Riding high on gasohol
Gasohol, the newest weapon in the administrationhs energy arsenal, has been characterized as an effort to "stretch hamburger with filet mignon;" and that assessment is painfully apt. Indeed alcohol is a superb automotive fuel, just as filet mignon is the king of meats -- but both, unfortunately, are far too expensive for the everyday diet of the American consumer.
The public's intoxication with the prospect of saving imported gasoline with alcohol produced from "home brew" is, however, understandable. Ostensibly we can use the solar energy falling upon Iowa or Nebraska to grown corn which will be distilled in American factories to displace imported oil. Proponents also argue that gasohol production will help support farm prices and eat up some of the grain surplus resulting from our embargo against the USSR.
While gasohol -- one part alcohol and nine parts gasoline -- is usable interchangeably in today's auto fleet, its drawback is not technical. Racing car drivers and model airplane enthusiasts can readily attest to the superiority of alcohol fuels -- just as we all acknowledge the delectability of filet.
The real problem is gasohol's cost. Alcohol sells for upward of $1.60 per gallon and contains only 60 percent of gasoline's energy; stripped of subsidies, it costs the equivalent of $2.60-plus per gallon of gasoline "saved."
Offsetting this high cost is an impressive array of federal and state subsidies which can reduce the apparent cost to zero. The federal excise tax exemption reduces the price of alcohol by a full 40 cents; and many states, particularly in the farm belt, waive the state tax as well, lowering the alcohol price another 40- 90 cents or so per gallon. In addition, gasohol gets a partial entitlement -- a piece of the oil import equalization kitty -- now worth 35 cents a gallon, while a variety of investment tax credits reduce alcohol's cost still another 5-10 cents.
These massive subsidies are the key to gasohol's heady popularity: there now are over 1,000 service stations retailing gasohol in 20 states, naturally concentrated in the farm belt. The US consumer has responded vigorously -- to the publicity or the novelty or some patriotic urge; and sales of gasohol are now limited only by alcohol availability. Indeed, consumers actually pay 10 cents more for gasohol than gasoline, in spite of its lower energy content.
The "Gasoholics" argue the justice of a price premium, pointing to alcohol's 100-plus octane rating and citing test data from corn- producing Nebraska which show 7 percent better gas mileage. However, the Congressional Office of Technology Assessment decried that data as statistically unreliable.
Prof. John Heywood, director of Sloan Automotive Laboratory at MIT, states "there is no engineering basis for expecting any mileage gain in a property tuned car." In fact, controlled laboratory and road tests indicate a loss in fuel economy, paralleling gasohol's lower energy content; and while some road tests show no loss, the conflicting evidence is traceable to poor carburetor settings. If an engine is running rich, the leaning effect of alcohol will cause a slight improvement in engine efficiency. But that same gain results if the engine is properly tuned and run on gasoline. In cars with the newest emissions controls, even that "gain" is excluded.
Thus the mileage gain with gasohol in illusory, and it costs $2.60 to displace a gallon of gasoline worth $1.000 at the refinery. This is the equivalent of $120 per barrel of oil, or three times the present inflated OPEC price.
Furthermore, the annual cost burden on consumers will be large, albeit hidden -- about $2 billion per year. Yet, even if successful, the program will only cut oil imports by one percent. Why, then has an improbable coalition of politicians, environmentalists, oil companies, and farmers all joined the gasohol bandwagon?
For the administration, it is a quick cosmetic fix, which is politically costless because all consumer costs are well camouflaged. Most environmentalists support gasohol as renewable solar energy, although some object to substituting food for fuel, arguing that this shuffles rather than solves a shortage.
While farmer support is obvious, that of the oil companies is more subtle. Besides being profitable, alcohol blending eases the expensive transition to lead-free fuels. Moreover, given its popular appeal, the oil companies, like the auto manufacturer's would only compromise their credibility by opposing gasohol; but they scrupulously and conspiciously do not endorse any of the extravagant claims for savings.
Thus, in the absence of informed opposition, the administration seems to be following Marie Antoinette's dubious solution to a bread shortage, "let them eat cake." President Carter proposes to stretch gasoline supplies by letting us burn "steak" -- alcohol, the filet mignon of fuels.