DOE Assistant Secretary David Sandalow's Speech at the Methanol Policy Forum

Thursday, March 29, 2012

Earlier this week the Methanol Institute, along with IAGS and the US Energy Security Council, hosted a successful, productive 1-day event at the Hyatt Regency on Capitol Hill — The Methanol Policy Forum 2012.

This event brought together government, industry, technology companies and federal agencies for a comprehensive discussion about the role methanol can play in our energy policy, and what can be done to move initiatives forward.

Department of Energy Assistant Secretary for Policy and International Affairs David Sandalow made an informative videotaped presentation at the event. Follow this link to watch a video of his remarks on YouTube: DOE Assistant Secretary David Sandalow at Methanol Policy Forum 2012. It is 13 minutes and 33 seconds long.

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Repercussions of High Gas Prices

Wednesday, March 28, 2012

"Every one-penny rise in the cost of a gallon of gas takes $1 billion of consumer spending away from other goods in the course of a year, according to an analysis by Credit Suisse bank. A 50-cent increase this year would thus divert $50 billion away from consumer spending."

- The Week Magazine

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$4000 Versus $2250 With Existing Technology: What Are We Waiting For?

Monday, March 26, 2012

The following is a comment made yesterday by Kevin D'Arcy on the OFS Facebook page (reprinted here with his permission):

I just did some quick math using Robert Zubrin's data from his methanol experiment with his Opal. Using a $4.00 per gallon price for gasoline and a $1.50 price per gallon of methanol, if Zubrin drove his Opal 36,000 miles it would cost him $2250 if he consumed methanol. If he consumed gasoline it would have cost $4000. That is almost half the price — and all of the profits and associated revenues would remain in America. And we would have the added benefit of cleaner air. So why is this so difficult for people and politicians to understand? Are we led by traitors and crooks?

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We Don't Have a Free Market in Transportation Fuel

Sunday, March 25, 2012

When thinking about the "mandate issue" (wanting to preserve a free market and not encumber it with government regulation), it is important to realize that right now petroleum does not exist in a free market.

Some oil production operations produce oil for much cheaper than others, so they could sell theirs on the market at a price lower than anyone else, and thus gain a larger market share.

But they don't. They all sell barrels of oil for the same exorbitant price. Why?

Because they can sell every drop they have at top dollar.

Why? Because OPEC keeps oil artificially scarce. They are large enough and keep it scarce enough that all the oil that becomes available on the world market is snatched up. There is no competition. It's an unprecedented (and illegally-created) seller's market.

But OPEC's price-fixing, economy-devastating scheme (and its destructive effects) can be bypassed with the simple introduction of the Open Fuel Standard. With the passing of the bill, cars would become a platform upon which different fuels would compete against petroleum in a free market.

Prices for fuel would quickly drop, and the economy — no longer dragged down by the crushing, encumbering, onerous fuel prices — would boom. Let's make it happen now: What You Can Do.

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How OPEC Profits Are Used to Endanger Americans

Saturday, March 24, 2012

In the article, Achieving Energy Victory, Robert Zubrin writes:
Until the Saudis started racking up billions in inflated oil revenues in the 1970s, the Wahhabi movement was regarded by Muslims the world over as little more than primitive insanity. Without rivers of treasure to feed its roots, this horrific movement could neither grow nor thrive.  
It is the Saudis’ unlimited funds — over $200 billion in foreign exchange earnings in 2006 — that have allowed them to buy up the faculties of the Islamic world’s leading intellectual centers; to build or take over thousands of mosques; to establish thousands of radical madrassas, pay their instructors, and provide the free daily meals necessary to entice legions of poor village boys to attend.  
Those boys are indoctrinated with the idea that the way to get into paradise is to murder Christians, Jews, Buddhists, Taoists, and Hindus (not to mention moderate Muslims). Graduates of these academies are today killing American soldiers in Iraq.  
Meanwhile, Arab oil revenues have underwritten news outlets that propagandize hatefully against the United States and the West, supported training centers for terrorists, paid bounties to the families of suicide bombers, and funded the purchase of weapons and explosives. We have been subsidizing a war against ourselves. 
And we have not yet reached the culmination of the process. Iran is now using its petroleum lucre to fund its nuclear program and to insulate itself from economic sanctions imposed on it. Once produced, Iranian nuclear weapons could be used by the Iranian regime itself or be made available to terrorists to attack U.S., European, Russian, or Israeli targets. This is one of the gravest threats to international peace and stability — and, again, we are paying for it ourselves with oil revenue. 
Our responses to these provocations have been muted and hapless because any forceful action on our part against nations like Saudi Arabia and Iran could result in the disruption of oil supplies that the world economy is utterly dependent upon.  
We cannot stand up to our enemies because we rely upon them for the fuel that is our economic lifeblood. We pay them for their oil and they make war on us. 
In light of these realities, U.S. energy policy for the last three decades has been a scandal. The time has come for change. To liberate ourselves from the threat of foreign economic domination, to destroy the economic power of the terrorists’ financiers, and to give ourselves the free hand necessary to deal forcefully with them, we must devalue their resources and increase the value of our own. We can do this by taking the world off the petroleum standard and putting it on an alcohol standard.

And we now have an opportunity to do just that with the Open Fuel Standard. Urge your Members of Congress to co-sponsor the bill, and convince all your friends and family to urge their MOCs too. Here's how to get started: Actions You Can Take.

The author of the excerpt above is Robert Zubrin, who wrote Energy Victory.

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Monopoly-Breaking Cars

Friday, March 23, 2012

The Flexible-Fuel Vehicles page on Wikipedia contains these exciting tidbits:

Lotus CityCar
In 2007 Ford produced 20 demonstration Escape Hybrid E85s for real-world testing in fleets in the U.S. Also as a demonstration project, Ford delivered in 2008 the first flexible-fuel plug-in hybrid SUV to the U.S. Department of Energy (DOE), a Ford Escape Plug-in Hybrid, which runs on gasoline or E85.

GM announced that the Chevrolet Volt plug-in hybrid, launched in the U.S. in late 2010, would be the first commercially available flex-fuel plug-in capable of adapting the propulsion to several world markets such as the U.S., Brazil or Sweden, as the combustion engine can be adapted to run on E85, E100 or diesel respectively. The Volt is expected to be flex-fuel-capable in 2013.

Lotus Engineering unveiled the Lotus CityCar at the 2010 Paris Motor Show. The CityCar is a plug-in hybrid concept car designed for flex-fuel operation on ethanol, or methanol as well as regular gasoline.
Imagine what kind of an explosion of innovation we will see when the fuel market is freed by the Open Fuel Standard!

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Reminder: Upcoming Methanol Policy Forum March 27th

Tuesday, March 20, 2012

Remember: On March 27th, the Methanol Institute along with IAGS and the US Energy Security Council will be hosting a 1-day event at the Hyatt Regency on Capitol Hill — Methanol Policy Forum 2012.

This all day event will bring together government, industry, technology companies and federal agencies to have a comprehensive discussion about the role methanol can play in our energy policy, and what can be done to move initiatives forward.

Get more information about the event, the timeline, and how to register here: Energy Security through Fuel Competition.

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Difference engine: Meet the Meth Drinkers

By N.V. in The Economist:

WITH the average price of petrol in America once again threatening the politically sensitive level of $4 a gallon as tensions mount over Iran’s threats to close the Strait of Hormuz, your correspondent has been puzzled by the deafening silence with which the current spike in pump prices has been greeted. Usually, when oil crosses the $100-a-barrel threshold and petrol prices soar, demands for drastic action fill the headlines. Given that this is election year, presidential candidates might have been expected to exploit the situation. There have been few such murmurings.

For sure, there have been the usual calls for the White House to dip into the country’s strategic oil reserves to slow rising prices at the pump—as happened last summer when more than 30m barrels were released to meet shortages caused by the Libyan uprising. The strategic reserve’s storage caverns in Texas and Louisiana are currently filled to the brim. So, do not be surprised if the administration releases some of the 700m barrels in storage should petrol prices remain stubbornly high during the summer months when people take to the roads for vacation and President Obama campaigns warily for re-election.

But America’s normally vociferous corn growers and ethanol producers have remained remarkably muted. At the least, one would have expected them to be clamoring for their precious E85 brew (85% ethanol and 15% petrol) to be re-instated in the government’s package of tax credits for alternative motor fuels. Since the expiration in January of their $6 billion-a-year subsidy, ethanol blenders have lost their 38 cents-a-gallon credit on E85, causing its price to rise to an average of $3.20 (compared with petrol’s $3.79). In California, where refineries have to use the highest grade of oil to meet the state’s stringent environmental standards, the average price of a gallon of regular petrol is currently $4.36.

Clearly, the ethanol lobby has been lying low since the outcry over the way subsidies for corn-based ethanol have pushed up food prices disastrously. Bioethanol—which was supposed to be a home-grown fuel that was cleaner than petrol—has also been heavily criticised for causing more, not less, environmental damage than even fossil fuels.

Ethanol producers are worried, too, about losing the additional tax credit they get for making ethanol from non-food biomass, such as switchgrass, corn stalks, wood chips and other cellulosic materials. Yet, even with a dollar-a-gallon subsidy, cellulosic ethanol remains wholly uncompetitive. Producers live in hope of a breakthrough that will one day make it commercially viable.

Such hopes are beginning to look increasingly forlorn. The alternative fuel that ethanol producers fear most, clean-burning methanol, is enjoying an unexpected resurgence—thanks to the vast supplies of natural gas discovered in shale deposits beneath West Virginia, Pennsylvania, New York, Texas and Oklahoma. Even if the reserves turn out to be only half as extensive as initially thought, many liken the handful of states where shale-based natural gas is currently being tapped by hydraulic fracturing (“fracking”) and horizontal drilling to Saudi Arabia. Already, natural gas has fallen to its lowest price in a decade, and is expected to stay there for decades to come.

The usual way of making methanol is first to react methane, the main component of natural gas, with high-temperature steam in the presence of a nickel catalyst, to produce a mixture of hydrogen and carbon monoxide known as “syngas”. A second catalyst—usually a blend of copper, zinc oxide and alumina—is then used to turn the syngas into methanol.

Because the process involves stripping off one of the methane molecule’s four hydrogen atoms that are tightly bonded to a central carbon atom, the process requires a good deal of energy. Even so, methanol has long been made commercially this way—without any taxpayer subsidies—for around a dollar a gallon. It can be bought on the spot market today for $1.13 a gallon. Modern catalysts, which eliminate the intermediate syngas stage, promise to make methanol even cheaper.

Methanol, the simplest of all alcohols, has a long history as a fuel for motor cars. It lost out to petrol in the early days of motoring because it packed only half the energy per unit volume (56,800 BTUs per gallon versus 114,100). All other things being equal, a car that gets 25mpg on petrol would get only 12.5mpg on methanol.

But all other things are not equal. Alcohols like methanol have higher octane ratings than petrol—typically 99 versus 87 for regular petrol. That means they can tolerate higher compression ratios without causing the air-fuel mixture in the cylinders to explode prematurely (“knock”) rather than burn smoothly. And the higher the compression ratio, the more energy stored in the fuel can be converted into useful work. In short, engines designed to take advantage of methanol's octane rating produce more power from the same cubic capacity, and can be more efficient in fuel-economy terms.

For years, lead was used to raise the octane rating of petrol and prevent high-compression engines from knocking. For health reasons, lead was replaced in the 1970s by MTBE, an anti-knock additive made from methanol and butane. When this smelly liquid was subsequently found to be contaminating ground water, it was replaced with ethanol. Today, petrol in most parts of America contains up to 10% ethanol in order to raise its anti-knock index.

For its part, methanol has long been used in motor racing, mainly because of its ability to boost horsepower. It also achieved a measure of popularity among motorists following the twin oil shocks of the 1970s—thanks to its ready availability, cheapness and environmental benefits. By the mid-1990s, some 20,000 “Flex-Fuel” vehicles capable of running on methanol as well as petrol were in use in America. Carmakers only stopped producing them when oil prices fell and the farming lobby won political support for corn-based ethanol.

If truth be told, motorists at the time were a little leery of methanol anyway. It may have been fine for “top fuel” dragsters developing 10,000 horsepower from an 8.2-litre V-8 to use a mixture of methanol and nitromethane. But to the average motorist, methanol seemed a bit unnerving to have around cars of the day. For one thing, methanol burns with an invisible flame, making it hard to see when a fire breaks out. For another, it is more corrosive than ethanol, attacking aluminium, rubber and many of the synthetic polymers found in older vehicles.

And unlike ethanol—the basis of all drinkable alcohols—methanol causes blindness in those who consume it habitually (“meth drinkers”). Not that motorists are prone to taking swigs from the fuel tank, but anyone who has syphoned fuel from one car to another will know the taste of petrol all too well. You would not want to do that with methanol in the tank.

Fortunately, the fuel systems of modern motor cars have been upgraded over the past few decades to cope with the demands of ethanol and methanol in anti-knock additives. Meanwhile, the cost of converting a petrol-powered vehicle to run equally on methanol has fallen to around $100. After allowing for methanol’s lower energy content, and including fuel taxes and the cost of all the necessary infrastructure, methanol producers reckon they can deliver the same quantity of energy found in a gallon of petrol for $3.

Two things must happen to make methanol a serious alternative to petrol. One is that oil prices become less volatile. Instead of yo-yoing as they have in the past—for instance, from $147 a barrel in 2008 to $35 in 2009 and back to $90 in 2010—nothing would benefit motorists more than if oil remained stable for at least the next five years at over $100 a barrel. That could well be on the cards. John Hofmeister, a former chief executive of Shell, predicts that the recent run up in demand for oil—primarily from China and India—will require output to be raised by an extra 10m barrels a day, pushing prices in the process to more than $200 a barrel.

The other requirement is a change in the law. The Flex-Fuel vehicles on the American market today are warranted to operate only on ethanol or petrol. “If Congress were to enact an open-fuels standard that required new cars to be warranted to run on all-alcohol fuels, including methanol, natural gas could compete with oil in the liquid-fuels market,” Tom Ridge, the first secretary of homeland security, and Mary Peters, a former secretary of transportation, wrote in the New York Times recently. Bills pending in both houses of Congress could make that happen.

On cue, both Chrysler and General Motors disclosed plans earlier this week to build fleets of pick-up trucks capable of running on both compressed natural gas (CNG) and petrol. With refueling stations few and far between, and needing $10,000 worth of conversion gear, CNG works best in taxis, buses and lorries that have long service lives (to recoup the conversion cost) and return to a central garage at the end of each working day (to refuel).

While natural gas, compressed or liquefied, is hardly the fuel for ordinary motorists, encouraging lorry drivers to adopt it could help spur the development of a methanol supply chain across the country. As T. Boone Pickens, a Texan billionaire with diverse energy interests, has pointed out, “Domestic natural gas is cleaner than diesel or gasolene. It is cheaper. It is abundant. And it is ours.”

True, but the last thing methanol needs—despite what Mr Pickens would like to see as a potential methanol supplier—is the kind of subsidies that have been heaped on corn-based ethanol, which remains as uncompetitive today as it was 30 years ago, despite the $40 billion of taxpayer support it has absorbed. Methanol, by contrast, has already proved itself to be a commercially viable fuel capable of providing cheaper and cleaner motoring while substituting for imported oil.

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America’s Energy Disaster

Monday, March 19, 2012

By Robert Zubrin in National Review Online.

President Obama says his energy policy is a great success. In support, Democratic-party stalwart John Podesta trumpets the claim that the United States is now producing more oil than it imports. A recent article in the Bloomberg News goes even further, saying that the U.S. is now a net oil exporter. New York Times columnist Tom Friedman instructs us to rejoice: High oil prices are now good for the United States.

Unfortunately, none of this is true. For the record, according to the Department of Energy/Energy Information Agency February 2012 Monthly Energy Review, the United States currently consumes (November 2011 figures, p.52) 12.93 million barrels of oil per day (mpd) in its transportation sector, 4.55 mpd in its industrial sector, 1.159 mpd in its residential and commercial sectors, and 0.096 mpd in electrical-power generation, for a total consumption of 18.735 mpd. In contrast, (page 37) in 2011, the United States averaged a production rate of 5.671 mpd of crude oil, or 30 percent of its total consumption, for a net deficit of 13.064 mpd, or 4.77 billion barrels per year. At today’s oil price of $105 per barrel, the bill for these imports runs to $500 billion per year, a tax on our economy equal to 20 percent of what Americans pay the IRS, and a reduction in the nation’s GDP sufficient to account for a loss of 5 million jobs at an average salary of $100,000 per year each.

So the administration’s claims about having made meaningful progress towards fixing America’s oil catastrophe are completely false. That said, it is true that the problem did not originate with Obama, but has been developing for some time. If it is to be understood and corrected, some history is in order.

In figure 1, below, I show U.S. oil production, OPEC oil production, and non-U.S./non-OPEC oil production from 1960 to the present. It can be seen the U.S. oil production grew at an average rate of 3.2 percent per year during the 1960s, peaking at 9.6 mpd in 1970. In that year, however, the Environmental Protection Agency was created, and U.S. production has been in decline ever since. As shown, the growth of OPEC production, which had been extremely rapid during the 1960s, came to a screeching halt in 1973, when the OPEC powers replaced the previously dominant Seven Sisters’ policy of expanding production to fuel the world economy with an alternative policy of constricting production to loot the world economy. As a result, OPEC production has not increased at all since 1973. Thus the entirety of the increase of world oil production over the past four decades — during which time the world economy has doubled in size — has come from non-OPEC, non-U.S. sources. As can be seen in the graph, this has increased at rate of 3.4 percent per year since 1970, essentially the same as the 3.2 percent average U.S. growth rate from 1960 to 1970. With the thin green line of the graph, I show how U.S. production would have developed had it matched other non-OPEC sources and continued to grow at its pre-EPA rate. In that case, instead of producing 5.7 mpd today, we would now be producing 35 mpd. Together with other non-OPEC production, this would have totally marginalized OPEC and constrained oil prices below $30 a barrel today, with associated gasoline prices driven to the $1 to $1.50 per gallon range. Just as they did in the 1950s and 1960s, such low oil prices would fuel dramatic U.S. and global economic-growth rates.

Fig. 1: World Oil Production, 1960–2011. Actual U.S. production is marked with the pink squares. Hypothetical U.S. production continued at pre-EPA growth rates is shown by the green-crossed line. Note that such growth was in fact achieved by other non-OPEC countries.

The catastrophic deterioration of the American oil position is shown even more starkly in figure 2, which presents the U.S. share of total world oil production over the period from 1940 to 2010. In 1940, the United States produced 60 percent of the world’s oil. Today we produce 7 percent. Or, put another way, in 1940, the United States, alone, produced half again as much oil as the entire rest of the world put together; today they produce 13 times as much as we do.

Fig. 2: U.S. Oil Production as a Share of Total World Output.

As I explain at some length in my book Energy Victory, during World War II, the American strength in oil production was a decisive advantage for the Allies. Airplanes, ships, and tanks all ran on oil, and we controlled the supply. Because we were so rich in oil, we had no compunction whatsoever deterring us from bombing the Third Reich’s oil refineries or sinking the Japanese tanker fleet, and by doing so, we brought the enemy to their knees. In contrast, today, we are afraid to strike the Islamists for fear that our actions might endanger their petroleum output. The Kharg Island oil terminal handles 80 percent of Iran’s oil exports. An air raid on this extremely flammable facility would bankrupt the regime, thereby putting an end to its nuclear bomb project — and probably its existence. But we are not prepared for the economic consequences, and so must refrain, even as the terrorists continue to pour ever more bomb-usable, highly enriched uranium from their centrifuges.

In the 1940s, the petroleum business was an American game, and it was enormously to our advantage that the world ran on oil. Today, the exact opposite is true in both respects. That is why we need to take two vital steps:

1. We need to improve our horrible position within the petroleum game by eliminating the EPA and other crippling bureaucracies that have turned the U.S. from the game’s biggest winners into its worst losers.

2. We need to drastically reduce the importance of the petroleum game itself by enacting flex-fuel-vehicle legislation that will open the transportation market to fuels derived from non-petroleum sources.

America’s massive shortfall in liquid-fuel production is an ongoing economic disaster and a five-alarm strategic weakness. It cannot be remedied by business as usual, a philosophy of less-is-more consolation, goofy New Age–inspired feel-good projects, make-believe success claims, or rhetorical spin. Rather, it must be dealt with in a serious and forceful way. If Mr. Obama is not prepared to do that, it is essential that he be replaced by someone who is.

— Dr. Robert Zubrin is president of Pioneer Astronautics, and author of the book Energy Victory. His new book, Merchants of Despair: Radical Environmentalists, Criminal Pseudoscientists, and the Fatal Cult of Antihumanism, will be published by Encounter Books later this month.

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How to Stop Putting Gas in the Islamist Tank

Sunday, March 18, 2012

By Clifford D. May in The National Review Online.

Islamists are a diverse lot. Some are what diplomats like to call “violent extremists.” They want to kill you. Others are less eager to shed blood, more confident that by mastering electoral politics, manipulating international organizations, and designing effective public-relations campaigns, they can achieve their objectives. What are those objectives? Islamism implies a commitment to the imperative of Islamic power. Hassan al-Banna, founder of the Muslim Brotherhood, articulated the basic idea succinctly:

It is the nature of Islam to dominate, not to be dominated, to impose its law on all nations and to extend its power to the entire planet.

If those championing Islamism were only stateless terrorist groups and tin-pot dictators, their geostrategic significance would be minimal. But the regime that rules Iran is dedicated to waging what it calls a global Islamic revolution. And in Saudi Arabia, the state religion is Wahhabism, a strain of Islam that preaches the inferiority of infidels and the rejection of Muslims who do not share Wahhabi ideals.

These regimes float atop an ocean of oil, a commodity that is valuable thanks to those the Islamists despise. It was the Western mind that figured out how to pump oil out of the ground and refine it into a variety of fuels, including those used in internal-combustion engines, another history-bending Western invention.

Imagine you are one of the rulers of Iran or Saudi Arabia: Fabulous wealth is yours due to no intellectual or physical labors on your part. If you invest that wealth wisely, you’ll make even more, but if not, so what? Wealth will flow to you every single day as surely as rivers run to the sea. To sell rugs, olives, or computers requires salesmanship. But oil sells itself: Those who depend on it for their cars, ships, and planes have no other options. Well, theoretically, they do: They could take it by force. But you need not worry about that because, as you are well aware, modern Western ethics prohibit such behavior.

If there were even one oil-rich, Muslim-majority nation solidly committed to liberal democratic values, to freedom of religion and speech, to tolerance and minority rights, the challenges of the 21st century would not be so formidable. But there is no such nation.

Almost 80 percent of global oil reserves are controlled by the Organization of Petroleum Exporting Countries (OPEC), a cartel, a conspiracy in restraint of trade. Most OPEC countries are autocracies. Many are hostile toward America and other free nations. From the income produced by OPEC oil comes most of the money used to train and arm terrorists around the world, and to build nuclear-weapons facilities in Iran.

That makes the price of oil and the West’s dependence on it national-security problems of the first order. What can be done? Robert C. McFarlane, who served as then-president Reagan’s national-security adviser, wrote last week that we can and should be producing more of our own oil, but “that is not enough. To outmaneuver OPEC we need to eliminate oil’s monopoly as the only transportation fuel.”

The most promising possibility: Natural gas is a resource America has in abundance. Cutting-edge American technology — e.g., horizontal drilling and fracking — has made natural gas easier and cheaper to extract. As McFarlane points out, natural gas “can be used in various forms to fuel vehicles. Compressed natural gas (CNG) is well-suited to drive long-haul and other fleet vehicles” but for “light trucks or automobiles, a better approach lies in using natural gas to make the liquid-fuel methanol, a high-octane, clean and safe fuel . . . ”

He notes that the Methanol Institute, a private industry group, estimates that producers can, right now, deliver an amount of fuel equivalent to the energy in a gallon of gasoline for approximately $3. The cars we drive would require only minimal and inexpensive modifications in order to run on methanol — as race cars already do.

Let me emphasize: McFarlane is not proposing that we stop using gasoline and other petroleum products. He is not proposing government subsidies for natural gas, methanol, or other fuels. On the contrary, he is making the case for eliminating subsidies and government favoritism of one fuel over another. He and others are arguing for breaking the monopoly that oil currently enjoys and encouraging the creation of a competitive fuel market.

If, for any reason, that does not happen, only those who invested their own money would suffer. If it does happen, however, having a larger fuel supply from more than one source would provide multiple benefits: It would reduce the funds available to Islamists (strengthening national security), bring down the cost at the pump and reduce price volatility (easing the burden on families, commuters, truckers, etc.), and keep more money and jobs in the United States, thereby reinvigorating the domestic economy (good for those who live, work, and invest in America). The downside? There is no downside.

“Friedrich Hayek and Milton Friedman stressed that the foremost economic duty of government is to eliminate cartel pricing,” McFarlane notes. At the moment, however, government is not doing its economic duty. Nor is it doing its national-security duty: It should not require a Clausewitz to grasp that transferring unprecedented amounts of wealth to your enemy in a time of war is counterproductive. Yet, at the moment we are knowingly funding the “violent extremists” who want to kill us, as well as the more moderate Islamists who merely want to dominate us.

From time to time, Islamists of both stripes must gaze at Westerners and wonder: “How can people so technologically smart be so strategically stupid? Like the oil under the desert sands, this must be a gift from Heaven.”

— Clifford D. May is president of the Foundation for Defense of Democracies, a policy institute focusing on national security and foreign policy.

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Interview With John Hofmeister

Saturday, March 17, 2012

Click here to watch a video on CNN, an interview with the former CEO of Shell Oil, John Hofmeister. He says gasoline could very well go to five dollars a gallon or higher in America.

He has a plan to fix this. One of his suggestions is flex fuel cars: Using ethanol and methanol.

The video is five minutes and nine seconds long.

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An Open Fuel Standard Helps a Country's Economy — a Lot

Friday, March 16, 2012

Brazil is the first country to embrace anything resembling an open fuel standard (read more about that here). And according to economic data released last week, Brazil moved passed Britain to become the world's sixth largest economy behind the U.S., China, Japan, Germany, and France.

Brazil's economy grew three times faster than Britain's last year. It is one of the most dynamic economies in the world.

Flexible fuel vehicles in Brazil reached a record 94% of new car sales in August 2009. At the national level 65% of the flex-fuel registered vehicles regularly use ethanol fuel.

Read more about fuel competition's impact on the economy:

Legalize Methanol
A Petroleum-Only Society Leaves Our Economy Vulnerable
Read more about Brazil's transformation:
If Iran and Brazil Can Do It, So Can We

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The Methanol Alternative to Gasoline

Thursday, March 15, 2012

By TOM RIDGE and MARY E. PETERS in The New York times.


PRESIDENT Obama recently called the United States the “Saudi Arabia of natural gas” and asserted that it was time for our oil-dominated transportation fuel market to open the door to natural gas. He’s right. It would be cheaper for consumers and reduce the strategic importance of oil. But first we need cars that can run on methanol, a high-octane fuel made from converted natural gas.
We’re producing more natural gas these days than we can use, thanks to new techniques to extract gas from shale. A recent report from the M.I.T. Energy Initiative, “The Future of Natural Gas,” called methanol “the liquid fuel that is most efficiently and inexpensively produced from natural gas.” China has already taken notice. Automakers there, like Chery, Geely and Shanghai Maple, have all introduced vehicles capable of running on methanol. Indeed, methanol is so much less costly per mile than gasoline that illegal fuel blending is rampant in China.
Unfortunately, most cars sold in the United States offer consumers no choice beyond gasoline. The so-called flex fuel vehicles that are now on the market are warranted to operate only on gasoline and ethanol. If Congress were to enact an open fuel standard that required new cars to be warranted to run on all-alcohol fuels, including methanol, natural gas could compete with oil in the liquid fuels market. Producing these cars would cost about $100 more. And these fuels could be distributed through the current refueling infrastructure with only slight retrofits.
The current global spot price for methanol made from natural gas is $1.13 per gallon, without any subsidy. Methanol produces about half the energy per gallon as gasoline, so you need to burn twice as much to go just as far. But it is still cheaper than gas. It would cost approximately $3 today, including taxes, distribution and retail markup, to travel the same distance on methanol as on a gallon of gasoline, according to calculations by the Methanol Institute, a cost that is well below the current national average for gasoline. If the economics of natural gas change, a flex fuel vehicle could still run on methanol made from coal, biomass and possibly recycled carbon dioxide, if that technology proves economical.
Natural gas can also play other roles in the transportation sector. It can be used to generate electricity to charge the plug-in hybrids and electric vehicles that have entered the market. And if natural gas prices were to spike, there is always coal, nuclear or renewable power to rely upon for power generation. (Today, only 1 percent of the electricity in the United States is generated from oil.) Still, mass-market penetration of plug-in hybrid and electric vehicles will take some time, because of the high cost of automotive batteries.
Another way to run cars on natural gas is by using compressed natural gas, or C.N.G. These vehicles require a dedicated fuel line and a large gas canister in the trunk. However, the cost of converting a light-duty vehicle to C.N.G. is over $10,000. Such an upfront cost would be reasonable in high mileage users (over 35,000 miles per year) like taxis, buses and garbage trucks, but is too high for a typical car owner, and the return on investment would take many years, even with current low natural gas prices.
America is rich in natural gas and coal, but this is meaningless in terms of energy and economic security as long as our cars are unable to run on fuels made from these domestic commodities. Consumers should have a choice in the cost and type of fuel their vehicles require.

Tom Ridge, a former governor of Pennsylvania, was secretary of homeland security from 2003 to 2005. Mary E. Peters was secretary of transportation from 2006 to 2009. They are members of the United States Energy Security Council.

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Between Iran and a Hard Place

Wednesday, March 14, 2012

Forced to choose between high gas prices and a nuclear Iran, Barack Obama could very well remake himself into a war president.

By Gal Luft
When U.S. President Barack Obama enters his White House meeting with Israeli Prime Minister Benjamin Netanyahu on March 5th — angling to dissuade Israel from attacking Iran’s nuclear facilities — there will be one seemingly mundane issue on his mind that he may be too uncomfortable to share with his guest: gasoline prices.

There is no gainsaying the corrosive political impact that high gasoline prices have on an incumbent president’s chances of getting reelected. With prices projected to hit a national average of $4.25 a gallon by Memorial Day, and with a new poll finding that seven in 10 Americans find the gas price issue “deeply important,” the president should be concerned. The tension with Iran has already pushed crude prices to their highest level since the onset of the Arab Spring, adding at least 30 cents to a gallon of regular gasoline. Investors, concerned about potential escalation in the Persian Gulf, are likely to push oil prices even higher. Other factors — a decline in the dollar, tensions and supply disruptions in oil-producing nations such as Nigeria and Sudan, stocks building up in refineries in preparation for the summer driving season, and a sense that the American economy is improving, to name a few — have also contributed to the upswing.

No one recognizes the political implications of high fuel prices during an election year more than Obama himself. During the summer of 2008, when he ran against Sen. John McCain, oil prices stood at a historical high of $147 a barrel and gasoline prices surpassed $5 a gallon in some parts of the country. The Republican response — for the most part “gas-tax holiday” and “drill-baby-drill” sloganeering — demonstrated the incumbent party’s helplessness in the face of an out-of-control oil firestorm. At the time, the crisis worked in Obama’s favor. Today, it’s the GOP’s turn to smell blood. Obama knows this. The problem is that Netanyahu, one of the savviest foreign leaders when it comes to American politics, knows this too.

Israel, meanwhile, is running out of patience with diplomatic responses to Iran’s nuclear program, and the momentum for Israeli airstrikes is growing by the day. The economic sanctions against Iran may be biting, but they’re not crippling. Iran is moving full steam ahead with its uranium-enrichment activities, and Israeli Defense Minister Ehud Barak, who also visited Washington this week, says that Iran will shortly reach a “zone of immunity” in which military intervention by the outside world may no longer be feasible. The recent string of apparent Iranian attacks against Israeli diplomats in Bangkok, New Delhi, and Tbilisi have strengthened the perception among Israelis that the regime in Tehran is a loose cannon, while the shameful display of cynicism and apathy at the U.N. Security Council by China and Russia in the face of Bashar al-Assad’s atrocities have reminded the Israelis of how unreliable the international community can be when it comes to their national security.

Fed up with the vague official U.S. line that “all options are on the table” when it comes to Iran, Netanyahu is reportedly going to ask Obama to harden the rhetoric against Tehran and make some unequivocal statements about the United States preparing for a military strike in the event that Iran crosses certain red lines. If Obama refuses to oblige, it would expose clear daylight between the two leaders just before they share the same podium at next week’s annual conference of the American Israel Public Affairs Committee. It would also expose Obama to harsh GOP accusations that he is weak on Iran. Acquiescence, on the other hand, would elevate the temperature in the global oil market, driving prices to a higher level and deepening Obama’s gas price predicament.

As if the horns of this dilemma don’t poke enough, Obama has another mine to diffuse: the potential of an Israeli military strike on Iran prior to the November elections. Should such an attack take place — regardless of its success in destroying Iran’s nuclear sites — the short-term implications for the global economy could be dire. A war in the Middle East means an oil shock and, as was the case in 1973, 1979, and 1990, oil shocks are harbingers of recessions. In testimony before the Senate Budget Committee last month, Federal Reserve Chairman Ben Bernanke warned that a major disruption in oil supply could put the kibosh on the recovery. Indeed, a new oil shock would be just as dangerous as a second heart attack for a fragile patient who is just recovering from his first.

Getting an Israeli commitment to hold its planes on the ground until after the November elections means Israel would have to postpone the attack by at least a year, as a winter strike is more difficult to execute. This is a non-trivial request that — if even considered — would come at a hefty price. While such a quiet agreement would never be publicly acknowledged, there would be telltale signs galore. The release of imprisoned spy Jonathan Pollard, a job-creating U.S. weapons deal, or an overturning of the decision to cut missile-defense spending for Israel in the administration’s fiscal 2013 budget proposal would indicate to the outside observer that the president may have bought himself more time.

But there is another possibility. Instead of postponing the inevitable crisis, the president may decide to own it.

Some historical perspective is helpful here. Forty-five years ago, America was embroiled in a protracted and costly war in Vietnam. Yet President Lyndon Johnson, a Democrat, gave Israel a “yellow light” to preemptively attack Egypt, knowing that such a nod meant stirring the hornets’ nest of the Middle East, an oil shock, and an escalation in the Cold War. Today, the risks of an Israeli attack for the international system are no smaller. While such an act could be a stunning success, it could just as easily unleash a chain of events that would bring the world to the brink of the Greater Depression.

The key difference between then and now is that Johnson did not run for reelection, and could therefore afford to turn on the yellow light and depart from the scene. Obama, by contrast, wants a second term and cannot afford to relinquish control over what could be a spiraling international crisis. If all other measures fail, Obama’s only way of turning lemons into lemonade is to take ownership of, and lead, the military option against Iran, and reinvent himself as a war president in the hope that American motorists will view their pain at the pump forgivingly as part of their patriotic duty. Such an option would also defuse Republicans' criticism about Obama being weak on Iran and transform national priorities in the months leading up to the elections.

The link between barrels and bombs — or bunker busters, to be precise — has never been more apparent. And, regardless of what transpires, there is an important, widely ignored lesson in the nexus between the two. For decades, American politicians and pundits have toed a line that calls for the United States to reduce its dependence on foreign oil in order to insulate Americans from the volatility of the Middle East. The only difference between the two parties has been that Republicans advocate supply-side, drill-baby-drill tactics while Democrats prefer dieting and demand reductions through fuel-efficiency standards.

These two responses combined have dramatically reined in America’s oil imports in recent years. Since 2005, oil imports as a share of overall oil use in the United States have fallen from their 60 percent peak to 46 percent, or 1995 levels. In just seven years, in other words, the United States has reduced its demand for oil imports by an amount equivalent to three times the oil imported by the United States from Saudi Arabia. Though some of this is due to the recession, most of the credit goes to a ramp-up in domestic oil production, enabled by technologies such as deep-water drilling, hydraulic fracturing, and horizontal drilling as well as increased fuel efficiency in vehicles. Pundits and energy experts now declare that America is on the road to self-sufficiency.

But here’s the rub: Over the same period of time, oil prices have nearly doubled and the price of a gallon of regular gasoline has increased by 65 percent. In fact, U.S. drivers spent more last year on gasoline than ever before. Should the price of gas hit $4.25 a gallon by the spring, as the Oil Price Information Service predicts, that would represent an 85 percent increase over the 2005 price. The experience of the past seven years reveals nothing less than the collapse of the very energy security paradigm that dominated America’s political discourse throughout the tenure of no fewer than eight consecutive presidents and 20 Congresses. Americans were promised that if they drilled more and saved more they would pay less. They did both, and they’re paying more.

Why? Over the past 45 years, America has failed to address the real root of its energy vulnerability: oil’s virtual monopoly on transportation fuel, enabled by the fact that, for the most part, cars sold in America are made and warrantied to run on nothing but petroleum fuels. As long as most cars are off-limits to competing fuels — whether electricity, gaseous fuels, or liquids made from biomass, coal, or natural gas — American motorists and presidents will be financially and politically vulnerable to the convulsions of the Middle East, regardless of how much we drill at home or how efficient our cars are. Only once Americans have cars that encourage fuel competition, thereby eroding the strategic importance of oil, will American presidents be able to pursue the country’s foreign policy objectives without fearing shock at the pump. But that’s likely small consolation for President Obama as he considers the threats posed by high gas prices on one hand and a nuclear Iran on the other, and his political future — not to mention the fragile health of the U.S. economy — hang in the balance.

Gal Luft is executive director of the Institute for the Analysis of Global Security (IAGS) and senior adviser to the United States Energy Security Council.

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New Co-Sponsor!

Sunday, March 11, 2012

Representative Brad Sherman from California has joined the growing list of co-sponsors in the House. If he is your representative, please congratulate him on his support of this vital piece of legislation.

Like him on Facebook. Visit his web page here.

There are many reasons to support the Open Fuel Standard. Among them are these four (quoted from Why Alcohol Fuel?):

1. Alcohol is a superior fuel to gasoline! It’s 105 octane, burns much cooler with less vibration, is less flammable in case of accident, is 98% pollution-free, has lower evaporative emissions, and deposits no carbon in the engine or oil, resulting in a tripling of engine life. Specialized alcohol engines can get at least 22% better mileage than gasoline or diesel.

2. It’s not just for gasoline cars. We can also easily use alcohol fuel to power diesel engines, trains, aircraft, small utility engines, generators to make electricity, heaters for our homes — and it can even be used to cook our food.

3. The byproducts of alcohol production are clean, instead of being oil refinery waste, and are worth more than the alcohol itself. In fact, they can make petrochemical fertilizers and herbicides obsolete. The alcohol production process concentrates and makes more digestible all protein and non-starch nutrients in the crop. It’s so nutritious that when used as animal feed, it produces more meat or milk than the corn it comes from. That’s right, fermentation of corn increases the food supply and lowers the cost of food.

4. Locally produced ethanol supercharges regional economies. Instead of fuel expenditures draining capital away to foreign bank accounts, each gallon of alcohol produces local income that gets recirculated many times.

Check to see which representatives and senators support the Open Fuel Standard. If yours doesn't, it's time to turn up the heat. Start here.

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A Flex-Fuel Mandate Is Pro-Market

Saturday, March 10, 2012

By Robert C. McFarlane in the Wall Street Journal:

If we produce more oil, OPEC will sell less to keep prices high. So Congress should encourage car makers to look for new alternatives.

The current election cycle and the rising price of gasoline have rekindled interest in energy security and how best to achieve it. We've had these spasms of interest and hand-wringing before — many times. And each time we believed we had identified a way to overcome our vulnerability to the disruption or unaffordable pricing of oil, the price would decline, we would become complacent again, and effective, long-term solutions were forgotten.

This time, however, the stakes go well beyond the price of a fill-up at the pump. They involve a predictable renewed recession and prolonged, severe economic hardship for all Americans. As we tackle this energy challenge again, if the outcome is to be any different it may help to start with a few facts:

• Petroleum products drive 97% of all air, sea and land transportation in our country. Oil is truly the lifeblood of every industrial economy. If goods don't move, revenues stop, jobs are lost and economies collapse. Oil is a strategic commodity, an essential good which if disrupted or priced extravagantly can cause our economy to collapse.

• Unlike other essential commodities such as clothing and food, where we have choices, in transportation fuel we're stuck with petroleum alone. It enjoys a monopoly.

• The price of oil is set by a foreign cartel. The Organization of Petroleum Exporting Countries (OPEC) owns almost 80% of global oil reserves yet produces only 36% of daily global supply. This dominant position enables OPEC to raise or lower their production to maintain the global supply-demand relationship that suits their interest. If U.S. oil companies produce more, OPEC will produce less.

That's why increasing domestic production of oil or increasing fuel efficiency can reduce our trade deficit and the $400 billion (at current oil prices) we send overseas annually, but they won't change the price we pay at the pump. In 2008, when the price of oil went to $147 per barrel, the United Kingdom was self-sufficient thanks to the oil it produced in the North Sea. Yet U.K. truckers went on strike over the extravagant price of diesel, which was driven by the global price of oil. Oil is a fungible commodity traded globally but priced by a cartel.

This is not to say that we shouldn't try to produce more of our own. Of course we should. But that is not enough. To outmaneuver OPEC we need to eliminate oil's monopoly as the only transportation fuel.

In recent years, we've discovered that we are blessed with truly unfathomable amounts of natural gas embedded in shale deposits — primarily located in Pennsylvania, New York, Texas and Oklahoma. Natural gas can be used in various forms to fuel vehicles. Compressed natural gas (CNG) is well-suited to drive long-haul and other fleet vehicles, although it's quite expensive to adapt a truck or car to burn natural gas.

For light trucks or automobiles, a better approach lies in using natural gas to make the liquid-fuel methanol, a high-octane, clean and safe fuel (which race-car drivers love) whose spot price is roughly $1.10 a gallon. New cars and trucks can be adapted to burn methanol, ethanol, gasoline or any combination of the three for less than $100 per vehicle. The Methanol Institute, a private industry group, estimates that after compensating for methanol's lower energy content and adding the cost of distribution, taxes and infrastructure, producers can deliver an amount of fuel equivalent to the energy in a gallon of gasoline for approximately $3.

But we must get busy, because we're about to face additional upward pressure on the price of oil. Former Shell CEO John Hofmeister has predicted that the rapid run-up in demand for oil over the next two to three years — primarily in China and India, and by as much as 10 million barrels per day—may well outstrip supply and raise the price of oil to more than $200 a barrel. A gas price almost double what we're paying now would constitute only a fraction of the impact on our economy. We will go back into recession and stay there for a long time.

Today, you hear candidates for president espousing partial solutions. President Obama calls for unnecessary, expensive tax credits (up to $40,000 per truck) to persuade long-haul vehicle owners to convert to CNG, and he wants to extend similar, though much smaller, tax credits to promote alternative fuels. Former Speaker Newt Gingrich calls for more oil drilling here, which is fine. And yet, as explained earlier, that alone will not have much effect on the price of gasoline.

Let's open our market to good old American competition. Friedrich Hayek and Milton Friedman stressed that the foremost economic duty of government is to eliminate cartel pricing. Bills are now pending in both houses of the Congress (HR 1687 and S1603) that seek to do exactly that by requiring car makers to enable fuel competition in their own product lines — adding flex-fuel, all electric, hybrid electric, or any other way auto makers choose to implement the law.

Thanks to the windfall discovery of incalculable quantities of unconventional gas in our country, we can do this. If Congress acts, we can finally establish energy independence through competition.

Mr. McFarlane served as President Reagan's national security adviser from 1983-85. He is the co-founder of the United States Energy Security Council, a bipartisan nonprofit organization committed to competition and energy security.

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Methanol Institute's Letter in Support of the Senate's Open Fuel Standard Amendment

Friday, March 9, 2012

The Methanol Institute recently wrote a letter to the Honorable Harry Reid and the Honorable Mitch McConnell in support of the Open Fuel Standard Amendment being considered by the Senate. (Click here to see the letter as a PDF document.) Here is what it says:

Dear Leaders Reid and McConnell:

We are writing you today in support of the bipartisan Open Fuel Standard Amendment (S.A. 1657) to the pending transportation bill that is being considered by the Senate. This simple, no-cost amendment would ensure that new light-duty vehicles that are sold in America enable real energy competition at the pump and help to break the stranglehold that gasoline has on our economy. The amendment will ensure that new cars are able to operate on something besides just gasoline, but leaves it to the marketplace and consumers to decide the technologies and fuels that will ultimately have the biggest impact.

Natural gas vehicles, electric vehicles, hydrogen, fuel cells, bi-fuel and alcohol flex fuel vehicles — all of these technologies and more are included in this comprehensive bill which does not favor any one approach over the other, but instead recognizes that America needs an ‘all of the above’ solution that effectively combats the monopoly that gasoline and oil have over our transportation economy. With over 95% of the vehicles on the road today capable of running on nothing but gasoline, our ability to create change is limited by the technology that is being made available to American consumers — gasoline-only cars.

One of the greatest challenges facing technologies that hope to improve the aged transportation industry is the chicken-and-the-egg conundrum of fuel station owners not wanting to install a pump or charging station when so few vehicles are available and automakers claiming that the cars are useless when not enough refueling stations exist. When alternative vehicles are put on the road, fueling station owners are incentivized to install pumps and chargers to meet the growing demand for these fuels — and putting vehicles in consumers’ hands is the first part of that puzzle.

Ford and other Detroit automakers pioneered methanol FFV technology in the United States over 20 years ago and put thousands of these vehicles on the roads before abruptly closing the door on these efforts due to a quick decline in gasoline costs — a scenario Americans have suffered through numerous times when innovation is cut short because OPEC allows prices to fall for a few months.

General Motors Vice Chairman Tom Stephens said it best in a keynote presentation: while in fact a paltry 4% of vehicles on the road today are flex fuel vehicles, 90% of FFV owners do not have an E85 pump in their zip code and more than 50% do not have a pump anywhere in their county. Automakers would like to see more alternative fueling stations deployed too, but they are not willing to produce more alternative fueling vehicles unless they are allotted a larger CAFE Standards loophole so they can avoid increasing vehicle efficiency. More specifically, automakers should actually be asked to live up to their promise to Congress to produce 50% of their vehicles as FFVs by 2012 — a promise they will fall woefully short of because it is not being enforced; a promise made to Members of Congress while they sought an immense government bailout.

The Open Fuel Standard Act is in fact designed to hold the automakers to their word, while actually expanding the requirement to give the automakers more time and more options for the type of vehicles to produce instead of limiting them to just FFVs. It is a bill that calls for innovation and competition, but most importantly it calls on our manufacturing sector to take action.

By putting an ever increasing number of flexible and alternative fueling vehicles of all types on the road, fuel station owners are able to make a competitive economic case for installing new pumps and fueling infrastructure. Moreover, there is no cost imposed on the federal government; instead allowing automakers the opportunity to find market-driven solutions for meeting the requirement.

In short, the Open Fuel Standard Act is the simplest, least-costly approach to reducing the strategic importance of oil and the corresponding liability of gasoline price spikes that wreak havoc on our economy and American family budgets. There is a widespread consensus on these facts:

• Competition is the bedrock of our American way of life, but oil has a virtual monopoly over transportation fuel. Ninety-seven percent of the fuel used to transport people and goods in the United States is based on petroleum.

• When the price of a barrel of oil reaches $100, America sends $400 billion per year overseas for oil, a drastic disparity in our balance of payments to foreign nations.

• America is rich in a variety of energy commodities and other feedstocks that can be converted into fuels that are considerably less expensive than petroleum.

Methanol in particular, which is currently produced in America and around the world for use as a fuel, a key component in biodiesel production, and as a chemical feedstock, costs $.30 - $.40 less per energy equivalent gallon than gasoline, is just one of many energy solutions included.

• FFVs that are capable of running on multiple types of alcohol fuel in addition to gasoline, cost about $70 more per car — about a third as much as the proposed back-up camera mandate — and would save households more than $1250 per year at current pump prices.

The Open Fuels Standard Act is technology and fuel-neutral, does not require any new tax breaks or subsidies, and enjoys strong support across the entire political spectrum as reflected by the diverse group of cosponsors for the companion bill in the House, H.R. 1687.

Consider the case of natural gas; unlike oil prices, which are expected to continue to rise significantly, the price of natural gas has been on the decline for years. Among other available and promising options, the Open Fuels Standard would open the door to methanol, a liquid fuel produced from affordable natural gas that can run in flexible fuel vehicles or be blended into gasoline at low levels.

A recent MIT report called “The Future of Natural Gas” determined that methanol “is the liquid fuel that is most efficiently and inexpensively produced from natural gas.” Methanol can also be made from coal, biomass, or municipal solid waste, and some of the most innovative companies in the world are recycling carbon dioxide directly into methanol, and is significantly less costly than gasoline on an energy equivalent basis. Where some raise concerns about using food sources as fuel feedstock, methanol is a much more affordable fuel that can be made from almost anything — leaving food stocks for both our ranchers and our own plates.

The automakers have been reticent in moving forward with proven technologies that are available today at low cost, and instead have largely pushed off blame onto retail fueling stations. American households are demanding answers to the ever rising costs of transportation, and the Open Fuel Standard Amendment is a no cost solution that can provide relief in the near term while we continue to explore and innovate as a nation to develop long-term solutions to our energy challenges. We urge you to consider adopting the Open Fuels Standard Amendment in the transportation bill now on the Senate floor. We cannot think of any Act of Congress that would have a more lasting impact on America’s energy security.

Sincerely,
Gregory Dolan
Acting CEO

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The Latest Action Alert From ACT! for America

Monday, March 5, 2012


*** LEGISLATIVE ACTION ALERT ***

VOICE YOUR SUPPORT FOR THE OPEN FUEL STANDARD
AMENDMENT TO THE SENATE TRANSPORTATION BILL!


This week, the U.S. Senate is scheduled to consider S. 1813, a transportation bill called “MAP-21.” We expect Senators Maria Cantwell (D-WA) and Richard Lugar (R-IN) to offer S.1603, their Open Fuel Standard (OFS) Act as an amendment to the transportation legislation (amendment #1657).

The auto industry has been blanketing the Hill in opposition to the OFS amendment, using patently false claims. To counter that message, it is critical that our U.S. Senators hear voluminous and loud support for the amendment from the folks back home. ACT! for America’s 185,000 grassroots members can easily provide that support. Will you help us make this impact?

The Open Fuel Standard Act is very much needed legislation—especially at this point in time. With the return of increased gas prices due to OPEC’s standard manipulation, as well as the Iranian regime’s dangerous game-playing, using oil as a negotiating tool, it’s time for us to finally sever OPEC’s chokehold. The OFS Act will move us in that direction. Brazil has already done it successfully and other nations are moving in the same direction.

While there certainly are numerous valid approaches to transportation fuel independence (most of which we fully support), the Open Fuel Standard legislation is the easiest first step. At zero cost to the Federal Government, and only $70 to $100 per vehicle, passage of the OFS Act will finally provide Americans a choice when filling up their gas tanks—just like we all have a choice for every other product offered to us. It will allow free market capitalism to be applied to the transportation fuel industry—something that currently does not exist.

We must finally cut the cord that keeps us dependent on wealthy dictators and Islamist nations for our gasoline. Further, we must stop funding Islamist terrorists every time we fill up our gas tanks. Passage of the Cantwell/Lugar Amendment is our opportunity to do so.

** IMPORTANT ACTION ITEM **

Please take a moment today to send your U.S. Senator an e-mail of support for the Cantwell/Lugar OFS amendment. Simply click on the Alert titled, “Cantwell/Lugar OFS Amendment” and follow the simple directions!

Thank you for all of your efforts. Together we will achieve freedom from OPEC oil!


REMEMBER, YOUR VOICE COUNTS!
IF EACH OF US DOES JUST A LITTLE, TOGETHER WE CAN
ACCOMPLISH A LOT!

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Action Alert: Urge Your Senators to Support the Cantwell/Lugar Amendment

Sunday, March 4, 2012

The Open Fuel Standard Cantwell/Lugar Amendment (S.A. 1657) was proposed as an amendment to the pending Transportation Bill (S.A. 1813). We are calling on you to urge your Senators to support this amendment.

Below are two sample letters you or your association can personalize and send to every Member of the US Senate, including leadership offices. The faster we can do this, the better.

And for those of you with national networks, if you could please set up a "Write your Senator" opportunity and get your network to send letters — it would be extremely helpful to our cause.



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Sample Letter #1 to Senators to Support S.A. 1657

We are writing you in support of the bipartisan Open Fuels Standard amendment (S.A. 1657) to the pending transportation bill. By ensuring new cars are open to fuel competition from some subset of non-petroleum fuels (including liquid, gaseous, or electricity) we believe the Open Fuels Standard is the simplest, least-cost approach for reducing the strategic importance of oil and the corresponding liability of gasoline price spikes that wreak havoc on our economy and American family budgets.

There is a widespread consensus on these facts:

• Competition is a bedrock of our American way of life, but oil has a virtual monopoly over transportation fuel. Ninety-seven percent of the fuel used to transport people and goods in the United States is based on petroleum.

• When the price of a barrel of oil reaches $100, America sends $400 billion per year overseas for oil, with too much of that money ending up in the hands of oligarchs, autocrats, dictators, and sometimes even terrorists.

• For an additional $100 or less, automakers can build vehicles that break the monopoly of oil, yet relatively few of these "flex fuel" cars that can run on multiple fuels are being made for the domestic market.

• America is rich in a variety of energy commodities and other feedstocks that can be converted into fuels that are considerably less expensive than petroleum.

• Empowering Americans to arbitrage among fuels based on the comparative cost per mile will dampen the price of oil. For these reasons we believe our nation must introduce competition into our transportation fuel marketplace.

The Open Fuels Standard is technology and fuel-neutral, does not require any new tax breaks or subsidies, and enjoys strong support across the entire political spectrum as reflected by the diverse group of cosponsors for the companion bill in the House, H.R. 1687. Consider the case of natural gas. Unlike oil prices, which are expected to continue to rise significantly, the price of natural gas has been on the decline for many months. Its price is so low that some producers are reconsidering investments and shutting in production wells in this job creating sector. Among other available and promising options, the Open Fuels Standard would open the door to methanol, a liquid fuel that can run in flexible fuel vehicles. A recent MIT report, The Future of Natural Gas, determined that methanol “is the liquid fuel that is most efficiently and inexpensively produced from natural gas.” Methanol can also be made from coal, biomass, or municipal solid waste, and perhaps in the future recycled carbon dioxide, and is significantly less costly than gasoline on an energy equivalent basis.

We urge you to consider adopting the Open Fuels Standard Amendment in the upcoming transportation bill. We cannot think of any Act of Congress that would have a more lasting impact on America’s energy security.

Sincerely,

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Sample Letter #2 to Senators to Support S.A. 1657

We are pleased to share our support for the Open Fuel Standard Act HR. 1687 with you.

We are strongly supportive of the policy embodied in this bill. We believe placing oil into competition with fuels made from other commodities including natural gas and coal is imperative to reducing its inordinate strategic importance and the geopolitical power it grants the OPEC oil cartel.

OPEC countries control 80% of conventional oil reserves, and yet due to a deliberate policy of constraining production capacity to keep prices higher than they otherwise would be, account for just 36% of global oil supply. While our economy bleeds, key OPEC countries accumulate wealth that allows them to propagate the ideology of radical Islam and foment hatred against our country, our values, and our allies.

At the same time, our country is blessed with a vast array of energy resources that can be converted to transportation fuel. Natural gas in particular is very low cost today. A recent MIT report concluded that the most economical way to use natural gas in vehicles is to convert it to the liquid fuel methanol. This fuel is so economic that illegal fuel blending is rampant in China. Unfortunately, Americans are unable to take advantage of this option because cars sold in the U.S. are not warranted to use the fuel. Ensuring new cars are fuel flexible so drivers can choose the least expensive fuel per mile among a broad array of choices including methanol would cost automakers under $100 dollars a car.

The Open Fuel Standard, in a fuel and technology neutral manner, ensures that most new cars will be open to fuel competition, so the market can determine the optimal fuel blend on any given day depending on comparative pricing. Further, this policy expends no tax dollars.

We understand that a companion bill S. 1603 was introduced by Senators Cantwell and Lugar in the Senate and we strongly urge you to consider adding your support as a co-sponsor.

Sincerely,

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Upcoming Event: Methanol Policy Forum 2012

Friday, March 2, 2012

On March 27th, the Methanol Institute along with IAGS and the US Energy Security Council will be hosting a 1-day event at the Hyatt Regency on Capitol Hill — Methanol Policy Forum 2012.

This all day event will bring together government, industry, technology companies and federal agencies to have a comprehensive discussion about the role methanol can play in our energy policy, and what can be done to move initiatives forward.

We are hoping for strong turn out and participation, as we plan on this being the first annual event.

Get more information about the event, the timeline, and how to register here: Energy Security through Fuel Competition.

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