In Washington, a coalition called FuelChoiceNow has opened for business.  With gasoline and diesel priced near $4.00US and a record year in progress for the average fuel costs, fuel costs are giving the world’s largest transport fuel market a serious case of personal and business budget realignment and a national economic recession.

FuelChoiceNow believes the circumstances that advanced fuel companies are developing new, affordable and commercial-ready alternatives to oil, but are inhibited by unnecessary vehicle and refueling constraints that choke demand and inhibit change in the marketplace.

The case for the position is founded in reality: ethanol and natural gas are evidence of a marketplace that does not reward price-competitiveness and innovation. Both are domestically-produced fuels that are cheaper than gasoline, but have limited market access.

Brooke Coleman, Executive Director of the Advanced Ethanol Coalition and a columnist of the BioFuelsDigest, is coordinating the organization’s campaign.  Coleman notes that cars and trucks could be made to run on any blend of gasoline, ethanol or natural gas-derived methanol for less than $100 per vehicle.  He’s correct if not exactly accurate.  For some the $100 quote is low and others way under.

Coleman says, “Americans are paying $4 per gallon for gasoline while we export cheaper fuels to other countries.”  This is not refutable – US firms are planning to export natural gas in liquid form, sell ethanol oversees in a growing market, and sell coal by the shipload.  All of these products could be used in the U.S.

FuelChoiceNow has a bit of a problem with the positioning.  Some folks insist that biofuels are best, as they offer no new CO2 to the atmosphere.  But the energy security crowd is quite pleased that alternatives and fossil sources are considered fairly.

That may be from a reality of economics.  Alternatives are only small fractions of the whole scale of fuel use.  More likely is that opportunities for jobs and an economic turnaround are going to need both sources at full speed.

FuelChoiceNow sees the effort as encompassing a wide range of fuels, including biofuels, natural gas, electricity and others, while supporting the immediate deployment of technologies that are available and price-competitive now. The position of its longer-range view has something to offer those whose primary concerns revolve around carbon, and the replacement of an oil-based fleet with electric vehicles.  That could be inevitable – or not – depending on how the storage issues work out.  We may be recycling carbon for centuries.

The ‘who’ of the early backers is heavily based around biofuels producers and an influential group of Silicon Valley venture capitalists.  Observers have noted that after a period of three years in which a combination of oil, food and environmental interests have maintained a counteroffensive and substantially eroded much of the fan base of alternative fuels in Washington.  FuelChoice Now seeks to draw together a group comprising all the alternative fuel technologies and thereby renew the offensive against the oil platform.

Your humble writer doubts that big bad oil is so nefarious.  They’re just self-interested and will argue with considerable credentials that the facts command that the existing industry be handled with care.

FuelChoiceNow offers four arguments for gaining support.  First is that no single technology, in the near term, has the feedstocks or manufacturing base to replace all 180 billion gallons of fossil fuels consumed for road transport in the United States, or even the substantial majority of those gallons that are imported. A portfolio of technologies, and vehicle efficiencies, will be needed to end the addiction of imported oil.  This rather counterpoints the idea of an offensive mentioned above – yet the perspective is that transition is key to an earlier point – economic security may be more important to oil company stockholders than market suzerainty and share.

The second argument proposes that new technologies – through market access and market choice – will reduce costs for the American driver, create jobs for the domestic fuel and vehicle makers, reduce the trade deficit, and keep dollars inside the US that can be used to further economic growth through domestic investment.  This point has been pounded for months by the American Petroleum Institute to deaf democrats – so wish ‘em luck.

Third is the dubious “ridiculously low price of $100 per vehicle” for a flex-fuel conversion to unlock the fuel markets.  The pitch is “That’s the cost of two fill-ups, over the lifetime of the vehicle.” Right or even wrong by 100% – its cheap and worth doing by most people.

The fourth is a matter of reality – China, India and Brazil are already going this way.  These countries are the rising economic powers of the 21st century and unless the U.S. reasserts its economic leadership in a massive way risks being left far behind.  An oil-only U.S. economy corralled with high energy prices and the costs of defending access to imported oil, has no hope of competing in world trade against countries that have developed superior platforms for domestic energy production.

The FuelChoiceNow effort is missing a major player in energy sources.  Coal.

Technologies that convert natural gas to liquid fuel are similar to the technology to convert coal into liquid fuel as well.  Another is compressed natural gas, already in use by fleets.

Coleman’s relationship with BioFuelsDigest has triggered a discussion of technology from Celanese Corporation (at the end of the article)
.  Celanese has worked on light carbon molecules for years with acetic acid – the two-carbon molecule component of vinegar that is one step away from ethanol.  Celanese can make methanol from natural gas and with syngas can make abundant ethanol competitive to $60 crude.

Celanese is headed to China because they can do business there.  In the U.S. the process would be some major “policy discussion” taking years whereas China just needs to work out the commercial details.

There’s a recession based on business regulation example for you.

Right now China is already the second largest market for ethanol.  You might want to take a few minutes out to look at the BioFuelsDigest article for a much deeper explanation.

We best keep an eye on FuelChoiceNow.  Lets hope their press releases make it this way. Here’s to wishing them some success.


2 Comments so far

  1. Matt Musson on September 23, 2011 8:07 AM

    Economically – jobs are scarce, gasoline is high, SSN is in trouble (because the money was replaced with gvt IOU’s).

    So, it’s time to open up leases throughout the country for drilling (including ANWR) and send the lease payments and a $5 per barrel pass through to a SSN lock box.

    Result: Hundreds of thousands of new good jobs. Plentiful gas and falling prices. Vastly improved Balance of Payments. SSN saved.

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