Editorial: Politics and fuel choice

Aug. 10, 2009
The folly of governmental fuel choice is playing out vividly in the shadowed margins of fiscal politics. Hydrogen, everyone’s favorite vehicle fuel a few years ago, has fallen from grace—at least in some quarters.

The folly of governmental fuel choice is playing out vividly in the shadowed margins of fiscal politics. Hydrogen, everyone’s favorite vehicle fuel a few years ago, has fallen from grace—at least in some quarters.

Who can forget the hydrogen hooplah that gripped the US Department of Energy during the administration of George W. Bush? According to DOE’s press notices, a “hydrogen economy” loomed. There, vehicles would emit nothing more than water. Global warming would cease. The country would quit importing oil. All that stood between the US and hydrutopia was reversal of a chicken-and-egg problem: Build a hydrogen distribution system, and the rest would take care of itself. It was only a matter of political will.

Of course, political will tends to change with inconvenient frequency. It’s doing so now with hydrogen.

Nothing for hydrogen

In its federal budget proposal for fiscal 2010, the administration of President Barack Obama requested nothing for hydrogen research. Some of the reason no doubt reflects the administration’s revulsion toward anything associated with the former president. But some, too, shows a measure of welcome pragmatism. The hydrogen fad, based though it was on genuine fuel advantages, overlooked huge commercial problems, most of them tied to the energy needed to isolate the hydrogen atom.

Explaining to Congress his department’s loss of appetite for hydrogen research, Energy Sec. Stephen Chu in May said the government had better uses for the money. He, for one, sees greater potential in electric plug-in cars and biofuels, at least over the next 20-30 years. As a Nobel Prize-winning physicist and former director of DOE’s Lawrence Berkeley National Laboratory, Chu brings impressive scientific authority to these judgments.

Yet it’s not difficult to find similarly qualified scientists who think the government is foolish to abandon hydrogen research. Many of them work for the automakers that have committed themselves to commercialization of hydrogen vehicles or for universities hoping to soak up some of the $1.2 billion Bush channeled toward hydrogen.

Research funding notwithstanding, knowledgeable people can disagree honestly over the merits of one fuel in relation to others. Without question, upper-level disagreement such as this generates insights enlightening to energy choices. But it can’t efficiently make those choices. If it’s to produce policy, academic argument must yield to the clanking machinations of politics, with all its deal-making and insidious influences. Ultimately, the laboratory’s soaring truth becomes the cloakroom’s squirming compromise.

Energy choices are best left to free markets, fully informed. This historic verity, which tends these days to be dismissed as quaint ideology, has received no clearer or more immediate demonstration than with the national calamity developing from biofuels.

Now and even more so in the future, biofuels surely must contribute to total energy supply. They will do so only if the government confines itself to conducting research and disseminating the results. Instead, lawmakers and presidents of both major political parties have seen fit to push fuel ethanol and biodiesel into the market with mandates and generous subsidization. For the fuels themselves, the consequences are disastrous.

Overbuilding—encouraged in part by state-guaranteed loans—and market surprises have crushed the economics of ethanol manufacture. A rushed conversion of soybean agriculture into corn has raised the price of biodiesel’s main feedstock while the product’s price has sunk. Bankruptcy courts are selling distressed plants at dimes on the dollar.

Congressional mandates for biofuels, which rise each year through 2022, probably are futile. Because the gasoline market soon won’t be able to absorb ethanol at mandated rates, the ethanol lobby wants increased blending levels. But that’s just the immediate problem. Satisfying future mandates depends on the development and implementation of technology that’s not yet commercial and on a delivered supply of plant waste that probably won’t materialize.

Program fails

Biofuels haven’t failed. The failure is an ill-considered program to rush them to market.

Renewable and other unconventional fuels have an important and growing role to play in energy supply. Governments have roles to play in stimulating their growth. Ultimately, however, fuels need solid commercial grounding, which never results from political caprice.