Sunday, September 29, 2013

What Happens When You Break Up a Monopoly

The following has been condensed from an article on Fuel Freedom by Zana Nesheiwat:

Before 1984, only AT&T could sell long-distance telephone service, making a long-distance call cost $3.00 a minute. That monopoly and unfair pricing ended when a federal judge required AT&T to grant access to any carrier that wanted to sell long-distance services. Within three years, the price of a long-distance call decreased from $3.00 a minute to 30 cents a minute. Today it’s 3 cents a minute, thanks to competition and an open market.

Without the breakup of that monopoly, which brought forth industry competition and consumer choice, we wouldn’t be enjoying rapid advancements in the communication industry and the ability to watch, listen, play, tweet and stream from one device.

Economics 101: A monopoly has the power to set the price on a commodity. Although there is more than one oil company (Shell, Exxon, BP, etc.), the only fuel they sell to consumers is petroleum. The lack of fuel competition allows “big oil” to set the price. The wide-scale adoption of abundant, domestic fuel supplies (natural gas, methanol, ethanol and electricity) will boost competition and innovation, resulting in a wider fuel selection for consumers and lower prices at the pump. This is not to mention protection against resource and price volatility and improved air quality.

Beneficiaries of an oil-addicted population and economy, or, as many call it, an oil monopoly, will do everything in their power to maintain a situation where they have sole custody over the transportation fuel market. Recent actions from the American Petroleum Institute (API) demonstrate this. Group Downstream director, Bob Greco, announced that API is “strongly considering” asking the U.S. Supreme Court to hear a case regarding the sale of a high-ethanol fuel blend. Soon after, a press conference ignited news headlines with something along the lines of, “Ethanol destroys cars.” The claims that warn of the dangers of ethanol are based on a research study funded by — you guessed it — the API and automakers.

Clearly, API is threatened by the “competition” and has good reason to be! The competition – natural gas, methanol and, in this case, ethanol, or any combination of alternative fuels, could cause the oil industry to lose profits, market shares and eventually, their dominant control over the fuel market.

The breakup of AT&T brought forth a new era of technology — multi-functioning phones and affordable long-distance phone calls. Breaking the oil monopoly would give us far more than that — relief at the pump and a thriving future for years to come.

Saturday, September 28, 2013

Does the Oil Industry Create Many Jobs?

The following are excerpts from an article originally published in UCUSA, entitled, Drivers Spend Almost as Much on Gas as They Paid for Their Cars:

Filling up with gasoline does not do much to feed money into communities. In fact, just 81 cents of an average $50 fill-up goes to the local gas station owner. “In the end, gas stations make more money off the bottled water, beef jerky, and other things you buy inside than off the fuel you buy outside,” says policy analyst Joshua Goldman.

According to data from the Department of Labor’s Bureau of Labor Statistics, extracting oil and gas produces less than one job per $1 million of output, and is among the least job-intensive industries in the United States. When consumers reduce spending on gasoline, they spend more money in areas of the economy such as retail, which employs about 12 people per $1 million of output.

When we have fuel competition in America, consumers will cut their spending on fuel at least in half, greatly boosting employment in the U.S. And you can help make this happen. Start here.

Friday, September 20, 2013

Methanol and Ethanol Achieve Better MPG Than Originally Estimated

Here's the latest from Fuel Freedom: How much do you know about replacement fuels? According to Fuel Freedom's co-founder Eyal Aronoff, “Alcohol fuels are not getting a fair treatment.” His recently published white paper shows that EPA’s method of approximating the gasoline gallon equivalent (GGE) mileage of methanol and ethanol fuel blends underestimates the true performance of those fuels. In other words, methanol and ethanol are not only cheaper and cleaner-burning than gasoline, they can also achieve better mpg than originally estimated.

The significant findings, which were highlighted in a Bloomberg article, can have far-reaching implications for the use of American-made replacement fuels in lessening our nation’s appetite for oil, including the over $300 billion we spend each year on foreign oil.

Eyal, who is leading the development of Fuel Freedom’s next study on “The Myths and Realities of American Energy Independence,” will be presenting the details of his findings on Wednesday, Oct. 2, in an online seminar. Once again, he will highlight Fuel-Freedom-authored research to clarify the facts about oil usage, its harm to the American economy and how we can end this dangerous dependence.

Friday, September 13, 2013

Fuel Competition Within a Car is Far Better Than Competition Between Cars

As soon as possible, we need to break oil’s monopoly on transportation. The fastest, least expensive, most immediately effective way to strip petroleum of its strategic status is with flex fuel cars — by making the cars themselves a platform upon which fuels can compete.

Even though we have CNG cars (compressed natural gas) and electric cars and others, that is not good enough — fuels are still not really competing. Not many of us can afford to have four or five cars (each powered a different way) so we could choose on any given day how we will power our day’s commute. When people have few choices at the pump, the logical course of action is to buy a car that runs on the most available fuel, which is why most people are still buying petroleum-only cars.

When you arrive at the pump to fill your tank on any given day, if your car is capable of burning multiple fuels, those fuels are in immediate competition for your dollar. That kind of competition will drive fuel prices down. If your vehicle can only be powered by one fuel, those multiple fuels are not really competing with each other for your business. The car manufacturers are competing, but not the fuel.

In other words, the competition needs to happen within each vehicle (not between vehicles) or it’s not true fuel competition.

To bring about fuel competition as quickly as possible, we should all stop burning petroleum fuels and spend as much of our transportation money as we can on anything but oil. Right now, ethanol is the most available alternative, so we can start there. It might be easier than you think. Ethanol can be the thin edge of a big wedge with which we can open the fuel market. 

And we should pass the Open Fuel Standard to speed up the process of making this a flex fuel nation. It will change the world.

Tuesday, September 10, 2013

What About Syria?

U.S. administration officials have been talking to energy experts about the consequences of a military strike against Syria. What effect would it have on oil prices and thus on our economy? What impact would a strike have? And what impact would not striking have?

Are you tired of worrying about the economic and political consequences of events in the ever-tumultuous Middle East? Then join us in getting the Open Fuel Standard Act passed into law. Within three years, this bill would begin stripping oil of its strategic status, which means it would strip the Middle East of its strategic status. Wouldn't that be wonderful? We need your help. Start here.