Montana Viewpoint


July 21, 2008

The high price of oil is causing a lot of economic turmoil in America, largely because it so completely saturates our economy. The most tangible aspect, of course, is the increased cost of highway fuels; gasoline prices are having an effect on consumer spending for life’s necessities, let alone those purchases that make life more fun, and diesel prices affects the cost of virtually everything else. It’s no secret to anyone that food prices have shot up dramatically and much of that increase is directly tied to the price of oil.

The price of transporting feed, seed, and fertilizer to the farm, the cost of running farm equipment, and the cost of transporting finished goods all depend on fuel costs, not to mention the fact that fertilizer is a petroleum by-product that is seeing its own dramatic price increase.

In our hypothetical quest for “energy independence” we have created another factor that’s increasing the cost of food, and that’s producing ethanol as a partial replacement for gasoline. Forgetting for a moment the fact that it takes more energy to create a gallon of ethanol than the energy contained in that gallon, the amount of cropland that has been diverted from raising other crops in favor of growing the corn used in ethanol production is creating its own little economic mischief. Because less land is devoted to the production of animal feeds the cost of that item is going up, and that cost eventually lands in the American frying pan in the form of more expensive steak, eggs, or pork.

Who dealt this mess? If anyone thinks there is any intelligent planning here I’d like to know about it. The world’s integrated oil companies certainly aren’t anxious to see change as long as they’re cutting a fat hog. In fact, their answer to the problem is, use even more oil. Well, heck, it’s what they do best, but it’s not helpful, let alone even close to an answer.

There are a few countries that have not been hard hit by oil prices. They don’t produce a lot of oil, and they no longer import a lot of oil because they have figured out another way to power cars. Brazil relies on its vast acreage to grow sugar cane for ethanol production (no, I don’t know if it’s driving their food costs up), Israel is switching to electric cars, and China is moving toward methanol, otherwise known as wood alcohol.

There are a number of products that methanol can be made from; natural gas, coal, CO2 recovery from industrial exhaust gases, and wood. Montana has a lot of coal in the east and a lot of wood in the West. More importantly, the forests in the West are in bad shape and patches of dead and diseased trees are increasingly visible on the landscape. There is a need for stewardship to both maintain and improve forest health and to prevent wildfire. In an era of drought, thinning forests makes more moisture available for remaining trees to keep them healthy and can reduce the danger of forest fires. A study done for the Oregon Department of Energy—“Western Forest Health and Biomass Energy Potential”—contrasted the $ 216 cost per acre of fighting fire with the $50 to $150 per acre cost of thinning.

I’m not suggesting wholesale tree slaughter, but I am saying that there is a potentially viable market for wood products that don’t have much value for anything else. I’ve written before that there is not a significant construction market to absorb timber from a large scale forest renewal project, and that any such project would need to be government subsidized, which is not all bad. But there can be a methanol market for such timber, and the quality of the timber doesn’t make any difference to the wood stills.

Engines run well on methanol, so well that it was mandated for use by the United States Auto Club after 1964 for the Indianapolis 500. It took a tragedy to accomplish that however, after a seven car pileup in which Eddie Sachs and Jimmy MacDonald were burned to death in their gasoline fueled cars when their gas tanks ruptured. Johnny Rutherford, driving a methanol fueled car also had his fuel tank rupture, but survived the crash because methanol is less volatile than gasoline. It was a safety move by USAC more than anything else, but if methanol is good enough for high performance auto racing, it can work anywhere.

This is just a suggestion with benefits for a couple of problems, fuel costs and forest health. We tend to stick with things we understand, even when—or especially when—they aren’t working. It is wiser and more productive to recognize problems and anticipate solutions instead of waiting for the crisis, which, by the way, has arrived.

Jim Elliott