Alternative Fuel Research Shows How Business Can Avoid Inflationary Pressures By Kicking The Petroleum Habit

Share Article

Available research shows it is time for business leaders, to stop looking to the government for a quick fix to the petroleum problem. Businesses and individuals can now take this matter into their own hands, self-responsibly converting to the viable alternatives that are now commercially available

News Image
If Fortune 500 business leaders are serious about containing rising costs, they must begin the switch to alternative sources of energy now.

Charles Cresson Wood, an alternative fuels management consultant with Post-Petroleum Transportation, based in Sausalito, California, contends that, "If Fortune 500 business leaders are serious about containing rising costs, they must begin the switch to alternative sources of energy now." According to Wood's new book, Kicking The Gasoline & Petro-Diesel Habit: A Business Manager's Blueprint For Action, there are now 11 commercially available fuels that can be used instead of gasoline and petro-diesel. These include: hydrogen, ethanol, butanol, bio-methane, natural gas, propane, bio-diesel, straight vegetable oil, di-methyl ether, electricity, and synthetic liquid fuel. In many cases, according to a three-year study done by the Energy Management Institute, "These fuels are now cost-competitive with petroleum-based fuels."

"For years, the International Energy Administration (IEA) projected optimistic numbers about increasing supplies of petroleum," explained Wood, noting the IEA assumed supply would continue to match increasing demand. But, recently, "The IEA has significantly revised its oil supply numbers to reflect a much more pessimistic situation." Faith Birol, the IEA's chief economist has stated, "This is a dangerous situation." This is notable because even the conservative IEA is beginning to recognize that the world's supply of oil cannot keep up with increasing demand.

The only predictable result based on accepted market-based economics is that prices will continue to rise. Reflecting this new reality, the price of crude oil has risen 95% over the last year. According to Wood, "Whether or not the world is now at, or will soon reach the zenith of its oil production capacity--a concept known as the "peak oil theory"--it is clear that producers cannot keep up with world demand as it stands today," which is increasing at about 2% per year.

Wood points to a recent front-page story in the Wall Street Journal* that reported how Dow Chemical had raised prices on a wide variety of its products, some as much as 20%. In the article, Dow blamed its soaring costs on energy, noting its oil and gas costs grew by 42% in a single year. Dow then blasted Washington for policies that have led to higher energy costs.

"But the blame does not rest solely on the shoulders of government," says Wood. Businesses and individuals have also been dragging their feet when it comes to transitioning to petroleum substitutes. "With increasing demand and decreasing supply, the market price of petroleum is now signaling that it's important that all these parties rapidly transition to alternatives."

Others say this is a political problem. Wood notes President Bush's recent visit to Saudi Arabia--where he requested more oil production--indicates this viewpoint. Others say it is a logistical and investment problem, that producers have not sufficiently invested in exploration and infrastructure. And, it is true that much of the existing infrastructure is old and needs replacement or upgrading. Still others say the U.S. must exploit the oil found in environmentally protected places, such as the Arctic National Wildlife Refuge. But, as Wood explains, "All of these suggestions simply postpone an inevitable reckoning with the truth, and do not fix the fundamental problem: that petroleum is not an infinite resource, and that supplies are now unable to keep up with increasing demand."

Wood says, "It is time for business leaders, such as those at Dow, to stop looking to the government for a quick fix to the petroleum problem." He recommends a reality-based, market-driven approach that enables organizations, as well as individuals, to take this matter into their own hands, responsibly converting to the viable alternatives that are now available.

"It is now possible for a business to make its own fuel, store and distribute its own fuel, and maintain and manage its own vehicles using alternative fuel technology," Wood says. This is for example possible with bio-methane, which can be manufactured from agricultural by-products, animal excrement, municipal garbage dumps, and other waste streams.

Even if you aren't concerned about global warming carbon emissions, improving air quality, reducing toxic chemicals in the environment, reducing the skewed balance of trade, reducing military and political conflicts over oil, or even the prospect of shortages and rationing, "the possibility of containing rapidly increasing costs should now prompt us all to initiate a rapid transition away from petroleum."

Charles Cresson Wood is an alternative fuels management consultant with Post-Petroleum Transportation in Sausalito, California. His most recent book is entitled Kicking The Gasoline & Petro-Diesel Habit: A Business Manager's Blueprint For Action (http://www.kickingthegasoline.com).

*See the 29 May 2008 issue, p. A1, "Chemical Prices Jump, Fueling Fear Of Inflation," by Ana Campoy and Leslie Eaton

# # #

Share article on social media or email:

View article via:

Pdf Print

Contact Author

BILL GRAM-REEFER
Visit website