US Energy Sec. Samuel Bodman seems a little behind the times when it comes to alternative fuels and the interests of carmakers.
Last week, Bodman released a study by the Department of Energy showing that cars can run on gasoline with a much higher ethanol component than the 10% blend now being sold at pumps across the US.
Bodman said that 13 different “late-model” cars were tested using gasoline that was 15% and 20% ethanol, and the results were “very encouraging.”
The US corn lobby was pleased to hear the results. Tom Buis, president of the National Farmers Union, called the DOE study results “good news.” He’s also on record as saying, “America’s farmers are ready, willing, and able to play a vital role in reducing our dependence on foreign oil.”
Courting farmers
After all, ethanol is made in the US from corn, and ethanol demand is assuming a growing importance in the farming industry. A higher ethanol blend in gasoline would mean stronger demand for the corn-based fuel by gasoline producers. It would also reduce demand for “foreign” oil.
To his credit, Bodman cautioned that more research on a wider variety of vehicles is necessary to determine whether the results of the study could be sustained more broadly.
With due respect to Bodman, Buis, and other people locked into the current US presidential campaign—and desirous of capturing the farmers’ votes in November—one wonders whether they might also look at expanding the kinds of fuel to be studied. After all, cars do not run on ethanol alone.
In fact, some automakers now believe that cars of the future will be driven by electricity. Consider the statement by Volkswagen AG Chief Executive Martin Winterkorn: “The future belongs to the electric car—with power from the socket.”
The future is electric
The biggest European car maker by sales is testing the Golf TwinDrive, in which an electric powertrain supports a diesel motor. The company also wants to introduce a purely electric model of its “Up!” small car.
Daimler AG’s Mercedes-Benz cars unit plans to build an electric version of its Smart car from the end of 2009, while Mitsubishi Motors Corp. plans to launch a mass-produced electric vehicle next year in Japan.
Would these developments en mass affect the oil and gas industry? Well, yes. Gasoline demand could decrease dramatically. And an all-electric car has no gearbox, valves, clutch, muffler, or exhaust and requires no spark plugs, no filters, and—no oil.
Developments of this sort really should be occupying the minds of oil and gas industry thinkers. What is the likelihood of their coming to fruition and how, in detail, will they affect the industry?
In an election year, though, it seems that about all the US energy secretary can think of are the number of votes the corn lobby can muster up.
