Oil was a replacement for ethanol and biodiesel. The ICE was originally made to be powered by ethanol. The diesel engine was also originally designed to be run on biodiesel so that farmers could grow their own fuel.
"Fuel of the Future
When Henry Ford told a New York Times reporter that ethyl alcohol was "the fuel of the future" in 1925, he was expressing an opinion that was widely shared in the automotive industry. "The fuel of the future is going to come from fruit like that sumach out by the road, or from apples, weeds, sawdust -- almost anything," he said. "There is fuel in every bit of vegetable matter that can be fermented. There's enough alcohol in one year's yield of an acre of potatoes to drive the machinery necessary to cultivate the fields for a hundred years.
Ford recognized the utility of the hemp plant. He constructed a car of resin stiffened hemp fiber, and even ran the car on ethanol made from hemp. Ford knew that hemp could produce vast economic resources if widely cultivated. "
"Indeed, when Henry Ford designed the Model T, it was his expectation that ethanol, made from renewable biological materials, would be a major automobile fuel. However, gasoline emerged as the dominant transportation fuel in the early twentieth century because of the ease of operation of gasoline engines with the materials then available for engine construction, a growing supply of cheaper petroleum from oil field discoveries,
and intense lobbying by petroleum companies for the federal government to maintain steep alcohol taxes."
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Interesting stuff.