Conversation with Marc Goldman on Energy Security

Friday, April 13, 2012

In a Q&A session on inSIGHT, David Frum, contributing editor at The Daily Beast and a CNN contributor, answered a question about energy independence, which you can read here.

In a follow-up conversation, Marc Goldman had this to say about Frum's answer:

David [Frum] is right to lay out for [inSIGHT] readers that when we talk about oil supplies and energy diversification we are talking about transportation fuel. We don't use oil to generate electricity; we use domestically produced coal, natural gas, nuclear, hydroelectric, wind, and solar. America imports oil from nasty and dangerous regimes almost exclusively to fuel personal and commercial vehicles. Having rightly focused on transportation, David makes a case for domestic oil, conservation, and a better price structure for gasoline.

But as long as oil in the form of gasoline is the only thing that propels cars and trucks (and ships and airplanes), we will be subject to oil pressure. We are playing/struggling with fuel cells, expensive electric cars, and other technologies that may one day give us vehicles that operate entirely differently, but right now we can use existing technology to break the link between transportation and gasoline by adopting open fuel standards.

There are two bills before Congress (HR-1687 and SR-1603) that would require any new car produced that runs on gasoline to also be able to run on alcohol-based fuels — primarily methanol and ethanol. The additional cost to a new car would be about $100 for gaskets and hose material. You can get more information at

There are already flex-fuel vehicles, of course, but this [the OFS bill] would open new demand for alcohol fuel and additional pumps at fueling stations — which the market is fully able to meet with the relatively recent understanding that we have trillions of cubic feet of accessible natural gas.

The idea of a "government mandate" really disturbs some people, although as mandates go, this one is minimal. Private capital can be expected to enter the domestic fuels market, both at the production end and at the pump, creating domestic jobs as well as improving our balance of payments. And people won't be required to put alcohol-based fuel in their cars; they can pay the going rate for gasoline. But given gas at $4.25-4.50/gallon and the differential for methanol and ethanol, it is unlikely that they would.

This is not an experimental technology. Brazil has moved almost entirely away from gasoline-only-powered automobiles, and the same companies that make cars for Brazil make them for the U.S. market. The fuel is here, the technology is proven — what we are lacking thus far is leadership.

This goes back to where David and I agree: some of the world's nastiest people pump most of the world's oil. Our Congress and our president have no greater obligation under the Constitution than to provide for the common defense. In my mind, that means they have to make us independent of Iran, of Saudi Arabia, of Venezuela.

Iran is an apocalyptic country — if they do decide to destroy the tanker passageway in the Strait of Hormuz, Americans will see that our dependence on oil is not only about personal vehicles and paying stratospheric amounts of money to fill our personal gas tanks. Oil is how our food gets to market, how we get to work, how we export our products and import goods from other countries — it is hard to imagine the chaos and dislocation if the transportation industry came to a halt. Our way of life, indeed our very ability to function as a nation depends on the movement of goods, services, and people across a very large country and beyond.

Our way of life depends on our alliances as well.

Right now, our friends in Europe are paying $8-10/gallon for gas (which hasn't reduced their dependence on imported oil despite somewhat greater fuel economy; there is a limit to the relationship between price and consumption). They don't have the resources for methanol and ethanol that we have, but if the United States shows leadership by breaking the link between transportation and gasoline, they will follow us. And interestingly, Israel — our good friend, but one that has mixed relations with the countries of Europe — is sitting on a major, major natural gas find. It doesn't take much imagination to foresee the next energy-based alliance being the U.S.-Europe-Israel.

That works much better for me than Iran, Saudi Arabia, and Venezuela.


Stafford "Doc" Williamson April 14, 2012 at 1:42 PM  

I agree with the basic idea here, that a small adjustment to the software (ok, firmware) in a car, and a more robust set of gaskets will easily allow for all new cars & trucks to run fuels rich in bio-derived fuels like ethanol and methanol, although the latest word is that the cost MIGHT be as much as $25 per vehicle, but the proposed legislation doesn't go nearly far enough. We need a "fuel policy" not a fuel band-aid. We need not just leadership, but some vision within the leadership.

Confession: I work with biofuel technologies. My company is DaoChi Energy of Arizona (a div. of Williamson Information Technologies Corp.)

I often object to T. Boone Pickens "plan" that ignores the fact that the natural gas he wants to substitute for gasoline and diesel in vehicles is still a "fossil carbon" fuel, not part of the cycle of carbon that is currently between plants and the air, but coming out of the ground where the Earth put it to rest anything up to hundreds of millions of years ago. On the other hand, natural gas, or propane or any of several other versions of vapor state fuels will power domestic delivery vehicles to pick up your garbage and re-cycling in a way that is vastly cleaner for the air than diesel or gasoline. Some more progressive fleets have already begun to use this fuel, including some major metropolitan bus lines. Why not include in the legislation that fuel systems in personal transportation and urban delivery vehicles should also be flexible enough to use (at least) one of these gaseous, cleaner burning fuels. "Natural gas" is a phrase that describes "found gas" sequestered in the geological formations of the Earth, but this gas is actually mostly "methane" (as in "methanol") and some of it is now being used to make methanol liquid fuel. But methane is also the gas that leaks (unless it is being captured) from landfills all over the world. Landfill gases could power some of our vehicles, and in some places (in Sweden) they actually do. Landfill methane has the advantage that it does come from decaying vegetation (food wastes) so it is already part of the existing circulating amount of carbon in our ecosystem.

There is, essentially, no good reason that the intelligent men of vision couldn't stop focusing on "party" politics, and focus on a policy for energy that included phased-in adoption of proven technologies as alternatives required for vehicles manufactured for the North American market. Private industry has, in a few, admittedly visionary, cases already taken such steps. The IATA, International Air Transport Association, has mandated that its members adapt to the coming European Union's standards to reduce fossil carbon in aviation fuels. They are one of the great forces pushing biofuels into a viable market position, along with the remarkably progressive stance of the US Navy and the rest of the US Armed Forces, who are planning for an "energy secure" future. With the Armed Forces and private industries setting the example, couldn't politicians be a little less petty, perhaps even a little "bold" for a change, and envision a future that is consistent with the changes already being made by these pioneers of the biofuels age? After all, Henry Ford designed his automobiles to run on ethanol back at the turn of the twentieth century. Don't you think we could take a small step into the twenty-first century with a more forward looking view than 100 years in the historical mirror?

Stafford "Doc" Williamson

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