A few weeks ago, I wrote about the tremendous surge in domestic energy production. It’s important to note that this surge has been primarily financed by the $100-plus per barrel international market price for crude oil, making previously prohibitively expensive extraction techniques suddenly profitable. Given the worldwide, ever-growing demand for oil, these prices are unlikely to come down and U.S. oil production will continue to grow.
The bad news for consumers is that gasoline prices, which are highly correlated with crude oil prices, are also unlikely to come down. For relief at the pump, we are going to have to look to alternative fuel sources that can compete with gasoline. Natural gas, which is surging out of oil wells in unprecedented quantities, is the best available transportation fuel alternative. It is abundant, inexpensive and burns cleaner than gasoline, and with new technologies that can convert natural gas into liquid ethanol or methanol (without costly government subsidies), it just might become practical too.
The Fuel Freedom Foundation is a nonprofit, nonpartisan organization dedicated to “opening the vehicle fuel market to competition and allowing cars and trucks to run on cheaper, cleaner, healthier, American-made fuels.” Fuel Freedom’s plan is to clear all of the regulatory hurdles so a new competitive market might arise for these alternative fuels, arguing that this will lead to “accelerated economic growth, greater energy security, reduced air pollution, lower greenhouse gas emissions and improved health.” I am excited by Fuel Freedom’s project. While ambitious and visionary, it is also very doable.
In its gaseous form, natural gas is not a viable competitor to gasoline. It is notoriously difficult to transport, requiring airtight tanks and dedicated pipelines. To power vehicles, it must be compressed, requiring specialized fuel systems, which can cost thousands of dollars to install. It also requires a parallel distribution network with complicated pumps and storage. While compressed natural gas can and does fuel fleets of buses and trucks in cities around the country, there are many barriers to its widespread use.
New enzymes and chemical technologies, however, can now efficiently convert natural gas into cheap, pure ethanol and methanol. A byproduct of the federal government’s expensive forays into corn-based ethanol is that a large segment of vehicles in the U.S. are designed to run on high-ethanol blend fuels (called “E85” or 85 percent ethanol). Most cars on American roads can be converted to run on ethanol, methanol and gasoline for less than $300.
For consumers, the experience at the pump would be exactly as it is today, except cheaper. High-ethanol blend fuels might require a dedicated pump, similar to diesel, but would not require specialized equipment such as compressed storage tanks, making it much easier for gas station owners to offer the product. Perhaps most importantly, consumers could fill up their cars with regular gasoline when high-ethanol alternatives were unavailable.
I have long been an advocate of an “all of the above” energy strategy, believing that a diversified energy portfolio will lead to greater prosperity and security for the U.S. But just as we need diversified energy production, we also need diversified energy consumption. Reducing our dependence on gasoline as a transportation fuel is critical to our nation’s long-term energy diversification strategy.
I agree with and fully support Fuel Freedom’s efforts to foster a new market for natural-gas-based high-ethanol-blend fuel. Such a development would be a clear win for consumers, our economy, our environment and our national security.
Dan Liljenquist is a former state senator and U.S. Senate candidate.