In response to my article, a number of readers wrote in posing the following questions: Given the ease of creating methanol compatibility, and the manifest financial advantages that would accrue to motorists who undertook such conversions, why is an Open Fuel Standard law necessary at all? Instead of seeking a new law that would require that all vehicles be flex-fuel, why wasn’t I simply moving to launch a business that would undertake such conversions, set up methanol pumps, and let the Invisible Hand accomplish the rest?
These are very good questions and deserve answers. To start with, I should point out that national defense is the first and foremost obligation of the federal government. Therefore, when the nation is being looted into depression by a foreign cartel whose members are using the funds to promote armed movements and develop weapons intended for our annihilation, forceful action by the government is entirely appropriate, and in fact could not be more urgent.
But, given the fact that neither Congress nor the administration has chosen to take such action to defend the nation’s vital interests, wouldn’t it still make sense to try an entrepreneurial solution? The opening of the fuel market to methanol through a bottom-up approach might take effect more slowly than the crisis truly demands, but still, wouldn’t some progress be better than none?
Indeed it would. So I decided to look into the possibility. Here is what I found: The technology required is in hand. The business plan is straightforward. The financial requirements, while significant, are manageable. But: The regulatory obstacles are a show-stopper. Put simply, given the spread between current natural-gas and coal prices on one hand, and petroleum prices on the other, the main thing protecting the oil cartel from killer competition from methanol is the EPA. It has done this through regulations that make it illegal to sell methanol in significant quantities as motor-vehicle fuel, and also through restrictions that enormously increase the expense of commercial modification of cars to optimize their performance with any alternative fuel (or with gasoline, for that matter).
First, the prohibition. According to the EPA (FRL-9620-5, published January 20, 2012), “Section 211(f)(1) of the Clean Air Act makes it unlawful for any manufacturer of any fuel or fuel additive to introduce into commerce, or to increase the concentration in use of, any fuel or fuel additive . . . which is not substantially similar to any fuel or fuel additive utilized in . . . 1975. . . . The current ‘substantially similar’ interpretive rule for unleaded gasoline allows oxygen content up to 2.7 weight [sic] for certain ethers and alcohols.”
Since methanol is 50 percent oxygen by weight, this rule limits the amount of methanol that it is legal to add to gasoline to just 5.4 percent — if we assume that there is no ethanol in the gasoline – and going down to zero if the ethanol content of the gasoline is 8.1 percent or greater. (E10 and E15, which are 3.3 percent and 5 percent oxygen by weight respectively, are legal for sale only because of a special waiver granted by the EPA. It is the general practice of the EPA to declare impractical arbitrary limits to commercial activity in many fields, and then grant waivers on a case-by-case basis to those who are willing to spend the time and money required to beg well. (I mention this not to take exception to the waivers — I believe that ethanol producers should be allowed to sell their product in any concentration to anyone willing to buy it — but to the process that requires enterprises to grovel for such special favors, and thus places commercial activity firmly under the thumb of bureaucratic caprice.)