We all know that gasoline has several disadvantages. Oil is a finite resource, and can sometimes be very costly. It empowers totalitarian regimes around the world to spend billions of dollars on their murderous schemes. It pollutes the air. And, with economic development is Asia and elsewhere, more and more people are starting to buy cars and other luxuries that require oil. It does not take a Mises to figure out that when demand doubles and supply stays put, the price will go through to roof in the years and decades ahead.
Other fuels have more potential. Ethanol, for example, is carbon-neutral, cheaper than gasoline, and has higher octane than gasoline. Hydrogen is the world’s most common element and produces pure water when consumed. Hydrogen costs a little over a dollar per kilogram to produce. Hydrogen fuel cells are not subject to the same inefficiencies as internal-combustion engines, because they generate electric current from chemical reactions and are not thermodynamic devices.
The trouble is, nobody is going to produce ethanol or hydrogen vehicles when there are no hydrogen or ethanol fuel stations. And, nobody is going to create hydrogen or ethanol fuel stations where there are no hydrogen or ethanol vehicles on the road.
Brazil successfully switched to efficient sugar-based ethanol–by government fiat. How would a free market economy make that transition?
It is still cheaper and more efficient than other fuels.
Not really…
All the corn in America could only supply 4% of the fuel market at current. Even if we used sugar cane ethanol, we would have to face skyrocketing food and fuel prices if we switched.
Hydrogen fuel cells cost a lot.
There are ethanol fuel stations. If you really want an ethanol, hydrogen, natural gas, etc. as fuel then you can also get your own fuel station. The problem is that none of these are as efficient as oil for fuel. Only CNG has any future prospect, I believe.
So you believe that there isn’t a single ethanol, hydrogen, CNG, or electric car in all of America?
If by “successful” you mean “the destruction of millions of acre of food crop in order to grow sugar cane for ethanol.”
If there were a genuinely profitable fuel - like I think CNG might become in the future - an increasing number of people would begin buying cars that use this fuel, stimulating their production. As more people see its profitability, gas stations might start adapting pumps to the new fuel.
Fuel distribution companies have operations worldwide. If they wanted to switch technology, they could easily do so in cooperation with the similarly worldwide car companies. The reason they don’t is that it is an inferior technology you want them to switch to.
Look at how the electronics industry switched from CD to DVD and now to Blu-Ray.
Where there is a demand, the market will faciitate a supply in ways that are often so genius and innovative that none prior, otherthan futurist writers, could have predicted. As of now, there is little demand fof an oil-substitute for such fossil fuels are extremely efficient and are still in enough supply that there is still enough to last in the short-term without its price skyrocketing; however, once such factors begin to chance than there will emerge a demand for alternative fuels that the market can accomidate. Its economics 101.
Right now. Maybe ten years from now you’ll be lucky to get a gallon of gas for less than six dollars. In the meantime the auto industry can keep building gas-guzzlers, or switch to something better.
Maybe you should catch up on physics. The average automobile is extremely wasteful, compared to other options. The reason they stay in the laboratory is because of the cost of replacing existing infrastructure.
Everybody knows that corn ethanol is nothing more than a ridiculous political perk for midwestern states.
We wouldn’t have sky-rocketing fuel prices because, like I said, ethanol cost less than gasoline and has more energy in each gallon. I don’t foresee sky-rocketing food prices, either; they would just have to stop putting sugar in everything.
Priuses cost a lot, too, and people still buy them.
I agree. It’s already powering busses and UPS trucks.
When oil went up to $4 you couldn’t build Priuses fast enough. What do you think will happen when the wealth in the industrializing nations trickles down to the bottom and everybody in the world starts buying cars and iPhones?
I on’t know what will happen and nor do I need to know. One of the glories of the market economy is that it enables the most efficient utilization of knowledge; rather than needing to centralize all the facts in one center, in one “brain-trust” so that they may engineer everything the way they see fit, which is impossible due to the nature of the world and resuts in disaster, the markets enables all economic actors to do what they know best in synchronization with everyone else. Anyone, even the most intellegent economists in the entire word, when faced with this question, and with a question about the future in general can only reply in conjectures that often don’t even resemble what is to come. Rather than trying that, I shall plead ignorence, but I know that the actors who all have a pieces of the infromation that I would need to accuratly hypothesize will be able to yield the best possible result with the given conditions.
Yes, maybe 10 years from now a gallon of gas will be $6. The problem is that there is no reason to believe that the inflation-adjusted price of gasoline will rise above $6 a gallon. Considering that there is already “bug” produced crude oil that can be produced at $50/barrel, I don’t see us paying $6 a gallon gasoline any time in the future.
Maybe you should catch up on the news. Never heard of ethanol-powered cars? Or electric cars? Or CNG-powered cars? All of these exist with a very minimal infrastructure… hmmm, but you just said that that’s impossible! I wonder how.
Yet you mentioned it as an example of a good alternative fuel that could replace crude oil… Interesting.
Yet again, all of America’s corn could only produce 4% of America’s fuel needs. Only America’s fuel needs. And this isn’t about “using less sugar.” When you divert land from growing corn, barley, wheat, potatoes, etc. to growing corn or sugar cane for ethanol, you are by default raising food prices by reducing supply.
They also cost less than hydrogen-powered cars. Take this for example:
The Shelby Cobras start at $149,000, the pickup is $99,995 and the Hummers run $60,000 for the conversion alone — you supply the Hummer.
Unless you want to force everyone to buy super-expensive automobiles, you won’t get what you desire.
Krazy kaju, the question is how would the free market phase out gasoline power. 150 years ago people would have laughed at the idea of using petroleum products to make a 2-ton object safely move people around at 60 miles per hour. Today you are laughing at the idea that ethanol could do it better. You are arguing as if the free market has nothing to do with the situation. Your pessimism is warranted only so long as the state has a stranglehold on the industry, which is not a condition of the hypothetical question asked by the OP.
The fact that crude can be synthesized from biological sources does not comes as any surprise to me. I think it would be better to use, say, hydrogen, which is cheaper to produce and does not have to be processed as much.
The reason that they are not filling up the auto malls is because of a lack of, what do you call it, infrastructure. There are only about 800 CNG service stations in this country. Maybe that is why CNG vehicles are not so popular.
Don’t be silly. I meant sugar-based ethanol (and, possibly, some other source of ethanol that has not yet been discovered).
The idea is that any slight increase in food prices will accompany a greater decrease in energy prices. Sugar-based ethanol fits the bill because it is cheaper per gallon than gasoline and packs more energy per gallon.
If you’re critique ultimately doesn’t make sense, then yes.
Yet the reason hydrogen isn’t used is because of the incredible costs of production of hydrogen-using cars. Only because hydrogen fuel is cheaper doesn’t make hydrogen-using vehicles superior.
Most people who own CNG vehicles actually have their own filling stations. The problem is that, like with electric vehicles, it takes a considerable amount of time to fill a car with CNG. Also, CNG takes a large amount of space to store.
Using your logic that alternative fuel cars won’t become popular because the “infrastructure” for them doesn’t exist, you might as well argue that no petrol based vehicle exists. After all, how could gas stations ever be created without government intervention? There obviously is a free market solution to the problem IF the fuel is actually efficient. If it isn’t, don’t expect it to permeate the market.
All ethanol is sugar-based ethanol. Yes, there is sugar in corn. Regardless, by diverting land from food production to fuel production, you will cause food prices to skyrocket due to our huge demand for fuel.
The problem is that “the idea” is not going to work in the forseeable future. We just had a huge energy crash. As energy prices increase, exploration is incentivized as is the use of marginal oil fields. Likewise, “renewable oil” will probably be the replacement, considering that alternative fuels like hydrogen, CNG, and ethanol all come with their own problems (e.g. expensive vehicles, large necessary storage place, etc.).
A recent youtube video with Ron Paul discussing hemp- the topic came up and it turns out Hemp is a great source for ethanol. Anyone have any more detailed information on this subject?
Although you do have a good question that does have a good answer, I just wanted to highlight your statement here first. This is not to insult you, it is simply to correct a factual error in a statement. And it’s because the whole “ethanol” thing is a pet peave of mine. The idea that ethanol is a better fuel is flat out false, the combustion reaction for ethanol is as follows:
C2H5OH(g) + 3 O2(g) → 2 CO2(g) + 3 H2O(l); (ΔHr = −1409 kJ/mol)
It produces carbon dioxide. Ergo, it cannot possibly be “carbon neutral”. Furthermore, it produces large amounts of water vapor which is an even more potent green house gas than CO2.
Even the idea that ethanol somehow has more potential (through handwavium, I suppose) is tripe, since ethanol has an energy density of only 31.1 MJ/kg. On the other hand, regular gasoline has an energy density of 44.4 MJ/kg. Ethanol is only more efficient when it forms a 90/10 mixture (90% regular gasoline, 10% ethanol), which then produces a 47.1 MJ/kg energy density. On the other hand E85 (the magic wand of many ethanolites) has an energy density of only 33.2 MJ/kg. Are there more efficient fuels than gasoline? Yes, absolutely, but ethanol is not one of them.
The same way that gas stations got their start. This site may help give you a starting point. The gas station came into existence during the early 20th century through the spontaneous order of the market. There was a demand which was constituted in a source of supply. Originally people would just use buckets. Then they started using underground pumps. It simply went from there. Hydrogen stations can, and should, originate the same way.
Seriously, do a google search on “History of Gasoline” or “History of Gas Stations.” It’s actually pretty fascinating.
History of gas stations aside, the free market has solved problems like this before, it can do it again. That is as long as the government does not decide to “protect jobs” in the gas station industry.
Ama gi, are you a farmer who wants a subsidy or something? Ethanol is INEFFICIENT in every way. You need to go check up on your physics before you insult Krazy kaju.
Energy Density of Ethanol:24 MJ/L Energy Density of Gasoline: 34.2 MJ/L. Higher numbers are better right??? If you wanna go by mass, its 30 vs 46.4 MJ/Kg in favor of gasoline as well. Ethanol is highly expensive, it has destroyed brazil’s environment, forced them to subsidize the program to make it look successful, forced them to allegedly use slave labor to produce enough sugarcane, etc. The US would have to convert much of our food land into sugarcane land (corn is horribly inefficient to turn into ethanol, because you have to convert the carbohydrates into sucrose first), which would drastically decrease our food supply and raise costs. While at the same time raising the cost of the fuel! If ethanol is, as you say, inexpensive, then why do companies refuse to produce it? Why are governments forced to subsidize the programs? You think Exxon, the company who openly says we dont give a damn so long as we make profit, would ignore something that’s betterand cheaper than their gasoline? Ethanol is a joke.
The market’s solution is simple: as soon as oil becomes scarce enough to make it expensive enough that alternatives are cheaper, the first company to come out with an efficient alternative, be it CNG (good technology, but only a stopgap due to natural gas’ limited supply) or even better, efficient batteries for an electric vehicle, will be successful. You insult the prius, yet it is the symbol of the market responding to the will of the people. Granted, it was developed with government subsidy, but still the Japanese government didnt order its development, Toyota saw the demand and responded. The future of transportation, in a totally free market, will be electric vehicles charged from nucular power plants. Cheap, clean, efficient. Yet until oil is expensive enough to justify the investment in battery technology, the market is functioning perfectly by using oil. Rest assured, recent breakthroughs in battery technology such as silver nanotubes (http://peswiki.com/index.php/Directory:MIT_Nanotube_Super_Capacitor) will make gasoline obsolete in short order. I give it 30 years.
BRAZIL HAS NOT SWITCHED AWAY FROM OIL BASED FUELS!!!
Having been to Brazil 16 times in the past 10 years I can say that the above statement is true. It is also true that alcohol is cheaper per unit of energy than oil based fuels. It is not true to say customers prefer alcohol. There is a heavy subsidy to the sugar industry in Brazil that makes the alcohol. Without the subsidy Brazilians would in my estimation abandon alcohol and use petrol based fuels.
Brazilians seem to use (I do not have any data only observation.) have much more use of natural gas in powering vehicles especially in taxi and delivery fleets. Large vehicles use diesel just as they do in the US. Keep in mind that most natural gas in the US heats homes and generates electricity.
