprisingly inexpensive to do. Ethanol and methanol burn in similar ways, and they work very well in ordinary gasoline-only engines. The main thing automakers would need to do is install the flex fuel software in the onboard computer.

This small change brings into being real fuel competition. Drivers filling their tanks could choose on the spot which fuel they want to buy that day. So those fuels would have to compete with each other on price. And if there was an oil price spike, it would hardly make a dent in our economy. People would simply buy one of the other available fuels.

Methanol and ethanol can both be made right here in America, producing American jobs and pouring money into the American economy. Please help us make this a reality. Sign up for our free email updates at and participate. The bill subsidizes nothing and costs taxpayers nothing, but a freer fuel market means the consumer wins.

Author: Adam Khan, the co-founder of and co-author of the book, Fill Your Tank With Freedom. 

Sunday, November 24, 2013

The Only Country in the World With True Fuel Competition

I met a businessman from Brazil the other day. For years I've been reading about what Brazil has accomplished, but this is the first time I've met someone from Brazil and could talk to them about it. "Yes," he said, "we have the choice of ethanol and gasoline at every filling station in the country. Yes, almost all the cars on the road are flex fuel vehicles."

What struck me most was his nonchalance, especially as contrasted with my obvious envy. He lives in a country where a liquid fuel is in constant competition with gasoline. Brazil has done something amazing. And they are the only country on earth doing it. Their economy is thriving. They recently passed Britain to become the sixth largest economy in the world (behind the U.S., China, Japan, Germany, and France). They won the bid to host the 2016 Summer Olympics. They've arrived on the world stage as a major economic power.

When I commented on his lack of excitement about his country's fuel competition, my new Brazilian friend said, "Well, this all started way back in the 1980s." It is no big deal to him that every time he fills his tank, he chooses what he wants to put in it. It's been that way for a long time. He said sometimes ethanol is a better deal and sometimes gasoline is. But, he said (not yet realizing I know a lot about this topic) "you can't go as many miles on a gallon of ethanol as you can on a gallon of gasoline. We just do a quick calculation, multiplying by point seven. So if the price of ethanol is 70 percent of the price of gasoline or lower, most people buy ethanol. If it's above that, we buy gasoline."

On sale in Brazil are 80 different flex fuel vehicle models, made by 12 major automakers, and four flex fuel motorcycle models. The automakers are GM, Ford, Volkswagen, Honda, Nissan, Toyota, Peugeot, Renault, Mitsubishi, Citroën, Fiat, and Kia Motors.

In Brazil, the gasoline is E20 or E25. That is, their gasoline is 20 to 25 percent ethanol. And the ethanol for sale at the pump is 100 percent ethanol (rather than E85, as it is in the U.S.). Pure ethanol is very popular in Brazil — 65 percent of the people with flex fuel vehicles regularly use ethanol.

Although Brazil made ethanol available for ethanol-only cars at every filling station starting back in the 1980s, flex fuel cars didn't come onto the Brazilian auto market until 2003. The next year, 22 percent of new car sales were FFVs. It climbed until by 2009, 94 percent of new car sales were FFVs. Not many people choose to not have any choice in fuels.

We could do in America what they've done in Brazil. In fact, we could go one better. We could add methanol. The mechanical tweaks necessary to enable a gasoline-only engine to also burn methanol and ethanol are almost nil. Then we would have three good fuels all competing with each other for our fuel dollars. What do you think that might do for our economy?

Author: Adam Khan, the co-founder of and co-author of the book, Fill Your Tank With Freedom. 

Makes and Models of Flex Fuel Vehicles in Brazil

On sale in Brazil are 80 different flex fuel vehicle models, made by 12 major automakers, and four flex fuel motorcycle models. The following is a list of flex-fuel automobiles and light-duty vehicles available in Brazil (source):

Chevrolet: Astra, Blazer, Celta, Classic, Corsa, Montana, Meriva, Prisma, S10, Vectra, Zafira

Ford: Courier, EcoSport, Fiesta, Focus, Ka

Volkswagen: Bora, CrossFox, Fox, Gol, Golf, Kombi, Parati, Polo, Saveiro, SpaceFox, Voyage

Nissan: Livina, Sentra, Tiida

Honda: City, Civic, Fit, and four motorcycles CG Titan Mix, NXR 150 Bros Mix, GC 150 Fan Flex and the BIZ 125 Flex

Toyota: Toyota Corolla

Fiat: Doblò, Linea, Idea, Mille, Palio, Palio Fire, Palio Weekend, Punto, Siena, Stilo, Strada, Uno

Hyundai: Hyundai HB20

Kia Motors: Kia Soul

Mitsubishi: Pajero TR4, Pajero Sport, Pajero L200 Triton

Peugeot: 206, 307

Renault: Clio, Kangoo, Grand Tour, Mégane, Scénic, Logan, Sandero, Symbol

Citroën: C3, C4, C4 Pallas, Xsara Picasso

In Brazil, the gasoline is E20 or E25. That is, their gasoline is 20 to 25 percent ethanol. And the ethanol for sale at the pump is 100 percent ethanol (rather than E85, as it is in the U.S.). Pure ethanol is very popular in Brazil — 65 percent of the people with flex fuel vehicles regularly use ethanol.

Although Brazil made ethanol available for ethanol-only cars at every filling station starting back in the 1980s, flex fuel cars didn't come onto the Brazilian auto market until 2003. The next year, 22 percent of new car sales were FFVs. It climbed until by 2009, 94 percent of new car sales were FFVs. Not many people choose to not have any choice in fuels.

We could do in America what they've done in Brazil. In fact, we could go one better. We could add methanol. The mechanical tweaks necessary to enable a gasoline-only engine to also burn methanol and ethanol are almost nil. Then we would have three good fuels all competing with each other for our fuel dollars. You can help make it happen. Start here.

Saturday, November 23, 2013

OPEC Country Finances Anti-Fracking Film

Several articles about the Matt Damon movie, Promised Land (see links to the articles below), explain how the movie deliberately distorts the facts in order to make fracking (hydraulic fracturing) seem as bad as possible, and reveal that the movie was funded by Abu Dhabi Media, which is wholly owned by the United Arab Emirates, an OPEC nation.

The recent transformation of the oil and gas industry in the U.S. has OPEC concerned. So far America hasn't used its new technology to create fuel competition in the liquid fuel market, but if we ever get a collective clue, it would spell doom for most of the regimes now ruling OPEC nations. They've gotten in over their heads with future commitments to pay off their citizens, which requires a high global price for oil. If the U.S. uses its new natural gas wealth to create methanol to compete with gasoline directly, the price of fuel will drop precipitously and OPEC's controlling power over the world's economy will collapse.

Of course OPEC doesn't want this to happen. That's an understatement. They absolutely cannot allow this to happen. One good way of stopping it is to try to discredit or even vilify the source of America's new natural gas wealth: Fracking technology. That's what Matt Damon's movie does. And that's what several other films have done, including the documentary, Gasland.

When Matt Damon and John Krasinski wrote their screenplay about fracking, they were so pleased with it, they announced it would be "promoted as a potential Oscar winner." But, says director Phelim McAleer, "then came trouble." He explains:

In courtroom after courtroom, it has been proved that anti-fracking activists have been guilty of fraud or misrepresentation.

There was Dimock, Pa. — the likely inspiration for “Promised Land,” which is also set in Pennsylvania. Dimock featured in countless news reports, with Hollywood celebrities even bringing water to 11 families who claimed fracking had destroyed their water and their lives.

But while “Promised Land” was in production, the story of Dimock collapsed. The state investigated and its scientists found nothing wrong. So the 11 families insisted EPA scientists investigate. They did — and much to the dismay of the environmental movement found the water was not contaminated.

There was Wolf Eagle Environmental Engineers in Texas, a group that produced a frightening video of a flaming house water pipe and claimed a gas company had polluted the water. But a judge just found that the tape was an outright fraud — Wolf Eagle connected the house gas pipe to a hose and lit the water.

Other “pollution” cases collapsed in Wyoming and Colorado. Even Josh Fox, who with his Oscar-nominated documentary “Gasland” first raised concerns about flammable water, has had to admit he withheld evidence that fracking was not responsible.

These frauds and misrepresentations created huge problems for the Damon/Krasinski script...

So, according to sources close to the movie, they’ve come up with a solution — suggest that anti-fracking fraudsters are really secret agents employed by the fossil-fuel industry to discredit the environmental movement.

In the revised script, Damon exposes Krasinski as a fraud — only to realize that Krasinski’s character is working deep undercover for the oil industry to smear fracking opponents.

I really liked how Noel Sheppard of Newsbusters ended his article. He wrote:

Making matters worse, the film is full of so many falsehoods, Phelim McAleer reported Tuesday "the script’s seen some very hasty rewriting because of real-world evidence that anti-fracking activists may be the true villains."

According to McAleer, the reworked plot suggests "anti-fracking fraudsters are really secret agents employed by the fossil-fuel industry to discredit the environmental movement."

That's pretty funny since Damon in real life is an "anti-fracking fraudster" employed by an OPEC nation to discredit fracking.

Now THAT'S entertainment!

There is so much at stake for the oil industry, I think we can expect to see anti-fracking propaganda of many kinds in the near future. They've done it to ethanol. There's no reason to think natural gas (or any other potential competitor) wouldn't get equally rough treatment from the petroleum monopoly. Here are the articles on Matt Damon's movie:

Matt Damon's Anti-Fracking Movie Financed by Oil-Rich Arab Nation
For His Next Escape
Anti-Fracking Film Backed By OPEC Nation
Yoko Ono, Matt Damon and OPEC Versus American Energy Independence

Author: Adam Khan, the co-founder of and co-author of the book, Fill Your Tank With Freedom.   

Friday, November 22, 2013

Is Corn Ethanol Production Bad For The Environment?

Have you seen any recent articles about how "devastating" corn ethanol is to the environment? Setting aside the fact that corn was only the beginning and given what Joule Energy is doing, corn isn't the best thing to make ethanol from anyway (because its yield is so low compared to other feedstocks), it's still true that corn ethanol is being demonized unfairly. The following was published by the Renewable Fuels Association, who obviously have an ax to grind, but the points they make are accurate and should be included in our national conversation about fuel. Here's what they wrote:

The Associated Press has just published a new account of the effects of corn production and ethanol on the environment. The piece is appearing in newspapers across the country starting this week.

The AP calls it "investigative reporting." We call it salacious and unbalanced.

RFA staff spoke with the story's lead reporter numerous times, providing indisputable facts, peer-reviewed studies, and government data documenting ethanol's positive impacts. Instead, the writer chose to use disproven myths, skewed data, and outright fabrications to suggest biofuels and the Renewable Fuel Standard haven't lived up to their promise.

Here are just a few of the "facts" the AP got wrong or chose to ignore:
  • There is no evidence farmers are "plowing into pristine prairies." No new grassland has been converted to cropland since 2005, and most is protected under "sodbuster" and "swampbuster" provisions of the 2008 Farm Bill.
  • In the same vein, the AP claims to have used "government satellite data" to determine that "1.2 million acres of virgin land" have been converted to corn since 2006. But the AP has so far refused to release this "data."
  • No one is "filling in wetlands," as the article claims. Enrollment in the Wetland Reserve Program hit a record high of 2.65 million acres in 2012.
  • The article uses Wayne County, Iowa as a "case study" of corn's out-of-control growth. But corn acreage in that county went down in 2012 and was 34% lower than at its peak in 1986.
  • The article criticizes the rising use of corn for fuel instead of animal feed. But this ignores that for every bushel of corn that goes into producing ethanol, 17 pounds of livestock feed is returned to market. Because of this, on a net basis, livestock feed production still accounts for 50% of the corn supply, with ethanol only consuming 26%.

There's more. They've put together a PDF fact sheet covering some of the biggest flaws in the AP report: Myths Versus Facts.

Tuesday, November 19, 2013

Ethanol For $1 a Gallon Using Unfarmable Land and Undrinkable Water

Corn can produce 350-400 gallons of ethanol per acre per year. Cellulosic fuels such as grass and wood chips can produce 2,000 to 3,000 gallons of ethanol per acre per year, but so far, not cheaply enough to compete with gasoline.

But Algenol, a company in Florida, has successfully achieved 9,000 gallons of ethanol per acre per year using algae grown in salt water at one dollar a gallon! Another company, Joule Energy, is producing 15,000 gallons of ethanol per acre per year at $1.23 per gallon using undrinkable water! And they are confident they will eventually be able to achieve 25,000 gallons of ethanol per acre per year!

How are they able to achieve this? They genetically modified algae to produce ethanol. Let me be clear: These companies are not harvesting the algae and then fermenting it. The algae itself excretes ethanol continuously, which is why the yields are so remarkable the production is continuous year round. Corn is a crop grown and harvested only once a year.

The algae are grown inside tubes, so evaporation is minimal. It can be done in on harsh desert land in fact that might be the best place to do it since there is so much sunlight.

To accelerate the algae's growth, waste CO2 is pumped into it, turning a burdensome waste into a valuable resource.

What Joule Energy is doing is so remarkable, they won a very prestigious award this year by Bloomberg New Energy Finance. They said, "Every year, the Bloomberg New Energy Finance Pioneers program identifies 10 companies from around the world that are changing the energy landscape as we know it. An independent panel of industry experts from banking, academia, corporations, utilities and technology providers choose the honourees by assessing them against three criteria: potential to scale, innovation and momentum." In April, 2013, Joule was given this award.

Joule has also genetically modified algae to make diesel fuel and jet fuel.

More information: 
Algenol web site
Joule Energy website
Article about Joule Energy's funding
Joule Plant Overview video

Video interviewing CEO of Joule

Author: Adam Khan, the co-founder of and co-author of the book, Fill Your Tank With Freedom.  

Monday, November 18, 2013

Robust Versus Feeble Competition: A Key Distinction

We have two very different ways fuels can compete with each other. One is what we have now — different cars competing with each other, each car using a single source of power: gasoline or compressed natural gas or electricity or hydrogen, etc. The other way is for the cars themselves to be capable of using multiple power sources, like flex fuel cars, plug-in hybrids, Ford’s new CNG-gasoline truck, etc.

Competition between cars is feeble. It is weak, slow, expensive, and cumbersome. It will do very little to lower fuel prices. Competition between power sources within a single vehicle, on the other hand, is robust, vigorous, agile and immediate. It pits fuels against each other, creating a strenuous daily battle to provide the best deal for the consumer. That's the kind of competition we should be aiming for.

To brew coffee at home, imagine what it would be like if each different kind of coffee required a different kind of machine. If you wanted to brew Folder’s coffee, you had to use a Folder’s machine. If you wanted to make Peet’s coffee at home, you had to use a Peet’s coffee machine. Each machine costs, let’s say, $100. You would be able to say that technically the different kinds of coffees are competing with each other, but it is also clear that this is a far cry from what we have now — where a single drip coffee machine can brew any of these brands of coffee, which forces the brands to compete more directly with each other. They must constantly try to outcompete each other to get your coffee dollars.

What if Peet’s dropped the price of their coffee, and you really liked Peet’s coffee, but you had a Folder’s machine? You couldn’t take advantage of the new low price for Peet’s unless you forked over 100 bucks for a new machine. You might hesitate to get the new machine. Peet’s new lower price might be temporary, after all. And how long would it take for you to recoup the 100 dollars for the new machine at Peet’s new low price?

That’s the choice people have now with cars and fuels (but with far more money at stake). You can buy a CNG car, but the car is more expensive than a gasoline-only car, and it still runs on only one fuel. No fuel choice. And what happens if natural gas prices rise and/or gasoline prices drop? You cannot easily switch fuels. That’s what happened in Brazil during the mid-80s and early 90s — the country had switched most of their cars to ethanol-only cars in the early 80s (flex fuel cars hadn’t been invented yet), but OPEC decided to drop the price of gasoline very low in the mid-80s. Brazilian drivers of ethanol-only cars were paying much more for their fuel than the owners of the old fashioned gasoline-only cars.

Competition between cars is feeble compared to competition between fuels within a single car. Think about what happened to phones. Originally, each cell phone had different features, and you could choose between phones. This was weak competition, though, because phones cost money and you often had to agree to a two year contract, etc.

Now most phones are capable of using apps. The apps are competing within single phones, and innovation has exploded. You don’t have to buy a new phone to get a new function. There are literally millions of apps available, doing every conceivable thing, with the level of innovation rising exponentially.

The same thing could happen in the fuels market. Imagine automakers creating cars that can use multiple power sources — the more power sources the better. For example, General Motors is coming out with a Chevrolet Impala in 2015 that will be capable of using gasoline or compressed natural gas. It will have two different tanks. Drivers will be able to fuel up on either, so those two fuels will have to compete against each other at the pump.

But GM could go even further. Since the car can burn gasoline, with a few very minor tweaks it could also burn ethanol, using the same liquid fuel tank used for the gasoline. Now all three fuels would have to constantly battle each other.

When the EPA changes its regulations, methanol could be added too. Four fuels in a single car. That's starting to look like robust competition.

Methanol and ethanol can also be made from multiple feedstocks, and those sources would have to compete with each other. Most methanol, for example, is made from natural gas. But it can be made out of many things. If a local waste conversion facility was turning garbage into methanol, it could compete with methanol made from natural gas. They could compete on price, and they could also compete on other factors. Even if the methanol made from local waste was more expensive, some people would rather buy it because it is local or because they want to support that industry, or for whatever reason. So even between different sources of methanol, we could have competition. The same would be true for ethanol.

But we can go still further. If the car can burn compressed natural gas and gasoline and methanol and ethanol, it might also be a plug-in hybrid. Now all those fuels would have to compete directly with electricity.

The point of all of this is that we need to draw a clear distinction between vehicle competition and fuel competition. They are two very different things. And we should be aiming most intently at fuel competition. We should aim at pitting fuels against each other in real time.

Methanol sells today for 93 cents a gallon. It is only 60 percent of the energy density of gasoline, but that still makes it half the cost of gasoline per mile driven. This low cost is in the absence of a vigorous competitive fuel market. If methanol was allowed to fight for our fuel dollars in an open market (which is what the Open Fuel Standard would accomplish), methanol could get even cheaper, and gasoline would have to radically drop its price if it had any hope of competing.

Robust fuel competition would transform our economy. Each of us would have more money to spend, which would create more jobs. The strategic importance of the Middle East would dwindle, which would allow for fewer conflicted foreign policy decisions. We’d save billions that we now spend protecting shipping lanes for oil. Every power source we’ve mentioned — CNG, ethanol, methanol, and most sources of electricity — produce less pollution than petroleum fuels, so the competition would be good for our health too. The petroleum industry would no longer have a monopoly and the excessive power it gives them. America would be a happier, freer, more prosperous country.

You can help us make this happen. Begin here.

Author: Adam Khan, the co-founder of and co-author of the book, Fill Your Tank With Freedom. 

Saturday, November 16, 2013

The Prime Minister of Israel Says "We Can Break Oil's Monopoly"

Prime Minister Benjamin Netanyahu spoke at the Fuel Choices Summit in Tel Aviv (November 12th and 13th, 2013) about Israel's role in breaking oil's monopoly in transportation. He called for the creation of a Joint Alcohol Fuel Alliance (JAFA) where the major alcohol-fuel economies of China, U.S. and Brazil would join forces to break the "oil monopoly created by volatile countries" in the Middle East. Watch his speech below. The first six minutes of the video are comments about Iran. The comments on oil start at 6:15.

At the summit, a one million dollar prize was awarded to George A. Olah, a Nobel laureate, and G.K. Surya Prakash, for their "Innovation in Alternative Fuels." You can read more about their work here.

Many prominent leaders were attending this summit, and PM Netanyahu acknowledges many of them by name in his opening remarks.

Sunday, November 10, 2013

The Gift of Life

The American military protects oil shipping lanes, protects many oil-producing countries, and fights to defend the U.S. and its allies from terrorist groups funded by oil money (source). Why? Because oil has a monopoly on transportation fuel, so it is vital to America's interests.

But fuel competition would change that. And it would put fewer servicemen and servicewomen in harm's way. It's something to think about on Veteran's Day.

Saturday, November 9, 2013

Gasoline's Greater Range

Some people have argued against flex fuel cars or the Open Fuel Standard because methanol and ethanol don't give cars enough range. In the same sized fuel tank, a full tank of gasoline would travel more miles than a full tank of methanol or ethanol.

There are two answers to this. One is that the range difference isn't as great as you'd think — especially if the car is optimized for alcohol fuels. Most of the comparison between gasoline and alcohol uses BTUs (British Thermal Units), which is a measure of heat. Gasoline produces more heat when it burns. But heat is not what creates forward motion. Gasoline produces more heat, but some of its energy is expended in producing heat, and that energy is wasted. More of alcohol's energy is used to power the car and less of it is wasted on creating heat.

Also, alcohol fuels become more efficient at higher compression. So the difference in miles per gallon between gasoline and alcohol will be smaller with a higher compression engine. Engineers are already in the process of perfecting a variable-compression engine.

The second answer is that if it is a flex fuel car, it doesn't matter that alcohol doesn't have as much range as gasoline because if you are going on a long trip or want more range, you can just buy gasoline. The car can burn gasoline too. That's the whole point. You will have a choice. If you want to burn nothing but gasoline, no matter how expensive it gets, you will be able to. Flex fuel technology doesn't reduce a car's ability to burn gasoline. That's why so many people own flex fuel vehicles now without even knowing it: Because they've been burning gasoline in their cars and it burns gasoline just as well as a gasoline-only car.

Friday, November 8, 2013

Alternative Fueling Stations in the Palm of Your Hand

The Alternative Fueling Station Locator app, now available through the App Store, allows iPhone users to select an alternative fuel and find the 20 closest stations within a 30-mile radius. Users can view the locations on a map or as a list with station addresses, phone numbers, and hours of operation.

"If you drive an electric vehicle, for instance, you can now use your iPhone to effortlessly identify, contact, and navigate to the charging station that's most convenient for you," said Project Manager Trish Cozart of the National Renewable Energy Laboratory. "Drivers aren't searching for stations while they're sitting at their computers; they need this information while they're out and about, which makes the iPhone an ideal means to deliver it."

The app draws information from Clean Cities' Alternative Fuels Data Center (AFDC), which houses the most complete, up-to-date database of alternative fueling stations in the United States. The database currently contains location information for more than 15,000 alternative fueling stations throughout the country.

The AFDC is a comprehensive clearinghouse of information about advanced transportation technologies and offers unbiased information, data and tools related to the deployment of alternative fuels and advanced vehicles.

Tuesday, November 5, 2013

Zero Tolerance For Monopolies?

11/01/2013 - Carl Pope, former executive director of the Sierra Club, now senior adviser to Securing America's Energy Future wrote the following op-ed for the Mercury News:

Forty years ago, the Saudi Oil Ministry informed the Secretary of Defense that it would no longer supply fuel to the U.S. 6th Fleet. The OPEC oil embargo had begun. For the next five years, the U.S. made serious efforts to escape monopoly dependence on oil. Then, with the decline in oil prices, we fell asleep.

Even when prices began to rise to the stratosphere in 2004, America kept on snoozing. Whenever voices from the military, who bear the heaviest burden, urge us to end oil's stranglehold on our transportation system, the oil cartel and industry concoct a new theory to put us to back to sleep.

This time, the sedative is the promise that huge, exciting, Saudi-sized oil production in the U.S. will achieve "energy independence."

Increased U.S. oil production, combined with more efficient autos pouring into the marketplace powered by the Obama fuel-efficiency regulations and a revived U.S. auto industry, are indeed lowering the volume of oil that the U.S. imports. But world oil prices have risen so much that the dollars and jobs we export to pay for imported oil are greater than ever. We'll add another $4 trillion to our national debt from importing oil over the next 20 years.

As long as the United States uses almost 20 million barrels of oil each day, increasing our domestic production by fracking a million or two barrels a day — which are the projections — still leaves us importing more oil than we did when the first embargo hit, at a much higher price. And new U.S. oil costs more than $90 a barrel to find and produce, so it only comes to market if oil continues to be unaffordable.

Every American recession over the past several decades has been preceded by, or was concurrent with, an oil price spike. The U.S. economy is tied to the highly unpredictable, cartel-influenced global oil market, which manipulates supply and prices. As long as oil is the lifeblood of the U.S. economy, wherever a specific barrel comes from, our military will be forced to bear the burden of guarding against a supply disruption anywhere in the globe. Oil dependence, at times, requires us to accommodate hostile governments or alter our pursuit of key national security objectives.

We don't tolerate such monopolies elsewhere. We source electricity from hydro, gas, coal, nuclear and now wind, geothermal and solar. If wheat gets too pricey, we buy rice or corn; chicken can replace beef. It's folly that nothing is set up to replace oil in our cars, planes or trucks when there are lots of perfectly good energy sources that could cost less than $100 per barrel.

Whenever oil prices spike, we crowd our underinvested transit systems; let's build them out. Natural gas could power trucks for a fraction of the cost per mile of diesel; electric cars free drivers from the volatile oil market. We just need to make these alternatives the norm.

It's not that oil is imported that is crippling us, or even that it is expensive. It is the fact that it has a monopoly — one our environment, our security and our economy can no longer afford.

After 35 years, it's time for the U.S. to wake up.

Thursday, October 31, 2013

What if Ethanol Didn't Raise Food Prices?

Someone emailed us recently. He wrote, "I talk to a lot of people on the subject of ethanol as a source of fuel and some people get kind of hostile because they think that will make the price of food go up. One couple I know have a hog farm in and they claimed that using corn for making fuel made the price of hog feed go up."

It's the most common objection we get to fuel competition. Ethanol has, in fact, raised corn prices slightly, because the corn is more valuable on the market, which has allowed the government to stop some subsidies. Many people in the food industry do not like this because those subsidies were allowing the food industry to buy corn and its products (for example, high-fructose corn syrup) at less than the market price. So they joined with the oil industry in 2008 in a PR campaign to make people think ethanol will raise food prices and cause starvation (read more about the campaign here).

By far the biggest cause of rising corn prices is rising oil prices, and the oil industry has done an expert job of deflecting attention away from their own culpability and laying the blame on their biggest competitor (ethanol). It has been a brilliant campaign, although underhanded and bad for America. They have successfully misled even people in industries that depend on corn (like those hog farmers). Read more about oil price's impact on food prices here, here, here, here, here, here, and here and here.

Having said all that, we really shouldn't bother making ethanol from corn. It's not the most efficient thing to make ethanol out of. The only reason so much of the ethanol in America is made from corn in the first place is that for almost the entire 20th century, farmers had an overproduction problem. They grew too much corn. When there was too much, prices dropped so low that farmers went out of business. Since it's bad for a country's population when its farmers go out of business, the U.S. government has tried many things to prevent it from happening. They could have just told farmers what to grow, but that's pure socialism, and besides, what happens if there's a drought that year? Instead, they tried to find other markets for excess grain. One of the things they came up with is adding ethanol to gasoline instead of lead (gasoline by itself isn't high enough octane to use without the engine knocking, so the oil industry added lead for a long time, but since it is highly poisonous, it was eventually made illegal, so now ethanol is used to raise the octane level).

But many other sources (feedstocks) can be used to make ethanol that are far more productive and efficient than corn. Let me give you some comparisons:

Wheat: 277 gallons per acre
Corn: 354 gallons per acre
Sweet Sorghum: 374 gallons per acre
Sugarcane: 662 gallons per acre
Sugar Beets: 714 gallons per acre
Switchgrass: 1,150 gallons per acre

Sugar beets and switchgrass both require less fertilizer than corn. Researchers have created a genetically-altered strain capable of increasing switchgrass’s massive ethanol yield by another 38 percent!

This doesn’t even begin to cover all the things alcohol fuels can be made from. With gasification technology (heating up organic material until the basic elements separate) we can inexpensively make alcohol fuels from wheat and barley straw, rice bagasse, municipal waste and a variety of agricultural wastes like corn stover (the stalks and husks left over after harvest), sawdust, paper pulp, small diameter trees, etc.

And waste can be made into ethanol (see more about that here).

Ethanol can also be made for $1.50 per gallon right now, without any subsidies, from natural gas or coal, both of which are abundant in the USA and inexpensive (more about that here).We've got so much natural gas, we're just burning it off to get rid of it (mainly because it isn't able to compete in the fuel market yet — but we're working to change that).
Read more about burning off excess natural gas here.

America has plenty of fuels. We simply need to make them available and allow them to compete with each other. Fuel competition 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, drastically 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. And you will be paying significantly less at the pump.