Ground Clutter

June 3, 2005
It's started. On May 2 it was announced that Neiva, a subsidiary of Embraer, has delivered the first certificated production aircraft powered by ethanol — a crop duster. The company next plans to convert passenger aircraft to operate on ethanol.

Funny thing about this. For years, folks have been urging our guvmint to push subsidies and force the use of ethanol over oil-based fuels. For years, I have argued that ethanol will be used when ethanol delivers more energy per dollar than gasoline. In Brazil — which is short on oil, long on the ability to grow sugar cane — that is true today. Arguably, that is also now true in the U. S. of A. If it isn’t, it most likely soon will be.

The advantages of ethanol are largely two-fold: It's cleaner and it's renewable. Thus we can do good for the environment and kick our dependence on outside oil all in one fell swoop. According to ethanol boosters (most loudly represented by agricultural interests), this is ample reason for the guvmint to get involved. On the other hand, Americans are not interested unless ethanol is cheaper.

Many say it should be forced upon us by increasing the taxes on oil-based fuels or providing subsidizes on ethanol. Indeed, we currently have a half-dollar-per-gallon tax credit on ethanol. The other side (loudly represented by oil interests) says ethanol is too expensive, particularly when you consider the infrastructure changes required.

We already have refineries that produce gasoline, trucks that deliver it, service stations that pump it, and engines that burn it. A massive shift to ethanol for cars, airplanes, lawn mowers, and trucks would require some combination of duplicating and/or replacing all of that infrastructure.

On the other hand, if there’s one thing we can do in this country, it's produce grain and deliver it (cheaply) to the market. We can flat do that job, perhaps better than any other country in the world. It makes you wonder why we are so terrified of expensive oil. We might even profit from a switch to ethanol. After all, we already export grain. (If we in the South ever figure out how to convert kudzu into fuel, the South really might rise again.)

Ethanol, of course, is not the only alternative fuel being touted as oil prices climb. Diesel, fuel oil, nuclear power, hydrogen, and wind power are being pushed by big boys and girls who are putting their money where their mouths are. One company has invested in converting coal into fuel oil. The Germans did that in WWII, then quit in the face of cheap oil. Now, perhaps the process will turn a profit. In the meantime, Diamond’s twin-engine diesel aircraft is selling all over.

It is happening. It is an exciting time to be alive and watching.

So, which alternative fuel will end up on top? What should the guvmint do about all of this? Sit back and watch, that’s what. Let the market sort it all out. Anybody want to take bets on that happening?