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Ties to Big Oil explain flex-fuel absence, author says
By TIM ALEXANDER
Illinois Correspondent

WASHINGTON, D.C. — A recent article published by the National Review Online linking the relative dearth of flex-fuel vehicles offered by U.S. automobile manufacturers with Big Oil’s interests in the auto industry is causing a buzz as the price of gasoline ascends to $4 per gallon and above.

The article by controversial author and Pioneer Astronautics President Robert Zubrin asserts although all new gasoline-powered cars being manufactured in the U.S. come with built in flex-fuel capabilities, all but approximately 5 percent are being marketed with their flex-fuel capability disabled by manufacturers.
Further, Zubrin insists in his essay, “A Conspiracy in Restraint and Trade,” auto manufacturers will never feel compelled to increase flex-fuel vehicle production without U.S. lawmakers forcing their hand.

“This is a very curious situation. One may well ask, why should an automaker choose to disable a useful feature that it has built into its cars?” asks Zubrin, author of Energy Victory: Winning the War on Terror by Breaking Free of Oil. “The problem is that the automobile companies are not independent entities capable of pursuing their own interests. Rather, they are owned and controlled by organizations that are much more heavily invested in oil.”

Zubrin points out that Volkswagen, the largest automobile company in the world, is 17 percent owned by the sovereign wealth fund (SWF) of OPEC (Organization of the Petroleum Exporting Countries) emirate Qatar, which also controls 10 percent of Volkswagen’s Porsche subsidiary.

“One of the Qatar SWF board members, Hussain Ali Al-Abdulla, accordingly sits on the supervisory board of Volkswagen AG,” Zubrin reported. “Elsewhere in Europe, the same story holds. For example, the Kuwait SWF owns 6.9 percent of Daimler/Mercedes, 20 percent of Spyker/Saab and 100 percent of Aston Martin, which it acquired from Ford for $450 million.

“The Abu Dhabi Investment Authority (ADIA), one of the sovereign wealth funds of the United Arab Emirates, owns 9.1 percent of Daimler/Mercedes and 40 percent of Mercedes-Benz Grand Prix, and has a $2.7 billion investment in Chrysler.”

Zubrin piles on example after example to illustrate how intertwined the auto industry and big oil have become: the ADIA also has a “major position” in Fiat/Ferrari, while the government of Libya owns 2 percent of the company, which in turn owns 52 percent of Chrysler, according to the author.

General Motors and Ford, America’s two biggest auto companies, are dominantly held by major Wall Street firms whose collective energy holdings exceed $700 billion. “Thus, while the $9 billion these funds have invested in GM and the $24 billion placed in Ford are of great weight to the auto companies, the funds themselves are far more concerned about protecting their investments in oil,” Zubrin wrote.

“It is futile to hope that, left to their own devices, these companies will do anything to endanger the ability of OPEC to loot the world. Rather, they will continue to protect the monopoly the oil cartel holds on the world’s vehicle-fuel supply. If the auto companies were free agents, they would act to break the fuel monopoly that is so damaging to their own interests and those of their customers. But they are not, so they won’t.

“The situation is a case of conspiracy in restraint of trade, with the national interest at stake,” he added.

Farm World contacted Renewable Fuels Assoc. (RFA) President and CEO Bob Dineen for comment on Zubrin’s article in defense of an open fuel standard. Dineen responded he held tremendous respect for Zubrin’s efforts highlighting the consequences of America’s dependence on imported energy.

“I absolutely agree with (Zubrin’s) effort to increase the number of flex-fuel vehicles. (RFA) supports the open fuel standard, which would require automakers to produce something other than a gasoline-only vehicle, whether it is flex-fuel, electric, natural gas or a hybrid vehicle. We need to empower consumers to be able to utilize something other than gasoline,” Dineen responded.

“However, I’m not certain that I would agree with Mr. Zubrin’s characterization that the auto companies are refusing to produce flex-fuel vehicles because of the influence of the oil interests. I think the automobile and the oil industries have been at odds on more issues than not over the years. I have to give credit to the U.S. auto manufacturers that are indeed producing flex-fuel vehicles today. Some of the foreign manufacturers have not been anywhere near as aggressive in introducing flex-fuel vehicles ... and are missing a tremendous opportunity.”

Dineen noted he, the RFA and Zubrin are aligned from a policy standpoint and he doesn’t wish to be portrayed as challenging Zubrin’s assertions. “I agree with most of what Mr. Zubrin said, but I’m not sure I see the connection (between Big Oil and automakers) in the same way he does.”

Zubrin concluded unless Congress passes legislation to force the opening of the vehicle-fuel market to competition from non-petroleum fuels, “this situation is not going to be rectified.”
In his article, he pledged support for the Open Fuel Standards Act of 2011 (HR 1687, SB 1603), which would require that most new cars sold in the United States offer fuel choice.
4/4/2012