Ethanol: Real fuel or just fluff?

By Tim Molloy

updated 9:27 a.m. ET Jan. 27, 2006

LOS ANGELES - A federal push for cars that run on an alternative fuel straight from the heartland isn't winning many converts among American drivers — but is a hit with automakers who use it to skirt mileage standards.

Five million cars across the country are equipped to run on the fuel, but almost no one uses it outside the corn belt.

Fortunately for carmakers, a 1988 law designed to decrease oil use gives them credits for building vehicles that run on the alternative fuel whether anyone uses it or not. Those credits allow automakers to relax gasoline efficiency standards on other vehicles — which drives oil consumption up instead of down.

The situation would be different if many more people replaced the gasoline in their tanks with the fuel known as E85 — a combination of 15 percent gasoline and 85 percent ethanol, a corn-based additive. Flex-fuel cars can run on gas, E85, or combinations of the two.

Ethanol supporters say the extra oil consumption is part of the growing pains of the flex-fuels program, which they say will decrease oil use when more E85 fueling stations are available to drivers.

"You've got to get the cars out before you can get the fueling structure," said Tom Koehler, a spokesman for Pacific Ethanol in Fresno, Calif.

Skewed results
A 2002 Department of Transportation study estimated that E85 accounted for only about 1 percent of the fuel consumed by flex-fuel vehicles between 1996 and 2000 — the equivalent of 26 million gallons.

Relaxed fuel economy standards resulting from flex-fuel credits, meanwhile, were responsible for increased petroleum consumption totaling 772 million gallons — enough gas for a Jeep Grand Cherokee to drive from San Diego to Boston and back more than 1.9 million times.

Often cheaper than gasoline, E85 is known for getting fewer miles to the gallon but higher octane, resulting in more horsepower.

The fuel works in more than 30 models, including General Motor's Yukon, Chevrolet's Silverado, and Ford's Taurus, but many people don't know it. Ford and GM have only recently begun national ad campaigns to promote their vehicles' flex-fuel capabilities, trying to lure consumers skittish over gas prices.

Drivers can see if their vehicle will run on E85 by checking the owner's manual or a Web site, e85fuel.com, that lists compatible models. Ethanol promoters say motorists are often stunned to learn their cars will run on the fuel, but even those well-schooled in E85 may need to drive hundreds of miles to buy it.

At the Los Angeles Auto Show in early January, General Motors announced a partnership with Chevron, California officials and Pacific Ethanol to gauge the public's interest in E85. Those involved said high interest could lead to more pumps nationwide.

Tie credits to use?
The GM initiative is only a small step toward the kind of widespread E85 use that the flex-fuel credit program requires, said Roland Hwang, a senior policy analyst for the National Resources Defense Council.

"If this is the beginning and the end, this is less than a drop of the bucket," said Hwang. He said the incentive program should end if it continues to promote rather than discourage oil use.

Therese Langer, transportation program director for the American Council for an Energy-Efficient Economy, said the program should allow automakers to reduce fuel efficiency standards only if drivers actually use E85 in their vehicles. That use could be monitored by tracking E85 sales.

With strong support from automakers, the incentives program was renewed in the sweeping energy bill President Bush signed last August.

Ethanol's promoters call it a clean-burning fuel that helps farmers in the nation's corn belt while reducing greenhouse emissions and shifting the nation's dependence on foreign oil.

"It's 100 percent domestic," said Phillip Lampert, executive director of the National Ethanol Vehicle Coalition. "We don't have to fight wars to bring it in."

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