adding to world supply another Venezuela or Nigeria. The push to biofuels has been global. The European Union mandates at least 10 percent renewable energy, including biofuels, in the transport sector of each member state by 2020. India has proposed an ambitious 20 percent target for biofuels blending by 2017. But the champion is Brazil, where 60 percent of automotive motor fuel today is already ethanol.
In the biofuels vision, the process that produces fossil fuels—compressing organic matter into oil at tremendous pressure and heat deep below the earth’s surface over hundreds of millions of years—could be foreshortened into a cycle measured in seasons. A larger and larger share of the world’s transportation fuels would be cultivated, rather than drilled for. Hydrocarbon Man—the quintessential embodiment of the twentieth century, the century of oil—would increasingly give way over the twenty-first century to Carbohydrate Man. If this vision eventuates and biofuels do take away significant market share from traditional oil-based fuels over the next few decades, the results would reset global economics and politics. And agri-dollars would come to compete with petro-dollars.
Significant growth of ethanol use has already been registered. Today the amount of ethanol blended into gasoline is close to 900,000 barrels per day, in terms of volume, almost 10 percent of total U.S. gasoline (including blended ethanol) consumption. However, ethanol, on a volume basis, has only about two thirds the energy value of conventional gasoline, and so on an energy basis, today’s ethanol consumption is the energy equivalent of 600,000 barrels per day of gasoline.
Ethanol’s share in the United States is likely to grow over the next few years, although it must first contend with a “wall” on the amount of ethanol that can be blended with gasoline for use in all gas-powered vehicles. The fear is that greater concentrations of ethanol could harm engines not designed to run on biofuels.
There is also E85 fuel, which contains between 70 percent and 85 percent ethanol, but it can only be used in flex-fuel vehicles that can switch between oil and ethanol-based fuels or all-ethanol vehicles, specifically designed to accommodate this type of fuel. Currently such vehicles total only about 3 percent of the U.S. car fleet.
All this may strike many as new. But it isn’t, not by any means.
THE FIRST FLEX-FUEL VEHICLE
Henry Ford did not much care for cities. “There is something about a city of a million people which is untamed and threatening,” he once said. “Thirty miles away, happy and contented villages read of the ravings of the city.” Not that he had illusions about rural life. “I have followed many a weary mile behind a plough and I know all the drudgery of it.” The automobile would be the “messenger,” the liberator, linking farms and villages to the wider world, and the tractor would overcome the drudgery of rural work, enabling the farmer to get beyond “a bare living” and become so much more productive. “What a waste it is for a human being to spend hours and days behind a slowly moving team of horses when in the same time a tractor could do six times as much work!”
Ford was keen on using the preferred auto fuel, ethanol, produced by farmers, to tie farm and city together in a mutual interdependence, a sort of social contract. “If we industrialists want the American farmer to be our customer, we must find a way to become his customer.”1
Yet there was a huge obstacle in the way of ethanol: price. Every gallon of alcohol carried a $2.08 a gallon tax imposed as a revenue measure during the Civil War. With the discovery of vast amounts of oil in Texas and Oklahoma around the beginning of the twentieth century, gasoline had a decided cost advantage, at least in the United States. That was not the case in Europe, where auto races pitted ethanol against gasoline as a fuel. The French and German governments used tariffs and mandates to encourage alcohol fuels. Finally, in 1906, responding to farmers who were reeling from low grain prices, Theodore Roosevelt signed a bill eliminating the alcohol tax. One congressman (and a future Speaker of the House) predicted that alcohol “made from cornstalks” would soon be one of the “most pertinent factors in modern civilization.”2
With the tax eliminated, demand shot up, and ethanol was once again locked in a great race with gasoline as to which would be the “fuel of the future.”
Making good on his social contract with America’s farmers, Ford ensured that the Model T,