The Only Country in the World With True Fuel Competition

I met a businessman from Brazil the other day. For years I've been reading about what Brazil has accomplished, but this is the first time I've met someone from Brazil and could talk to them about it. "Yes," he said, "we have the choice of ethanol and gasoline at every filling station in the country. Yes, almost all the cars on the road are flex fuel vehicles."

What struck me most was his nonchalance, especially as contrasted with my obvious envy. He lives in a country where a liquid fuel is in constant competition with gasoline. Brazil has done something amazing. And they are the only country on earth doing it. Their economy is thriving. They recently passed Britain to become the sixth largest economy in the world (behind the U.S., China, Japan, Germany, and France). They won the bid to host the 2016 Summer Olympics. They've arrived on the world stage as a major economic power.

When I commented on his lack of excitement about his country's fuel competition, my new Brazilian friend said, "Well, this all started way back in the 1980s." It is no big deal to him that every time he fills his tank, he chooses what he wants to put in it. It's been that way for a long time. He said sometimes ethanol is a better deal and sometimes gasoline is. But, he said (not yet realizing I know a lot about this topic) "you can't go as many miles on a gallon of ethanol as you can on a gallon of gasoline. We just do a quick calculation, multiplying by point seven. So if the price of ethanol is 70 percent of the price of gasoline or lower, most people buy ethanol. If it's above that, we buy gasoline."

On sale in Brazil are 80 different flex fuel vehicle models, made by 12 major automakers, and four flex fuel motorcycle models. The automakers are GM, Ford, Volkswagen, Honda, Nissan, Toyota, Peugeot, Renault, Mitsubishi, Citro├źn, Fiat, and Kia Motors.

In Brazil, the gasoline is E20 or E25. That is, their gasoline is 20 to 25 percent ethanol. And the ethanol for sale at the pump is 100 percent ethanol (rather than E85, as it is in the U.S.). Pure ethanol is very popular in Brazil — 65 percent of the people with flex fuel vehicles regularly use ethanol.

Although Brazil made ethanol available for ethanol-only cars at every filling station starting back in the 1980s, flex fuel cars didn't come onto the Brazilian auto market until 2003. The next year, 22 percent of new car sales were FFVs. It climbed until by 2009, 94 percent of new car sales were FFVs. Not many people choose to not have any choice in fuels.

We could do in America what they've done in Brazil. In fact, we could go one better. We could add methanol. The mechanical tweaks necessary to enable a gasoline-only engine to also burn methanol and ethanol are almost nil. Then we would have three good fuels all competing with each other for our fuel dollars. What do you think that might do for our economy?

Adam Khan is the co-author with Klassy Evans of Fill Your Tank With Freedom and the author of Slotralogy and Self-Reliance, Translated. Follow his podcast, The Adam Bomb.

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