The Cost of Gasoline versus the Cost of Alternatives
Kimberly Nunnery
May 1, 2006
Dr. Rosemary Carlson
FIN 660
Executive Summary
Due to the recent rise in the price of gasoline, more resources than ever have been allocated to the research and development of alternative fuel sources, with emphasis on replacing the modern automobile with one that either does not run on gasoline or uses very little of it. This rise gas prices places a significant amount stress on any company that uses modern internal combustion engines as their main source of transportation to consider switching to the newly developed alternatives.
The two main alternatives for the modern automobile are automobiles that have combustion engines that use ethanol instead of octane and automobiles that use hydrogen powered fuel cells to drive electric motors. While the price of gasoline will no doubt remain astronomical, the costs of switching to an alternative may be even higher. This analysis will compare the consequences of switching to an ethanol based fuel source to using hydrogen powered automobiles as well as compare these consequences to the hardships that would come with the rising prices in gasoline.
Since fuel prices are predicted to either stay high or continue to rise and using automobiles that run on hydrogen powered fuel cells will require a major infrastructure transformation, the switch to using ethanol will be the most cost effective decision.
Analysis
Consequences of using alternatives to gasoline
I. Hydrogen powered fuel cells
The good:
Hydrogen is clean. Chemically, hydrogen is the simplest molecule: it is simply one proton with one electron, but in the ga ...