Earlier this month, Democratic Presidential Candidate Barack Obama outlined an ambitious energy plan to drive the United States toward a self-sufficient green economy. From fuel rebates to carbon cap-and-trade to vehicle fuel efficiency, the Obama plan has been widely accepted as the most comprehensive energy package released by a Presidential candidate to date. There is one specific section of the Obama energy plan which has the biofuel community abuzz: a flex fuel mandate for all new vehicles in the United States.
“Sustainably‐produced biofuels can create jobs, protect the environment and help end oil addiction – but only if Americans drive cars that will take such fuels. Obama will work with Congress and auto companies to ensure that all new vehicles have FFV capability – the capability by the end of his first term in office.”
Obama’s mandate would require that every new vehicle sold in the United States would be capable of running on gasoline, ethanol, methanol and other alcohol-based fuels. While this is exciting news to the biofuel world, Obama’s plan only effects new vehicles– leaving only a tiny portion of the 250,851,833 cars on the road in the US ready for Biofuels. This mandate would only stimulate biofuel production as new cars are sold, ignoring the opportunity of converting the existing fleet to flex fuel ready vehicles.
A Flex Fuel Stimulus, Not Just a Mandate
In his energy plan, Obama calls for an emergency energy rebate providing $500+ per tax payer for “relief at the pump”. While gasoline prices remain fixed near the $4.00 mark throughout the U.S., this rebate would provide temporary relief before gas prices continue their skyward climb. An alternative investment of that rebate by the US government could provide long-term fuel price relief to the US– as well as a major step toward energy independence and a shot in the arm for a failing, petroleum-based economy.
Senator Obama should amend his plan to provide a $500 rebate to tax payers who install flex fuel conversion kits in their vehicles, allowing them to run on gasoline and biofuels alike. At cost, these conversion kits start at $250 for 4-cylinder engines and increase from there. Installation is as easy as replacing an air filter, but can be done by certified mechanics for a small fee. In short, flex fuel installation is cheap, easy, and can provide immediate benefit for both consumers and the US economy at large. Here are just a few of the benefits:
- A stimulus to the biofuel industry
- Beyond the nation-wide ethanol fuel blend, this stimulus would have consumers at the pump choosing E85 over gasoline due to the large price disparity.
- The result in E85 use would be a boon for existing ethanol producers.
- Increased advancement in 2nd gen biofuels
- An existing, biofuel capable auto market would increase investment in 2nd gen biofuels like “Celluline“, aglae biofuel and others.
- When a new biofuel is ready for production, it has an auto market ready to pump it.
- Lower oil prices
- Lowered demand for petroleum fuel would lower oil prices across the globe, bumping out speculators and bringing the price of petroleum fuel down to a reasonable range.
- True relief at the pump
- The option between a range of biofuels and cheaper gasoline would make the consumer the true winner in the next generation gas war.
- Lower consumer product and commodity prices
- As transportation fuel prices drop, so will the increase in food prices, commodity prices and consumer goods prices.
The Obama flex fuel mandate could be a magic bullet for the biofuel industry, but it misses the greatest opportunity to develop the biofuel economy. Our existing fleet can be converted to flex fuel on the cheap, and a government stimulus could manage this conversion on its own. Senator Obama’s flex fuel mandate is a strong step in the right direction, one that he should be applauded for. In the next President of the United States, we need not only a flex fuel mandate– we need a flex fuel stimulus to help us achieve all the promise of a smart, clean biofuel economy.