What if You Could Choose Your Fuel?

Gas prices in California are finally starting to drop after a series of record highs, following a fire at a Chevron refinery and a power outage at an Exxon Mobil facility, hurting Californians at the pump, and leading to calls for investigations into price manipulation.  Of course, you’ve read this story many times before.  Now, imagine the same series of events, but with a crucial difference ― your car has the ability to run on multiple fuels.  What if, instead of just driving around for the gas station that has the least painful price, you could choose between fuels, and switch to an alternative when the price of gasoline goes through the roof?

Next time there is a refinery accident in California, violence in the Middle East, or a hurricane in the Gulf of Mexico, and prices at the pump shoot up as a result, imagine if you could easily choose an alternative unaffected by the latest headlines.  Just as more folks take public transit when gas prices rise, as shown in the chart below, imagine if consumers could choose fuels other than those derived from oil:

Gas Prices and Ridership.PNG

You’d be better off, and it would likely ease the severity of the crisis as demand would quickly shift to alternatives, alleviating the impacts of the supply crunch.

Thankfully, California is making steady progress towards this vision. The state is setting targets that will foster increased investment in real alternatives to oil, including advanced biofuels and electricity, and implementing standards that will clean the air, reduce our dependence on oil, and result in one in six vehicles sold in the state being capable of driving emissions free by 2025.

These efforts are already paying off.  More and more Californians are driving cars that have the ability to run on fuels that aren’t derived from oil.  Thousands have purchased plug-in hybrids, such as the Chevy Volt and Toyota Plug-in Prius, which run on electricity for daily driving needs and switch over to gasoline for longer trips.  While in all-electric mode, those drivers enjoy a cleaner, domestic fuel that, for the last 40 years, has cost about as much as buck-a-gallon gasoline.  Even better, the price of electricity is forecasted to stay at the buck-a-gallon equivalent mark for the next three decades.  That’s because electricity is made from a diverse supply of largely domestic resources, and its price is controlled by state public utilities commissions.  But the future isn’t just about plug-in vehicles, it’s about increased choices across the board, with cars and trucks that can run on multiple fuels, including advanced biofuels.

Not surprisingly, oil companies are sending misleading messages to policy-makers about alternative fuels.  As my colleague, Simon Mui, explains, the industry’s exorbitant cost claims are meant to weaken the very policies that would provide consumers with greater fuel choice.  California should see through those flawed arguments and continue its steady march towards a future in which you aren’t locked into pain at the pump, but free to choose alternatives to oil.

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