MUTUAL FUND OF FUELS

It’s a busy time for alternative fuels.  Last week I spoke about the upcoming fuel economy regulations at the Pacific Northwest Green Truck Summit.  ACT Research published its first Natural Gas Quarterly Report.  The National Academies Press published a report called, “Overcoming Barriers to Deployment of Plug-in Electric Vehicles.”  California published a document called, “Sustainable Freight:  Pathways to Zero and Near-Zero Emissions.”  In less than two weeks, hundreds of people will meet in Dallas for the Alternative Clean Transportation (ACT) Expo.  

Clearly, gasoline and diesel prevail today.  Many will argue that these two fuels will continue for decades to be the fuel of choice, even as prices move up and down, sometimes violently.  I heard an interesting comment at the summit this week.  Just as I am encouraged in my financial planning to have a basket of investments and to spread my risk around by investing in mutual funds, fleets should consider powering their trucks with a range of fuels to hedge their bets.  I guess the thought is that if prices go up on diesel, they can run the lower cost alternative fuel vehicles.  If the prices for gasoline and diesel go down, they can run more of those vehicles cost efficiently.  It was an interesting thought, but one that does not hold fuel (instead of saying water).

Mutual funds for my finances have no inventory costs, no maintenance costs, no special service needs.  For the most part, it’s just a bunch of numbers on my computer screen when I log into the web site for my finance advisors.  Spreading my risk around really takes very little effort.  On the other hand, in two weeks I will be a keynote speaker at an advanced manufacturing summit in Fresno, CA in the San Joaquin Valley.  I’ll be talking about lean manufacturing and statistical process control.  In the world of high quality and low cost manufacturing, the whole idea is to reduce variability so that you can get really good at something and remove all forms of waste.  A mutual fund of vehicles would seem to increase my risk and costs, rather than decreasing them.

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