Ethanol – the best alternative fuel according to GM

In November of 2007, General Motors updated a report on a benefit to cost analysis for E85 ethanol, saying the report did not take into account many positive factors.

GM said it issued the change in response to a report made earlier in USA Today that proclaims ethanol E85 fuel loses its cost-benefit to diesel.

According to Mustafa Mohatarem, GM’s Chief Economist, explained in a statement, “We believe ethanol as a renewable fuel is the best near-term alternative to oil as a transportation fuel and replacing gasoline with ethanol positively contributes to lowering greenhouse gas emissions.”

As of now, less than 1% of gas stations in the United States of America offer E85, and prices can vary greatly. Some fueling stations charge the same price for E85 ethanol as they do for gasoline, so when gas prices go up or down, E85 follows as well. In other parts of the country, predominantly in regions such as the corn belt where ethanol fuels are more easily attainable, the cost for E85 is usually about a dollar cheaper then regular gas.

According to GM, they are currently producing around 400,000 E85 flex-fuel model cars per year and that number will double that to 800,000 by 2010. GM hopes to produce more than 2 million FlexFuel automobiles by the year 2012.

GM also went on to say that aside from building the fleet of cars, they are also committed to help build everything necessary for ethanol to catch on.

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