Sunday, January 1, 2006

With gasoline currently as the only game in town (with the exception of the sparsely populated midwest where E85 is widely available and cheap) and with our inelastic demand for gasoline (any policy that relies on conservation is a non starter) no matter the price, the oil cartel literally has us over a barrel.

The answer is that we need fuel choice. There are 6 million vehicles on the roads today that are "flex fuel" capable. This allows them to run on both gasoline and E85 ethanol. When ethanol is priced at least 30% less than gasoline, it is equivalent in dollars per mile (ethanol has 74% of the energy of gasoline).

In Brazil, drivers pull up to the pump, check the comparative price between gasoline and ethanol and CHOOSE the one that gives them the most bang for their buck. In more cases than not they have been choosing ethanol, which is the single biggest factor in them declaring 100% energy independence late last year.

We need fuel substitution, not conservation.

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