Factual · Powerful · Original · Iconoclastic
It’s coming soon to a gas station near you. It may cost you more than the price of a movie ticket each week. And you may get less out of it than you got out of that foreign film you went to where you thought there would be subtitles. Introducing alternative fuels, one part of the Clean Air Act which Congress came close to passing this year and which will be back next year with a vengeance.
While the Bush Administration has estimated the cost of the Act at "only" $21.5 billion a year, according to the Business Roundtable, an association of chief executives from U.S-based Fortune 500 companies, the annual cost could range from a "best estimate" of $54 billion to as much as $104 billion. And while the White House described the Bush alternative fuel proposal as "perhaps the most innovative and far-reaching component" of the act, the congressional Office of Technology Assessment has calculated that the alternative fuels provision will be, per ton of pollutants removed, the most expensive part of the act.
You’ve probably heard something about alternative or "clean" fuels, most of it positive. The Clean Air Act aside, the crisis in the Persian Gulf has focused even greater attention on them. What you may not have heard about are the added costs, concerns over increasing ozone pollution (this is surface ozone and has nothing to do with the alleged depletion of the upper-atmospheric ozone layer), concerns over safety, and the politics behind these alleged wunderfuels. Alas, like most things in life, these fuels just aren’t what they’re cracked up to be. If we don’t watch out, we could soon be paying more for air that is dirtier than it is now.
Most automobile air pollution is caused by gasoline that is incompletely burned in a car’s cylinders, although some may be emitted from the gas tank itself or when cars are fueled at the pump. Nitrogen oxide, carbon monoxide, and various trace substances (aldehydes, olefins, hydrocarbons) spew out of tailpipes. Collectively, they are called "volatile organic compounds" (VOCS). Some, like carbon monoxide, cause pollution directly, while others, such as nitrogen oxide, hydrocarbons, and aldehydes, when cooked by sunlight, form ozone. These non-carbon monoxide pollutants come together and form smog.
Alternative fuels are supposed to reduce air pollution by reducing some or all of these emissions. That is the theory. Here are the dirty secrets of these allegedly clean fuels.
All of the alternative fuels will be more expensive than gasoline in some ways; the only question is how much more.
Methanol, or wood alcohol, is normally manufactured from either natural gas or coal. Many consider it the alternative fuel of choice. C. Boyden Gray, special counsel to President Bush and an avid supporter of alternative fuels, drives a methanol-powered car. Methanol works well in internal combustion engines. The fact that it has a higher octane rating than unleaded gasoline helps prevent knocking, or "pinging," and translates into more power when you push down on the accelerator. It has been used in the race cars at the Indy 500 for years.
But methanol fuel has half the energy value of gasoline; the same volume will propel a car only half as far. Methanol would require either doubling the size of the gas tank — a severe logistical problem — or cutting cruise range in half. If mass-produced for automobiles, methanol would cost anywhere from 50 to 90 cents a gallon; before the outbreak of the Iraq crisis, gasoline was wholesaling at about 65 cents a gallon.
Taking into account the fewer miles per gallon, drivers’ fuel bills, presently averaging $543 a year, would increase dramatically. A recent national poll showed that those questioned, while willing to pay for testing and repairs of emission systems every year and to pay for more expensive automobile emission systems, showed no such willingness to pay 20 cents extra per gallon for cleaner fuels.
Obviously, converting existing cars to methanol use would involve considerable expenses. But even off the assembly line, such cars would cost about $300 more than their gasoline equivalents. Of course, given that an air bag can add $1,000 to the cost of a car, this could be considered a good investment — if in fact there were a real reduction in overall emissions. But that is not necessarily the case.
Ethanol is distilled from corn, sugar cane, or other grains, and is mixed with nine parts gasoline to create gasohol. Adding ethanol to gasoline adds oxygen to the fuel as well, hence it is called an "oxyfuel." Introduced over a century ago, ethanol gained attention during the oil "crisis" of the 1970s, when Congress sought to reduce oil imports and prop up sagging corn prices. Ethanol is used primarily in the Midwest, and accounts for a bit less than one percent of the 110 billion gallons of gasoline sold annually in the United States.
A fundamental drawback of ethanol is cost: almost $1.40 per gallon to produce only 70 percent of the energy of normal gasoline. To make ethanol competitive, the federal and state governments have given tax exemptions of 60 cents to 80 cents per gallon to gasohol producers, over $4.6 billion since 1980 — most of which would otherwise have gone to the Federal Highway Trust Fund to rebuild and maintain roads.
Ethanol also takes advantage of corn subsidies, over $1.2 billion since 1980, with about $1 billion of that since 1985. Moreover, the tax subsidies, by driving up the demand for and the price of corn, raise food prices. Yet the increase in the corn price has been small enough for the Department of Agriculture to conclude in a study that ethanol is a wasteful farm program. The federal General Accounting Office did calculate that ethanol saved more by reducing farm subsidies than it costs in highway subsidies, but this assumes that farm subsidies will remain at their current high levels. In the event, it is hardly reassuring to learn that one needless subsidy can slightly reduce another.
The Brazilian ethanol lesson is one to be heeded. A decade ago that nation, with a $250 million loan from the World Bank, began to convert its automobiles to run on pure ethanol. The use of cropland to grow sugar cane for distillation, along with heavy government subsidies to make ethanol competitive with gasoline, has helped make Brazil the Third World’s largest debtor and contributed to its 1,000 percent inflation rate. Last year, a World Bank study urged an end to the alcohol program, calling it inefficient and costly compared to world oil prices.
Nonetheless, Brazilian manufacturers continue to turn out ethanol-powered vehicles, forcing the country to make huge purchases of over 100 million gallons of the fuel from U.S. companies. So much for a program designed to reduce Brazil’s dependence on imported fuel.
Closer to home, Colorado’s three-year-old oxyfuel program has been heralded as a great success — by those who run it. However, experts like Larry Anderson, a professor of chemistry at the University of Colorado at Denver, question whether the program has brought any real improvement in Denver’s air quality. His worries were recently confirmed by an independent analysis of Colorado’s clean air program conducted by the Milliken Research Group, Inc., sponsored by gasoline refiners and marketers.
The study noted that carbon monoxide levels in Denver’s air have declined an average of 29.1 percent each year since 1982, and are expected to continue to decline. Denver could comply with federal ambient carbon monoxide standards as early as 1991, with little if any deviation from this trend attributable to the oxyfuels program. According to the University of Denver’s director of atmospheric sciences Clay Smith, who worked on the study, oxyfuels have probably done nothing to help bring Denver into compliance. "At best, oxyfuels will put us into compliance one year earlier." Says Smith, "Oxyfuels are of marginal benefit in improving air quality. They’re too expensive."
The experiences of other states, whose officials enacted oxyfuels programs in response to the lofty claims streaming out of Colorado, may prove far worse. Gary Woodard, a researcher at the University of Arizona in Tucson, recently completed a study for that state’s legislature of oxyfuels programs in Arizona and other states. "The costs were a lot higher than most people expected," says Woodard. He found that the highest figure the Colorado Department of Health had been using for its program, about $8 million to $9 million "is probably a low-end figure, and the actual range is about nine to fifteen million."
Woodard found that the Colorado program made assumptions that just didn’t jibe with reality, such as one indicating a mileage improvement in older vehicles; Woodard found that converted older vehicles had had a mileage reduction, though not as dramatic as newer vehicles. He found, too, that Colorado’s program represented the best-case scenario, with a more competitive fuel market, a shorter program (four months per year versus six in Phoenix and other cities), and higher elevation.
Woodard found that per pound of carbon monoxide removed from emissions, the oxyfuels program in Phoenix cost four times that of Colorado. Nonetheless, the figures put forth by the Colorado Department of Health are used by Congress to estimate the cost of mandating oxyfuels for much of the country. Woodard also found that the oxyfuels program in Arizona was considerably less cost-effective than the emissions inspection and maintenance program already in place, and that it appeared to hamper that program by allowing some cars to pass inspection that wouldn’t have, leaving them to pollute excessively during the warm months when oxyfuels are not used.
Mandating a greater use of ethanol would increase the already massive subsidies ethanol producers and corn growers receive, with resulting dislocations elsewhere. Further, ethanol has been shown to corrode and to cause build-up on engine and fuel system parts, sometimes prompting repairs of up to $800 in middle-priced cars. The owner’s manuals for 1987 BMWs, Chryslers, Fords, General Motors cars, Hondas, and Volkswagens all caution that ethanol can cause problems.
ETBE, a new combination of ethanol and t-butanol (a petroleum extract), uses less ethanol than gasohol and is easier on engine parts, but like ethanol it owes its existence to heavy subsidies.
MTBE, a combination of methanol and t-butanol, is also an oxyfuel when added in a large quantity to gasoline (eleven parts per hundred under Colorado’s program). Like ethanol, it produces a leaner burn and is an octane booster, but is more expensive than gasoline, causes corrosion and fouling — albeit less than ethanol — and lowers mileage. About one-third of the MTBE sold in the U.S. is produced by one company, ARCO.
Natural gas is mostly methane. Like oil, it is tapped primarily from wells, but it can also be extracted from coal mines or made from garbage. For use as a motor fuel, however, natural gas must be compressed or liquified. Liquified natural gas needs to be kept at temperatures far below the freezing point and is not yet practical for vehicles.
Compressed natural gas (CNG) is practical and is used in fleet vehicles (taxis, company cars, and the like) around the world. It is a far more efficient means of using natural gas than converting it to methanol, in that methanol conversion results in the loss of 43 percent of the original energy, while CNG allows 84 percent of the gas’s original energy to be used.
Unlike other alternative fuels, CNG can not only compete with gasoline costs but is in fact considerably cheaper per mile It has an extremely high octane level, and allows vehicles to start and run much as they do on gasoline. They take much longer to refuel unless the gas is compressed before it reaches the dispensing unit. Unfortunately, compressing stations cost about ten times as much as ordinary pumps.
CNG cars need not only different engines and fuel systems, but also fuel tanks of very heavy stainless steel construction or somewhat lighter aluminum composite cylinders, both of which can significantly limit mileage. And CNG has even less energy value than methanol; compressed to 2,400 pounds per square inch, it still only has about one-fifth the energy of gasoline per unit of weight. Because of the weight of the tanks, the acceleration rates of CNG vehicles are 20 to 65 percent lower than those of typical gasoline vehicles. Finally, a CNG vehicle would cost about $1,000 more than its gasoline equivalent.
New Zealand, which produces all of its own natural gas, put much stock in CNG. But when the government ended subsidies for vehicle conversions and oil prices fell, the number of new conversions plummeted.
Propane, or liquefied petroleum gas, is a paraffin: although a petroleum product (it can also be produced from natural gas), it contains none of the olefins or aromatics that produce smog. Propane mixes very well with air, and, like compressed gas, is already vaporous when mixing in the injection ports of carburetors, reducing the pollutants ordinarily released when an engine turns over. It also has the major disadvantage of needing heavy tanks for fuel storage.
Propane’s energy value is somewhat below gasoline’s — about 85 percent — but in cost per mile this is more than made up for by the lower price of the fuel. Propane cars off an assembly line will cost more than gasoline cars, probably some where between methanol cars and CNG cars. Propane is already used to power indoor forklifts and some other fleet vehicles.
Electric vehicles (EVs), which run on batteries, were said in the mid-1970s to be the car of the future. In 1990 they remain the car of the future, at least for private (non-fleet) owners, but the future may at last be drawing close. General Motors has developed an electric vehicle, the Impact, which may be in dealer showrooms by the mid-1990s. A sleek two-seater coupe, the Impact accelerates as quickly as many gasoline-powered sports cars and has a top speed of more than 100 miles per hour.
California has contracted for 10,000 electric cars for fleet use, which are to be built in Sweden and in Colorado by a company called Unique Mobility, Inc., and are scheduled for deployment by 1995. Currently, the most expensive part of powering an electric car is not the electricity itself but the cost of the batteries, which must occasionally be replaced. The batteries now powering the impact need replacement every 20,000 miles or so, which would make electric cars twice as expensive per mile as gasoline cars.
GM engineers are confident that within the next few years that capacity can be doubled to a competitive 40,000 miles. Another battery being produced is expected to have a life of 100,000 miles. The Impact is limited by range (124 miles) and recharging time (two hours). The Unique Mobility mini-van has a range of 100 miles, which can be extended by a small on-board propane-powered engine, and its batteries need up to eight hours to charge. Eventually, solar cells may be put on automobiles to provide extended range, but passenger vehicles run solely on solar energy will never be practicable simply because the cells caret produce enough power for acceleration, no matter how efficient they are at converting sunlight.
Reformulated gasoline, unlike most alternative fuels, is a petroleum product. Oxygen is added to reformulated gasoline by adding about two to three parts per hundred of MTBE, giving it the octane to make up for the removal of aromatics that lead to ozone formation, such as benzene and toluene. Reformulated gasoline has an energy value only about two percent lower than conventional unleaded gasoline and can use the same pipelines, engines, and gas tanks. Therefore, the extra two to three cents per gallon cost will be the total added cost. Further, because it requires no new equipment, reformulated gasoline’s effect on pollution levels is instantaneous.
(One much-ballyhooed alternative fuel-hydrogen — has not been discussed here. That’s because it’s still completely experimental and not likely to be used for years to come, regardless of merit.)
It is well known that gasoline can be dangerous. Although automobile explosions are actually quite rare, especially in comparison to those depicted on television and in the cinema, they do occur. Gasoline can also be toxic. But the dangers of gasoline may be dwarfed by those of its alternatives.
Methanol is more acutely toxic than gasoline, and almost certainly the most dangerous of the alternative fuels. Gasoline must be taken into the lungs to cause damage, but just a small amount of swallowed methanol can cause blindness, nerve damage, or death. It is colorless, and unlike gasoline, both tasteless and odorless. If methanol came into widespread use it could cause many fatalities and dramatically increase the incidence of accidental blindness. People could ingest it accidentally by siphoning it orally, as they siphon gasoline.
And methanol is toxic even when absorbed through the skin; drivers and service station personnel could be exposed by continuing to wear clothing on which they accidentally spilled methanol. Methanol burns with no flame and no smoke, making methanol fires much more difficult to spot and fight. If you’ve ever seen a driver running frantically from a crashed Formula One racing car as if being burned by invisible flames, then you’ve witnessed this effect.
Some of these problems could be corrected by using a mix of 85 percent methanol and 15 percent gasoline, or "M85," which gives the fuel a more visible flame, a bad taste, and some smoke, and also makes vehicles easier to start in cold weather. But such a mixture greatly increases emissions, possibly negating the effect of using methanol in the first place.
On the brighter side, despite tunnel bans in many areas on vehicles carrying propane, it appears that both propane and natural gas are just as safe in the event of a collision as is gasoline. Indeed containers for alternative fuels are so solid that the explosion rate for these vehicles is below that of gasoline cars.
The House and Senate bills refer to alternative fuels as "clean fuels," as do most members of the media. This is a gross misnomer. All fuels cause pollution, and some "clean fuels" are dirtier for some emissions than gasoline. The widespread belief that methanol produces significantly reduced emissions is based on theory, outdated studies, and erroneous presumptions.
Many recent tests have shown no benefit, or even a detriment, from burning methanol instead of gasoline. An Environmental Protection Agency study has found M100 producing about a third of the hydrocarbons as gasoline, with M85 producing about two-thirds as much. But a study by the California Air Resources Board (CARB) shows only tiny differences, and a study by Sierra Research, a California consulting firm that has done extensive work for the governments of eight northeastern states and California, shows both M85 and M100 emitting slightly more hydrocarbons, than gasoline.
As for nitrogen oxide, the other principal component of smog, methanol has, in test after test, car after car, caused higher emissions. M85 produces three to five times more formaldehyde than does gasoline, Formaldehyde is another component of smog and a suspected human carcinogen. M85 has also proved to produce as much or mom carbon monoxide than gasoline.
A leading environmentalist and a White House appointee under President Carter, James MacKenzie of the World Resources Institute, says of methanol: "It’s a turkey. It has nothing to offer." Both the EPA and Congress’s own Office of Technology Assessment believe methanol would bring little improvement in air quality, and in Brazil last December environmentalists won a court order blocking the fuel’s importation. Perhaps the best we can hope for from tremendous expenditures for methanol would be only slightly more pollution than we get from gasoline.
Finally, widespread use of methanol from natural gas would probably result in either importing the methanol from foreign countries or converting abundant domestic coal supplies — a process that generates large amounts of carbon dioxide. This would be ironic, as the Clean Air Act will mandate severe and expensive controls on carbon dioxide emissions in the belief that they contribute to global warming.
Ethanol can reduce carbon monoxide emissions in some cars by adding oxygen to fuel, but it too may end up causing more pollution than it prevents. A Sierra Research study concluded that ethanol would cut carbon monoxide by 25 percent, but that nitrogen oxides, which cause smog and acid rain, would rise by 8 to 15 percent, and hydrocarbons by 50 percent. That works out to six percent more smog. Tom Austin, former head of the CARB Mobile Sources Division and one of the authors of the Sierra study, said, "Motorists will end up paying more for dirtier air."
Because the study was financed by the oil industry, some opponents cried foul. But the CARB and the Northeast States for Coordinated Air Use Management, two entities with the toughest air standards in the world, have agreed with the findings. The study should have come as no surprise to the EPA, which found that the use of ethanol so increased evaporative emissions from gas tanks that the fuel could not qualify for use under the 1977 Clean Air Act. A loophole in the regulations allowed ethanol to be used without EPA permission. In 1987, another request for formal gasohol approval was denied on similar grounds.
All cars built since the mid-1980s have oxygen sensors that automatically adjust the burn mixture. For such cars, there are few advantages to oxygenated fuels. In older cars or cars with broken oxygen sensors, oxyfuels have been shown to reduce carbon monoxide emissions, but to mandate that everyone in an area use such fuels for the sake of those cars is rather like making everyone take aspirin each day because some people will develop headaches. While ethanol, added costs aside, might prove useful for a minority of cars in cities where carbon monoxide is a problem but ozone isn’t — such as Las Vegas, Denver, and Phoenix — it makes no sense for areas with ozone problems.
Nuclear power — no emissions but politically very incorrect.
Electric vehicles, since they have no tailpipes, appear to emit no pollution until one considers they are ultimately powered by some other fuel, whether oil, coal, or nuclear. Nevertheless, electric car engines are so efficient compared to internal combustion ones that, depending on the type of plant generating the electricity, they can be up to 90 percent cleaner for nitrogen oxide and 99 percent cleaner for carbon monoxide and other gases. Indeed, if nuclear power is used to generate the electricity, gaseous pollution is reduced to nearly zero.
As for natural gas, limited testing indicates hydrocarbon emissions may be significantly lower than for gasoline engines. Stronger evidence indicates a major decrease in carbon monoxide emissions. Things are less clear concerning nitrogen oxide: the EPA estimates that condensed gas would actually increase emissions significantly, but others have concluded that with properly designed engines, nitrogen oxide emissions would be lower than with gasoline. Propane has significantly lower carbon monoxide and hydrocarbon emissions, and causes nitrogen oxide emissions that, while no lower than gasoline, are not significantly higher, either.
The least of the alternative fuels — in several senses of the word — is reformulated gasoline. Gasoline is currently reformulated by removing olefins and aromatics and replacing them with a small amount of MTBE to keep the octane up. Like the oxyfuels, reformulated gasoline works best for the dirtiest-running cars but has little effect on clean-running ones.
Nevertheless, it is less expensive than the oxyfuels, causes no damage to car engines or fuel lines, and is being touted by the oil industry as only a temporary measure en route to better reformulations. To find the right recipe for reformulated gasoline, fourteen oil companies and the Big Three auto companies have embarked on an unprecedented joint research and testing program, comprising 2,200 tests of thirty-four cars and twenty fuels. It is the most comprehensive analysis of its kind ever undertaken, and the results are expected late this year.
Unfortunately, Congress would not wait before promulgating its own recipes. Both House and Senate versions of the bill require fairly specific formulas for what should and should not be in fuel. But even C. Boyden Gray says that it should not be up to Congress to devise recipes for fuel, rather that the petroleum industry, with over a hundred years of experience in refining, should be given performance standards rather than specific recipes.
If alternative fuels are not the wonders we’ve generally been told, what is the driving force behind them? In part it is the belief that gasoline, since it has contributed so much to air pollution, is somehow immoral, and that any alternative must therefore be better. But the case for ethanol, the "most successful" alternative fuel, is based not on idealism but on good old-fashioned politics and payoffs.
Indeed, it is doubtful that ethanol would be considered at all as a fuel today without the massive lobbying effort of Archer Daniels Midland (ADM), a Decatur, Illinois-based corporation, and its chairman Dwayne Andreas.
Archer Daniels, with gross annual revenues of about $7 billion, is the largest grain processing company in the world. It also has a 60 percent share of the U.S. ethanol market, according to the Renewable Fuels Association, a lobbying group funded primarily by ADM. The corporation puts out as little hard information as possible and doesn’t even maintain a press office, although this doesn’t prevent some of its individual officials from complaining about the media more than Reed Irvine ever does. Nor does it break down earnings by product, but, according to George Dahlman of Piper, Jaffray & Hopwood, Inc., about 27 percent of its revenue, approximately $1.9 billion, comes from corn processing. About one-third of that, or $633 million, comes from ethanol, the rest from the sale of high-fructose corn syrup (HFCS), a sugar substitute.
Like ethanol, high-fructose corn syrup has been around for some time, but only since the late 1970s has it surpassed corn starch, glucose, and dextrose. In 1975 corn refiners produced only half a million tons of the syrup. By 1980 this had jumped to 2.2. million, by 1985 to 5.1 million.
It’s no coincidence that the corn syrup boom has paralleled the increase in gasohol production. Wet-milling ethanol plants (including all of Archer Daniels’s), in which water is added during the milling process, can produce ethanol at lower cost than dry-milling ones (where water is added downstream during milling), in part because their facilities are shared with corn syrup production.
Ethanol can be produced using excess syrup capacity during the winter, when demand for the sweetener giveaway, every government support for ethanol is also a support for high fructose corn syrup. Sugar price supports and sugar import restrictions, both of which Archer Daniels has lobbied for through its representatives, also support ethanol.
Archer Daniels is the primary funder of two pro-gasohol lobbying organizations located in Washington, the Renewable Fuels Association and the Corn Growers Association. In the last presidential race, Archer Daniels and the Andreas family contributed to the of both George Bush and Michael Dukakis, as well as those of Jesse Jackson, Albert Gore, Paul Simon, and Robert Dole.
The point man for Andreas has been Senate Minority Leader Robert Dole, Republican of Kansas. Dole sponsored the original 1978 amendment that provided a tax break for gasohol and at least twenty-four other bills designed to promote the product, For their part, Andreas and Archer Daniels’s PAC have kicked in at least $87,000 to Dole’s Senate and presidential campaign committees, more than they have given to any other current member of Congress.
The ADM Foundation has contributed $160,000 to the Dole Foundation, a charitable organization established by the senator. Dole took three free trips to Midwest speaking engagements on ADM airplanes in 1983. But by far the most lucrative contribution to Dole was ADM’s co-sponsorship (with Mobil Oil) of Face-Off, a daily three-minute radio debate between Dole and Sen. Edward Kennedy, which Dole took part in from April 1984 until he announced his candidacy for President in November 1987.
Broadcast prime-time on 160 stations of the Mutual Broadcasting System, the show provided Dole with a sounding board that, had he had to pay for it, would surely have busted his campaign bank account. Mutual Broadcasting would not give an exact figure on the cost of sponsoring the show, but, according to spokesman John Gudelanis, "a thousand dollars a day would not be too far out of the range." In addition, Gudelanis thought that the sponsors of Face-Off paid some of the production costs. At $1,000 a day, this unofficial contribution was worth $840,000 to Dole over three years.
Whatever his motivations, Dole always stands ready to do Archer Daniels’s bidding, even if it goes against the interests of his state. While it’s true that ethanol production does prop up corn prices somewhat, Kansas is much more a soybean state, and the ethanol program hurts soybean farmers, since livestock feed, a by-product of ethanol production, competes with soybean meal. When a corn product like wet gluten feed enters the market, the demand for soybean meal is reduced. Every 100-million-bushel increase in ethanol-induced corn production causes an estimated twelve to thirteen cent decline in soybean prices per hundred-weight.
Dole’s support for corn farmers via gasohol, then, comes only at the expense of his state’s soybean farmers. Often, of course, farmers grow both crops, not realizing that the extra money they’re making on corn is depressing the price of their soybeans. Not incidentally, Archer Daniels, as a major processor of soybeans, gains from this decline in soybean prices.
Yet the major crop of Kansas is wheat. Kansas is the nation’s foremost wheat producer, and the grain accounts for three to four times the cash value of the state’s corn crop. And it is wheat farmers who have stood to lose the most from the Dole-Andreas ethanol protection. Dole pursued alcohol tariff legislation against Brazil despite strong warnings that Brazil might retaliate with trade restrictions of its own. Had it done so, wheat would have been perhaps the first target, as Brazil is the world’s fourth greatest importer of the grain.
Despite their senior senator’s best efforts, Kansas wheat farmers suffered no such retaliation. In late 1985, however, they didn’t fare so well when the Brazilian minister of industry and commerce, Roberto Gusmao, with the aid of the U.S. ambassador to Brazil Diego Acensio, proposed that the United States relax its import restrictions on Brazilian alcohol in exchange for any number of possible concessions on the part of Brazil. One suggestion was that Brazil buy the corn for its increased ethanol production from American farmers. Another was that it increase its wheat allocation from the United States.
Between a sudden drop in oil prices and therefore decreased attractiveness of gasohol, and intense lobbying, the deals fell through. Says Acensio, "My understanding was that they ran afoul of the objectives of Archer, Daniels Midland. The minister came back crestfallen, convinced he had been torpedoed by Archer Daniels. " Was Dole involved? Royal Daniel, a Washington, D.C. attorney who lobbied for the Brazilian government, believes he was. "How directly I just can’t tell you. Dole followed very closely. ADM is one of his great benefactors, what with that Face-Off show and all."
Furthermore, many corn farmers, in Kansas and elsewhere, are far from happy with the gasohol program. "The piggishness of ADM has caused a major political problem for the whole corn industry," John Ford of the American Corn Growers Association told the Kansas City Star. "The corn industry, the politics of it, is controlled by one man and Bob Dole is his gofer on the Hill."
Dole was the sponsor or co-sponsor of at least five bills in the crucial 1981-85 period that set or served to maintain sugar price support targets, although only two of the bills concerned sugar exclusively. Telling was Dole’s response to a request by Savannah Food and Industries in December 1985 for a presidential proclamation to allow imports of raw sugar in amounts exceeding existing quotas so that U.S. sugar refiners could make high fructose syrup from the cheaper sugar.
According to Alcohol Update, a publication of Information Resources, Inc., "If a measure like this is adopted under the farm bill or through other means, Sen. Robert Dole has said that he would introduce legislation to nullify it."
Ethanol, bastard of science and creation of politics, stands to gain the most from the alternative fuels section of the Clean Air Act. In negotiations the week before the House approved its version, pro-ethanol Energy and Committee members met with environmentalists from ethanol-producing states. Together they pushed through a compromise that would effectively mandate the use of MTBE or ethanol year-round in the nation’s nine ozone non-attainment areas and for the six coldest months in the forty-four carbon monoxide non-attainment areas beginning in 1992.
[Author’s note: To determine whether a city is a nonattainment area, the carbon monoxide or ozone is measured hourly at stations spread strategically through the city. Eight consecutive hours are then averaged, and that average recorded. If the maximum percentage of particles is violated (9 per million of carbon monoxide, .12 per million of ozone), this is considered an "exceedence" day. It is also an exceedence day for carbon monoxide if the level of 35 parts per million is recorded in any given hour. The EPA tolerates one such day, but two or more such days put the city in non-compliance. Among other reasons, the standard is controversial because, as in the case of Denver, if only one monitor, located at the worst traffic spot, is triggered for two hours of non-compliance, the entire city can be branded as a high pollution area.]
If the five most serious carbon monoxide areas don’t achieve attainment by 1994 they will effectively be required to use ethanol only, since only ethanol can reach the oxygen level required. A co-sponsor of the legislation, Rep. Bill Richardson (D-N.M.), said the amendment would "give credibility to the growing ethanol industry," as if a congressional edict should overrule scientific evidence.
Meanwhile, Sen. Tom Daschle (D-S.D.) has pushed through an amendment to the Senate bill that would effectively mandate MTBE or ethanol for high-ozone areas in the six coldest months, with effectively half of that share going to ethanol for high carbon monoxide areas. It seems to have mattered little to Richardson or Daschle that evidence shows that ethanol aggravates the ozone problem. Nor will this increased smog come cheaply. The Congressional Research Service estimates the extra 10-to-15-cent-per-gallon cost of the fuel in the nine non-ozone non-attainment areas alone would cost consumers in those cities $25 to $50 billion annually. Under certain circumstances, the cost could be as high as $100 billion.
The only other alternative fuel that has received serious lobbying is methanol. In 1988, Sen. Jay Rockefeller (D-W.V.) sponsored successful legislation to exempt alternative fuels from the Corporate Average Fleet Economy (CAFE) standards which mandate that if cars do not maintain a certain average fuel economy, the manufacturer will be fined. The legislation serves as an incentive for the sale of alternative fuel vehicles. Rockefeller’s purpose could only have been to support the coal industry, which hopes to gain by the conversion of its product to methanol. Other lobbyists for methanol include the natural gas companies Hoerscht Celanese of West Germany and ICI Americas of the United Kingdom.
The final politically created fuel is reformulated gasoline, which exists primarily to allow the petroleum companies to assert that they are making progress in refining cleaner fuels and to stave off efforts to mandate the use of alternatives. It scores points with the media, which are generally critical of the petroleum industry, but has been ignored by Congress. Nevertheless, while the petroleum industry obviousy has a stake in keeping as much of its market share as it can, the drawbacks of non-petroleum fuels make this political creature far more attractive than ethanol.
All of which brings us to another dirty little secret. According to the EPA, better engine design and tuning, and recycling of vapors (for example, the catalytic converter) have cut emissions of volatile organic compounds from automobile tailpipes by 96 percent since 1970. In fact, most of the volatile emissions that cause smog some from cars built before 1981. But a Brookings Institution study pointed out a few years ago, regulations that increase the price of owning or operating new cars only cause old-car owners to delay retiring their vehicles. Which is exactly what alternative fuels will do.
There are some advantages to some alternative fuels in some situations. As battery technology improves, electric cars may begin to outperform all combustion engine vehicles. Propane and natural gas may help reduce pollution in some areas, and have few drawbacks if used only for fleet vehicles. But for now and the near future, all the alternative fuels have serious disadvantages.
Unfortunately, the House version of the 1990 Clean Air Act mandated the selling of 150,000 alternative fuel vehicles in California in the 1994 model year and 300,000 per year for 1997 and after. Congress has not, in its infinite wisdom decided how it is going to get individual Californians to buy vehicles at cost more to purchase, will reduce driving range, may cost more to run, and would effectively curtail out-of-travel for fear of breakdowns where there are no mechanics trained work on alternative fuel vehicles.
It might seem at first that alternative fuels could contribute significantly to lessening America’s dependence on imported oil. Indeed, the Department of Energy (DOE) has responded to the Iraqi crisis by calling for more ethanol production. But it’s important to understand that the U.S. isn’t running out of oil. Petroleum reserves in the U.S. are estimated to be as high as 300 billion barrels, more than the known reserves of Saudi oil. What has happened is that much of the easiest oil to reach has been extracted, and the incentives for drilling consequently eliminated.
Further, the 1986 tax reform severely curbed the depletion allowance and eliminated tax shelters that allowed many of the industry’s tax advantages to be passed on to investors. Like many U.S. companies, petroleum drillers and importers have found it cheaper to do their work abroad. If Congress were to grant U.S. oil companies the tax breaks it gives ethanol producers — with the stipulation that it apply only to U.S. oil — domestic oil production would skyrocket and dependence on foreign oil would drop dramatically. Although the price for the subsidy would be enormous, it would be less so than pouring money into ethanol production.
The other reason for a lack of American drilling is the environmentalist movement’s success in getting large oilfields declared off-limits. Envirommentalists prefer to put emphasis on the development of nonhydrocarbon and non-nuclear sources of energy such as solar. Environmentalism success reminds us that politics is largely responsible for our dependency on imported oil, and that some of the same people agitating to reduce dependency are the ones who helped bring it about in the first place.
One final dirty secret: cleaner fuel won’t do as much good in cars, old or new, as a good tune-up or making owners who have intentionally disabled their pollution control systems fix them. Donald Stedman, a professor of chemistry at the University of Denver and a former Ford scientist, says that too much emphasis is being put on reducing low levels of emissions from essentially clean-running cars-either through alternative fuels or by further tightening up tailpipe emission standards — and that more emphasis should be put on cleaning up dirty cars. Gary Woodard’s Arizona study also found that "programs focusing on identifying and remedying high [carbon monoxide] emitters may be more cost-effective than programs that impact equally on all vehicles."
About half of all automobile pollution is emitted by only ten percent of cars; cleaning them up would lead to rewards as great as getting the clean ones to run just a bit cleaner, an action Stedman compares to making a sharp pencil a little bit sharper.
Stedman and several colleagues have developed a device called FEAT (for "Fuel Economy Automobile Test") which, when stationed by the side of the road, measures on-road-emissions in about a second at a cost of 50 cents a reading. In combination with a videotape machine and a program of awards and fines, this device would dramatically reduce emissions at a fraction of the cost of alternative fuels or even present emissions testing programs. FEAT has been successfully tested in Colorado, California, and Illinois, and an amendment to the House Clean Air Act would mandate its use in non-attainment areas.
Stedman and his device show that the real hope for the future is in fresh alternative ideas. Gasoline — along with methanol, ethanol, propane, and natural gas — will eventually go the way of whale oil. And no one sees the writing on the wall better than the Arab oil nations, which invest heavily in U.S. solar energy research. Perhaps even now they’re planning for an Organization of Solar Panel Exporting Countries, or OSPEC.
But the time for worry will come only after many years, when today’s events in the Persian Gulf are a distant memory. Until then, the fuels our cars use will have to be chosen according to which provides the optimum in price, performance, and pollution control. Sentimentalism and blind prejudice against gasoline should not be among the factors.