Spring: Time to Root for Alternate Auto Fuels and the Cubs

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Spring approaches, and if you live in the Northeast, as I do, or in the mid-Atlantic region, otherwise known as the new "snow capital" of the United States, you'll be really glad to see the days of longer sunshine and rising temperatures arrive.

But the temperature isn't the only metric that heads higher every spring. Another is the price of gasoline.

Even though the U.S. recession has taken millions of drivers off the road and lowered gasoline demand, you can count on gas prices, currently averaging about $2.78 per gallon for regular unleaded nationally, to rise another 30 cents to 50 cents, minimum. It happens almost every year by May. And if a refinery catches fire anywhere in the lower 48 states, Canada, Mexico, or even near Novosibirsk, Russia, make that a 70 cent increase. Guaranteed.

Every year, this rite of spring prompts me to contemplate whether we could find a better way to fuel our cars. I've been thinking about and evaluating different energy forms for some time. Perhaps rooting for a different fuel is a better way to phrase it.

However, as a colleague points out, rooting for a new way to fuel our cars is sort of like rooting for the Chicago Cubs to win the National League pennant. Every year, my hopes are raised by talk of some new energy source that's touted as being "capable of replacing oil." And every year, I root for the Cubs to win the pennant, then watch the team -- and the fuel source -- fade from contention late in the season.

Pick a newfangled energy source -- any newfangled source: Ethanol from corn, sugarcane or switchgrass. Biodiesel from soybeans or algae. Fuel cells. Electricity. Natural gas. All have been touted as "potential breakthroughs" with regard to vehicle energy. Yet none has been able to displace oil's stranglehold on the vehicle fuel market. They haven't even come close.

My Pick: Natural Gas

Of all of the above, natural gas -- barring a quantum leap in vehicle battery technology -- appears to have the most promise in the United States. Natural gas is plentiful, cheap, relatively clean and available domestically. There are more than 9.5 million natural gas vehicles on the road globally, according to the International Association for Natural Gas Vehicles, and the group has set 65 million vehicles as its global target for 2020. However, although natural gas has found its way into U.S. commercial and government fleets, often in buses, it hasn't caught on within the civilian car fleet yet, save for a few models. Even so, natural gas vehicle technology has made progress in the past decade -- more progress than another energy form with promise, fuel cells, which have been in development for decades, but have not achieved anywhere near the vehicle market share of natural gas.

However, natural gas propulsion is not without its drawbacks, and a major one is the size of the fuel tank. One solution to the natural gas tank problem would be to make the trunk or the whole vehicle longer. But that rules out natural gas for compact cars, unless (barring further fuel-efficiency improvements) you're willing to drive a natural gas vehicle with limited range, or if the fuel tank is the typical size, one with a smaller cabin or reduced trunk space.

Envisioning the next fuel for vehicles is not inconsequential musing. The price of oil currently is about $82 per barrel. The liberation of Iraq and the long-delayed development of its massive oil fields were supposed to keep oil prices low. A late start to that oil field development was one reason oil prices remained high in the last decade. The start of this decade was supposed to usher in more moderate oil prices, given a global recession that has kept a lid on demand. However, the weak dollar, emerging market growth and the use of oil as an alternative asset have all helped keep it at its lofty price level, despite brimming inventories.

Prices Likely to Remain High

Further, although there's a chance that oil prices could drop significantly in the immediate years ahead, particularly if the dollar strengthens, there are just as many forecasts that show little moderation in prices, particularly if U.S. GDP growth exceeds expectations and if oil demand in emerging markets is strong.

Regarding forecasts, I tend to view my local auto mechanic's estimate as the most telling. Whenever he's asked what he thinks the price of oil will be in 2011, he says, "In a year, the price of oil is guaranteed to be between $40 and $140."

The U.S. economy can grow adequately with oil at $40 per barrel, but it can't with oil at $140 per barrel, which is why the nation needs to think seriously about finding a replacement vehicle fuel. It may be the view of an optimist, but with ingenuity and hard work, I believe the nation can achieve this goal -- and the Cubs can win the National League pennant.
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