Christopher Ruddy's Perspective:
Can the United States create jobs, lower the price of fuel, reduce emissions, and become energy-independent all at the same time?
The answer is, “Yes — and rather quickly.”
The simple answer correlates with a rather simple solution being evangelized by Marc Goldman, a former milk company executive from New Jersey.
Marc is not a household name, but he once made big headlines in New York for taking on the state’s powerful dairy interests and a system that kept milk prices artificially high by limiting competition among dairies.
Marc spent a small fortune and considerable time in court challenging that system, and in January 1987, won the right for his Farmland Dairies to sell milk in all of New York City and its suburbs — a victory that led to a sharp drop in milk prices for many New Yorkers.
The milk story really has nothing to say directly about energy, but it does have something to say about Marc, who has sold his milk company and now lives in Boca Raton, Fla.
Today, Marc spends his time on another worthy crusade — promoting the Open Fuel Standard Act of 2011, known in the House as H.R. 1687 and in the Senate as S. 1603.
The proposed bills create a “free market for fuel,” just as his victory in New York created a free market for milk, by requiring car manufacturers to give owners a choice in the fuel they use in their vehicles.
The bills call for “fuel competition” to reduce the nation’s dependence on foreign imports through greater use of domestic energy sources, and for an annually increasing percentage of automobiles sold in the UnitedStates to be flex-fuel capable.
This new law would require vehicles to be manufactured flex-fuel ready, adding less than $100 to the cost of each car, which would allow drivers to easily change the type of fuel their engine uses — from gasoline to other types of fuels, such as methanol or ethanol.
Such an option is available today in most cars in Brazil, where massive production of sugarcane ethanol has made Brazil the world’s first sustainable bio-fuel economy. It’s no accident that Brazil’s economy has been booming in recent years as the United States’ sags under high petroleum costs.
Rightfully, critics have complained that if the United States sharply increased the production of ethanol, made from corn or sugar, food prices would skyrocket globally.
This would be bad for everyone, and especially harm the poor.
But Marc points out that the United States has huge reserves of natural gas — by some estimates over 2,500 trillion cubic feet of recoverable reserves. He notes that natural gas is easily converted into methanol, and methanol use could save drivers at least 80 cents per gallon for the same energy a gallon of gasoline today provides.
Marc’s point here is that once the fuel option opens up in Americans’ cars, the free market will work to meet the demand. Natural gas will boost demand and spur other forms of biomass fuel to be mass produced. And, as demand for oil drops, the fall-off in petroleum prices will be catastrophic for suppliers.
Today, the lion’s share of global oil reserves is under the control of OPEC, a cartel with many member states that are openly hostile to American interests.
As for environmental concerns, experiments show that methanol and ethanol fuels yield fewer hydrocarbon and nitrogen oxide emissions than gasoline.
It’s a win-win for consumers, the environment, and the country.
To the bills’ opponents, perhaps energy expert Dr. Robert Zubrin, an aerospace engineer and author, puts it best in a National Review article:
“In whose interest is it that Americans should continue to be denied fuel choice, that America’s vast natural gas, coal, and biomass remain unusable as a source of liquid fuel, that America continues to give hundreds of billions of dollars each year to foreign potentates bent upon our destruction, instead of paying our own people to make fuel out of our own resources, that a foreign cartel retains unlimited power to raise the cost of our fuel?
“We can set ourselves free, but action is required.”
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