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The Future of Alternative Fuels


Presentation Series

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Suggested Citation:
Sperling, Daniel (1991) The Future of Alternative Fuels. Institute of Transportation Studies, University of California, Davis, Presentation Series UCD-ITS-RP-91-15

Presentation, Detroit Section, SAE

My message is simple. We have lost our way with alternative fuels and desperately need some leadership. Ten years ago, we as a country squandered billions of dollars on ill-advised synthetic fuel investments. Today, we have gone to the other extreme, toward excessive cautiousness. But it's much worse than that. Because, what little we are doing, is, in my opinion, mostly wrong. We are mostly pursuing the wrong options and doing so in a narrow, shortsighted manner.

Let me say I have been closely monitoring energy policy and private investment in alternative fuels since the late 1970s. I have spent most of my research career evaluating the merits of the different options, and analyzing strategies for introducing the more promising options. I try to be objective and to understand the interests and concerns of the different parties: those of industry, government regulators, and the environmental community.

When asked my opinion on what should be done with alt fuels — and even when not asked — I have counseled "Caution. I urge caution because the future is uncertain, and our knowledge incomplete. Caution, because recent history is a story of costly mistakes: this country's costly adventure with synthetic fuels, New Zealand's catastrophe with synthetic gasoline, and the premature commitment by Brazil to ethanol, and by NZ to CNG. The result in each case was major economic losses with little or no benefit. So I am highly sensitive to the folly of premature commitments to alt fuels.

But look at what we are doing in the US: We are spending close to a billion dollars per year subsidizing the least attractive alternative fuel available: corn-based ethanol. We are mandating oxygenated fuel blends that provide little or no environmental benefit (or benefits of any other type), and that incur a significant additional cost; And industry and govt policymakers are focusing on an option — FFVs — that provide essentially no benefit of any sort — and they are doing it on the basis of some vague — wrongheaded, I believe — notion that FFVs are an important first step in moving toward an alternative fuel future, whatever that is. GM and Ford have made commendable progress in developing FFV technology, but it's not nearly enough.

In summary, cautiousness and conservativeness are admirable, but what we have here is foolhardiness.

No single person or organization is to blame. We are adrift in a sea of chaos. The problem is a result of political compromise, coalition-building that is not in the public interest, and a decentralized political system that lacks leadership.

I must confess that what provoked me into this rather intemperate outburst is a short article in the latest issue of the SAE magazine, an article on alt fuels. The problem with the article is that it is remarkably narrow in addressing why to introduce alt fuels; and remarkably conservative in addressing how to introduce alt fuels.