Anyone who has put gasoline in his or her car or filled up a fuel oil tank over the last six months is painfully aware of what has happened to the price petroleum-based products. Since President Bush mentioned energy prices and some alternatives in his State of the Union message, I thought we would look at some of the background about alternative fuels and take a look at two of the more popular alternative fuels: ethanol and biodiesel.
The price of petroleum has become so unstable because of several factors. Petroleum is a scarce resource, i.e. we’re not making any more of it. Petroleum is sold in commodities markets and therefore the price will fluctuate based on speculation of conditions, events and demand for petroleum. The expanding world-wide economy has strained the existing petroleum supply mechanisms to the point where there is little elasticity in the supply and demand equation. Any disruption, real or perceived, will trigger price increases by commodity speculators.
Petroleum usage in internal combustion engines produces a range of noxious gases as by-products. Some of these by-products are known to trap infrared radiation outbound from the earth back into space. This reflection of infrared energy back onto the earth is thought to be one source for the rise in the Earth’s mean temperature.
So for reasons both economic and ecological, we would like to power our internal combustion engines with something that costs less and emits less harmful by-products. There are roadblocks to implementing such a shift. There is a huge investment in infrastructure to move, process, distribute and use petroleum-based energy. No one can afford to simply ignore this entire infrastructure and move to something different right away. So any successful alternative fuel will piggyback on as much of this existing infrastructure as possible.
Alternative fuels will succeed at being cheaper and cleaner if they are derived from the source materials that are readily available in our environment, no harder to refine than existing petroleum-based equivalents, and produce a positive gain in net-energy. This last criterion is often overlooked in popular press accounts of alternative fuels. A new alternative fuel will not be practical if it requires more energy to produce and distribute than it produces when used. Two of the contenders as an alternative to petroleum-based fuels are biodiesel and ethanol.