A Free Market For Fuel

Fuel is not sold in a free market. In the last hundred years, the oil industry has shut down, smeared, discredited, and blocked competing fuels. Right now, methanol could be sold for half the price of gasoline. But because of a pointless EPA regulation, it’s not sold as a fuel in the United States. Normal gasoline-only cars can efficiently burn methanol, which can be made inexpensively from three resources America has in abundance: coal, natural gas, and municipal waste (among many other resources).

Ethanol is another example. Oil companies have blocked ethanol from being sold at most gas stations. Petroleum interests have also been trying to discredit ethanol as a fuel for literally a hundred years.

Petroleum has a monopoly, and OPEC has been exploiting it. OPEC was created to raise world oil prices, which they’ve successfully done since 1973. The OPEC nations produce 40 percent of the world’s annual oil supply, which is enough of a percentage that they can (and they do) regularly decide to lower their production to raise the world price of oil.

OPEC is an illegal price-fixing cartel, and if they were operating within our borders, they would be prosecuted for it. What they are doing is also illegal internationally, but nobody is likely to prosecute them because OPEC could, and probably would, retaliate by stopping their production, which would cause a worldwide depression.

Free trade and the economy as we know it completely depend on transporting goods from place to place. When the price of transportation fuel rises, the price of everything rises. Every time oil prices have spiked since World War II, we’ve had a recession in America.

It is our complete reliance on oil that creates our economic vulnerability. What can we do about it?

The solution to a monopoly is competition.

But how can we create free trade in the fuel market when the problem is outside our borders? The Open Fuel Standard is the solution. The bill, which has been in Congress many times, says half the cars sold in America must allow fuel competition — if the car can burn gasoline, it must also be able to burn gasoline, ethanol and methanol in any proportion. This is technically simple and surprisingly inexpensive to do. Ethanol and methanol burn in similar ways, and they work very well in ordinary gasoline-only engines. The main thing automakers would need to do is install the flex fuel software in the onboard computer.

This small change brings into being real fuel competition. Drivers filling their tanks could choose on the spot which fuel they want to buy that day. So those fuels would have to compete with each other on price. And if there was an oil price spike, it would hardly make a dent in our economy. People would simply buy one of the other available fuels.

Methanol and ethanol can both be made right here in America, producing American jobs and pouring money into the American economy.

Adam Khan is the co-author with Klassy Evans of Fill Your Tank With Freedom and the author of Slotralogy and Self-Reliance, Translated. Follow his podcast, The Adam Bomb.