The real oil monopoly

A hundred years ago, Americans could use typewriters, the telegraph and primitive telephones. Today, Americans have computers, the Internet, cell phones, satellite television and radio, DVDs, iPods, email and instant messaging.

A hundred years ago, Americans could have personal vehicles powered by internal combustion engines running on gasoline. Today, Americans can have personal vehicles powered by internal combustion engines running on gasoline.

You see the problem?

For a long time, oil products have enjoyed a monopoly because oil has been cheap and easy. But it’s getting less cheap and Americans ought to be growing uneasy about sending billions of dollars to corners of the Earth where terrorism is both preached and practiced.

To solve this dilemma, we could invest in a new Manhattan project. If we gathered the smartest scientists and gave them a ton of money, might they develop an automobile that would run not just on gasoline but also on non-petroleum-based fuels?

News bulletin: The technology to run cars on alternative fuels already exists. The cost: less than $150 per vehicle. If the government would provide tax incentives _ for manufacturers, motorists, maybe both _ millions of Flexible Fuel Vehicles (FFV) could be on the roads in short order.

What non-petroleum fuels would be used in these vehicles? That problem would solve itself. Once a sufficient number of FFVs were on the road, entrepreneurs would find a way to make money by producing alternative fuels that cost the same _ or less _ than gasoline.

Research already has established that such fuels can be made from wild grasses, coal (liquefied), biomass (garbage), and many other materials. There just needs to be a market big enough to make commercial production a potentially profitable investment.

In Brazil today, automobiles are running on alcohol made from sugar cane. Consider how many Third World countries might produce similar fuels if they could sell them to eager consumers in the United States. Saudi Arabia’s loss could be Haiti’s gain.

Want to speed the transition from oil dependency even more quickly? Once you have FFVs on the road, you could advantage non-petroleum fuels by taxing them less _ or not at all _ for, say, 10 years, and by putting no tariffs on alternative fuels coming from abroad.

How would you distribute these new fuels? Here’s a crazy idea: They should be available at service stations. New pumps cost about $60,000. If the government provided tax incentives, or low-interest loans, don’t you think enterprising small business owners would take advantage of the opportunity?

There are other technologies we can and should _ in the interest of national security _ give a boost. Hybrid cars that utilize batteries for short trips are selling well. A huge improvement would be plug-in hybrids that can use a standard electric outlet to charge. Because less than 2 percent of American electricity is generated from oil, plug-in hybrids would allow city drivers and commuters traveling under 40 miles a day to use no gasoline at all. Equipped also as FFVs, they wouldn’t need to use gas on longer trips either.

Ideas like these have been developed by the Institute for the Analysis of Global Security (, a small but creative think tank, and by Set America Free ( which former CIA director James Woolsey calls “a coalition of tree huggers, do-gooders, sodbusters, hawks, and evangelicals.”

The point is this: Build the FFVs and the fuels will come. Let a hundred flowers _ and grasses and weeds _ bloom; make them into fuels that can compete with _ not replace but compete with _ gasoline. As for which non-petroleum fuels will win and which will lose, that’s not for the government to decide. That’s the job of entrepreneurs and consumers.

Bills based on the Set America Free plan for energy security are before both the House and Senate: H.R. 4409 and S.2025. Who would oppose such progress? An army of special interests that benefit from the status quo. These groups will fight like ferrets to preserve petroleum’s market share and to preserve the tax and tariff advantages they now enjoy.

Is it too much to ask that a critical mass of politicians from both sides of the aisle stand up to them, break oil’s monopoly, reduce America’s dependence on foreign energy and allow us to stop funding both sides in the War Against Terrorism?

We don’t have a hundred years to wait.

(Clifford D. May is president of the Foundation for Defense of Democracies, a policy institute focusing on terrorism.)