Sinking Slowly into the Sunset 16 comments
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80-year old billionaire T. Boone Pickens stays busy these days making money on alternative energy ideas he's putting into practice. Meanwhile, America's formerly "Big 3" automakers are losing billions of dollars due to the high cost of gasoline. So what, you may ask. Where's the connection? It's a fascinating tale, actually, of how a lone entrepreneur is turning lemons into lemonade, while once giant corporations are fast turning themselves into wards of the government.
Mr. Pickens' outlook is to look at the world and say, "Why not?" His present investments include a $2 billion gamble that America's electric utilities are going to connect the wind farms he's building into our nation's electric grid. Not satisfied with that, he is also investing heavily in companies that manufacture long-haul trucks that are fueled by LNG (liquid natural gas) instead of gasoline, and signing contracts to use this new technology in existing vehicle fleets. He figures he can improve the environment while making money for himself.
Getting back to the Big 3, they are touting the 19 mpg hybrids they've introduced, along with their new "flex-fueled" vehicles that operate on gasoline and e-85, which is ethanol distilled from corn. The only problem is these are both losers. One doesn't improve gas mileage, while the other costs more to produce than the fuel derived from it.
But, believe it or not, until recently these same auto manufacturers were ahead of this curve that has become part of our nation's energy crisis. Between 2000-05, they manufactured trucks and vans that were "dual-fueled" by gasoline and CNG (compressed natural gas), not corn. Of course, it's difficult to find one now, because they are being snapped up by drivers in OK and UT, where CNG costs the equivalent of less than $1 a gallon at the pump. This has left the CNG-powered vehicle field to the Honda Civic GX, which sells out.
And Boone Pickens isn't the only entrepreneur involved in trying to improve our automotive lot. A private Canadian company named the FuelMaker Corporation manufactures a device called the Phill, which enables CNG car and truck owners to fill up AT HOME at night. If you are lucky enough to own a Civic GX or one of the gasoline-CNG dual-fueled trucks formerly made by the Big 3, you can buy a Phill and operate it on the natural gas connection to your house.
So let me ask, wouldn't you like to run your SUV or your truck or car on CNG, instead of gas or e-85, at 1/3 the price? I know I would! If our auto companies had a little more foresight, we'd be doing it now. Or they could start using this 30-year old proven technology once again tomorrow if they wanted to help themselves out. They may not be the visionaries that Mr. Pickens and FuelMaker are, but it would sure beat waiting around for a government bailout.
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This article has 16 comments:
starting a Company to manufacture CNG vehicles!!
The US 3 stopped building these vehicles when the price of CNG went into outer space. The only people interested in this idea are oil company slappy's apologizing for big oil not investing their billions in actual alternatives to fuels they already produce.
Wind farms are not exactly a high risk investment since most states have regulations requiring local utilities to purchase electricity produced by independents. If you have solar panels on your property and produce more than you use, the utility is obigated to buy it from you. The risk is producing the electricity at a profit, which these days is not that hard.
The real embarassment is the oil companies. They are making money hand over fist and investing none of it in the future. GM had to build its own hydrogen refueling stations in California because the oil companies failed to meet their committment to provide them.
E85 from corn is a tranistional fuel to cellulose. GM is also investing in companies to accelerate this process. The oil companies are also fighting this to their dying breath because the last thing they want is the US to use less oil. Texas has the nerve to ask Washington for a waiver on the use of ethanol in gas it is reducing the amount of oil the companies are refining and cutting into their profits.
So, ethanol is significantly reducing the amount of oil being refined and the amount of gas being used in the US (all of the gas you buy is 10% ethanol), Brazil has become energy independent using ethanol and E85, and you are still pushing the oil company BS about CNG.
I agree we should remove the tariff on importing ethanol from Brazil and Latin America. We need to force the oil companies to provide E85 to the millions on flex fuel vehicles on the road and become more energy independent, like Brazil, rather than selling out our future to fat oil profits today.
Why not just repeal the ethanol mandate, and let the free market decide what is best for all of us. If ethanol can compete in a completely free market, then I'm all for it, but we must get the gov't out of this business, so we can see what really works. Forcing the oil companies to do anything, is not using our free market system to our advantage, and is in fact part of the problem that we are facing today. Had we not 'Forced' the ethanol mandate down our throats, we would already be seeing the free market provide some alternative solutions, instead of the gov't mandated system we have today.
Re: T. Boone Pickens and his plan, IMHO, it is the best and only really complelling plan yet presented. It may well have some flaws, but it is well ahead of whatever is in second place. However, enough of this talk. Let's get started now!
There are over 2.5 million flex fuel vehicles capable of running on E85 and the oil companies have instituted numerous policies blocking and/or penalizing station owners for supporting this demand. This is because over 50% of the price of gasoline is for crude oil. If this becomes 85% ethanol, the oil companies become refiners/distributors instead of providers and their margins shrink considerably.
Ethanol is far superior to CNG for the transition off of oil because all existing vehicles can run on 10% ethanol with no modifications which means we can reduce gasoline consumption by 10% by simply switching to E10. Flex fuel vehicles that use E85 can run on pure gas, E10, E20, or E85 so if the owner cannot find E85, they can still fuel the vehicle. This capability makes an orderly transition possible.
CNG vehicles can only drive on CNG, which means you cannot travel too far from a CNG filling station or you will not be able to refuel.
Redbaron - the CNG plan has already been tested and it has failed. If they oil companies were interested in building a public fueling infrastructure for CNG vehicles, what are they waiting for? The US 3 produced CNG vehicles for over 10 years and ramped down production when the price of CNG exploded and the infrastructure was never put in place. Also, if you really want to elminate government mandates, let's start with CAFE. The government forcing the auto companies to build vehicles in the absence of demand is a major cause of the problems the industry is facing. The ethanol mandate forces the oil companies to comply with market demand they refuse to acknowledge.
Ethanol derived from corn is bad joke, and would not even EXIST but for government subsidies, which were only designed to bail out a bunch of broke corn farmers in the first place. Ethanol made from biomass and sugar are a different question, but due to EXISTING corn ethanol subsidies and government sugar TARIFFS, are years away from helping out in any meaningful way.
Conversely, U.S. NG reserves have DOUBLED during the past ten years. And Boone Pickens is taking a multi-billion dollar gamble to power American trucks using LNG (NOT CNG) instead of diesel, which would curtail imported oil demand, lower prices and improve the environment.
How about this? Let's kill the 81-cent a gallon corn ethanol subsidy, and you go ahead with e-85. And let's end sugar tariffs and open up the OCS and ANWR to oil and gas exploration at the same time. We'd have lower prices at the pump AND the grocery store as a result.
(And this would also have the ancillary benefit of my not having to listen to any more Iowan university economists tell me how corn ethanol takes less energy to produce than it provides, which only DISPUTES ALL KNOWN SCIENCE.)
What we really need is an energy policy that has a comprehensive plan to reduce transportation petroleum use by a set date. If we can mandate car companies, why not the oilies? Force them to make 10% of their annual station refreshes include alternate fuel (I prefer hydrogen) over the next 10 years. I understand they refresh every 10-15 years. That would get the infrastructure in place in time for the vehicles.
Why not just MANDATE everyone to do everything. Don't worry, friends, NObama will take care of that for you.
What is it you don't understand about the total FAILURE of federal mandates heretofore? Let's see, there's the post office, Amtrak, schools, Medicare, Social Security, the Fannies, et al, ad nauseam.
This listing could go on forever, but SA would run out of space. Oh, I know, but the mandates I LIKE would be different THIS TIME.
Right!