Alcohols Considerably Cheaper Than Gas Already

In an article on CBS San Fransisco, Consumer Watch says:

With fuel prices on the rise, drivers are looking for ways to save. If you have a flex fuel vehicle, you can switch over from gasoline to cheaper alternative fuels such as ethanol or alcohol. And you may be already driving one... 

According to Scientist David Bloom, flex fuel is better for the environment than traditional gasoline and is also cost efficient. Currently the price of alcohol is 90 cents less then gasoline. 

And as the popularity rises for flex fuel, there are Apple and Android apps for consumers to locate the nearest station. There are currently less than 2,000 flex fuel stations nationwide. 

Automakers including General Motors, Ford Motor Company and Chrysler have committed to 50 percent flex fuel cars within the next couple of years. But according to industry insiders, there are 10 million flex fuel cars on the road and many drivers are unaware they are already in one.

When the Open Fuel Standard Act has passed, it will become commonplace for cars to be flex fuel, and fuel stations with choices will be ubiquitous. And because of the bigger market and greater amount of competition, fuel prices will be even lower than they are now. Let's make this happen quickly. Start here to find out what you can do.

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The U.S. is Overflowing With Natural Gas

By Associated Press energy writer, Jonathan Fahey:

Natural gas storage facility: FULL

NEW YORK — The U.S. natural gas market is bursting at the seams.

So much natural gas is being produced that soon there may be nowhere left to put the country’s swelling surplus. After years of explosive growth, natural gas producers are retrenching.

The underground salt caverns, depleted oil fields and aquifers that store natural gas are rapidly filling up after a balmy winter depressed demand for home heating.

The glut has benefited businesses and homeowners that use natural gas. But with natural gas prices at a 10-year low — and falling — companies that produce the fuel are becoming victims of their drilling successes. Their stock prices are falling in anticipation of declining profits and scaled-back growth plans.

Some of the nation’s biggest natural gas producers, including Chesapeake Energy, ConocoPhillips and Encana Corp., have announced plans to slow down.

“They’ve gotten way ahead of themselves, and winter got way ahead of them too,” says Jen Snyder, head of North American gas for the research firm Wood Mackenzie. “There hasn’t been enough demand to use up all the supply being pushed into the market.”

So far, efforts to limit production have barely made a dent. Unless the pace of production declines sharply or demand picks up significantly this summer, analysts say the nation’s storage facilities could reach their limits by fall.

That would cause the price of natural gas, which has been halved over the past year, to nosedive. Citigroup commodities analyst Anthony Yuen says the price of natural gas — now $2.08 per 1,000 cubic feet — could briefly fall below $1.

“There would be no floor,” he says.

Since October, the number of drilling rigs exploring for natural gas has fallen by 30 percent to 658, according to the energy services company Baker Hughes. Some of the sharpest drop-offs have been in the Haynesville Shale in Northwestern Louisiana and East Texas and the Fayetteville Shale in Central Arkansas. But natural gas production is still growing, the result of a five-year drilling boom that has peppered the country with wells.

The workers and rigs aren’t just being sent home. They are instead being put to work drilling for oil, whose price has averaged more than $100 a barrel for months. The oil rig count in the U.S is at a 25-year high. This activity is adding to the natural gas glut because natural gas is almost always a byproduct of oil drilling.

Analysts say that before long companies could have to start slowing the gas flow from existing wells or even take the rare and expensive step of capping off some wells completely.

“Something is going to have to give,” says Maria Sanchez, manager of energy analysis at Bentek Energy, a research firm.

U.S. natural gas production has boomed in recent years as a result of new drilling techniques that allow companies to unlock fuel trapped in shale formations. Last year, the U.S. produced an average of 63 billion cubic feet of natural gas per day, a 24 percent increase from 2006. But over that period consumption has grown half as fast.

The nation’s storage facilities could easily handle this extra supply until recently because cold winters pushed up demand for heating and hot summers led to higher demand for air conditioning. Just over half the nation’s homes are heated with natural gas, and one-quarter of its electricity is produced by gas-fired power plants.

But this past winter was the fourth warmest in the last 117 years, according to the National Oceanic and Atmospheric Administration. It was the warmest March since 1950.

Between November and March, daily natural gas demand fell 5 percent, on average, from a year earlier, according to Bentek Energy. Yet production grew 8 percent over the same period.

“We haven’t ever seen a situation like this before,” says Chris McGill, Vice President for Policy Analysis at the American Gas Association, an industry group.

At the end of winter, there is usually about 1.5 trillion cubic feet of gas in storage. Today there is 2.5 trillion cubic feet because utilities withdrew far less than usual this past winter.

There is 4.4 trillion cubic feet of natural gas storage capacity in the U.S. If full, that would be enough fuel to supply the country for about 2 months.

If current production and consumption trends were to continue, Bentek estimates that storage facilities would be full on October 10.

Storage capacity, which has grown by 15 percent over the past decade, cannot be built fast enough to address the rapidly expanding glut. And analysts note there is little financial incentive to build more anyway.

The low price brought on by the glut has increased demand for natural gas among industrial users and utilities.

Makers of chemicals, plastics and fertilizers that use natural gas as a feedstock are expanding. Garbage trucks, buses and delivery vehicles are using more natural gas. Electric power producers are switching from coal to natural gas whenever possible.

This won’t add up to enough new demand quickly enough to relieve the pressure on storage facilities this summer.

Scorching temperatures this summer would do the trick, but Mother Nature is not expected to cooperate.

Temperatures this summer are forecast to be about normal, and much cooler than the last two summers, says David Streit, a meteorologist at Commodity Weather Group expects.

Sultry winters, he said, do not usually develop into sultry summers.

Jonathan Fahey is an energy writer. He can be reached here: http://twitter.com/JonathanFahey.

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Why Would Gas Companies Be So Strongly Against Making Flex Fuel Cars?

I've often wondered about this. I was shocked with the automakers came out with a unified stand, vehemently against the Open Fuel Standard Act. Robert Zubrin gives a plausible answer in an article in National Review Online entitled, "A Conspiracy in Restraint of Trade." Here it is:

2007 Chevy Cobalt

In a previous article for National Review Online, I reported on how easy it is to enable the flex-fuel capabilities in modern automobiles, allowing them to run equally well on methanol, ethanol, or gasoline, thereby giving the customer fuel choice and, with it, a substantial opportunity for savings. For example, at current gasoline and methanol prices, the miles per dollar achieved by running my 2007 Chevy Cobalt on methanol is 40 percent higher than that possible with gasoline. This is not new technology: As extensively documented by Ford’s former director of alternative-fuel vehicle research, Roberta Nichols, the Big Three produced tens of thousands of highly successful methanol-gasoline flex-fuel cars for the state of California more than 20 years ago.

At one time, adding flex-fuel capability to a car increased its production cost by about $100. That is no longer true. Currently, all new gasoline-powered cars sold in the U.S. are flex-fuel cars, but only about 5 percent are being sold as such. The rest are being marketed with their flex-fuel capability disabled by their manufacturers.

This is a very curious situation. One may well ask, why should an automaker choose to disable a useful feature that it has built into its cars? It seems to make no sense for any company to take measures to degrade its own product. Furthermore, given the fact that the auto industry has a fundamental interest in low fuel prices — consumers have only so much they can spend on transportation, and it either goes for cars or for gas — why should it choose to cripple a capability that otherwise could serve to erode prices at the pump? It seems like a very bizarre policy — until you look at who owns and controls the auto companies.

The problem is that the automobile companies are not independent entities capable of pursuing their own interests. Rather, they are owned and controlled by organizations that are much more heavily invested in oil.

The largest automobile company in the world is Volkswagen. Who owns it? The answer is the government of Qatar. That’s right, the sovereign wealth fund (SWF) of Qatar, an OPEC emirate, owns 17 percent of Volkswagen — potentially a controlling interest — as well as 10 percent of Volkswagen’s Porsche subsidiary. One of the Qatar SWF board members, Hussain Ali Al-Abdulla, accordingly sits on the supervisory board of Volkswagen AG. Elsewhere in Europe, the same story holds. For example, the Kuwait SWF owns 6.9 percent of Daimler/Mercedes, 20 percent of Spyker/Saab, and 100 percent of Aston Martin, which it acquired from Ford for $450 million. The Abu Dhabi Investment Authority, one of the sovereign wealth funds of the United Arab Emirates, owns 9.1 percent of Daimler/Mercedes and 40 percent of Mercedes-Benz Grand prix, and has a $2.7 billion investment in Chrysler. In addition, the Abu Dhabi Investment Authority has a major position in Fiat/Ferrari, on whose board it is represented by its managing director, Khaldoon Khalifa. The government of Libya also owns 2 percent of Fiat/Ferrari, which in turn owns 52 percent of Chrysler.

What about the two biggest American auto companies, GM and Ford? The dominant positions in these companies are held by major Wall Street firms whose collective energy holdings exceed $700 billion. Thus, while the $9 billion these funds have invested in GM and the $24 billion placed in Ford are of great weight to the auto companies, the funds themselves are far more concerned about protecting their investments in oil.

It is thus futile to hope that, left to their own devices, these companies will do anything to endanger the ability of OPEC to loot the world. Rather, they will continue to protect the monopoly the oil cartel holds on the world’s vehicle-fuel supply. If the auto companies were free agents, they would act to break the fuel monopoly that is so damaging to their own interests and those of their customers. But they are not, and so they won’t.

The situation is a case of a conspiracy in restraint of trade, with the national interest at stake. It is not just a matter of saving consumers gas money. High oil prices severely damage our economy. Furthermore, as current events concerning Iran make clear, it is essential that the U.S. have copious alternative sources of liquid fuel whose availability and price are not determined by events in the unstable Middle East. This imperative provides strong justification for government intervention.

Unfortunately, rather than move to break the hold of the oil cartel on the management of the auto companies, the Obama administration has acted to reinforce it. When GM went bankrupt, the president appointed Wall Street insider Steven Rattner as his auto czar, charged with reorganizing America’s leading automaker. However, instead of forcing GM to implement flex-fuel capability across the board, Rattner fired GM CEO Rick Wagoner, who was making tentative moves in that direction, and replaced him with Ed Whitacre, a director of Exxon. Subsequently, Rattner moved Whitacre up to be GM’s chairman of the board, giving the CEO position to Dan Akerson, a managing director of the Carlyle Group, a Saudi-funded business partnership. Under this new “friends of OPEC” management, Wagoner’s earlier commitment to have half of all GM cars be flex fuel by 2012 was, not surprisingly, shelved.

Unless Congress passes legislation to force the opening of the vehicle-fuel market to competition from non-petroleum fuels, this situation is not going to be rectified. It is for this reason that the Open Fuel Standards bill (H.R. 1687, S.B. 1603), which would require that most new cars sold within the United States offer fuel choice, has been introduced into the House and the Senate with bipartisan support.

To explain the necessity for this bill for American prosperity and national security, a special event has been scheduled for February 29, from 1 to 3 p.m. in the Gold Room of the Rayburn House Office Building. Those speaking include former NATO supreme commander General Wesley Clark, former CIA director James Woolsey, myself, and Center for Security Policy director Frank Gaffney. Everyone concerned with the need for America and her allies to diversify their liquid-fuel supplies should urge their congressional representatives to send staff or come themselves.

As Adam Smith, the founding thinker of free-enterprise economics, wrote in The Wealth of Nations: “To prohibit a great people . . . from making all that they can of every part of their own produce . . . is a manifest violation of the most sacred rights of mankind.” In restricting their vehicles to use only the fuel offered by the Islamist-led oil cartel, the automakers are preventing America from making use of her copious non-petroleum energy resources. Despite being bailed out — in some cases repeatedly — by the public purse, the automakers have shown little public spirit. Rather, they have acted in accord with the larger portfolios of the cartel-linked or conflicted organizations and individuals who have bought into or been placed into their management, to the great detriment of not only their own customers and retail stockholders, but the economy and vital national-security interests of the United States.

This is an unacceptable situation. Congress needs to act.

— Robert Zubrin is president of Pioneer Astronautics, a member of the Steering Committee of Americans for Energy, and the author of Energy Victory: Winning the War on Terror by Breaking Free of Oil. His next book, Merchants of Despair: Radical Environmentalists, Criminal Pseudoscientists, and the Fatal Cult of Antihumanism, will be published by Encounter Books on March 6.

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