The Dangers of Running on Empty

Since, these days, gasoline costs as much as fine wine, many drivers are trying to stretch each tankful to the limit. But this tactic can have very negative consequences that extend beyond being stranded by the side of the road, which is negative enough. AAA, which rescues more out-of-gas motorists than anyone, cautions that allowing your car to run out of fuel could not only put you in a potentially dangerous situation, but also result in costly repair bills.

“We realize some motorists are trying to be resourceful and delay fuel expenditures by driving their car until the gas tank is nearly empty, but this can sometimes do more harm than good,” says John Nielsen, AAA national director of auto repair, buying services and consumer information.

A key problem of getting extremely low on fuel is the gunk at the very bottom of your fuel tank. The sediment in the nether regions of the tank can clog the fuel-pump pickup, the fuel filter or the fuel injectors. You might even hit the trifecta and foul all three. In addition, as strange as it may sound, gasoline is sometimes used as a coolant for the electric fuel pump, so when a minimum level of fuel is not maintained, it could cause the pump inside the tank to overheat. The cost to replace that one component alone can cost $500 or more in parts and labor.

Then there’s the value of your personal safety, which many gauge as being priceless. Running out of gas can put you and your passengers in a precarious position if your car or truck suddenly becomes immobilized on the roadway. Power steering and power brakes cease to function in their normal manner when the engine dies, so maneuvering an out-of-gas vehicle is cumbersome at best, dangerous at worst. You can end up stranded in the middle of a busy highway -- without the ability to move your vehicle -- and find yourself at the mercy of oncoming traffic. Fortunately, out-of-gas situations are completely avoidable just by keeping an eye on the fuel gauge, says Nielsen. When you’re running low, pull into a gas station, mobilize your charge card and put some gasoline into that tank. AAA recommends that drivers always maintain at least a quarter tank of fuel.

Rather than stretching your fuel supply beyond the prudent limit, you might want to make a few simple changes in your driving habits that can greatly improve fuel economy. For instance, instead of making quick starts and sudden stops, go easy on the gas and brake pedals. Smooth driving is more fuel-efficient, and it is more pleasant for your passengers. If there is a red light ahead, ease off the gas and coast up to it rather than waiting until the last second to brake. Once the light turns green, accelerate gently rather than making a drag-strip-style start. The U.S. Department of Energy reports that aggressive driving can reduce a car’s fuel economy up to 33 percent, so you have to wonder how important it is to beat that other car across the intersection.

When you’re underway, speed is also a key factor in fuel use. The fuel efficiency of most vehicles decreases rapidly at speeds above 60 mph. Every additional 5-mile-per-hour increment above 60 mph is like paying an additional 24 cents per gallon for gas, says Nielsen. So even in this era of through-the-roof gasoline prices, you can keep some gas in your tank, and that will continue to pay dividends.

Ethanol Needs Boost From Feds

President Barack Obama’s recent address on the fuel situation gave hope to advocates of electric cars, natural gas and, as we told you last week, propane. But it offered little solace to those in America’s heartland who are the biggest promoters of ethanol. Of course, ethanol is derived by distilling vegetable material -- primarily corn -- so America’s farmers are generally in favor of the expansion of ethanol use. Others claim that creating fuel from ethanol actually uses more energy than it creates, and that it threatens the country’s food supply. The Renewable Fuels Association (RFA), the key trade association of ethanol producers, is certainly gung ho about the fuel, but it is also convinced that the commercialization of advanced ethanol technologies will not happen without meaningfully expanding the market for ethanol-blended fuels, and it would like the federal government to make that happen.

“For the Renewable Fuels Standard’s ultimate goal of 36 billion gallons of renewable fuel use to be realized … additional federal efforts to open markets, stimulate investments in new technologies and assist in the development of infrastructure for these new fuels will be necessary,” said RFA President and CEO Bob Dinneen in prepared testimony before Congress.

Why should the government promote ethanol use? Well, it is renewable and domestically produced, and it uses the current fuel-delivery infrastructure. Curr Tom Ripley ently, ethanol represents approximately 10 percent of the nation’s gasoline, with nearly 14 billion gallons of production expected this year. The RFA estimates some 8.5 million vehicles currently on the road are flex-fuel vehicles (FFVs), which means they can operate on conventional gasoline or on ethanol. This means FFVs are the largest alternative-fuel vehicle fleet in the country, far outnumbering natural-gas vehicles, plug-in hybrids, electric vehicles, and other alternative fuel vehicles. Additionally, approximately 2,700 out of some 162,000 retail gas stations offer ethanol blends above the standard E10 (10 percent ethanol). The problem is that only a relative few of America’s FFVs are typically fueled with ethanol; the remaining ones are typically filled with conventional gasoline.

That’s one of the reasons the RFA would like to see some changes made on the federal fuel policy front. Specifically, Dinneen identified four policy and regulatory steps that are needed to allow ethanol-blended fuels to gain greater market share versus what RFA calls “the monopoly oil interests”:

  • Federal policies should maintain and extend existing tax incentives for higher-level ethanol blends to allow for continued growth
  • The use of E15 and potentially higher-level blends should be approved for use in all gasoline-powered vehicles
  • Congress should expand tax incentives to gasoline retailers for building new refueling infrastructure beyond the existing alternative-fuels infrastructure tax credit
  • Congress should create new consumer-based tax incentives to encourage the purchase of flexible-fuel vehicles capable of utilizing higher-level ethanol blends

The RFA would also like to see legislative action that requires a percentage of new vehicles sold in the U.S. to be flexible-fuel-capable, and it would like the federal government to mandate the installation of an ethanol-refueling infrastructure.

“At a minimum, federal policies should maintain and extend existing tax incentives for higher-level ethanol blends to allow for continued growth, expand tax incentives for refueling infrastructure, and create new consumer-based tax incentives to encourage the purchase of FFVs,” Dinneen testified.

To get even a part of this agenda approved is problematical, however. Neither the president nor his administration is an ardent booster of ethanol. Many in the administration appear to prefer electric vehicles and hybrids to ethanol-powered cars and trucks, so ethanol proponents may find the next couple of years very difficult.

Is Propane the Fuel of the Future?

In many parts of America, gasoline prices have shot up to $4 per gallon or more -- and that rapid increase has had the predictable effect of prompting many consumers to take a second look at alternative energy sources. One of these – propane -- has a long and positive history as a transportation fuel, but it has been often ignored in the hype about “the hydrogen economy,” gasoline-electric hybrids, and dedicated electric vehicles. Even ethanol, which will be the subject of next week’s feature, has received much greater attention than propane. But now there are signs that the worm is turning and that propane’s considerable virtues as a transportation fuel will finally be more widely recognized.

Interestingly enough, it was a recent speech by President Barack Obama -- who is generally seen as a strong electric-car proponent -- that has given the propane backers new hope. The president outlined a variety of goals, including the importance of securing America’s energy supply, saving consumers’ money at the pump and creating a cleaner environment.

“We cannot keep going from shock to trance on the issue of energy security, rushing to propose action when gas prices rise, then hitting the snooze button when they fall again,” said Obama during a recent speech at Georgetown University. “It is time to do what we can to secure our energy future.”

Frankly, those who back propane as an alternative fuel think the abundant gas has the potential to help the president meet all of his goals. Ninety percent of the propane consumed in the United States is produced domestically. While you can count the number of hydrogen filling stations in the entire nation on your fingers and toes, thousands of propane refueling stations across the country make propane gas convenient and available. In fact, proponents claim there are more propane “autogas” stations than any other type of alternative-fuel station, although ethanol boosters may dispute that. One fact is indisputable: Propane is the only alternative fuel with stations in every state.

While propane has found the sledding tough in much of the United States, there are more than 15 million vehicles operating on propane worldwide. According to the U.S. Department of Energy, more than 270,000 on-road vehicles operate on propane across the United States. Of course that is a drop in the ocean compared to the number of vehicles that use gasoline or diesel fuel, but it does prove the viability of propane as a transportation fuel. Frito-Lay, ThyssenKrupp Elevator, Schwan’s, Red Top Cab and SuperShuttle are among the many companies that operate fleet vehicles powered by propane.

“The Department of Energy’s Clean Cities initiative and the White House’s newly announced National Clean Fleets Partnership share a common goal with the propane industry -- to introduce state-of-the-art technology that makes fleets more sustainable,” says Roy Willis, president and CEO of the Propane Education & Research Council (PERC). “In recent years, the propane industry has partnered with Clean Cities Coalitions to develop programs for propane autogas deployment projects, including vehicles and infrastructure.”

In fact, it is in trucks rather than in cars that propane might find a firm and expanding role in fueling America’s vehicles. Light- and medium-duty trucks and vans fueled by propane are available from a number of industry-leading manufacturers, including ROUSH CleanTech for Ford Motor Company commercial vehicles and General Motors commercial fleet products through a partnership with CleanFUEL USA.

The major hurdle for the clean-burning abundant gas might be the prejudice some diehard environmentalists have against vehicles that burn any fuel at all. These all-electric proponents have previously had a likely ally in President Obama, but his most recent words on the subject seem to offer hope to those who think propane can be part of a national energy solution to pollution and the vagaries of foreign oil.

The Real Cost of Ethanol

If you think gasoline prices have skyrocketed recently -- and they have -- you should take a look at the price of corn. It has more than doubled over the last 10 months, far outstripping the pace of gasoline price increases. Why should you care about the price of corn any more than you care about the cost of tea in China? You may not know it, but there is a corn-derived product -- ethanol -- in the fuel that’s sitting in your gas tank right now. Not only that, but the federal government also has ambitious plans for the increased use of ethanol -- again, mostly corn-based -- in our fuel’s future, and it is backing that policy by a series of subsidies that are designed to promote the use of ethanol.

Now, a report from the Energy Policy Research Foundation Inc. (EPRINC) throws all that into question. The report found that high and volatile corn prices will limit the success of the push to expand the use of ethanol via additional stations that provide E15 (15 percent ethanol, 85 percent gasoline) and E85 (85 percent ethanol, 15 percent gasoline) fuel. The report also found that, without a variety of incentives, ethanol would have a market approximately half the size it currently enjoys.

One of the major obstacles to the expansion of the use of ethanol in U.S. transportation fuels is the rising cost of ethanol’s principal feedstock, corn. As we said, corn prices have more than doubled in less than a year, and that’s an increase considerably greater than the rise in crude prices over the same period. Current U.S. policy requiring ever-larger volumes of ethanol blended into the gasoline pool is now running into the cost reality of the rapidly rising cost of corn. Disappointing U.S. corn yields, loss of wheat crops worldwide and increasing domestic and international demand for corn has pushed prices from $3.50 per bushel to over $7.50 per bushel since the summer of 2010. This, in turn, has driven ethanol prices to levels well above the cost of gasoline when adjusted on a gallon of gasoline equivalent (GGE) energy basis. That means that expanding the use of ethanol in motor fuels will not solve the cost problem consumers are facing at the gas pump right now, because fuel with more ethanol in the mix cannot provide a cost-competitive alternative to E10 (10 percent ethanol, 90 percent gasoline), the type of gasoline currently used by most U.S. motorists.

The report says that various ethanol subsidies with an estimated cost of some $6 billion per year encourage its use as a component of our fuels. The incentives have resulted in some reduction in crude and gasoline imports, but these reductions have come at a very high cost. The open question is: Are the benefits derived from using ethanol in our gasoline worth the huge amount of federal dollars that support its use?

The EPRINC report does some complicated analysis to put a value on the amount of imported petroleum ethanol displaces, and it concludes “even without a precise calculation of these costs [grants, loan guarantees, loss of efficiencies in refinery and retail operations, and rising corn prices] the loss of taxpayer revenue far exceeds the benefits from the program by nearly 3 to 1 under the most conservative assumptions.”

That is not exactly an endorsement of renewable fuels or the future “green economy,” especially as the nation struggles to shed itself of the effects of the Great Recession and the federal government is mired in enormous debt.

Should Fuel Taxes Be Raised?

Do you think the taxes you pay are too low? Not many of you are likely to say “Yes” to that question, but a new study might change your mind at least in one area: state fuel taxes. A new analysis from the Institute on Taxation and Economic Policy (ITEP), a nonprofit that examines the implications of United States tax policy, says that state governments are losing out on more than $10 billion in transportation-related revenue each year. Critics might say that keeping that money away from bumbling governmental spenders is a good thing, but since the money raised by gas taxes would typically go directly to improving roads and related infrastructure, consumers and commerce might well be suffering from this revenue shortfall. The ITEP report suggests that the lost fuel tax revenue results in an estimated $130 billion drain on the economy resulting from higher vehicle repair costs and travel-time delays.

The organization says that state lawmakers who are understandably reluctant to raise gasoline taxes have cost their states, on average, $201 million in annual revenues by not pegging gasoline taxes to inflation. These losses are accompanied by the declining value of the current federal gas tax, which also supports state transportation projects. It has not been raised since 1993 and it has lost 41 percent of its value because of inflation over that time timespan.

“Unfortunately, many politicians won’t consider touching the gas tax,” says Carl Davis, senior analyst at ITEP and author of the study. “They are raising sales taxes, fees on vehicles, tolls on roads, even looting education funds, all to make up for the stagnant gas tax. But they can’t bring themselves to modernize the biggest source of transportation revenue that’s actually under their control. It makes no sense.”

The report “Building a Better Gas Tax” shows that the average state has not increased its gasoline tax rate in more than a decade, and 14 states have gone 20 years or longer without an increase. One has to believe that citizens of those states have reasons to be happy about that, but while state gas taxes remain flat, the cost of paving roads and building bridges has risen markedly, often at a rate higher than general inflation.

“It’s basic math,” says Davis. “The road repairs you could buy in 1990 with 20 cents, for example, are going to cost 34 cents today. But we still see some states collecting the same flat 20-cent tax that they did back in 1990. That’s the definition of unsustainable.”

After adjusting for construction cost growth and general inflation, the average state’s effective gasoline tax rate is down by 20 percent, or 6.8 cents per gallon, since the last time it was raised. The effective rate of taxes on diesel fuel is off by 18 percent, or 6.0 cents per gallon. Note that the taxes haven’t been lowered; they simply have not been raised to keep up with inflation.

Today’s state gas taxes make up a smaller portion of family budgets than at any time since the tax was first widely instituted in the 1920s, the study says. So should we raise gasoline taxes? That is the thorny issue. A 10-cent-per-gallon increase would cost today’s average driver $4.31 per month, and the 6.8-cent-per-gallon increase needed in the average state would cost the average driver $2.93 per month, according to the report. But the report also acknowledges that a gasoline tax is regressive, that is, it has a disproportionate effect on low-income families, who often use as much gasoline as high-income families.

“Building a Better Gas Tax” offers three specific policy recommendations for modernizing -- and increasing -- state gasoline taxes. They are:

1.    Increase gas tax rates to reverse their long-term declines; the “appropriate rate” of increase desired varies by state.

2.    Peg gas tax to grow alongside the cost of transportation construction projects.

3.    Create or enhance targeted tax credits for low-income families to offset the impact of gas tax increases.

Will the proposal fly? In these days of economic malaise, often made worse by high taxes, onerous regulations, and red tape, it might struggle for air. But as consumers and businessmen alike see the country’s roads and bridges crumble, it might well gain traction.