Saudi Arabia. United Arab Emirates. Iran. Iraq. Kuwait. Nigeria. Qatar.
That may look like a list of seven random countries, but they all have something sinister in common. Namely, being generally awful places for women to live. Read more →
In a recent piece for Forbes, petroleum economics analyst Michael Lynch claimed that America’s addiction to oil is a “myth.” He contends that “Americans consumers have ample choices” when it comes to transportation fuels, and that our relationship with oil is no different than our relationship with “food, housing, and clothing” or “cement or steel.”
When people talk about electric vehicles, the conversation usually revolves around companies like Tesla, GM/Chevrolet, and Nissan who, thus far, have dominated the EV market.
Americans love their freedom to choose. Someone invents something, and competitors rush in with their own similar products to fight for a market that didn’t exist before.
This is what Tesla has done with the electric vehicle: The Model S is making cold-eyed journalists swoon, and the next few months are huge: The company will soon release its eagerly awaited crossover SUV, the Model X, followed by its more-eagerly awaited “affordable” sedan, the Model 3.
But Tesla shouldn’t get too comfortable, because the established auto-makers want to steal some of its quiet, zero-emission thunder with EVs of their own: In the past week, Toyota unveiled the new Prius, trying to assure everyone it can be cool as well as get 10 percent more miles out of a battery charge; Edmunds gave its blessing for the 2016 Chevy Volt; there was a possible sighting of the 2016 Nissan Leaf, the best-selling EV in the U.S.; and there were rumors that Mercedes-Benz is working on an electric car than has a range of 311 miles.
It’s a basic rule of economics: Competitive markets are good for consumers. Which is why drivers should be demanding fuel choice as well.
Gasoline is cheap now, but it doesn’t take much to cause a price spike: The threat of a supply constriction overseas; a refinery going down (and staying down, in California’s case); output quotas in OPEC nations. Anything can cause volatility in the global market. Businesses don’t like uncertainty, and it’s bad for consumers as well.
The only way to reduce the cost structure of fuels over the long term is to create fuel choice, something the United States has never known. To quote former Shell Oil president John Hofmeister: “We will never get past the volatility of oil until we get to alternatives to oil.”
We’re not advocating an end to fossil fuels. We just want fuel choice: Ethanol, methanol, CNG, LNG, biodiesel, hydrogen and, yes, electric batteries. Anything that reduces our dependence on oil is good for America.
If gasoline, the same fuel we’ve been stuck with for more than a century, is the superior fuel for vehicles, let it compete with other choices at the pump. If oil companies don’t want competition, what are they afraid of?
Related posts:
We spend billions of dollars every year on oil that could be spent on cleaner, cheaper, American-made fuels. The impact of this addiction can be seen throughout our economy in a cycle of job and money loss:
The U.S. is at the mercy of oil companies as prices fluctuate, impacting our economy, including day-to-day prices for consumers and the overall job market. It’s time to break this cycle of dependence by bringing fuel choice to the pump.
Join the movement: http://www.fuelfreedom.org/take-action/
PUMP the Movie is now available on Netflix, giving millions of Americans the chance to watch an important film that shows the patch forward to ending our dependence on oil.
The documentary, produced by Fuel Freedom Foundation and narrated by Jason Bateman, was originally released in theaters last September. In fact, it’s still showing on big screens around the country, as the foundation has worked with partners to host screenings on college campuses and for nonprofits.
(For a full schedule of showings, as well as movie reviews and other content, check out PUMPtheMovie.com.)
But Netflix is a whole new level. The video-on-demand service is now available in 36 percent of U.S. homes, compared with 13.5 percent for Amazon Prime and 6.5 percent for Hulu Plus. Thirty-five million people watch movies and TV shows using Netflix’s streaming service, while another 5 million still get DVDs by mail. (We have DVDs for sale too, in an attractive blue case, on our website).
PUMP charts the century-long story of oil and how it built its monopoly on the U.S. transportation-fuel industry. There are interviews with major energy and auto-industry players like John Hofmeister, former president of Shell Oil Company, and Tesla Motors founder Elon Musk.
Much of the film is dedicated to solutions to our oil addiction: For example, ethanol, which is cheaper than gasoline and burns cleaner, with fewer toxic emissions, can be made from plenty of “feedstocks” besides corn.
Here’s a clip from the film featuring alcohol-fuels expert David Blume, telling us about the possibilities:
Another voice in that snippet belongs to Marc Rauch, editor of the Auto Channel website, who says: “Ethanol is not just any competitor [to gasoline]. It is the better fuel. It has always been the better fuel.”
The point is choice: American drivers deserve more than just one. To learn how we can achieve it, in the cars, trucks and SUVs we drive today, pick up the remote and watch PUMP.
Some environmentalists believe that if you invest in and develop alternative replacement fuels (e.g., ethanol, methanol, natural gas, etc.) innovation and investment with respect to the development of fuel from renewables will diminish significantly. They believe it will take much longer to secure a sustainable environment for America.
Some of my best friends are environmentalists. Most times, I share their views. I clearly share their views about the negative impact of gasoline on the environment and GHG emissions.
I am proud of my environmental credentials and my best friends. But fair is fair — there is historical and current evidence that environmental critics are often using hyperbole and exaggeration inimical to the public interest. At this juncture in the nation’s history, the development of a comprehensive strategy linking increased use of alternative replacement fuels to the development and increased use of renewables is feasible and of critical importance to the quality of the environment, the incomes of the consumer, the economy of the nation, and reduced dependence on imported oil.
There you go again say the critics. Where’s the beef? And is it kosher?
Gasoline prices are at their lowest in years. Today’s prices convert gasoline — based on prices six months ago, a year ago, two years ago — into, in effect, what many call a new product. But is it akin to the results of a disruptive technology? Gas at $3 to near $5 a gallon is different, particularly for those who live at the margin in society. Yet, while there are anecdotes suggesting that low gas prices have muted incentives and desire for alternative fuels, the phenomena will likely be temporary. Evidence indicates that new ethanol producers (e.g., corn growers who have begun to blend their products or ethanol producers who sell directly to retailers) have entered the market, hoping to keep ethanol costs visibly below gasoline. Other blenders appear to be using a new concoction of gasoline — assumedly free of chemical supplements and cheaper than conventional gasoline — to lower the cost of ethanol blends like E85.
Perhaps as important, apparently many ethanol producers, blenders and suppliers view the decline in gas prices as temporary. Getting used to low prices at the gas pump, some surmise, will drive the popularity of alternative replacement fuels as soon as gasoline, as is likely, begins the return to higher prices. Smart investors (who have some staying power), using a version of Pascal’s religious bet, will consider sticking with replacement fuels and will push to open up local, gas-only markets. The odds seem reasonable.
Now amidst the falling price of gasoline, General Motors did something many experts would not have predicted recently. Despite gas being at under $2 in many areas of the nation and still continuing to decrease, GM, with a flourish, announced plans, according to EPIC (Energy Policy Information Agency), to “release its first mass-market battery electric vehicle. The Chevy Bolt…will have a reported 200 mile range and a purchase price that is over $10,000 below the current asking price of the Volt.It will be about $30,000 after federal EV tax incentives. Historically, although they were often startups, the recent behavior of General Motor concerning electric vehicles was reflected in the early pharmaceutical industry, in the medical device industry, and yes, even in the automobile industry etc.
GM’s Bolt is the company’s biggest bet on electric innovation to date. To get to the Bolt, GM researched Tesla and made a $240 million investment in one of its transmissions plan.
Maybe not as media visible as GM’s announcement, Blume Distillation LLC just doubled its Series B capitalization with a million-dollar capital infusion from a clean tech seed and venture capital fund. Tom Harvey, its vice president, indicated Blume’s Distillation system can be flexibly designed and sized to feedstock availability, anywhere from 250,000 gallons per year to 5 MMgy. According to Harvey, the system is focused on carbohydrate and sugar waste streams from bottling plants, food processors and organic streams from landfill operations, as well as purpose-grown crops.
The relatively rapid fall in gas prices does not mean the end of efforts to increase use of alternative replacement fuels or renewables. Price declines are not to be confused with disruptive technology. Despite perceptions, no real changes in product occurred. Gas is still basically gas. The change in prices relates to the increased production capacity generated by fracking, falling global and U.S. demand, the increasing value of the dollar, the desire of the Saudis to secure increased market share and the assumed unwillingness of U.S. producers to give up market share.
Investment and innovation will continue with respect to alcohol-based alternative replacement and renewable fuels. Increasing research in and development of both should be part of an energetic public and private sector’s response to the need for a new coordinated fuel strategy. Making them compete in a win-lose situation is unnecessary. Indeed, the recent expanded realization by environmentalists critical of alternative replacement fuels that the choices are not “either/or” but are “when/how much/by whom,” suggesting the creation of a broad coalition of environmental, business and public sector leaders concerned with improving the environment, America’s security and the economy. The new coalition would be buttressed by the fact that Americans, now getting used to low gas prices, will, when prices rise (as they will), look at cheaper alternative replacement fuels more favorably than in the past, and may provide increasing political support for an even playing field in the marketplace and within Congress. It would also be buttressed by the fact that increasing numbers of Americans understand that waiting for renewable fuels able to meet broad market appeal and an array of household incomes could be a long wait and could negatively affect national objectives concerning the health and well-being of all Americans. Even if renewable fuels significantly expand their market penetration, their impact will be marginal, in light of the numbers of older internal combustion cars now in existence. Let’s move beyond a win-lose “muddling through” set of inconsistent policies and behavior concerning alternative replacement fuels and renewables and develop an overall coordinated approach linking the two. Isaiah was not an environmentalist, a businessman nor an academic. But his admonition to us all to come and reason together stands tall today.
It’s amusing to see analysts at high-powered, influential financial-services companies continue to predict what oil will do, following its 55-percent plunge from June to early February.
Here’s a news flash: Nobody knows what it’s going to do: whether the price will spike again, and if so, by how much. They were wrong in the last half of 2014, and some of them are sure to be wrong even as we speak.
The Wall Street Journal’s Alexandra Scaggs looks into specifics ($$), leading with the recommendations of Raymond James & Associates analyst Pavel Molchanov. In late November, with oil already down 30 percent from June, he issued a report saying oil prices and energy stocks were “within weeks of bottoming.”
He and his colleagues maintained the equivalent of a “buy” recommendation on Houston energy producer Southwestern Energy Co., also down about 30% since June. … More than two months after Mr. Molchanov made that call, it is clear he and many other analysts were wrong. Nymex crude prices and Southwestern Energy’s stock each have fallen more than 20% since Thanksgiving.
What does Molchanov say now?
“It’s a little late in the game to downgrade stocks on oil going down, because oil’s already gone down,” said Mr. Molchanov. But “commodity prices are almost impossible to predict in the short run.”
As the story notes, often analysts have waited until very late in the game to recommend against holding energy stocks. Molchanov’s colleagues at Raymond James didn’t downgrade Southwestern Energy’s stock until Jan. 6.
Reed Choate, portfolio manager at Neville, Rodie & Shaw of New York, says: “Analysts are always optimistic.” But “this was a big miss.”
Arun Jayaram, an analyst for Credit Suisse Group AP, added: “In an ideal world, as an analyst you anticipate moves.” But “it’s difficult.”
You’d figure that such analysts, chastened by their bad moves, would be a little less enthusiastic. Nope.
Mr. Molchanov of Raymond James thinks the sector could begin a lasting recovery in the second half of this year. The firm forecasts Nymex crude will sell for an average $62 a barrel this year. “The recovery will take time,” he said. “Then, naturally, there’s going to be a bounce in most oil stocks.”
Maybe. Oil has certainly climbed back upward a bit the past week, but it could just as easily slip back as march upward.
What consumers need, instead of expensive guesses and uncertainty, is a steady cost structure they can count on when they build their household budgets. And the best way to achieve that kind of stability is by introducing choice into the transportation-fuels market.
Resolution time, people: Forget the gym, forget cleaning out the garage, forget writing that novel.
Resolve to start small in helping the economy and helping the environment in 2015: Sign the “fuel choice resolution” on the Fuel Freedom website today.
No. 1 on the list is: Watch PUMP the movie, of course. The documentary is coming to iTunes on Jan. 13, and is available now for pre-order. If you happen to be in Omaha, Nebraska, on Feb. 2, you can also catch a special screening put on by the Nebraska Ethanol Board.
No. 2 among the resolutions: Sign our petition asking that major independent fueling retailers like Costco and Walmart make ethanol available at their locations.
No. 3: Shopping for a new or used vehicle? Look for one that’s branded as flex-fuel. Then you’ll know it’s ready to rock with ethanol blends.
No. 4: Come up with your own idea about how you can promote fuel choice in the new year. Something that means a lot to you.
Go to the page on our website for the full list of resolutions, then share your pledge on social media.
Thanks, and Happy New Year! Let’s all work together in 2015 to make a diversified transportation fuel market one step closer to reality.
John Brackett is one of the stars of the Fuel Freedom-produced documentary PUMP, but he’s more than just a pretty mutton-chopped face.
Brackett, an automotive engineer in Colorado who goes by the Twitter handle @Fuelverine, has spent a great deal of time promoting the film, which is now available for pre-order on iTunes.
Brackett specializes in tinkering with gasoline-powered engines — any kind, including vehicles and generators — to make them run on multiple types of fuel. But he’s also on a mission to educate the general public, as well as regulators. Converting one’s car to run on alternative fuels is technically not legal, as is using any fuel not specifically listed in the owner’s manual.
But once the public finds out that replacement fuels like ethanol, methanol and natural gas are not only cheaper but burn cleaner than gasoline, they’ll demand them in the marketplace. And they’ll want to learn how to convert their own cars. As Fuelverine says in PUMP: “That’s the best part about being an American: We don’t like it, we’ll change it.”
Fuel Freedom: Why aren’t all the vehicles rolling off the assembly lines labeled as flex-fuel?
John Brackett: The only reason they were ever flex-fuel in the first place was CAFÉ standards (Corporate Average Fleet Economy). And basically what they said is that, ‘Hey, your 6 miles per gallon Tahoe, since it only burns 15 percent gasoline [running on E85], is a 66 mpg vehicle!’ So your overall average for your fleet went up, and that’s why we only have flex-fuel in the giant V-8s and the V-6s. They very rarely went into the four-cylinders, and when they did, they canceled the model within 1-2 years, or even worse, they made it so you could only buy it if you were a commercial or rental fleet company. The [Chevy] Malibu is my favorite example: They made flex-fuel in 2010 for ’em, but it was only for the commercial or the rental fleets, and you couldn’t buy that four-cylinder from your local dealer. So there was never any incentive for them to actually make it mass-produced, they’re just doing it to hit the CAFÉ credits.
FF: Is it a case of companies only doing something because they have a financial incentive to?
JB: Exactly. I’m not usually a mandate-type person, but the Open Fuel Standard is the right type of mandate to allow competition right now. We just don’t have any options.
FF: What are you most interested in right now?
JB: My main thrust is actually making any engine run off of any fuel. I’ve built generators, I’ve gotten cars running on fuels, I’ve done hydrogen, ethane, methane, propane, butane, ethanol, methanol and gasoline. So my personal interest is being able to tell the computer what to change to run off those other fuels. What blew my mind was that the GM cars, and from what we’re told from several tuners, all the Ford cars since 2005, already have the algorithm in there. They literally turned it off. It’s in there.
FF: Is it possible for a car running on ethanol to get better mileage than gasoline?
JB: Basically, E85 has about 25 to 27 percent less energy in the same volume. So when you drive on the fuel, you would expect to lose that much gas mileage. What we found was that if you were driving on the stock flex-fuel from GM, you lost 25 to 30 percent, exactly what you would expect. When I started doing my tuning, and I would change the spark timing just a little bit – I varied it very small, and I did a lot of runs –and when I treated the fuel as gasoline or with slight advancement in timing, we only lost 5 to 15 percent of our fuel mileage.
Let’s go to what GM has already done: GM has a 2.0-liter, 4-cylinder, turbocharged engine out for the Buick Regal. That engine makes 5 to 15 percent more power on E85 than regular gasoline, while still getting the same fuel mileage. They have obviously tuned that car, so they have no problems doing it. Now, if we go to what is called direct-injection engines, which are definitely in the future … you can get even more efficiency out of it. You get another 15 to 20 percent efficiency increase by going to direct injection.
FF: If you look at prices of E85 around the country, there’s a big disparity [for example, it’s $2.09 in Iowa and $2.59 in Arizona, according to E85prices.com]. What will it take to get more consistency?
JB: If you have a bad original flex-fuel tune from a factory, you’re going to lose 30-40 percent [in mileage compared with gasoline]. Nobody wants to do that when it’s only 10 to 20 percent cheaper fuel. That’s one of the big reasons we try to use methanol as a big one, because it is so much cheaper, especially on a dollar-per-mile basis. But the ethanol fight, we just need more cars that have it as an option. Until we have that, you’re not going to have that market saturation. So if you think about where the cars are vs. the market, the numbers don’t add up. And that’s why we need every car to have the option to run a flex-fuel — on gasoline or ethanol or methanol, or any combination of them in the same tank.
FF: A constant refrain among the anti-ethanol crowd is that it damages engines.
JB: The biggest thing I like to tell people is, if you start with the first cars: They were all flex-fuel. They stopped being flex-fuel because of Prohibition. We have the materials, we know how to do this, we’ve been doing this for 30 years. Every car made since 2001 or ’02 has E10-compliant components. All the fuel lines, everything. And if you look at the corrosive nature of ethanol, it happens most between E10 and E30, so it’s actually very small blends of ethanol that cause the worst corrosion. But all the cars should already come to the factory with parts that work for it. There shouldn’t be any problem with it.
FF: Tell me about this conversion kit you’re using, by Flex Fuel U.S.
JB: They have the only E85-approved conversion system right now in the United States. What is different about their unit is it plugs into the oxygen sensor, so it reads the exact feedback from the oxygen system. So if it is lean [too much oxygen and not enough fuel], it should adjust. It plugs in line with the injectors as well, the difference being it doesn’t increase the injector pulse for the stock injectors; they add a whole new injector somewhere in the intake system, and flood the system that way. So they’re actually adding additional injectors to it. I’ve talked to the guy several times. Basically, he has to sell the kits for $1,100 to $1,500 right now, because it cost him $4 million to go through the EPA certification process. And that was only for 8 to 10 models. It’s absolutely ridiculous, the hindrance to competition. But he could easily, at mass scale, sell these for $300 to $500.
… We are now at the point where EPA is stopping us from getting clean air. They’re just making things more expensive.
(Photo: John Brackett dropping some knowledge to the assembled in Times Square, September 2014.)
