This first article is about a small start-up company that is going into business making industrial engines that use alternative fuels.
ALGONA, Iowa -- While much of the world fumes over escalating fuel prices, a small company in north central Iowa is quietly hoping to make gasoline obsolete as an engine fuel.
Research at the Hydrogen Engine Center is done in an early 1900s red brick armory at the Kossuth County fairgrounds.
There, a clean six-cylinder engine that looks like it could have been pulled from a Ford pickup has been running for 110 hours, not quite half the 300 hours it must continuously run for certification. The company, led by a retired Ford Motor engineer, hopes to meet Environmental Protection Agency automotive 2007 emission standards.
These guys are planning to move into the market that the Big Three are moving out of.
Ford, General Motors and Chrysler have dropped industrial engine production as they've cut costs, leaving what Hollinger said is a ready-made market for his fledgling company.
Now why can this company make money on these engines while the Big Three can't? I don't know, you tell me. But however it is, it seems they can and will. They're looking at a huge market to move into. As gas prices rise and rise (and as they are projected to keep rising indefinitely), companies that use a large number of these kinds of engines stand to spend millions or billions of dollars on fuel alone. Wouldn't they like it if they could use fuels that cost half as much? Apparently so!
The company said American Airlines alone has 9,500 vehicles likely to be converted to alternative fuels over the next decade.
American Airlines has 9,500 vehicles. How many trucks does the US Postal Service own, or UPS or Fedex? Think of all those gallons of fuel. Millions a day, at least. Hydrogen fuel may not be the answer for most cars and trucks however. There are some problems with it right now that make it not as cost-effective as gas.
While the engines drive a revenue stream for the company, engineers are working to improve the technology of engines that run on hydrogen and other clean fuels. Bob Mendlesky, another retired Ford engineer, light ups when he describes the potential for the engines his shop is developing.
He said there are obstacles to making cars powered with hydrogen-fueled internal combustion engines. To carry enough hydrogen, the fuel tank would have to be under extremely high pressure, he said. In addition, tanks made to that specification cost as much as the engine to power the car.
Hydrogen technology is better suited for generator applications and for industrial uses at its current stage of development, he said.
Not to worry though, they have ideas for cars too.
A better solution may be engines that run on ammonia, Hollinger said.
Development of ammonia as a fuel must include ways to improve its combustibility. Ammonia does not readily spark like other fuels, but Hollinger is determined to overcome some of the obstacles.
He expresses doubts about making that one work well, however. On the other hand, ethanol is really taking off. As many of you may have noticed (at least in Texas), we are using ethanol as an additive to gasoline.
In signs that big-time players are betting on ethanol's future, Illinois-based agribusiness giant Archer Daniels Midland Co. recently announced a large expansion, while car makers are increasing their commitment. General Motors Corp. says it will manufacture 400,000 more flex-fuel vehicles, which will join more than 5 million on the road.
The mixture Texas and other states are using now is 10% ethanol to 90% gasoline. Flex-Fuel vehicles can use a blend up to 85% ethanol. And what's the market incentive?
At a gas station in Hiawatha, outside Cedar Rapids, an ethanol-infused gallon of 89 octane premium gas recently cost $2.69, 10 cents a gallon cheaper than the weaker 87 octane regular.
This is no temporary bubble, and people are buying into it like nobody's business.
Two years ago, it took less than three weeks to raise about $20 million from 472 investors for the Goldfield plant in central Iowa. The average investment was $47,000, and two of every three dollars came from within 40 miles, said general manager Brad Davis.
Recently, the money has started arriving even faster.
When Horan and his partners sought $20 million for each of three new biodiesel plants, no request took longer than 10 days to fulfill. In one case, the offer was fully subscribed in eight days and the organizers sent $2.5 million back. Horan said banks have been willing to lend large sums with no collateral other than the refinery itself.
There's a lot of positive stuff in this article. As we hoped, this is turning out to be a movement of the people, not just big companies. Americans really want this to work, and are putting their own money in. The corn producing states will start take some of that money that goes overseas now, and it will be put back in local economies. Can you imagine if the tens of billions of dollars we spent on gas just went back into the US? And long term, this will shatter the dynamic of the rich oil dynasties overseas as fuel begins to be produced by the world's grain producers. The only limiting factor is how much corn we can grow (which presents a problem, but more on that later).
Not only the corn, but the cellulose of the stalks themselves is potential fuel, because there's another process that makes use of those. Although production costs are not competitive at the moment, they could be (and almost certainly will be). This fuel can come from almost any cellulose-containing plant waste. If that's not a winner, I don't know what is!
Of course we've mentioned bio-diesel before, and it's part of this revolution. As gas' price and availability (lack of) makes it a less and less attractive fuel, these alternative fuels are just going to keep getting more popular. In fact, Cincinnati is using a 50/50 blend in their transit buses, and it's actually costing them less than regular diesel (because of pollution credit trading).
Metro - which uses about 3.6 million gallons of fuel a year - has a contract to buy biodiesel fuel at about $1 less than market rates by passing an IRS blender credit on to Peter Cremer, according to Sallie Hilvers, spokesperson for Metro. Biodiesel fuel is more expensive than regular diesel fuel on the market, but Metro's savings makes it cheaper.
Even with these steps forward, we're a long ways from living in a pollution-free country. It's going to be a long time before all the old fossil-fuel burners are off the road and we have clean coal plants, but it's nice to see that something is happening. Maybe it's just me, but I certainly wouldn't mind driving a hybrid car that used ethanol or bio-diesel for fuel. Imagine getting 80 mpg, and only paying $1 per gallon for the 5 or 6 gallons of fuel you do need. I'll insist that people shouldn't be driving wasteful SUVs until the end of my days, but if by the time I retire most people are driving cars like that, I'll be happy.
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