Flexible Fuel to End Foreign Oil Dependence

Thursday, June 14, 2012

From the Washington Times by Robert McFarlane:

Your only option, and the price is $300.
THE NEXT TIME you go to buy a car, a fridge, shoes, a TV, boxer shorts or lipstick, what if there were only one choice — a single product in the marketplace for each category — take it or leave it? Worse, what if the price of that item were set by a foreign cartel that is dominated by autocrats who are not our friends? Sound far-fetched? That’s essentially what you face each time you fill your car’s gas tank. Why is that not OK? Let me count the ways.

Our entire transportation system — that is, the vast majority of anything that moves anything from Point A to Point B (i.e., aircraft, trucks, ships and your family automobile) runs on a petroleum product. Oil has become a strategic commodity — a good that if priced extravagantly or if its supply is disrupted literally can bring down the global economy. Yet this year, we will send $400 billion overseas to buy oil whose price is set by the Organization of the Petroleum Exporting Countries (OPEC). In addition, we also will spend an additional $150 billion (about one-third of the Pentagon’s budget) to keep this nonsensical arrangement working. Think how many soldiers’ lives could be saved and jobs created at home if we solved this problem. In sum, for the past 40 years, our country has endured this outrageous national security, economic and environmental problem, all the while whistling past the graveyard, hoping that we will muddle through somehow. And the outrage is on course to persist into the future as far as the eye can see.

It’s also interesting to note that oil’s strategic status affects not just our transportation sector but chemicals and agriculture as well. Just about 90 percent of the products that Dupont and Dow put on the shelves of American stores — from synthetic fibers (i.e., the clothes on your back) to plastics that wrap everything else to the molded material in your dashboard — rely on oil as the feedstock. In short, we — and everyone else in the world — live in a global economy that runs, at its peril, on oil.

But there is some very good news: In recent years, we have experienced the increasingly promising emergence of new oil reserves here in North America. Because we will now be able to use supplies found here in the United States, those reserves will reduce our balance-of-payment deficits. Unfortunately, it won’t have much impact on the price you pay at the pump — again, because OPEC sets that price. You can do that when you own nearly 80 percent of world oil reserves but supply just 30 percent of daily global supply.

It doesn’t have to be this way. But the only way we will overcome this challenge will be to introduce competition at the pump. Fortunately, there are alternative fuels in a family of alcohol products. One hundred years ago, Henry Ford thought we ought to burn alcohol in his cars. It burns cleaner and has a higher octane (race-car drivers love methanol) and would enable us to stop breathing in carcinogenic benzene, xylene and toluene (additives currently blended into gasoline to increase octane). Methanol, which a recent Massachusetts Institute of Technology study concluded is the most desirable alternative to gasoline, can be made from natural gas — think shale gas — which is being found in great abundance both here and throughout the world. The best news is that methanol producers think they will be able to deliver at the pump the energy equivalent to a gallon of gasoline for about $3 (including processing, distribution, infrastructure and taxes) — all without federal subsidies of any kind.

Parallel advances have been made in the chemical industry, where the time isn’t far off when a pound of sugar will replace a barrel of oil and enable the growth of a huge biochemical industry that doesn’t rely on any food feedstock to produce those fibers and plastics mentioned earlier. To reach that day, the industry may need a little help — in the way of investment tax credits or loan guarantees — to complete the necessary research and development. But that support will be short-lived and could be offset by no longer needing to give $40 billion annually in subsidies to the oil industry. It would be the best bargain we’d ever make.

America, we can do this. Following a week of remembrance when we honored those who have given their lives to preserve the freedoms we enjoy at the ballot box and in the marketplace, what better time to recommit ourselves to lessening our dependence on unstable parts of the world where our sons and daughters have died fighting. A good starting point would be investment into ramping up production of methanol and other alternatives to gasoline. This will add immeasurably to our national security, our economic security, our health and the environment. We simply cannot go on as we have. To do so is to heap yet another family of burdens on the backs of generations to come.

Robert McFarlane served as President Reagan’s national security adviser and is co-founder of the U.S. Energy Security Council.

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