Life As We Might Have Known It: What If Ethanol Was Our Primary Engine Fuel

by Marc J. Rauch (The Auto Channel) ... Our exchange began with his comments that government should not decide which fuel is the winner; that fossil fuels dominance over alternative fuels was due to consumer choice; and that society owes a great thanks to fossil fuels for giving us such a high quality of living.

In my response to these comments, I agreed that the government should not dictate which fuels win, but added that our government very definitely determined who the winner was. "The government did this," I wrote, "by placing burdensome taxes on alcohol right after the founding of the United States. The burdensome taxes became onerous in 1862. Alcohol was priced out of the market by the government. When the taxes were finally lifted for a short period after 1907, alcohol began to compete with gasoline, and virtually all objective scientists agreed it was a better fuel than gasoline." I then added that government interference culminated with the national prohibition of alcohol, which ended the competition.

I also wrote, "Consumers never had the opportunity to vote on which fuel they wanted; there was never a national referendum. And in the years since the repeal of prohibition the public has never been told the truth about petroleum oil fuels, nor has the public been given the opportunity to vote to discontinue petroleum oil subsidies." Ethanol was never given a fair chance.

Events of the American Civil War set in stone social and economic conditions that have been with us ever since, and they are certain to be with us long into the foreseeable future.

Perhaps the least considered of the events were the Revenue Acts of 1861 and 1862, which were passed by the U.S. Congress to fund the Union's military efforts. Ramifications of these bills included the first Federal income tax statute and the levying of excise taxes (often referred to as "sin taxes") on tobacco and ethyl alcohol (ethanol). Alcohol's tax rose to more than $2 per gallon, regardless of whether the alcohol was intended for consumption or industrial purposes. In today's money, that's purchasing power equivalent to about $120. In 1860, rent for 4 rooms was $4.45/month; land was selling for $3 to $5 an acre; and a laborer’s wage was 90 cents a day.

In 1872, some of the taxes were repealed - income tax, for example. The alcohol tax remained in place for decades until finally removed by the 1906 Free Alcohol Act.

The high tax on alcohol priced alcohol out of consideration for use as lamp and kitchen stove fuel, ...

The beneficiary of alcohol's forced decline in popularity was the nascent petroleum oil industry and their principal product, kerosene.

In countries that didn't have domestic petroleum resources and onerous alcohol taxes, alcohol fuels became the preferred engine fuel. In 1899 Germany, the price of gasoline and alcohol fuel were both equivalent to approximately 27 cents. Tests conducted in Germany and France showed that alcohol optimized engines were at least as efficient as gasoline optimized engines.

By removing the tax (in 1906), ethanol fuel became less expensive than gasoline for the first time. This meant that the top scientists and engine builders of the day could work towards better performing vehicles that relied on low cost ethanol and ethanol blends. Henry Ford's Model T was the most famous of new vehicles that could now be powered by gasoline or ethanol (the Model T had two simple adjustments located on the dashboard and steering wheel column).

The third obstacle was National Prohibition. With the war out of the way, and the public ready to roar into the Roaring 20's, ethanol was eliminated from the scene; and nothing can kill competition like a law banning one of the two competitors.

Ethanol was the only solution to engine knock. However, after the GM scientists invented leaded gasoline (tetraethyl-lead), and combined their patents with Standard Oil and Dupont Chemical, the world's two largest companies in their respective industries, the prospect of billions of dollars in profits from leaded gasoline put aside any consideration of ethanol-gasoline blends in America.

But what if the government didn't tax alcohol in 1862? What if alcohol was allowed to compete freely during the second half of the 19th century and all through the 20th century without Prohibition (or without Prohibition affecting ethanol production for fuel)? What might have happened?

We may not have engaged in so many wars; we may not have lost tens of thousands of servicemen in the wars; we may not have had to spend trillions of dollars to engage in the wars. We might not have needed to pour money into the Middle East oil countries to secure their oil as we wouldn't have needed it. Instead of making terrorist regimes rich, which allowed them to fund terrorist actions they might all have remained sleepy backwater countries.

If ethanol fuel was allowed to prosper our farmers might have required less aid. Our skies may never have become smog filled; we may have had fewer catastrophic oil spills and disasters. If we didn't have National Prohibition perhaps organized crime wouldn't have become so organized. READ MORE