Trying to Mandate the Future

Bureaucrats never seem to learn that you don't create behaviour by fiat. People have to be motivated. And motivation by false promises only goes so far. Eventually people catch on and they follow their self interest.

Here's a bit from a post by Geoffrey Styles in his Energy Outlook blog talking about mandated ethanol standards, e.g. E85, and the market for FFV (Flex Fuel Vehicles) given the underlying economics where ethanol is less energy intense:

Today, reading between the lines, there are hints that EPA might regard E85 as a failed product that may no longer be necessary for pushing biofuel into the market. Their statistics on E85 paint a bleak picture. According to EPA, out of a total retail gasoline market of 138 billion gallons in 2008, E85 accounted for just 12 million gallons. Such low volumes are partially attributable to the fact that there are still only 2,100 retail facilities in the US with an E85 pump, and only 8 million FFVs on the road, out of a US vehicle fleet of 240 million or so. Yet after taking these constraints into account, the EPA calculated that FFV owners bought E85 just 4% of the time. They offer a variety of reasons for this, including concerns about reduced range on the lower-energy fuel, but mainly point to the much higher average price of E85 compared to unleaded regular on an energy-equivalent basis. In other words, consumers are choosing value and maximizing their miles per dollar. So it wouldn't just require a big increase in the number of E85 pumps and FFVs to make E85 successful; the product must be priced a heck of a lot cheaper than it has been, reducing the incentive for dealers to sell what today is a very low-volume product. Catch-22?

Read the original post to get more context and the embedded links.

By the way... here are some interesting facts about the economics of gasoline vs diesel and the limitations of the Volt electric car from another posting on Style's blog:

According to the Department of Energy a typical gallon of gasoline delivers 116,000 BTUs of energy, and a gallon of diesel fuel 128,000 BTUs, based on their lower heating values. Converting to electricity units gives us 34 kilowatt-hours (kWh) per gallon and 37.5 kWh/gal., respectively. Using typical volumetric densities for these fuels, I come up with figures of 5.5 kWh/lb. for gasoline and 5.3 kWh/lb. for diesel. By comparison, the battery for the extended-range GM Volt hybrid, which is rated at 16 kWh, appears to weigh 400 lb., yielding an energy density of just 0.04 kWh/lb., or less than 1% of the energy density of hydrocarbon fuels. If this were the entire story, EVs would look like a hopeless proposition, and we could dismiss them for another generation.

The factor that helps to bridge the enormous gap in energy density between the best batteries and liquid fuels is efficiency. While neither electric motors nor internal combustion engines (ICEs) can turn 100% of that stored energy into motion, the EV motor has an efficiency advantage of roughly 4:1 over ICEs. Even after taking that into account, we're still left with a requirement for roughly 25 lb. of batteries to deliver the same range as a pound of gasoline, with the effective useful capacity of the Volt's entire battery pack storing the equivalent of no more than one gallon of unleaded regular. Plug-in hybrids like the Volt cleverly finesse this limitation by using on-board generators running on liquid fuels to extend their range. Of course this entails big trade-offs of cost and weight, but the designers of such vehicles hope to come up with a mix that will satisfy consumers who are accustomed to cars that can go 300 miles without provoking "range anxiety".

These calculations don't take into consideration stop-and-go versus highway, acceleration needs, and time spend idling. So there is no simple calculation of "best fuel" or "best vehicle". Like most of life, it comes down to trade-offs and in fact humans aren't the rational calcuating engines that economists pretend us to be, so we end up making choices by munching a lot of factors together using gut feel, back of the envelope estimates, and "recommendations" from trusted sources.