Flex Fuel

Professor Mankiw has his damned (pronounce two syllables) Pigou Club and Professor Reynolds has his Zubrin plan. I should let it rest, but every time they push it I wonder how those two can be so off.

Dr. Zubrin massacres the Obama Energy proposal today. It lacks any mercy at all and should be read in full, several times a day. The lone happy note at the very end of the piece is that -- like Zubrin -- the Obama plan calls for mandates to force automakers to produce "flex fuel" vehicles.

The best part of Obama’s plan is his strong support of biofuels. In contrast to John McCain, Obama favors both the renewable fuel standard and ethanol production subsidies. These subsidies cost taxpayers $0.45 per gallon of ethanol produced but save the nation $3 in foreign oil purchases at the same time. Why John McCain prefers to send $3 to Saudi Arabia instead of $0.45 to Iowa is difficult to understand, especially given the strategic nature of the commodity in question, and the fact that the foreign oil money helps to finance acts of war and terror against the United States. Yet he does. So on this question Obama has it right and McCain has it badly wrong.

Moreover, there is one part of the Obama plan which is absolutely splendid, and that is his explicit promise to require flex fuel capability on all new cars sold in the USA by the end of his first term. This is indeed a potential real game changer, especially if the flex fuel standard is written to include not only automobile compatibility with gasoline and ethanol, but methanol as well. Methanol compatibility only adds about $30 to the cost of an ethanol-gasoline flex fuel car (which itself is only about $100 more expensive than a comparable gasoline-only car), but multiplies its versatility, since methanol can be made out of any kind of biomass without exception, as well as coal, natural gas, and recycled urban trash.

Now, I think biomass methanol and cellulosic ethanol are exciting technologies. I also like puppies and would like to see kids drinking clean water.

But Zubrin wants to pick the winner today. Screw the market, we'll mandate $130.00 extra cost to new American cars. T. Boone wants CNG cars. I am leery of some of his plans but CNG cars seem to make sense just on their own.

I propose that if you make $2 gallon Kudzu-ethanol, you will have a lot of Americans demanding flex fuel vehicles or upgrading their own. The $2.40 CNG on the Pickens Plan Commercial could do the same.

We might also find algae output that could go straight in a diesel engine or landfill waste or a rapid adoption of plug-in hybrids. Let's not have the gub'mint pick a winner first. And. Dr. Z, don't be shocked that Senator McCain would rather willingly send money to Saudi Arabia than be forced to send subsidies to Iowa. The difference is coercion, not geography.

Hat-tip: Instapundit, of course, who links favorably

Oil and Energy Posted by John Kranz at October 7, 2008 4:50 PM