Saudis Might Push Oil Price Even Lower

Tuesday, December 30, 2014

Saudi Arabia’s oil minister, Ali al-Naimi, said recently it was “not in the interest of OPEC producers to cut their production, whatever the price is...”

Naimi also said the Saudis might even raise their output to improve their market share (which would also lower prices further). "The best thing for everybody," he says, "is to let the most efficient producers produce..."

What exactly does he mean? Olivier Jakob, an oil analyst at Petromatrix Oil in Switzerland, spells it out in plain English. Jakob writes: the OPEC oil ministers “basically want oil prices to move lower to reduce production in the U.S.” There it is.

That's what monopolies do. If a monopoly can produce a commodity or product cheaper than anyone else (and Saudi Arabia has the cheapest oil in the world to produce), their best bet in the long run, if they can get away with it, is to drop the price so low it puts all the competition out of business.

Oil prices are low and getting lower, and that's great. It will boost the U.S. economy while it lasts. If the Saudis get their way, eventually most of its competition will be dead and they can go back to gouging the world. The only way to get our economy off their roller coaster is robust fuel competition. It can be done now, and when they raise their prices again, our economy will keep humming. Let's hope enough of us see the wisdom to keep pursuing it while oil prices are low.

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Low Fuel Prices Create Winners and Losers

Monday, December 22, 2014

In late November, in Vienna, OPEC decided not to do what it normally does when oil prices get too low: They chose not to cut their production levels. Some OPEC members can afford this because their oil is cheap to produce. Some countries like Venezuela will be hurt badly by this decision, but they don't have the same clout within OPEC. This is a quote from an article in USA Today:

In Vienna, Venezuelan Oil Minister Rafael Ramirez effectively conceded defeat when he appeared to angrily storm out of the OPEC meeting once a no-cut decision was signaled.

Over half of officials from OPEC countries — the poorer half — were consistently on-message that the market is over-supplied and that something needed to be done. Nothing was done.

Shale-oil producers in the United States and Canada could also be hurt. Low crude prices make it harder for them to launch new drilling projects or expand operations because they count on high returns to finance the costly penetration and oil harvesting.

These are interesting times. We'll see how it all plays out. In the meantime, the lower fuel prices will immediately ease the financial burden of hundreds of millions of people around the world because the artificially-induced high oil prices we've experienced around the world have functioned like a regressive tax on the whole world.

What we're getting now is a taste of what could happen if we had true fuel competition in America. It's a goal worth fighting for. In the meantime, enjoy the low prices while they last.

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Will Oil Prices Rise Again?

Friday, December 19, 2014

Gal Luft, an advisor to Fuel Freedom’s board, doesn’t know if or when oil prices might start rising again. For all the predictions out there lately, few experts can say for certain what the market will do in 2015.

“I started working on this when oil was $20 a barrel,” he says, referring to an era roughly between the mid-1980s and late ’90s when oil was at that threshold or even below it.

“I don’t think that we should aim to bring the price of oil to any specific place, because sometimes the price will be high, and sometimes the price will be low,” he adds. “That’s what commodities do: They fluctuate. It’s true for oil, it’s true for cocoa, it’s true for soybeans.

“And I think the question is not, ‘How high is oil or how low it is.’ The question is, ‘Why is oil the only commodity in the transportation sector?’ … The issue should not be to look for a sweet spot for oil or a certain target price for it, but to talk about the lack of competition and the lack of choices and the need to diversify our sources of supply in the currently monopolized market.”

The above is an excerpt from an article on Fuel Freedom Foundation's web site. Read the rest: Oil's Monopoly More Important Than Prices

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Monopolies Think Long-Term

Friday, December 5, 2014

OPEC has traditionally cut its production when new sources of oil were added to the global total output. It has always been done to keep the world price of oil high.

Only once has OPEC chosen to overproduce oil in order to lower oil prices (in the late 1980's and early 1990s). The cheap oil hit Brazil's bold ethanol infrastructure investments hard, and put half the U.S. ethanol production facilities into bankruptcy.

In other words, it was a classic monopoly maneuver.

And for the second time, OPEC is doing it again. For a year now, against the expectations of the experts, OPEC has decided not to reduce its output even though Iran's oil has been added to the global total, and so has a new bonanza of American oil. Everyone seemed to expect that OPEC would do what it has always done: Cut its production to keep the price of oil high. But it has not.

OPEC is trying to kill off its competition.

The good news is that lower fuel prices are always good for the economy, so as long as fuel prices remain low, we can expect to see a significant economic uptick, as we did in the late 80s and early 90s. But we can also expect to see a drop in new oil investments and a drop in interest for fuels that could compete with oil.

When it has cleared the field of its competition, OPEC will raise the price of oil again and continue gouging the world.

If you'd like to see OPEC lose its power, if you want lower fuel prices permanently, and the healthy economy it always brings, never stop working toward fuel competition. Here's how.

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

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Keep the Focus on Fuel Competition

Thursday, December 4, 2014

In an article in USA Today, Jonathan Fahey says the dropping gas price is so surprising, people are sharing photos of it. He writes about the reasons it's getting cheaper, and fails utterly to give the fundamental cause of the lower price, or what we might do to keep the prices low. Here are some excerpts from the article, starting with the reasons:

...demand isn't rising as fast as expected, drillers have learned to tap vast new sources of oil, particularly in the U.S., and crude continues to flow out of the Middle East.

Seasonal swings and other factors will likely send gas back over $3 sooner than drivers would like, but the U.S. is on track for the lowest annual average since 2010 — and the 2015 average is expected to be lower even still.

Oil fell from $107 a barrel in June to near $81 because there's a lot of supply and weak demand. U.S. output has increased 70 percent since 2008, and supplies from Iraq and Canada have also increased. At the same time, demand is weaker than expected because of a sluggish global economy.

In the past, a stronger economy in the U.S., the world's biggest consumer of oil and gasoline, typically meant rising fuel demand. No longer. Americans are driving more efficient vehicles and our driving habits are changing. Michael Sivak of the University of Michigan Transportation Research Institute calculates that the number of miles traveled per household and gallons of fuel consumed per household peaked in 2004.

The drop will save the U.S. economy $187 million a day, and also boost the profits of shippers, airlines, and any company that sends employees out on sales calls or for deliveries.

Whenever fuel prices drop, the economy does better. Five of the biggest airlines reported very strong quarterly earnings mostly because fuel prices have dropped 15% since September. When fuel is less expensive, almost everything becomes less expensive. That's one of the biggest selling points of the Open Fuel Standard. Right now, global commodity prices are falling around the world.

The real cause of the global drop in oil prices is an overabundance of oil on the market, caused by OPEC's surprising move to keep their production high regardless of new sources of oil on the market. Another way to describe the cause is that American oil producers are adding more oil to the market and OPEC is not responding the way it has traditionally responded (cutting its production to keep oil scarce and the price high).

Why do you suppose they haven't cut their production?

"At a recent oil industry event in London," writes anchorwoman Trish Regan, "OPEC's Secretary-general Abdullah al-Badri told reporters, 'If prices stay at $85, we will see a lot of investment going out of the market. About 65% of the producers, they have high costs. Not OPEC.'"

OPEC is playing monopoly with the world's economy. Once they've killed off interest in new oil investment, they can safely raise prices again.

If you'd like to end our vulnerability to OPEC's manipulations, keep working toward fuel competition while oil prices are low. There are many reasons to achieve fuel competition besides the economic ones, although those would be reasons enough. Here's a summary of why its worth fighting for: Fuel Competition Will Change The World.

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Why Are Oil Prices Falling?

Saturday, November 15, 2014

"Oil prices need to stay above $85 a barrel in order for new fracking investment to be worthwhile," says anchorwoman Trish Regan.

Today's Brent Crude is $77.74 a barrel.

In USA Today, Regan writes, "Despite increasing tensions in the Middle East, the nationwide average for a gallon of gas stands below $3 for the first time in four years — a roughly 20% drop from June levels. And OPEC, the oil-producing group that controls an estimated 40% of world supply and aims to keep oil prices as high as it can, seems to be just fine with that."

The question is: Why?

Because that's what monopolies do when begin to face competition: Drop the price and try to put the competition out of business. Oil analysts seemed surprised last December when Saudi Arabia elected to keep their oil production at a high level even when new oil from Iran, Libya, and the U.S. were flooding the market.

But the most likely, rational reason to maintain high production is to drop the global price of oil. Saudi Arabia's oil is very cheap to produce — it's the cheapest in the world. It costs them less than $5 a barrel to produce. So even with lower prices, they're still making money. That isn't the case with the fastest-growing oil producer (and therefore biggest competitive threat), the USA.

"At a recent oil industry event in London," writes Regan, "OPEC's Secretary-general Abdullah al-Badri told reporters, 'If prices stay at $85, we will see a lot of investment going out of the market. About 65% of the producers, they have high costs. Not OPEC.'"

They're looking at the long term. If they hold prices low for awhile, maybe U.S. production will crash. Then they can go back to gouging the world in peace.

Regan concludes with an acknowledgement that lower oil prices are great for the economy, but we should "maintain investment in all forms of alternative energy."

That doesn't go far enough. We don't merely need "alternative energy," we need something more specific: Competition in the fuel market. Not weak competition, but vigorous, robust competition, which can only happen if individual cars can burn multiple fuels. It would not be difficult to accomplish and it would cost very little. But it would shield us permanently against OPEC's monopolistic manipulations.

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Oil Prices Are Dropping. So What?

Wednesday, November 12, 2014

In Politico Magazine, Gal Luft had this to say about our currently dropping oil prices:

Ten years ago, when oil prices were under $40 a barrel, the idea of $80 oil considered “cheap” would have sounded inconceivable. But let’s not be mistaken: Oil is not cheap even at its new level. It costs the Saudis and their OPEC partners under $5 to produce a barrel so their profit margins are orders of magnitude higher than in any other commodity. In fact, on an energy-equivalent basis the new “cheap” oil is still four times more expensive than coal and natural gas.

While the other fossils compete with each other — as well as with nuclear, solar, hydro and wind power — over market share in the electricity generation sector, oil faces no competition in the sector that matters most for the global economy: transportation. This monopolistic position has allowed OPEC, a cartel that today produces fewer barrels than it did 40 years ago despite controlling more than three-quarters of the world’s conventional reserves, to hike the price gradually in order to meet its member regimes’ budgetary needs. And those needs are only going to rise.

Advice to Washington: Don’t get too comfortable with the new price level, as it is not reflective of a new era of cheap oil but merely a remission in the global economy’s worst affliction: oil’s virtual monopoly over transportation fuels. While OPEC, for tactical reasons, might keep its production level intact over the next few months, it is not likely to do so for very long. Most of its members need higher prices to balance their budgets: Saudi Arabia needs $95 per barrel; Venezuela $120; Iran $140. For these countries, the only possible course of action to avoid economic collapse is to cut production in order to offset the rising supply of North American oil. In other words: higher prices, again. Sinking into complacency and veering off the worthy goal of opening the transportation sector to fuel competition would sow the seeds for a painful oil shock down the road.

Gal Luft is co-director of the Institute for the Analysis of Global Security and senior adviser to the U.S. Energy Security Council.

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Should Cars be Made to Run on Any Fuel so the Best Fuel Wins?

Sunday, October 26, 2014

It takes almost nothing at all to make a gasoline-only car capable of also burning methanol and ethanol. If that was done to all cars, when you went to a fuel station, those fuels would be in constant daily competition, which would be really good for the consumer.

Not only would we have three fuels competing, but ethanol and methanol can both be made from many things, so their feedstocks could also compete. Which would you buy? Ethanol made from corn, ethanol made from local municipal waste, or ethanol made from algae using undrinkable water and unfarmable land? Or maybe methanol made from natural gas? Methanol made from coal? Methanol made from agricultural waste? Wouldn't you like to have a choice? Wouldn't you like to see those fuels have a chance to compete with petroleum?

The best fuel would only win for the day. Tomorrow, who knows what new, better, cheaper, cleaner fuel would hit the market and set the bar even higher? In other words, fuels would compete the way apps for your phone compete: Fiercely. Daily. Creatively.

All that needs to happen is to break the monopoly. In the case of phones, the monopoly was AT&T's on long distance calling. When that monopoly was broken in 1984, the phone industry exploded with new services, cheaper services, new ways of making phone calls, and now phones and phone services and apps are all competing for our dollars fiercely. It has been great for the consumer.

In the case of fuels, the only thing holding us back from a similar competitive environment is the one-fuel car. That's what keeps petroleum's monopoly in place. Break that and you change the world.

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True Independence

Monday, October 6, 2014

We can break the cartel's influence on our gas prices by stripping oil of its strategic status. And we can get out of the box of GAS prices and concern ourselves with FUEL prices. How can we lower fuel prices? We can introduce competition in the fuel market by turning the cars on our roads into platforms upon which fuels can compete. We can buy flex fuel cars. We can convert our cars to flex fuel cars now and start burning alcohol fuel.

And we don't have to rely on any other country's cooperation. We can do this ourselves. OPEC may decide to continue plundering the world's financial resources by keeping the price of oil high, but it would no longer affect fuel prices in America. Our fuel prices could steadily drop as we develop better ways of making fuel.

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Interview with PUMP's Filmmaker Josh Tickell

Wednesday, October 1, 2014

You can listen to an interview with Josh Tickell, the filmmaker of the new movie, PUMP here:

The Coast to Coast Show

You'll see "Download MP3s." Choose "Hour 1."

Here is the radio station's description of the interview:

First hour guest, filmmaker Josh Tickell talked about his documentary, Pump, which tells the story of America's addiction to oil and alternative fuels that can replace it. Rudolf Diesel made his diesel engine to run on vegetable oil and Henry Ford originally designed the Model T to run on alcohol fuel, Tickell explained. They realized if fuel was controlled by large organizations, then the power would rest with large organizations instead of with the people, he added... [Tickell] spoke about how newer gasoline burning cars can be switched via software to run on more than one fuel type, including ethanol, methanol, and natural gas. He also suggested that the Millennial generation will take on the challenges of fuel and energy, and radically change them.

To find out if PUMP is now playing in your city, go here:

http://www.pumpthemovie.com/?buytickets

And select your state.

Watch a couple of great previews at Fandango.

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A Movie About Fuel Competition

Thursday, September 18, 2014

The Huffington Post published a good write-up about the new movie, PUMP. The author, Carl Pope, wrote:

"The movie, produced by the Fuel Freedom Foundation, puts today's global oil landscape in the proper historic perspective, tracing how oil's current monopoly as a transportation fuel emerged. First came John D. Rockefeller's successful efforts to leverage prohibition to kill off Henry Ford's plan to rely on alcohol as the primary driver of the automotive revolution. In the '30s General Motors conspired with Chevron, Firestone and Mack Truck to shut down America's streetcar system. The recent assault on ethanol as a fuel was, similarly, funded and managed by the oil industry and its hired guns.

"PUMP next takes us on a survey of the fuels that ought to be competing with oil for our transportation dollar — because they all cost less than gasoline or diesel — electric vehicles, natural gas fuels, or biofuels derived from agricultural or municipal wastes or dedicated crops. It argues that a huge portion of today's cars could actually operate on ethanol or methanol derived from natural gas or biomass with truly trivial software and fuel line modifications, while fleet turnover will more slowly take us to a largely electric vehicle future. It uses Brazil as a powerful counter-narrative, a country that did break oil's monopoly at its pumps, and convincingly argues that the alternatives to oil are both better and cheaper — if they could get into the market."

The fastest way to get these fuels into the market is the Open Fuel Standard. Let's hope the movie awakens Americans' determination to break oil's monopoly forever.

Read the whole article in The Huffington Post here: Pump the Movie — Pricking Petro-Nonsense.

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Using Yahoo Answers for a Public Education Campaign

Thursday, August 28, 2014

If everyone you know is already educated about the Open Fuel Standard, and you want to inform more people, here is a way you can do it: Go to Yahoo Answers and sign up. Then click on "Discover." You'll see many categories. Choose "Environment" or "Politics and Government" or "Cars and Transportation." Make a bookmark or toolbar bookmark for this.

Now check it every day. People are always asking questions. You will see questions that can be answered with information about the Open Fuel Standard (it is a good answer or solution to many problems).

Sometimes you have to go through quite a few to get to a question you can answer. When you find one, give a good answer. Help educate people.

You can also use the search function and type in something like "fuel" or "open fuel standard" or "national security" or "economy" and then click on "Newest" to find good questions.

You can also ask questions and vote on the answer.

Often Yahoo questions and answers rank very high on a Google or Bing search. So your answer can potentially reach many people over time. In the meantime, you're educating the few people involved in that particular question and answer. It's actually fun and addicting and will help us get the word out.

Use lots of links in your answers. Put in the time to write good answers. Try to get your answer voted as the best one. If you're ready to launch your public education campaign, start here: Yahoo Answers.

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

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Yossie Hollander Interviewed by Frank Gaffney

Saturday, August 23, 2014

The following was written by Landon Hall and published on FuelFreedom.org:

Americans often get caught up in where we get our oil, convinced that the goal should be to reduce our dependence on imported resources.

Although that’s an admirable goal, the origin of the oil we use isn’t as important as the fact that it’s too expensive, Fuel Freedom chairman and co-founder Yossie Hollander said this week on Frank Gaffney’s “Secure Freedom Radio” show.

To listen to the ten-minute segment, click here.

Gaffney, who is also a Washington Times columnist, began the segment with Yossie Hollander, co-founder of Fuel Freedom Foundation, by asking whether the United States is “too dependent on world energy supplies, and the possibility that they might be interrupted.”

“I think people sometimes mistake the issue of dependency on oil as an import issue or an export issue,” Yossie replied. “The problem is the price. If oil was $1 a barrel, we wouldn’t mind if we imported it from anywhere in the world, because it wouldn’t fund anything that was operating against us.”

This line of thought highlighted one of the key pillars of Fuel Freedom’s message: That the wealth created by expensive oil often ends up underwriting violent extremist groups.

“If we reduce the price of oil to $50, $60 a barrel, then we can de-fund those elements,” Yossie said.

The price of Brent crude rose by $1.26 on Friday, to $103.40 a barrel, largely on concerns about the conflict along the Russia-Ukraine border.

Yossie explained that the solution is to “allow us choice at the pump” by forcing gasoline to compete with other fuels like ethanol and methanol. Alcohol fuels can be processed from a variety of resources widely available in the U.S., including corn, natural gas, garbage and biomass.

“We have so many resources that can produce liquid fuels that are cheaper than gasoline by at least a dollar a gallon,” he said.

Asked by Gaffney what needs to happen to clear the way for competition, Yossie said:

“I think what we’re promoting the most is the ability to covert your car. We figure that most of the cars built in the last 20 years can probably be converted to run on various liquid fuels, all in the same tank. And that can be done for less than $300 per car, if the regulations allowed it.”

All of these issues are laid out in the Fuel Freedom-produced documentary, “PUMP,” coming to theaters in September. Which Gaffney is eager to see.

“Fuel choice is the name of the game, it seems to me,” he said. “I think this is a tremendously important initiative. I look forward to seeing the movie.”

———

Stay connected with the latest news and happenings of Fuel Freedom by joining their email list.

Join the conversation: Facebook | Twitter | Instagram | Google Plus | LinkedIn + tagged in Ethanol / Frank Gaffney / national security / pump / replacement fuels / Secure Freedom Radio / Yossie Hollander

Landon Hall has more than 20 years of experience as a reporter and editor, including a decade at The Associated Press in Portland, Oregon, and New York City.

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Fuel Choice Now

Friday, July 25, 2014

Sign up for updates at FuelChoiceNow, a national advocacy campaign that supports policies that will bring competitiveness and choice to the U.S. transportation fuel marketplace. They are promoting something very similar to what we promote here on OpenFuelStandard.org:

Offering drivers the option of buying clean, low cost transportation fuel alternatives.

Reducing America's dependence on foreign oil.

Creating fuel sector jobs and economic growth.

Catalyzing the development of alternative fuel infrastructure.

Reducing carbon emissions and other pollutants from fuels and vehicles.

FuelChoiceNow
believes that U.S. transportation fuel markets should be competitive, and consumers should have a choice at the pump. They think policymakers should take every reasonable step to open U.S. transportation fuel markets to alternative fuels because the economic consequences of oil dependence are severe. Virtually every facet of our economy is tied to oil prices. When oil prices spike, the costs of living and doing business follow.

They point out that oil price shocks and price manipulation by OPEC cost the U.S. economy roughly $1.9 trillion from 2004 to 2008, according to the U.S. Department of Energy. And 75 cents of every dollar spent on petroleum is exported out of the country, at the rate of almost $1 billion per day (source: ILSR, U.S. DOE).

Our economy will become more strained as the worldwide demand for oil increases and global oil reserves become more depleted and expensive. Over the course of history, a recession has followed every major oil shock, according to the U.S. Department of Energy. That would no longer happen with sufficient alternative fuels (and cars that can burn them) on American roads.

The more difficult-to-reach oil resources are dirtier (e.g. tar sands, thermally-enhanced oil recovery, heavy oil) and come with serious ecological risk (e.g. deep water spills such as the BP Gulf Spill).

There are affordable ways to significantly increase market access for alternative fuels in the immediate term. Flex Fuel Vehicles (FFVs) run on virtually any blend of ethanol, methanol and gasoline, and cost no more than gasoline-only cars. FFV technology is very cheap and already commercialized. In Brazil, about 90 percent of all new vehicles sold are flex-fuel, including those manufactured by well-known U.S. automakers.

Aggressive deployment of FFVs would immediately open U.S. fuel markets to robust fuel competition (rather than the feeble competition we have now). The costs of FFV deployment are very low and the Return on Investment (ROI) is extremely high. Aggressive FFV deployment comes at no cost to the U.S. Treasury.

Open fuel markets are critical to unfettering the natural market forces that will lead to major infrastructural developments (e.g. blender pumps).

Sign up for their updates here: Subscribe to FuelChoiceNow.
You can also find them on Facebook: FuelChoiceNow on Facebook.

FuelChoiceNow is supported by alternative fuel production and technology companies, investors, and other clean tech entities.

FuelChoiceNow has a great lineup of supporters, and they share a common vision in which alternative fuels play an increasing role in an open and competitive U.S. transportation fuel marketplace that offers consumers a choice at the pump, allows alternative fuels to compete on a level playing field, and reduces U.S. dependence on foreign oil.

FuelChoiceNow strongly supports the aggressive deployment of Flex Fuel Vehicles (FFVs) as one of easiest and most affordable strategies to bring consumer choice to the pump in the immediate term, but also supports a longer term portfolio approach that includes electric vehicles, compressed natural gas vehicles, hybrids, and other practical alternatives.

Campaign Supporters:

@Ventures
www.ventures.com

Abengoa Bioenergy
www.abengoabioenergy.com

Advanced Technology Ventures
www.atvcapital.com

Agrivida
www.agrivida.com

Battery Ventures
www.battery.com

BlueFire Renewables
www.bfreinc.com

Coskata
www.coskata.com

Craton Equity Partners
www.cratonep.com

Enerkem
www.enerkem.com

Fulcrum Bio Energy
www.fulcrum-bioenergy.com

Globespan Capital Partners
www.globespancapital.com

Inbicon
www.inbicon.com

Iogen
www.iogen.ca

Mascoma
www.mascoma.com

Mohr Davidow Ventures
www.mdv.com

Nth Power
www.nthpower.com

Novozymes
www.novozymes.com

Osage Bio Energy
www.osagebioenergy.com

Paladin Capital Group
www.paladincapgroup.com

Propel Fuels
www.propelfuels.com

Qteros
www.qteros.com

Syngenta
www.syngenta.com
Venrock
www.venrock.com

Zeachem
www.zeachem.com

The above is an edited compilation of several of FuelChoiceNow's web pages.

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A New Movie About Fuel Choice and Fuel Competition

Monday, July 21, 2014

Is this what future fuel stations will look like?
The following is an announcement from Fuel Freedom Foundation:

For more than a year, Fuel Freedom Foundation has been working on a project that makes the case for fuel choice at the pump.

Call it the perfect vehicle for our mission. And it's ready for a close-up.

That project is "PUMP," a full feature film directed by Joshua and Rebecca Tickell, and narrated by Jason Bateman, set to open in select cities on Friday, September 12th, 2014, expanding to additional markets on September 19th.

PUMP is an inspiring, eye-opening documentary that tells the story of America’s addiction to oil, from its corporate conspiracy beginnings to its current monopoly today, and explains clearly and simply how we can end it — and finally win choice at the pump.

Watch the trailer: PUMP Preview.

Today oil is our only option of transportation fuel at the pump. Our exclusive use of it has drained our wallets, increased air pollution and sent our sons and daughters to war in faraway lands. As "PUMP" expertly explains, it doesn't have to be this way. Through the use of a variety of replacement fuels, we will be able to fill up our cars — cheaper, cleaner and American made — and in the process, create more jobs for a stronger, healthier economy.

The film features notable experts such as John Hofmeister, former President of Shell Oil US; Elon Musk, CEO of Tesla Motors; Peter Goldmark, former president of the Rockefeller Foundation; and other noteworthy figures who share their passionate views and knowledge.

Fuel choice will help bring down prices for all fuels, while spurring innovation and driving job growth. Choice also will strengthen U.S. national security by reducing the need to send our sons and daughters around the world to protect the flow of imported oil. Choice will slow the production of greenhouse gases that harm the atmosphere and impact our health.

An important film for anyone who drives or owns a car, PUMP will inform the audience how to change their lives for the better: save money, create jobs and improve the environment.

We're extremely proud of "PUMP," because it's more than just a movie. It's a call to action. But we can't make this movement achieve results without your help. Start by watching the trailer: Share it, discuss it with your friends, and tell us what you think.

Then keep the conversation going, because a chorus of voices will change the system.


​Thank you for supporting the movement!

The Fuel Freedom Foundation Team

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The Fuel Choice for American Prosperity and Security Act: New Legislation to Encourage Fuel Competition

Saturday, July 19, 2014

Washington, DC, Jul 15, 2014 – U.S. Rep. Ileana Ros-Lehtinen (R-FL), along with her colleagues, U.S. Reps. Tom Cole (R-OK) and Matt Salmon (R-AZ), introduced the Fuel Choice for American Prosperity and Security Act (FCAPS), a bill that would provide automakers the option of reducing their CAFE obligation by four miles per gallon if half or more of the vehicles they manufacture in a model year are warranted to operate on any technology in addition to or instead of petroleum-based fuel.

Statement by Rep. Ros-Lehtinen:

Fuel competition in our transportation sector will improve U.S. energy and national security, increase our foreign policy flexibility, spur economic growth, and lower fuel prices. By providing more options at the pump, we can dampen the impact of oil price volatility and reduce the leverage of oil rich governments and rogue regimes that are unstable, repressive, or hostile to the United States and who use oil as a weapon to undermine U.S. foreign policy efforts. Fuel choice will also allow the American economy to capitalize on our plentiful domestic resources, create jobs, and encourage innovation, all while driving down the price of fuel.

“By providing automakers the option of rolling back costly fuel economy regulations, we are incentivizing a technologically neutral, free market competition for transportation fuels without government mandate and without picking winners and losers. I am proud to introduce the Fuel Choice for American Prosperity and Security Act with my colleagues Tom and Matt and look forward to working with the rest of the House to move this important bill forward.”

Statement by Rep. Cole:

"I am pleased to join my colleagues in introducing legislation that allows consumers to choose the most cost-effective fueling option at the pump. By encouraging automakers to manufacture cars that operate on a variety of fuels, this allows them to not only meet the necessary CAFE regulations but also be more competitive in the process. Certainly, this legislation helps consumers and automakers alike.”

Statement by Rep. Salmon:

“By incentivizing American auto companies to make better use of our abundant, domestic energy resources, we offer them the opportunity to be a part of the “all-the-above” solution to our national energy and security needs.”

The above is an edited version of the original announcement: Ros-Lehtinen Introduces Fuel Choice for American Prosperity and Security Act.

To thank the sponsors of the bill for their forward thinking, and find out what you can do to help, contact:
Keith Fernandez (202) 225-8200 (for Ros-Lehtinen)
Sarah Corley (202) 225-6165 (for Cole)

You can also write to your Representatives and urge them to co-sponsor the bill. Here's how.

Or visit your Representatives and make your case in person. Here's how.

Transport Topics says this about the new bill: "The most recent corporate average fuel economy (CAFE) standards require an automaker’s complete model lineup to achieve overall average fuel economy of 54.5 mpg by model year 2025. The program is designed to cut 6 billion metric tons of greenhouse-gas emissions over the lifetimes of the vehicles sold in model years 2012-2025.

"Within this mix, the legislation is meant to level the playing field for alternative technologies, according to bill sponsor Rep. Ileana Ros-Lehtinen...

The reductions in requirements contained in the bill would apply to automakers that warranty 50% or more of their vehicles to operate on natural gas, hydrogen, propane or biodiesel; to run on up to 85 percent ethanol; or that are propelled by a fuel cell or something other than an internal combustion engine.

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Purer, Cheaper Fuel Without Using Cropland or Drinkable Water or Drilling, and it's Made in America

Tuesday, July 1, 2014

In a recent Forbes article, Matthew de Paula writes:

Audi e-fuel plant in New Mexico
"Audi has been producing e-fuels at a research facility in Hobbs, New Mexico, through a partnership with Joule, a firm that specializes in developing synthetic fuels with solar energy. At the facility, genetically engineered photosynthetic microorganisms are kept in water (which could be brackish, salt or wastewater). They metabolize carbon dioxide after being exposed to sunlight and produce fuel as a byproduct.

"Audi says e-fuel is superior because of its purity. Unlike fossil fuels, which vary in composition depending on their place of origin, synthetic fuels contain no olefins or aromatic hydrocarbons. This optimizes combustion and results in fewer emissions.

"Joule says on its website that the method it uses for creating synthetic fuels is better than other methods that use agricultural or algal biomass, such as corn or fibers from plants, because no arable land, fresh water or crops are required.

"Once the technology is fully commercialized, Joule aims to produce 25,000 gallons of synthetic ethanol and 15,000 gallons of synthetic diesel per acre annually, for as little as $1.28 a gallon and $50 a barrel..."

Read the whole article here: Audi Says Synthetic 'E-Fuel' From Microorganisms Is Better Than Gas Or Diesel.

Read more about what Joule is doing: Ethanol For $1 a Gallon Using Unfarmable Land and Undrinkable Water.

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Will the Trouble in Iraq Raise Fuel Prices? That Depends on What WE Do

Saturday, June 28, 2014

In an article in the Wall Street Journal, Gal Luft and Robert McFarlane write about the impact of Iraq's oil production on the total global oil supply, which, of course, is a key factor in the global price of oil. And since the price of oil is the most important element of the vitality of the world's economy, Iraq's oil production is important to all of us. What will the recent trouble in Iraq do to the price of oil and the world's economy? They write:

Last month the International Energy Agency noted that "in the long term Iraq is set to become one of the main pillars of global oil output, and will also become the largest contributor to global oil export growth." Iraq was expected to produce nine million barrels a day by 2035, surpassing Saudi Arabia as the region's largest exporter. Now the ISIS takeover of large swaths of oil-rich Iraqi territory threatens this hope.

The potential implications for the world economy are serious. Other than the North American shale-oil boom, which has brought an extra three million barrels a day online over the past several years, there has been very little good news in the oil market. Saudi Arabia's production is stagnant at around 10 million barrels a day and its political future is in doubt. The country's gluttonous oil consumption — with only 28 million people, Saudi Arabia is the world's fifth-largest oil consumer — leaves less and less available for export. Meanwhile, Nigeria is facing problematic elections next year that could blow the top off an already shaky political system, Venezuela's oil industry is on life support, post-Gadhafi Libya is faltering, and the outputs of Russia and Iran are clouded by sanctions.

What is at stake is not only the loss of Iraq's current output but its ability to secure the investments necessary to deliver the additional six million barrels a day the market is counting on. Today over 80% of the global investment in upstream oil and gas goes to replace depleting fields, and the Middle East accounts for only 15% of the world's overall upstream investment. With Iraq sinking deeper into protracted civil war, investment will fall even more, creating fuel shortages down the road.

The authors suggest several steps the U.S. could take to minimize our economic vulnerability to oil's unpredictable supply. Their most important recommendation is to "significantly increase the number of vehicles that can run on fuels made from natural gas and coal..."

They don't necessarily mean cars that run directly on natural gas and coal. "With minor adaptations to vehicles," they rightly point out, "natural gas and coal can be put to use in the form of alcohol fuels such as methanol and ethanol. These can be easily blended with gasoline and hence reduce transportation's dependence on oil.

"For the foreseeable future, oil will continue to be the lifeblood of the global economy. Our hope is that the turmoil in Iraq subsides and its oil fields reach their full potential. Meanwhile, the least we can do to protect the world economy from future oil shocks is to keep the price of oil at bay by allowing drivers to switch on the fly from gasoline to non-petroleum fuels."

Read the whole article here: Turmoil in Iraq Spells Trouble For Oil Markets.

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Seven Ways Big Oil Rigs the System

Tuesday, April 22, 2014

The following list was created by Fuels America, and originally published here:

Rigging Congress: In the last five years, the oil industry has spent over $885 million on lobbyists and campaign contributions to buy influence on Capitol Hill. That’s more than $1 million for every Member of Congress.

Rigging the Market: Big oil has a near-total monopoly on the marketplace — so when oil prices go up, you get gouged. Because oil companies want to protect that monopoly at all cost, they’ve taken aim at the commonsense, bipartisan renewable fuel standard — demanding that the EPA effectively cut the amount of renewable fuel in gasoline and raise the oil content. That would increase their profits, cost consumers more at the pump, and increase our dependence on foreign oil.

Rigging the Tax Code: For over 100 years (!), oil companies have held onto sweetheart tax breaks — supercharging Big Oil’s profits with hard-earned wages from American families.

Rigging the Fuel Supply: Oil companies made $100 billion in profits last year, but have refused to pay for infrastructure to sell more renewable fuels in spite of a law requiring them to do so. Now the companies want the government to excuse them from selling more renewable fuels due to a lack of infrastructure … a bottleneck they deliberately created in order to protect their monopoly on the marketplace.

Rigging Studies: The oil companies like to quote a study that said ethanol damages engine valves. Who paid for the study? The oil companies. How did they rig the study? By pre-selecting cars with known valve defects. Come on, guys. Remember when tobacco industry studies found that smoking wasn’t harmful?

Rigging the Debate: Big Oil companies have spent millions on slick advertisements attacking clean, American-made renewable fuel. What don’t the ads say? That fuels like ethanol are higher octane — making them better for your engine — higher performance, cleaner burning, and cost less money than regular gasoline.

Rigging the Airwaves: Where is the “American” Petroleum Institute getting all this money to attack our homegrown renewable fuels? Hint – API isn’t quite as “American” as the name would suggest.

Get the facts. Don’t get oil rigged.

Since ethanol can be made for a dollar a gallon using undrinkable water and unfarmable land with already-existing technology, oil's monopoly on transportation fuel is an idea whose time has passed.

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Don't Send America's Natural Gas to Ukraine

Tuesday, March 18, 2014

Russia’s invasion of Ukraine has given a boost to those calling for the United States to expedite natural gas exports to help allies overseas. In this thinking, American gas exports — in the form of liquefied natural gas, or LNG — are not only a boon to the domestic economy but also a potent geopolitical tool to be wielded against the Kremlin.

Never mind that the United States won’t have its first LNG export terminal in operation until late 2015 at the very earliest; that all of its approved gas exports are already committed to long-term contracts; and that Ukraine does not even have a single terminal for receiving LNG.

Even without the newly concocted geopolitical rationale for exports, though, Washington seems favorably disposed to permitting much of America’s surplus gas to migrate overseas. Since the beginning of the shale gas revolution, which kicked off in 2005, the U.S. Department of Energy has approved six LNG export terminals with a combined export capacity of 8.5 billion cubic feet a day, and more projects are in the works.

But before we put more of our gas in the service of our foreign policy, be it saving Europe from Russia’s claws or Asia from its toxic air, we should ask ourselves one question: Why aren’t we using more gas in our cars and trucks?

Read the rest on Politico by Gal Luft: Don't Send America's Natural Gas to Ukraine.

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Who Needs High Oil Prices?

Saturday, February 8, 2014

Click on the image to see it larger.

This chart shows what oil prices are necessary to sustain different types of crude production. So, for instance, countries in the Middle East and North Africa can keep pumping out oil at a profit even when prices drop to $30 a barrel.

It's a different story in the United States, however. Production of "light tight oil," like that in North Dakota and Texas, typically requires higher prices (between $50 a barrel and $100 a barrel).

The flip side, however, is that many OPEC countries need high prices to sustain the social spending they've ramped up in recent years. By some estimates, Saudi Arabia needs oil prices to stay at about $82 a barrel to maintain its current budget. Iraq needs prices around $104 per barrel. Russia's "break-even" point might be even higher. So there are a lot of nations that would actually prefer to keep prices high.

The above is excerpted from an article in the Washington Post entitled, How the Oil Boom Could Change U.S. Foreign Policy.

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9 Myths About Fracking

Friday, February 7, 2014

The following list is adapted from Phelim McAleer's Ten Big Fat Lies About Fracking. McAleer is an Irish filmmaker based in America whose pro-fracking movie FrackNation is described by the New York Times as "meticulously researched and provocative."

Fracking has gotten a lot of bad press, of course. But like everything else, there is another side to the story that should be included in our thinking about it. As we've already seen (here), at least some of the bad press has been generated by an OPEC nation with a good reason to stop American fracking (their own self-interest). Anyway, read the list and follow the links and let us know what you think. Here is the fracking myths list:

1. Everyone hates fracking.

From news coverage, you would think that everyone in America hates fracking. Even the name sounds awful. Who could support such a terrible practice?

Well, it turns out that just about everyone who lives with it loves it.

Dimock, Pennsylvania is one place where all journalists reported that everyone hates fracking. Yes, there were 11 families in the village involved in a very lucrative lawsuit with an oil-and-gas company, and the journalists always interviewed them. But they completely ignored a petition signed by 1,500 people in the community who said their water was fine and had not been affected by fracking. What is 11 out of 1,500? Less than 1%. It’s the 99% who support fracking.

There is one other group that is opposed to fracking in Pennsylvania — the New York elite. This coalition of grumpy hipsters and celebrities have holiday homes in Pennsylvania, or they’re concerned that if a new industry brings wealth and progress to Pennsylvania then the "traditional" (read poor) way of life there will be destroyed.

So once or twice a year, the likes of Mark Ruffalo, Susan Sarandon and Yoko Ono get bussed in from the city to meet disgruntled locals, and then are chauffeured back to their gas-heated homes after another day of successfully blocking natural-gas development.

If you want proof positive that communities love fracking, look no further than the ballot box. Consider this U.S. Businessweek report on the 2012 election: "Anti-fracking candidates in the Southern Tier [New York] were beaten up and down the ballot after intense campaigns, some of which were framed as referendums on shale-gas development."

At least 20 anti-fracking candidates were rejected by New York voters (New York is supposed to be the heartland of anti-fracking sentiment). But hey, keep protesting, fracktivists — after all, democracy is for the little people, and you can walk all over them on your way to your next starry TV interview about the ‘evils’ of fracking.

2. Fracking is brand new and untested.

Pop quiz: how long has fracking been around? Here are your choices:

a) Since 2010
b) Since 1990
c) Since 1975
d) Since 1960

Sorry, you’re wrong. Trick question. The first fracked well was in 1947! And more than one million wells have been fracked in the U.S. since then (2.5 million worldwide). In terms of industrial processes, it doesn’t get much older or more thoroughly tested than fracking.

3. Fracking makes your water flammable.

No myth about fracking is more widely believed than this one. It was popularized by Josh Fox in his HBO-funded documentary, Gasland. In it he shows a man who can light his tap water on fire, supposedly because of fracking.

I asked Josh about reports that some people could light their water before fracking occurred. He didn’t like this question.

He eventually admitted that he knew people could light their tap water on fire decades before fracking ever started but chose not to include this fact in his documentary because "it wasn’t relevant."

There are three places in the U.S. called "Burning Springs," and there are historical records of people lighting their water since the 1600s.

4. Fracking contaminates drinking water.

If fracking doesn’t make your water flammable, it must at least contaminate it with dangerous chemicals, right?

Not according to Lisa Jackson, the former head of the U.S. Environmental Protection Agency (EPA) and no friend to big business. She testified before Congress that there have been zero proven cases of water contamination due to fracking.

That’s right — one million fracked wells later, there are no examples of contaminated water anywhere. Zero.

5. Fracking uses a lot of dangerous chemicals.

Standard fracking fluid is 98.5% water, 1% sand, and 0.5% chemical additives. Some of these additives are also used in making ice cream! Colorado’s Democratic governor, John Hickenlooper, drank fracking fluid to prove its safety to his local residents.

But these are still chemicals and we should be scared of them — that is the cry of the fracktivists. But water is a chemical. Coffee has a whole bunch of chemicals in it. Everything is a chemical. Don’t be duped by bad science (like the people these American comedians convinced to ban the scary sounding "dihydrogen monoxide").

And fracking is still developing. It is being made even safer. Read about some new developments here, here and here.

6. Fracking causes breast cancer.

In his short film, The Sky is Pink, Josh Fox claimed that a spike in breast cancer in Texas was a result of fracking. Turns out he was wrong. Again. (Seems like a theme for Josh.)

The Associated Press interviewed leading cancer researchers who all concluded: There was no spike.

Did Fox apologize for scaring women and families? No. He’s an environmental activist. The media don’t ask him difficult questions or demand that he clears the record. Less than a year later, HBO released Gasland Part 2, Fox’s sequel about the dangers of fracking. There was no mention of breast cancer in it, and he has never withdrawn his original claim. This is the anti-fracking playbook. Scare people, get media attention. And when the science comes in debunking the scare story, move on to the next scare story.

7. Fracking uses a lot of water.

Even fracking fans have a hard time swallowing the water stats for fracked wells: The EPA estimates that fracking used between 70 and 140 billion gallons of water in 2011. That sounds like a lot of H2O. Unless you have a lawn.

Americans use 20 times more water on their lawns than they do on fracking.

Besides that, one of the developments in fracking is waterless fracking, also called "gas fracking." It actually gets a better yield than using water. Read more about that here.

8. Fracking should be banned because it causes earthquakes.


One of the scarier arguments against fracking is that it causes earthquakes, especially if you live in a tectonically charged U.S. state, like I do. Yet all activity under the ground affects the earth, and if you don’t like this fact then you should also campaign to ban supposedly ecofriendly hydropower, which actually has caused earthquakes.

But the biggest cause of man-made earthquakes is a very popular power source: geothermal. It seems that some earthquakes are more equal than others.

9. Fracking destroys the landscape and disturbs the serene vistas of rural America.

The process of fracking (which is separate from drilling) is noisy and looks messy — for a few days. Then the land is reclaimed and the industry moves on to the next area. All the scary photos of huge machinery and big trucks are taken during this initial process. Which is a bit like photographing the building site of a half-built house and saying all house-building should be banned. As a filmmaker, my biggest problem was trying to film working gas wells in a way that would look interesting. They are tiny and often hidden behind hills or behind bushes and trees.

Oh, and fracking does create traffic. That claim is true. Locals call this "jobs." They generally like it. They may complain sometimes but they know that the only thing worse than traffic in rural America is no traffic.

The list above was adapted from an article by Phelim McAleer. Read the original here: Ten Big Fat Lies About Fracking. Read more about his film here: FrackNation.

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How Oil Industry Doublespeak has Influenced the Media

Wednesday, February 5, 2014

What's with the strange language writers are using to describe what OPEC is doing? In most articles, they describe OPEC's influence on the oil market as "stabilizing prices." I feel as if I've been dropped into the Stalinist Soviet Union where the title of everything meant the opposite of what it really was.

In an article by Sami Alnuaim, for example, he writes, "The observer of what is happening in some OPEC countries finds some undesired voices that question the successful, wise and balanced OPEC strategy which — in my opinion — was the main reason for the unprecedented oil prices stability in the global oil markets in the last few years."

Okay, he is a Saudi obviously defending Saudi Arabia's commitment to keep world oil prices high (which allows them to make maximum profit on their oil and not use it up too fast). But what about the rest of the writers on the oil market? What could they be thinking? In an article in Gulf Times, the author describes Saudi Arabia's heroic efforts: They are "willing" to increase production to "steady the market." How nice of them. World oil prices are high because of Saudi Arabia's leadership within OPEC (an illegal price-fixing cartel that has gouged the world for 40 years). And because some oil production in other OPEC nations temporarily dropped, Saudi Arabia "came to the rescue" to sell more of its oil.

In other words, the Saudis could have been producing more oil all along, but they haven't because they want the world's oil price to remain high. So the entire world has been paying extra for a product that the Saudis are making deliberately scarce, and now the Saudis are heroes for selling some extra oil at top dollar? This is doublespeak at its finest.

In an article in Trend, OPEC Secretary General Abdalla El-Badri is quoted as saying, "The Organization is making sure its consumer's needs are met. At the same time, spare capacity remains at comfortable levels. And we see these comfortable levels remaining for the foreseeable future." Comfortable levels of spare capacity? The Energy Information Administration says that in September and October 2013, "OPEC pumped an average of about 2.3 million barrels a day below its capabilities..." And that doesn't even count the oil fields they have deliberately left undeveloped.

El-Badri also was quoted as saying, "It is important that prices do not witness extremes — neither too high nor too low."

Yes, God forbid we have low oil prices. The whole world might experience an economic boom!

Okay, so these people might be excused because they're in favor of high oil prices. They benefit from them, of course, and need some way to justify it. But what about the language from this article in Business Week: "OPEC may have to reduce crude output next year (2014) amid increasing supply from producers outside the group..."

What an odd thing to say. Or what? The price of oil will come down! I want to grab the author by the lapel and yell, "Whose side are you on?!"

What about this one from Bloomberg? "Analysts at banks including BNP Paribas SA, Citigroup Inc. and Deutsche Bank AG predict that some members of OPEC, notably Saudi Arabia, will probably need to reduce output in 2014 to prevent a global glut."

A global glut? What a strange way to put that. Oh my God! Cheap fuel prices! Further in the same Bloomberg article is this little gem from Michael Lewis, head of commodities research at Deutsche Bank in London, saying: “Downside risks to the oil price may require OPEC to cut production to defend oil prices.”

Defend oil prices? I might expect that kind of language from someone rooting for OPEC. But from Deutsche Bank of London?

This perspective is common in writers all over the world. Here's one from South Africa's Business Day Live: "In the months ahead, new oil supply is expected to outstrip new demand, largely following improvements in output in Iraq and Libya. By the end of the first quarter of 2014, Saudi Arabia will likely have to reduce production to keep prices stable."

In other words, if Saudi Arabia doesn't reduce production, the world price of oil will drop. So "stable" is doublespeak for "high." Wouldn't that sound completely different without the doublespeak: "Saudi Arabia will have to reduce their oil production to make sure oil remains expensive for the whole world."

Everybody in the world — rich people and poor — have to pay double or more for their fuel because Saudi Arabia has bills to pay. They've got to pay off all their non-working citizens (which is most of them) so the people don't revolt against the dictatorship, and the Saudis have mosques and madrassas to build all over the world, spreading Wahhabi fundamentalism (Saudi oil money funds 90% of all Islamic institutions around the world), and they've got American lobbyists to pay (they have 100 full-time lobbyists in America promoting their agenda to our representatives). So yes, I guess Saudi Arabia will have to reduce its production to keep prices "stable."

I think if the language in the media was more straightforward, the level of outrage at this ridiculous situation we're in would reach a threshold and everything would change overnight. People would immediately grasp how pathetic it is that the greatest nation on earth hasn't solved the problem of oil's monopoly yet. It is clear to anyone with better than a tenth grade education that the answer to a monopoly is, of course, competition. And yet the icon of free markets — the United States — hasn't yet allowed a free market with the most important commodity on earth?

The media probably won't change. So it's up to us. Please take up this cause. Explain to your friends and family what is at stake here. You will know you've succeeded when they become outraged. Light them on fire and encourage them to light others on fire. We need to hit that threshold. Sooner is better than later.

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

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What Will it Take to Break Oil's Monopoly?

Thursday, January 16, 2014

Many people want to introduce competition into the fuel market and break the oil monopoly. But we are completely outgunned. The oil industry is vastly outspending the fuel freedom fighters. The oil industry has so much more money in their war chest that this is like an elephant being challenged to a duel by an ant.

The only way we'll win is by talking to our fellow citizens and increasing our numbers. The more people involved in this cause, the more clout we'll have in the marketplace and with Congress. Swarming ants can, in fact, defeat entire herds of elephants.

That means the most important thing that needs to be done is recruiting. Increasing our numbers. In other words, those of us who already understand what's at stake need to take it upon ourselves to talk to people and get them motivated to talk to others about it.

We are not outnumbered. Far more people would benefit from an open fuel market than are now profiting from oil's monopoly. It wouldn't take a majority of us to make this happen, but it will take more than we have now. So let's get on it. What can you do today that will recruit more people to this cause?

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Alnuaim Threatens to Burst America's Shale Oil Bubble

Sunday, January 12, 2014

In an article in the Saudi Gazette, Dr. Sami Alnuaim discusses OPEC. Alnuaim is a Saudi expert on the Saudi oil business. On its surface, it is merely an article about OPEC's oil strategy. Barely veiled by its superficial appearance is a threat. On behalf of Saudi Arabia, Alnuaim is threatening the United States with the collapse of its oil boom. He says the Saudis could drop the world price of oil to $70 a barrel. Many experts in America have pointed out that a significant percentage of American shale oil production begins to be unsustainable below $90 a barrel.

In other words, whenever they think the time is right, Saudi Arabia could drop the world price of oil and burst the shale oil bubble in America, just as they did to the ethanol industry in the 1980s.

Are they waiting for a better time to bring down the shale oil industry? Are they waiting until much more money is invested before they pull the rug out from under it? Are they waiting until Americans feel overconfident and begin gloating over our new "energy independence?"

Saudi Arabia has the cheapest-to-produce oil in the world. That's the leverage they have over the other members of OPEC and why Saudi Arabia can dictate to them what the world oil price will be. Member nations of OPEC must agree to do what Saudi Arabia says or the Saudis can retaliate by lowering the price so much (by increasing their oil production) that the rest of the OPEC nations go into debt or even collapse.

They have the same power over America's oil industry, and for the same reason. But their power over our energy security and economic vitality only exists because we haven't yet bothered to create true fuel competition in America, even though it would be easy and inexpensive to do. Part of the reason is that some of the immense profit from the oil industry has been used for over a hundred years to prevent competition.

This is ridiculous. If we were already using methanol made from natural gas, Saudi Arabia couldn't touch us. Their ability to influence our economy or our national security would drop to almost nothing. They would have nothing to threaten us with. And as a side-effect of our new fuel competition, our economy would be thriving.

We must — urgently — diversify our fuel portfolio. We must introduce competition.

If our cars were able to burn methanol, the price per barrel of oil would drop below $70 a barrel, completely changing the balance of power in transportation fuel. But it would also hurt the shale oil boom in America because that price is too low for much of that oil to be worth recovering. However, there would be a simultaneous profusion and expansion of other American fuel-producing businesses, and American drivers would save big money at the pump, which means we would have more money to spend on other things, which leads to job creation.

Saudi Arabia would no longer have the ability to threaten the United States. In fact, their repressive regime may well collapse without their massive oil revenue to pay off their subjects. And when fuel prices drop in America, the economy soars. It would greatly increase our national security, it would reduce the amount of money the oil industry has to influence our government, it would help solve our garbage and landfill problem, help people in developing nations rise out of poverty, help prevent mental illness, put fewer military personnel in harm's way, and reduce the amount of pollution and greenhouse gases that are sent into the atmosphere, into the ocean, and into the ground.

It would be such a technically simple thing to do, but the consequences would be world changing. Get involved and let's make this happen. Use whatever resources you can muster to support this goal. Support and promote Fuel Freedom's plan and support and promote the Open Fuel Standard. Overkill would not be out of line for a goal this significant.

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 Important Are Fuel Prices?

Monday, January 6, 2014

Material used in manufacturing is often created using fuel: Mining, logging, farming, etc. The material is then SHIPPED (using transportation fuel) to a manufacturing plant. The finished product is then SHIPPED (using transportation fuel) to a distribution center, where it is then SHIPPED (using transportation fuel) to a store, where you DRIVE (using transportation fuel) to the store to get it, or you order it online, in which case it is SHIPPED (using transportation fuel) to you.

Someone has to pay for all this fuel. Guess who?

Without transportation fuel, the world as we know it stops functioning. With expensive fuel, more of the economy's resources have to be spent on shipping rather than the material or products themselves.

With inexpensive fuel, more economic activity can happen, more goods are created, more goods are delivered, and it is all less expensive. The result: Everyone has a higher standard of living all over the world.

What will make fuel less expensive? Competition.

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