Energy Management Institute Reports Alternative Fuels May Become Cost Competitive for Americans

NEW YORK, March 4, 2003; -- The Energy Management Institute's latest Alternative Fuels Index (AFI) price survey indicates that alternative transportation fuel is becoming cost-competitive to traditional gasoline and diesel fuels. While the U.S. consumes oil at record pace, proponents of DOE-classified alternative fuels are working on increasing their efficiency. With the price of crude oil, gasoline, and heating oil at record highs consumers are beginning to explore their alternatives. In addition, national security issues and the threat of war are causing many to second-guess a domestic economy based on foreign oil. Alternative Fuels Index editor, J. Scott Susich, said, "alternative fuels are about to step into the spotlight." Today, you can fill your car at a compressed natural gas station for $1.49. While CNG is still a hydrocarbon-based fuel, the U.S. and North America have large domestic reserves unlike oil. Ethanol is a grain-based fuel and according to AFI's Thursday index it cost $2.17 per gallon. Biodiesel is made from soybeans, animal fats, and other vegetable processing streams. The price of biodiesel is $2.07 per gallon. While these prices are higher than their petroleum counterparts, consider that the biodiesel price is based on a meager national production of about 20 million American-made gallons. Gasoline and diesel prices are based on billions of gallons of imported foreign oil. Applying the same economies of scale to domestic alternative fuel production would reduce prices dramatically.

According to AFI's (www.altfuelsindex.com ) National Roundup, Thursday's equivalent wholesale price of transportation fuels is shown below. These prices do not include taxes, distribution, or profits:

Diesel Fuel - $1.2061 Natural Gas - $.9126 (compression extra) Biodiesel - $2.0710 Ethanol - $2.1721 Electricity - $2.5397 Methanol - $1.5138 Propane - $1.1656 Gasoline - $1.1469

"We need to begin a transition to the freedom of alternative fuels even if it costs us more in the short-run. Either that or we remain hostage to a foreign-based oil economy and the turmoil associated with guaranteeing its supply," said Susich.

J. Scott Susich is the Editor of the weekly Alternative Fuels Index published by the New York based Energy Management Institute (www.energyinstitution.org). EMI is an education, publishing, and consulting company that provides training and information services to energy users and suppliers.