Fueling America for 2009 and beyond

State of the Union?

In his 2006 State of the Union speech, President George W. Bush called for U.S. citizens to cure their "addiction" to imported oil, stressing alternative fuel as a large part of his plan for U.S. oil independence. With the election of President Obama, increasing political and environmental concerns, the United States and the world are changing the way they look at fueling vehicles. Here are some of the alternative fuel sources being produced or considered.

Ethanol

Alcohol-based ethanol is made from distilled starch crops such as sugar cane, corn, barley and wheat. Combined with gasoline it makes E85, which can fuel cars known as flexible fuel vehicles (FFVs). Ethanol's benefits are that its source can be grown, making it renewable and vehicles fueled by ethanol usually produce lower carbon monoxide and carbon dioxide emissions. Some environmentalists point out, however, that some companies producing ethanol are releasing volatile organic compounds and carbon monoxide into the air during production. Others are concerned about global deforestation needed to create the ethanol itself adding to global warming.

Natural gas

Natural gas is made up mostly of methane with other hydrocarbons mixed in. Natural gas is attractive as an alternative fuel source because it burns cleanly and can be produced domestically. The fuel can be stored as compressed gas or in liquid form and can also be mixed with hydrogen to create a fuel blend.

Propane

Liquefied petroleum gas, or propane, produces fewer emissions as a fuel source than gasoline and is accessible to the public because of an already existing infrastructure of storage, processing and transportation methods. A byproduct of natural gas processing and crude oil refining, propane also tends to be a cheaper fuel source than gasoline.

Hydrogen

• Hydrogen is the lightest alternative fuel source, allowing for greater ease in transportation and storage. The gas is being used experimentally for fuel cell vehicles and combustion engines. Benefits of hydrogen fuel are that it is an easily renewable fuel source that can be produced in a variety of methods and its use may improve air quality and reduce greenhouse gas emissions. Hydrogen fuel plays a big part in President Bush's plan to reduce dependence on imported oil.

Biodiesel

Biodiesel can be created from vegetable oils, animal fats, or recycled restaurant greases and can be combined with petroleum diesels to create fuel that emits fewer pollutants. Pure biodiesel or blends with a high concentration of biodiesel can be used in some engines made after 1994 with certain modifications required in some cases, but engine manufacturers are concerned about the fuel's long-term effect on the engine and whether it is suitable for wintertime use.

Electricity

Electricity is the only alternative fuel source that provides direct mechanical power rather than providing power through chemical energy and combustion. Since the process takes place without combustion, there is no pollution emitted. Batteries for electric vehicles have a limited storage capacity, but they can be recharged from the existing power grid or through solar or wind energy.

P-series fuels

P-series fuel is the only new fuel source to be recognized under the U.S. Energy Policy Act since the Act was passed in 1992. The blend of natural gas liquids, ethanol, and the biomass derived co-solvent methyltetrahydrofuran is not currently widely used or mass produced.

Your Turn…

Your new job is that of an investment broker with 100 million to invest in energy sources for the future. What are your top two choices to invest your 100 million in? Why do you think they will be viable in the future and worthy of the investment?