7/18/08 Iran Announces Crash Energy Independence Program;
                                                                                America Sleeps

By Peter Forman
Published: July 18, 2008
New York—Iran has begun a crash program to establish its own energy independence by converting all of its vehicles to natural gas.

 

Iran, one of the world's largest suppliers of oil and gas, has a shortage of oil-refining capacity—the ability to turn oil into gasoline.
In recent months, the West has discussed using a blockade of Iran to try to influence its behavior on a host of issues.

Iran has responded by implementing a crash program, which it is subsidizing, that would permit its vehicles to run on natural gas—of which it has the world’s second largest reserves.

 

Iran charges $50 per vehicle for a "field conversion" at service stations, despite an actual cost of over $1000.
Iran is pursuing energy independence; America sleeps.

 

Meanwhile Brazil has achieved its own energy independence by using “Flex-Fuel” technology.  Flex-Fuel allows any mix of gasoline, methanol, ethanol, or butane to be used.
Here in the U.S., for a cost of about $100 per vehicle, new cars coming out of the factory could be made Flex-Fuel.
But there is no place to fill up.
So we have a classic chicken-and-egg problem.

 

Gas station owners will not add alcohol fuels to the stations until, it is estimated, about 25% of the cars already passing through are Flex-Fuel compatible.
America puts between 12 and 17 million new cars and SUVs on the road each year.
So if Congress were to require that all new cars were Flex-Fuel, then within 2-3 years there would likely be alcohol fuels available.
The aggregate cost of this conversion would be between $1.2 and $1.7 billion per year — a modest amount for the value derived.

Now, we could argue that the seriousness of our situation requires even more draconian measures, but we at least need to move on this.
Congress is considering a 50% requirement, which would materially extend the time for alcohol to show up at gas stations.  We should require 100%.
Maybe we need to create incentives for station owners to accelerate the conversion.

 

Admittedly, these are short-term solutions, but they are critically valuable ones.
OPEC is a cartel.
We are the victims of this oligopoly (monopoly of a few).
Let us begin to reintroduce at least some competition to the transportation sector with Flex-Fuels.

 

We urge you to show your support for these measures.
Contact your Senator or Congressperson and ask (demand) that they support Flex-Fuels.

Ask them to support the Open Fuel Standard Act of 2008 that will require Flex-Fuel for 80% of all new vehicles; our first step on the road to energy independence.

 

Iran is awake.  Are we?

 

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