Fueling the Automobile: An Economic Exploration of Early Adoption of Gasoline over Ethanol

Abstract

When the automobile was developed near the beginning of the last century, it was the relatively new fuel gasoline, not the familiar ethanol that became the fuel of choice. We examine the intersections of the early development of the automobile and the petroleum industry and consider the state of the agriculture sector during the same period. Through this process, we find a series of influences, such as relative prices and alternative markets, that help to explain how in the early years of automobile development, gasoline won out over the equally likely technical alternative ethanol. We also examine the industrial relations in the automobile industry that seem to have influenced the later adoption of leaded gasoline, rather than ethanol, as a solution to the problem of engine knock.

Bolivia and Paraguay: A beacon for sustainable electric mobility?

“…During this period, petroleum fuels became the main vehicular energy sources, aligning automobile and oil market structures with commercial and production practices as well as marketing arrangements. According to Puerto Rico et al [3] and Dimitri and Effland [4], the economic interests of three production sectors were aligned: the exploration and refining of petroleum, chemicals and automotive, a strategy strongly pursued respectively by major representative companies: Standard Oil and its spinoffs, Du Pont and General Motors.…”

Ethanol and oil firms

“…Ethanol and ethanol blended with petrol have a long history as automotive fuels (Dimitri and Eikland, 2007) and have recently received growing attention as alternative fuels due to their possible role in reducing problems such as climate change, 'peak oil', high oil prices, and political instability (Solomon, Barnes and Halvorsen, 2007). Increasing interest in ethanol has prompted studies which even see the fuel as a potential threat to petrol, and in the past decade ethanol has experienced an increase in both production and blending volumes in many countries around the world (Szklo, Schaeffer and Delgado, 2007).…”

Multi-level governance, technological intervention, and globalization: the example of biogenetic fuels

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