xcel
06-29-2006, 11:20 AM
U.S. car builders unite for ethanol.
Demand for mixing ethanol into gasoline has boosted E85 prices to as high as $5.20 a gallon on the East Coast. (http://www.freep.com/apps/pbcs.dll/article?AID=/20060629/BUSINESS01/606290327/1014)
Justin Hyde - Detroit Free Press - June 29, 2006
http://www.cleanmpg.com/photos/data/501/E85_Dispenser.jpg
Pumps are ready. Farmers say they're ready. Are Consumers?
WASHINGTON - Detroit automakers said Wednesday they would double their production of vehicles capable of burning ethanol and other renewable fuels to 2 million cars and trucks a year by 2010, and called on Congress to help make ethanol more widely available.
The unusual joint announcement gives Detroit automakers a united defense against rising sentiment in favor of higher fuel economy standards on Capitol Hill. It also ratchets up the pressure on oil companies and service stations, which have cited high costs and limited demand in their failure to sell more E85, a mix of 85% ethanol and 15% gasoline.
In a letter to members of Congress, General Motors Corp. Chairman Rick Wagoner, Ford Motor Co. Chairman Bill Ford and Chrysler Group Chief Executive Tom LaSorda said their pledge was "the single largest commitment to renewable fuels in our nation's history."
"Our hope is that with this commitment, fuel providers will have even more incentive to produce ethanol and other biofuels and install pumps to distribute them. ... Eventually, we need to get to the point where most Americans have reasonable access to these fuels at a price that is competitive with gasoline."
GM had said it would build about 400,000 E85-capable vehicles this year, while Ford estimated its total at 250,000. Chrysler had said it would build more than 250,000 such vehicles in 2007 and nearly a half-million in 2008. The three companies sell about 10 million vehicles a year in the United States.
Spokesmen for the automakers said the announcement was a follow-up to the meetings the executives had with congressional leaders on May 18. Some Michigan lawmakers have said Detroit automakers rarely presented a unified front to Congress and urged them to do more on key issues.
Ethanol has become a favorite topic among lawmakers grappling with the energy concerns of voters who are spending nearly $3 a gallon for gasoline. Ethanol is made mostly from corn in the United States, and the makers have promoted the fuel as a renewable, homegrown replacement for foreign oil imports. Detroit automakers and dozens of lawmakers have backed the "25-by-25" plan, which calls for replacing 25% of the nation's energy demand with renewable fuels by 2025.
Detroit automakers for years have built trucks capable of burning ethanol or regular gasoline under federal rules that gave automakers fuel economy credits even if those vehicles never burned a drop of E85. That program was extended in 2004 through the 2008 model year, even though federal research showed that it had increased gasoline demand.
With the greater focus on ethanol, Detroit's automakers also have found an environmental angle against their largest Japanese competitors, which beat them to market with gasoline-electric hybrids. Although the cost of altering a vehicle to burn ethanol is small, the changes are extensive enough that they take years to plan and design. After initially downplaying ethanol, Toyota Motor Corp. has said it is considering E85-capable vehicles for the United States.
But ethanol's drawbacks have also become more pronounced in recent weeks. Only 767 of the 170,000 filling stations in the United States sell E85, according to data from the National Ethanol Vehicle Coalition; Michigan has 12 filling stations that either sell E85 or are planning to do so soon.
Ethanol isn't as easy to transport as gasoline, and most ethanol plants are in the Midwest. Despite a boom in ethanol factories, the increased demand for mixing ethanol into regular gasoline has boosted E85 prices to as high as $5.20 a gallon on the East Coast.
Service station trade associations say adding an E85 pump costs them between $50,000 and $200,000, a number only partially offset by a $30,000 federal tax credit. Because drivers get lower mileage on E85 than regular gas, station owners say E85 has to sell at a discount to regular gasoline - as much as 30 cents a gallon - before there's enough demand to justify ethanol pumps.
"Marketers would be adding them left and right, but they can't do it as long as ethanol prices are so erratic," said Dan Gilligan, president of the Petroleum Marketers Association of America. "The ethanol industry needs to have more consistent pricing so marketers know how to plan ahead."
Ethanol Con’s Few stations carry it.
Costs fluctuate widely.
Fewer miles per gallon.
Demand for mixing ethanol into gasoline has boosted E85 prices to as high as $5.20 a gallon on the East Coast. (http://www.freep.com/apps/pbcs.dll/article?AID=/20060629/BUSINESS01/606290327/1014)
Justin Hyde - Detroit Free Press - June 29, 2006
http://www.cleanmpg.com/photos/data/501/E85_Dispenser.jpg
Pumps are ready. Farmers say they're ready. Are Consumers?
WASHINGTON - Detroit automakers said Wednesday they would double their production of vehicles capable of burning ethanol and other renewable fuels to 2 million cars and trucks a year by 2010, and called on Congress to help make ethanol more widely available.
The unusual joint announcement gives Detroit automakers a united defense against rising sentiment in favor of higher fuel economy standards on Capitol Hill. It also ratchets up the pressure on oil companies and service stations, which have cited high costs and limited demand in their failure to sell more E85, a mix of 85% ethanol and 15% gasoline.
In a letter to members of Congress, General Motors Corp. Chairman Rick Wagoner, Ford Motor Co. Chairman Bill Ford and Chrysler Group Chief Executive Tom LaSorda said their pledge was "the single largest commitment to renewable fuels in our nation's history."
"Our hope is that with this commitment, fuel providers will have even more incentive to produce ethanol and other biofuels and install pumps to distribute them. ... Eventually, we need to get to the point where most Americans have reasonable access to these fuels at a price that is competitive with gasoline."
GM had said it would build about 400,000 E85-capable vehicles this year, while Ford estimated its total at 250,000. Chrysler had said it would build more than 250,000 such vehicles in 2007 and nearly a half-million in 2008. The three companies sell about 10 million vehicles a year in the United States.
Spokesmen for the automakers said the announcement was a follow-up to the meetings the executives had with congressional leaders on May 18. Some Michigan lawmakers have said Detroit automakers rarely presented a unified front to Congress and urged them to do more on key issues.
Ethanol has become a favorite topic among lawmakers grappling with the energy concerns of voters who are spending nearly $3 a gallon for gasoline. Ethanol is made mostly from corn in the United States, and the makers have promoted the fuel as a renewable, homegrown replacement for foreign oil imports. Detroit automakers and dozens of lawmakers have backed the "25-by-25" plan, which calls for replacing 25% of the nation's energy demand with renewable fuels by 2025.
Detroit automakers for years have built trucks capable of burning ethanol or regular gasoline under federal rules that gave automakers fuel economy credits even if those vehicles never burned a drop of E85. That program was extended in 2004 through the 2008 model year, even though federal research showed that it had increased gasoline demand.
With the greater focus on ethanol, Detroit's automakers also have found an environmental angle against their largest Japanese competitors, which beat them to market with gasoline-electric hybrids. Although the cost of altering a vehicle to burn ethanol is small, the changes are extensive enough that they take years to plan and design. After initially downplaying ethanol, Toyota Motor Corp. has said it is considering E85-capable vehicles for the United States.
But ethanol's drawbacks have also become more pronounced in recent weeks. Only 767 of the 170,000 filling stations in the United States sell E85, according to data from the National Ethanol Vehicle Coalition; Michigan has 12 filling stations that either sell E85 or are planning to do so soon.
Ethanol isn't as easy to transport as gasoline, and most ethanol plants are in the Midwest. Despite a boom in ethanol factories, the increased demand for mixing ethanol into regular gasoline has boosted E85 prices to as high as $5.20 a gallon on the East Coast.
Service station trade associations say adding an E85 pump costs them between $50,000 and $200,000, a number only partially offset by a $30,000 federal tax credit. Because drivers get lower mileage on E85 than regular gas, station owners say E85 has to sell at a discount to regular gasoline - as much as 30 cents a gallon - before there's enough demand to justify ethanol pumps.
"Marketers would be adding them left and right, but they can't do it as long as ethanol prices are so erratic," said Dan Gilligan, president of the Petroleum Marketers Association of America. "The ethanol industry needs to have more consistent pricing so marketers know how to plan ahead."
Ethanol Con’s Few stations carry it.
Costs fluctuate widely.
Fewer miles per gallon.