The Open Fuel Standard Act Versus the Natural Gas Act

Thursday, June 16, 2011

Zubrin clarifies the choice.
Because of the high cost of oil and the burden that puts on the American economy, two bills have recently been introduced into the House of Representatives. One is the Open Fuel Standard Act and the other is known as the Natural Gas Act.

Robert Zubrin wrote about the differences between the bills in a recent article. Below is a summary. Click here to read the whole article.

The Natural Gas Act would commit the government to providing a government subsidy totaling $11,500 per car. For trucks, the subsidy would be twice as much or more, up to $64,000. Plus there would be government subsidies for filling stations to the tune of $100,000 to encourage them to put in natural gas pumps.

This is a lot of money. It would cost taxpayers $13.8 billion a year. Zubrin contrasts this with the corn subsidies for ethanol that costs $4.5 billion and has successfully replaced 8 percent of our nations gasoline use. If the Natural Gas Act passes, it would take 18 years before it would add up to replacing 8 percent of our gasoline use, and could cost a total of $248 billion! And — here's the kicker — we would actually be more dependent on foreign oil after 18 years than we are now.

The Natural Gas Act picks a fuel. It would attempt to replace our reliance on petroleum for transportation with a reliance on Natural Gas. As we've seen with Brazil's example and our own example, diversifying our fuel portfolio is much smarter than relying on a single fuel.

Okay, let's contrast the Natural Gas Act with the Open Fuel Standard Act. First of all, the Open Fuel Standard Act doesn't cost the taxpayer anything. Secondly, it doesn't pick a winner, but allows the marketplace to pick a winner. And it keeps our fuel portfolio diversified.

The Open Fuel Standard Act calls for new cars sold in the U.S. to be flex fuel, natural gas, electric, hybrid, or biodiesel compatible. Flex fuel, in the bill's definition, means capable of burning gasoline, methanol, or ethanol, or any combination of any of these.

The fact that methanol will be one of the competing fuels would probably open up the market to natural gas faster (and without costing taxpayers anything) because methanol can be made out of natural gas (as well as many other things like municipal waste, algae, CO2 exhaust, forest thinnings and agricultural waste). Drivers will be able to choose which fuel they use because their cars' flexibility would allow them that choice.

Flex fuel adds very little to the production cost of a car. GM says it costs $70 or less. And it will drive oil prices down worldwide because the U.S. is the leading petroleum consumer and car market, so the flex fuel cars that automakers produce for the U.S. will inevitably be sold around the world, creating an open fuel standard everywhere. For oil to compete, the price of oil will have to come down.

In contrast, the Natural Gas Act would have almost no impact on global oil prices.

Let's make sure our representatives make the right choice. Click here to find out how.

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