I have displayed often my open enthusiasm for the possibility that bio-fuel technology will eventually replace our country's dependency on imported crude. If you will look in the archives of this blog for the month of February, there are six posts on the topic.
Actually, I believe only one thing could stand in the way of this happening: THE RETURN OF PERSISTENTLY CHEAP OIL. Altogether not a bad predicament to be in, huh?
To itemize my reasons why ethanol combined soon with methanol have the potential to eliminate our use of petroleum:
1-The technology to produce the vehicles which run on bio-fuels is already there, and drivers will not have to sacrifice power OR vehicle size. It also costs no more to buy a new vehicle so equipped.
2- Ethanol is much more environmentally friendly than gasoline. It is bio-degradable and water-soluble, and most of us have IMBIBED quite a bit of it. It's combustion emits far less greenhouse gases than that of gasoline. Environmentalists who never saw an energy they couldn't oppose will have a difficult time attacking this one. Anything they use to attack ethanol will have to simultaneously be used to attack every winery and brewery in the country.
3-The delivery infrastructure is already there. Admittedly, at this time ethanol cannot be shipped via pipeline, it would have to be trucked, shipped, or sent by rail, but it can be stored at current petroleum distribution centers, and can be dispensed from existing retailer assets by simply cleaning out the tanks.
4-At $60 per barrel of crude, ethanol is price competitive, even considering the MPG deficit of approximately 15%.
5-It feels GOOD. A Chevrolet Tahoe with the 5.3 liter V-8 engine, burning E85 ethanol (85% ethanol-15% regular gas) will go 93 miles on every gallon of GAS it burns, again even taking into account the MPG deficit. In other words, compared to the smallest Toyota or Honda hybrid, (approx 60 MPG) its owner will be helping reduce our dependency on oil by ONE-THIRD MORE. America will be able to DRIVE WHAT IT HAS ALWAYS WANTED instead of having to give up size and power.
6-The demand for ethanol will triple in three years, (there are about 3 million flex-fuel vehicles already out there) without government intervention, because Ford, GM, and Chrysler have flex-fuel vehicles not only available, but available in their most popular vehicles and engines. THE VEHICLES ARE BEING DELIVERED IN QUANTITY AS WE SPEAK. Most of the people buying them don't know they are flex-fuel capable, and don't care, they are buying them for the same reasons they always do. The reason the manufacturers are building them is because each one gains them an exemption from CAFE fuel-economy standards, and thus helps the bottom line.
7-The creation of demand for bio-fuels will spark the profit motive to ignite exponential advances in production processes and alternate feedstocks, something which has been happening in recent times even without much demand. There are 91 plants producing ethanol in this country at this time, with a whopping 31 under construction. There is money to be made.
The arguments against ethanol's viability are two:
1-It takes more energy to produce ethanol than it puts out during combustion.
2-We don't have enough land.
The first one I'll take on by asking the question "Which ENERGY to produce ethanol is NOT already priced into the tank full I purchased in Statesville, North Carolina last Saturday for $2.11 per gallon? Did the farmer DONATE the diesel to plow and harvest the corn? Did the REFINERY (Oops! That's oil, ethanol is FERMENTED), er, ah, did the PRODUCTION FACILITY DONATE the fuel used to generate heat, or simply not charge for the labor involved in producing the ethanol? Did the trucker who trucked it to Statesville not charge anyone to deliver the ethanol? Now, I'm being a bit cute for a reason because this argument has been the favorite of nay-sayers for years, it is only recently that it could be refuted.
Yes, I am aware that there is a 51 cents per gallon federal subsidy for every gallon of ethanol produced. I am also aware that there may be other subsidies to the farm industry which may tend to reduce the price at the pump, but even after adding the 51 cents and an estimate of other government help, ethanol is already COMPETITIVE with gasoline, and as I shall show momentarily, all it has to be is competitive for Americans to choose to buy it. First I ask your indulgence to examine the HIDDEN COSTS of gasoline.
The price of gasoline you see at the pump doesn't BEGIN to express the costs to GET IT TO THE PUMP in order for you to put it in your tank. How much could America LOWER ITS MILITARY BUDGET if Middle Eastern countries didn't have the market cornered? What if we didn't have to protect Middle Eastern sea-lanes against terrorists? How might our foreign policies change if we were conducting diplomacy with countries who COULD NO LONGER TURN OFF THE OIL SPIGOT? What if we could no longer be confronted with this threat?
How much could you add to the price you see for gasoline to account for the BILLIONS in foreign aid we provide to countries who get it only because they threaten to turn off that spigot, or have friends who can? And the most important question....
What if OPEC could be BUSTED by competition from another liquid fuel?
The second contention of the nay-sayers is that there isn't enough land in America to both produce ethanol AND feed ourselves. Doesn't this sound a bit like Paul Samuelson?
What those in this particular negative camp have been hanging their hat on is that ethanol will continue to be made from kernel corn, as it mostly now is. Advances in feedstock technology now enable us to make ethanol from things we can't even ingest, like corn stalks, rice stalks, and switch grass. Biological genetic engineering has just begun to take on the task, on both the feedstock and production/fermentation ends of the equation. No, we have enough land, we have enough smarts, we have enough motivation, and pretty soon we'll have enough DEMAND to set it all into motion.
I believe Americans INSTINCTIVELY know that there is a tremendous HIDDEN COST to gasoline, and when they see an alternative fuel, they will, out of concern for our country and our environment, factor it in when they make a purchase decision. We have proof of this in the fact that consumers have paid $3500 to $6000 more for a tiny hybrid car, with no hope of ever getting their investment back through gas savings. Americans WILL BUY ETHANOL when they are convinced of the stakes involved, and they will be willing to pay more for it.
Which brings us to my opening contention that bio-fuels HAVE THE POTENTIAL to completely eliminate our need for oil, and that the only thing which could stand in its way is THE RETURN OF PERSISTENTLY CHEAP OIL.
I believe that cheap oil WILL RETURN, and soon. It will prevent bio-fuels from dominating the liquid-fuels market for many years. Notice I didn't say that cheap oil would PERSIST, because it won't. Petroleum price VOLATILITY will be with us for some time because of the political considerations not related to the supply and demand of oil.
Ethanol in a few years will help bring down the cost of gasoline, but it won't eliminate its use. Bio-fuels will one day BREAK OPEC, there will be a building for sale in Vienna, but for at least a couple of generations, ethanol and gasoline from crude petroleum will probably be sold side-by-side at America's refueling stations. The flex-fuel vehicle will allow us to choose which liquid fuel we will buy; some can afford to do so and will be patriotic and pay more, and some will not have the ability to do so. When gasoline prices spike up, flex-fuelers will LIVE to go to a social gathering so they can brag about what they paid for E85. Rest assured that when ethanol becomes CHEAPER than gasoline, we will see the price of gasoline go DOWN, and down, and down, until first they sell the building, then the Arabs begin to cut expenses, invest in cost-saving capital improvements, and in general, JOIN THE WORLD OF PEACEFUL NATIONS.
Ethanol, being sold side-by-side with gasoline, made possible by the inevitable proliferation of flex-fuel vehicles, will do all these things. It will put the Middle Eastern and South American oil producers in a prison cell of their own making. It will change not only the economic dynamic of globalization in America's favor, but the political one as well. One does not have to be a genius to see the implications that bio-fuels portend for the SECURITY of our country; our national security situation will change when the day comes that those who supply our crude realize that a rubicon has been crossed, and they have to COMPETE to sell us their oil.
When Americans become informed, they will act on this information, and we can all sit back and watch the inevitable unfold, and it will be a good thing, a VERY good thing.