Book report: "Turning oil into salt."

Just read "Turning Oil Into Salt" a couple of weeks ago - a great and insightful read. While I don't agree with the author on everything, I do agree with the basic premise of the book. That is that oil has become a strategic commodity because it enjoys a monopoly on transportation fuels, and that this provides both security and economic threats to America. Breaking that monopoly (i.e., allowing other fuels to compete with oil - even on today's internal combustion infrastructure) is not actually all that hard: about $100 added to the cost of a car makes it fully flex-fuel capable, enabling it to run on ethanol, methanol, or gasoline.

There are obviously a lot of policy decisions (e.g., do you allow imports of sugar-cane based ethanol from Brazil or use corn-based ethanol from Iowa?) and market issues to work through, but other countries have successfully addressed this issue. Brazil is a great case in point: the entire fleet there is flex-fuel, and they have lots of low-cost sugar-based ethanol. When oil prices skyrocketed last year, the mix of fuels significantly shifted towards ethanol; when oil prices eased, the blend shifted back toward petroleum. Brazilians were thus largely shielded from the shocks of the oil price swings, and oil had to actually compete on price for a share of Brazilians' fuel tanks.

And as newer plug-in-hybrid vehicles start hitting the streets (cars such as the Volt which primarily use an electric motor for the first 30-50 miles of travel, using an internal combustion engine either as a backup drive when the batteries deplete, or as a generator to supplement the batteries, thus extending range), you get an even bigger benefit: these cars can already make 100-200 miles per gallon of gasoline, and if they are made flex-fuel, they could conceivably go an arbitrary distance with no petroleum at all.

It's the sort of thing that would drive Ahmadinijad crazy. And isn't that a good thing?