About Zana Nesheiwat


A lesson from the Kiwis

kiwiDid you know that a Kiwi is not just a fruit? It is New Zealand’s native flightless bird and a slang term for a New Zealander. Did you also know that alternative (or replacement fuels) can be substituted for or used in combination with gasoline fuels to power our cars? Natural gas, alcohol fuels (such as ethanol and methanol) and electricity are examples of replacement fuels. Research and demonstrations of replacement motor fuels have been taking place and continue to take place in New Zealand and around the world.

The oil crisis in the early 1970s, which accompanied an increase in gasoline prices and supply shortages, prompted governments, like New Zealand, to look for opportunities to produce and use domestic fuels to reduce their dependence on imported oil (the cost of oil imports increased from $52 million in 1972 to $709 million by 1980). With private-sector involvement, the government developed New Zealand’s natural gas fields, influenced production and prices and owned the pipeline system connected to the gas utilities – all in an effort to become transportation fuel self-sufficient.

New Zealand’s approach provides an example of an organized effort to encourage the use of replacement fuels.

Characteristics of New Zealand’s Alternative Fuel Program

new zealand

The island country began its alternative-fuels program in 1979. Financial incentives given by the New Zealand government to citizens for converting their cars to run on replacement fuels, combined with incentives to industry for developing a fueling network, enabled 140,000 vehicles to be converted to CNG or propane through 1985. Unlike Brazil’s alternative fuel program, which placed an emphasis on newly manufactured vehicles, New Zealand relied on vehicle conversions. In preparation for this change, New Zealand’s government established groups to evaluate alternative fuels and use of domestic natural resources which lead its recommendation of CNG and propane fuels. Industry faced a limited distribution network in developing a CNG fueling infrastructure. Not surprisingly, New Zealand oil companies were unwilling to invest in fuel alternatives that they did not control and competed with gasoline, even when government grants, loans and tax incentives were offered to install CNG equipment. In addition, because existing gas stations were owned by independent retailers, they were generally reluctant to take the risk of installing costly natural gas compressors and pumps. At the start of the program, the propane industry consisted primarily of small distributors selling propane for other uses. Again, government funding, along with financial support from industry players, helped establish a propane-fueling infrastructure. According to New Zealand government and industry officials, saving money on fuel prices was the most important draw for consumers to convert their vehicles and use replacement fuels. Another important factor was reducing the perceived risks associated with alternative fuels and vehicles.

New Zealand currently imports most of its transportation fuels, which are responsible for 20% of the country’s greenhouse gas emissions. Recently, the country has made big investments and impressive progress in terms of diversifying their fuel market to become less reliant on imports. Its “Stump to Pump” program is being awarded NZD$6.75 million in government co-funding to create a new market pathway that links low-value forestry and wood-processing residuals to renewable fuel markets.

Government cooperation, together with industry and consumers, can build a consensus to overcome the technological, financial and consumer perception barriers involved in initiating an alternative fuels program. This is not to say that the U.S. or any other government must introduce costly and unreasonable incentives to drive the transition to alternative fuels and gain consumer acceptance. Rather, the government’s role is to enable an open fuel market — one in which new businesses will compete, prices will fall and innovation will drive efficiency and quality.

It’s clear that expensive car conversions are a turn off to consumers. For personal vehicles, liquid fuel conversions are far more cost-effective than CNG or LNG. Providing consumers a choice between fuels when filling up their gas tanks will ignite competition that will bring down fuel prices. The safe and efficient use of fuels, such as ethanol and methanol, can be used to expand consumer choice and would require slight modifications to existing vehicles, necessitating reasonable capital investment. Barriers must be overcome and outdated regulations must be updated in order to have a truly open fuel market. The abundant supply of natural gas provides an opportunity for the U.S. to become self-sufficient.

Originally published on oilprice.com.

Displacing oil costs less than oil

shutterstock_105879284“Innovation is the ability to see change as an opportunity not a threat.” Steve Jobs

Are we running out of oil? Are fuel alternatives overrated? Can fossil fuels become irrelevant? The recent surge in so-called “energy” discussions is astounding. From top news outlets like National Geographic’s “Great Energy Challenge” and The New York Times’ “Wheels” to niche sites like The Energy Collective and Oil Price, proponents have consciously delegated a space to discuss solutions to some of the most important transportation, electricity generation and environmental issues of our time.

An article by a contributing editor to The Atlantic, Charles C. Mann, is among those believing in the economic significance of fossil fuels. He claims that “Americans will be less likely to spend trillions on fancy no-oil cars if cheap petroleum is in abundant supply,” which is debatable for two reasons:

First, new oil is harder to find, takes longer to develop and requires a lot more capital. We are not running out of oil. Although supply is indisputably important, the amount of oil that can be extracted at a reasonable cost should be more of a concern. Oil must be in the range of $50 per barrel to sustain economic growth, far below the current level of over $100 per barrel. Even when the price of oil in the U.S. (the WTI) dips, the price of gasoline does not decrease because it is determined by the international market (Brent Price).

Second, modern technologies to save or displace oil cost far less than oil. Alternatives become highly attractive when considering the entire cost of relying predominantly on oil for transportation, from individual wallets to economic and political stability. Here are some facts:

  • In 2012, the U.S. spent $291 billion on imported oil.
  • Oil accounts for over half of the nation’s trade deficit.
  • The bulk of our national security budget is spent on protecting oil routes in oil-rich regions.

And the list goes on.

Presently, the number of oil rigs operating in the U.S. is at its highest level in almost 30 years. We should reduce our dependence on foreign oil by utilizing our substantial petroleum reserves. Yet, our domestic oil supplies alone cannot satisfy our present or future transportation needs. Another error in Mann’s article, along with many others that attempt to tackle our so-called “energy” problem, is lumping electricity and transportation fuels together under one synonymous and interchangeable category — energy. When discussing the topic of oil consumption, it is imperative to distinguish electricity from transportation because approximately 71% of our oil supply fuels transportation.

Lastly, Mann is not wrong to be concerned of costly car conversions and the potential need for new car manufacturing to accommodate abundant replacement fuels. But why not consider fuels that can be easily transported with existing infrastructure, directly used in flex-fuel vehicles with minor engine modifications and blended with gasoline? Most cars that have been produced over the last five years are already capable of being flex-fuel vehicles that can run on ethanol and gasoline.

However, to enable the cars to run on multiple fuels, slight modifications to fuel line seals and other parts and computer reprogramming in the vehicle are required. Ethanol and gasoline flex-fuel capable cars could be converted to support a blend of up to 60% methanol by merely replacing fuel system seals and o-rings. Support for higher methanol blends can be achieved by modifying an automobile’s spark tables. Late model year non-flexible fuel cars could be converted to flex-fuel by reprogramming their on-board computers to recognize alcohol fuels. Altogether, there are an estimated 50 million cars and trucks that could be converted to run on ethanol, methanol and gasoline blends. In addition, it is not costly to convert vehicles. Most of the associated costs are for the labor that is required to replace the seals with alcohol-compatible products.

Because the role of government in capitalism is to enable markets, our goal should be simply to facilitate an open market that encourages fuel competition. New businesses will compete, prices will fall and innovations will drive efficiency and quality. How do we know such a transformation is possible? Because it has happened time and again as our free market system has evolved and thrived over hundreds of years. By disregarding the power of competition we are running away from a great opportunity.

originally published on oilprice.com

Choice. Competition. Free trade.

PetropolyFuel Freedom Foundation’s premiere “Fueling the Future” webinar featuring Gal Luft and Anne Korin of the Institute for the Analysis of Global Security took place April 8, 2013 at 7 p.m. EST. The discussion was based on the book, “Petropoly: The Collapse of America’s Energy Security Paradigm.”

Fuel Freedom will continue hosting a variety of webinars with industry professionals, energy experts and political leaders to discuss the feasibility of flex-fuel vehicles, the cost-benefit of replacement fuels and the positive macro-economic impact of shifting our reliance off oil.

Luft and Korin covered everything from “America’s energy paradigm” to the adoption of replacement fuels. How has Brazil successfully transitioned to an open fuel market and why is China increasing its use of methanol fuel for transportation? Other questions that the webinar addressed are:

Why did Luft and Korin, the authors of “Petropoly” write a book on the collapse of an energy paradigm when we are constantly hearing that America is becoming increasingly independent from imported oil with help from the “oil production boom”?

  • Because America is becoming more oil independent, but we are paying more for oil

What is the oil paradigm that the book refutes?

  • America is dependent on Middle East oil
  • Drilling is the answer
  • Conservation and efficiency is the answer
  • U.S. self-reliance on oil will reduce the global price of oil and weaken unfriendly regimes

Oil & Natural GasPicture2

Do policies designed to lessen oil consumption lower the price of crude oil?

The answer providing energy security and lower fuel prices, as Luft and Korin suggest is “choice, competition and free trade.” We can break oil’s monopoly on our transportation sector through fuel competition. Brazil shows the sudden positive economic impact of a country transitioning to an alcohol fuel (ethanol) while China illustrates the benefits of transitioning to methanol fuel for transportation.Natural gas in the U.S. is abundant and economical.

The U.S. is not currently taking advantage of this plentiful resource, with less than 1% of natural gas being used in the transportation sector. Natural gas is a feedstock that a variety of domestic fuels can be derived from.

Click here to listen to the entire webinar, or click here to download the PowerPoint presentation.

Sweden’s quest to be the first oil-free nation

SwedenFamous for Volvo, Ikea and Absolut Vodka, Sweden is now on a new pursuit to become the first completely oil-free economy in the world by 2020.

The oil crisis in the early 1970s forced Sweden to embark on a quest for alternative energy sources. Its phasing out of oil has proceeded smoothly; in 1970, oil accounted for 77% of Sweden’s energy, but by 2003 that figure fell to 32%.

According to the energy committee of the Royal Swedish Academy of Sciences, there is growing concern among nations that global oil supplies are peaking and will soon become scarce, causing the price of oil to skyrocket. Committee members predict that a global economic recession could ensue, and Sweden is taking action to make its economy less vulnerable.

“Our dependency on oil should be broken by 2020,” said Mona Sahlin, former minister of Sustainable Development, in an interview with The Guardian newspaper. “There shall always be better alternatives to oil, which means no house should need oil for heating, and no driver should need to turn solely to gasoline.”

Timeline_Policy Development in Biofuels (European Commission GovThe Renewable Energy Directive (RED) requires 10% of Europe’s fossil fuel in transport to be replaced with liquid biofuels by 2020. The majority of biofuel produced is sold as a low-admixture (ethanol and biodiesel) to fuel companies for blending with fossil fuel. The blending ratio is 5% biofuel to 95% fossil fuel. About 80% of low-admixture ethanol is imported from Brazil.

In 2006, the government passed a “pump law” to require larger Swedish fuel stations (selling more than 3,000 cubic meters of gas or diesel per year) to provide a replacement fuel option. Also, starting in 2009, all small stations that sell more than 1,000m3 per year were required to meet the same standard.

Of the European member states, Sweden has one of the highest shares of renewable energy in transport with 5.4% in 2009. One-fifth of the cars in Stockholm can run on alternative fuels, primarily ethanol. It is not uncommon to see gas stations that sell ethanol because ethanol stations have lower construction costs than petroleum stations. Most of the ethanol sold in Sweden is derived from grain. From a lifecycle viewpoint — where climate impact is measured along the whole chain from production to use — ethanol extracted from sugarcane is favored. Swedish researchers focus on the production of ethanol from cellulose, referred to as second-generation biofuels, which uses a more effective production method than grain-based ethanol. Moreover, this type of ethanol does not affect food crops. Among other biofuel sources is biogas that can be extracted from manure and waste.

Flex-Fuel Vehicles
Stockholm placed an order for 2,000 flex-fuel vehicles (FFVs) for any car manufacturer willing to produce them. Ford Motor Company took the offer and delivered its first set of the flex-fuel version of the Ford Focus in 2001, selling more than 15,000 by 2005.

Sweden’s swift adoption of flex-fuel vehicles, rising from 717 in 2001 to over 200,000 by 2011, can be attributed to the National Climate Policy in Global Cooperation Bill passed in 2005, which exceeded the Kyoto Protocol expectations and sought to eliminate oil imports by 2020.

To meet these high standards, several government incentives were implemented, including a tax exemption for ethanol and other biofuels, which resulted in a 30% price reduction at the pump for E85 fuel over gasoline. Other “demand side” incentives included a US$1,800 bonus to buyers of FFVs, a 20% discount on auto insurance, free parking spaces and a tax reduction for flex-fuel company cars. By 2008, this incentive package resulted in sales of FFVs representing 25% of new car sales.

International oil dependency is one of the world’s biggest problems and as Sahlin notes, a Sweden free of fossil fuels would give the country enormous advantages, “not least by reducing the impact from fluctuations in oil prices. The price of oil has tripled since 1996.” Sweden’s investments, actions and laws are no accident, and although Sweden’s goal of eliminating oil consumption is seen as ambitious by the rest of the world, their attention to the detrimental effects of this dependence is worth noting. As Nelson Mandela reminds us “it seems impossible until it is done.”

Join our Inaugural Webinar Session for a Riveting Discussion on Breaking the Oil Monopoly

shutterstock_105024428Join Fuel Freedom, industry experts and members of your community in a webinar discussion of “Petropoly:
The Collapse of America’s Energy Paradigm” with authors Gal Luft and Anne Korin, on April 8 at 7 p.m. EDT.

The “Fueling the Future” book club and webinar series is part of a national effort to inform the public of the key issues surrounding America’s oil dependency and to motivate public participation and discussion. The book club program will feature relevant, timely and thought-provoking book selections throughout the year. We have established a book club forum that provides members the opportunity to collaborate with like-minded individuals, initiate discussions with members of their community and pose questions to leading industry experts.

Following the book reading and forum discussion, participants are invited to attend a webinar featuring the book’s authors. In addition to the book club webinars, Fuel Freedom will host a variety of other webinars with industry professionals, energy experts and political leaders to discuss the feasibility of flex-fuel vehicles, the cost-benefit of alternative fuels and the positive macro-economic impact of oil independence.

“We are storming into the national energy debate as American family budgets are being clobbered, yet again, by the high cost of oil. In an effort to influence and alter the national dialogue, our education and outreach programs, including the book club and webinar series, offer lively and engaging conversations and an opportunity to connect with members of your community and industry professionals all in one place. It is a platform to exchange ideas, learn about current events from energy experts and most importantly, to get a sense of the devastating consequences of our oil addiction and the viable replacements that offer a solution,” said Ann Norman, Fuel Freedom Foundation vice president of communications.

The Foundation’s current book selection is “Petropoly: The Collapse of America’s Energy Security Paradigm.” In a no-holds-barred, fast-paced, information-packed sequel to “Turning Oil into Salt: Energy Independence through Fuel Choice,” energy experts and co-directors of the Institute for Analysis of Global Security (IAGS), Gal Luft and Anne Korin, spell out the pitfalls of an oil market dominated by a cartel.

The Washington Times said, “Ms. Korin and Mr. Luft’s thinking is rooted in science, economics and politics and they display intellectual equity to other points of view that is refreshing and clarifying.” The National Review calls the book “a muscular case for a Teddy Roosevelt-style solution: trust-busting.”

As Fuel Freedom Foundation continues to advocate for an open fuel market so that cheaper, cleaner, American-made replacement fuels may compete fairly with gasoline at the pump, we will continue to educate the public about the viability of cost-effective replacement fuels, such as natural gas, methanol and ethanol.

Join the conversation today.

China’s Growing Methanol Economy

Could methanol be the feasible path toward replacing petroleum-based fuels?

Balancing dependence on Middle East oil against increasing fuel demand continues to challenge China in its ongoing urbanization and industrialization. In an effort to adapt to such limitations, China has increased production capacity and consumption of methanol. In less than a decade, methanol use in China’s transportation sector grew from virtually zero to replacing nearly 8% of the country’s gasoline requirement.

China’s approach may prove to be profitable and strategic. Research suggests that methanol fits within existing energy infrastructure, offers a convenient solution for efficient energy storage and most importantly, certain methanol fuel blends can be used in today’s internal-combustion engines. Demand in Asia is rising as methanol is increasingly used as more than a chemical feedstock.

“Methanol is seen as a strategic fuel by the rapidly growing nation due to its clean fuel benefits, favorable economics, the ease of adopting methanol in current fueling infrastructure and the advantage of being able to use alternative feedstocks in a nation that is lacking in domestic oil reserves,” said former Deputy Governor of Shanxi Province, Peng Zhi Gui.

china

In 1995, the first methanol pilot project in China was initiated by Sino-American Scientific Collaboration.  Ford Motor Co. donated a methanol engine and assisted in developing the first methanol automobile in China. Direct blending with gasoline drives the recent growth in methanol demand. In 2009, national fuel blending standards for M85 and M100 went into effect across China, and a national M15 standard is currently in the final stages of adoption. These standards, along with the domestic availability of methanol and its lower cost compared to gasoline, will increase methanol’s fuel market share. In addition, methanol-blended fuel could be 50% cheaper than regular gas for drivers at the pump, depending on blend.

Global Methanol Production

Source

In 2010, China’s methanol production capacity reached 38.4 million tons and will increase to 50 million tons by 2015. The M15 blended fuel is already widely used in five provinces – Shanxi, Shaanxi, Zhejiang, Guizhou and Heilongjiang, with localized standards implemented by provincial governments.

Methanol is the simplest alcohol, with the lowest carbon content and highest hydrogen content of any liquid fuel. As such, it offers a substantial improvement in toxic emissions, eliminating extremely harmful aromatics like benzene and xylene, and the particulate matter present in gasoline and diesel fuel.

China also plans to invest $382 billion in innovative energy conservation and anti-pollution projects over the next four years. Methanol is biodegradable in both aerobic and anaerobic conditions posing little long-term threat to ecosystems because it is unlikely to accumulate in the environment.

China is edging ahead by actively restructuring the contours of the system, placing a focus on the real problem (oil), and diversifying the transportation fuel market.  The country has set a target of producing and selling 500,000 energy-efficient and alternative-energy vehicles a year by 2015, and five million vehicles a year by 2020. Improved methanol production capacities would provide China with a handy alternative to petroleum-based fuels and chemicals in a post-peak-oil scenario, or as an emergency reserve in a temporary oil crisis.

It is a concern that China primarily derives its methanol from coal. As a transportation fuel, coal-based methanol has a larger carbon footprint than gasoline and could trigger higher world coal prices. Natural-gas-based methanol is also an alternative to petroleum-based products. Outside of China, methanol is primarily made from natural gas. In the United States, increased supply of shale gas and other unconventional sources is expected to keep gas prices relatively low.

California promoted methanol as an automotive fuel in the 1980s and ‘90s. In fact in the early ’90s, methanol was a more accepted automotive fuel than ethanol in the U.S. and the U.S. even helped initiate methanol fuel programs in China. Very little data is available on how and why methanol policy and programs ended in the United States.

No matter one’s individual perspective — liberal or conservative — we need a concrete solution that encourages competition and innovation, ensuring Americans an affordable and stable supply of replacement fuels for our transportation needs. Methanol can be derived from many plentiful energy resources and give the oil fuels a real run for their money.

More Oil, More Problems

shutterstock_87551914What if your city, county, state or country suddenly struck oil, welcoming it into a billion-dollar industry?

Oil is a global commodity with unique characteristics. While being a driving force in global industrialization and world commerce, oil is a finite natural resource with extreme price volatility and notorious boom and bust cycles.  It has the exceptional ability to generate profits for state and private actors. The combination of these factors produces what some have called ‘‘the paradox of plenty’’ or the ‘‘resource curse.’’

The “resource curse” refers to the inverse causation between natural resource abundance and economic growth, especially oil. Simply put: more oil, more problems. The symptoms of the “resource curse” include less economic growth, a negative correlation between a country’s dependence on oil and their GDP, poor development outcomes, high rates of poverty, malnutrition, child illiteracy, corruption, authoritarianism and civil war.

For example, following the early ‘60s discovery of natural gas deposits in Norwegian North Sea territory, an export boom reduced the profitability of Norway’s manufacturing and service exports. (For similar reasons, total exports from the Netherlands decreased markedly relative to GDP during that time.) Nonetheless, Norway was able to overcome this economic calamity and progressed to secure the number one spot in the United Nations’ Human Development Index (HDI). HDI is a composite statistic of life expectancy, education, and income indices that ranks countries into four tiers of human development, serving as a frame of reference for both social and economic improvement.

But in developing countries with weaker institutions and governance structures, the economic impact of oil exploitation on the populace is likely to be devastating and can trigger much deeper social problems. Oil exploration in the Niger Delta wetlands has made poverty and hunger commonplace. Angola, where 90% of the government’s revenue comes from oil, remains one of the poorest countries in the world. Saudi Arabia’s riches and royalty conceal its growing poverty problem, with an estimated quarter of the population living below the poverty line. Recent developments in Iraq may attest that this valued resource may be a curse rather than a blessing.

In 1991, after the devastating Iran-Iraq war, Iraq ranked 50th out of 130 countries in the HDI. By 2000 it had fallen to 126th out of 174. Iraq currently ranks 132 out of 178 in the HDI. Over 20% of the population does not have access to safe drinking water, over 50 percent of its people are illiterate and there are high rates of malnutrition.

Iraqi Kurds, who have sought an independent state since 1920, have begun post-Saddam to assert their right to sign deals with foreign oil companies and drill on lands they historically claimed. In 2004 the Kurdistan Regional Government opened up to drilling, allowing foreign oil companies to keep 30 times the profits than the Iraqi government was offering. In response, Baghdad threatened to cancel all the KRG’s drilling contracts elsewhere in the country, but to no avail. Over 50 multinational companies, including Exxon Mobil Corp. and Chevron, proceeded to sign contracts with the Kurds to tap into the estimated 66 billion barrels of oil. This does not only have the potential to shift the global market for crude; it could tear apart the country. Recent bombings that have killed more than 90 people and wounded more than 500 illustrate the mounting tensions that could lead to a “resource war” over the right to drill for crude.

Could the country’s treasured resource, its means of corruption, wealth and poverty soon become “blood oil” — the cause of war between the Iraqi and Kurdish populations?

*In cases where oil has been the cause of wars, or has funded the prolonging of wars, it can justifiably be regarded as ‘blood oil’.

Oil
Data Source

As “Fueling Poverty: oil war and corruption” states, oil, “when mixed with prevailing conditions in poor countries – weak institutions, governance and democracy – the result is a lethal cocktail that poisons oil-producing developing countries and hits poor communities hardest.”

Oil’s effect on poverty in source countries has not been a deterrent to the market. So, various proposals have been made to lessen this ‘‘paradox of plenty,’’ including demands for revenue transparency by oil companies and exporting governments, revenue management schemes, stabilization funds, etc. One proposal to mitigate the resource curse stands out. Todd Moss, a senior fellow and vice president for programs at the Washington-based Center for Global Development looks optimistically at the Alaska Permanent Fund. State law requires that a quarter of the state’s revenue from oil be put into the fund. Every year, the money is invested and every Alaskan resident gets a share of the dividends. These payments stimulate the economy, reduce income disparities and have contributed to a large reduction in poverty among Alaskan Natives, the state’s poorest group. This approach, however, has not been successful in other places it has been implemented, including Venezuela where Hugo Chavez has raided the oil fund. The lack of personal taxes and respect for dividends which carry no public responsibility often resulting from these “oil-to-cash” programs can undermine the sense of community and alienate citizens from government.

Oil-to-cash would be a challenge for countries that have witnessed the power of their natural resources and have entrenched interests guarding business-as-usual. Many oil-producing countries don’t have an incentive to change their governments to serve and protect their constituents, but only to secure revenues gleaned from the export of petroleum on which they rely. Without a significant effort to reduce dependence on foreign oil, the consequences will continue to affect producers and consumers worldwide.

What do AT&T and Big Oil have in Common?

shutterstock_112767175When’s the last time you made a long-distance phone call? Do you even notice the difference between local and long-distance charges? Before 1984, only AT&T could sell long-distance telephone service, making a long-distance call to your great aunt 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 the staggering $3.00 a minute to 30 cents a minute. Today it’s a mere 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.

Here’s a lesson from 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 gasoline. 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 (which we so desperately need), 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. A transition of this magnitude does not happen on its own. Businesses must invest in innovative ideas; policies must evolve to accommodate a changing world; and organizations must unite to educate, inform and involve the public.

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.

The competition – natural gas, methanol and, in this case, ethanol, or any combination of alternative fuels, could cause would bolster the U.S. economy, millions of jobs and improve air quality.

Moreover, the oil industry’s recent investments and interest in natural gas is no coincidence. Natural gas is abundant in America and has the potential to become a dominant transportation fuel.

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.

Two possible futures for oil in America

Anaheim, Calif. resident, Rocha, 35, said, “You can’t do nothing about it,” as he pumped $4.66 a gallon regular gasoline into his truck at a Chevron station. The bad news is that the worst is yet to come. The good news is we CAN do something about America’s dependence on oil.

Alternative FuelsHow can the United States reduce the susceptibility to volatile oil prices?   The answer is quite simple: create a marketplace where cheaper, cleaner, American-made fuels, including ethanol, methanol and natural gas, can compete with gasoline, allow consumers to have fuel options at the pump and permit the current fleet of vehicles to be modified to run on multiple fuels.

Fuel Freedom Foundation co-founder, Yossie Hollander, said, “$2 a gallon gasoline is an achievable goal in this decade. Antiquated regulations, lack of infrastructure for alternative fuels and the need to modify the current car fleet are the largest barriers to a free and open fuel market.”

Many factors can disrupt the flow and the price of oil, from geopolitics and natural disasters to tightening of supply and war. The future is unsustainable with the current system that is dominated by imported oil. The average American spends over $4,000 a year on gasoline for their vehicles. This is the main reason why American’s spend more on transportation than on food, clothes and entertainment, combined.

Disruptions are inevitable, oil demand increases are unavoidable and innovating and diversifying the transportation landscape is indispensable. As a nation, what makes sense is to focus on a concrete solution that encourages robust competition and innovation within the transportation sector.

Recent reports are hopeful that the U.S. can achieve oil independence by the year 2035. The adaption of replacement fuels as an alternative to gasoline, however, can bring forth oil independence long before fuel prices become more unaffordable and unpredictable than ever.

“There are two different possible futures for this country,” says Eyal Aronoff, co-founder of Fuel Freedom Foundation. “One future is where we do nothing and the oil price keeps rising and we eventually deteriorate into a Mad Max society. The opposite is our message of hope, where we address this concern and fix it over the next few years.”

Don’t be fooled by the illusion of low gas prices

gas prices headlinesOvernight, the most popular headlines have become “Gas Prices Hit Low for a Year,” “Gas Prices Continue to Decline” and the list goes on. According to Daily Fuel Gauge, the average price of a gallon of regular gas in the U.S. fell to about $3.25, which is down nine cents in the last week and down 17 cents from a month ago.

Mixed messages and exaggerated reports make one wonder what the true energy situation is and what’s forthcoming. Perhaps, the decline in gasoline prices is a mere reflection of typical decreases in demand or of increased supply, partially due to the refinery market recommencing its normal activity. Yes, gas prices have decreased to new lows for 2012, but the national average one year ago at this time was almost exactly as it is today: $3.22, meaning gas prices are still high.

There is little contention over the fact that global crude oil prices depend on a myriad of factors, such as increased demand in emerging economies like China and India, spare oil capacity in Saudi Arabia, natural disasters, sanctions and political upheaval, all which assure the continued volatility of prices at the pump.

Looking at the big picture reveals a very clear long-term price trend in the oil market. Oil prices are volatile but exhibit an upward trend. China has no intention to halt economic growth, meteorologists have yet to uncover a method to control the weather and oil prices will always be determined in the global market. Thus oil prices will continue to rise alongside gasoline prices if oil remains the nearly exclusive component in transportation fuel.

For the “Drill Baby Drill” supporters, domestic commodity options are by no means a bad thing, but the predominate sources of petroleum in North America (shale, tar sands and deepwater) are the most expensive and environmentally destructive to extract. The increasingly high costs associated with such drilling are ultimately passed onto consumers. Take Canada for example: the country is by no means conservative in their drilling practices and has an abundant oil supply, yet Canadians pay the same high prices at the pump that Americans do.

Because the demand for oil is insensitive to the price over the short run and because small disruptions or additions could produce big price changes, I do not have much confidence in anybody’s near-term oil-price forecast and am not swayed by attempts designed to excite me over a temporary decline in gas prices.