Methanol has been a preferred fuel for race-car drivers and teams for decades, for various reasons.
In the movie PUMP, racing teams explain that the lower cost, compared with gasoline, is a big selling point. The footage, which depicts the 91st running of the Race to the Clouds on Pikes Peak, in Colorado, in 2013, includes an interview with one mechanic who says his crew has been running on methanol for 19 years. “It’s just a much better fuel for racing,” he says.
We could go on about the safety of methanol — it burns cleaner than gasoline, is less flammable and burns “cooler” — but come on. What really gets the gearheads salivating is the pure power of methanol.
Methanol has less energy content than regular gasoline, so vehicles get about half the mpg out of the fuel. But it has a higher octane.
As the smart people at Hot Rod magazine explain, race-car engines are built to squeeze more power out of that less-energy-dense methanol, by adjusting the air-to-fuel ratio.
While it’s true that gasoline has a higher energy density (about 18,400 BTU/pound) than methanol (9,500 BTU/pound), if you can burn three times more methanol than gasoline per power stroke, you can make more power. An engine that flows 1,000 cfm of air (about 70 pounds worth) means that on gasoline, the engine will consume about 5.6 pounds of fuel based upon its 12.5:1 max power ratio, giving a total energy output of (5.6 pounds x 18,400 BTU) or 103,040 BTUs of energy. If we do the same calculation on methanol, we get 17.5 pounds of fuel burned, and (17.5 pounds x 9,500 BTU) or 166,250 BTUs of energy—that’s a 60 percent greater energy output.
These folks have forgotten more about engines than most people will ever know, so here’s some more knowledge: Methanol is the better fuel at conserving heat inside an engine. With gasoline, more of that heat is wasted.
Gasoline, when it undergoes a phase change can suck out about 150 BTUs of heat energy per pound of fuel, which results in a temperature drop. Methanol, on the other hand, takes 506 BTUs per pound of fuel of heat energy to make the phase change. When we look at our above example of an engine flowing 1,000 cfm of air, the 5.6 pounds of gasoline will take about 840 BTUs of energy, versus 8,855 BTUs for methanol—more than 10 times as much. This is what makes methanol such an effective fuel in forced-induction applications like turbocharging and supercharging, and it absorbs so much heat that an intercooler often isn’t even needed.
The seven-month-long plunge in oil prices appeared to be enough to re-establish gasoline as the default fuel for motorists, while stunting the progress of replacement fuels.
But attendees at last month’s North American International Auto Show in Detroit would have thought differently. Prominently displayed were various alternative vehicles that have been making headway and are just building momentum in the auto market, so they may be able to shrug off the precipitous fall in oil prices.
Also exhibited in Detroit was the first generation of hydrogen vehicles from Japan, which are challenging both the gasoline monopoly and the electric car, which is much more popular in America and Europe. The Honda FCV concept car boasts a driving range of about 300 miles and a refueling time of just three minutes, marking another step forward for the hydrogen fuel industry. California, where the cars are to be introduced later this year, is already preparing its “hydrogen highway,” which will make the cars feasible for drivers. Toyota’s fuel-cell offering, the Mirai — which also runs on hydrogen — is also scheduled to hit showrooms this year.
Chevrolet has had middling success with its electric-gasoline hybrid the Volt, but the maker has another generation planned with its concept car, the Bolt. The car will be made of extremely lightweight material and will have an all-glass roof and aluminum wheels for further weight reduction. Its lithium-ion battery will give the car a range of 200 miles and a recharging time of 40 minutes for an 80 percent charge. The price of $30,000 is likely to expand the market for electric cars.
Analysts note that oil is not used much for electricity anymore. The 1980s are the benchmark and generally remembered as the “Valley of Death” for renewables. Wind and solar were undercut by falling oil prices and lost their place in the generation of electricity. At the time, oil was providing 17 percent of our electricity. Now it provides barely 5 percent, and wind and solar energy have not felt any effect from oil prices.
Of course, natural gas has largely replaced oil, and a drop in gas prices could cut into the advance of renewables. Gas prices have traditionally been between one-sixth and one-twelfth of oil prices but have uncoupled themselves in recent years. This could work both ways, since gas prices have not fallen by the same degree that oil prices have.
Gas still holds its edge, however, and this means the attempt to use natural gas as an oil substitute may not slow. T. Boone Pickens has had some success in switching long-haul trucks to compressed natural gas, and this effort may be slowed only a little by gasoline’s new low price. However, if natural gas prices fall as well, then it may be able to keep pace with lower oil prices. The possibility that cheaper natural gas might encourage the conversion to methanol as a gasoline substitute would also be encouraged by falling natural gas prices.
That leaves the big question of whether ethanol can survive in the face of falling gasoline prices. In the first place, low gas prices are not likely to last forever. Some analysts are predicting crude oil prices will probably bounce back to $75 a barrel in the near future. Second, ethanol is protected by the federal mandate that says each gallon must contain 10 percent ethanol. If falling gas prices encourage the purchase of more gasoline – which it already has – then ethanol consumption must climb as well.
Ethanol has been under fire recently from studies that say it competes with food resources. The latest is a report from the World Resources Institute in Washington, which argues that “There are other, more effective routes to get to a low-carbon world.” But the rapid development of cellulosic ethanol severely reduces the possibility that ethanol will compete with food crops. And the possibility that natural-gas-based methanol might begin substituting for ethanol makes the threat of competing with food crops even less.
Altogether, it appears that renewable energy and alternate vehicles are going to survive the dramatic fall in oil prices. Alternative vehicles and other related technologies are now too far along to be crushed by falling oil prices the way they were in the 1980s.
(Photo: The Toyota Mirai at the Los Angeles Auto Show in November. Credit: Vision Automotriz, Flickr)
UPDATED 2:21 p.m. PST Friday. Officials say it’s unclear how much ethanol has spilled into the Mississippi River following a train derailment about 10 miles north of Dubuque, Iowa. The 81-car train derailed on Wednesday morning, and 15 cars left the tracks in a remote, wooded area inaccessible by road. Crews had to build a temporary road to reach the site. Eight of the 14 cars that were carrying ethanol appeared to be leaking, and crews were working to minimize the impact on the river, and to wildlife, Canadian Pacific said. Fox Business reports:
“We have verified some ethanol has reached the water but we do not have an estimate of how much,” said CP spokesman Andy Cummings, who was at the scene Thursday.Ethanol mixes with water and, in high concentrations, can deplete the oxygen in water and kill fish, said Iowa Department of Natural Resources spokesman Kevin Baskins. He noted the impacted segment of the river was within the Upper Mississippi National Fish and Wildlife Refuge.Baskins said the primary concern is the threat to fish and other aquatic life, such as mussels, which can’t easily move away when oxygen levels dip. The DNR plans to sample fish collected from fishermen and monitor open-water areas in the largely iced-over river for signs of dead fish.
Ethanol is an alcohol fuel made primarily from corn, but it can also be processed from any other plant high in sugar content. It’s fermented in a distillery, and in the past it was commonly known as “moonshine.” The ethanol being transported was denatured, meaning it contained toxic additives to discourage human consumption. Such spills involving crude oil have tended to have more environmental impact. The Renewable Fuels Association points out in a report on the dangers and cleanup protocols for ethanol spills:
Ethanol is less toxic than gasoline. Carcinogenic compounds are not present in ethanol. … The biggest difference between ethanol and hydrocarbon fuels is the water solubility. This property changes how ethanol will react in the environment, including surface and ground water, and soils.The complete solubility of ethanol in water means that if a release reaches surface water, the ethanol will rapidly disperse and can no longer be recovered as a product. … Ethanol in surface water will rapidly biodegrade. The concentration of ethanol can create a toxic effect on aquatic organisms, though frequently the depletion of dissolved oxygen caused by biodegradation has a greater impact to fish and aquatic organisms.
As production of U.S. oil skyrocketed the past few years, much of it from large shale-rock formations in North Dakota and Texas, more oil needed to be transported through America’s rail system. There has been a series of derailments and fires, most notably the inferno in Quebec that killed 47 people 2013. Much of the spotlight has shone on the aging DOT-111 fuel-tanker rail car that’s been in use for decades. That was the model of car used on the Iowa train that derailed. Reuters reported:
The incident is likely to add to a debate about transporting flammable goods by train after a series of fiery accidents involving crude oil cargoes in recent years.The U.S. Department of Transportation has proposed new safety features for new tank cars transporting fuel and called for the phasing out of older cars considered unsafe.The U.S. ethanol industry has pushed back on the new rules, saying regulators should distinguish between corn-based biofuel and crude oil.Ethanol is less volatile than crude oil, is biodegradable and has a 99.997 percent rail safety record, according to the national Renewable Fuels Association.
It’s amusing to see analysts at high-powered, influential financial-services companies continue to predict what oil will do, following its 55-percent plunge from June to early February.
Here’s a news flash: Nobody knows what it’s going to do: whether the price will spike again, and if so, by how much. They were wrong in the last half of 2014, and some of them are sure to be wrong even as we speak.
The Wall Street Journal’s Alexandra Scaggs looks into specifics ($$), leading with the recommendations of Raymond James & Associates analyst Pavel Molchanov. In late November, with oil already down 30 percent from June, he issued a report saying oil prices and energy stocks were “within weeks of bottoming.”
He and his colleagues maintained the equivalent of a “buy” recommendation on Houston energy producer Southwestern Energy Co., also down about 30% since June. … More than two months after Mr. Molchanov made that call, it is clear he and many other analysts were wrong. Nymex crude prices and Southwestern Energy’s stock each have fallen more than 20% since Thanksgiving.
What does Molchanov say now?
“It’s a little late in the game to downgrade stocks on oil going down, because oil’s already gone down,” said Mr. Molchanov. But “commodity prices are almost impossible to predict in the short run.”
As the story notes, often analysts have waited until very late in the game to recommend against holding energy stocks. Molchanov’s colleagues at Raymond James didn’t downgrade Southwestern Energy’s stock until Jan. 6.
Reed Choate, portfolio manager at Neville, Rodie & Shaw of New York, says: “Analysts are always optimistic.” But “this was a big miss.”
Arun Jayaram, an analyst for Credit Suisse Group AP, added: “In an ideal world, as an analyst you anticipate moves.” But “it’s difficult.”
You’d figure that such analysts, chastened by their bad moves, would be a little less enthusiastic. Nope.
Mr. Molchanov of Raymond James thinks the sector could begin a lasting recovery in the second half of this year. The firm forecasts Nymex crude will sell for an average $62 a barrel this year. “The recovery will take time,” he said. “Then, naturally, there’s going to be a bounce in most oil stocks.”
What consumers need, instead of expensive guesses and uncertainty, is a steady cost structure they can count on when they build their household budgets. And the best way to achieve that kind of stability is by introducing choice into the transportation-fuels market.
Flint Hills Resources, a biofuels company owned by the corporation controlled by brothers Charles and David Koch, has purchased its seventh ethanol plant.
This week Flint Hills completed its acquisition of the plant near Camilla, Ga., from Southwest Georgia Ethanol. According to Flint Hills’ press release, the plant produces about 120 million gallons of ethanol a year and employs about 60 people.
As the Wichita Eagle notes, Flint Hills is now one of the largest ethanol producers in the country. Its biofuels business …
… has a combined annual capacity of 820 million gallons of ethanol, a biodiesel plant and investments in biofuels technology and feedstock development.
Considering that the entire ethanol industry produced 13.3 billions of fuel in 2013, Flint Hills now controls 6.2 percent of the U.S. market. Pretty substantial for an enterprise owned by Koch Industries, which made the bulk of its vast fortune on oil.
The Kochs are hardly greenies. According to a Rolling Stone story from last September:
Thanks in part to its 2005 purchase of paper-mill giant Georgia-Pacific, Koch Industries dumps more pollutants into the nation’s waterways than General Electric and International Paper combined. The company ranks 13th in the nation for toxic air pollution. Koch’s climate pollution, meanwhile, outpaces oil giants including Valero, Chevron and Shell. Across its businesses, Koch generates 24 million metric tons of greenhouse gases a year.
A 2011 story by the Center for Public Integrity contends that while oil is the “core of the Koch business empire,” its influence extends much further.
Koch companies trade carbon emission credits in Europe and derivatives in the U.S. They make jet fuel in Alaska from North Slope oil, and gasoline in Minnesota from the oil sands of Canada. They raise cattle in Montana and manufacture spandex in China, ethanol in Iowa, fertilizer in Trinidad, nylon in Holland, napkins in France and toilet paper in Wisconsin.
Since federal guidelines call for a certain amount of ethanol to be blended into the nation’s gasoline supply, investing in ethanol might be a simple hedge, the story says.
“New or emerging markets, such as renewable fuels, are an opportunity for us to create value within the rules the government sets,” Flint Hills Resources President Brad Razook told his employees …
It might not yet be the “snap-back” we’ve been talking about for some time — that inevitable climb back upward after a seven-month downward spiral — but the price of oil has shot up 19 percent across the last four trading sessions.
So maybe start preparing to say goodbye to those savings you’ve been pocketing at the pump every week or two.
Brent crude LCOc1, the international benchmark, rose $3.16 (about 6 percent) to $57.91, and U.S. crude CLc1, West Texas Intermediate, rose $3.48 (7 percent) to $53.05.
The four-day surge is the biggest such gain since January 2009.
The rally began on Friday, when oil services firm Baker Hughes said the number of U.S. oil drilling rigs had its biggest weekly decline in nearly 30 years.
Of course, that could mean further job losses in the U.S. oil-production sector. Baker Hughes last month announced plans to layoff 7,000 employees, or 11 percent of its workforce, because a global oversupply of oil pushed down prices and made expensive-to-extract American oil less profitable.
Fuel Freedom has argued that American workers, as well as consumers, need cheap fuel prices for the long-term, instead of the job-killing rollercoaster of volatility that’s inherent in the oil market. The solution is to displace some of the oil we consume with cleaner-burning, cheaper fuels like ethanol and methanol.
John Hofmeister, the former president of Shell Oil and a star of the documentary PUMP, has said that the oil price plunge is an “anomaly,” and has warned of a price “snap-back” based on the reduction in U.S. drilling. Last month he told CNBC: “The more consumers enjoy the price production, the sooner we’ll be headed back to higher crude-oil prices. That’s the reality.”
As Reuters explained, oil didn’t just spike in a vacuum. Tuesday’s jump came after the dollar fell about 1 percent against other currencies, the dollar’s biggest one-day drop since October 2013. This had the effect of elevating the value of oil and other commodities.
Despite the four-day rally, some traders doubt that the selloff in oil was over, citing last week’s build in U.S. crude stockpiles as evidence. A U.S. refineries strike also stretched into its third day on Tuesday, weakening the picture for crude.
The Wall Street Journal reported that “few investors and analysts are willing to call a bottom to a downdraft that began in July, the magnitude of which caught many market experts by surprise.”
Still waiting for Debbie Carlson to explain why ethanol “isn’t a good fuel.”
That was the headline of a piece she wrote for The Guardian last week: “Energy hypocrisy: Ethanol isn’t a good fuel, but it’s not going away anytime soon.”
Carlson, a veteran business freelancer who also has written for Barron’s and The Wall Street Journal, makes several uncontested points, noting that ethanol — particularly ethanol made from corn — carries some political baggage. And of course there’s a looming battle over how much ethanol to blend into the nation’s gasoline supply under the Renewable Fuel Standard.
But nowhere in the 1,024-word post does Carlson explain, specifically, what makes ethanol such a lousy fuel.
Ethanol, whether it’s made from corn, sugarcane, biomass or other feedstocks like natural gas or municipal waste, simply burns cleaner, producing far fewer emissions than gasoline. The result is a net gain for air quality, people’s health and the environment. Henry Ford called it the fuel of the future.
Marc Rauch. Credit: The Auto Channel
Marc Rauch, executive vice president and co-editor of The Auto Channel website, takes issue with Carlson’s assertions in a new TAC post, titled “Ethanol Honesty is the Best Energy Policy.” Marc Rauch, a longtime champion of alcohol fuels who appears in the Fuel Freedom-produced documentary PUMP, starts in right away with the title of Carlson’s piece, noting that she “included nothing within her story to support calling ethanol a bad fuel.”
Rauch is just getting warmed up. He continues:
Ms. Carlson doesn’t get any more honest as she thoughtlessly rattles off hackneyed, long disproved criticisms of ethanol like a detached high school cheerleader who doesn’t understand the rudiments of the game she’s cheering for.
Ms. Carlson writes that while ethanol was supposed to help reduce our dependence on foreign oil; combat climate change; be a gateway for more renewable fuels technology, and reduce gasoline prices because it was cheaper; that it hasn’t done any of these things. She is wrong, it has done all of these things.
If America used 13 billion gallons of ethanol in 2014 to help power our passenger vehicles then that means we reduced our dependence on foreign controlled oil by 13 billion gallons — simple mathematics.
Rauch saves his harshest criticism for Carlson’s rehashing of the argument that corn ethanol steals food out of the mouths of starving babies. It’s a line that opponents of ethanol, including the oil industry, have been leaning on for years. She writes that “we’re putting nearly 40% of the US corn crop in our gas tanks, which some argue pushes up food prices.” (emphasis added.)
Rauch writes that Carlson “attempts to re-ignite the preposterous flames of the ‘food vs. fuel’ argument, adding:
Central in trying to make this an alarming statistic is the imagery that just as the corn is about to be distributed to millions of corn-on-the-cob deprived starving people around the world, greedy ethanol producers swoop in and buy up all the food to be turned into fuel. In reality, this is not how the system works.
There is no question that more corn being grown in America today is being used for ethanol production than as compared to, say, 10 years ago. But the reason for this is that the corn is specifically grown to be used for ethanol. There is demand for the crop so farmers grow more. This means that farmers (American farmers) can grow something that is profitable. Moreover, it means that they can grow something without having to turn to public assistance.
In 2000, U.S. corn production was 251,854 metric tons. In 2013, U.S. corn production was about 353,715 metric tons. Despite the increase in the amount of corn grown between the two years the actual amount of corn available for human consumption remained the same. Additionally, although most of the world outside of the western hemisphere does not eat corn the way that we do, world corn production reached record highs in 2014. So it’s safe to say that there were fewer starving Africans being deprived of non-nutritious high-fructose corn syrup products. Considering the obesity problem that we have in America, even if we were depriving someone of corn chips perhaps we would be doing them a favor.
Finally, there’s the issue of ethanol’s price. Carlson writes that: “As of 26 January, Chicago Board of Trade ethanol futures were holding around $1.448 a gallon, whereas New York Mercantile Exchange reformulated gasoline futures prices were at $1.3167, giving the renewable fuel a 13-cent premium.”
Ask yourself: Where have you seen regular gasoline at $1.31 a gallon? That low price doesn’t take into account marketing and distribution costs for gasoline, Rauch says.
As for the price in the real world, FFF blogger William Tucker has observed that ethanol prices have dropped, which is remarkable considering that oil has plunged 60 percent in seven months. According to E85Prices.com, the national average for E85 on Monday was $1.70, compared with $2 for E10 (regular gasoline with 10 percent ethanol).
In some states, it’s more cost-effective than the national average: In Texas on Monday, E85 was 18.2 percent cheaper than E10. In Florida, the spread in favor of ethanol was 24 percent, and in California it was 19 percent. The spread likely will increase if volatile oil prices rise again, which some experts say they inevitably will.
Rauch writes that Carlson is:
assuming the current surprisingly low price of crude oil will remain surprisingly low …
Read Rauch’s full post, and watch his segment in PUMP, to learn the truth about ethanol.
Until then, here’s a clip from the film, in which Rauch says ethanol “has always been the better fuel” for cars and trucks, and David Blume discusses the many crops besides corn that can be processed into alcohol fuels:
Energy experts are starting to pay more attention to an important byproduct to U.S. oil extraction: the incredible amount of natural gas that gets burned off into the atmosphere, or “flared,” because it’s not profitable enough to capture at the well head.
… the sheer volume of gas that gets flared or emitted into the atmosphere t remains truly astounding. A potential source of profits and jobs is literally transformed in bulk into an environmental hazard and potential liability around the clock.
It’s an environmental hazard because natural gas is made primarily of methane, a greenhouse gas that’s many times worse for the environment than carbon dioxide. Some methane leaks from wells and pipelines, but even when the gas is burned off, it creates some GHG emissions.
Methane has tremendous potential as a commodity, however, because it can be turned into alcohol fuels — ethanol and methanol — to run our cars and trucks. Both fuels burn much cleaner in engines, and can be cheaper for the consumer.
When the price of oil was $115 a barrel, there was little incentives for oil drillers — who put bits in the ground mainly for oil, after all — to capture and store the natural gas, because gas remains stuck in the cellar in terms of pricing. Now that oil has dropped by 60 percent over the past seven months, maybe U.S. drillers will be incentivized to keep more of the gas that comes up in the wells.
Landfills also emit methane, and much of that is flared as well. If we captured more methane and turned it into fuel, there would be more of a market for it, and the infrastructure for converting it to fuel and distributing it would grow. A whole new generation of jobs could be created in the sector, jobs that by their nature would stay in America.
Kanellos has compiled many fascinating statistics about how much natural gas is wasted by flaring, including these nuggets:
Since the beginning of 2010, more than 31% of the natural gas in the Bakken region has been burned off or flared. It was worth an estimated $1.4 billion.
Over 150 billion cubic meters, or 5.3 trillion cubic feet, get flared annually worldwide, or around $16 billion lost.
Flaring in Texas and North Dakota emit the equivalent amount of greenhouse gases as 500,000 cars.
Every so often, a new “study” is published that shows why many of oil’s competitors are “bad” in one form or another. Such “studies” are usually widely circulated in the media without much fact-checking. When other experts start looking into the “study,” they usually find that it is anything but scientific (remember all those “studies” that said that smoking is good for you.)
The question each American should ask is, Why are they trying to tell us which fuel we should use? All these studies basically don’t want Americans to be exposed to other fuels (in order to maintain the oil monopoly). Americans are smart enough to decide which fuel is best for them, but that’s what scares the oil monopoly. They don’t want competition at the pump. Take a look at the most recent “study.”
Researchers at the University of Minnesota have stirred up a hornet’s nest by supposedly proving that ethanol is no better than gasoline for air emissions, and electric cars don’t fare much better either, especially if they get their electricity from coal. The study compared the air pollution level of gasoline with 10 alternative fuels and came up with a winner – what they called “renewed methane” — methane captured from landfills, which have no link to fossil fuels.
Air-pollution groups and the ethanol industry pointed out that the study was deeply flawed and based on outdated assumptions.
“On a full lifecycle basis, the study’s results are contradictory to the results from the Department of Energy’s latest GREET model,” the Renewable Fuels Association wrote in a response published the next day. (GREET stands for “Greenhouse gases, Regulated Emissions, and Energy use in Transportation,” a recent standard set by the Department of Energy that attempts to measure all energy use for the different fuels through the entire life cycle. GREET shows ethanol doing fairly well, while the Minnesota study used an older model that is not as favorable to ethanol.)
“There is a substantial body of evidence proving that ethanol reduces both exhaust hydrocarbons and CO emissions, and thus can help reduce the formation of ground-level ozone,” the RFA said. The study “… excludes NOx and SOx emissions associated with crude oil extraction, a decision that grossly under-represents the actual lifecycle emissions impacts of gasoline. Omitting key emissions sources from the lifecycle assessment of EVs and crude oil inappropriately skews the paper’s results for the overall emissions impacts of these fuels and vehicles.”
The study included the entire lifecycle components of ethanol but excluded the lifecycle components of gasoline (like tar sands extraction). This is not a minor omission. It essentially means that the entire report is materially incorrect.
The Urban Air Initiative was also highly critical of the Minnesota report. “The study utterly failed to consider a vast body of research by auto industry and health experts that conclusively show gasoline aromatic hydrocarbons are the primary source of the most dangerous urban pollutants,” said David VanderGriend, president of the Initiative. “The aromatics — which comprise 25–30 percent of U.S. gasoline — are responsible for a wide range of serious health effects, including autism, cancer and heart disease.”
“Urban air pollution, and specifically summertime smog or ozone, is a mix of volatile organic compounds, carbon monoxide, particulates, NOx, and countless other factors. Gasoline itself is a toxic soup of chemicals, but as we add ethanol we clean up that gasoline and protect public health,” added VanderGriend, whose group keeps track of pollutants in cities.
VanderGriend pointed out that ethanol is a source of clean, low carbon octane that is used in federal reformulated gasoline in major U.S. cities. Although it is not required, refiners choose ethanol for its clean-burning properties and its ability to help them meet emission standards. “Excess carbon monoxide has essentially been eliminated in the U.S. due to the presence of ethanol, and ozone violations are at the lowest levels in the history of the automobile,” said the RFA response. According to the EPA, the amount of ozone in the air has decreased 18 percent from 2000 to 2013.
What the Minnesota study completely misses is the role that ethanol is playing in reducing our dependence on foreign oil. People have jumped to the conclusion that because our imports have fallen and because the price of oil has nosedived, we don’t have to rely on oil from countries that oppose our policies at all. Nothing could be further from the truth. We still import about 40 percent of our oil and spend $300 billion in the process. This figure is likely to remain high as oil bounces back from its recent lows. The major chunk of our trade deficit is made up of imported oil.
We still have a lot way to go in freeing ourselves from these responsibilities. All these strategies – ethanol, methanol, compressed natural gas, electric vehicles and others – can play a part. The important thing is to give consumers a choice – as Fuel Freedom Foundation has long recommended. The last thing we want to do is be influenced by studies that are heavily biased against ethanol or any of the other alternatives that threaten the monopoly of gasoline.
Communities around the country that drove the surge in U.S. oil production are becoming victims of falling global prices. Already this month, oil-and-gas servicing companies Baker Hughes and Schlumberger announced a combined 16,000 layoffs, owing to the steep drop in oil prices.
“They gave me 24 hours to leave my house,” John Roberts, a van driver for Schlumberger who was let go in Williston, N.D., told CNN Money.
In North Dakota, where work on the Bakken shale-oil formation had attracted thousands of workers amid an economic surge, Jim Arthaud, CEO of MBI Energy Services in Belfield, said up to 20,000 jobs could be lost in that area alone, and just among companies that service oil and gas drillers.
Prof. Bill Gilmer of the University of Houston told Forbes that 75,000 jobs could be lost in Houston alone in 2015. The city has added about 100,000 jobs a year since 2011.
The antidote to this boom-and-bust cycle of volatile oil prices is to provide a steady, dependable supply of cheap transportation fuel to American drivers for the long term. Increasing the use of alternative fuels will reduce our dependence on oil and protect the economy from the oil-market rollercoaster.
The United States has helped bring down the global price of oil by producing more oil – a lot more – here at home. But that oil, extracted from shale rock, mostly in North Dakota and Texas, is expensive to get out of the ground. As the global price of oil has plummeted, so too have the oil companies’ profit margins, and they’re starting to lay off workers on a mass scale.
To promote the use of more alternative fuels, as a counterweight to oil-price volatility, the U.S. should build up its infrastructure for producing and distributing fuels like ethanol and methanol. There are thousands of jobs that could potentially be created. In 2013, for instance, the U.S. produced 13.3 billion gallons of ethanol, which is blended into the gasoline we all use. The ethanol industry supported 86,504 direct jobs and 300,277 indirect jobs, according to the Renewable Fuels Association‘s most recent data. Those are domestic jobs that support American families, and which can’t be outsourced.
The sector added $44 billion to the nation’s gross domestic product and paid $8.3 billion in taxes, without government subsidies.
If we made such alternative fuels more widely available, we could not only reduce our dependence on oil, we’d create a whole new generation of U.S. jobs that would keep investment in the country and strengthen the overall economy.
Our Mission: Fuel Freedom Foundation is working to reduce the cost of driving your existing car or truck by opening the market to cheaper, cleaner, American-made fuel choices at the pump.
Fuel Freedom is a non-profit with a simple mission: break America's oil addiction by bringing competition to the U.S. transportation fuel market.