Turning Oil Into Salt – A Review

Turning Oil into Salt, a review of the new book by Gal Luft and Anne Korin

If you believe in global warming, you believe we need to get off of fossil fuel.  Conversely, if you believe we need to reduce the strategic value of oil, it is a different calculation.  People get these issues confused they result in similar outcomes.

Reducing our dependence on fossil fuel is generally considered the province of “Green Liberals,” “Al Gore Disciples,” “Tree Huggers,” “Global Warming Alarmists,” etc. However this is certainly not the case.  An example would be the following video made by unlikely partners, Newt Gingrich and Nancy Pelosi:


But reducing the strategic value of oil is something everyone should be able to agree on, even for those who are skeptical that a global warming hazard even exists.  The following video was made by ex CIA head James Woolsey:


So why are you reading this in an auto publication?  Because according to Gal Luft and Anne Korin, the authors of Turning Oil Into Salt, MORE government intervention into the auto industry is required to reach a solution.  Many of us are rolling our eyes at even the thought, but the stakes couldn’t be higher.  We ARE engaged in a war against fundamentalist Islam, and we ARE paying for both sides of the war.

Today, roughly two-thirds of the world’s oil is used for transportation, and most vehicles are able to run on nothing but traditional gasoline. As such, oil’s strategic status stems from its virtual monopoly over fuel for transportation, which underlies the global economy and our way of life.

To understand the implication of an over dependence on a strategic commodity we can look at history.  At one time, salt had a virtual monopoly on food preservation.  Wars were fought over salt.  Finally, Napoleon, whose army “traveled on its stomach,” had enough and offered a significant sum of money to the person to eliminate his army’s reliance on salt.  Within a few years, a French chef invented food “canning.” After canning, electricity, and refrigeration, salt has lost its strategic status and we no longer go to war over salt.

How can this be accomplished with oil?  According to Luft and Korin it only requires Congress to mandate that from a specific date forward, all or most vehicles sold in the U.S. must be manufactured as a “flex fuel” vehicle, capable of running on gasoline and/or a variety of alcohols and blends.

This has already been done in Brazil where 80% of new vehicles purchased in 2008 were flex fuel.  The additional cost to produce a flex fuel vehicle is about $100, which includes the cost of premium fuel system components, a fuel sensor and computer chip reprogramming.

The first Model T Fords ran on gasoline OR alcohol, so the concept is not new.  There are also a variety of alcohol fuels available.  Alcohol does not mean just ethanol, and ethanol does not mean just corn, a particularly bad fuel feed stock.  Other alcohol based fuels include methanol made from coal and ethanol from almost anything.

According to the authors, the average vehicle in the U.S. is in service for 16.7 years.  Once 15% – 20% of the total vehicles on the road are flex fuel, the market will take over.  Refueling infrastructure will develop and additional alcohol production will come to market with coal/methanol probably eclipsing corn as a feed stock, much to the chagrin of Midwestern farmers and Senator Charles Grassley.

Add in additional vehicles operating on compressed natural gas and electricity, plus additional conservation based on increased fuel efficiency, and dependency on oil could be reduced 35% in 10 years, the exact amount we currently import from OPEC.  We would also be less dependent on oil in general and all of our oil could be sourced from North America, including Mexico and Canada.

There is even a “Drill Baby Drill” component to the Luft/Korin plan, although we have some disadvantages in the USA.  It costs OPEC less than a dollar per barrel to lift their oil from the ground, while it costs us almost $10.   They have about 78% of the world’s known reserves, but only produce 40% of the world’s supply, as they work to maximize the price of each barrel they sell.  OPEC produces less now than they did in 1973.

In the meantime, we have less than 5% of known reserves but consume 25% of the world’s production.  And the lower the American price at the pump, they more we’ll consume and the more pressure we put on the world market price of oil to rise.  Unfortunately, we don’t get a discount for our volume purchases.

OPEC also has the nasty habit of flooding the world market with supply to drive down the price any time a new but more expensive technology threatens their dominant position.  This is another reason government involvement might need to be involved before flex fuel begins to make oil a less strategically important commodity.

A bill called the “Open Fuel Standard” is pending before both the House and the Senate.  The bill ensures that 50% of new vehicles sold in the U.S. with an internal combustion engine would be warranted to run on gasoline, ethanol, or methanol.  Diesel vehicles would also be warranted to run on bio-diesel.

In 2009 there were no fewer than 33 Make/Models warranted to run on up to 85% ethanol, but no warranty for methanol.    Expanding this to more models and including blends of methanol should be easy.  Brazil has done it and at one time, auto manufacturers considered using methanol as an octane booster, but chose lead instead.

There are currently 8 million flex fuel vehicles on the road out of 200 million total vehicles but we have not yet reached the critical mass necessary for the market to respond with refueling infrastructure and additional investment in alcohol production.

Some say the expansion of alcohol fuels is being held hostage by agribusiness lobbying efforts.  For some reason, we place a 54 cent per gallon tariff on imported Brazilian sugar cane ethanol.  A barrel of oil is 42 gallons.  You can do the math.

Turning Oil into Salt is must reading for auto industry professionals and for all U.S. citizens.  And it’s a quick read, making its points in only 138 pages.


1 Comment

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One response to “Turning Oil Into Salt – A Review

  1. David Simpson

    I was part of the Ford initiative to place M85 into service in the 1990’s. I served on the Houston Clean Air Council. I can tell you without a doubt, that the oil companies run the show, and get exactly what they want. At that time, there was a concerted effort to stop this initiative. Ford abandoned over 1 billion in research to bow to the oil companies because of some bogus research on MTBE. Ford already has the solution. Methanol can be made from coal, natural gas and even garbage. But, if the oil companies don’t profit from it, it doesn’t get done. Been there, done that, lost my shirt in the process.

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