Emerging Industry Overview: Alternative Vehicle Fuels

Industry Snapshot

With skyrocketing gas prices, the threat of global warming, and the consequences of extensive reliance on foreign oil supplies, U.S. automakers, researchers, environmentalists, and policy makers shared a common goal in the development of alternatives to the transportation sector's basis in gasoline and diesel fuels . Alternative fuels--including liquefied petroleum gas (LPG), methanol, ethanol, compressed natural gas (CNG), hydrogen, biomass (plant or animal waste), and mixtures of these with regular gasoline--gained increasing favor due to test results demonstrating their significantly more benign effects on the ozone layer and their reduction of pollutant emissions; however, mass commercialization was another issue.

The extensive resources, in terms of private investment and public policy, required to maintain the stability of the U.S. oil supply create an enormous incentive for the introduction of viable alternative fuel technologies on a mass level. Political factors, including increasing concern--particularly following the terrorist attacks of 11 September 2001, and the U.S. military involvements in an unstable Middle East, home to 90 percent of the world's proven oil reserves--over the country's dependency on foreign energy sources, as well as evolving attitudes toward environmental stability, have played the leading role in the push toward alternative vehicle fuels.