Energy Conservation And Alternative Fuel

What Are Alternative Fuels
In the simplest form, an alternative fuel is one that is not produced by using crude oil. They are
simply fuels that replace conventional gasoline as a means of powering vehicles. Alternative
fuels have desirable energy efficiency and pollution reduction features. The 1990 Clean Air Act
encourages development and sale of alternative fuels.
More specifically, the Energy Policy Act (EP Act) of 1993 gave a more in-depth definition of
what they consider to be alternative fuels. The United States Department of Energy recognizes
the following as alternative fuels:
· Mixtures containing 85% or more by volume of alcohol fuel, including methanol and
denatured ethanol
· Natural gas (compressed or liquefied)
· Liquefied petroleum gas (propane)
· Hydrogen
· Coal-derived liquid fuels
· Fuels derived from biological materials
· Electricity (including electricity from solar energy)
· 100% Biodiesel (B100)
Energy Conservation And Alternative Fuel

Pure biodiesel (B100) is considered an alternative fuel under EP Act. Lower-level biodiesel
blends are not considered alternative fuels, but covered fleets can earn one EP Act credit for
every 450 gallons of B100 purchased for use in blends of 20% biodiesel or higher.
Through the Alternative Fuel Petition Program, third parties can petition the Department of
Energy to add alternative fuels to the above list. People are always on the lookout for new ways
to combat rising fuel prices and develop fuels that are not only good for the environment, but for
the consumer’s checkbook as well.
Basically, alternative fuels include methane, propane, ethanol, and compressed gas among
others. We’ll examine some of these a little later in the book, but alternative fuels don’t fall into
one compact category other than the one that defines them as an option over gasoline.
It’s kind of exciting to think about the fact that we can now power our vehicles using things like
vegetable oil, animal fats, and even wood! It brings to mind the movie “Back to the Future”
where Doc would power his DeLorean time machine using garbage as fuel!
Energy Conservation And Alternative Fuel

Why Are Gas Prices So High
There are three main grades of gasoline: regular, mid-grade, and premium. Each grade has a
different octane level. Price levels vary by grade, but the price differential between grades is
generally constant.
The cost to produce and deliver gasoline to consumers includes the cost of crude oil to refiners,
refinery processing costs, marketing and distribution costs, and finally the retail station costs
and taxes. The prices paid by consumers at the pump reflect these costs, as well as the profits
(and sometimes losses) of refiners, marketers, distributors, and retail station owners.
In 2005 the price of crude oil averaged $50.23 per barrel, and crude oil accounted for about 53
percent of the cost of a gallon of regular grade gasoline. In comparison, the average price for
crude oil in 2004 was $36.98 per barrel, and it composed 47 percent of the cost of a gallon of
regular gasoline. The share of the retail price of regular grade gasoline that crude oil costs
represent varies somewhat over time and among regions.
Federal, State, and local taxes are a large component of the retail price of gasoline. Taxes (not
including county and local taxes) account for approximately 19 percent of the cost of a gallon of
gasoline. Within this national average, Federal excise taxes are 18.4 cents per gallon and State
excise taxes average about 21 cents per gallon. Also, eleven States levy additional State sales
and other taxes, some of which are applied to the Federal and State excise taxes.
Additional local county and city taxes can have a significant impact on the price of gasoline.
Refining costs and profits comprise about 19 percent of the retail price of gasoline. This
component varies from region to region due to the different formulations required in different
parts of the country.
Energy Conservation And Alternative Fuel

Distribution, marketing and retail dealer costs and profits combined make up 9 percent of the
cost of a gallon of gasoline. From the refinery, most gasoline is shipped first by pipeline to
terminals near consuming areas, and then loaded into trucks for delivery to individual stations.
Some retail outlets are owned and operated by refiners, while others are independent
businesses that purchase gasoline for resale to the public. The price on the pump reflects both
the retailer’s purchase cost for the product a