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  • Government Shouldn’t Decide What Cars Run On

    With gas prices hovering at $4 per gallon, politicians are trying to sell quick fixes that will inevitably end up hurting consumers. The latest attempt is an open fuel standard that would require a certain percentage of new vehicles to be flex-fuel (a combination of gasoline and ethanol or methanol), electric, natural gas, biofuels, or any other power source that is an alternative to your traditional internal combustion engine.

    Policymakers will attempt to convince the public that open fuel standards encourage competition and will benefit consumers. Consumers won’t be paying such high prices at the pump and Americans will be buying less foreign oil. Moreover, the additional cost for each vehicle will be marginal. As opposed to promoting one technology (such as electric vehicles or natural gas vehicles), an open fuel standard does not pick winners or losers.

    It all sounds great. So why do we need a mandate for vehicle producers to make 50 percent of their fleet to run on these technologies? The reason there are not more cars running on batteries, natural gas, methane, or other alternative fuels is the result of competition, not the absence of it.

    This isn’t the first attempt to mandate alternative vehicle fuel use. Policymakers in the past have proposed to have vehicle manufacturers make a certain percentage of their fleet flex-fuel. What the Competitive Enterprise Institute’s Marlo Lewis writes about that idea applies to a broader alternative vehicle mandate as well:

    What flex-fuel mandatists lament as a lack of competition is simply a competitive outcome they dislike. Mandatists do not want competition. They want a rigged marketplace in which they, rather than competition, dictate the outcomes.

    There are plenty of technologies already developed to promote competition, and the one that emerges to provide a consistently affordable alternative to gasoline won’t need the help of the government, because the profits will be enough incentive to drive production and lower costs, which will be enough incentive for the consumer to switch from a car that runs on gasoline to something that is cheaper. It may not happen as fast as politicians and lobbyists representing the beneficiaries of open fuel standards would like, but then again, it might. Good economic ideas can expand at rapid rates. Getting the government involved only impedes the process.

    Having an open fuel standard also means one of two things for domestic vehicle manufacturers. They’re going to be producing a lot of cars no one wants to buy or they’re going to receive more taxpayer dollars for the production and consumption of these vehicles. The government already manipulates the automobile market with fuel efficiency standards. Do we really need more government intervention?

    Posted in Energy [slideshow_deploy]

    8 Responses to Government Shouldn’t Decide What Cars Run On

    1. George Colgrove, VA says:

      Agreed!

    2. Bobbie says:

      isn't there an ethics code stating "no government shall interfere with the freedom of our livelihoods?"

      The bias and favoritism of government is unethical in itself. Remove government from the private sector and out of our freedom.

    3. Tim, USA says:

      Here's a radical idea for lowering the price at the pump: Let the Democrats raise gas prices through regulation or taxation. The price will spike to $5/gal or more at which point all commerce in the country will grind to a halt with the average individual or business unable to eat the increase. Phones will begin ringing off the hook in DC and in state capitals around the country with demands to provide an immediate uncomplicated resolution to the price at the pump. This is where the absence of a viable cheap unsubsidized alternative to oil makes the response so predictable. The only answer is expansion and deregulation of drilling licenses. The market would reflexively drop the price of oil under the expected increase in supply and the price would fall at the pump. How low? I'm not sure but it would likely fall until it is well below the threshold where it is again profitable for businesses to operate and the working stiff to get to work. Let regulation and taxation run wild and they will be their own undoing. Sure it will hurt, probably for a few weeks until enough stuff has hit the fan and Congress can't ignore it anymore.

    4. Abe Shackleton, Ariz says:

      If the fuel market was already free, I would say let us keep government out of it. But oil has a virtual monopoly on the transportation sector. 97 percent of all transportation runs on nothing but oil, and oil gets its own subsidies:

      http://www.ethanol.org/pdf/contentmgmt/Oil_Indust

      With the passing of the Open Fuel Standard, different fuels created by different sources will freely compete in the marketplace, and probably, as a consequence, force a removal of already-existing subsidies since any fuel source that doesn't get subsidies will cry foul, as well they should.

      And it won't produce cars people don't want. The cars are almost no different. They have slightly better fuel lines and a small fuel sensor. Many people already have flex fuel cars and don't even know it. GM is already making flex fuel cars and they say it adds "up to $70 to the production cost of a car." And for that we have instant competition at the pump for the first time since the advent of prohibition when Standard Oil crushed its only competitor in the fuel market: Alcohol.

    5. Robert Zubrin, Lakew says:

      Dear Mr. Loris:

      I am the author of "Energy Victory: Winning the War on Terror by Breaking Free of Oil," (see http://www.energyvictory.net) which makes the case for the open fuel standard that you oppose.

      I would be willing to travel to Washington DC to debate you on this issue. This could be done one vs one, or if you prefer, I and another open fuel standard bill supporter would debate you and Marlo Lewis, two vs two.

      Are you willing to debate?

      Robert Zubrin

    6. Jacquelyn Evans, Bel says:

      Your title "Government Shouldn't Decide What Cars Run On" is misleading. This bill doesn't decide what cars should use. It does just the opposite: Basically It says cars should be able to use more than just gasoline.

      Right now 97% of our entire transportation sector–from cars, to trucks, to boats, trains, and planes–are dependent on gasoline. So when OPEC mandates a price increase we HAVE to pay. This has created the largest transfer of wealth in the history of the world. Billions of dollars each day leave our economy to fill the bank accounts of the OPEC nations. How do we have an economic recovery when we are giving more to the OPEC nations than we spend on our own military defense?

    7. Fred, Toledo says:

      The Open Fuel Standard seeks to solve a very important problem: The United States is sending over a billion dollars a day to foreign countries for fuel. Many of these countries are using that money to undermine the American economy, to influence our politicians, to influence our media, and to build madrassas and mosques all over the world that preach hatred toward America. This is a serious problem. This is an unprecedented transfer of wealth and it needs to be stopped. Yesterday!

      Another major problem is that because OPEC is such a large cartel, what they produce determines the world price of oil.

      One of the ways some people would like to solve these problems is to "drill our own," but while that would make more of our money remain in this country, it would not lower gas prices, and the world would continue to buy oil at OPEC's inflated prices, which would continue to fill their coffers with money, regardless of the level of our participation in that process.

      Even if we drilled ALL our own oil, it is not really "we" who are drilling "our" oil. It is oil companies. These are not state-owned companies. Would an American oil company sell its oil to American consumers at a lower price than it could sell the oil to another country? Not likely. Would the American government FORCE the companies to sell it to us for less than they could make elsewhere? Not likely.

      And even if we drilled a LOT of oil, OPEC has repeatedly responded to more oil on the world market by lowering its production (to keep the price of oil high).

      So while drilling might solve one problem, it does not solve the whole problem. But drilling our own AND passing the Open Fuel Standard would solve them all. Fuels would compete in the largest fuel-consuming country in the world, gas prices would have to come down to compete, and no matter which fuels were selling, all the money would be going into our own economy.

    8. zachary says:

      Yeah, the government cannot decide for us. We have our own choice. They just want us to buy electric cars. I know gas prices are increasing nowadays. But electric cars aren't the answer to their gas prices woes. As it can just add to our burdens. Yes, it can help for a greener environment. But it has a lot of downsides. In the first place its very expensive and thus its parts from online auto parts are way to expensive compared to the gas-powered cars. There are only few charging stations available and it cannot even travel in long distances. Let our own decision prevail.

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