The BRIC countries (Brazil, Russia, India and China) are all in search of new streams of energy. Russias leader Vladimir Putin is sending clear messages to western Europe about who owns the oil Europe is dependent on. Russia is creating a pipeline under the Baltic Sea to circumvent future problems with the Ukraine and Poland. China is putting a pipeline into place from it’s natural gas origin all the way to Shanghai. India is a thriving automobile industry bringing in new automotive brands monthly. Brazil is not only getting off the dependence of foreign oil by using it’s sugar cane to create an ethanol blend as a fuel for vehicles, but they are also able to create another revenue stream for their farmers.
What this means for these countries is self-reliance for their country. It also means more domestic revenue streams inside their own country and less dependence on foreign oil. Brazil is able to pay off their debt to the International Monetary Fund (IMF) earlier than thought. After that Brazil will have the money to afford more development in their own country and to keep more of their money in their own country. Within a couple years Brazil will not be importing any foreign oil.
Oil companies are starting to invest money in technology ventures. Chevron, Pacific Ethanol, General Motors and the state of California have a demonstration that has quadrupled the number of E85 gas stations in California. This may sound great, but it takes California from one station to 4 stations. Chevron has invested 1/3 of 1 percent of the net income of their first nine months of profit. If Chevron sneezed wrong, they would spend more money than that.
Back in the late 70s The National Highway Traffic Safety Administration (NHTSA) ordered automobile makers to find ways to increase their Corporate Average Fuel Economy (CAFE). The goal was to make America less dependent on foreign oil. The most obvious way of doing this was to increase the miles per gallon a car could get. Or at least NHTSA thought so. All one has to do is look at the sprawl of suburbia and you can see that we havent decreased the amount of fuel we are using.
Another way of doing this was to allow a credit for “flex-fuel” vehicles ” meaning that those vehicles can run on gas or a blend made up of 85% ethanol, called E85 ” a corn based fuel (sugar cane in Brazil) that opens up a revenue stream for the farmers in the mid-west.
This allowed the automobile manufacturers to produce flex-fuel vehicles and get a credit for them, which allowed the manufacturers to produce bigger vehicles with less miles per gallon since CAFE was average fuel not per car fuel regulations. It would be beneficial to the ultimate goal of getting the United States off of foreign oil except for one thing; NHTSA didnt demand that the oil companies make E85 accessible at their corner gas stations.
There are over 5 million flex-fuel vehicles on the road today that could use E85, but the fuel is not available. If McCain and Kerry were serious about CAFEs goal, they would submit a plan to get E85 in the corner gas station and our diesel fuel as clean as Europes diesel fuel. Diesel fuel gets about 25 percent better miles per gallon. Ethanol is homegrown and allows us to use 85 percent less foreign oil. If you spend $50 on gasoline to fill up your tank, on a well-to-wheel basis, that $50 starts in the middle east and goes to the oil company and into your tank. If you spend $50 on E85 blend $42.50 *85%) of that money starts in a farm, goes to the producers here in the states and ends up in your tank. All $42.50 stays in the United States.
The automobile business is not the only industry that is subject to ups and downs. Oil companies have not always enjoyed the types of profit’s they are making today. Twenty years ago General Motors was just as fat as sassy as the oil companies are today. If, just like General Motors, the oil companies dont start listening to the market and what their customers want, their customers will find different avenues to get what they need. And just like General Motors, Chevron has health care and pension costs.
Case in point, the automotive industry keeps pushing back the arrival date of hydrogen vehicles, partially because there is no infrastructure for hydrogen fuel. But Honda Motor Company is working on a hydrogen home refueling system; either electric or solar. If you have a solar roof that produces all your electricity you will eventually be able to buy a home refueling system that can produce hydrogen in your garage.
Worried about traveling out of a certain radius of your home for fear of no hydrogen? There are cars that are being brought to production right now that are bi-fuel; they can take gasoline or hydrogen.
I would submit that most people are not so against the profit’s that oil companies make. What they are against is the blatant disregard of the oil companies in listening to what the consumer wants; to get off the dependence of foreign oil and to bring more revenue streams back to the United States. There is a great fear in Americans that they are losing all of their high paying jobs to foreigners who will do the job cheaper.
On “Walk to the Moon”, narrated by Tom Hanks, their is a point that Hanks makes in the movie, “In 1969 the lunar module went to space with less memory in it than a regular pocket calculator.” Cars at that time were about the same, but in the last 40 years cars have made huge technological advances, mainly in an effort to help save fuel. Yet, we are still using the same fuel for transportation energy.
We are a great country. We have intelligence and technology that we could deploy if we would only send all the lobbyists, or warlords, packing out of 1600 Pennsylvania Ave. It is completely disingenuous for President Bush to understand that Brazil is doing better financially because of E85 and not demand that it at least be supplied to 40 percent of the gas stations.