With gas prices nearing an average of three dollars a gallon, there are a lot of people trying to make this appear to be a complicated issue. However, it only appears complicated because certain groups want it this way. The simple truth is that gasoline prices are high for reasons other than what you've been told and the solution is far easier that anyone is letting you know.

Before I get to the solution, let’s look at the problem.

America is addicted to oil, although not as much as we think we are. Currently, our number one use for oil is fuel - both gasoline and diesel. While our level of addiction may be in question, our dependence on fuel is not. There is no way around it. We must have fuel and lots of it. No matter how high the price at the pump goes up, we will have to pay it. Fortunately for the oil companies, they know this all too well. This is the reason why you are paying so much, but it's the way we get here that's truly interesting.

The primary reason that we are told gas prices are so high is that there is a shortage, which brings about the issue of supply and demand. A shortage is what happens when there isn't enough to go around. This begs the question of when was the last time you couldn't get any gas? Obviously, this isn't the case. Even for the few areas that have had minor shortages lately, it wasn't because the gas wasn't available, just that it was having a tough time getting to them.

With no real lack of supply, we can all buy as much fuel as we want, just at a price far above what we are willing to pay. A shortage is what happened last Christmas when you couldn't buy an X-box. There weren't enough to go around, creating a true shortage. The difference with the X-box is that the stores didn't charge more for the game console (which would be price gouging). It was the lucky people who were able to buy one and who then resold them at a mark up - based on supply and demand. While the demand for fuel may be great, the supply is more than capable of keeping up.

Along similar lines, oil companies need to look at a different part of economics - volume pricing. Oil companies appear to work just the opposite of the way business is supposed to work. While everyone else lowers their price as volume goes up, oil companies raise their price, such as during the summer months and on holidays. Again, there isn't a shortage during these time periods, there is simply a greater volume of product being sold. The only description for this type of practice of price gouging - taking advantage of people based on misleading information.

With the realization that there isn't a shortage of fuel, because we can all buy as much gas as we want, where does this myth come from? Well, this is where things finally start to get a little complicated.

Oil companies are extremely wealthy, and for good reason. They know how to make you think there is a problem when there isn't one, just like a good magician can make you believe they can pull a rabbit out of a hat.

Oil companies, as strange as it sounds, do their best to create their own problems. They claim that they haven't been able to build a new refinery in over twenty years. However, this isn't because of restrictions, but because they don't really need any more.

In fact, American based refineries already produce far more fuel than we need here and they sell their excess fuel to other countries. This is done by amazingly accurate predictions on just how much gas America is going to need, and then making bargain priced deals with other countries to buy the rest.

In fact, this excess fuel is typically sold to these other countries, such as Mexico, at prices well below what we pay here. Even better, the oil companies do this in an effort to help eliminate the chance that these other countries will start to produce their own fuel, which would then compete with American fuel and possibly drive prices down.

Another great myth is that oil companies aren't allowed to explore for new supplies. This isn't true as they all know where there is enough oil to take us far into the future. In all actuality, they do all the exploring they need to do and make sure that they are able to make use of just enough supply to keep things going.

Think of it this way, why would they want to waste the effort and resources to tap more areas than they need? It's no different than a lumber yard cutting down more trees than they need, while still having a huge forest to tap into.

For oil companies, this untapped oil is like money in the bank. It's important to understand that oil companies make the biggest profits when they run what they have as close to 100% as possible. It's this efficiency that keeps them profitable.

Taking this even further, the claim that we are running out of oil is the best yet. The funny thing is that we were told this in the seventies - when there was a shortage, and the gas lines to prove it. However, it didn't take long to catch up with demand and we've had many good years of fuel prices. Today, living with an artificial “shortage”, we are stuck with high fuel prices, just without the gas lines.

Again, we have all the oil we need for many years into the future and the oil companies are simply doing what they can to making as much money as possible before an alternative can be found. With any luck, this plan may be their undoing.

This brings us to the solution, which is way past due. However, this also brings us to what has taken us so long to get here.

Over the last few years, we have all been told that efforts are being made to find an alternative to fossil fuels. The government concluded, at the time, that our best bet was to push for hydrogen fuel cells, and in return threw tons of money behind this so called solution. Unfortunately, what they didn't tell us is that this is the least likely system to solve our problem.

Sure, hydrogen fuel cells work and they're environmentally friendly, they just aren't very efficient, they're very expensive, and to be honest, I don't trust the other drivers on the road to safely refuel their vehicles with the same thing that was used in the Hindenburg.

Finally, we're at the solution - Ethanol and Bio-Diesel. Yeah, they're finally getting some press, and even the president is making references to their use. Unfortunately, they just aren't getting the respect they deserve.

Both of these fuels are perfect for our day and age. Both are cleaner burning than our current choices, both are renewable, and both are very easily adaptable; far more than any other option we have available today. It's the adaptability of these fuels that is the key to their conversion.

All of our other choices, hydrogen fuel cells, electric hybrids, vehicles with greater fuel economy... all of these choices require us to convert our fleet, which will require a great amount of time, and cost an incredible amount of money - neither of which is something our country can afford.

What we need now is a solution that can be up and running as soon as possible, and with the least amount of change to our daily lives as possible. Again, this is why these fuels are such a great choice.

Ethanol is made from foods such as corn, sugar cane, and sweet potatoes, allowing the fuel to be grown anywhere in the country, and at an alarming rate. Just as good, if the source for this fuel is grown, but not needed, it can be sent of to grocery stores and used as food.

Equally as important, almost every car and truck on the road today can be easily converted to run on these fuels. This is extremely important because Americans love their cars, and the bigger the better.

Getting everyone to switch over to a tiny new, low powered, hybrid vehicle isn't going to go over too well. Allowing people to keep their current vehicle and switch over to a fuel that is cleaner burning, easily available, and inexpensive will take little to no effort at all - except for convincing the oil companies to get this to happen.

Unfortunately, this is where the problems begin. At this point in time, there are very few Ethanol refineries in this country. As our country is starting to use Ethanol as an additive to help gasoline burn cleaner, we are starting to find our limits in producing Ethanol.

Oddly enough, no one is crying out for us to crank up production, just letting us all know that there isn't much to go around. So, why isn't more being done to get us converted?

Could it be that the oil companies, the same ones that would most likely be responsible for building the new Ethanol refineries, aren't very interested in loosing their excuse for high priced gas? Perhaps corn farmers should look into their own refineries.

Could it be that the political friends of the oil industry aren't very interested in loosing this excuse either (or the excuse to waste money on other ridiculous programs such as emissions testing) or the deep pocketed support of the oil industry? Not to worry, corn producers will soon have money to spend as well.

As with any potential change, there will always be those that try to come up with misleading reasons why Ethanol won’t work.

It is said that it takes more energy to produce ethanol than it creates. However, this is true for most sources of power, including gasoline and hydrogen fuel cells, not just Ethanol. In fact, Ethanol is rather good considering the limited equipment, such as tractors and simple refineries used in it's production, compared to the complicated equipment needed to make gasoline from oil - including drilling for oil and the boat ride over from other countries.

It is also said that Ethanol isn't very clean. This is also misleading.  It is true that it's not as clean as hydrogen fuel cells, but it is far cleaner than what we are using today and is the cleanest option that will work in the cars we have today.

Finally, it is said that it will take too long for us to switch over. This is only true if we continue at the pace we are on today. Of all the options available now, none could be fully ready faster than Ethanol. If we could just get the process started, it wouldn't take long and it would do wonders for the economy.

The bottom line is that Ethanol and Bio-diesel are easy answers to the fuel problem our country is currently facing. Our current fleet of cars can be easily converted to use these fuels, and synthetic additives could make this even easier. These fuels are much cleaner than their current counterparts. The source for these fuels (corn, sugar cane, etc.) are easily grown, will never run out, and, if necessary, can be used for other purposes if needed. The refining for Ethanol is very simple to produce compared to manufacturing gasoline, which allows for the refineries to be produced quickly. And most important, all this could be done within a very short span of time - just one year could have most of our country up and running on these fuels.

All we have to do now is find a way to convince the right people to make this happen.

Part II - The dark side of oil companies (coming soon)
Part III - The bright side of Ethanol (coming soon)