<<  <  >  >>

The economic

and more than 70 percent less than

tion in 1906, and farm states such as

the first Model T, introduced in 1908.

Nebraska subsidized the fringe substitute

and efficiency

And that's without any adjustment

for conventional motor fuel during the

progress of the

for quality. Early cars rarely had an

Great Depression. Despite encouragement

internal combus-

enclosed body, tires couldn't be

from the U.S. Department of Agriculture,

removed from rims and buyers had to

ethanol produced from surplus grain proved

tion engine can

purchase a separate anti-kickback

to be no match for the surplus of crude oil

be expected to

device to prevent broken arms.

that came from the new discoveries in Texas,

Today's models embody literally hun-

Oklahoma, and other states in the 1920s and

continue.

dreds of standard features--from air-

1930s.1 3 4

conditioning and antilock brakes to

The subsidy floodgates for ethanol

computer-controlled carburetors [and

opened during the 1970s energy crises when

injection systems] and CD players--

tax breaks and government grants for

making driving safer, more economi-

ethanol conversion projects become com

-

cal and more fun.1 2 9

monplace. The Biomass Energy and Alcohol

Fuels Act of 1980 earmarked $900 million

for ethanol projects and set a goal for the

"Price war" conditions for automobile

farm fuel to capture 10 percent of the entire

sales beginning in 1997 and continuing into

U.S. motor fuel market by 1990.1 3 5 Despite

1999, coming on top of intense gasoline

competition, are continuing this trend.1 3 0

such government support, ethanol blends

would be as much as twice the cost of gaso-

The price of renting an automobile, not

line on an energy-equivalent basis. Ethanol's

only buying one, has significantly declined.

market share in 1990 was four-tenths of 1

The Cox and Alm study found that car

percent (0.4 percent),1 3 6 making the legisla-

rentals in 1997 were 60 percent cheaper than

in 1970 in terms of work-time pricing.1 3 1

tive goal 25 times greater than the actual

result. The market share of transportation

The economic and efficiency progress of

biomass has not appreciably changed

the internal combustion engine can be

despite state and federal tax subsidies of 54

expected to continue. Direct fuel injection as

cents per gallon.1 3 7

well as turbochargers to improve combustion

and intercoolers are promising technologies

Current interest on the part of Ford and

for diesel engines.1 3 2 Continuous transmis-

Chrysler in "alternative-fuel flexible" vehi-

cles that can run on either ethanol or gaso-

sion has great promise for reformulated

line is due more to the desire to use a loop-

gasoline engines as well. Improving today's

hole to achieve compliance with the corpo-

energy conversion efficiency factors of

rate average fuel economy (CAFE) mini-

around 24 percent for gasoline and 44 per-

mum mileage standards than to true con-

cent for diesel will be an important compo-

sumer demand. In fact, ethanol flexible

nent of future emissions reduction.1 3 3

vehicles register 25 percent less fuel econo-

A survey of the various alternatives to

my than do vehicles running on CARB

fossil-fueled transportation, on the other

Phase 2 reformulated gasoline--with no

hand, suggests that the market dominance

reduction in air emissions per mile.1 3 8

of conventional vehicles will continue long

into the foreseeable future.

Adding to the problem, only 40 service sta-

tions in the Midwest sell ethanol, ensuring

Ethanol

that the several hundred thousand alterna-

Ethanol is a high-octane motor fuel

tive vehicles produced by the two automak-

derived from grain and waste products, pri-

ers will run exclusively on gasoline.1 3 9

marily corn, and mixed with 15 percent gaso-

Ethanol output, even after receiving pref-

line ("E85"). Special governmental treatment

erential tax subsidies, can be disrupted by

of ethanol began with a federal tax exemp-

high corn prices, as occurred in 1996.1 4 0

23