E85, Automakers and Bush

The United States automaker chief executives met with and further pushed President George Bush to back incentives bringing e85 ethanol and biodiesel to more gas stations across the country. The automotive companies examined their output of the newest flex-fuel vehicles.

In five years, half the cars made by General Motors, Chrysler and Ford Motor company, would be capable to run on biodiesel or E85, the automotive executives explained.

The meeting with President Bush in Washington DC was for the second time in about 16 weeks that Rick Wagoner of GM, Alan R. Mulally of Ford and Thomas W. LaSorda of Chrysler urged President Bush to expand access to more and more biofuels. The automaker executives wanted that over the proposed stricter fuel economy as a way to cut America’s oil use.

“If the goal is to reduce oil imports and improve the environment, the opportunity is first of all in ethanol, biodiesel,” Wagoner explained to reporters after the summit. They spent almost no time at all conversing about mileage, he said.

The United States of America has over six million flex-fuel vehicles on the roads, but of the country’s 170,000 gas stations we only have 2,000 E85 or biodiesel pumps, they added.

“We are willing to lead the way,” the automakers’ stated. “We need government and fuel providers to increase infrastructure before we can make a meaningful impact.”

President Bush did not comment publicly to biofuel incentives. America’s ethanol producers, made mainly from corn, receive a tax credits of 51 cents per gallon. They also receive a 54 cent tariff on every gallon of ethanol that is imported. Flex-fuel vehicle automakers get a credit that lets them increase their automobile’s fuel economy.

Putting E85 stations within five miles of American motorists would require at a minimum of 20,000 pumps, Phil Lampert says, the director of the National Ethanol Vehicle Coalition based in Jefferson City, Missouri.

President Bush is calling for a 20% cut in American’s oil consumption within a decade, 75% of that figure factors using alternative fuels, and the rest of the 25% will be attributed to better vehicle fuel economy.

GM wants more E85 stations

The auto industry executive says the ethanol industry must work to make higher blends of ethanol more readily available as an increasing number of car buyers begin driving flex-fuel vehicles.

Mary Beth Stanek, GM’s director for Environment and Energy, comments that the company remains committed to flex-fuel technology, but also is working on the development of electric hybrid and hydrogen fuel cell technology.

Since there is only so much funding available for research and development “we need to see a corresponding of support from the (e85) industry” to make sure the fuels are available to all drivers and that the flex-fuel automobiles “are experiencing the fuel,” said Stanek, who manages GM’s partnerships with ethanol producers.

“We’re not going to work on power trains when we don’t have fuel for it, and we’re certainly going to make sure that it’s economical for consumers as well,” she told many of the renewable fuels industry leaders and media who attended a biofuels forum put on by Successful Farming magazine on Tuesday.

Making available E85, an 85 percent ethanol – 15 percent gasoline blend, should not be “as hard as people are making it,” Stanek said.

“I’m not saying it’s easy, but we can all work together to get more E85 out there,” she said. “I just don’t feel it’s insurmountable.”

While the ethanol industry frequently announces the opening of new E85 pumps, the blend really is “a classic chicken and the egg” scenario, said Matt Hartwig, a spokesman for the Renewable Fuels Association.

To make E85 a mainstream product, he said there needs to be vehicles that can burn E85, the infrastructure to make it and transport it, and the need for more technology to produce enough ethanol to supply the higher E85 demands. That includes more development and funding to cellulosic ethanol production, which breaks down any organic material from various plants, not just corn, to produce ethanol.

GM, Ford and DaimlerChrysler have said they plan to have half of annual vehicle production be E85 flexible fuel or biodiesel capable by 2012. For the Detroit based GM, that means ramping up production from 400,000 of the E85 flex-fuel vehicles each year up to 800,000.

The cost of the items that help vehicles use E85 ranges from $150 to $500. But for auto manufacturers, Stanek said the investment into the technology and research to make the autos run correctly on E85 is “quite expensive.”

“It’s not the parts in the box, it’s about the investment into the engineering expense,” she declared. “We are willing to do that, and we’re going as fast as we can.”

GM Says Hybrids Were Pushed for Public Relations and Politics

With all the problems faced by GM, one would assume they wouldn’t go ahead and shoot themself’s in the foot with this.

Last week, the struggling automotive giant General Motors admitted with a surprisingly candid admission: They apparently created Hybrid vehicles for the sole purpose of improving public relations and perception.

The unusual statement was given by the company’s vice chairman, Bob Lutz. "Hybrids are technologically of doubtful benefit, and expensive, but necessary from a political and public relations point of view," remarked Lutz.

"The reduction in fuel consumption does not pay for the technological content and cost of the vehicle." Nonetheless, the company is attempting to do what it can to help turn the tide in what is undoubtedly viewed as a desperate financial situation.

Lutz’s other comments consisted of…

"Toyota has said, economically, hybrids make no sense. The reduction in fuel [consumption] does not pay for the technological content and cost of the vehicle so therefore economically it remains fairly nonsensical, so that’s the left-brain analytical argument.

The right brain is it’s the popular thing to do, many people believe that if we all drove hybrids the world would suddenly get cooler again and then it’s the patriotic thing to do because if you drive a hybrid you will no longer be funding the Arab terrorists, and so forth.

So, with all those beliefs out there, you have to do a hybrid for public policy reasons."

Lutz believes hybrids are just not cost effective. But then again, GM should consider why they have lost billions of dollars in the past few years.