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.