After writing about gas consumption, I read an article on Consumer Reports giving a global understanding of the industry.  Consumer Report has good articles like these but sometimes, they score on the bizarre when rating some products.  None the less, this report was very revealing.

The production of ethanol in our country is based around corn whereas our neighbors used sugar cane and other cellulosic sources.  The problem involves power, lobbies and politics as usual.  Currently there is no real price saving in switching to an FFV (flexible-fuel vehicle) vehicle when the consumption is higher than on gasoline.  Case in point, a Tahoe SUV running on ethanol is 27% less efficient than on gasoline, has poorer range and at $2.91 per gallon, well, you do the math.  Most FFV are heavy SUV that will cost you a lot at the pump, no matter what.  E85, is ethanol with 15% gasoline, is only sold in 800 gas stations country wide.  In fact, California has less than five stations that sell it.   The reason why ethanol has to be mixed with an oxygenated combustible like gasoline is its poor effective combustion rating.  Compared to gasoline’s 115,4000 BTU, ethanol is only 75,670.  Engine could approach the energy output of gasoline if manufacturers would fine tune their engines for it.

Car manufacturers benefit from making some FFV with tax cuts.  Instead of this being a motivation to produce better mileage and performance cars, and by that I mean, engine that increase horsepower and lower emissions, they play a shuffling game of manufacturing cars based on average consumption.  Manufacturers receive credits for every FFV they make.  Sounds god but the workaround is the credits raise their fuel consumption on dual-engine configuration (which rarely gets used with ethanol) and it gives them more leeway to manufacture other cars with so-so gas mileage.

On top of this, put an agro-industrial lobby pushing the governments for corn ethanol and raising a 56% tax on Brazilian sugar cane, easier to manufacture ethanol and you get a better picture of the state of things.  So the petro-industry would rather give our billions of dollars every day to countries that harbor disputable organizations that tie into terrorism instead of helping our southern American neighbors come out of their slumps and making them long-term allies.  OK, that is simplifying it a bit but the overall picture is good.

So where is the future?  After seeing Syryana, until interest lobbies stick to their cash-cow middle eastern producers, alternative fuels will take a while before becoming mainstream.  When these lobbies finally figure out how to make a healthy profit from alternative fuels, and they are coming up with solutions, you can expect to see a lot of alternative fuels.