Wednesday, March 12, 2008

Introducing the OPEC Avenger


By DAVID REINHARD

What if a car could run on gasoline or alcohol or any combination thereof?

Think about the possibilities. Drivers wouldn't be lashed to the skyrocketing price of oil on world markets. The Organization of Petroleum Exporting Countries (OPEC) wouldn't have consumers over a barrel. Cars able to burn petroleum or alcohol-based fuels or any brew of the two would drive down oil prices. Oil would have a competitor in the transpiration sector—a fuel that's better for the environment. And less dependence on foreign oil would mean less dependence on unsavory regimes living off petrodollars—such as Iran and Venezuela. U.S. drivers would no longer indirectly fund terrorists who want to kill us. U.S. farmers could start to grow our own auto fuel. So could farmers in what are now some of the globe's poorest nations.

Yes, if only cars could run on gasoline or alcohol or any mix of the two. . . .

They can. As author-engineer Robert Zubrin details in his latest book, "Energy Victory: Winning the War on Terror by Breaking Free of Oil," this kind of flexible-fuel vehicle is not only a technological possibility. It's a technological reality. Indeed, cars that run on gasoline and/or alcohol fuels have been a technological reality for years. In 2007, 90 percent of new-car sales in Brazil were flex-fueled. Today, 3 percent of new U.S. car sales are.

So why aren't automakers pushing these vehicles? Where's the new OPEC Avenger? Here's the problem: Automakers won't market flex-fuel cars until there are stations where customers can fill up on methanol or ethanol. And station owners won't put in the alcohol-fuel pumps until they have customers with flex-fuel vehicles. It's the age-old question: Which comes first, the flex-fuel car or the flex-fuel station?

Zubrin thinks he has come up with the answer: Mandate that all new cars sold in the United States be gasoline-ethanol-methanol flex-fuel vehicles. Making a vehicle flex-fuel ready costs about $100 more, but the impact on the U.S. and world markets would be staggering. Each year, Americans buy 17 million new vehicles in a U.S. fleet of some 117 million. In three years a third of our fleet would be able to run on gasoline, ethanol, methanol or any combination. This would jump-start the investment in flex-fuel stations and alcohol-fuel production.

Most of the focus on ethanol centers on corn, but it's not the only source. Sugarcane grown here and abroad can be turned into ethanol. It's what all those flex-fuel vehicles in Brazil burn. But other starchy crops (yams and sweet potatoes) work as well. The other alcohol, methanol, can be produced from any kind of biomass (wild grasses, crop residues, fallen leaves and weeds) as well as from municipal trash, natural gas and coal.

Zubrin's flex-fuel mandate would bust open the oil-based transportation fuel market here and around the globe. OPEC oil would have to compete with other, cleaner fuels, since automakers everywhere would retool to sell into the king-sized U.S. market.

Zubrin doesn't believe the United States can upset the OPEC cartel by drilling more, or using less, oil. Neither fix is equal to the problem. He notes, for example, that between 1975 and 1990, average U.S. auto fuel economy went from 13 to 20 miles per gallon—while U.S. gasoline consumption went from 89 billion gallons in 1975 to 103 billion in 1990.

But won't higher gas prices cause U.S. drivers to cut back and won't that lower prices? Unlikely. Since 2001, oil prices have shot up fivefold—while sales of low gas-mileage vehicles pepped along. "If we actually wanted to enforce global petroleum conservation through price increases, we would have to raise costs several hundred dollars per barrel," Zubrin writes. "That would give the Saudis control of the world."

Zubrin would switch the world to an entirely different fuel--no small feat--but his plan is elegant simplicity itself: Mandate freedom of fuel choice.

A contradiction in terms? No. While libertarian conservatives might initially recoil at the idea of government mandates—aren't they often the problem?—Zubrin said Thursday that Friedrich von Hayek, Milton Friedman and Adam Smith all knew government action was sometimes necessary to break up monopolies and give consumers a choice. His proposal is a mandate in the cause of the free market.

His proposal also beats the mandates that will inevitably come with $100-a-barrel oil and $4 a gallon gasoline. Hillary Clinton's fuel mandate, for example, picks the fuel (ethanol) and spends government funds on the fueling infrastructure. All this, and her plan would still only be effective in the United States.

"The time has come for action," Zubrin writes. "We must take ourselves—and the rest of the world—off the petroleum standard. If we adopt a policy of deliberately growing the alcohol economy, we can make OPEC's oil unnecessary. We will then be in a position to dictate terms to the terror bankers."

Maybe this is think-tank stuff. Maybe there are insurmountable problems hidden in the plan. But Robert Zubrin's plan deserves intense and fair scrutiny in Congress and maybe a champion in this year's presidential race. But if the proposal proves out, perhaps he can turn next to the chicken-and-egg question.




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