The CO2 Advantage of Methanol

Friday, December 27, 2013

Question: If we had a sizable number of cars on our roads burning methanol rather than gasoline, would it put less CO2 into the atmosphere? If so, how much less? We haven't yet seen any studies that directly answer the question, but we've found enough clues to make the answer quite clear.

Let's start with the creation of the fuel. Refining gasoline produces considerable CO2 emissions. To produce one gallon of gasoline puts 2.45 pounds of CO2 into the atmosphere. (Source)

Methanol is a little more difficult to determine because there are many ways to create methanol, and each method creates different amounts of CO2. But all the methods produce less CO2 than refining gasoline. Fuel Freedom writes:

"Studies indicate that methanol produced from natural gas is somewhat less greenhouse gas intensive than gasoline produced from conventional oil, and substantially better than high carbon, non-conventional gasoline.

"Oil refining impacts air and water quality, produces toxic solids and sludge, and is the most energy intensive industry in the U.S. On the other hand, methanol produced from natural gas requires only a simple gasification process that avoids the toxic byproducts of oil refining." (Source)

That's methanol from natural gas. In a technical paper entitled, Large Scale Methanol Production from Natural Gas, the authors say it makes the process more productive to add CO2 to the syngas. Most methanol is created by heating up natural gas until the molecules separate, producing "synthesis gas" or "syngas." The authors of the technical paper write: "The addition of CO2 permits optimization of the synthesis gas composition for methanol production. CO2 constitutes a less expensive feedstock, and CO2 emissions to the environment are reduced. The application of CO2 reforming results in a very energy efficient plant. The energy consumption is 5-10% less than that of a conventional plant." (Source)

That was technical jargon, but what they're saying is that you get more methanol from the same amount of natural gas if you add CO2 to it — and it's less expensive to make because CO2 is cheap. It's an industrial waste.

But some new technologies are even better. In an article in the Wall Street Journal, Nobel laureate George Olah explains how he and Surya Prakash created a breakthrough that won them a million dollars for their innovations:

"Thanks to recent developments in chemistry, a new way to convert carbon dioxide into methanol — a simple alcohol now used primarily by industry but increasingly attracting attention as transportation fuel — can now make it profitable for America and the world to reduce carbon-dioxide emissions.

"At laboratories such as the University of Southern California's Loker Hydrocarbon Research Institute, researchers have discovered how to produce methanol at significantly lower cost than gasoline directly from carbon dioxide. So instead of capturing and 'sequestering' carbon dioxide...this environmental pariah can be recycled into fuel for autos, trucks and ships." (Source)

Olah and Prakash are not the only ones working on using CO2 to produce methanol. In Iceland, the company Carbon Recycling International captures CO2 produced by industrial processes and makes renewable methanol using geothermal energy. Their CEO, K.C. Tran, says, "We often describe our technology as liquid electricity because we store the electricity in the form of liquid, for consumption in today's internal combustion engine based cars. It is similar to storing electricity in a battery. We capture CO2 and turn it into renewable methanol for gasoline blending in the US and EU." (Source)

Describing the Icelandic company's commercial scale plant, Wikipedia says, "Initially the major source will be the CO2 rich flue gases of fossil-fuel-burning power plants or exhaust from cement and other factories. In the longer range however, considering diminishing fossil fuel resources and the effect of their utilization on earth's atmosphere, even the low concentration of atmospheric CO2 itself could be captured and recycled via methanol, thus supplementing nature’s own photosynthetic cycle. Efficient new absorbents to capture atmospheric CO2 are being developed, mimicking plants' ability." So methanol could be made directly from CO2 in the air.

"Methanol may be viewed as a compact way of storing hydrogen," says Wikipedia. "Methanol has a high octane rating, making it a suitable gasoline substitute. It has a higher flame speed than gasoline, leading to higher efficiency..." (Source)

A method for creating methanol using CO2 and sunlight, developed at the University of Texas at Arlington, uses very little electrical power and can be "scaled up to an industrial scale to allow some of the CO2 emitted from electrical power plants to be captured and converted into" methanol. This would make electric cars even greener because the CO2 generated for electricity is captured and used. (Source)

Researchers are innovating other ways to convert CO2 into methanol using very little energy. A team led by Professor Frédéric-Georges Fontaine at Université Laval has accomplished a very efficient method. As Science Daily puts it, "the results have been spectacular." They're now working on ways to make it profitable. (Source)

In an article in Forbes, a Nobel Prize winning physicist, Carlo Rubbia, says natural gas has the most promise as an abundant, clean fuel that can help reduce global warming. He said one of our most important goals should be to convert the transportation sector from gasoline to methanol. "Natural gas can be integrated into human society more quickly and easily than nuclear, solar or wind," Rubbia said, "and because of global warming, speed is of the essence."

"For transportation, he suggests producing methanol liquid by recombining hydrogen with CO2 that has been removed from the atmosphere. Cars burning methanol would still produce CO2 emissions, but as long as the fuel is made with captured CO2 they would not increase existing CO2 levels.

"Because methanol can be handled like ethanol or gasoline is now, society could avoid several of the obstacles it would face if it tried to convert transportation to hydrogen, including the need for new storage and transportation infrastructure and the need to switch from internal combustion engines to electricity-producing fuel cells." (Source)

Another important consideration about the CO2 impact of methanol made from natural gas is that flaring natural gas (burning it just to get rid of it) now produces a huge amount of CO2 without any benefit whatsoever only because methanol is not allowed to compete with gasoline at the pump. If that natural gas was converted to methanol and burned as a fuel instead of flaring it, the methanol could displace billions of gallons of a much more polluting fuel (gasoline) that is now being burned for transportation. The methanol which is being flared would be used instead to propel cars down the road and billions of gallons of gasoline now being burned for transportation fuel would not have to be burned, considerably reducing total CO2 emissions. 

A report by GE stated: "Gas flaring [in America] emits 400 million metric tons of CO2 annually, the same as 77 million automobiles, without producing useful heat or electricity. Worldwide, billions of cubic meters (bcm) of natural gas are wasted annually, typically as a by-product of oil extraction." (Source)

A report by Ceres says, "At current market rates, oil is approximately 30 times more valuable than natural gas. As a result, producers have chosen to flare much of the gas they produce, rather than invest in the infrastructure necessary to collect, process and market it...

"The practice of natural gas flaring has generated significant public attention after recent NASA satellite images revealed that North Dakota’s gas flares can be seen from space, burning nearly as brightly as the city lights of Minneapolis and Chicago." (Source)

In a New York Times article by Clifford Krauss, he writes, "With cheap (natural) gas bubbling to the top with expensive oil, the companies do not have an economic incentive to build the necessary gas pipelines, so they flare the excess gas instead.

"Flaring is environmentally less harmful than releasing raw natural gas into the atmosphere, but the flared gas still spews climate-warming carbon dioxide into the atmosphere." (Source)

Reuters reports: "The World Bank estimates that the flaring of gas adds some 360 million tonnes of carbon dioxide (CO2) in annual emissions, almost the same as France puts into the atmosphere each year or the equivalent to the yearly emissions from around 70 million cars." (Source)

With the passing of the Open Fuel Standard, we would soon have a large percentage of cars on the road capable of burning ethanol and methanol as well as gasoline, and there would be a profit-incentive for waste-into-fuel plants to spring up in every town and city, further cutting the greenhouse gas emissions. Rather than municipal waste being dumped into a landfill where it leaks tremendous amounts of methane into the atmosphere — a greenhouse gas far worse than CO2most of the waste could be turned into fuel, as one facility is now doing in Vero Beach, Florida. And turning the trash into fuel reduces the bulk going into landfills by 90%. (Source)

The production of methanol is one factor in its CO2 emissions, and it easily wins that competition with gasoline because methanol production creates substantially less CO2 than refining oil into gasoline. The other factor, of course, is burning the fuel in vehicles. This is a more straightforward thing to measure. Robert Zubrin, president of Pioneer Energy and an accomplished engineer, discovered during his methanol experiment that methanol produces less CO2 when burned than gasoline. "Carbon dioxide emissions were reduced by 35 percent," he writes. In a recent paper of his, he graphs the results of testing M100 (pure methanol), M60 (sixty percent methanol, forty percent gasoline), and E10 (normal gasoline, containing ten percent ethanol). Here are the results:


Read more about it here. So using methanol for fuel instead of gasoline would lower CO2 emissions from vehicles by 35%. Methanol is a high-octane, clean-burning fuel and gasoline should have to compete with it in a free market. This could happen quickly. It was not difficult for Zubrin to adjust his regular gasoline-only car to be able to burn methanol. The only part he had to replace was a fuel pump seal that cost him 41 cents. Methanol could very well be the silver bullet everyone has been searching for. At the very least, it could cut CO2 emissions from our existing cars immediately while new technologies like electric cars have a chance to gain a larger share of the market. A few relevant points about methanol from Wikipedia:

"Methanol is in fact toxic and eventually lethal when ingested in larger amounts. But so are most motor fuels, including gasoline and diesel fuel. Gasoline also contains many compounds known to be carcinogenic (e.g. benzene). Methanol is not a carcinogen, nor does it contain any carcinogens.

"Compared to gasoline, however, methanol is much safer. It is more difficult to ignite and releases less heat when it burns. Methanol fires can be extinguished with plain water, whereas gasoline floats on water and continues to burn. The EPA has estimated that switching fuels from gasoline to methanol would reduce the incidence of fuel related fires by 90%.

"An accidental release of methanol in the environment would cause much less damage than a comparable gasoline or crude oil spill. Unlike these fuels, methanol, being totally soluble in water, would be rapidly diluted to a concentration low enough for microorganisms to start biodegradation. Methanol is in fact used for denitrification in water treatment plant as a nutrient for bacteria." (Source)

Fuel Freedom has this to say about the possibility of methanol as a transportation fuel:

"Development of methanol as a fuel source has suffered from a lack of physical and legal infrastructure. Steps that could make methanol more viable as an alternative fuel include:

1. Passage of the Open Fuel Standard that would mandate that new cars sold in the U.S. support multiple fuels, not just gasoline;
   
2. Government protocols for the conversion of existing cars to flex-fuel vehicles capable of running on high concentrations of methanol and the installation of flex-fuel pumps at gas stations so consumers can choose between competing fuels and blends;
   
3. Construction and streamlined permitting for new plants, initially to convert natural gas and coal to methanol, and later to convert more sustainable feed stocks such as biomass. Because methanol is so easily produced, facilities could be small and decentralized, located near to gasoline stations." (Source)

If you would like to see a cleaner, safer, cheaper alternative to gasoline at the pump — a fuel that releases less CO2 into the atmosphere — start here: First Things First.

Author: Adam Khan, the co-founder of OpenFuelStandard.org and co-author of the book, Fill Your Tank With Freedom. 

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Top Seven Myths About the Open Fuel Standard

Thursday, December 26, 2013

MYTH #1: The bill favors one fuel over others. The Open Fuel Standard allows fuels to compete with each other by enabling regular gasoline-only cars to burn not only gasoline, but methanol and ethanol too. It would allow us choice at the pump. It is an inexpensive improvement to the car, and methanol and ethanol can be made from a huge variety of feedstocks. The bill doesn't favor any of them.

MYTH #2: It will make food more expensive and lead to food shortages. The largest influence on rising food prices for the last fifty years has been rising oil prices. Ethanol production has had a miniscule effect on food prices. And the Open Fuel Standard would make cars capable of burning methanol as well, which can be made inexpensively from municipal waste, natural gas, coal, etc. These, of course, would not raise food prices — they would lower prices as transportation fuel becomes less expensive.

MYTH #3: The bill will cost taxpayers. The bill itself will cost taxpayers nothing, and it subsidizes nothing. Flex fuel cars are sold at the same price as gasoline-only cars. By allowing other fuels to compete with gasoline, the price for fuel will come down, saving drivers money. Right now, both ethanol and methanol could be sold for far less than gasoline, and that is in the absence of a large market and the economy of scale. And both can both be made from material abundant within the United States, creating millions of jobs, strengthening the American economy and reducing our trade deficit.

MYTH #4: It will interfere with a free market. Just the opposite is true. The fuel market is not free today. The Open Fuel Standard would create a free market. Oil enjoys a virtual monopoly over the transportation fuel market, held in place with political contributions, influence over automakers (because oil interests invest in car manufacturing companies), blocking access to alternatives at fuel stations, funding propaganda against competitive fuels, and lobbying. Saudi Arabia alone has a hundred full-time lobbyists in Washington, D.C. OPEC’s price-fixing cartel is illegal, but international bodies are outside the reach of our judicial system. The Open Fuel Standard is a way to get around these barriers to a free market.

MYTH #5: We can solve our problems by drilling more American oil. We cannot end oil’s monopoly by drilling more oil. We cannot end OPEC’s ability to manipulate world oil prices by drilling more oil. American oil companies sell their oil at the world’s going oil price, which is set by OPEC. Many new sources of oil have been discovered over the years. OPEC responds by cutting their production to keep oil prices high. They collectively produce over 40 percent of the world’s annual oil production, which is enough to make a small drop in their output significantly raise the price per barrel of oil worldwide. One country alone cannot control world oil prices. That’s why Saudi Arabia joined together with the eleven other oil producing nations of OPEC.

MYTH #6: We can solve our problems by using less oil. When we use less oil, there should theoretically be more oil available on the world market, which should lower world oil prices, right? Unfortunately, when this has happened, OPEC responded by cutting its production to keep oil prices high. The demand for oil is so high (and continually growing) that OPEC doesn’t have to cut their production very much to raise prices.

MYTH #7: Alcohol fuels are bad for car engines. Alcohol dries out rubber, and cars used to have rubber fuel lines. Without additives, gasoline is low in octane, so lead was added for seventy years. In 1987 lead was made illegal, and ethanol replaced it as an octane booster, so automakers began using ethanol-compatible fuel lines. Brazil has been using ethanol in their cars for decades (cars made by Ford, GM, Toyota, etc.), and they’ve found that car engines burning ethanol typically last as much as three times longer, for two reasons. First, ethanol burns much cleaner and leaves no carbon deposits when it burns. Alcohol also burns cooler. Engines heat up and cool down thousands of times, and an engine that doesn’t get as hot creates less stress on the engine's components over time. Alcohol fuels are good for car engines.

Oil’s monopoly of fuel leaves America’s economy vulnerable to oil price hikes. Every time oil prices have spiked since World War II, America experienced a recession. OPEC’s exploitation of oil's monopoly has generated vast funds, some of which is used to fund terrorism around the world. The two most important members of OPEC are Saudi Arabia and Iran, both of whom are spending their oil money on terrorism and the expansion of fundamentalism. Iran funds its nuclear program and supports the terrorist army, Hezbollah. Saudi oil financially supports the Taliban, Al Qaeda, and the building of mosques and madrassas all over the world that promote fundamentalist, intolerant, militant Wahhabi Islam.

As OPEC’s income has risen over the years, so has the scale and pervasiveness of Islamic fundamentalism and terrorism. The Open Fuel Standard would make America economically stronger and physically safer. Let’s make it happen: OpenFuelStandard.org.

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Something Spectacular is About to Happen

Tuesday, December 24, 2013

Fuel Freedom has been getting their ducks in a row for a long time. And in the year 2014, they will demonstrate their painstaking preparation. Are you ready to see something amazing?

In 2014, the Fuel Freedom Foundation is going to launch several state demonstration projects showing how existing cars can easily be converted to run on alcohol fuels such as ethanol or methanol.

Through these state pilot projects and a public awareness campaign, Fuel Freedom will demonstrate the path to fuel choice and competition, to economic dynamism, to a new era in national security, and to breaking oil's stifling monopoly once and for all.

Sign up for their updates here, like them on Facebook, and share their posts with your friends. And if you have money to donate, send it their way. This could be the year that changes everything.

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Alcohol's "Gasoline Gallon Equivalent" Measurement is Higher Than Predicted

Saturday, December 14, 2013

The oil industry has done its best to discredit alcohol fuel for over a hundred years, and one of the criticisms they've leveled most consistently against ethanol is that it has less energy per gallon than gasoline, as measured in BTUs (British Thermal Units — a measure of heat). But people who frequently use ethanol to fuel their cars, such as drivers in Brazil, have long noted that the mileage they get from ethanol is better than what is predicted by BTU measurements.

The Fuel Freedom Foundation decided to find a definitive answer this question for both ethanol and methanol. In the introduction to their white paper entitled, Is the Gasoline Gallon Equivalent an Accurate Measure of Mileage for Ethanol and Methanol Fuel Blends?, Eyal Aronoff and Nathan Taft wrote:

A presentation composed by Henry Joseph Jr. — the Product Technology Emissions Laboratory & Engine Test manager of Volkswagen Brazil — for the Brazilian Vehicles Manufacturers Association claims that ethanol performance in Brazilian vehicles is nine percent higher than predicted by energy content. Meanwhile, a study conducted by the University of Riverside claims despite a lower energy content, higher efficiency is obtained from ethanol in optimized engines.

Alcohol gets better mileage than we have been led to believe. This is an important point for many reasons. On the other hand, it may be less important for individual drivers because proponents of fuel competition are not suggesting we do away with gasoline. Once the U.S. has achieved fuel competition, whenever a driver wants to buy a fuel with greater energy density (for a longer trip or fewer refuelings, or for whatever reason), the driver will be able to put gasoline in the car (or butanol, when that becomes available).

This is one of the biggest advantages of cars that allow true fuel competition: They allow the driver to choose. If you would like to see fuel choice and competition in America, there are many things you can do to help. Here are some ideas.

Read more: Gasoline's Greater Range.

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Methanol Fuel In China...And America?

Thursday, December 12, 2013

There are now more than a million methanol cars on the road in China and estimates show the fuel substitutes for 5-8% of gasoline consumption — about the same proportion that corn ethanol provides in the United States.

In this country, the proposal has been that we derive methanol from our now-abundant supplies of natural gas. California had 15,000 methanol cars on the road in 2003 but curtailed its experiment because natural gas supplies appeared to be too scarce and expensive! Instead, the main emphasis has been on tax incentives and mandates to promote corn ethanol.

China has vast shale gas supplies and could benefit from America’s fracking technology. We could benefit strongly from China’s greater experience in developing methanol cars. The pieces of the puzzle are all there. Perhaps George Olah’s proposal may be the catalyst that puts them all together.

Ironically, all this began with a Chinese-American collaboration in 1996. At the time, China had little knowledge or interest in methanol but was persuaded by American scientists to give it a try. Ford provided a methanol engine and China began ramping up its methanol industry and substituting it for gasoline. As a result, China is now the world’s largest producer of methanol, with about one-quarter of the market.

A year ago the Chinese national government was about to mandate a 15% percent methanol standard for gasoline when it ran into opposition from executives in its oil industry. Those leaders have since been deposed, however, and the 15% mandate may go ahead this year. In the meantime, provincial governments  have developed their own standards, with the Shanxi province west of Beijing in the lead.

Ironically, because methanol is only half the price of gasoline, many local gas stations are diluting their gasoline with methanol anyway in order to shave their costs. As a 2011 Energy Policy article by Chi-jen Yang and Robert B. Jackson of Duke University’s Nicholas School of the Environment reported, “Private gasoline stations often blend methanol in gasoline without consumers’ knowledge… In fact, its illegal status makes methanol blending more profitable than it would be with legal standards. Illegally blended methanol content is sold at the same price as gasoline. If legalized, standard methanol gasoline would be required to be properly labeled and sold at a lower price than regular gasoline because of its reduced energy content. Such unannounced blending is now common in China.”

So both countries are feeling their way toward a methanol economy. As Olah points out, the problem in the U.S. is that the various advantages given to ethanol have not been extended to methanol. “One means of addressing this inequity would be for Congress to pass the bipartisan Open Fuel Standard Act of 2013, which would put methanol, natural gas, and biodiesel on the same footing as ethanol (but without subsidies and without telling consumers which one to choose) for use in flex-fuel cars.”

The above is excerpted from the article, The U.S. and China on Methanol: Two Roads Converge by William Tucker.

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Gasoline is the Junk Food of the Fuel Market

Sunday, December 8, 2013

Gasoline needs additives* to make it palatable to an engine (which will knock or fail to run without the additives). And many of those additives are carcinogenic. And even with the additives, gasoline burns dirty, creating smoke and grime. Gasoline is potentially cheap, and once other fuels can compete with it, its cheapness will be its only advantage.

Pure methanol or ethanol can be used by an engine without any additives. They are both naturally high in octane and burn clean with high performance.

* Benzene, toluene and xylene are added to gasoline, among other additives.

Author: Adam Khan, the co-founder of OpenFuelStandard.org and co-author of the book, Fill Your Tank With Freedom. 

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How Will Oil Prices Respond to the Iran Deal?

Sunday, December 1, 2013

The Huffington Post ran a story last week entitled, Why Oil Prices Will Rise Despite Iran Deal. Here's why: Iran and Saudi Arabia are enemies, and Saudi Arabia will probably cut their oil production drastically in order to punish the U.S. for making the deal with Iran.

So even though Iran will add over a million barrels of oil per day to the world market (which would lower oil prices if nothing else happened), Saudi Arabia could drop their production by two million barrels a day, which would raise oil prices and hurt the world's economy, including America's.

The United States doesn't import much oil from Saudi Arabia, but that doesn't matter. Oil sells for the global price, no matter where it is produced, and a higher global price depresses and slows the American economy (and the rest of the world's). When oil prices rise, so does America's unemployment rate.

Saudi Arabia can deliberately threaten the U.S. economy, and deliver on the threat — not because they produce a large percentage of the world oil supply, but because in our fuel market, gasoline has no competition. Saudi Arabia does, in fact, produce a large percentage of the world's oil, but that's not the reason they can inflict damage on the American economy.

Even though it would be very easy and inexpensive to introduce robust fuel competition in America, we have failed to do so and that is the only reason we are vulnerable to Saudi Arabia's threats. If we had fuels available to compete with gasoline at the pump when Saudi Arabia raises the price of oil, drivers would simply switch to other fuels like methanol and ethanol, both of which are made in America from abundant American resources and could sell for far cheaper than gasoline right now.

Is it okay with you that the economy of the greatest country on earth is subject to the whim of a small, backward, misogynistic monarchy? I hope not. Our intolerable vulnerability can be completely eliminated, and within a very short time. The answer to oil's monopoly is fuel competition. The fastest way to achieve it is with the Open Fuel Standard. Please let everyone know. We need to make this happen quickly.

Author: Adam Khan, the co-founder of OpenFuelStandard.org and co-author of the book, Fill Your Tank With Freedom. 

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A Free Market For Fuel

Tuesday, November 26, 2013

Fuel is not sold in a free market. In the last hundred years, the oil industry has shut down, smeared, discredited, and blocked competing fuels. Right now, methanol could be sold for half the price of gasoline. But because of a pointless EPA regulation, it’s not sold as a fuel in the United States. Normal gasoline-only cars can efficiently burn methanol, which can be made inexpensively from three resources America has in abundance: coal, natural gas, and municipal waste (among many other resources).

Ethanol is another example. Oil companies have blocked ethanol from being sold at most gas stations. Petroleum interests have also been trying to discredit ethanol as a fuel for literally a hundred years.

Petroleum has a monopoly, and OPEC has been exploiting it. OPEC was created to raise world oil prices, which they’ve successfully done since 1973. The OPEC nations produce 40 percent of the world’s annual oil supply, which is enough of a percentage that they can (and they do) regularly decide to lower their production to raise the world price of oil.

OPEC is an illegal price-fixing cartel, and if they were operating within our borders, they would be prosecuted for it. What they are doing is also illegal internationally, but nobody is likely to prosecute them because OPEC could, and probably would, retaliate by stopping their production, which would cause a worldwide depression.

Free trade and the economy as we know it completely depend on transporting goods from place to place. When the price of transportation fuel rises, the price of everything rises. Every time oil prices have spiked since World War II, we’ve had a recession in America.

It is our complete reliance on oil that creates our economic vulnerability. What can we do about it?

The solution to a monopoly is competition.

But how can we create free trade in the fuel market when the problem is outside our borders? The Open Fuel Standard is the solution. The bill now in Congress says half the cars sold in America must allow fuel competition — if the car can burn gasoline, it must also be able to burn gasoline, ethanol and methanol in any proportion. This is technically simple and surprisingly inexpensive to do. Ethanol and methanol burn in similar ways, and they work very well in ordinary gasoline-only engines. The main thing automakers would need to do is install the flex fuel software in the onboard computer.

This small change brings into being real fuel competition. Drivers filling their tanks could choose on the spot which fuel they want to buy that day. So those fuels would have to compete with each other on price. And if there was an oil price spike, it would hardly make a dent in our economy. People would simply buy one of the other available fuels.

Methanol and ethanol can both be made right here in America, producing American jobs and pouring money into the American economy. Please help us make this a reality. Sign up for our free email updates at openfuelstandard.org and participate. The bill subsidizes nothing and costs taxpayers nothing, but a freer fuel market means the consumer wins.

Author: Adam Khan, the co-founder of OpenFuelStandard.org and co-author of the book, Fill Your Tank With Freedom. 

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The Only Country in the World With True Fuel Competition

Sunday, November 24, 2013

I met a businessman from Brazil the other day. For years I've been reading about what Brazil has accomplished, but this is the first time I've met someone from Brazil and could talk to them about it. "Yes," he said, "we have the choice of ethanol and gasoline at every filling station in the country. Yes, almost all the cars on the road are flex fuel vehicles."

What struck me most was his nonchalance, especially as contrasted with my obvious envy. He lives in a country where a liquid fuel is in constant competition with gasoline. Brazil has done something amazing. And they are the only country on earth doing it. Their economy is thriving. They recently passed Britain to become the sixth largest economy in the world (behind the U.S., China, Japan, Germany, and France). They won the bid to host the 2016 Summer Olympics. They've arrived on the world stage as a major economic power.

When I commented on his lack of excitement about his country's fuel competition, my new Brazilian friend said, "Well, this all started way back in the 1980s." It is no big deal to him that every time he fills his tank, he chooses what he wants to put in it. It's been that way for a long time. He said sometimes ethanol is a better deal and sometimes gasoline is. But, he said (not yet realizing I know a lot about this topic) "you can't go as many miles on a gallon of ethanol as you can on a gallon of gasoline. We just do a quick calculation, multiplying by point seven. So if the price of ethanol is 70 percent of the price of gasoline or lower, most people buy ethanol. If it's above that, we buy gasoline."

On sale in Brazil are 80 different flex fuel vehicle models, made by 12 major automakers, and four flex fuel motorcycle models. The automakers are GM, Ford, Volkswagen, Honda, Nissan, Toyota, Peugeot, Renault, Mitsubishi, Citroën, Fiat, and Kia Motors.

In Brazil, the gasoline is E20 or E25. That is, their gasoline is 20 to 25 percent ethanol. And the ethanol for sale at the pump is 100 percent ethanol (rather than E85, as it is in the U.S.). Pure ethanol is very popular in Brazil — 65 percent of the people with flex fuel vehicles regularly use ethanol.

Although Brazil made ethanol available for ethanol-only cars at every filling station starting back in the 1980s, flex fuel cars didn't come onto the Brazilian auto market until 2003. The next year, 22 percent of new car sales were FFVs. It climbed until by 2009, 94 percent of new car sales were FFVs. Not many people choose to not have any choice in fuels.

We could do in America what they've done in Brazil. In fact, we could go one better. We could add methanol. The mechanical tweaks necessary to enable a gasoline-only engine to also burn methanol and ethanol are almost nil. Then we would have three good fuels all competing with each other for our fuel dollars. What do you think that might do for our economy?

Author: Adam Khan, the co-founder of OpenFuelStandard.org and co-author of the book, Fill Your Tank With Freedom. 

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Is Corn Ethanol Production Bad For The Environment?

Friday, November 22, 2013

Have you seen any recent articles about how "devastating" corn ethanol is to the environment? Setting aside the fact that corn was only the beginning and given what Joule Energy is doing, corn isn't the best thing to make ethanol from anyway (because its yield is so low compared to other feedstocks), it's still true that corn ethanol is being demonized unfairly. The following was published by the Renewable Fuels Association, who obviously have an ax to grind, but the points they make are accurate and should be included in our national conversation about fuel. Here's what they wrote:

The Associated Press has just published a new account of the effects of corn production and ethanol on the environment. The piece is appearing in newspapers across the country starting this week.

The AP calls it "investigative reporting." We call it salacious and unbalanced.

RFA staff spoke with the story's lead reporter numerous times, providing indisputable facts, peer-reviewed studies, and government data documenting ethanol's positive impacts. Instead, the writer chose to use disproven myths, skewed data, and outright fabrications to suggest biofuels and the Renewable Fuel Standard haven't lived up to their promise.

Here are just a few of the "facts" the AP got wrong or chose to ignore:
  • There is no evidence farmers are "plowing into pristine prairies." No new grassland has been converted to cropland since 2005, and most is protected under "sodbuster" and "swampbuster" provisions of the 2008 Farm Bill.
  • In the same vein, the AP claims to have used "government satellite data" to determine that "1.2 million acres of virgin land" have been converted to corn since 2006. But the AP has so far refused to release this "data."
  • No one is "filling in wetlands," as the article claims. Enrollment in the Wetland Reserve Program hit a record high of 2.65 million acres in 2012.
  • The article uses Wayne County, Iowa as a "case study" of corn's out-of-control growth. But corn acreage in that county went down in 2012 and was 34% lower than at its peak in 1986.
  • The article criticizes the rising use of corn for fuel instead of animal feed. But this ignores that for every bushel of corn that goes into producing ethanol, 17 pounds of livestock feed is returned to market. Because of this, on a net basis, livestock feed production still accounts for 50% of the corn supply, with ethanol only consuming 26%.

There's more. They've put together a PDF fact sheet covering some of the biggest flaws in the AP report: Myths Versus Facts.

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Ethanol For $1 a Gallon Using Unfarmable Land and Undrinkable Water

Tuesday, November 19, 2013

Corn can produce 350-400 gallons of ethanol per acre per year. Cellulosic fuels such as grass and wood chips can produce 2,000 to 3,000 gallons of ethanol per acre per year, but so far, not cheaply enough to compete with gasoline.

But Algenol, a company in Florida, has successfully achieved 9,000 gallons of ethanol per acre per year using algae grown in salt water at one dollar a gallon! Another company, Joule Energy, is producing 15,000 gallons of ethanol per acre per year at $1.23 per gallon using undrinkable water! And they are confident they will eventually be able to achieve 25,000 gallons of ethanol per acre per year!

How are they able to achieve this? They genetically modified algae to produce ethanol. Let me be clear: These companies are not harvesting the algae and then fermenting it. The algae itself excretes ethanol continuously, which is why the yields are so remarkable the production is continuous year round. Corn is a crop grown and harvested only once a year.

The algae are grown inside tubes, so evaporation is minimal. It can be done in on harsh desert land in fact that might be the best place to do it since there is so much sunlight.

To accelerate the algae's growth, waste CO2 is pumped into it, turning a burdensome waste into a valuable resource.

What Joule Energy is doing is so remarkable, they won a very prestigious award this year by Bloomberg New Energy Finance. They said, "Every year, the Bloomberg New Energy Finance Pioneers program identifies 10 companies from around the world that are changing the energy landscape as we know it. An independent panel of industry experts from banking, academia, corporations, utilities and technology providers choose the honourees by assessing them against three criteria: potential to scale, innovation and momentum." In April, 2013, Joule was given this award.

Joule has also genetically modified algae to make diesel fuel and jet fuel.

More information: 
Algenol web site
Joule Energy website
Article about Joule Energy's funding
Joule Plant Overview video

Video interviewing CEO of Joule

Author: Adam Khan, the co-founder of OpenFuelStandard.org and co-author of the book, Fill Your Tank With Freedom.  

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A New Fuel Paradigm For America

Monday, November 11, 2013

The Institute for the Analysis of Global Security has released an important 52-page PDF document entitled, Fuel Choice For American Prosperity. The following is an excerpt from the introduction by the co-founders of the United States Energy Security Council, Robert C. McFarlane and R. James Woolsey:

Oil’s strategic importance stems from its virtual monopoly as a transportation fuel. Today, 97 percent of transportation fuel is petroleum based. During the past four decades since the Arab Oil Embargo the policy consensus has been that if we only increased our domestic production of oil and/or learned how to use less of it we would be energy secure. We have done both: America’s domestic crude production is at its highest since 1992 and our vehicles are more fuel efficient than ever. As a result America’s oil import dependency has dropped from 60 percent in 2005 to 36 percent today, and it may drop further still. But none of this seems to have affected the global price of crude or the price of gasoline Americans pay at the pump. On the contrary, while our import dependency slumped our foreign oil expenditures nearly doubled, the share of oil imports in the overall trade deficit grew from one third to nearly a half and American motorists pay in real terms more for fuel than ever before. Clearly something is wrong with the paradigm.

What is needed is a competitive transportation fuel market in which a variety of energy commodities can vie with petroleum for market share. As long as the vehicles rolling onto our roads can essentially run on nothing but oil based fuels, and consumers are thus thwarted from making an on-the-fly choice among different fuels, America will remain susceptible to oil price hikes emanating from the Middle East to the detriment of our economy and national security — no matter how little oil we import from that region.

Competition is a bedrock of our American way of life. It’s time to introduce it into our fuel market.

The paper examines the goal we've been pursuing since the first oil embargo, which could be summarized as: "Reduce foreign oil, especially oil from the Middle East." We have made great strides in accomplishing this goal but it has failed to give us "energy independence" because it was the wrong goal to begin with. The paper offers a revolutionary way to look at this issue: The problem with oil is not where it's from, it's the petroleum monopoly, which gives oil a strategic status it doesn't deserve (especially given the already-existing fuels that could successfully compete with petroleum if given a chance). The paper offers many practical recommendations to solve the real problem and create true energy security for America.

Read or download the document here: Fuel Choice For American Prosperity.

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The Gift of Life

Sunday, November 10, 2013

The American military protects oil shipping lanes, protects many oil-producing countries, and fights to defend the U.S. and its allies from terrorist groups funded by oil money (source). Why? Because oil has a monopoly on transportation fuel, so it is vital to America's interests.

But fuel competition would change that. And it would put fewer servicemen and servicewomen in harm's way. It's something to think about on Veteran's Day.

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Gasoline's Greater Range

Saturday, November 9, 2013

Some people have argued against flex fuel cars or the Open Fuel Standard because methanol and ethanol don't give cars enough range. In the same sized fuel tank, a full tank of gasoline would travel more miles than a full tank of methanol or ethanol.

There are two answers to this. One is that the range difference isn't as great as you'd think — especially if the car is optimized for alcohol fuels. Most of the comparison between gasoline and alcohol uses BTUs (British Thermal Units), which is a measure of heat. Gasoline produces more heat when it burns. But heat is not what creates forward motion. Gasoline produces more heat, but some of its energy is expended in producing heat, and that energy is wasted. More of alcohol's energy is used to power the car and less of it is wasted on creating heat.

Also, alcohol fuels become more efficient at higher compression. So the difference in miles per gallon between gasoline and alcohol will be smaller with a higher compression engine. Engineers are already in the process of perfecting a variable-compression engine.

The second answer is that if it is a flex fuel car, it doesn't matter that alcohol doesn't have as much range as gasoline because if you are going on a long trip or want more range, you can just buy gasoline. The car can burn gasoline too. That's the whole point. You will have a choice. If you want to burn nothing but gasoline, no matter how expensive it gets, you will be able to. Flex fuel technology doesn't reduce a car's ability to burn gasoline. That's why so many people own flex fuel vehicles now without even knowing it: Because they've been burning gasoline in their cars and it burns gasoline just as well as a gasoline-only car.

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Zero Tolerance For Monopolies?

Tuesday, November 5, 2013

11/01/2013 - Carl Pope, former executive director of the Sierra Club, now senior adviser to Securing America's Energy Future wrote the following op-ed for the Mercury News:

Forty years ago, the Saudi Oil Ministry informed the Secretary of Defense that it would no longer supply fuel to the U.S. 6th Fleet. The OPEC oil embargo had begun. For the next five years, the U.S. made serious efforts to escape monopoly dependence on oil. Then, with the decline in oil prices, we fell asleep.

Even when prices began to rise to the stratosphere in 2004, America kept on snoozing. Whenever voices from the military, who bear the heaviest burden, urge us to end oil's stranglehold on our transportation system, the oil cartel and industry concoct a new theory to put us to back to sleep.

This time, the sedative is the promise that huge, exciting, Saudi-sized oil production in the U.S. will achieve "energy independence."

Increased U.S. oil production, combined with more efficient autos pouring into the marketplace powered by the Obama fuel-efficiency regulations and a revived U.S. auto industry, are indeed lowering the volume of oil that the U.S. imports. But world oil prices have risen so much that the dollars and jobs we export to pay for imported oil are greater than ever. We'll add another $4 trillion to our national debt from importing oil over the next 20 years.

As long as the United States uses almost 20 million barrels of oil each day, increasing our domestic production by fracking a million or two barrels a day — which are the projections — still leaves us importing more oil than we did when the first embargo hit, at a much higher price. And new U.S. oil costs more than $90 a barrel to find and produce, so it only comes to market if oil continues to be unaffordable.

Every American recession over the past several decades has been preceded by, or was concurrent with, an oil price spike. The U.S. economy is tied to the highly unpredictable, cartel-influenced global oil market, which manipulates supply and prices. As long as oil is the lifeblood of the U.S. economy, wherever a specific barrel comes from, our military will be forced to bear the burden of guarding against a supply disruption anywhere in the globe. Oil dependence, at times, requires us to accommodate hostile governments or alter our pursuit of key national security objectives.

We don't tolerate such monopolies elsewhere. We source electricity from hydro, gas, coal, nuclear and now wind, geothermal and solar. If wheat gets too pricey, we buy rice or corn; chicken can replace beef. It's folly that nothing is set up to replace oil in our cars, planes or trucks when there are lots of perfectly good energy sources that could cost less than $100 per barrel.

Whenever oil prices spike, we crowd our underinvested transit systems; let's build them out. Natural gas could power trucks for a fraction of the cost per mile of diesel; electric cars free drivers from the volatile oil market. We just need to make these alternatives the norm.

It's not that oil is imported that is crippling us, or even that it is expensive. It is the fact that it has a monopoly — one our environment, our security and our economy can no longer afford.

After 35 years, it's time for the U.S. to wake up.

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Why Conservatives Love the Open Fuel Standard Bill

Friday, November 1, 2013

The Open Fuel Standard bill creates a free market instead of what we have now: Oil’s virtual monopoly of transportation fuel. Oil is in the same position AT&T was in prior to 1984: Because of the way things are structured, oil has a monopoly. Gasoline-only cars can efficiently burn methanol and ethanol as well as gasoline. Flex fuel technology is inexpensive and mature. When AT&T’s monopoly was broken and competition was introduced, the cost of long distance calls dropped in the span of three years from $3.00 a minute to 30 cents a minute, and now it is more like 3 cents a minute. Why? Competition. The Open Fuel Standard would do the same for fuel — our economy’s most important commodity.

The Open Fuel Standard bill would also create greater national security for the United States. The threat of Islamic fundamentalism is growing around the world because of money from oil. OPEC nations keep raising the world price of oil and using that money to fund Hezbollah, the OIC, the Muslim Brotherhood, the Muslim Students Association, the Taliban, etc. — these are all funded by OPEC oil money. Fundamentalist Wahhabis from Saudi Arabia are also using their oil profits to buy and build madrassas and mosques all over the world to spread their message of hatred of non-Muslims. The only reason they’re making so much money is that the world is stuck on a one-fuel standard. The economy requires transportation fuel and petroleum is the only one most of the world uses, even though methanol and ethanol also burn efficiently in the same engines and are half the cost per mile. The Open Fuel Standard would change all this. Fuel prices would drop and OPEC’s decades-long tradition of bleeding the West of its money would stop.

Find out what you can do to help get this bill passed: First Things First.

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Make Petroleum Directly Compete

Sunday, October 20, 2013

For true fuel competition, having different kinds of vehicles — electric, compressed natural gas (CNG), diesel, etc. — is not good enough. We need the competition to take place within a single vehicle. For example, a GEM car is capable of burning gasoline, ethanol, and methanol in any proportion. With a car like that, every time you arrive at the filling station, those different fuels are pitted against each other to compete for your fuel dollar. That is real fuel competition.

The 2014 Ford F-150 truck does just that. It can burn CNG or gasoline, depending on which fuel is available at the time, and at what price. That's fuel competition. I don't mean to sound insatiable, but Ford already makes the F-150 in a flex fuel version, which does not require any new parts, which means they could have a truck that would give us three choices in fuel: Ethanol or CNG or gasoline, depending on what's available and at what price. That would be even better fuel competition, but at least they're heading in the right direction. Watch a YouTube video about the F-150 CNG truck by clicking here.

At PickupTrucks.com, they say this about Ford's new truck:

No matter what fuel it's using, the F-150 CNG engine is designed to feel identical when running. During our quick drive over nasty dirt roads through an East Texas ranch where we punished the two-wheel-drive up and down hills and river washes, we found absolutely no performance difference between either fuel. We’re told the added range with the CNG tank in the bed can mean running up to 800 or 900 miles between fill-ups. Unlike some systems out there, Altech-Eco allows the driver to decide which fuel they want to run on with a small manual switch on the side of the dash. The only other way to identify the truck from a "normal" F-150 (when sitting inside the truck) is by identifying an extra fuel gauge where the 4x4 switch would be next to the radio. 

Forbes says:

Though customers will pay about $10,000 more to buy the CNG version of the F-150, they could see a payback on their investment in as little as two to three years because natural gas prices are so much cheaper than gasoline or diesel fuel, according to Kevin Koswick, Ford’s director of North American fleet, leasing and remarketing operations...

CNG sells for an average of $2.11 per gallon of gasoline equivalent, and as little as $1 in some parts of the country. The national average for unleaded regular gasoline is $3.66.

For fleet owners, that can make a huge difference in their business. AT&T for example, is deploying 15,000 alternative-fuel vehicles by the end of 2018, including 650 F-350 chassis cabs with CNG engines it purchased recently from Ford. Those alt-fuel vehicles have helped AT&T avoid purchasing 7.7 million gallons of gasoline over the past five years, and reduce the company’s CO2 emissions, said Jerome Webber, AT&T’s vice president of global fleet operations.

Here's more information on the truck from Ford
.

Along the same lines, General Motors announced its 2015 Chevrolet Impala will be offered with bi-fuel capability. Drivers will be able to choose their fuel on any given day. They can fill up with ordinary gasoline or compressed natural gas (CNG). It'll have a range of 350 miles on gas, and/or 150 miles on CNG. Read more about the car here.

Again, the Impala also comes in a flex fuel version so this could be a tri-fuel vehicle instead of merely bi-fuel without adding any more weight to the car or any more cost.

Some people are thinking, "If we have these things coming out, do we really need an Open Fuel Standard bill? Isn't it happening on its own?"

The answer is: The Open Fuel Standard bill will make it happen much faster. Speed is a crucial element here. Click here to find out why fuel competition is so urgent.

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A Breakthrough That Could Fuel a Revolution

A recent Wall Street Journal article by George Olah and Chris Cox reveals a better way of reducing carbon emissions than the proposed "carbon capture and sequestration." They propose a way that simultaneously reduces greenhouse gas emissions while "growing the economy and increasing U.S. energy independence." They write:

In place of expensive mandates and wasteful subsidies, what is needed are powerful economic incentives. These incentives should operate not just in the U.S., but in other countries as well.

Thanks to recent developments in chemistry, a new way to convert carbon dioxide into methanol — a simple alcohol now used primarily by industry but increasingly attracting attention as transportation fuel — can now make it profitable for America and the world to reduce carbon-dioxide emissions.

At laboratories such as the University of Southern California's Loker Hydrocarbon Research Institute (founded by George Olah, one of the authors here), researchers have discovered how to produce methanol at significantly lower cost than gasoline directly from carbon dioxide. So instead of capturing and "sequestering" carbon dioxide...this environmental pariah can be recycled into fuel for autos, trucks and ships.

The United States is now producing abundant natural gas, which can also be converted into methanol inexpensively. The new breakthroughs in chemistry and drilling are not benefiting drivers, however, even though methanol is a superior fuel. It burns cleaner and has a higher octane than gasoline. It could successfully compete with gasoline. And not just gasoline. New advances make it possible for methanol to be used in diesel truck and ship engines too. How can this possibility become a reality? The authors have some great suggestions:

Instead of paying extravagant sums to sequester unwanted carbon dioxide, we now can recycle it into valuable fuel while mitigating carbon-dioxide emissions. But one thing stands in the way. What is needed to permit large-scale use of this technology in the U.S. is an end to anticompetitive laws.

Given the advantages of methanol, it is not surprising that millions of U.S. and European cars today operate on gasoline mixed with methanol in countries around the world. Not so in America. That is because for years, federal law has subsidized corn-based ethanol. Since 1980, those subsidies — largely in the form of tariff protections and tax credits — have exceeded $45 billion. The subsidies expired in 2011, but Congress continues to mandate that the oil and gas industry purchase ever-larger quantities of ethanol each year to be blended into gasoline. All of this has tilted the playing field so that superior fuels such as methanol cannot compete.

There is another crippling legacy of this pro-ethanol government policy: Manufacturers of cars for the American market honor their warranties only for vehicles using mandated fuels (gasoline and diesel), which in turn may contain only ethanol as a blend. One means of addressing this inequity would be for Congress to pass the bipartisan Open Fuel Standard Act of 2013, which would put methanol, natural gas, and biodiesel on the same footing as ethanol (but without subsidies and without telling consumers which one to choose) for use in flex-fuel cars.

Little is required to achieve the objectives of a healthier environment, stronger economic growth, lower fuel costs and increasing energy independence that new technology and chemistry offer. We don't need to spend new billions of taxpayers' money on subsidies and imports. Federal law should allow other high-quality alternatives to gasoline — including methanol — to compete.

Read the whole article here.

Dr. Olah, a Nobel Laureate in chemistry, is a professor of chemistry and engineering at the University of Southern California. Mr. Cox, a USC trustee and member of the Loker Institute's board of advisers, is president of Bingham Consulting LLC.

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The Myth of U.S. Energy Dependence: What We Got Wrong About OPEC's Oil Embargo

Friday, October 18, 2013

By Gal Luft and Anne Korin, October 15, 2013, originally published in Foreign Affairs.

The first U.S. energy secretary, James Schlesinger, observed in 1977 that when it comes to energy, the United States has “only two modes complacency and panic.” Today, with the country in the middle of an oil and gas boom that could one day crown it the world’s largest oil producer, the pendulum has swung toward complacency. But 40 years ago this week, panic ruled the day, as petroleum prices quadrupled in a matter of months and Americans endured a traumatic gasoline shortage, waiting for hours in long lines only to be greeted by signs reading “Sorry, no gas.”

The cause of these ills, Americans explained to themselves, was the Arab oil embargo — the decision by Iran and the Arab members of the Organization of Petroleum Exporting Countries (OPEC) to cut off oil exports to the United States and its allies as punishment for their support of Israel in the 1973 Yom Kippur War. And the lessons they drew were far-reaching. The fear that, at any given moment, the United States’ oil supply could be interrupted by a foreign country convinced Washington that its entire approach to energy security should center on one goal: reducing oil imports from that volatile region.

But Americans were wrong on both counts. The embargo itself was not the root cause of the energy crisis. Contrary to popular belief, the United States has never really been dependent on the Middle East for its supply of oil — today only nine percent of the U.S. oil supply comes from the region. At no point in history did that figure surpass 15 percent. Rather, the crux of the United States’ energy vulnerability was its inability to keep the price of oil under control, given the Arab oil kingdoms’ stranglehold on the global petroleum supply. Nonetheless, for the last four decades, Washington’s energy policy has been based on the faulty conclusion that the country could solve all its energy woes by reducing its reliance on Middle Eastern oil.

Where did this conclusion come from? By the time the six-month embargo was lifted, in March 1974, the global economy lay in ruins. In the United States, unemployment had doubled and GNP had fallen by six percent. Europe and Japan had fared no better, and struggling, newly created countries in Asia and Africa took the worst hits. Countries completely dependent on energy imports found themselves heavily in debt, and millions of unemployed poor had to migrate from the cities back to their villages.

The crisis also dealt a blow to American prestige. At the height of the Cold War, the United States essentially proved that without oil it was a paper tiger. The worried secretary of state, Henry Kissinger, indicated that the United States was prepared to send military forces to the Persian Gulf to take over whatever country was needed to keep the oil flowing. Since 1973, the United States has sent forces to the Middle East time and again in the name of energy security. Moreover, the embargo created a deep sense of vulnerability from which the United States has never recovered. The country has been portrayed that way by its own leaders: in 2006, Senator Joseph Lieberman called it “a pitiful giant, like Gulliver in Lilliput, tied down and subject to the whim of smaller nations.” 

The only proper response, it seemed, was to stop importing so much Middle Eastern oil. Every U.S. president since the embargo, from Richard Nixon to Barack Obama, has sought the elusive goal of “energy independence,” either by increasing domestic oil supply (Republicans) or by constraining demand through a gasoline tax and improving the standards for cars’ fuel efficiency (Democrats). Americans have been led to believe that the vulnerabilities associated with oil dependence would be alleviated if only oil imports decreased. Furthermore, they have been promised that import reduction would yield lower crude prices and thus lower prices at the pump.

Those assertions were wrong 40 years ago and they are even further off the mark today. The long race for energy self-sufficiency reflects a systematic failure to grasp the meaning of the events of 1973 — specifically the exact role that OPEC played during this episode and over the subsequent four decades. It is time to take a fresh look at those events, to rethink the U.S. national fixation with energy self-sufficiency, and to focus on solutions that actually have a chance of getting the United States — not to mention the rest of the world — out of the mire.


GAL LUFT and ANNE KORIN are Co-Directors of the Institute for the Analysis of Global Security and Senior Advisers to the United States Energy Security Council. They are the co-authors of Petropoly: The Collapse of America’s Energy Security Paradigm.

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It's Time to Shock O.P.E.C.

Thursday, October 17, 2013

We need to use our newfound energy leverage to cause some oil “shocks” of our own.

By Frank Gaffney, Jr., originally published on October 14, 2013, at the Center for Security Policy:

Forty years ago this week, America received a harsh lesson about the dangers of relying on others for energy.  President Nixon’s decision in the midst of the Yom Kippur War to resupply Israel with U.S. weaponry gave members of the OPEC cartel an excuse to embargo oil supplies to this country and drive up prices worldwide.  It became known as the “oil shock” of 1973.

Ever since, politicians of both parties have promised to reduce our dependency on unreliable foreign sources.  To that end over the past four decades, they have invested untold sums on various schemes – from imposing price controls, producing synthetic fuels and subsidizing ethanol production, curbing demand and diversifying overseas sources of supply for oil and natural gas.

Thanks largely to private sector initiatives and funds, however, real progress has lately been made on this longstanding national objective. Finally, the widespread application of technology like horizontal drilling and hydraulic fracturing (better known as fracking) and a series of discoveries of vast quantities of natural gas around the United States and off its coasts have transformed our situation from one of energy dependency to potentially that of the largest energy exporter in the world.

The geopolitical and economic significance of this transformation will be the focus of conferences sponsored by two influential, bipartisan groups in Washington this week.  Former Cabinet and sub-Cabinet officers, senior military personnel and other experts will convene on Tuesday under the auspices of the U.S. Energy Security Council and on Wednesday under that of Securing America’s Future Energy (SAFE) to discuss the oil embargo, the intervening years and where we are today vis a vis those who used energy as an economic weapon against us in the past.

It is very much to be hoped that these conversations will not simply repeat nostrums about the inadvisability of being dependent upon unreliable – to say nothing of actually hostile – energy sources.  Or, worse yet, simply revel in the change of fortunes that will, in the absence of further Obama administration obstructionism, enable us to become again a huge net producer of energy.  (Regrettably, between its pursuit of cap-and-trade restrictions on carbon emissions, overreaching EPA regulations, the campaign to destroy the coal industry and further shenanigans with respect to the Keystone XL pipeline, there is ample reason to expect more official impediments to our energy security, not fewer.)

What is needed now is a strategic approach to using our newfound energy leverage to cause some oil “shocks” of our own.

For starters, the windfall of natural gas deposits being found in this country opens up an opportunity to transform the sector in which we are still almost entirely dependent on oil and its byproducts: the transportation of people and goods via automobiles, busses and trucks.  If natural gas can become widely used in eighteen-wheelers and turned into methanol for use in most modern cars, we could dramatically reduce the amount of gasoline we are obliged to import from the Islamists of OPEC.

What is more, as Nobel laureate George Olah observed in an op.ed. article he co-authored in the Wall Street Journal last week, recent breakthroughs in chemistry are allowing another vast U.S. resource – carbon dioxide – to be cost-effectively converted into methanol.  Far better to burn it in our automobiles and in modified surface transportation and maritime diesel engines than to pay exorbitant sums, as Team Obama has in mind, to try to store it underground.

Best of all, by enabling these alternatives to oil and gasoline to become available across America, we can create fuel choice for consumers – and competition for the cartelists.  The predictable effect would be to drive oil prices down, especially as the scores of other developing nations capable of manufacturing their own alternatives to gasoline begin to do so, as Brazil has already done with ethanol.

The result could be to break the back of OPEC, once and for all.  That, in turn, would help dry up the funding that has done so much for decades to power jihadism and undermine our economy.

This is no longer simply a desirable thing to do.  It is absolutely imperative.  As Center for Security Policy Senior Fellow Kevin Freeman has observed, Mideast oil producers seem determined to join the Chinese and Russians, among others, in terminating the U.S. dollar’s status as the world’s international reserve currency.  Should they succeed in this gambit, the profound and debilitating economic and strategic ramifications will make the oil shock of forty years ago look like the good old days.

Adopting bipartisan Open Fuel Standard legislation and taking such other steps as are necessary to enable fuel choice can help us withstand as well disruptions in oil supply and/or skyrocketing price increases in the event of a new regional war in the Middle East.  We can and must be in a position to deliver the next oil shock, not be its recipient.


Frank Gaffney is the Founder and President of the Center for Security Policy in Washington, D.C. Under Mr. Gaffney's leadership, the Center has been nationally and internationally recognized as a resource for timely, informed and penetrating analyses of foreign and defense policy matters. Mr. Gaffney formerly acted as the Assistant Secretary of Defense for International Security Policy during the Reagan Administration, following four years of service as the Deputy Assistant Secretary of Defense for Nuclear Forces and Arms Control Policy. Previously, he was a professional staff member on the Senate Armed Services Committee under the chairmanship of the late Senator John Tower, and a national security legislative aide to the late Senator Henry M. Jackson.

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Competition Going Up In Smoke

Wednesday, October 16, 2013


Do you know what you're looking at? This is a photo from space of the Bakken shale oil fields in North Dakota (circled) flaring off the natural gas that comes up with the oil. This is not the only place in the U.S. that the natural gas is simply burned to get rid of it (rather than captured, turned into methanol or ethanol, and used as a liquid fuel that gasoline would have to compete with).

The Bakken shale fields alone burn an enormous amount of natural gas — the equivalent of one fourth of the natural gas Americans use. What a waste! It could be made into a fuel that could sell for half of what gasoline is selling for. And it burns cleaner.

The Open Fuel Standard could provide a good reason for oil producers to capture this valuable resource. They could sell it as a high-octane fuel rather than letting it go up in flames.

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You Should Be Outraged

Sunday, October 13, 2013

In America, we have 487 different kinds of breakfast cereals to choose from. And there are, of course, other things you can have for breakfast besides cereal. But for one of your biggest expenses (fuel), you have only one choice at almost every filling station in the country and with almost every car on the road.

If petroleum was the only fuel that worked, this would be somewhat acceptable. But there are alternatives that are cheaper, burn cleaner, and make your car last longer, and your access to those fuels are being deliberately blocked. That should make our situation completely unacceptable to all of us.

How is our access being blocked? Oil companies make it very difficult or impossible for fuel station owners to offer any other fuel but petroleum. The oil industry has also invested heavily in car companies, which is why we see gasoline-only cars on the road with their flex-fuel capability disabled by the manufacturers, preventing you from having any choice at the pump. The American Petroleum Institute has helped create EPA regulations that prevent widespread use of alternative fuels. And the oil industry spends lavishly to influence politicians in Washington DC. The oil and gas industry employs 736 lobbyists in DC. Just to give you a number to compare that to, the NRA (which is considered a very powerful lobbying group) has 28 lobbyists. Saudi Arabia alone has 100 lobbyists in Washington. And the oil industry also spends lavishly on PR campaigns to discredit alternative fuels.

If this was happening with any other product, people would be completely outraged. But we've grown up with it, so it seems "normal." If there were other choices of breakfast cereal available, but the only one in the store was Cocoa Puffs because the Cocoa Puffs manufacturers were preventing stores from carrying anything else, people would be justifiably up in arms. I know I would. I hate Cocoa Puffs.

And breakfast cereal matters far less than fuel. Especially when you consider two other factors: Oil's monopoly allows OPEC to plunder the world's wealth, and what they are doing with that money is awful for everyone in the world, including their own citizens.

OPEC produces a large enough percentage of the world's oil production that they can cut their production by only a little to raise world oil prices, and they do exactly that. They've been doing it for years. They get together twice a year to determine what price they want, and they keep raising it, and we all keep paying it because we don't have any choice. Saudi Arabia, which has the biggest influence on OPEC, can produce a barrel of oil for less that $2. But they have raised oil to over $100 a barrel. Year after year they reap tremendous windfalls, providing them with almost unlimited funds, which they use to repress their own people, spread violent fundamentalism around the world, and corrupt our government.

This has got to stop, and the sooner the better. Put your outrage into action and let's get it done: Start here.

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