The Ideal Alternative Fuel

Monday, June 22nd, 2009 at 7:15 pm

Whether or not it is done deliberately, it seems as though the huge swings in oil prices encourages us to put large amounts of money into alternative energy when the price of oil is up, only to see all these ventures fail when the price of oil swings down and makes them uneconomic.

We saw this happen in 1986 when the price sank to $10 per barrel and ethanol refineries were being given away by state governments that had taken them for unpaid taxes. We are seeing this now as the price plummeted from $150 to $35 in only a few months.

So we now know that the ideal fuel is one with a price lower than the lowest price of oil so that it remains viable even when oil is down. According to the Financial Times, the Mideast price of oil is about $30 per barrel.

How do the alterative energy sources compare? Oil shale and coal to liquid cost the equivalent of $100 per barrel. Oil sands maybe $85. US ethanol costs about $65.Onshore wind costs $75.

Another great problem in changing from fossil fuels to something greener is the problem of replacing the massive infrastructure investment we have in these fuels. According to the IEA, about 80% of our energy base is fossil fuel. Changing electrical power plants from coal to something else would require years. To switch from oil, we have to change the production system from oil wells and refineries to something else, and change over countless gas stations and vehicles. Even if we have the right technology, do we have enough money?

We need an energy system with minimal capital investment in production that can be implemented by inexpensively adapting conventional delivery systems and engines – diesel, gasoline, and gas turbines.

Finally, even if we have the right system, do we have the time? How long will it take to switch a significant amount of our energy system over to a new one? Predictions are that by 2030, over 20 years from now, fossil fuels still will be two-thirds of the mix. It seems that we do not anticipate a real solution to fossil fuels.

So the ideal alternative fuel solution, the answer to our energy problems would have at least these characteristics: (1) cheap variable cost, below $30 per barrel equivalent of oil, (2) predictable cost, (3) low capital cost for production facilities and delivery systems and other infrastructure, (4) provide a fuel that can be used in existing infrastructure, (5) and a fuel that can with be implemented rapidly implemented at a low cost. This would be the ideal alternative energy, the ideal alternative fuel, the real answer to our energy problems.

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