Saturday, April 22, 2006

What Fuels Us

Much ink has been spilled lately on the price of gas in the U.S. For me, it’s not so much the cost -- it is what it is and you pay it or you don’t drive -- it’s the rapid rise in the price that makes me crazy. A jump of over 20 cents overnight is unjustifiable in the absence of a catastrophe somewhere.

Having said that, our prices here in the U.S. are actually much lower than in many countries. A few countries, like Venezuela and Iraq, have prices that are a lot lower.

The main factor in price disparities between countries is government policy, according to AirInc, a company that tracks the cost of living in various places around the world. "Many European nations tax gasoline heavily, with taxes making up as much as 75 percent of the cost of a gallon of gasoline. In a few Latin America and Middle-East nations, such as Venezuela and Saudi Arabia, oil is produced by a government-owned company and local gasoline prices are kept low as a benefit to the nation's citizens."

I did a bit of research and put together the following list of current average gas prices around the world, converted to U.S. currency and converted to gallons from liters (most other countries sell “petrol” by the liter), listed most expensive to least.

Amsterdam, Netherlands: $7.12
London, U.K.: $7.03
Oslo, Norway: $6.80
Copenhagen, Denmark: $6.68
Paris, France: $6.04
Athens, Greece: $5.12
Sofia, Bulgaria: $4.24
Santiago, Chile: $4.20
Hamilton, Bermuda: $4.10
Queenstown, New Zealand: $3.73
Vancouver, BC, Canada: $3.52
Johannesburg, South Africa: $3.32
Hilo, Hawaii, USA: $3.30
Los Angeles, California, USA: $3.00
Singapore: $2.52
Salt Lake City, Utah, USA: $2.48
St. Petersburg, Russia: $2.23
Beijing, China: $2.12
San Juan, Puerto Rico: $2.01
Riyadh, Saudi Arabia: $1.50
Lagos, Nigeria: $0.62
Baghdad, Iraq: $0.40
Caracas, Venezuela: $0.15

No doubt you’ve seen the General Motors’ “Live Green Go Yellow” commercials touting their E85 (85% ethanol blend) alternative fuel. This sounds like a great idea, fuel from corn! However, things are not always what they seem.

According to the Green Car Congress website: “Because ethanol has less energy than gasoline, engines consume more to deliver equivalent power—in other words, burn E85, and your fuel consumption increases.

As an example, the 2006 Chevrolet Tahoe FFV delivers 13 mpg combined when burning E85 and 17 mpg combined when using gasoline—in other words, due to its lower energy content, ethanol imposes a 23% fuel consumption penalty in this vehicle. The Chevrolet Impala FFV delivers 19 mpg with E85, versus 24 mpg with gasoline—a 21% penalty.

E85 pricing tends to track with gasoline pricing, for a number of reasons. Add in the increasing demand for ethanol both as a standard blending component in gasoline as well as in higher-concentration E85 blends, and the price delta between E85 and regular gasoline may not be enough to offset the decreased fuel efficiency vehicles deliver when running on E85. According to the most recent (September 2005) Alternative Fuel Price Report from the DOE, E85 averaged $2.41/gallon and regular gasoline averaged $2.77 for that reporting period—a 13% difference.”

Well now, that doesn’t really sound like it’s worth it, does it? I’m not a scientist, or a socio-economic expert, but I do know that we are going to run out of oil, sooner rather than later. You can make a car run on just about anything, including used cooking oil (known as “biodiesel”) and ethanol, a major by-product of (among other things) sugar cane. Why aren’t the car manufacturers jumping on this bandwagon and offering vehicles already set up to run on alternative fuels? Because they don’t have to. I don’t have any answers here, just venting and throwing the topic out there.

I took this picture in Hilo, Hawaii when we were there in September, I had never seen a 4 on a gas sign before. I think I will soon see it again, and a lot closer to home.

23 comments:

  1. You missed an important point on E85. It is renewable, petroleum isn't. Also, the actual reduction in E85 milage in most FFVs is 5% -10%, not 21%. Ethanol critics are always inflating the numbers, and even Green Car Congress gets it wrong sometimes.

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  2. American Lung: I didn't miss that point, I realize that anything renewable is a better alternative to fossil fuels, I just meant that for consumers, the benefit needs to outweigh the hassles. Thanks for your input!

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  3. We had an interesting discussion in my family recently about what will happen when it is more profitable to sell corn to fuel cars than to sell corn to feed people. Actually, I guess we've already reached that point, but the demand for ethanol doesn't seem to have gotten high enough that it's diverted the corn market, nor the market for people who now grow other foodstuffs but may be tempted to chuck them for the corn that makes ethanol. That's the part that scares me. I am all for renewability, but is this a long-term model that will really work?

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  4. One word: money. Too many people (like W and his pals) are too heavily invested and are making too much of a killing in oil and gas production to get out. They're going to use it up to the last drop, come hell or high water and we will have to pay for it. It sickens me, but that's the way it is...

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  5. It is astonishing to me that the US continues to allow such cheap gasoline into its cars. Global warming is now a reality, even GW isn't denying it any more. So I hope, and please don't flame me, that the gas price in the US continues to soar, hopefully that will reduce gas consumption somewhat - of course, that will also require investment in public transport. Hmmm.

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  6. What do you think the price of corn will be in 2 years? Will our future Presidents be land tycoons rather that oil tycoons? Whose really going to benefit?

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  7. when I lived in Riyadh,SA the price of gas rose overnight from 10 cents a litre to 20 cents! Oh the outrage!
    It will definitely be interesting to see what the world comes up with for fuel alternatives. I was also watching a programme where people (certain celebrities...Daryl Hannah, maybe?) stops by greasy spoon restaurants and asks for their used french fry oil for her car. (Excuse me...I must now go and google that!)

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  8. oh..ok. Biodiesel fuel! I missed that part on your post! http://www.newsociety.com/bookid/3897

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  9. I'm glad I never learned how to drive.

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  10. Yes, of course its about money. Whatever we come up with to fuel our cars, it will become the commodity that oil is now, regardless of whether it is renewable or not.

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  11. Thanks for such a great reality check on gas prices around the world. It's amazing that our government has kept our prices down as long as they have. It has spoiled us, though, and I think it is going to be a harsh reality change for many as prices go up.

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  12. somehow now, the measley $3.00 a gallon i've been bitching about in California doesn't sound so bad. I won't be driving in Amsterdam any time soon.

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  13. I always think about the prices I saw in London 10 years ago per liter when I see prices rise here; we still pay less. We are relatively fortunate in terms of prices I think. But this whole issue is why I put my $ where my ideals are and bought a Prius. We also have a newly-built extension of public transit near our house and I plan to use it.

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  14. I agree with you, the price is less of an issue than is the rapid increase over such a short period of time. I think in the US we are pretty fortunate that prices are as low as they are.

    Our government should be encouraging car manufacturers to develop cars that use alternative fuels, rather than encouraging them to build bigger cars.

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