About Zana Nesheiwat

Fuel Freedom founder cautions over IEA report claims

The International Energy Agency’s (IEA) World Energy Outlook 2012 generated a mostly enthusiastic response, rather than criticism, regarding its prediction that the United States will overtake Saudi Arabia as the world’s biggest oil producer by 2020 and become virtually energy independent by 2035.

Fuel Freedom Foundation co-founder Eyal Aronoff takes an in-depth look at the claims made by the IEA in his latest article “Why is the IEA Report Considered Good News?” In the article, featured on the well-respected Real Clear Energy news site, Aronoff suggests that it may be wise to hold off on celebrating the report until thoroughly reviewing the claims.

Aronoff highlights the second paragraph of the recent IEA report, which states:

“Taking all new developments and policies into account, the world is still failing to put the global energy system onto a more sustainable basis.”

Aronoff argues that the report indicates our surge in unconventional oil may only leave us even more dependent on OPEC.”

Aronoff explains that “the underlying problem, as the IEA continually points out, is that oil has no real competition in the transportation market. As developing countries expand their use of cars and trucks, this can only drive oil prices higher.”

“Read closely, World Energy Outlook 2012 is filled with such caveats,” Aronoff reminds readers.

The Fuel Freedom Foundation is right on point as the IEA report states:

“Growth in oil consumption in emerging economies, particularly for transport in China, India and the Middle East, more than outweighs reduced demand in the OECD, pushing oil use steadily higher.”

Although Aronoff is critical of the claims made by the report, he states that the IEA report is well-guided in emphasizing the advantages of natural gas:

“Natural gas is the only fossil fuel for which global demands grow in all scenarios, showing that it fares well under different policy conditions; but the outlook varies by region…in the United States, low prices and abundant supply see gas overtake oil around 2030 to become the largest fuel in the energy mix.”

Aronoff asserts, “Converting this gas to liquids – such as methanol, which can be substituted for gasoline in cars and trucks – would enable us to achieve the independence from foreign oil that the IEA so optimistically predicts. It seems worth a try.”

Read more about Eyal Aronoff’s vision here

The Holiday Scrooge: High gas prices

The holiday season is here. The smell of cinnamon fills the air and you can finally get your favorite mint-eggnog-spiced-dolce-latte from your local coffee shop. Everyone boasts about their strategy of quickly finding a parking spot at the mall. Families come together to greet, eat and argue. The holidays will come and go, like they do every year, and some things will never change. Some things, however, do change.

The average price of gas in the U.S. is at a high of $3.50/gallon, up from $3.42/gallon in 2011 and up from $1.31/gallon in 1990. Due to increased gas prices, shoppers are likely to drive less to make holiday purchases. According to Marin Software, searches for online shopping have a tendency to increase dramatically along with gas prices.

Americans aren’t just feeling the pain at the pump; increased gas prices affect the cost of goods and airfare. Retailers are squeezed as they are forced to pass on the expenses associated with increased transportation costs to consumers.

For example, in 2011, people traveling to European cities paid an extra $420 as a fuel surcharge. Anything that has to be shipped or transported – from gift baskets to electronics – costs more as gas prices rise.

The long-term price trend in the oil market is very clear – prices have increased for decades, and they will continue to rise.

According to UC San Diego Economist, James Hamilton, the single most likely outcome is that the factors behind the overall increase in oil prices since 2005 will stay with us. “Demand for oil, particularly from the emerging economies, has grown significantly, and we have had a hard time increasing global production. The most likely scenario is that the next decade will look something like the last, with oil prices volatile but exhibiting an upward trend.”

We should be able to enjoy the holidays at a reasonable price without being forced to adjust our lifestyles, just because oil, the global commodity that drives world commerce, is unaffordable.

Rising gas prices will have a MUCH greater impact on our lifestyle and the freedom to enjoy the simple things in life in the near future if something is not changed. It is not enough to treat oil dependence as a “side-effect” that must be mitigated: there must be a positive goal of transitioning off oil. We can achieve this, enjoy happy holidays and year-round saving by investing in the distributive infrastructure that will enable a shift away from oil dependence to the use of domestically produced alternative fuels.

Jordan: Fighting for economic relief

On Nov. 13, the Jordanian government made an announcement to cut fuel subsidies, triggering yet another round of protests in the Arab region and further accentuating the people’s political discontent and the nation’s economic challenges.

This may seem like a reverie, due to the government’s decision to back away from subsidy cuts in September, but make no mistake – this is real for the kingdom and its people. As they did last month, the Muslim Brotherhood’s Islamic Action Front (IAF) and leftist parties rallied thousands of demonstrators against government action and economic dismay.

Due to pressure from the International Monetary Fund (IMF) to cut down public spending and increase commodity prices, combined with the need for Jordan to secure their expected $2.05 billion loan from the IMF, the Jordanian government is forced to pass down the cost of oil subsidies to the publica dreaded policy change which was destined to happen.

The 33 to 55 percent rise in the price of fuel will be devastating to working families. Unfortunately, much like the U.S., the price increase affects poor and rural household expenses disproportionately more than any other group. (14 percent of Jordan’s population is below the poverty line). Not to mention the indirect impact of rising fuel prices – protests, famine, war and rising food prices due to transportation costs, which will become more evident in the coming weeks.

Jordan, one of the smallest economies in the Middle East, imports more than 90 percent of its oil and relies on foreign investment and grants to support public finances, making it even more sensitive to the volatile price of oil. Global crude oil prices, which depend on a myriad of factors such as increased demand in China and India, spare oil capacity in Saudi Arabia and in Jordan’s case, repeated bomb attacks against a gas pipeline in Egypt, are uncontrollable factors that significantly impact fuel prices.

The abandonment and lack of support, mainly by the Gulf States, further accentuates Jordan’s dire financial condition. Amman is reported to have only received $250 million of the $5 billion promised by the Gulf Cooperation Council (GCC) over the course of five years, leaving it with a growing national deficit and an inability to sustain government spending.

We mustn’t overlook the value to the U.S. in maintaining the peaceful state of Jordan. Its alliance with western states, peace treaty with Israel and its moderate voice in the region make it an invaluable ally. Although the Muslim Brotherhood remains a small minority in the country, we should not underestimate the slow but perhaps impactful influence this has or will have on the people, government policy and national security.

It is evident that the world’s oil dependency has much farther reaching implications and consequences than is immediately apparent. But, the global tone brings to light the unintended consequences of the world’s oil dependency and the desperate need for the world to shift its reliance on oil.


Vote yes on freedom: Break down barriers to fuel competition

I am happy to have the right to vote. Ok, happy is probably an understatement. Proud, honored, humbled and thrilled would be more appropriate sentiments. A democracy where an individual is celebrated and not penalized for having an opinion is not a privilege shared by the majority of the world. Some people are prosecuted when refusing to act in accordance with religion, culture and tradition.

While I experience a sense of satisfaction and pride every time I walk out of a voting booth, I am shocked by the idea that many Americans passively accept a lack of choice for transportation fuel.

As Americans, we have a say in almost all aspects of our lives: the way our food is packaged (Proposition 37 in California), who our leaders are, education reform and the list goes on. Yet, when it comes to the very thing that powers our cars and affects nearly every person, every day, we are reduced to only one choice: oil.

I am sure many people cringe and tightly clench their wallets at the mention of “oil,” “pump,” “gas station” or “fill up.” This would not be the case if alternative fuels such as ethanol, methanol and natural gas were made available at the pump alongside gasoline. These fuels are cheaper, cleaner and made in America from abundant feedstock.

Why can’t you choose your fuel?
Three interlocking forces maintain the closed, single-commodity market for transportation fuels, intensify our oil addiction and impede our right to choose our fuel:

  • Current regulations make it too expensive for consumers to convert their vehicles to flex fuels.
  • For the most part, auto manufactures don’t produce flex-fuel cars (cars that have the capability of running on a combination of gasoline, ethanol and methanol).
  • Fuel distributors and gas station owners have resisted installing non-gasoline pumps, resulting in fewer than 2,000 flex-fuel pumps around the country.

This lack of choice is a non-partisan issue. And addressing our oil dependency is more important than ever. Unless barriers preventing replacement fuels from entering the market are eliminated, Americans will continue to suffer increasing economic hardship while suppliers continue to benefit from their monopoly on our transportation fuel.

The next time you drive that ingenious contraption that gets you from your favorite fast food joint, to class and back home again, think about being afforded the option to choose a cheaper fuel that can power your car just as well as expensive imported oil, if not better. Think about the possibilities. Think about the innovation and billions of jobs that will be generated. Lastly, think about organizations that are “of the people, by the people” and intended “for the people,” but have been slow to adopt policies that allow fuel competition, acting as barriers to America’s drive for change.

We can make all this possible. The U.S. has the resources, technology and the manpower to produce domestic fuels that will revolutionize the transportation industry. Most importantly, our actions will reaffirm Americans’ right to choose.

Attacking U.S. interests with oil

While the United States depends on its ally, Canada, for 15 percent of its oil, it remains largely dependent on unstable countries for fuel consumption needs. In fact, the Middle East’s Persian Gulf is the richest oil province in the world, accounting for approximately 20 percent of U.S. oil imports.

Our continued reliance on foreign oil presents a serious problem: it jeopardizes U.S. national security. The $400 billion in yearly oil revenue gives countries the ability to establish policies that, according to The Council on U.S. Foreign Relations, “oppose U.S. interests and values.”  By having this advantage, producer countries are free to ignore “U.S. policies and to pursue interests that are inimical to our national security.”

In an earlier blog, “Oil has two sharp edges,” I shared an old Arab proverb and explained how oil is unquestionably used as a weapon. Hostile dictators are aware that America, along with the entire world, is dependent on oil and those dictators aren’t afraid to use this “weapon” to sway policies.

This has been proven time and time again. In June 2006, Iran’s oil minister cautioned, “If the country’s interests are attacked, we will use all our capabilities, and oil is one of them.”

Perhaps more unsettling are the remarks of Iran’s supreme leader Ayatollah Ali Khamenei, “If the Americans make a wrong move toward Iran, the shipment of energy will definitely face danger, and the Americans would not be able to protect energy supply in the region.”

If the threat to our national security and our values is not enough, maybe the fact that supply disruptions drive up prices at the pump will trigger an emotion. Sure, one option is the use of military force to secure the free flow of oil in the Persian Gulf. The U.S. and its allies could fight and eventually defeat Iranian attempts to close the Strait of Hormuz. But taking this route will not only put the U.S. in yet another war and further cripple the economy, it will force Americans to send our troops (parents, children and friends) to faraway lands, with no way of knowing if they will return.

As an American, I demand more fuel choices so I can stop relying on foreign countries that use oil as a weapon to harm the country and the people I love. Expanding our fuel mix to include domestic sources such as ethanol, methanol and natural gas is a viable alternative that will encourage robust competition and innovation, ensuring the American people an affordable and stable supply of fuel for their transportation needs. Ultimately, this solution is one that allows us to keep our money, power and, most priceless possession, our people, in the U.S.

iPhone, Justin Bieber and lower fuel prices

It is the decade of the iPhone, Twitter and Justin Bieber. It is a decade where there are more music reality TV shows than you can count. It is a decade where Americans are spending more on transportation than on food, clothing and entertainment combined. So, in the midst of record-breaking oil prices, it should be no surprise that one of the questions asked during Monday’s presidential debate was, “How can we lower gas prices?” This is a question that many Americans are asking. Hell, I’m asking!

An article by NBC staff writer, John W. Schoen, argues that the government has no control over gasoline prices. In fact, he says it is “appalling” for Americas to think or believe such a thing. I would beg to differ.

It is possible for the government to lower gas prices and it is its responsibility to the American people. The answer to reducing our price at the pump is NOT wind or solar, which were mentioned as solutions multiple times by both candidates during the debate. Wind, solar and nuclear power generate electricity. The issue at hand is not electricity, it is transportation fuel. (And, by the way, our nation is already electricity independent). Continuing to lump these sources together and prescribing solar and wind as a remedy to our oil addiction is never going to solve the problem.

Improved fuel efficiency, which was also mentioned as a prescription during the debate, will not significantly lower prices. Although individuals may be using less petroleum per mile traveled, this does not imply less petroleum consumption. In fact, the increase in mileage efficiency may create a rebound effect, causing drivers to travel longer distances, offsetting some of the expected reduction in petroleum use and consumption. The bottom line is that expected efficiency gains are highly overstated. Even with a slight reduction in oil consumption, higher oil prices will continue to threaten the economy.

Growing world oil demand will continue to drive up the price of oil.  Increasing domestic production to lower gas prices was a focal point during the debate. This alone is not the answer since the price of oil is determined in the world market. Take Canada, America’s number one oil supplier, for example. They have an abundant oil supply, yet Canadians pay the same high prices at the pump that Americans do.

It is not rocket science. America needs an open fuel market where more than one fuel option (oil) is available at the pump. Global crude oil prices, which depend on a myriad of factors such as increased demand in China and India, spare oil capacity in Saudi Arabia and geological disasters, are factors that we have little control over. Domestically produced fuels such as ethanol, methanol and natural gas would not be vulnerable to such factors that cause sudden price spikes AND they have the potential to add millions of jobs to our economy.

I chuckled when Mr. Schoen mentioned that if gas prices were driven by decisions made in the White House, it’s a safe bet that everything possible would be done to drive them lower. That’s simply not true.

There are abundant fuels available today that, with simple modifications to car engines, can power our vehicles. All that’s missing is a policy that will cut through the clutter and support an open fuel market where cheaper fuels are permitted to compete with gasoline.

We can revolutionize the transportation industry and the next decade could be the one where we pay $2/gallon for fuel, once again.

Coast Magazine interviews Fuel Freedom founders

Terence Loose, staff writer at the well-respected Coast Magazine, interviewed Fuel Freedom Foundation Founders, Eyal Aronoff and Yossie Hollander, about how our addiction to oil is crushing our economy and harming our environment.

The Fuel Freedom Foundation aims to create a marketplace where all cheaper, cleaner and American-made fuels, including ethanol, methanol and natural gas, can compete with gasoline, allowing consumers to have fuel options at the pump and allowing the current fleet of vehicles to be modified to run on multiple fuels.

“There are two different possible futures for this country,” Aronoff said. “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.”

Fuel Freedom Foundation advocates for the development of cheaper, cleaner and American-made fuels for the purpose of reviving the economy, securing our nation and easing the burden for the poor and middle class, who spend a significant amount of their income on fuel.

Fuel Freedom Foundation is focused on the economy. “Price affects everything,” Hollander said. He also explained that gasoline for only $2 a gallon 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.

Coast Magazine highlights Aronoff’s and Hollander’s views on the public’s misconception of “energy independence.” Hollander notes that people are confusing the term “energy,” by bundling both electricity and transportation under energy. In reality, they are not connected at all.

“When you hear the smartest analysts say, ‘Energy prices are rising,’ and then five minutes later they tell you natural gas is at its lowest price ever, it’s an insane conversation. It’s not energy prices that are rising. Oil prices are rising and will be close to $200 a barrel by the end of the decade,” Hollander said.

The two passionate philanthropists, Aronoff and Hollander, established Fuel Freedom Foundation because they believe in the American dream and wish to sustain it. Fuel Freedom seeks to ignite the American spirit, innovation and hopes to make America great again.

Click here to read the full article

Diamonds are forever…is oil?

The question should not be, “Are we running out of oil?” The simple answer to that question is NO. What we should be asking is, “How much oil can be extracted at a reasonable cost?” Oil must be near $50 a barrel to sustain economic growth, far below the current level of approximately $100 a barrel!

There is a scarce supply of inexpensive oil. Shale, tar sands and deepwater sources are the predominate sources of petroleum in North America, making U.S. and Canadian supplies the most expensive and environmentally destructive to extract. Economic and geopolitical pressures will continue driving up oil prices and the rare conventional “cheap oil” suppliers, such as Saudi Arabia, will continue to be the biggest beneficiaries of the higher prices.
Oil PricesLow-cost producers benefit from the difference between costs, including normal rate of return and price. According to a RAND study, countries like Iran, Iraq, Kuwait, Qatar, Saudi Arabia and the UAE band together in OPEC to influence the world market price of oil by adjusting output. When OPEC reduces supply and pushes prices up, the U.S. economy suffers from trade deficits and loss of consumer purchasing power.

Unless barriers for replacement fuels to enter the market are eliminated, Americans will suffer increasing economic hardship while suppliers continue to benefit from their monopoly of our transportation fuel. Three interlocking forces that maintain the closed, single-commodity market for transportation fuels cause our oil addiction. They are as follows:

  • For the most part, auto manufactures don’t produce flex-fuel cars (cars that have the capability of running on a combination of gasoline, ethanol and methanol).
  • Fuel distributors and gas station owners have resisted installing non-gasoline pumps, resulting in fewer than 2,000 flex-fuel pumps around the country.
  • Current regulations make it too expensive for consumers to convert their vehicles to flex fuels.

Introducing replacement fuel options at the pump that are domestically produced will not only end our reliance on imported oil and keep money in our economy, but it will also defund rogue states. Now the question is, “Who wants to pay for expensive fuels that thwart our economic growth when we can produce and use domestic transportation fuels that pave the way for a prosperous future?”

Oil: A weapon with two sharp edges

The Amman Message is an avowal, issued on Nov. 9, 2004 by King Abdullah II of Jordan, calling for tolerance and unity in the Muslim world. The message ties to Jordan’s foreign policy objective to be a peaceful state in the Arab region.

Last week’s protests were anything but peaceful, however. Thousands flooded the streets after the Jordanian government mandated a 10 percent increase in the price of 90-octane diesel fuel. The increase was part of an effort to reduce the subsidy burden on the state budget.

Unfortunately, such price increases affect poor and rural household expenses disproportionally more than any other group. The increase largely depends on the degree of oil subsidies and oil consumption patterns within a country. Sure, the Jordanian government amended the fuel price increase due to instability in the region and other factors, but the question about what will happen in the future when the government is forced to pass down the costs of oil subsidies to the public remains.

I don’t intend to criticize the Jordanian government or to say the protests that took place were justified, but rather I seek to assess and bring forth the affects of volatile oil prices on the poor.

A 10 percent suggested hike is not chump change and would greatly impede on the majority of the population’s budget and lifestyle. To put it into perspective, imagine waking up tomorrow and discovering that the price of fuel was so high that going to work was no longer economical. On Sept. 12, 57 franchise owners in New Jersey and Pennsylvania advertised $9.99 per gallon of gasoline in protest of the high oil prices charged by Lukoil North America. The owners aren’t actually charging customers these outrageous prices; they are illustrating the fact that the high price of oil is passed onto consumers.

So, while Petra may be one of the New Seven Wonders of the World and Amman is considered “one of the richest and most Western-oriented cities in the Middle East,” recent protests exhibit a growing national discontent over rising gas prices and the decisions being made by government officials. As for the United States, we must take action before fuel prices disrupt our way of life (as it has in Jordan and many other parts of the world).

There is an old Arabic proverb, “oil is the weapon with two sharp edges,” essentially translating into, “oil is a double-edged sword,” meaning: A benefit that is also a liability, or that carries some significant but non-obvious cost or risk.

The indirect impact of rising fuel prices – protests, famine, war and rising food prices due to transportation costs – can be reduced with an open fuel market for transportation fuels. We mustn’t undermine the severity of our oil addiction and the importance of cheaper, cleaner, American-made fuel choices in remedying our oil dependence.

Sleeping Beauty and the REAL energy dilemma

While sleeping beauty or I should say, the United States, is drowning in a deep slumber waiting for prince charming to break the spell of passiveness and free her from her so-called “energy problem,” China is wide awake, actively and aggressively investing in traditional and non-traditional fuels along with innovative energy technologies at home and abroad in an attempt to focus on the REAL energy dilemma – oil.

It is apparent that China is feeling trepidation about the future of fuel in their country. With current plans to move 50 million people to cities each year, China’s urban centers are growing rapidly. This urbanization creates massive demand for fuel. The demand increases, in China, India or any other country, means an increase in the price of oil and the urgency to identify and develop innovative and more efficient technologies that will contribute positively to economic growth.

This is precisely why China is rapidly expanding by embracing the reality that alternative fuels are the engines of economic growth, prosperity and security. The U.S. must also embrace this reality and resist the misguided and unfounded temptation to believe that the “energy problem” in the U.S. is with electricity, but focus on a concrete solution that encourages robust competition and innovation within the transportation sector.

China’s global reach further reaffirms its unshaken focus on the impact of future oil demand. The latest $15.1 billion offer for Canadian-based Nexen is the most recent addition to China’s resource investment portfolio in the Americas. This was no accident.

In 2009, PetroChina – China’s biggest oil producer – signed a multi-billion dollar deal with ExxonMobil to purchase liquefied natural gas from the Gorgon field in Western Australia. China has now invested a total of $42 billion in the U.S. This, of course, is in addition to Chinese investments in Brazil, Venezuela, Bolivia and Columbia.

China's global reach

In addition to China’s international investment endeavors, the Chinese auto industry has grown tenfold in the last decade to become the largest in the world. Despite recent reports about inventory surplus, the Chinese government’s National Development and Reform Commission is not concerned. China is projecting sustained consumer demand growth in the next three years.

Bottom line is that China is looking ahead, preparing for a future that is unsustainable with the current system that is dominated by imported oil. Population growth is inevitable, oil demand increases are unavoidable and innovating and diversifying the transportation landscape is indispensable. For the U.S. to reposition itself as an innovative leader she must realize that prince charming will not come save her from the “energy problems” she faces. As a matter a fact, the U.S. does not need a prince. The solutions she seeks are at home and are plentiful. It’s time to look beyond fairytales for guidance and start taking advantage of the affordable and stable supply of alternative fuels and invest in innovative projects that will make America better.