Imagine There’s No Gasoline (No Demand for It, That Is)

Lynne Kiesling

The ever-clever Jonathan Rauch has a Reason column today in which he makes a provocative proposal to President Bush:

Here is the idea: Propose an international treaty whose signatories would agree to eliminate gasoline from their transportation systems by a date certain—say, in 30 years. Seek initial support from Europe and Japan, but open the treaty to any country that cares to join. Specify only that the treaty should allow signatories to reach the goal in any fashion they please and that it should allow for tradable credits against whatever interim targets it sets. That way, countries can act at different speeds and in different styles. Then let the negotiations begin.

Hmmmm. I like the flexibility, tradability and transparency. I have my doubts about being able to innovate to such a specific, goal-oriented target, though; recall the California dictums that “we will have an electric vehicle by 1996, no, we meant, 1999, no, well, 2001, oh, well, forget it”.

What do you think?

Later in the column Rauch notes

Replacing gasoline also happens to be do-able. In a December 2004 NRDC report, Greene calculated that by 2050 the United States could virtually eliminate its demand for gasoline by substituting ethanol, making cars more efficient, and taking some other conservation measures. That was without considering the effects of plug-in hybrid cars, which can be charged from the power grid at night. Because they switch to liquid fuel only for longer trips, plug-ins can get more than 100 miles to the gallon of gasoline—and much more than that if they run on a mixture of, say, 80 percent ethanol and 20 percent gasoline.

This argument ignores the volumetric and energy density difference between gasoline and ethanol, which once you factor that in, makes ethanol-fueled transportation a higher-cost option. Only if you think that international financial markets do a poor job of pricing in the geopolitical security problems associated with oil are you willing to advocate government intervention to mandate ethanol.

Interesting, but I’m not yet persuaded. Add on the whole central-planning-unintended-consequences thing, and I’m really not persuaded.


19 thoughts on “Imagine There’s No Gasoline (No Demand for It, That Is)

  1. What’s the point of such a scheme?

    If we don’t also stop using kerosene, diesel, and every other fraction that comes from crude oil, all this would do is subsidide the rest of the world using gasoline.

    A gallon of crude oil contains various (more or less) volatile fractions. Some of them are diesel or kerosene or heating oil (same base oil); some are bunker fuel for ships. Some are various other oils and volatiles that have various uses. And some are gasoline.

    Not using the gasoline doesn’t stop it being produced, as long as we need any of the other fractions (and if anyone thinks ethanol is a serious possibility for trucks and ships, well… that’s even more crazy than suggesting the US switch to it for the passenger fleet, which is crazy enough, given the logistical and land-mass issues).

    So either we stop using petroleum for fuel entirely or we have gasoline around. If we don’t use it as fuel, it’ll just get sold to other people who will use it for fuel instead, and I don’t see the benefit of subsidising gasoline use in the rest of the world.

    (Since you already mentioned the inefficiency of ethanol, I don’t need to. Though it’s immense irony to see Reason advocating a government mandate of a total fuel change and massive restructuring of infrastructure by fiat…)

    I see no reason why any other country would wish to join in this suicide-pact of a treaty. They’d be better off burning the gasoline we’d make cheaper unilaterally.

    Given that the rest of the world simply isn’t going to sign on, realistically (why would they? they don’t seem to care about Chavez’ antics, or Iran, anyway – and oil is a far cheaper fuel than ethanol, unless you’re Brazil and happen to have a huge and otherwise wasted source of it lying around), his goals regarding reducing support for oil-based dictatorships, while well intentioned, simply won’t happen.

  2. I suppose that with a 30 year time horizon, anything is possible, BUT…

    this is pretty unrealistic. Our whole energy infrastructure is based on gasoline. There are gazillions of dollars in capital for wells, pipelines, terminals, refineries, etc. What happens to all that capital? Do you just break up the pipelines and such and sell the scrap metal to the Chinese?

    Another thing you lay people need to understand is that gasoline is not produced in isolation. With every gallon of gasoline, you get a certain amount of diesel, jet fuel, kerosine, asphalt, etc. Plastics, in particular, are a byproduct of the gasoline production process. So if you’re going to get rid of gasoline, you’re going to have to eliminate a lot of other things that smart guys like Rauch haven’t even considered.

    Plastics underly the modern world to a larger extent than even computers do. We are not in any position to eliminate them, not in even 30 years.

  3. Central-planning does tend to take the market forces out of play. Gasoline is king of the market for its power, portability and profusion (abundance). I would like to see the market ease into another biofuel and/or natural gas to power vehicles (I don’t think ethanol will be the best solution) while the hydrogen economy is formulated and implemented. By 2050?

  4. Central-planning does tend to take the market forces out of play. Gasoline is king of the market for its power, portability and profusion (abundance). I would like to see the market ease into another biofuel and/or natural gas to power vehicles (I don’t think ethanol will be the best solution) while the hydrogen economy is formulated and implemented. By 2050?

  5. Popular Mechanics did an article on various alternative fuels in the recent past (available online here.)

    Bottom line on ethanol, which I find quite telling:
    One acre of corn can produce 300 gal. of ethanol per growing season. So, in order to replace that 200 billion gal. of petroleum products, American farmers would need to dedicate 675 million acres, or 71 percent of the nation’s 938 million acres of farmland, to growing feedstock. Clearly, ethanol alone won’t kick our fossil fuel dependence–unless we want to replace our oil imports with food imports.

  6. Popular Mechanics did an article on various alternative fuels in the recent past (available online here.)

    Bottom line on ethanol, which I find quite telling:
    One acre of corn can produce 300 gal. of ethanol per growing season. So, in order to replace that 200 billion gal. of petroleum products, American farmers would need to dedicate 675 million acres, or 71 percent of the nation’s 938 million acres of farmland, to growing feedstock. Clearly, ethanol alone won’t kick our fossil fuel dependence–unless we want to replace our oil imports with food imports.

  7. So Peter,

    What if corn yields went up? If you can get me $3.00/bushel corn, I can get you more than 300 Gal of ethanol per acre.

    JBP

  8. John,

    How ya gonna grow that yield? Petroleum-based fertilizers? Sufficient fertilizer application that runoff kills fish in the Mississippi and the Gulf of Mexico? Does your calculation monetize those damages?

  9. John,

    How ya gonna grow that yield? Petroleum-based fertilizers? Sufficient fertilizer application that runoff kills fish in the Mississippi and the Gulf of Mexico? Does your calculation monetize those damages?

  10. John,

    How ya gonna grow that yield? Petroleum-based fertilizers? Sufficient fertilizer application that runoff kills fish in the Mississippi and the Gulf of Mexico? Does your calculation monetize those damages?

  11. John,

    Those words came from Popular Mechanics, not me.

    I’m certain that if a major use of corn were the production of ethanol, yields would go up. Perhaps someone would come up with an extremely high sugar content corn (through the evils of genetic engineering). Or more fertilizer. No matter what, someone will complain.

    Bottom line is that ethanol is not the silver bullet some are touting it to be.

    Peter

  12. Even if ethanol isn’t a bronze bullet, it (or Korea’s famous rooftop gardens) is an investment in a less-contangoed infrastructure. So perhaps this reduces to the previously given option of buying futures (or forced savings bonds!) at the pump; holy disentanglement, batman!

  13. Even if ethanol isn’t a bronze bullet, it (or Korea’s famous rooftop gardens) is an investment in a less-contangoed infrastructure. So perhaps this reduces to the previously given option of buying futures (or forced savings bonds!) at the pump; holy disentanglement, batman!

  14. Even if ethanol isn’t a bronze bullet, it (or Korea’s famous rooftop gardens) is an investment in a less-contangoed infrastructure. So perhaps this reduces to the previously given option of buying futures (or forced savings bonds!) at the pump; holy disentanglement, batman!

  15. Whoa Peter! Popular Mechanics, I stand corrected. I would never want to contradict an esteemed scientific and economics journal of its stature.

    JBP

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