(cross-posted at Deny My Freedom
If that doesn't look too familiar, you're not alone. That is a methanol gasoline pump, back when California funded it as an alternative to our most common source of gasoline, crude oil. It was a blend of 85% methanol and 15% gasoline - a hybrid blend that is similar to our efforts today to blend gasoline with ethanol. However, the experiment didn't last too long; it became one failure in a long line of attempts that California has tried to fund alternative energy sources to get the state moving towards cleaner fuels. In today's Wall Street Journal, there is a fascinating article about California's numerous failures to get the state off of its dependence on oil. It reveals a state whose attempts have been ineffective for several reasons - but mainly due to the oil lobby and a shift of focus from alternative sources of energy to making gasoline cleaner.
For a quarter century, California has pursued petroleum-free transportation more doggedly than any other place in the U.S. It has tried to jump-start alternative fuels ranging from methanol to natural gas to electricity to hydrogen. None has hit the road in any significant way. Today, the state that is the world's sixth-largest economy finds itself in the same spot as most of the planet: With $75-a-barrel oil, and increasing concern about the role fossil fuels are playing in global warming, 99% of its cars and trucks still run on petroleum products.
California launched its alternative-fuel drive as an energy-diversification effort following the 1979 global oil shock. When oil prices fell back, the state shifted its emphasis to fighting air pollution. Since then, California has rolled out mandates and subsidies for alternative-fuel demonstrations along with broader rules forcing the oil and auto industries to clean up their conventional fuels and internal-combustion engines. The assumption was that the one-two policy punch would induce the industries to shift away from oil.
But the market hasn't responded the way California intended. The oil and auto industries got the state to kill or water down the alternative-fuel mandates, arguing that making the technologies viable would require big public subsidies -- something most Californians didn't support. Meanwhile, the industries made their conventional products clean enough to meet the state's pollution limits.
The upshot: The alternative-fuel push has helped scrub California's air, but it has done so by forcing improvements in fossil fuels and the cars that burn them. It hasn't curbed California's oil consumption, because it hasn't meaningfully deployed alternative fuels.
It's not even clear that the air quality in California has necessarily been improving in recent years. According to the California Air Resources Board, it seems that ozone concentration has been increasing in most parts of the state in the past few years. Ozone is one of the chemical components that makes up smog, of which Los Angeles is notoriously known for. It's clear that even if we enforce limits on pollution, it does not necessarily mean that this will result in increasingly cleaner skies. If one looks at the data in California for the year to date, all the regions in California except two counties (Lake and Santa Barbara) exceed the state mandated level at the 1-hour time measurement, and those same two counties are the only ones that don't exceed the federally mandated level of pollution at the 8-hour mark.
However, the auto industry makes it plainly clear why it believes it shouldn't have to produce cars based on alternative sources of energy:
Oil and auto companies say they're justified in resisting government mandates to roll out alternative technologies when they're not convinced consumers will buy them. Donald Paul, Chevron's chief technology officer, says California regulators essentially tell industry officials, "We know what the answer is. You guys just spend the money and everything will work fine." He adds, "History has not shown that that works very well."
John Wallace, who dealt closely with California officials as head of Ford Motor Co.'s alternative-fuel program throughout the 1990s, agrees. "Beating up the car companies doesn't accomplish very much," says Mr. Wallace, who left Ford in 2002. "If you've got a pull from customers, the car companies will beat themselves up to try to satisfy it."
One wonders what it will take for companies to recognize that they have a moral imperative to change the way in which they act. If you've seen An Inconvenient Truth, you've seen what coastal flooding in regions around the world like Manhattan, Shanghai, and Calcutta would cause if the planet reaches that point - it would be devastating. Perhaps companies shouldn't worry just about whether or not people will buy their cars; they should educate consumers on the dangers of climate change and explain why new technology is needed. And given the fact that you have people pawning off their possessions to pay for gasoline, it might be a sign that people would be amenable to a solution that wouldn't humiliate them.
This image puts into visual form a startling sight: even though California has generally been acknowledged to be a leader in America when it comes to alternative energy, alternative fuels make up 0.29% of fuel consumption. We are extremely underprepared for the day that comes when oil runs out or when global warming forces us to change our ways. You have solar-powered cars, but these are not practical for traveling in yet. Fuel cell cars would be extremely clean, but they're not viable right now - probably because of their prohibitively high cost and the difficulty in perfecting the technique of efficiently converting hydrogen to energy.
While California has tried over the years to overcome its addiction to gasoline, it has failed in large part because of lobbying efforts on behalf of the oil and automobile industry - just another reason why politics in money is corrosive.
In 1987, a state legislator introduced a bill to require that, by 1994, all cars and light trucks sold in California either "operate exclusively on methanol fuel" or meet emission requirements essentially as low as those that did. Oil lobbyists got the bill watered down to call merely for a methanol study. In one meeting during the study, a top official of Arco, a California-based oil company later acquired by BP PLC, announced that Arco had figured out how to brew a gasoline that burned as cleanly as methanol, recalls Mr. Boyd, who was at the meeting.
That helped embolden California and the federal government to roll out requirements for cleaner-burning gasoline. By the late 1990s, auto makers had stopped building cars that would accept methanol, and oil companies no longer were putting in new methanol pumps. "That was the death of methanol," recalls Mr. Boyd. "Gasoline won."
California continued to search for oil alternatives. In 1990, as California regulators were putting the finishing touches on new clean-air rules, GM unveiled at the Los Angeles auto show a bubble-shaped car that ran on electricity and thus emitted no pollution. It was called the Impact.
The oil industry formed a coalition that sent letters to commission members and legislators opposing what it dubbed a "hidden tax" to subsidize alternative fuels. The California Public Utilities commission ruled that, while utilities might be able to spend ratepayers' money to roll out alternative fuels in the utilities' own fleets, they couldn't spend that money to try to commercialize alternative fuels more broadly.
This is not to say that methanol should be reconsidered as a solution - after all, it's been revealed to have its own problems. Aside from being an inefficient source of fuel (it was only 60% as efficient as pure gasoline), it also has toxic side effects, which led to its removal as a main method of producing the gasoline additive methyl tert-butyl ether (MTBE). However, corporations and lobbyists have vigorously opposed attempts to truly move us away from our addiction to oil. As soon as they associate such requirements to undertake development of alternative technology with the notion of a tax, they are able to successfully derail such legislation.
In 2001, GM sued California to block the zero-emission vehicle rule. Its suit, later joined by DaimlerChrysler AG's Chrysler unit, argued that by shifting their focus from electric cars to gasoline-burning hybrids, California regulators had turned their clean-air rule into a veiled attempt to improve fuel economy. And fuel economy, the auto companies noted, is something only the federal government has the legal power to regulate.
GM and Chrysler later dropped their suit when California officials further softened their rule.
Largely as a result of the zero-emission-vehicle mandate, California now accounts for 26% of the U.S. hybrid market, far more than any other state. Still, the approximately 52,000 new hybrids registered in California last year amounted to only about 2% of all new light-vehicle registrations there, according to R.L. Polk & Co., an industry consultant. As for the vaunted electric vehicles, there are about 15,000 on the road today, state officials say, but the vast majority are "neighborhood" versions, which resemble golf carts and aren't allowed on highways.
Automobile manufacturers are not really pushing the idea that people should be buying hybrid cars and other vehicles that run on alternative fuels. If you wonder why the 'Big Three', particularly GM and Ford, have been doing fairly shitty business as of late, the answer doesn't lie solely with pension costs and rising health care benefits, as their executives may like you to believe. No, the problem is that their business models are based on the premise that they will continue to sell SUVs and heavy-duty trucks at the levels seen earlier in this decade. With gasoline prices at their current levels, people don't want to buy cars that will burn a hole in their pocketbooks. As the WSJ article mentions, despite the rise in ethanol production, the practicality of moving to something such as E85, a blend of 85% ethanol and 15% gasoline, is very low at the time being:
Today there's just one E85 station in California that is open to the public. It sits beside a highway interchange in San Diego. It was opened three years ago by Pearson Ford, a San Diego Ford dealer that was convinced alternative fuels would be the next big thing. The station offers gasoline and diesel, natural gas, propane, electricity, biodiesel and E85.
What it sells, though, is mostly gasoline and diesel. On a recent morning, it was offering E85 for $3.10 a gallon, about 6% less than the $3.30 per gallon it was charging for regular gasoline. But, because a gallon of E85 contains about 25% less energy than a gallon of gasoline, the E85 actually cost more per mile. Only a handful of cars pulled up to the E85 pump.
As I had written in a previous entry, ethanol isn't going to be the solution we're looking towards. However, with a complete lack of investment in alternative energies - and an unwillingness by car companies to implement cleaner technology - one has to wonder what we are going to do to face this problem. Led by venture capitalist Vinod Khosla, an initiative will be on the ballot this fall that will impose a tax on oil companies, which in turn will be used to fund research in cleaner alternative fuel sources. It's called Proposition 87. It shouldn't come as any surprise who is opposing this measure:
Proponents of oil alternatives are pressing ahead. An initiative set for California's November ballot would hit oil companies with an "extraction fee" on every barrel of oil they pull out in California, a top oil-producing state. The fee would range from 1.5% to 6% of the oil's value, depending on the prevailing per-barrel price. Backers say the measure would raise $4 billion, which would fund research into alternative-fuel technologies and incentives for consumers and fleets to buy alternative-fuel vehicles.
The oil industry has formed a committee to fight the initiative. The biggest donor is Chevron, which so far has given $3.8 million, according to state records.
The measure has an impressive list of backers, including California Democratic gubernatorial nominee Phil Angelides and San Francisco mayor Gavin Newsom. The bill sets increased pollution limits, gives customers incentives to buy cleaner cars, and most importantly, takes a piece from oil companies' record profits to make a substantial move towards getting away from our dependence on crude oil and fossil fuels as a source of powering our cars. California, like the rest of America, has had great trouble in breaking the habit. But with 61 percent of Californians supporting Proposition 87, perhaps they may bring California to the forefront of the move away from gasoline once again. All addictions need to be broken sooner or later, and this is one addiction that could kill our planet.
(also cross-posted at Booman Tribune and My Left Wing)