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Freedom From Foreign Oil - The Key To A Thriving Economy & Environmental Sanity!

Freedom From Foreign Oil Within A Decade - Fact or Fiction?

 

Freedom from Foreign Oil In 10 Years
The Key To A Thriving Economy & Environmental Sanity!

By Robert Falco & George Cappannelli

Sound impossible? It is not! There is a realistic and achievable way to free ourselves from foreign oil in ten years and in the process create a stable economy and much healthier and saner environment. The answer lies in a multiple part strategy that includes both short and long term measures, but neither group of measures alone will get us there.

On the long term side, we need to craft a truly comprehensive, national energy plan that combines the best ideas from several alternative energy plans and ensures the coordinated investment of essential dollars in a host of technologies that are necessary for our energy future.  This future must include the creation of a new national electric grid, the development of major wind and solar capabilities, new batteries and fuel cells to power our vehicles and the retrofitting and green construction of our commercial and residential buildings.  Each of these should be a part of the plan if we are to ensure greater safety, stability and sanity for our nation over the long run. 

However, the best of intentions and a huge investment in these long term steps alone will not get us to our goal.  We also need a comprehensive, multi-decadal transportation fuel strategy that in the near term that will allow us to actually begin reducing our dependence on foreign oil – not at some hypothetical time when these future technologies are finally ready for prime time – but starting today! 

Can we do this?  Yes, if we create a new kind of strategic collaborative that works well above the level of partisanship and is made up of key stakeholders from government, related industries, the philanthropic sector, environmental organizations and the media. And this strategic collaborative must stay focused on one primary goal – the creation and implementation of a new, comprehensive, national energy policy. 

Another critical component of this near term strategy involves mandating that the U.S. auto industry begin manufacturing as many new dual-fuel automobiles (natural gas/gasoline, natural gas/ethanol, natural gas/electric) as possible and offering authorized natural gas fueling as “add-ons” to the hundreds of thousands of new vehicles that are currently sitting unsold in storage facilities and on dealer lots.  And a parallel and absolutely essential component to a national energy plan must involve the launch of an immediate, national initiative to convert as many of our current fleet of 235,000,000 cars, and light duty trucks as possible to this same dual-fuel operating system as quickly as possible. This should be done in addition to converting our 15,000,000 heavy trucks and buses to this same system. In fact, the conversion of our current fleet of cars and light trucks to this dual-fuel operating system is fundamental to the success of all of the other initiatives for it is the only thing that will provide us with the time we need to test and develop the future strategies without significantly delaying or sacrificing our ability to stabilize our economy, reduce our dependence on foreign oil, and reduce both the dirtying and warming of our planet.

A Straight Forward Solution

Is this achievable?  Yes and the way forward is much simpler than you may imagine. Contrary to the misinformation that continues to circulate in the public debate, we currently have ample supplies of natural gas or what we refer to at various points in this article as a transition fuel. This supply is sufficient to fulfill all of its current functions of fueling our industry, generating electricity, heating our homes and businesses and cooking our food, as well as the task of powering all of our vehicles. This supply lies right under our feet, it can be extracted from the ground reasonably quickly and safely and, in addition to serving us now as a primary transportation fuel, it will also serve as an infrastructure bridge to hydrogen when fuel cells become mainstream, and an enabler of electricity storage technologies and local rapid electrical recharging of the batteries in future plug-ins.

Natural Gas as a transition fuel for our transportation sector will also contribute significantly to helping us dramatically improve our economy through saving billions of dollars a year we currently spend on the purchase of foreign oil, billions of dollars that, rather than dirtying and warming our planet, can be invested in infrastructure improvements, education, healthcare, life care, research and development and much more. 

These tremendous benefits are all available to us starting now and yet, thus far, as a nation we have either decided the solution won’t work, (a decision that is based on old, outdated, data), or we have simply allowed its potential to be buried beneath partisan divisions and private stakeholder agendas. But the bottom line is that this solution will work and it can be implemented immediately -- if we have the national will and wisdom to put it in place.  And implementing it will set us on the path to oil independence within a decade, immediate reduction of pollution and greenhouse gases, creation of new jobs, the building of the infrastructure needed for an even cleaner future, the stimulation of our floundering auto industry and, of critical importance, it will remove us from the path of approaching international conflicts as the demand for oil resulting from the growth of both the Chinese and Indian economies collides with a dwindling worldwide supply.

An Essential Component

So providing our cars and light trucks with a natural gas based dual fuel operating system is not only a feasible solution, frankly it is the only one that will significantly reduce our use of foreign oil over the next couple of decades.  The implementation of our electric grid, although critical to our future, will not reduce our oil consumption for at least a decade or more.  A focus on diesel fuels will not do this because although cleaner than gasoline it is not economical.  And the expansion of our wind and solar grid, again an essential component of the future, will not reduce our dependence on foreign oil today either.  Only the conversion of our current cars and light trucks to a dual-fuel (CNG/gasoline, CNG/ethanol, CNG/electric) will accomplish this.  Why?  Because it is something we can start doing today.  And of equal importance, when all is said and done the powering our cars and light trucks accounts for approximately 75% of the oil America uses in the transportation sector and the transportation sector accounts for a preponderance of our total oil consumption.

Of course, some critics are quick to point out that this solution presents us with a kind of chicken-and-egg problem. On one hand we are not building cars that run on CNG because there are no fueling stations, and we are not yet building enough fueling stations because there are no cars to use them. But this problem will actually solve itself by having vehicles that can use both fuels. Because the cost of natural gas will be significantly less than the cost of gasoline, the cost of refueling and the eventual improved service station distribution will determine that natural gas becomes the primary fuel used. As part of the national plan, Federal and State fiscal encouragement for installation of these CNG filling stations is needed. As we shall see these installations will provide a basis for the future of both electrical and hydrogen refueling capabilities. This will further encourage advances in renewable bio-methane production from bio-wastes. In addition, the continued availability of the gasoline fuel systems in vehicles will also promote future advances in ethanol production, advancing development of cellulosic ethanol as an additional alternative to gasoline.

A Relatively Simple Conversion

In short, the smooth transition to CNG/gasoline fueling can be made by adding a ‘parallel’ natural gas fuel system in our existing 235,000,000 cars and light duty vehicles. This ‘parallel’ system involves a relatively simple installation and no advanced training for the people who will make the conversions – certainly nothing that comes close to the kind of training that would be necessary to convert current vehicles to an electric operating system.  And with this kind of dual system, drivers will be able to consider gasoline as a “backup” fuel which they can use to prevent themselves from being stranded until the day when sufficient CNG service stations are available.

Using natural gas will also allow us to keep our existing American-sized cars and pickups – no small benefit when convincing the public to adopt this system.  It will also greatly lower CO2 by 20-30%, and lower NOx (representing both NO and NO2, which are responsible for air pollution) by 75%.  As we discussed earlier, because heavy-duty vehicles, (i.e., trucks and buses,) are not able to run on batteries and fuel cells – at least not in the foreseeable future – natural gas gives us a means of powering these 15,000,000 vehicles into the distant future with a fuel source that is much cleaner  than gasoline or diesel. In addition to all these substantial benefits, perhaps the biggest gain of all will come from the fact that using natural gas as the primary fuel to power our cars, trucks, and buses, will shift our national focus away from our need to preserve our access to foreign oil and with it from the threats that availability and cost pose to our economy, our lifestyle, the safety of our nation and the wellbeing of the earth.

“Clean Diesel” Technology

Clean Diesel is currently being touted as one of the ways to reduce our dependence on foreign oil because of the increased mileage diesels get. And in the overall picture – at least in the short term - diesels do have a contribution to make. However, diesel fuel comes from oil, and although diesel engines are 30% more fuel efficient than gasoline engines, a barrel of oil produces less than one half as much diesel as it does gasoline. Sole reliance on diesel would be equivalent to reducing worldwide oil reserves by half. In a world where the demand for oil has already equaled or exceeded the supply, this proposed reliance on diesel by itself simply does not make sense. Furthermore, the additional cost of building a diesel is equal to, or more, than the cost needed to add the parallel CNG fueling system to a spark ignition engine. In addition, the proposed move to diesel engines only applies to new vehicles, many of which need years to have the diesel engines developed for them, and this solution doesn’t address the existing 235,000,000 cars and light vehicles currently on the road. Finally, to get cleaner diesel emissions, diesel fuel needs further processing to remove sulfur; this results in an additional increase in the price of diesel over gasoline.

Natural Gas -- The “Natural” Transition Solution

Deep underground in the U.S. and Canada lie huge supplies of natural gas. The U.S. alone has approximately 100 years of reserves and Canada’s supply may be double that. Although we have known this for a long time, it is only in recent years that we learned how to get natural gas out of the ground economically. Now, in principle, every internal combustion engine in the existing 250,000,000 registered vehicles on U.S. roads (whether gasoline or diesel) can be made to run on natural gas. We know what is needed to enable them to run on a parallel natural gas fuel system (tank, fuel lines, injectors, valves, meters and engine control module (ECM) remapping). All of the engineering and extensive testing to use duel fuel capability has already been done – literally millions of times – with a significant proportion done by American auto manufacturers. (There are over 8,000,000 vehicles converted to CNG worldwide.) This track record, as well as laboratory testing shows that natural gas fuel systems are safer than gasoline fuel systems, because the tanks are much stronger, and, if ruptured, the gas goes upward, rather than pooling under the vehicle.

Natural Gas Supply

Congressional hearings in 2003-2004 concluded that our natural gas supply was running out. So U.S. auto companies turned their attention away from the production of natural gas cars. However, this conclusion was reached before we learned how to “mine” the natural gas that lies deeper underground -- as much as 10,000 feet or more -- in gas shales and tight sands. Now that technology has been developed to allow us to mine huge supplies in the U.S. and Canada we no longer have that problem. Indeed, although the situation is different in Europe, where the North Sea gas supply has peaked, worldwide the known reserves of natural gas far exceed oil reserves.

When talking about the supply of natural gas, one must also consider that in addition to natural gas in the ground, methane (the main component of natural gas) is a renewable resource which can be made from municipal, farm and industrial wastes. It has been estimated that bio-methane could fuel all of the heavy duty vehicles in the U.S. into the foreseeable future.

Internal Combustion Engines

All internal combustion engines can run very well on natural gas, whether spark ignition or diesel. Because natural gas has 130 octane, it burns at a slower rate than gasoline. Thus, the sparks have to be ignited earlier in spark ignition engines. This timing change can be done by reprogramming the existing on-board computer, the ECM when natural gas is used as fuel. Timing is routinely changed by the ECM in Flex Fuel cars when we fill up with E85 instead of gasoline. For a vehicle to run on natural gas another program simply needs to be added to the engine’s computer. For older cars other changes need to be made, but none of these are either technically or cost prohibitive.  By the same token, because of the higher octane, an owner interested in taking advantage of it may choose to spend an extra few hundred dollars as part of the conversion, to “soup up” the engine’s power by changing its compression ratio, etc.

Further Improvements To Internal Combustion Engine Emissions

If 5-7% hydrogen is added to natural gas (based on the energy of the fuels), internal combustion engines will reduce emissions an additional 10% in CO2 and 25% in NOx. The immediate benefit would be further ‘greening’ our environment. Adding this small amount of hydrogen would require no changes in the CNG fueled cars except for another computer program to be added to the ECM. Think of it as “high test” natural gas. This addition of hydrogen can also improve the performance of older cars and light trucks.

Facilities Available for Conversions

Converting engines to run on CNG can be done using the existing equipment (hydraulic lifts, etc.) and skills of mechanics in the thousands of existing facilities discussed above. Technicians would have to be retrained, just as they do for model year changes, but as we said earlier their retraining is far more consistent with their current skill set than would be required for fuel cell or battery electric vehicle conversion and maintenance.

To accomplish the conversions we currently have 43,000 American dealerships as well as thousands of muffler, transmission and tire replacement companies. For the sake of our example, however, if we restrict the conversions to car dealerships and each dealership converts one vehicle per day, we can convert our 235,000,000 cars and light trucks in 10 years. And if auto manufacturers participated with their dealerships, any reprogramming “secrets” could be carefully controlled. Retraining mechanics to install and maintain gaseous fuel systems also will better prepare them for the fuel cell/hydrogen future. Of course, given the huge number of existing vehicles, many more technicians will have to be hired. As a result, the conversions would create profit centers for dealerships. This might lead to further acceleration of the conversions (maybe using two lifts per day), which would allow us to complete conversion of the fleet in 5 rather than 10 years.

Conversion Costs

The current cost for the conversion of cars and light trucks literally runs the gamut from the reasonable and affordable to the patently absurd.  What accounts for this range? Everything from lack of scalability within the auto parts manufacturing business to redundant and overly stringent EPA rules, from excessive tariffs charged for parts imported from other countries to very high costs charged by auto manufactures to conversion companies who require codes for each individual type of vehicle they want to convert.   There are, however, relatively sensible fixes for each of these cost impediments and limitations, if the industry stakeholders and our Federal and state governments are serious about finding a solution to our nation’s energy needs. 

The one factor that will most impact the affordability of conversion costs for our current fleet of cars and light trucks is, of course, volume.  The greater the number of conversions we execute, the more parts will be readily available at lower prices and the more streamlined EPA regulations will become.  There are also some very innovative solutions that need to be explored.  There is a leasing option the French are experimenting with that we will discuss shortly under the home refueling section. There are also conversion models in place in other countries that we would be wise to study.  In Argentina, for example, the average cost of conversion is about $600 per vehicle.  India, Brazil and other nations also have models that are worth exploring.  Finally, there are a host of new proposals that are currently working their way through the system that will allow for conversion costs as well as the cost of new dual-fuel vehicles to be included in new Carbon Cap and Trade legislation being considered.  So the bottom line on conversion costs is well covered in the old cliché that reminds us that, “Where there is a will there is a way.”     

CNG Distribution

As mentioned earlier, natural gas distribution should not present a major hurdle. Natural gas is very widely distributed. Approximately 64% of American homes and businesses currently rely on natural gas as their primary source of heating. As a result it is piped down the “Main Street” in almost every American town.  Since many service stations also exist on these main streets, and use natural gas for heating, the task of getting natural gas to the pumps is relatively easy and inexpensive. Finally, several companies sell and install CNG fueling pumps for service stations and while they currently cost about $400,000 per pump an increase in the number of pumps installed will significantly reduce their cost as well.

At present, there are more than 2.2 million miles of pipelines laid across our country to deliver this gas, and over 1500 CNG fueling stations already in place. An intelligent next step in the distribution process would be to make public the 800-plus private CNG refueling stations servicing fleets. Many of these can be opened up to the public by adding a fuel dispenser outside the private station, by simply fencing off the private areas; this would not require additional pumps. The second step is to take advantage of, as noted above, natural gas trunk lines that run down the “Main Street” of almost every city and town in the U.S. and the service stations that are on these main streets. Thus, as the conversion proceeds, if we add a CNG pump to these service stations, the availability of fuel increases substantially. And if we add sufficient numbers of pumping stations in clusters or regions, like Southern California, the Greater Phoenix area or wherever the largest numbers of conversions are being made, we can expand sensibly and in a timely manner. Of course, as more and more vehicles are converted more supply stations will be necessary, and while they are being upgraded vehicles will need the capability to operate on dual fuel (CNG/gasoline). The estimated cost of converting half of the existing 160,000 U.S. service stations (at $400,000 a pump) is $32 billion in total. While this may seem like a significant cost, it should be weighed against the $482 billion the U.S. sent oversees to pay for foreign oil in 2008 alone.

So getting a large number of service stations to include a CNG pump is not a logistics problem; it’s a cost issue. With most cities and towns in the U.S. having a natural gas trunk-line going down “Main Street” and several service stations located on main street, bringing a feeder line 100 feet or less to these station (if not already there for heating purposes) and installing a natural gas pump becomes a question of cost, not availability. It has been estimated that these costs could be recovered when one pump services 600 cars. If extending feeder lines and adding CNG pumps started soon and in earnest, having 600 cars fueling at every CNG pump in high-conversion regions across the country should be achievable within a year of the conversions. This is a propitious aspect of this solution for Federal energy policy to support. Initial steps have been proposed in the Emmanuel-Boren Bill, and these should be reframed with a national plan in mind.

Home Refueling

With natural gas as a fueling option, Americans have another way to fill up, namely, at home. Since some 64% of American homes use natural gas for heating and cooking, they are all candidates for home refueling. Currently, the only commercial home refueling device is quite expensive (approximately $3500, with a $1,000 federal rebate), but production of this technology in large numbers will bring the price down considerably. An example of pricing possibilities is the French approach, where home refueling devices are leased for one Euro a day from the French National Gas Company.

Operating Costs

The individual car owner will always look for the cheaper filling option. Pump price has and probably will govern fuel choice. Eventually, it is hoped that the desire to reduce carbon emissions and contribute to cleaning our cities and the Earth will also encourage customers to adopt CNG as their fuel. At present natural gas is selling for $4.25 cents for 7.78 gge. One gge is the amount of natural gas equivalent to the same energy as a gallon of gasoline. Thus, the spot price before taxes is about $0.55 per gallon. With state and federal taxes, it should be possible to keep CNG pricing at about $1 per gallon. (Note: The current price at the pump in Utah is $0.70 per gge because the state regulates pricing.) Clearly, if the value to the nation of having its citizens driving on natural gas becomes apparent, then the use of natural gas should be supported by state and federal programs through tax reductions or rebates on fuel and/or conversion costs. One emerging possibility is to recover costs through future carbon Cap and Trade laws, since natural gas results in vehicles emitting between 20-30% less CO2. Another possibility, given that natural gas was considered a public utility from 1939 to 1973 and held at a fixed price, would be to set a 10-20 year price range to incentivize conversions and usage. Although times are different, our current crisis may suggest a modern reassessment of the value of some form of regulation over a transition period.

Emissions

Natural gas engines emit lower greenhouse gases and less air pollutants. Comparing the only CNG-fueled car sold in the U.S., the Honda Civic GX, with its identical gasoline twin, the Honda Civic, the EPA measures for the GX are 76% lower smog forming pollution, 72.5% lower NOx, 52.4% lower CO, 82% lower NMOG (the sum of all organic air pollutants excluding methane) and 15% lower total greenhouse gases. Over the coming decades, by using CNG fuel, Americans could still enjoy their big vehicles, while at the same time reducing pollutants. This is the equivalent of 76% of us carpooling or giving up driving altogether.

In the 1st decade after the plan is put into effect we can save between 2.2 billion and 3.3 billion tons of CO2 from entering our atmosphere. (This is the equivalent of between $5 Billion to $7.5 Billion Dollars in Cap and Trade at today’s world prices.) During the implementation decade, roughly another 1.1 billion tons will not enter the atmosphere. Other than using CNG as the dual-fuel solution, this tremendous impact on the warming and dirtying of our planet will be delayed for at least twenty to thirty years! Although electric cars offer great promise toward reducing emissions, consider this: Ford Motor Co. recently committed to buying 5000 Lithium Ion batteries per year for 5 years starting in 2012; General Motors hopes to sell 10,000 Volts in 2011. At their predicted rate of electric car sales, no existing air pollution-measuring instrument would be sensitive enough to measure the miniscule total reduction in emissions from so few electric vehicles over the next couple of decades. Yet, with conversion to CNG, in 10 years the 235,000,000 existing autos and light vehicles can be converted.

E85 Use

Currently there are approximately 7,300,000 Flex Fuel cars on the road, although most owners don’t use E85 because of its cost and relative unavailability. As we learn to make ethanol from cellulosic waste products, prairie grasses, etc., the cost of ethanol will decrease. Then it may become an important fuel for internal combustion engines. However, at present, cheap, abundant, cleanly produced cellulosic ethanol is unavailable, while natural gas is available now. Nevertheless, the dual tank solution could allow E85 to be used if the liquid fueling system is made Flex Fuel ready. In this tri-fuel picture, the driver has further choice of which fuel to use (E85, CNG, or gasoline); the choice will again most likely be based on cost, with availability the second consideration.

A Critical Bridge to the Future

Implementing CNG as fuel will drive the development and implementation of local hydrogen production and local electrical peaking power capability. Apart from its role in further reducing internal combustion engine emissions, a very important additional reason to develop local hydrogen production capability is that hydrogen will be needed for future fuel cell powered cars whose “engines” will be twice as fuel efficient as our present internal combustion engines. Currently almost all hydrogen is made by reforming natural gas. This is done on a large scale, in which huge amounts of CO2 are released in the process. However, research now shows that hydrogen production from natural gas can be done very efficiently on a smaller scale, and much more cleanly, so that individual service stations can produce hydrogen locally. About 15 of these new and cleaner hydrogen production processes have been demonstrated in the laboratory. Many need further development. The economic incentives of having natural gas available for vehicles, and the desire and/or regulatory requirement to go to hydrogen/natural gas mixtures to further reduce the emissions of the natural gas burning engines, will accelerate these efforts, allowing the best of these processes to prevail. This has the added benefit in that a hydrogen supply becomes available earlier to power fuel cells as soon as the latter become an affordable and robust mass-produced electrical power source for vehicles.

Secondly, by the time fuel cells become mainstream and batteries have matured – a time frame some estimate to be between 15 and 20 years away - hydrogen, efficiently and cleanly produced at service stations all over the country from natural gas, will serve an additional purpose. Hydrogen can be used to power a stationary fuel cell at the service station to provide “burst” electric power for “quick” recharging of plug-in electric vehicles. This will ease the potential of electric grid overload, which could be a major problem during rush hour traffic, for example.

Economic Benefits

In addition to cleaner cities and a cooler world, the economic benefits to our nation of implementing this dual-fuel solution are enormous. The average cost of conversion per vehicle will be greatly reduced as more and more conversions are executed.  Parts will be cheaper and conversions themselves will be cost competitive.  In addition, Federal and state government tax rebates and subsidies will further reduce the costs.  But even without these elements the total cost of conversion of our current fleet of 250,000,000 vehicles is the equivalent of less than one year’s total spent to obtain foreign oil.  And when the conversion is complete, we will be economically and environmentally ahead.

This process will save or create a huge number of new jobs. In addition, these jobs skills will provide a lifetime of productive work. Furthermore, and of immense importance, the American technological advances and business models that inevitably will emerge can be exported all over the world. This will further support the American economy, while making a huge contribution to cleaning the earth’s air, lowering its greenhouse gases, and reducing the inevitable and dangerous tensions over oil supply. With China having already surpassed the US in carbon emissions and in the number of new vehicles sold, both milestones occurring in just this past year, the urgency to make the transition to natural gas is clear. With the much larger and more widely distributed reserves of natural gas, and with its renewable potential, we could foster a worldwide reduction in tensions, costs and emissions.

Government’s Role 

For our nation to move ahead in eliminating the need for foreign oil and, at the same time, encouraging and supporting the rebirth of our automotive industry, government – both Federal and state - will have to participate. Voters must also be re-educated on the real facts about natural gas as an alternative transportation fuel so they can be strong voices in encouraging and supporting a new direction for the automotive market. Our elected officials must also be re-educated. Some of the ways that government can accelerate this proposed nationwide conversion effort have already been mentioned. But perhaps the first and most important thing government can do is to make people aware of the enormous and detrimental cost of waiting for research and development to bring very complicated items such as batteries, fuel cells, and hydrogen production and distribution to the mass market, and a smart electric grid on-line. So far, neither fuel cells nor Li-Ion batteries have a proven track record on the road. These technologies raise concerns about their capabilities: what is the lifetime of these technologies under real world vibrations, temperature variations, power drawdown during acceleration and power input during rapid recharging, etc. Furthermore, these technologies commit the auto industry to aircraft manufacturing quality standards. These factors may cause massive delays in development of either fuel cells or batteries or both, or at the minimum, result in potential massive recalls on the part of auto manufacturers if put into service to early (which could truly bankrupt them!). Furthermore, they will significantly increase the price of a vehicle.

Federal and State governments can enact laws and regulations to support this solution that:

  • encourage conversion to natural gas;
  • streamline EPA regulatory procedures;
  • encourage or mandate that auto companies participate by requiring state and federal fleets to buy dual-fuel or tri-fuel cars (the gasoline side could also be ethanol enabled);
  • add conditions to auto manufacturers’ future bail outs requiring natural gas “dealer upgrades” on all vehicles as an add-on customer option;
  • seed the first natural gas corridors between major cities along federal highways;
  • provide rebates to consumers to help pay for conversions of existing vehicles or the purchase of new dual-fuel vehicles;
  • produce a national public service information campaign to educate the buying public.
  • support job training and retraining.

Although several incentive programs currently exist, most stipulate that the incentives are for dedicated natural gas vehicles only. This lack of confidence that the American driving public will use the free market pricing of fuel to guide their decisions has severely limited the number of natural gas vehicles that have been purchased. Drivers are being regulated away from the most important and realistic solution to our foreign oil problem. The American public deserves to have the choice of which fuel to use, and furthermore, it deserves to be treated in a much more responsible way by our government. Drivers will respond by making natural gas the resounding fuel success story it deserves to be.

The Missing Link

As if all of this were not already enough to convince even those most resistant to this solution, consider another issue. At present auto manufactures in the U.S. build and sell between 10-15 million new vehicles per year.  This variance depends on the strength of our economy.  In good years the number of vehicles sold is 15 million.  In challenging economic times like those we are passing through, that number will be at or below 10 million.  So even if every vehicle used fuel cells or Li-Ion batteries, it would take 20-25 years to replace our current fleet of 250,000,000 gasoline and diesel powered vehicles. In reality, however, the scenario will probably be a lot closer to President Obama’s goal of having 1,000,000 plug-ins on the road by 2015.  That would mean it would take six years to get to that 1,000,000 plug-in number or 166,666 vehicles on the road per year. Even if we were to greatly exceed this goal and put one million of these new vehicles on the road per year it would take 250 years to wean our fleet off oil.  Let us repeat this fact:  at 1,000,000 new alternative fuel vehicles per year it would take 250 years to replace our current fleet.  Unfortunately many of us remember the early 1990s when the perfect battery was “just around the corner.”  Unfortunately, we simply do not have the time to wait! 

Next Steps

To “crack this tough nut,” however, it will be necessary to approach the problem from multiple sides. We need cooperation and simultaneous movement from all strategic partners in the energy picture: industry stakeholders, state and federal governments, the media, the philanthropic sector and the public. To accomplish this we need to convene a stakeholder summit that moves well beyond the usual formula of talking-heads and the delivery of position papers. Instead the summit needs to take advantage of state of the art strategic planning models that are solution oriented, focused on achieving collaborative agreements and committed to putting in place operational plans that include the articulation of specific goals, clear roles and responsibilities, funding models and metrics. 

We need schools and universities to lay the facts before their students which in turn will promote a grass roots understanding that an alternative exists now, and that Americans have a choice about their energy future. Industry must see a profit in selling new dual/tri-fuel cars and their dealers must see a profit center in converting existing vehicles. The government must play its role as both facilitator and regulator, because safe extraction of natural gas and safe conversions are essential for the success of the plan. Both aquifer safety and environment protection must be assured.


Lastly there is the question of implementation. These strategies can include the adoption of the dual-fuel (natural gas/gasoline, natural gas/ethanol, natural gas/electric) model by private fleets who control their own destiny and timing and can seek assistance and support from both Federal and state governments in the form of various tax rebates and incentives.  States and municipalities also have the option of implementing pilot programs that can include the conversion of their own state vehicles as well as a sub-set of both early adopters from the public and private fleet companies.  There is also the option at the Federal and state levels of utilizing at least portions of budgets set aside for the purchase of new vehicles to convert current vehicles, reduce their maintenance costs and extend their life cycles.  In short, the road to implementation is as varied as our imaginations.
 
So imagine--an improved economy, new jobs, freedom from foreign oil, cleaner air and lower greenhouse gas emissions – not at some indeterminate time in the future, but now!  Imagine time and significant amounts of money available to invest in our critical needs and to develop (not just dream) of the hydrogen infrastructure for the future that can be used to support hydrogen-based electricity storage and/or instant electricity production for rapid plug-in car battery recharging without danger of overloading the grid. Lastly, imagine a vital, engaged automotive industry that is committed not just to profitability and to a series of mythical future solutions, but to working aggressively today to participate in solving our energy challenges. Finally, imagine that we can start immediately; that we can go to work solving a number of our nation’s biggest problems and that we can return America to the path of environmental sanity, economic prosperity, national security and conscious world leadership. So what are we waiting for?   As Peter Drucker once said, “If you want to know the future, invent it!”

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Freedom From Foreign Oil Within A Decade – Fact or Fiction?

By George Cappannelli & Robert Falco

From conversations in the Obama White House to those held in corner coffee shops all across America, from pronouncements delivered by the Speaker of The House to the messages about increases in miles per gallon performance presented in car commercials, and information about new drilling technologies for natural gas presented by major oil companies, the subject of our dependence on foreign oil is on the front burner.  Our dependence is blamed for our economic instability, for an increase in global warming through C02 emissions and pollution, and as one of the major underlying causes for the wars and aggression of the late 20th and early 21st Centuries.

If this list of ills is even partially true, the question that comes to mind is why haven’t we done something – something very immediate and substantial - about reducing our dependence on foreign oil?  Is it because there is no solution?  Do we lack the technological knowhow? Do we suffer from the absence of a real and immediately available alternative fuel for our transportation sector?  Or is our foreign oil dilemma the result of other causes such as the deep seated divisiveness and stalemate that has been present in Washington over the last several decades, a divisiveness that has contributed to so many of the serious challenges facing our nation today.

In this article I will address these primary questions, examine some of the misperceptions about alternative energy and offer some specific solutions to our foreign oil challenge – specifically as it relates to the transportation sector.  Why this sector? Because the burning of oil to power our cars, trucks and buses accounts for a very significant percentage of the 25% of the world’s oil supply we now consume annually.  Staggering, isn’t it?  We represent only 4% of the world’s population and yet we consume 25% of the world’s oil supply.

The Bottom Line.

So let’s begin with the end in mind.  Is there a solution that will actually allow us to dramatically reduce and then eliminate our dependence on foreign oil within a decade?  The answer is an unequivocal Yes!  This solution involves our use of our own natural gas supplies as a dual-fuel (natural gas/gasoline, natural gas/ethanol, natural gas/electric) operating system to power our cars, light and heavy trucks and buses.     Why natural gas?  Because natural gas is the most abundant, cheapest and most accessible fuel available today.  It is also 100% American owned.   With some intelligent self-regulation by the natural gas industry and more rigorous environmental standards set by both Federal and state agencies, natural gas can also be extracted from the ground relatively quickly and in an environmentally safe way.  

If this is true, why are there so many who believe that we do not have enough natural gas and that it is hard to extract and expensive to deliver to our filling stations?   The fact is, until relatively recently some of these things were thought to be true.  It is only in the last few years that dramatic improvements in our exploration techniques have allowed us to identify vast amounts of natural gas in gas shale deposits and tight sands basins all across the United States and the development of new systems for extracting the gas called ‘fracing’ have allowed us to know that we currently have enough natural gas to heat our homes and businesses and to power our entire transportation fleet – 250,000,000 cars, trucks and buses - for about 100 years.
  
The Distribution Side

So we have enough of a supply of an effective, available alternative fuel.  We also have the technical know-how to get it quickly and safely out of the ground, but what about distribution?   Can we get it to our filling stations?   Do we have to build an entire national distribution structure to make this solution a reality?  No.  Natural gas is currently used as the primary heating fuel in approximately 64% of American homes and businesses. This means there currently exits a major pipeline system delivering natural gas coast to coast.  In fact, most major towns and cities in America currently have natural gas pipelines running down their main streets.   And since many of our nation’s gas stations are also found along the main streets of America, the task of getting natural gas to our filling stations is relatively simple and reasonably inexpensive – certainly far more inexpensive than the cost of building out entirely new infrastructures for other alternative fuels.

What about natural gas pumps?  They, too, are available today.  While they are certainly not available on every corner, given an increase in the demand for natural gas for vehicles, the cost of installing and operating these natural gas pumps can be reduced significantly.

So if we have an abundant supply of natural gas; if we have the technological knowhow to get it safely and inexpensively out of the ground; if we already have a very substantial distribution system that can effectively get natural gas to our filling station; and if we have the pumps to deliver it to our cars and trucks and buses, what else stands in the way?  The answer quite simply is we need a sufficient number of cars, trucks and buses that use natural gas to allow us to capitalize on a dual-fuel (natural gas/gasoline, natural gas/ethanol, natural gas/electric) operating system. 

A Well Vetted Technology

So is it possible to run our current cars, trucks and buses on this dual-fuel mixture?  The answer again is a resounding ‘Yes.”  Today many of the world’s car manufactures produce new dual-fuel cars that run on natural gas/gasoline.  They produce and sell them in Europe, Asia, and Canada.   Why not in the U.S.?   Because most Americans and many of our legislators are still operating under a number of the misperceptions discussed above about the amount of natural gas we have, our ability to get it safely and cost effectively out of the ground and our ability to get it to the pump.   Why else?  Because our major American auto makers were given incorrect information in the early years of this century, information that was presented to Congress as well that suggested that our supply of natural gas was limited.  As a result auto makers decided they should focus their attention in other directions.

Well, if this is true, and if we know better now, why aren’t American auto manufacturers rushing to produce these dual-fuel cars?    There are a number of reasons for this, not the least of which centers around the fact that old habits are often the last to die.  But other reasons include the fact that once a very large enterprise like an automotive company begins to re-direct its attention and energies, it is sometimes very difficult and costly to change course.  Hence most America automakers today are betting the farm on hybrids, bio-diesels and ethanol alternatives and, further down the line, on electric plug-ins and fuel cells.

The Missing Link

There is, however, another problem and it involves basic math.  The real solution to our dependence on foreign oil requires more than the manufacture and sale of new, dual-fuel vehicles.  The real solution requires the conversion of the majority of our current fleet of 250,000,000 cars, trucks and buses to this same dual-fuel operation.  The reason for this is relatively simple.   Detroit currently produces somewhere between 10 million and 15 million cars and trucks per year.   This variance in this number depends on the strength of our economy.  In the best of years the number of cars and trucks manufactured and sold is around 15 million.  In leaner times, like those we are passing through, that number of cars and light trucks manufactured and sold in the U.S. drops to around 10 million or less.  
But for the sake of argument, let’s suppose that our Big Three American Auto Makers were to wake up tomorrow and decide that every car produced next year would be one of these new dual-fuel cars.  And let’s also say that American buyers were firmly convinced that this was the way to go and rushed out and bought up all 10 Million to 15 Million cars and trucks. 

Unfortunately, even if this miraculous scenario came to pass it would still take somewhere between 20 and 25 years to replace our current fleet of 250,000,000 cars, trucks and buses.  That’s 20 to 25 years of continued dependence on foreign oil, continued economic instability, continued warming and dirtying of our planet and continued exposure to the very real threat of oil driven wars and aggression as the economies of China and India grow and the inevitable collision between the supply and the demand for oil occurs.

So what’s the answer?  The only one that truly makes any real sense is not an ‘either or’ but an ‘and.’  To get ourselves out of this very serious dilemma of depending on foreign oil to power our vehicles we must build and sell as many new alternative fuel vehicles per year as possible and we must also convert as many of the cars, trucks and buses that are currently on the road as quickly as possible.
 
Can this be done?  Absolutely!   We have almost forty years of technical experience and knowhow gained converting and testing vehicles with internal combustion engines (ICE) to run on both natural gas and gasoline.   And this experience basically involves adding an additional tank to store the natural gas and pipe system to carry it to the engine.  Outside of some relatively minor adjustments to the cars onboard computers of cars manufactured over the last 5 or 6 years, no major changes need to be made to the engine itself.  For older cars there are others solutions.  In addition, we also have more than enough car dealerships, service stations, muffler shops, and tire replacement centers to allow us to make these conversions in a reasonable period of time.  In fact, based on recent estimates there are between 50 and 60 thousand places that could do these dual-fuel conversions.  They have the lifts, the tools and the staff.  All they need is some basic training. That means that if each of these locations completed only one conversion a day it would take about 7 or 8 years to convert our entire fleet of 250,000,000 cars, trucks and buses.  If each of these locations completed just two conversions a day this time frame could be cut in half?

The Cost of Conversion & The Cost At The Pump

What about the cost of the conversion?  Well, at the moment the cost of converting the average car or small truck runs somewhere between $2500 to $5000 per vehicle.   At first blush that’s a reasonable amount of money.  Our studies show, however, that the cost of conversion is related to a number of factors that can be controlled and with them the price of each conversion can be reduced.   Scalability is the first factor.  Because we do not currently convert a large number of cars to this dual-fuel operating system, the cost of parts and labor is reasonably expensive.  Increase the number of conversions substantially and the cost per conversion will be substantially reduced.  There are also costs associated with the conversion that result from trade tariffs on particular parts that are unnecessarily high and these can be reduced.  There are costs that conversion companies currently have to pay to buy computer codes from auto manufactures to make the conversion. The cost of these codes appear to be set high to discourage the conversions.  This factor can certainly be reduced or avoided entirely by having auto company dealers do the conversions or by making the codes available to all conversion centers at more moderate prices.  And finally, there is the very real possibility – especially with the recent enactment of the American Recovery and Reinvestment Act – that conversions can be paid for through tax rebates and incentives and unique application of cap and trade standards that would either fully cover or significantly lower the cost of these conversions.

And what about cost at the pump?   With gasoline prices relatively low, there are many who believe we can continue to avoid making a major decision about alternative fuels.  Fortunately, we now have a President who is not one of them.  He understands that our addiction to foreign oil is crippling us and that we must do something about it and do it now.   But how much will this decision cost?  Will it be more expensive for us to operate our cars, trucks and buses utilizing this dual-fuel strategy than using gasoline alone?   Fortunately for us and for the wellbeing of our country the answer to this question is NO.   The fact is, with some forethought and intelligent action on the part of our natural gas companies and some encouragement from the Federal government we can ensure that the cost of an equivalent gallon of Natural Gas can be about $1.00 not including Federal, state and local taxes.   In fact, in Utah where Natural Gas continues to be treated as utility, Questar delivers an equivalent gallon of Natural Gas at the pump for around .75 cents a gallon.

Collaboration Not Competition

What else is in the way?   There is, at present, a reasonable amount of misunderstanding and some negative and unhealthy competition between proponents of various alternative energy plans and various alternative energy fuel and power sources.   But that’s the American Way, you say!  It’s just part of the free market economy!  Well, that may be and, in good times, times when our economic survival and our environmental wellbeing are not hanging in the balance, the free market may, indeed, be the best way to vet products and services.   But in times like these it is apparent that that we need to consider other strategies – strategies that have been employed before in times of major crisis – strategies that involve collaboration, cooperation, new forms of strategic alliances and more.

And that is precisely what is both necessary and possible now.  Indeed, when we look at what we as a nation have accomplished in times of past national emergencies and during wartime, we see that we can, if we have the courage and the willingness, find a very clear and sensible path for going forward.   So when we look closely at a number of the alternative energy plans currently being proposed by people like Al Gore, Andy Groves (former CEO of Intel), T.B. Pickens and members of the Obama Administration, what we find are a lot of really terrific proposals and elements that will, in the long run, most probably get us to a much greener, smarter, environmentally sustainable and economically sensible economy.  What we do find, however, is that when it comes to the transportation sector these plans are betting the farm on large vehicles alone or on the availability of new electric and fuel cell technologies, technologies that many of our leading scientists tell us may be anywhere from 10 to 20 years away from reaching the mass market.  Indeed, when it comes to the electric battery, the promise of its possibilities has already been with us for several decades.
 
So much like the conundrum we discussed when we viewed the fallacy of relying exclusively on the manufacture of new dual-fuel cars, trucks and buses to get us out of our dependence on foreign oil, the question we must answer is whether or not we have the luxury of waiting a few decades or longer for these new batteries and fuels cells to come on line?  Yes, the question is, what do we do about our very serious economic and environmental challenges in the meantime?

The answer to this question seems relatively simple.  Rather than continuing to allow a struggle for positioning between various alternative energy plans and fuel sources and their advocates, what we all need to do is to start thinking with a lot more ‘and’s’ and a lot fewer ‘but’s’.   For in the end, the real solution to our independence from foreign oil lies in our willingness to utilize a combination of these plans in parallel rather than rely on a random, hit and miss consecutive application of just one of them.
 
This means we must continue to invest all of the resources we can in the development and testing of new technology.  We also need to encourage, and if that is not enough, mandate that our automotive manufacturers produce as many new dual-fuel vehicles as possible.  And if we are wise and truly want to put a stop to our economic hemorrhaging and our environmental degradation in the here and now, then we must also put an essential and necessary time bridge in place that connects the present to the future by converting as many of our current vehicles to dual-fuel (natural gas/gasoline, natural gas/ethanol, natural gas/electric) operating strategies.
 
Next Steps and Benefits

So let’s review a few of the steps necessary to implement this solution and take a final look at some of the benefits of adopting this dual-fuel strategy.  First we need to continue all of our efforts to develop both an electric and a hydrogen economy.  Second we need to encourage and require our auto manufactures to produce as many new dual-fuel cars, trucks and buses as possible.  Third we need to eliminate the misinformation about natural gas and start educating the Americans car and truck buying public and a number of our legislators about the availability of this, plentiful, cost-effective fuel source.  Fourth we need to convene key stakeholders from various industries (automotive, automotive parts, natural gas companies, pipeline companies, state, Federal and private fleet companies and representatives from both the Federal and state governments) to set a strategy for moving forward.  Fifth we must convert as many of our existing cars, trucks and buses to a dual-fuel (natural gas/gasoline, natural gas/ethanol, natural gas/electric) operating strategy as quickly as possible.

What will the benefits be of executing these five steps.  They are really quite extraordinary.   We will reduce and then eliminate our dependence on foreign oil within ten years and in the process save between $3.5 Trillion and $7 Trillion dollars, a savings that can be invested in infrastructure, healthcare, education, life care, science and technology, new industries, and much more.  Let me repeat!  This natural gas solution will save our nation between $3.5 Trillion and $ 7 Trillion Dollars over ten years.  That is roughly the equivalent of between 4 and 9 American Recovery and Reinvestment Acts put end to end.
 
This solution will also reduce CO2 emissions by 30% and pollution by more than 75%.  It will infuse over $1.3 Trillion Dollars into our economy from the conversion of our cars and light trucks alone, triggering a major new revenue stream for struggling car dealers.  It will create or save over 1 million jobs.   If Detroit is both wise and able, this solution will also stimulate the sales of new cars and increase the value of cars currently on the road.  It will also do something else - something very essential that none of the other solutions alone can do – it will provide our nation with the time we so desperately need to refine, test and execute some of the other energy and power options that will, no doubt, prove to be the key to long term economic stability and environmental sustainability.  This natural gas solution will put in place some very essential parts of the infrastructure that will be needed for the coming hydrogen economy. And finally, as a very important bonus, this solution will dramatically improve our national security by reducing our susceptibility to the oil driven wars and conflicts that will soon begin to occur as the world’s demand for oil collides with its supply.

A no-brainer you say!  That is precisely what we say and that is why we are strongly supporting The ReEmpoweringAmerica Plan.

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Energy Fact:

There are approximately 850,000,000 internal combustion powered vehicles on the world's roads.  250,000,000 of these are in the U.S.  At present there is only 1 car for every 72 families in China and India and yet the rate of auto sales in these countries is skyrocketing.  Consider the implications on the supply and demand issue if the number families in China and India that drive cars becomes 1 car for every 36 families.



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