Suggested Citation:
Sperling, Daniel (1990)

Toward Alternative Transportation Fuels

The United States is destined to make a transition to non-petroleum transportation fuels. The question is no longer whether the transition will occur, but when and to which substitutes. In mid-1989, President Bush brought the issue to center stage when he made a proposal to mandate the sale of 9.25 million alternative-fuel vehicles between 1995 and 2004 in the nine most polluted cities of the country and to require, beginning in 1994, that all new buses in areas with populations over one million operate on clean fuels.

Though the president's proposal was not adopted, state and local governments in regions with particularly severe air quality problems are already taking action. The California Air Resources Board has adopted dramatically tighter vehicle emission standards, in effect requiring that a large proportion of new autos and light-duty trucks in the state operate on clean-burning alternative fuels by 2000. In the Los Angeles area, the regional air quality district adopted a plan that will require all local vehicles to switch to electricity or other low-emission fuels by 2007. Even Texas, the center of the U.S. oil industry, is gradually switching to alternative fuels for state-owned vehicles.

The most immediate motivation for reducing gasoline use is concern over urban air quality, but a number of other powerful forces are pushing the country toward alternative transportation fuels. The need to curb emissions of greenhouse gases and improve energy security also points to the development of a new energy strategy for transportation. But questions remain about the relative importance of these social goals as well as about the performance of the various alternatives and about how government can smooth the transition.

The lack of a clear consensus on social priorities makes it hard to compare the benefits of different fuels, each of which may address one problem, such as the release of greenhouse gases, but do nothing about another, such as dependence on foreign sources. At the same time, the likelihood of technological change makes it difficult to project and compare the costs of different fuels and vehicles over the long run. Adding to the confusion, often intentionally, are the lobbying and public relations efforts of vested-interest groups, which often spread misinformation and half-truths. Given the complexity of the situation, government regulation aimed at promoting any one alternative is premature at best, and economically disastrous at worst.

A good deal of the pressure to settle on a single alternative comes from fuel suppliers and automobile manufacturers, whose central concern is the lack of coordination between them, with the accompanying risk of major investment blunders. Managers in these industries want to make sure that there will be fuel available for the vehicles they produce, and vice versa.