By Diana Bocco
As the world spins into the next decade, changes in the fuel industry are becoming increasingly evident. From the ecological conscience of society to the governmental concern about escalating prices and fuel shortage, the topic continues to be one of much debate. According to Sara Banaszak, a senior economist at the American Petroleum Institute (API) and executive member of the International Association for Energy Economics (IAEE), the primary energy challenge for America is ensuring the availability of affordable, reliable energy, which in turn will help to secure economic prosperity and a variety of choices for American consumers.
“America’s oil and natural gas industry has been doing this for more than 100 years,” Banaszak says, “but in an increasingly globalizing world with tremendous growth occurring in areas such as Asia, we will need to increase energy efficiency, the use of advanced technologies, and the diversity of energy supplies.”
From an industrial standpoint, there are many technologies readily available in renewable energy, but their ability to compete economically with traditional fuel depends on many factors such as technology development, geographical region, and the scale or amount of the technology to be used.
“Using wind power to generate electricity can be economically competitive, but not necessarily in all locations,” Banaszak says, “and not necessarily for generating enough electricity to meet demand in a large East Coast city.”
Other fuel sources, such as ethanol derived from corn, have been explored as well over the years, although none has proven to be competitive enough as a replacement fuel. According to a study by the University of Minnesota, even if the entire 2005 U.S. corn crop had been converted to ethanol, it would have supplied only 12 percent of gasoline demand. Banaszak says that we nonetheless should be optimistic about future alternatives.
“We have solved previous energy challenges with new technologies,” she says, “and the United States is a leader in using the spirit of competition and market incentives to develop the new technologies needed.”
Ethanol is an alternative fuel with a long history of successful use by consumers. E10 (a mix of 10 percent ethanol with gasoline) has been readily available for years and is quite accessible in both price and production. E85, another type of ethanol fuel, faces some significant technological and economic hurdles. E85 requires specially built “flexible-fuel vehicles” (FFVs), not currently available to the general public. At the present time, only some fleet vehicles, such as buses and taxis, use E85. The EIA estimates that even by 2030, there will be no more than 10 percent of FFV vehicles roaming the streets.
“Expanded E85 use would require overcoming major technological and economic barriers,” says Banaszak. Even with those breakthroughs, significant problems remain for both ethanol and biodiesel. Gathering feedstock, processing it, dealing with waste products, and delivering the biofuels to markets at a cost comparable to gasoline has yet to be demonstrated on a commercial scale.
Increasing biofuels usage would also require policymakers to address secondary impacts on, among other things, food supplies and the environment. “Diverting large amounts of U.S. corn for ethanol could mean less for food and animal feed, and in turn cause prices to escalate,” says Banaszak.
State laws push local governments to create “boutique fuels” that could be used to reduce that state’s gas consumption by a small but steady percentage. In fact, the Energy Policy Act of 2005 (EPACT05) mandates that by 2012, at least 7.5 billion gallons of biofuels per year will be used. In 2006, the industry exceeded a 4 billion-gallon requirement, using 5.4 billion gallons. Considering also the number of biofuels plants under construction or planned, EPACT has succeeded in spurring investment and market development of biofuels.
Alternative Fuels Currently Available
Biodiesel: vegetable oils
recycled restaurant grease
safe, biodegradable
requires engine modifications
Electricity: EV batteries
limited storage capacity
must be recharged often
Ethanol: corn and wheat fermentation
must be blended with gasoline
higher concentrations require special vehicle modifications that are too expensive
Hydrogen: Artificially produced hydrogen (H2)
still under development
will likely only work with commercial vehicles over the next few decades
Methanol: wood alcohol
added to gasoline to create cleaner burning fuel
contaminates groundwater
Natural Gas
domestically produced natural gas
cleanest-burning alternative fuel available
not many car models available that run on natural gas only
Propane
Propane or liquefied petroleum gas (LPG)
a byproduct of natural-gas processing
used mostly in fleet vehicles (taxis, buses, police cars)