Investing in Alternative Fuels

Investing in Alternative Fuels:Great Scott! The Future is NOW!
A Daily Reckoning Whitepaper Report
By Kate Incontrera
, Editor – The Daily Reckoning

“Roads? Where we’re going, we won’t need roads.”
-Dr. Emmett Brown, Back to the Future, Part II

The year is 2015 – and all of the cars are zipping around in the air, Jetsons-style, due to a “hover conversion.”

At least that’s how the 1989 film, Back to the Future, Part II envisioned our world would be nine years from now. And while flying De Lorean’s are most likely not in our near future, the race for car – or fuel – of the future is on.

As far as alternative fuels go, ethanol has been a kind of media darling in recent months, due to (among others) The Bush administration’s claim that it is much better for the environment – and easier on the wallet – than regular gasoline. says that if you put a combination of gasoline and this “clean-burning, high octane, domestically produced fuel” in your vehicle, you will “decrease the fuel’s cost, increases the fuel’s octane rating and decrease gasoline’s harmful emissions.”

Investing in Alternative Fuels: The Ethanol Myth

Although it sounds like a no-brainer; lately, reports of this biofuel not being all it’s cracked up to be have been popping up with a greater frequency. For example, the October issue of Consumer Reports ran a cover story called “The Ethanol Myth,” where they tested the 2007 Chevrolet Tahoe FFV – a flexible-fuel vehicle that can run on gasoline, or on E85, which is 85 percent ethanol and 15 percent gasoline.

In a nutshell, they found that while FFV’s emit less smog-causing pollutants than gasoline, the pros outweigh the cons. These vehicles provide few miles to the gallon, are not cheaper than regular gasoline, and it is quite hard to find ethanol outside the Midwest (for the article they actually blended their own E85.)

So, if the car of the future isn’t running on ethanol, what will fuel it?

GM seems to think they have found the answer, with the hydrogen fuel-cell car. “GM has reinvented the automobile,” brags Larry Burns, vice president of R&D.

Burns is talking about the Chevy Sequel, a fuel cell powered car, which burns no gas and produces no harmful emissions. According to Fortune magazine, the biggest problem for fuel cell powered cars is how to store more hydrogen gas. “The Sequel can carry about 18 pounds of hydrogen, equivalent in power to 16 gallons of gas. That gives it a range of about 300 miles – on the low end compared with conventional cars.”

Although the National Academy of Sciences believes the “hydrogen economy” is decades away, GM is much more optimistic, setting a deadline for 2010 by which to develop a “fuel-cell unit that is competitive in price and suitable for the mass market.” By 2020, they estimate that 10 percent of the world’s 90 million new cars and trucks will be powered by fuel cells.

Investing in Alternative Fuels: The Future is Diesel

In the meantime, Outstanding Investment’s Justice Litle thinks a viable alternative fuel lies in “the humble old diesel engine.”

People often equate diesel engines with the big rig, pollution nightmares that are tailing you on the freeway, but Litle promises those trucks are outdated and that new technology has made diesel engines cleaner than ever.

Diesel gets around 30 percent more miles to the gallon, and those concerned about global warming can rest easier at night – diesel emits up to 20 percent less carbon dioxide. And the use of diesel engines could help reduce the United States’ dependence on foreign oil, as you don’t need crude oil to make diesel fuel. It can be made from liquefied coal, plant matter, or even cooking oil.

“The technology that is winner is diesel engines, which already exist in Europe,” said Earl Hesterberg, president and CEO of Group 1 Automotive Inc. “There’s also a different perception of emissions.”

It looks like the diesel engine is coming out on top – at least until we start traveling via hoverboards, or in a flying De Lorean, whose flux capicator is powered by Mr. Fusion Home Energy Reactor.

Kate “Short Fuse” Incontrera
for The Daily Reckoning

P.S. One of the big technologies of the future will be liquefied coal, whether the diesel engine wins over the public or not. While oil supplies run low, there is still enough coal to last for over 300 years – and new advances in this field have figured out how to clean up the pollution aspects of coal…and found a way to make it power your SUV. Coal is going to play a key role in our energy future. The safest way to profit is to own some coal and wait for the price to go up. It will.

Useful links on Alternative Fuel

Popular Mechanics – Crunching The Numbers On Alternative Fuels
For this special report, PM crunched the numbers on the actual costs and performance of each major alternative fuel.

Alternative Fuels Info Center from PEI
We present the latest information on alternative fuel technologies, … As interest in alternative fuels, vehicles and the refueling equipment has grown, …
Alternative Fuel News Library
Hybrid Cars; Hybrid Trucks; Hydrogen Power; Electric Power; APV; All About APV’s.

Ethanol The Truth About this ‘Alternative’ Fuel