E85’s chicken-and-egg scenario

LAS VEGAS — Recent reports that soaring gas prices have renewed American car buyers’ interest in smaller, more fuel-efficient vehicles seems like a no-brainer. You have to really love your SUV to continue to pour a sizable portion of your paycheck into its tank.

But the goal of reducing the country’s reliance on $120-per-barrel petroleum won’t begin and end with buying smaller vehicles and driving them less. Some of the minds behind the exploration for new transportation solutions are meeting here this week for the Alternative Fuels & Vehicles National Conference.

While the list of conference sponsors features heavyweights such as GM, Honda, Toyota and Ford, tomorrow’s transportation solutions are just as likely to be introduced by some of the diverse “unknowns” that make up the bulk of the conference’s 100 exhibitors.

Presentations throughout the four-day event focus on how scientific advancements can significantly change transportation worldwide. For now, however, E85, the corn-based, high blend of ethanol and gasoline, remains the only viable alternative fuel available to U.S. consumers.

E85 cheaper but harder to find

If motorists can find it, E85 continues to cost as much as 70 cents less per gallon than regular gasoline. But ethanol has become embroiled in a larger debate playing out in the media and Washington, D.C., about its impact on the high cost of food worldwide and questions about just how eco-friendly it truly is. (Full disclosure: I am the editor of a trade publication that serves the ethanol industry called Ethanol Retailer.)

Supporters and detractors of ethanol both bring reams of statistics to bolster their side of the debate. For now, the two sides can only seem to agree to disagree.

The fact remains, if you own a flex-fuel vehicle (FFV) — the only type that is able to use E85 — you may have to drive far out of your way to find a gas station that sells it. And Minnesotans have it better than FFV owners in other states!

There are 338 gas stations that sell E85 in Minnesota, more than any other state, according to the Department of Commerce. That’s up from 320 stations at the end of last year and 287 stations in 2006.  (Motorists can find nearby pumps by visiting this website and entering their ZIP codes.)

Still, that’s only 10 percent of the stations in the state, says Stacy Miller, an employee with the Minnesota Department of Commerce who manages a program that provides rebates to gas station owners who install E85 pumps.

Meanwhile, the Department of Commerce reports there are 175,000 FFVs registered in the state, up from 155,000 in 2006. That number can be misleading, however, because many owners of FFVs don’t fill their vehicles with E85. Miller says some don’t realize their vehicles are FFVs, while others claim it’s inconvenient to find a station that pumps E85.

The Department of Commerce and the local chapter of the American Lung Association, which helps administer the E85 education and rebate program, want to increase both awareness and availability of the high ethanol blend.

State underwrites E85 pump conversions

Last year, the Legislature appropriated $3 million for a two-year grant program that reimburses fuel retailers that install E85 pumps. Retailers can receive 75 percent of the total cost up to $15,000. The average grant is $8,000 to $10,000. The U.S. Department of Energy provides an online list of state and federal incentives available.

Retailers can convert an existing pump — a premium blend that doesn’t sell well, for example — to an E85 pump for about $12,000. That cost covers cleaning the underground tank and upgrading the pump hose and other fixtures so that it’s compatible with E85. Installing a new tank and pump can cost $25,000 or more, which is why most retailers who do sell E85 have gone the conversion route.

Despite the financial assistance available to them, many retailers around the Twin Cities have taken a wait-and-see approach to installing an E85 pump. Their hesitancy has created a chicken-and-egg standoff: Retailers say they will install an E85 pump once consumer demand increases, while consumers say they will buy E85 when it’s more convenient for them to find a station that sells it.

Steve Williams, a partner with his dad in Bobby & Steve’s Auto World, which owns eight service stations around the Twin Cities, says they offer E85 at four of their stations, but don’t sell enough of it to make him eager to install E85 pumps at the remaining four stations. The first E85 pump they installed was paid for completely by subsidies. He received less in subsidies for his subsequent pumps.

Consultants from the ethanol industry say many fuel retailers secure fleet business prior to putting in an E85 pump. Many federal and state agencies are mandated to use E85 if it’s available. The American Lung Association, which oversees the state’s Clean Cities Program, tries to match fuel retailers that sell E85 with fleet business.

Tim Morse, director of the Fleet and Surplus Services Division of the state Department of Administration, oversees the “leasing” of about 1,800 vehicles to state agencies. Morse says about 1,200 of those are FFVs.

“Our state has a statutory requirement to use cleaner fuel whenever it’s reasonably available,” Morse says. What constitutes “reasonably available”? Morse says state employees fill up with E85 when it’s within five miles of their headquarters or their planned route.

Last year, that fleet of state vehicles used 412,000 gallons of E85 and 5 million gallons of regular unleaded gasoline (which has 10 percent ethanol blended in by state mandate). That’s means about 7.5 percent of its total fuel use was E85. Morse says the goal is to reduce regular gasoline use by 25 percent by 2010, but admits it’s a lofty goal.

“You still need to do some planning to find E85,” he says.

Comments (6)

  1. Submitted by Robert Moffitt on 05/13/2008 - 11:22 am.

    Dan, may I respectfully request that you limit your comments to your own views and opinions, and not offer speculation on what I “don’t like” or “prefer?”

    The position of the American Lung Association of the Upper Midwest is this: We strongly support E85 and biodiesel as cleaner-burning alternatives to traditional petroleum-based fuels.

    We are aware of the critics and have read the studies, including those from Jacobson et al. Like the US Department of Energy and other groups that have studied biofuel emissions for years, we disagree with his conclutions. We have shared our thoughts on this matter openly, and we stand by our position.

    The trademarked name of our website, “Clean Air Choice,” hints at a key point about E85. Owners of flex-fuel vehicles don’t HAVE to use E85. They can use gasoline, if they wish. Minnesota is one of the few places in the world where at least some drivers have a choice at the pump. The MN Dept. of Commerce figures say that more and more, Minnesotans are choosing E85.

    I’ve had my say, Dan, and you have had yours. Now let’s let the FFV owners choose what’s best for them, for our environment and for our nation.

  2. Submitted by Bill Barber on 05/13/2008 - 11:36 am.

    E85 is a joke it’s mph alone is enough to make me not want to use it. Farmers I know converted to flex fuel just to burn E85. But on average most I have talked with have quit running it because it takes about 1 1/2 tanks of E85 to go the same distance as a tank of regular gas, of the 30 plus people I have taked with only 2 or 3 still use E85. Milage aside the manufacturing process burns up the ground water at the rate of 6 gallons of water per gallon of E85 produced and if it wasn’t for MY tax dollars they wouldn’t the stuff because it’s to expensive to make without subsides. Bio diesel and algea oil are much more efficient and cheaper to make, these would be my choices if available.

  3. Submitted by Dan Hintz on 05/13/2008 - 12:36 pm.

    Well Robert, my statements were largely based on something you wrote in the Minnesota Daily – which you referred me to in a prior discussion on this topic. With regard to the study on air quality you state:

    “Jacobson repeated some outlandish claims he published last year, that air pollution from E85 would kill people – in the Los Angeles of the future. Sound like science fiction? To me, it sounds like more fiction than science, and I was astounded that a visiting professor with such impressive-sounding credentials would offer cherry-picked, tortured data to support his study on E85 and mortality rates.”

    So when you say “to me, it sounds like . . . .” I don’t think that I am out of line attributing something to what you don’t like or prefer. And while you certainly have shared you views openly, you have done so by simply mocking a published, peer-reviewed study.

  4. Submitted by Robert Moffitt on 05/13/2008 - 08:49 am.

    Government fleet use represents just a small percentage of the total E85 used by Minnesota drivers. Flex-fuel drivers bought 21.4 million gallons of E85 in Minnesota last year, they are on track to buy even more this year.

    Bobby & Steve’s experience as an E85 retailer are not neccesarily reflective of the market for the largely-renewable, cleaner-burning fuel. Holiday is a major E85 retailer with more than 50 branded outlets and franchises selling E85. I have heard that their sales of E85 are up sharply this year, they plan on expanding their E85 outlets.

    You can also find a list of all flex-fuel vehicles on our website:

    http://CleanAirChoice.org

    Robert Moffitt
    Communications Director
    American Lung Association of Minnesota

  5. Submitted by Dan Hintz on 05/13/2008 - 10:28 am.

    E85, or any ethanol made from corn, is not a cleaner fuel. In fact, a recent study showed that using corn ethanol results in twice the greenhouse emissions as oil.

    http://www.sciencemag.org/cgi/content/abstract/1151861

    E85 also will not improve air quality. A study performed last year found:

    “‘It’s true that ethanol does decrease some pollutants, but it also increases some others. Compared with gasoline, ethanol tends to produce less benzene and butadiene, but more acetaldehyde and formaldehyde, when burned.

    The result: more ozone and about 185 more deaths per year across the U.S., with 125 of those in Los Angeles. Jacobson studied that city in depth because of its ongoing smog problem and found that it has the right atmospheric chemistry to make the ethanol switch particularly problematic.”

    http://pubs.acs.org/subscribe/journals/esthag-w/2007/apr/science/ee_ethanol.html

    Mr. Moffitt doesn’t like this peer-reviewed published study because it uses computer modeling, and prefers his own non-peer reviewed study commissioned for his organization.

    And while E85 may be cheaper (thanks to subsidies) you aren’t saving any money by using it because the gas mileage is so much worse. A consumer reports study found that E85 resulted in a 27 percent decrease in fuel economy.

    http://www.consumerreports.org/cro/cars/new-cars/news/2006/ethanol-10-06/overview/1006_ethanol_ov1_1.htm

  6. Submitted by paul nolan on 05/15/2008 - 05:09 pm.

    Having just returned from the alternative fuels and vehicles expo that I mentioned in my original post, one of the most frequently heard comments heard during three days of seminars and roundtables (by people a lot smarter about the subject than me) is that there doesn’t appear to be a single, best solution to wean the U.S. off of its dependency on foreign oil.

    The critical objective is to develop and use alternative forms of energy, not battle over which one “wins out.” Indeed, a menu of options could prove to be that much better than a single solution.

    Even most proponents of corn ethanol that I have spoken with agree that it is not the final answer, but rather a bridge to a better form of ethanol.

    One speaker at this past week’s conference, Dr Bruce Dale of the Dept. of Chemical Engineering and Materials Science at Michigan State University, says we are a lot closer than many industry experts and other spokespeople would have you believe to cost-efficiently producing cellulosic ethanol (or what he calls “grassoline”).

    Dale has been working on developing cellulosic ethanol for more than three decades! If the government had financially supported this effort 25 years ago at the level it finally has started to now, we would have reduced our dependency upon foreign oil a decade or more ago, Dale says.

    You can find out more about what he’s up to here: http://www.everythingbiomass.org/

    What’s interesting about the exchange of comments after my original post is that it follows a pattern that I’ve seen repeated many times when the topic of corn-based ethanol is discussed. The two sides tear at each other’s argument so feverishly that they lose site of the larger objective: discovering usable forms of alternative fuels and bringing them to market as quickly as possible.

    I’m hopeful that there are a lot more people like Bruce Dale, who remain focused on the goal and how to achieve it.

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