Special Coverage

Management Briefing Seminars

TRAVERSE CITY, MI – Alternatives to foreign oil may sound as wholesome as mom and apple pie, but there are five major groups conspiring against their development that have to be stopped, argues Loren Beard, senior manager-Environmental and Energy Planning, Chrysler LLC.

Big Oil, Big Agriculture, auto makers that think they have the silver bullet for solving fuel-economy issues, some extreme environmental groups and the Organization of the Petroleum Exporting Countries all are trying to undermine progress in the development of alternative fuels for self-serving reasons, Beard tells attendees here at the Management Briefing Seminars.

Big Oil’s opposition is obvious, because all alternatives nibble at its life blood. But the creation of special blends that combine regular fuels with biofuels, such as ethanol and biodiesel, also complicate production and distribution of its regular products. That raises costs and cuts into profit margins.

Ironically, Big Agriculture also is becoming a foe of some alternative fuels, as well. That’s because Big Agriculture is stuck on the use of certain favored feedstocks for biofuels, such as corn and soybeans, and some agribusiness factions oppose financial incentives for promising new types of feedstocks and technology that might someday impinge on current subsidies.

There also is growing agribusiness support for so-called midlevel gasoline/ethanol blends such as E12 and E15 that contain 12% or 15% ethanol, far less than 85% ethanol E85 which auto makers favor.

Beard says such lower blends hide the true cost of ethanol and will kill the E85 initiative because it will eat up ethanol-producing capacity.

Auto makers that think their favored technology is the silver bullet to the industry’s fuel-efficiency quandary are another problem for the advancement of alternative fuels, Beard says.

Fringe environmental groups also are creating roadblocks for alternative fuels as they seek to attract donations for their causes by creating controversy and making unfounded claims against renewable fuels, such as biofuel production will cause mass starvation or that the production of ethanol requires huge amounts of water. Neither is true, he says.

Lastly, Beard says OPEC’s pricing structure is dependent on high-volume petroleum output, so it naturally is opposed to any renewable fuels that could lower demand for its product.

There is no consensus on exactly when the world will begin running seriously short of oil, Beard says, but because oil will run out someday, and so much petroleum currently is controlled by regions hostile to the U.S., efforts to create an infrastructure to produce and distribute alternative fuels must continue.

Production of renewable fuels in the U.S. could create as many as 2 million jobs, he says. That means Big Agriculture needs to continue to develop new crop strains to optimize biofuel production, and Big Oil needs to create a more consumer-friendly infrastructure for its distribution and sale.

dwinter@wardsauto.com