mark a. emalfarb

The Chicken and Egg of Flex-Fuel Vehicles in the United States

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We all dream of a day when America is free from its dependence on foreign oil. Flex-Fuel Vehicles (FFVs) that afford consumers choice in the fuels they use to fill their tanks, are a large part of the answer. However, integrating FFVs and providing consumers with a choice of fuels in America is a classic chicken and egg situation.
The Chicken and Egg of Flex-Fuel Vehicles in the United States

Which comes first, the vehicles or the choice of fuels?

What is the purpose of having pumps offering E85 at every gas station in America if there are only a few vehicles on the road that can take advantage of it? On the flip side, what is the purpose of producing large numbers of FFVs if there is no choice of fuel available?

In Brazil, FFVs and fuel choice is the norm, but getting there took a strong and sometimes military-backed government mandate. In America, the government has taken little action to resolve the situation, preferring the free market to work out the problem. Currently, there are about 11½ million FFVs on America’s roads and less than 4,000 stations offering E85 as a fuel option.

A few years ago, the government asked that auto manufacturers make 50 percent of their vehicles FFVs by 2012. In 2012, most of the manufacturers did not comply. General Motors did by placing nearly 7½ million FFVs on America’s roads but, ironically, the majority of consumers who purchased these FFVs were unaware that their vehicle had this capability.

Without government intervention in mandating greater production of FFVs and/or the installation of flex fuels at the pump, we remain at a standstill.

What the government has done so far

In 2011, the Renewable Fuel Standard (RFS) helped Americans save $50 billion on imported fuel costs. If all vehicles were FFVs with the ability to run on blended fuels containing high levels of alcohols such as ethanol, methanol, and butanol, the savings could exceed $500 billion.

Breaking the bottleneck

One solution that was briefly debated in Congress in 2012 was the Open Fuel Standard, which would require that all vehicles sold in America have the ability to be powered by at least one form of alternative fuel. With this initiative, market forces would help backfill the infrastructure.

Why America Needs an FFV fleet

Aside from providing the consumer with options of fuels they may prefer from an economic standpoint, there are national defense and strategic ramifications that should also play into consumers’ decisions as to what fuel to use when filling up their tanks.

Do consumers want to continue supporting the accelerating transfer of wealth to hostile oil-producing nations such as Saudi Arabia, Iran, and Venezuela? These countries are accumulating wealth at a rapid pace which they are using to gain political, religious and economic leverage to threaten Western values and political stability around the world. These countries are also using this wealth to buy up our assets, infrastructure and capital structure while financing terror and hatred for the West in the process.

This transfer of wealth is not just limited to draining American pocketbooks. The same is true for every nation that imports oil, including China, India and many other countries.

Retired 4-star general, Wesley Clark, speaks about how this all plays into national security here and here.

General Clark explains that if we merely go from E10 to just E15, America could reduce its oil imports by one million gallons per day. That's the amount of oil we are importing from Venezuela! So, by simply switching to E15, we could stop the transfer of wealth to this hostile nation.

There are a variety of other benefits that can be derived on a global basis including improving the balance of trade and reducing the transfer of wealth from the consuming country to the producing countries.

By implementing new biofuels, bio-based chemicals, biopolymers and bioplastics made from cellulosic sugars, or "Green Sugars™", reductions of greater than 80 percent in greenhouse gas emissions are possible. Companies such as Abengoa Bioenergy (Spain), M&G (Italy), POET (U.S.) and others are already constructing the first commercial second-generation cellulosic fuels and chemicals plants.

I'm dreaming in the near term of hybrid cars that are equipped to run on electricity and flex-fuels such as E85. When running on electricity, the need for imported oil is all but eliminated, and when running on E85 or some other form of alcohol, you greatly reduce the importation of oil and the enormous transfer of wealth to the oil-producing countries.

If the automobile manufacturers are not required to do in the U.S. what they are already doing for Brazil, namely to manufacture and sell cars without the option of fuel choice, the greatest transfer of wealth mankind has ever seen will continue. Our economic might is being weakened by continuing to transfer wealth to hostile oil-producing countries.

About the author:

Mark A. Emalfarb is the founder of Jupiter, Florida-based Dyadic. He has been a member of Dyadic’s board of directors since October 2004 and has served as its Chairman as well as President and Chief Executive Officer from October 2004 until April 2007 and from June 2008 until the present.

Since founding Dyadic in 1979, Emalfarb has successfully led and managed the evolution of Dyadic from its origins as a pioneer and leader in providing ingredients used in the stone-washing of blue jeans to the discovery, development, manufacturing and commercialization of specialty enzymes used in various industrial applications and the development of an integrated technology platform based on Dyadic’s patented and proprietary C1 fungal microorganism.

Emalfarb is an inventor of over 25 U.S. and foreign biotechnology patents and patent applications resulting from discoveries related to the Company’s patented and proprietary C1 fungus, and has been the architect behind its formation of several strategic research and development, manufacturing and marketing relationships with U.S. and international partners.

Emalfarb earned his B.A. degree from the University of Iowa in 1977.

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