pope dolls

Climate battle lines drawn ahead of pope’s visit

If Pope Francis had dropped by our booth at Shale Insight last week, I would have gladly given him a Fuel Freedom water bottle and encouraged him to watch PUMP on Netflix.

He didn’t turn up at the fifth annual natural-gas conference. But some of his supporters did: A few dozen protesters gathered outside the Pennsylvania Convention Center to denounce the gas-extraction method called fracking. Many dressed in papal garb, a nod to Francis’s unprecedented campaign to do something about climate change.

It was also a nod to the impending papal visit next week, when about 1 million people are expected to attend Francis’s address on Independence Mall on Saturday.

The pope’s smiling face was everywhere in Philly: on bus stops, in bars, in storefront windows. There was an official Pope Francis merchandise store, selling shirts and hats and crucifixes and plush dolls and bobbleheads, with proceeds going to the World Meeting of Families. At a Nationals-Phillies game, ushers handed out pope “rookie” cards, with stats on the back.

The pope and natural gas might not seem to belong in the same conversation, but with his visit putting a spotlight on climate change and how much of a burden poorer countries should carry to help forestall it, the role of gas extraction and consumption plays a big part. Opponents say to avoid ruin, we need to keep more oil and gas in the ground.

But the attendees at Shale Insight, many of them players in the natural-gas industry (the Marcellus formation is mostly gas, as opposed to other shale “plays” that contain a mix of oil and gas), differ. They note that NG produces less CO2 and other emissions than oil and coal, and that drilling technology is getting safer.

Anyone who stopped by our booth heard our angle: That as long as the Marcellus formation is there, and natural gas prices are so low that it’s barely worth it to bring it up, producers should take a look at a new market opportunity: Turning gas into liquid ethanol to run in the 17 million flex-fuel vehicles in the U.S., including 5 million within 500 miles’ driving distance of Philly. That kind of revolution would spur economic development for a domestically made fuel, as well as achieve the kinds of goals the pope is talking about — reductions in greenhouse-gas emissions and smog in urban areas.

Robert M. Bryce, the journalist and author who gave the final speech of the conference on Sept. 17, said the United States is the envy of the world when it comes to quality of life, education and economic opportunity. And much of that is fueled by the shale revolution.

“We have cheap, abundant, reliable energy and the rest of the world, by and large, does not,” he said. “And that gives the U.S. the linchpin advantage over the rest of the world.

“The fact is that the U.S. remains an exceptional place.”

Opponents, including some Christian leaders, aren’t convinced that fossil fuels are the rising tide that lifts all boats. This week more than 100 faith leaders in Pennsylvania, citing the pope’s efforts, sent a letter to Gov. Tom Wolf urging him to ban natural-gas development.

David Spigelmyer, president of the Marcellus Shale Coalition, which organized the two-day conference, defended natural gas, but declined to wage battle on religious grounds.

“I’ll be honest with you,” he told The Philadelphia Inquirer. “I don’t want to get into a battle with the pope, because I’ll lose that fight every day.”

Considering Francis can command an audience of millions, that’s a natural stance. The real battle over natural gas’s role in climate change, and U.S. energy policy, will resume after Francis leaves.

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Natural gas touted as the next alternative fuel in S.D.

Letter from a soul mate: Religion, oil and alternative fuels



gas pumps_colors

Tesla has to compete for customers. So should fuels

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?

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The demise and resurrection of the natural gas industry

Borrowing from Mark Twain, the reports of the natural gas industry’s death have been greatly exaggerated. Words and phrases — like epic decline, demise, abandonment, crushed, confused, over-leveraged, bankrupt ideas and financially ill — have been used by many in the media and some analysts to define the state of the sector. Why? According to a recent article from USA Today, “the U.S. is producing more natural gas than ever in 2015, despite low prices that make it increasingly difficult for companies to spend money on drilling.”

Henry Hub-2015While the negative evaluation of the industry’s health sounds a bit premature, and perhaps hyped up a bit to sell papers as well as economic and market news on cable, there are real problems facing producers, refineries and distributors:

1. Gas inventories are higher than they’ve been in a long time. This fact, combined with decreased demand, has and will continue to put downward pressure on prices. While a hot summer kept the natural-gas market relatively stable (e.g., high demand for air conditioner use), the mild weather that’s projected for late fall and winter will exacerbate the gap between supply and demand as gas-powered utilities face lower consumer need for heat.

2. Natural gas prices have dropped by more than 30 percent since a year ago. Understandably, falling prices have aborted investment in new rigs and drilling. The recent decline in the development of new rigs and the abandonment or capping of older rigs dropped the number of natural gas rigs from near 1,600 in 2009 to just over 200 presently. But the totals are blurred because many rigs produced both oil and natural gas and were reclassified as oil rigs for investment purposes. The diminished production of legacy wells, even if demand increases, are unlikely to result in significant and immediate pressures on gas prices, given the extent of inventories and a recent history of annual surpluses. Assuming visible growth in demand, it will probably take 1-3 years for the equilibrium to return to the natural gas markets and for prices to move significantly higher. Instead, what we are likely to see is relatively short-term, modest up-and-down movements.

3. Bankruptcies, particularly among small and medium-size participants (e.g., drillers, suppliers, operators, etc.) in the gas industry, have and will continue to increase, leading to increased market share for larger firms.

More than a handful of lender/investors/bankers seemed to have benefited from the recent rise and fall of natural gas prices. Indeed, some skeptics, even more cynical than I am, have suggested that in the relatively recent past, Wall Street investors “orchestrated” gas gluts by investing in shale exploration knowing that prices, because of overproduction, would decline and transactional costs would be worth millions. In essence, bankers lent, production increased and prices declined. Subsequently, lenders sold – many on the upside of the down curve and many at bottom prices. Some generated mergers and acquisitions and, in the process, secured large fees. It’s a tough dog-eat-dog world out there.

I suggest the cynics are overplaying the ability of bankers to make what they believe are rational decisions and, contrary to law, work together to achieve nefarious ends. Right now, the financial industry, despite the rewards flowing to some for guessing right on recent short-term price movements as well as the values embedded in some firms, has tightened up on investment, whether equity or debt, for the capital costs associated with natural gas production and distribution.

Sorting out whether the current changes in the natural gas industry are likely to lead to permanent structural changes is difficult. We know there will be fewer firms, at the least at the outset of any long-term recovery. Clearly, starting new capital-intensive natural gas companies is more difficult, for example, than starting new housing firms after a down or unstable economic period.

It is surprising that an industry with an uncertain present and future seems wedded to playing only a minor role concerning the development and use of natural gas as a transportation fuel. Because of variables, related mostly to costs and access to infrastructure, only approximately 150,000 vehicles in the U.S. out of nearly 300,000,000 are powered by natural gas – either CNG or LNG. The industry, paraphrasing Israel’s former Ambassador Abba Eban’s comments on the Middle East, has and appears willing to continue to miss opportunities and therefore misses opportunities to commit, in a meaningful way, to use of natural gas as a transportation fuel.

In light of available technology, natural gas and/or its possible derivative, ethanol, would be cheaper for consumers and emit fewer pollutants and GHG emissions. Because of its abundance in the U.S., if used more extensively, natural gas and/or ethanol could reduce dependency on oil imports from currently unfriendly or potentially unfriendly nations. Neither natural gas nor ethanol are perfect fuels. But in terms of the environment, global warming, the price at the pump and national security, natural gas and ethanol are both better than gasoline. Both are welcome transitional fuels until electric cars, hydro fuels and other renewable fuels are ready for prime time.

Existing and proposed federal and state regulations already have and, in the future, will reduce methane leakage problems (e.g., methane traps significantly more heat than carbon dioxide and therefore is a potent global warming contributor) and hopefully respond to fracking problems.

Natural gas-fueled vehicles are generally more costly than gasoline-fueled vehicles. However, lessons learned from the multi-state demonstrations led by Gov. John Hickenlooper of Colorado (Democrat) and Gov. Mary Fallin of Oklahoma (Republican) show promise in reducing vehicle costs. Twenty-two states are participating in the demonstration. Collectively, they have agreed to purchase natural gas vehicles to replace older, internal combustion cars from state fleets. The “market scale” of the demonstration will facilitate an effort by manufacturers to develop cheaper cars. Finally, the growing number of Detroit-produced flex-fuel vehicles and the development of simple ways to convert older vehicles to flex-fuel status suggest an increased market for natural gas-based ethanol. Happily, technology is emerging that will be able to convert natural gas to ethanol efficiently and at a scale and cost necessary to respond, hopefully, to increased demand and compete with gasoline.

Socrates, the legendary natural gas philosopher, once said, “the unexamined [future business plan] is not worth [having]” (I only added a couple of words)., Paraphrasing the “The Elephant’s Child” from Rudyard Kipling’s “The Just So Stories,” the natural gas industry needs “six honest serving men” or women (my addition. Kipling was a sexist.) to develop a doable plan and strategy to expand the use of natural gas as a fuel. “Their names are What and Why and When and How and Where and Who.” The old way of doing business may be changing but a new, better way can be resurrected with expanding natural gas markets to develop a decent, competitive transitional transportation fuel.

Mike Lewis

Pearson’s California growth proves there’s demand for E85

Even by Pearson Fuels’ own standards for a grand opening, the event in California’s state capital earlier this month was a smashing success.

Customers lined up dozens deep to buy E85 ethanol fuel for 85 cents a gallon at five Sacramento-area gas stations on Aug. 12. “We had people waiting in line for 2 hours,” said Mike Lewis, co-founder of the San Diego-based Pearson.


Drivers queued up to buy ethanol in the Sacramento area on Aug. 12. (Photo, and one above, courtesy Pearson Fuels)

It recalled the gas lines that formed during 1973-74 OPEC oil shortage. Except this time drivers weren’t enraged. They patiently waited to buy a cheaper, cleaner alternative to gasoline.

When the sales figures were tallied, it was a stunner: The five stations combined sold a total of 14,000 gallons of E85, an average of 2,800 gallons per station, during the promotion, which went from 8 a.m. to 5 p.m. By comparison, the week before, at the grand opening of a station in Yorba Linda, in Southern California, only 1,000 gallons were sold.

“It was by far the most successful one we’ve ever done,” Lewis said of the Sacramento event.

Pearson, which owns and operates one station in San Diego and supplies ethanol to 60 more around the state, isn’t slowing down in an age of rock-bottom oil prices. In fact, it’s expanding: It plans on opening 15 more stations over the next 18 months in California (including Fullerton soon), and 15 other deals are in the works.

The company is proving that it’s possible to turn a nice profit selling E85, because there’s a customer base out there ready to buy and use a fuel that emits fewer toxic pollutants and is made in America. Flex-fuel vehicles can run any mixture of gasoline and ethanol up to E85, and since California has 1 million of the nation’s 17 million FFVs, the state is primed for a rapid expansion of ethanol distribution.

Pearson’s San Diego station was the first on the West Coast to sell E85 when it opened in 2003, but the company’s expansion is driven by exclusive agreements with existing stations. Price usually splits the cost of installing an E85 pump with the station owner, and in return, Pearson supplies E85 to the station for 10 years.

Many drivers are motivated by the air-quality and climate-change benefits that ethanol use brings. But most are attracted by the price point. E85 often is 20 percent cheaper than gasoline, at least. When oil was rising a bit in the spring, the “spread” often was 80 cents or a dollar or more. “The station owners can set their own price, but it was I think 50-70 cents a gallon less,” Lewis said of the Sacramento promotion. “And I’m looking out right now at our station, and we’re at $2.64 and gas is at $3.35, so that’s 71 cents [less] right now.”

Of course, Pearson took a big hit by selling E85 for dirt-cheap on Aug. 12. But retailers can expect profit margins that often are greater than those for regular E10 (up to 10 percent ethanol) gasoline.

“There are times you make low margin, times you make 10 cents a gallon,” he said. “But there are times you make 30 cents a gallon too. So split that difference and say we’re making 20 cents a gallon … well, that’s 10 grand extra that the average gas station doesn’t have. And you’re not spending one more dollar on payroll; you have very few variable expenses.”

Ethanol runs more expensive than gasoline only about 5 percent of the time, Lewis says, such as last winter, when trainloads of it — produced mainly from corn in the Midwest — couldn’t get West because of snowy weather in the Rockies.

Pearson_pump2Consumers, even those who don’t drive a flex-fuel vehicle, are realizing that E85 is the vastly superior fuel compared with gasoline. Retailers are coming around too, with help from people like Lewis and entities like the American Coalition for Ethanol. Installing E85 pumps can be done in a cost-effective way, and offering fuel choice is a way for retailers to bring in customers they wouldn’t have had before. It turns out, flex-fuel drivers buy giant sodas, beef jerky and lottery tickets too.

“When I talk to station owners, there’s quite a few that are getting it,” Lewis said. “A perfect example is G&M: They’re the largest Chevron franchise in the United States. They’re doing 13 with us, and they get it. But it is surprising still, after all these years, people are so surprised by our numbers.”

The July figures for the Pearson station in San Diego are remarkable: 150,000 gallons of all fuel sold, including 53,000 gallons of E85. Regular 87-octane gas came in just ahead, at 64,000 gallons.

Like those customers, the ones who in and around Sacramento have remained loyal, Lewis said, although he doesn’t have numbers to quantify that. “That’s what happens with E85; it’s sticky business. They’ll come, and they’ll keep coming.”

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Oil is cheap, so why is gasoline sky-high in some places?

Even with a surge the past two days, oil prices have been on the downward slide the past 14 months, dropping from about $115 a barrel to around $40. But that hasn’t translated to savings at the pump for all drivers.

In some areas of the United States, gas prices have remained stubbornly flat during the oil plunge, or have inexplicably risen. Fuel Freedom Policy Manager Gal Sitty has put together this informative graph that tracks the price of oil (an amalgam of Brent crude, the international benchmark, and West Texas Intermediate, the U.S. standard) compared with the average price of gasoline in three big states: California, New York and Ohio.

gas prices-guns

Experts have no shortage of explanations for these anomalies. They usually sound like this: Something-refineries-inaudible. Cue Charlie Brown’s teacher talking wah-wah speak.

It’s true that a unit at the BP refinery in Whiting, Indiana, one of the largest refineries in the Midwest, is back online after breaking down Aug. 8. Media outlets report that gas prices in the region already have begun falling again, but they’re sure not doing so as quickly as they shot up. And it doesn’t explain that gentle slope of a line for New York above.

In California, where gas prices pushed toward $5 in July after a sudden, insufficiently explained shortage, prices remain high, purportedly owing to the Exxon Mobil refinery in Torrance still being below capacity six months after a fire. As Sue Carpenter, automotive writer at the Orange County Register, explains:

Crude oil typically accounts for just 46 percent of the cost of a gallon of gasoline, according to U.S. Energy Information Administration. Taxes account for 16 percent, 13 percent is marketing and distribution, and 25 percent is refining.

In California, though, crude oil is just 34 percent of the cost of a gallon of gas, and refining is 35 percent, according to the California Energy Commission.

Still, it’s curious that just as California motorists were getting hammered, oil refineries weren’t sharing the pain: Refineries in the state collected $1.61 per gallon in July, the highest since the state began keeping records in 1999.

It’s clear that there isn’t enough refinery capacity in the U.S. (Raise your hand if you’d like one built in your back yard. There are people in Whiting who still remember what happened there 70 years and a day ago.) But even if refinery disruptions are partially to blame, it’s only further evidence that we’re too beholden to a volatile global oil market, and we’re dependent on an aging, infrastructure for refining.

The only way to make the fuel pricing structure sustainably affordable is to introduce fuel choice so gasoline has to compete with cheaper, cleaner alternatives like ethanol and methanol.

Until that happens, wild price swings and supply disruptions will be the norm in America.

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The pot calling the kettle black: The AEA and alternative fuels

justice2I have great sympathy for the coal miners of this nation. Their job in supplying this nation with coal is among the toughest in the world. Their historical contribution to the nation’s economic well-being is well established. They were, and many remain, beset with long hours, moderate pay (currently $22,000 to $64,000 per year), negative health and safety problems, and, at times, an unsavory public and private sector bureaucracy.

The glory years for coal appear to be over. Increasingly, the public and environmental experts and policy leaders view coal as a dirty fuel. Succinctly, coal emits significant amounts of greenhouse gases and other pollutants. Most analysts believe the future of the coal industry is dim.

Clearly, in the past decade, market forces, not public policy, have forced many electric utilities to substitute natural gas for coal, and the competition with coal to date suggests coal will be the economic loser. The cost differential between the two, generally, has favored natural gas.

Without a bipartisan commitment to find transitional pathways for miners and/or successful economic development options for their communities, present-day miners will regrettably become part of America’s throwaway society — consumed and discarded by technological change and the fear of global warming. Congress, the White House and the American public have a moral — if not an economic, social and political– obligation to look hard at training and mobility initiatives for miners, as well as economic development strategies in their places of residence and work.

Regrettably, the conservative American Energy Alliance (AEA) has put its muscle behind a frontal attack on the president’s effort to substitute alternative fuels for coal to power utility plants instead of a well-defined effort to define workable strategies to help miners find other than declining mining positions. If a coalition cannot be built to find feasible solutions to expand job opportunities for miners, many miners, whose experience is often limited, will find themselves locked in place and will face a life of poverty or near-poverty — even when the economy returns to health and unemployment decreases. The structure of the American economy has changed, and the change does not favor mining.

Surprisingly, given its history in opposing social welfare initiatives, AEA indicates that the EPA’s recently announced Clean Power Plan, which requires the states to cut back significantly on GHG emissions, is “justice denied” to millions of minorities and low-income households. While analyses of the impact of the Clean Power Plan on different demographic and income groups are not yet precise, the AEA statement does not acknowledge the fact that alternative fuels, like natural gas, have been on a per-dollar kilowatt-hour cost cheaper than coal. The AEA also fails to note the potential savings in health and other societal costs (for low-income families in particular) resulting from lower GHG emissions and other pollutants. A disproportionate number of low-income people live near utilities, refineries and coal mines because of the absence of affordable housing and cheap transportation. Until relatively recently, gasoline prices limited the ability of many low-income households to travel from decent housing to their current or potential jobs. Several respected economists view the current drop in oil and gasoline prices as a relatively short- to intermediate-term phenomenon (1-2 years), and that the norm, once the world economy improves, will much higher than it is today.

The American Energy Alliance is pro-oil and pro-coal. That’s okay — this is its right. But in this context, its support of both fuels should mute its legitimacy as a research organization or the research of many of the organizations it supports or its supporters support. The AEA is, plain and simple, an advocacy group whose causes are predetermined by the self-interest and ideology of its donors.

Unfortunately but understandably, the AEA is unlikely to ever support the considered use of high-octane alternative fuels or their independent study, whether for utilities or transportation. Placing alternative before fuels, even though it could mean improved choices and lower costs for low-income consumers, improved environmental conditions, less GHG emissions and greater overall economic benefits is and will not be in AEA’s lexicon. In this context, AEA seems to have hijacked the term or phrase “justice denied” in a manner that does not fit the intent of some of the original users — Martin Luther King, Jr., William Gladstone, and Frederick Douglass. Their respective purposes in using the term were to expand choices, to redress societal inequities and to lessen the burdens of the disadvantaged. It is time we consider alternatives to weaning the nation and the world off of oil and coal, and acknowledge the fact that justice denied diminishes justice everywhere, and in the ethicist John Rawls’s words, hurts the least advantaged among us.


Cellulosic ethanol has benefits in the age of drought

The prolonged California drought, made worse by climate change, should get farmers and regulators thinking more about the benefits of cellulosic ethanol. Plants whose sugars are fermented from cellulose, as opposed to starchy plants used for food like corn and sugar cane, often don’t need nearly as much water, tending or high-quality soil.

Currently, the vast majority of the 14 million gallons of ethanol produced in the United States is made from corn — not “corn on the cob,” the sweet corn consumed by humans, but field corn normally given to livestock. Because of the vast scale of corn production, growers are able to tinker and experiment, and their advances in technology and growing techniques have brought higher crop yields than ever: In 2014 farmers grew an average of 171 barrels per acre, about 6 barrels per acre more than the record yield of 2009.

That translated to yields of ethanol: According to the Renewable Fuels Association, corn used for fuel yielded 2.82 gallons per bushel, or 478.8 gallons per acre.

Other starchy, food-based fuel crops are not far behind: Sugar beets actually produce more than twice the ethanol yields as corn (about 1,200 gallons per acre), and many U.S. farmers are increasing production. Grain sorghum is another good sugar/starchy ethanol “feedstock,” yielding potentially 2.27 gallons per bushel.

Other examples of cellulosic ethanol feedstocks would be switchgrass; corn stover; miscanthus giganteus; and wood waste left over from forestry operations. These sources not only are inedible for humans, they don’t require that much work to grow: In the case of corn stover, it’s the leftovers from corn harvesting.

For more information, check out our cool new shareable infographic on feedstocks for ethanol:


According to a study released in March by the Energy Biosciences Institute at the University of Illinois, miscanthus — a reedy plant that can grow 12 feet tall or more — was the “clear winner” in a side-by-side comparison between switchgrass and corn stover, when it comes to yields and costs of production.

“One of the reasons for interest in these second-generation cellulosic feedstocks is that if they can be grown on low-quality soil, they wouldn’t compete for land with food crops, such as corn. This study shows that although miscanthus yield was slightly lower on marginal, low-quality land, a farmer would have an economic incentive to grow miscanthus on the lower quality land first rather than diverting their most productive cropland from growing corn,” said University of Illinois agricultural economist Madhu Khanna, a co-author of the study.

If the California drought persists for years, and the situation is repeated around the world, it makes sense to displace dirty oil with cleaner-burning alcohol fuels, especially ones that thrive in arid conditions.

Related posts:



Not just corn: 10 homegrown feedstocks for ethanol

The debate over ethanol often is dominated by corn, our most widely used natural resource for making the fuel.

But there are many different “feedstocks” that can be used to produce the alcohol fuel. Fuel Freedom Foundation has created a new infographic detailing some of those. Of course, corn is in there, but so is natural gas and a variety of plants that don’t just look pretty, they’re useful as a fuel to power our cars, trucks and SUVs.

Companies also are ramping up production of “cellulosic” ethanol. That form of ethanol isn’t fermented from corn starch but from the sugars extracted from a wide variety of plants. Cellulosic ethanol can be made from wood waste, corn stover (the leftovers from corn after it’s harvested) and switchgrass, among other inedible plants.

The infographic is below. Click on the image for a wider view:


Share it, pass it around, use it to debate your skeptical friends!

As David Blume, author of “Alcohol Can Be a Gas!”, outlined in our 2014 documentary PUMP, ethanol can be made from the agave plant, cat tails, sweet sorghum and other plants that don’t require as much effort (and diesel-powered machinery) to grow.

Prickly pear, for instance, “grows all over the world, in huge quantities, especially in places where it’s dry,” Blume said. “We can grow this in poor countries that don’t have a viable agriculture, in arid areas.

“What is the best alcohol crop? It’s the one that’s best suited to your soil and climate where you are.”

Watch that clip from the movie:

E85 pump

Alt-fuel stations growing, without subsidies or regulations

Without much fanfare, the number of fueling stations offering an alternative to gasoline has passed the 20,000 mark, according to the federal government’s Clean Cities program. The number of gasoline fueling stations, according to the American Petroleum Institute, is 153,000.

The figure shows that alternative infrastructure is gaining ground even as the number of alternative vehicles sold in the U.S. has slowed of late, an obvious result of falling oil prices. On the other hand, the sale of alternative vehicles has actually accelerated in Europe. China is also giving indications of a big push that will attempt to make it the leading market of alternative vehicles in the world.

Clean Cities is a 1993 initiative of the Department of Energy that has picked up steam in recent years. Its efforts to reduce gasoline consumption include 1) replacing petroleum with alternative and renewable fuels; 2) reducing petroleum consumption through smarter driving practices and fuel economy improvements; and 3) eliminating petroleum use through idle reduction and other fuel-saving technologies and practices. The goal is to reduce gasoline consumption by 2.5 billion gallons every year through 2020. The program claims to have already reduced consumption by 6 billion gallons since its inaugural.

In order to carry out its mission, Clean Cities has formed coalitions with nearly 100 major cities covering 82 percent of the population of the United States. Coalitions are comprised of local businesses, fuel providers, vehicle fleets, state and local government agencies, and community organizations. These stakeholders come together to share information and resources, educate the public, help craft public policy, and collaborate on projects that reduce petroleum use. There are networking opportunities with fleets and industry partners, technical training workshops and webinars, plus information on alternative fuels, advanced vehicles, idle reduction, and other technologies that reduce petroleum use. There are also funding opportunities from the Department of Energy.

Probably Clean Cities’ biggest initiative, however, has been a map of alternative fueling stations across the country. The Station Locator has now grown to a list of 20,000. These include: 12,334 electric recharging stations, 3292 propane stations, 2,956 gas stations that offer E85 (up to 85 percent ethanol), 1,549 compressed natural gas (CNG) outlets, 729 biodiesel pumps, 115 liquid natural gas (LNG) outlets and 41 hydrogen stations.

Dennis Smith, director of the Clean Cities program, says that both plug-in electrics and propane vehicles are becoming increasingly popular. “Plug-in electric vehicle sales for consumers have passed more than 300,000 since they were introduced in 2010, and an increasing number of fleets are using propane,” he told The growth of these stations is most likely in response to a need from these drivers. In addition, both propane and EV stations are less expensive to purchase and install than those for many other fuels.” Smith also said that the number of CNG and LNG stations understates their impact, since they tend to service heavy-duty trucks along interstate highway routes.

While the sale of alternative vehicles may have leveled off of late in the United States, they are burgeoning in Europe, despite the drop in world oil prices. Alternative fuel vehicle registrations rose 17.4 percent across Europe in the second quarter of 2015, and 24.6 percent over the first half of the year. There are now nearly 300,000 registered vehicles, according to the European Automobile Manufacturers’ Association. The United Kingdom led the pack in major markets with an increase of 62.4 percent registrations in the second quarter. Norway led the entire continent, however, with 77 percent of all 11,614 newly registered vehicles being electrically powered. The country has offered huge incentives to alternative fuel owners as its oil production from the North Sea begins to taper off.

Meanwhile, in China, the Beijing city government is considering investing tens of billions in a plan to make the Middle Kingdom the world’s largest manufacturer of alternative vehicles. China now has 18,000 EVs on the road, 10,133 public passenger vehicles and 8,360 owned by individuals and organizations.

To cut down on traffic, Beijing has a unique system in which cars with certain license plate numbers are forbidden from being within the city’s fifth-ring road from 7 a.m. to 8 p.m. from Monday through Friday. And it’s not automatic that a new car can receive a license plate. But electric vehicles are much easier to register and will be allowed to drive within the city at any hour, giving them a distinct advantage. BAIC, the principal maker of EVs, has become China’s largest automobile manufacturer, controlling 22.5 percent of the market.

So the initiative to cut down on imported oil is universal. In Europe, it comes from heavy-handed government subsidies and regulations. In China, it comes from government favoritism and outright prohibition. In the U.S., however, volunteer organizations, led by government initiative, seem to be achieving similar results.

methanol car

Why aren’t we using methanol?

The more you look at the contemporary scene with gasoline and imported oil, the more you have to wonder why we’re not switching some of our fuel needs to methanol.

Look at what’s happening: Oil has become so plentiful that we’re reverting to the old situation of the 1950s, when the big concern among oil people was that some new discovery was going to be made in some far corner of the world and there would be a new “glut” that would cause the bottom to fall out of the market. It was during this era that we placed a 20 percent cap on our oil imports. The concern was that there was so much cheap oil in the world that the American oil industry would be decimated.

All that changed in 1970 when American production finally leveled off — right about the time geoscientist M. King Hubbert had predicted “Hubbert’s Peak” would occur. The import ban proved easy to circumvent, and before we knew, it we were importing 36 percent of our oil, most of it from the Persian Gulf. OPEC, first convened in Baghdad by Saddam Hussein in 1960, suddenly became more than a debating society and realized it had real market leverage. Instead of begging the oil companies for higher royalties, the OPEC nations suddenly realized they could raise their price and even withhold supplies. The era of the Energy Crisis had begun.

Congress did all the wrong things in responding. It extended President Nixon’s price controls on one commodity, oil, creating a domestic shortage — too much consumption, not enough production. We made up for this by importing more oil, in which the price controls didn’t apply. While President Carter mandated a “moral equivalent of war” and wore cardigan sweaters, the price controls had the exact opposite effect: Our imports swelled from 36 percent to 50 percent in 1980, and we were sitting ducks when the outbreak of the Iran-Iraq War suddenly cut short supplies. The result was the Second Gas Shortage.

President Reagan put an end to all this by striking down the oil-price controls his first week in office. Drillers went wild in Texas, and the Saudis flooded the market in trying to maintain market share. Soon prices had collapsed back to 1972 levels, and the “oil shortage” was pretty much forgotten.

Meanwhile, similar developments were taking place in natural gas. This commodity had been subject to federal price controls since the 1930s. Basically, it was an attempt by the Northern consuming states to rob Texas and Louisiana of their natural resources. In 1977 we actually experienced a “natural gas shortage” that caused factories and schools all over the North to close down in mid-winter, while Texas and Louisiana were burning natural gas for electricity — then considered horribly wasteful — because the price controls did not apply intrastate. This “crisis” was solved more slowly as natural-gas price controls were not phased out until 1988. Once again, supplies gushed forth. (We did learn a lesson. Nobody has talked about price controls on oil and natural gas since.)

Even with the market freely operating, however, the natural supplies of both oil and natural gas seemed to be diminishing, so that by 2005 we were running short of gas and back to importing more than half our oil. Then George Mitchell’s fracking revolution began. Suddenly, America was the world’s leading producer and oil and gas were once again in abundance.

Yet as far as freeing ourselves from further dependence on foreign oil, the results have been disappointing. Even though we are again producing 10 million barrels of oil a day, we are still dependent on imports for 30 percent of our oil, about one-quarter of this from the Persian Gulf. Low prices have stimulated consumption. People are going back to buying bigger cars and our gasoline use is hitting new records. Sales of electric cars and other alternative vehicles have nearly collapsed. Whatever impulse there is toward conservation is highly dependent on price.

Anything that requires a new infrastructure — electric cars, hydrogen vehicles, compressed natural gas and propane — will have trouble getting beyond a niche market. It’s simply too troublesome and expensive to get people to convert. But corn ethanol and methanol both slot easily into our current system of gas pumps and can compete.

The trouble with corn ethanol is that we are rapidly exhausting the potential supplies. We now use 40 percent of the corn crop to replace 3 percent of our gasoline. Cellulosic ethanol may expand supplies, but it is still basically experimental.

That leaves one fuel that could potentially replace vast amounts of our imported oil — methanol made from natural gas. We have enough natural gas supplies from fracking to make this a game-changer.

The great irony is that China sees this opportunity and is already seizing it. The Chinese are busy constructing two huge methanol conversion plants in Texas and Louisiana in order to take advantage of the abundant supplies coming out of the region. The Chinese have a million methanol cars on the road and will be carrying these supplies back to China to power their growing transport sector.

Yet the EPA continues to refuse to allow methanol to be used in car engines, mainly because of the reputation earned as a poisonous “wood alcohol” during Prohibition.

As Anne Korin of the Institute for the Analysis of Global Security once said: “I think methanol fares poorly in Washington precisely because it doesn’t need any subsidies or government assistance in making it economical. For that reason you have no big constituency behind it and no member of Congress crusading on its behalf.” The entire farm belt is working to support ethanol, but there is no “methanol state” or corresponding congressman working in its favor. For that reason it languishes.

For almost 50 years the Indianapolis 500 cars have run on methanol. Yet it is still forbidden in our commercial transport sector. Isn’t it time that somebody considered the general good and started crusading on behalf of methanol?

(Photo by Vivid Racing, posted to Flickr)

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