Energy Policy Needed

I remember the energy crisis of the 1970s. We didn't have an energy policy, but we didn't stand around with our thumbs up our noses.

We built the Alaskan pipeline, so we could get oil beneath the Arctic ice. We set the national speed limit at 55 mph (88 km/h). We began storing oil in Louisiana caves for emergencies.

We took action, and it worked. I know most deplored the Double Nickel speed limit, but it made us all part of the energy effort.

Now everyone complains because we have no “energy policy.” I've tried to come up with one, but nothing seems to work.

There's E85 — 85% ethanol and 15% gasoline. I was all for E85 until I looked at the numbers. We use about 150 billion gallons (567 billion L) of gasoline a year and produce about 4.5 billion gallons (17 billion L) of ethanol from corn. Ethanol production is ratcheting up. Thanks to government subsidies, it's profitable for farmers and distillers.

E85 (used in “flex-fuel” vehicles) requires some modification of engines (little cost) and special fuel dispensers and storage tanks (expensive). But you can add ethanol to gasoline (sometimes called gasohol), up to 10%, with no extra cost to auto makers and no special pumps or tanks. Even non-flex-fuel vehicles can run on it.

Adding 10% ethanol to all 150 billion gallons of gas would produce an additional 15 billion gallons (56 billion L) of fuel, helping reduce our dependence on foreign oil.

So why do E85 at all? Because ethanol is a political crop. Auto makers were paid to build flex-fuel cars (via fuel-economy credits), even if no one used E85, and the farmers and ethanol producers profited.

Importing cheap ethanol from Brazil is not an option. U.S. farmers and distillers don't want any imports. Ethanol can be made out of other stuff — switch grass, wood chips — instead of corn. But I suspect the agriculture lobby will try to block the other crops, too.

My conclusion is E85 doesn't make sense compared with just adding ethanol to gasoline. But even that route won't make much difference. Now I hear of a study that says the 10% ethanol solution is good for reducing global warming but creates other pollutants. For every “yes,” there's a “no.”

How about biodiesel? I thought that was a great idea, too. Never mind getting it from leftover burger grease. Instead, make it from soybeans. Then I read that bio-diesel costs nearly 50 cents a gallon more to produce than ethanol, and ethanol is almost as expensive as gasoline now, even though a gallon of it won't take you as far.

I know about the dream of fuel cells, and maybe the hydrogen economy will arrive. The problem is harnessing and storing hydrogen.

So I'm back where I started. What energy policy should we promote, study, test? And where will the money come from?

My son Dave says: “Change the National Aeronautics and Space Admin. into the National Energy Agency. Give it the same money but stop sending those shuttles up. Work on energy instead.”

Maybe he's got something.

Jerry Flint is a columnist for, and a former senior editor of, Forbes magazine.