History of Oil Industry Opposition to Alcohol Fuel
The fuel of the future, according to both Henry Ford and Charles F. Kettering, was ethyl alcohol made from farm products and cellulosic materials. Ford, of course, is well known as an automotive inventor; Kettering was the head of research at General Motors and a highly respected inventor in his own right.
Henry Ford's outspoken support for alcohol fuel culminated with the the Dearborn, Mich. "Chemurgy" conferences in the 1930s. Little is known about Kettering's interest in ethyl alcohol fuel and how it fit into G.M.'s long term strategy. Moreover, aside from the Chemurgy conferences and a brief period of commercial alcohol-gasoline sales in the Midwest during the 1930s, very little is known about the technological, economic and political context of alcohol fuels use. This paper examines that context, including the competition between lamp fuels in the 19th century; the scientific studies about alcohol as a fuel in the early 20th century; the development of "ethyl" leaded gasoline as a bridge to the "fuel of the future" in the 1920s; the worldwide use of alcohol - gasoline blends in the 1920s and 30s; and the eventual emergence of the farm "Chemurgy" movement and its support for alcohol fuel in the 1930s.
The full story is incredible, but long so get a cup of tea and follow this link:
"Kerosene from petroleum was a good fuel when it arrived in the 1860s: it was usually not too volatile, it burned brightly and it was fairly cheap. A gradual shift from camphene to kerosene might have occurred, but instead, a $2.08 per gallon tax on alcohol was imposed in stages between 1862 and 1864 as part of the Internal Revenue Act to pay for the Civil War. The tax was meant to apply to beverage alcohol, but without any specific exemption, it was also applied to fuel and industrial uses for alcohol. "The imposition of the internal-revenue tax on distilled spirits ... increased the cost of this 'burning fluid' beyond the possibility of using it in competition with kerosene..," said Rufus F. Herrick, an engineer with the Edison Electric Testing Laboratory who wrote one of the first books on the use of alcohol fuel.24
While a gradual shift from burning fluid (or spirit lamps) to kerosine did occur in Europe during the last half of the 19th century, the American alcohol tax meant that kerosene became the primary fuel virtually overnight, and the distilleries making lamp fuel lost their markets. The tax "had the effect of upsetting [the distilleries] and in some cases destroying them," said IRS commissioner David A. Wells in 1872. "The manufacture of burning fluid for lighting suddenly ceased; happily, it was replaced by petroleum, which was about to be discovered."25 Similarly, C.J. Zintheo, of the US Department of Agriculture, said that 90 million gallons of alcohol per year were used for lighting, cooking, and industry before the tax was imposed.26 Meanwhile, use of oil shot up from almost nothing in 1860 to over 200 million gallons in 1870.27 "The effect was disastrous to great industries, which, if [they were to be] saved from ruin, had to be rapidly revolutionized," according to Irish engineer Robert N. Tweedy.28'