Beyond Oil

Now we finally have the technology and resources to end our addiction to foreign oil by creating an open market for Cheaper, Cleaner, American-Made fuels. Free competition for domestic fuel among oil, natural gas, ethanol, methanol, and electric power would set the nation on a path toward more jobs, lower inflation, a healthier environment and a safer world.

Critical Breakthroughs

These major developments have set the stage for removing the barriers to fuel competition:

  • Maturing Technologies for Natural Gas Production. Hydraulic fracturing (“fracking”), imaging, horizontal drilling and new bit technologies have resulted in a major increase in natural gas production to power vehicles directly and to create methanol fuel.
  • A Revolution in Biofuels.  Improvements in the yield-per-acre of biofuel crops have dramatically increased the supply of replacement fuel feedstocks.
  • The Proliferation of Flex-Fuel Technology. Vehicles now have common technology and are controlled by computer software that greatly simplifies the conversion from gasoline-only to replacement fuels.

The Breakup of AT&T Opened Markets To Competition

Why do we believe the fuel market can be opened to methanol and ethanol? Because monopolistic barriers to competition have been removed before—notably in the case of the long-distance telephone market, and to the great benefit of consumers.

Before 1984, only AT&T could sell long-distance telephone service because other operators were denied access to local carriage. That monopoly 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 $3.00 a minute to $.30 a minute. Now it’s $.03 a minute, thanks to an open market. Competition also spawned innovation, and new technologies and companies.

Ingredients for Success

The huge influx of feedstocks, combined with the technological capability to use them as vehicle fuel, has created the first real opportunity for the U.S. to move beyond the “oil economy.” Gasoline is inherently limited by its dependence on a single production input: petroleum. Fuels like methanol and ethanol, on the other hand, have the advantage of relying on an almost inexhaustible supply of feedstocks—from coal to natural gas to woodchips and garbage.

As a result, we now possess critical ingredients for success: An abundance of transportable feedstocks on the order of magnitude of oil, and the operational infrastructure to deliver replacement fuels to the consumer without making major changes to the nation’s social fabric.

Case Studies: China and Brazil

The challenge for creating a successful replacement fuel industry is to remove barriers to entry, attract new investment and scale up to serve a mass consumer market. China and Brazil—the world’s third and fourth-largest energy consumers, respectively—have shown it is feasible to create a mass market in replacement fuels:

  • China has been using methanol as a transportation fuel since the 1980s and is in the process of creating a methanol-based transportation system. Methanol accounts for eight percent of China’s transportation fuel, with methanol capacity reaching 50 million tons by 2015. China, which produces methanol from its vast coal reserves, uses M15, M85 and M100 methanol blends and sells blended methanol fuel at the pump for half the price of gasoline. There are 20,000 methanol-powered cars on the road and thousands of buses. Twenty-six provinces are using or testing methanol and efforts are underway to increase production of methanol-fuel vehicles and convert hundreds of thousands of government fleet vehicles to run on the fuel. China actually banned the use of corn and other grains to make ethanol because of the cost and the need to devote these resources toward feeding its burgeoning population.
  • Brazil has mandated the use of blended ethanol and gasoline since 1976 and today there are no cars or light trucks that run only on gasoline. The current mandatory blend is set at 25 percent ethanol (E25), although consumers have the ability to purchase up to 100 percent ethanol at the pump.  Over 90 percent of all new cars and light trucks sold in Brazil are flex-fuel vehicles. Ethanol now accounts for as much total fuel production as gasoline. Brazil’s ethanol-fuel program is made possible by its highly efficient sugarcane production and large land mass. The challenge will be continuing to meet domestic demand while maintaining its position as a major exporter of ethanol. Download the PDF.

Beyond Oil

Moving beyond oil means giving Americans a choice—at the dealership and at the pump—to power cars and trucks, commercial fleets and family vehicles, on oil, natural gas, ethanol, methanol and electricity.

The solutions lie in a series of steps aimed at removing barriers to competition:

  • Build more flex-fuel vehicles. Today, only 5.6 percent of vehicles on the road use flex fuel. The federal Open Fuel Standard Act, if passed, would require production of flex-fuel vehicles capable of running with any combination of gasoline, ethanol and methanol to reach 95 percent of each manufacturer’s model-year fleet by 2017. Flex-fuel involves a 40-year-old technology that is already used in millions of U.S. cars and can be implemented at a minimal cost per vehicle.
  • Enable the cost-effective conversion of existing vehicles to run on replacement fuels, improve fuel efficiency and reduce toxic emissions. This means creating markets for aftermarket conversion kits, and locally produced fuel and aftermarket efficiency accessories. It also means simplifying emissions regulations so that it is affordable for car owners to convert their vehicles to flex-fuel power, and changing manufacturers’ service warranties to include various fuel combinations.
  • Remove regulatory barriers to methanol production so companies can build municipal feedstock-to-methanol facilities and deliver methanol fuel directly to the gasoline station without going through a distributor.
  • Open up fuel distribution to competition to supply the nation’s massive network gasoline stations with replacement fuels.
  • Support plug-in vehicles because the electric car is a long-term future even though it’s not a realistic solution in the near-term.
  • Mobilize the public to demand these actions on local, state and national levels.

With markets open to competition, ethanol, methanol and natural gas can power vehicles, from subcompacts to SUVs to luxury cars, and enable Americans to preserve the lifestyles they have worked so hard to attain.