• Jun 16, 2006
Once again Steven J. Harris, General Motors' VP of Global Communications, has posted on the company's FastLane Blog a response to New York Times columnist Thomas Friedman's most recent op-ed piece on the giant automaker. And again, Harris takes Friedman to task by pointing out that HUMMER sales account for less than half of one percent of vehicle sales in the U.S., and that less than 7,000 H2s have been sold this year and only 138 H1s, the latter of which will be discontinued this month anyway. As we also noted in our a previous post, the rebates GM is offering on 2006 model large SUVs that Mr. Friedman seems to think is a subsidy for gas-guzzling is actually, according to Harris himself, just GM trying to move what's left of last year's model.
While we're with Harris on these first two points, we hesitate to follow him down his path of reasoning that explains the "shameless federal loophole" that Friedman claims many automakers used in the past to make it possible to sell less fuel-efficient vehicles without being penalized by the E.P.A. Harris refers to the "loophole" as a "public policy incentive that actually did what it was supposed to do" and got flex-fuel vehicles on the road. By his reasoning, either the cars or the fuel had to come first, and this legislation paved the way for E85-capable vehicle to be mass-produced. The only reason why ethanol-based fuel hasn't been such a hot commodity until now is because high gas prices are finally encouraging the public to consider alternatives, which wasn't the case 5-10 years ago.

Despite one's feelings about the efficacy of E85, it is a good thing that there's already a fleet of 5 million vehicles on the road ready to accept the alternative fuel as soon as production and distribution catch up with demand. However, Mr. Harris doesn't explain exactly how the aforementioned legislation encouraged his employer and others to produce flex-fuel vehicles. Without knowing exactly what incentive was offered to automakers, it's impossible to judge whether or not the cost of putting FFVs on the road has been worth it.

[Source: GM FastLane Blog]


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  • 17 Comments
      • 8 Years Ago
      The obvious "warning sign" that this fellow is not giving a well rounded opinion is that he is ONLY picking on GM -- going the old "big brother" thing Apple tried to do with IBM.

      Japanese companies in particular are amazing at working the old regulations. Just look how Honda deleted the sunroof from its top line Accord in order to have it tested different manner for mileage (the sunroof literally added something like 30lbs and required the car to be classified one size up).

      Years ago (early 80s); the Civic failed one of the crash tests, and the Honda team had a second back up cars with them plus a team of engineers -- they worked on the second car and gave it for testing within 2 hours -- it passed with flying colours. I only knew about it because some article appeared where one of the testors casually mentioned the story as it stood out to him at the time as showing how well the Honda engineers understood their cars.

      Anyway .. EVERY car manufacturer is very active in those regulations etc (lobbying if nothing else). To single one company out is totally absurd.
      • 8 Years Ago
      The incentive to produce E85 vehicles meant that the Corporate Average Fuel Economy ratings of vehicles was altered to enable (mostly GM, but some Ford and DCX) an increased number of large SUVs to be built, if I recall correctly. Yeah, it was a loophole. Yeah, GM are putting a positive spin on it. But yeah, point taken, there are now 5 million vehicles (mostly used) ready to accept E85 (most of which never had a drop of alcohol in their tanks and were hundreds if not thousands of miles from an E85 fuelling station).

      But then, my father had a flex-fuel capable 1992 Dodge Spirit, and it went through its entire life cycle without seeing one drop of E85. So, how many of these 5 million vehicles GM claims are E85 ready, are still on the road?
      • 8 Years Ago
      That seemed like a pretty reasoned and reasonable response by GM PR. I'm glad to see that it didn't throw another missle to bait Friedman; in fact, I thought its offer to have Friedman come to Detroit was a good one.

      Rick Wagoner was on Charlie Rose and said the basically same thing. Rick also mentioned that it might be prudent, at some point, for the automakers to agree on technologies so that they can focus on one or two, vs investing in 5 different technologies.

      I agree with that as long as creativity and innovation are not stifled. Why not collaborate whenever possible and feasible? Is it possible to work together, yet maintain a competitive stance?

      I think so and I'd like to see more of it.

      • 6 Years Ago
      What was the cause of death of Alexander Farrell, 46, expert on alternative fuels?

      http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/04/18/BAOK1087DP.DTL
      • 7 Years Ago
      • 7 Years Ago
      The Farce About Ethanol...

      By State Senator Tom McClintock, Free Republic, 06/28/2007

      In response to my blog, "Ethanol Economics," Former Secretary of State Bill Jones (now Chairman of Pacific Ethanol), made five key points in his piece, "The Facts About Ethanol." Just for fun, let's run "The Facts About Ethanol" through the old fact-checker:

      "Today, ethanol is about 65 cents per gallon cheaper than gasoline in the California market." That's only after taxpayers and consumers have kicked in a subsidy of $1.50 per gallon - or $7 billion a year paid into the pockets of ethanol producers to hide the staggering price of ethanol production. And even with the subsidy, the California Energy Commission estimates that the new CARB edict will INCREASE the price per gallon by between 4.2 and 6.5 cents - on top of the tax subsidies. Ouch.

      "Allowing a 10 percent blend of ethanol into gasoline provides a 4 percent supply increase to the marketplace at a price far below current gasoline prices." Not only is the price far ABOVE current gasoline prices (see above) but Bill ignores the fact that ethanol produces less energy than gasoline - meaning you'll have to buy more gallons for the same mileage.

      "CARB's recent vote reduces our reliance on oil from overseas..." Let's walk through the numbers again. One acre of corn produces 350 gallons of ethanol; the CARB edict will require 1.5 billion gallons of ethanol, in turn requiring 4.3 million acres of corn for ethanol production. Yet California only has 11 million acres devoted to growing crops of any kind. And that, in turn, means an increasing reliance on foreign agricultural produce, shifting our energy dependence from King Abdullah to Hu Jintao.

      "Further, it sends a signal to companies like ours to continue to invest in California production to help make this state energy independent." Yes, you can sell a lot more ethanol with a kind word and a gun than with a kind word alone. You got me there. But it also sends a signal to the market to raise prices on every product that relies upon corn for both food and grain feed - meaning skyrocketing prices for everything from corn meal to milk. Remember the tortilla riots in Mexico in January?

      "Pacific Ethanol uses state-of-the-art production practices that reduce carbon dioxide emissions by up to 40 percent compared to conventional gasoline." Unless Pacific Ethanol has re-written the laws of chemistry, ethanol is produced by converting glucose into two parts ethanol and two parts carbon dioxide. The chemical equation is C6H12O6 = 2C2H5OH + 2CO2. (Memo to Bill: If you're not using this formula, you're not producing ethanol. And if you are, you're also producing lots of carbon dioxide. Better check.)

      http://www.freerepublic.com/focus/f-news/1858095/posts

      * NO on “car tax” AB118 (Nunez)

      * Clean Air Performance Professionals (CAPP) supports a Smog Check inspection & repair audit, gasoline oxygen cap and elimination of dual fuel CAFÉ credit to cut car impact over 50% in 1 year.

      * Some folks believe corn ethanol in gasoline increases oil use and oil profit

      * Ethanol uses lots of water

      * A Smog Check audit would cut toxic car impact in ½ in 1 year. Chief Sherry Mehl, DCA/BAR, has never found out if what is broken on a Smog Check failed car gets fixed, never

      * A corn ethanol waiver would stop a $1 billion California oil refinery welfare program coming from the federal government @ $0.51 per gallon of ethanol used

      * About 60,000 barrels per day of the oil used by cars is allowed by the "renewable fuel" CAFE credit
      • 8 Years Ago
      Mr. Harris is dead wrong about the reasons for this federal 'loophole' in the CAFE standards for E85 vehicles. It was put in place to help the auto companies to avoid millions of dollars in CAFE fines, plain and simple. Just pure bribery from the auto companies to the Congress got this in the standards. What does this guy Harris take us for, complete fools? Also, as has been pointed out on other web sites and studies, E85 is more expensive and less efficient than gasoline. Who is going to pay more for a gallon of E85 over gasoline, and get worse gas mileage! As was pointed out in a Fortune article recently, E85 has turned from a decent idea into a windfall for the auto companies and grain producers (i.e. Archer Midland), thanks again to all our crooked politicians in Congress always willing to sell votes for money..
      • 8 Years Ago
      Very eloquent blog post, which elegantly covers up the federal loophole.

      That said, I don't really blame GM for producing gas guzzlers. Why do they build em? Cus' people wanted them. If Toyota had 70% of the truck/SUV market you know they'd also be churning em out as well. But where Toyota and GM differ is that one has the foresight to diversify into different market segments, while GM continues to be a one-trick pony. They've given up long ago on a Camry rival, and until the Mustang didn't think about bringing old-school muscle cars.
      • 8 Years Ago
      Government incents companies to make flex-fuel cars. Companies make flex-fuel cars. And the blame for this falls at GM's feet?

      If you don't like the loophole, blame the government for making it.

      Note that some sort of fuel economy adjustment needed to be made for E85 cars. Ethanol produces inferior fuel economy, so a 19mpg SUV on gas would be a 17mpg SUV or something on E85. Maybe the rules were intended to allow that?

      I dunno. Anyway, it seems this guy will find any reason he can to not like GM. I doubt any kind of reasoned response is going to convince him.

      I still see FFV Tauruses (but not so many Rangers) on the road.

      Home come there is no E85 Prius? If I buy a Prius, I reduce my carbon footprint by 40%. If I buy an E85 vehicle and use E85, I reduce my carbon footprint by 85%. The Prius comes out looking rather poorly there. Why can't Toyota combine the two and let me get my footprint down 91%?
      • 7 Years Ago
      Chief, Sherry Mehl, DCA/BAR, has never found out if what is broken on a Smog Check failed car gets fixed, never



      "Although it may be the first of its kind, it will likely not be the last. John Shearer, owner of Tahoe Sportfishing expects to have 2 of his 6 boats fitted with engines funded through the Carl Moyer Program before the summer boating season. He expects 3 more of his boats' engines to replaced with more efficient, cleaner-burning engines by this fall."


      --------------------------------------------------------------------------------


      Setting the stage: Bleu Wave burns clean on lake



      Adam Jensen, Tahoe Daily Tribune, March 14, 2007




      With significant help from funds brought in through state grants, a classic 70 foot Burger yacht might just house two of the cleanest-burning diesel boat engines on Lake Tahoe.

      Two 500 horsepower Series 60 Detroit engines were installed in January on The Bleu Wave, a vessel previously owned by MontBleu, but bought 2 months ago by Ryan and Laura Forvilly of Round Hill.



      "We're running really clean right now," said Ryan Forvilly. "It's probably the cleanest burning boat on Lake Tahoe."

      Clark Smithson, the Bleu Wave's captain of three years, estimated the new engines have cut fuel consumption by a third and emissions by half. The new computerized engines also have a leak-free nature that is sure to keep Smithson happy for a long time to come.

      "My bilge will stay clean for the first time in years," he said.

      Dirty bilge water wasn't the only problem with the old 8V71 diesel engines on the Bleu Wave. A particularly nasty exhaust also had found its source in those engines. When inspectors came to test the emissions, even Smithson was surprised at the outcome.

      "It was a little embarrassing," Smithson said. "It was worse than we thought."

      That's where the California Environmental Protection Agency Air Resources Board Carl Moyer Memorial Air Quality Standards Program comes in. Started in 1998, the program's aim is to offset the higher cost of cleaner-than-required heavy-duty engines.

      "The Carl Moyer Program has been a public health success in its first eight years providing over five dollars worth of health benefits for every dollar spent," said Dr. Robert Sawyer, California Environmental Protection Agency Air Resources Board Chairman, in a press statement. "With the demand for grants routinely outstripping availability, increased funding assured by Governor Schwarzenegger will allow California to more rapidly improve air quality."

      In its first six years, the Carl Moyer Program provided over $140 million in funding to clean up more than 6,300 heavy-duty engines. Engines on buses, trash trucks, construction and agricultural vehicles have seen most of the funding from the program, making the on-water improvements of the Bleu Wave a rarity.

      Moyer grants covered 80 percent of the costs associated with the boat's new engines, according to Smithson. Obtaining the necessary funding included Carl Moyer Grant contributions from Sacramento, Placer County, and El Dorado County.

      "Everyone chipped in," Smithson said. "They were kind of excited about it being the first commercial boat (under the program) on the lake."

      Although it may be the first of its kind, it will likely not be the last. John Shearer, owner of Tahoe Sportfishing expects to have 2 of his 6 boats fitted with engines funded through the Carl Moyer Program before the summer boating season. He expects 3 more of his boats' engines to replaced with more efficient, cleaner-burning engines by this fall.



      http://www.tahoedailytribune.com/article/20070314/NEWS/103140059
      • 8 Years Ago
      There was a time when "The New York Times" was a good newspaper.

      Now it's nothing but liberal Democrat nonsense that's best used to line the bottoms of bird cages.
      • 7 Years Ago
      Loophole fuels Detroit's ethanol Politics and Policy fixation

      Mileage credit pushes flex-fuel trucks despite lackluster efficiency of E-85

      Editorial -- Henry Payne, The Detroit News, June 8, 2006


      A gallon of corn-based E85 ethanol fuel goes only three-quarters as far as gasoline, costs more at the pump and provides negligible environmental benefits.

      So why are U.S. automakers beating a track to Capital Hill and promoting ethanol as an alternative for their vehicles? And why are they producing millions of flex-fuel vehicles that can use the blend of 85 percent ethanol and 15 percent gasoline when it is nearly impossible to find E85 at the pumps?

      The answers, industry experts say, lie in the perverse incentives of the federal government's mandated, and increasingly stringent, fuel economy program.

      Perverse incentive for E85

      The government manipulates its fuel economy ratings to give automakers an incentive to make flex-fuel vehicles so they meet federal fuel economy rules.

      Ethanol is already one of Washington's most infamous boondoggles, costing U.S. taxpayers $4.1 billion a year in federal subsidies. The money is a political sop to the farm lobby.

      But because of ethanol's mediocre mileage performance, the E85 blend is only in 600 of America's 180,000 filling stations nationwide and a small but growing handful in Michigan.

      How does a fuel that is 25 percent less efficient than gasoline help increase fuel mileage ratings and help automakers avoid fines that run into the hundreds of millions of dollars? Welcome to the looking glass world of federal regulations.

      Manipulating CAFE rules

      Corporate Average Fuel Economy (CAFE) rules set minimum mileage standards across all vehicle models. For cars, the average is 27.5 miles per gallon. For light trucks (sport utility vehicles, pickups, and minivans), it's 21.6 mpg.

      But under pressure from $3-a-gallon gas prices, the Bush administration is recommending that trucks produce an average of 24.1 mpg by 2012. The new rules will be a daunting challenge for automakers already struggling to meet the current standard.

      An alternate fuel-friendly government, however, has created an ethanol loophole for carmakers. It lets manufacturers pump up their fuel economy ratings, particularly in the most popular vehicles that tend to get the least gas mileage, light trucks.

      Running on gasoline, an SUV like the Chevy Tahoe achieves 20.1 mpg under CAFE's test. Put E85 in it instead and the fuel economy plummets to 14.6 mpg.

      America's 100 mpg truck

      But for the purposes of CAFE -- and here's where we fall down the rabbit hole, Alice -- the government starts massaging the numbers. It only counts the 15 percent of E85 that is gasoline in its fuel economy rating, increasing the vehicle's mileage figure a whopping seven-fold to 97.3 mpg.

      Only Washington, D.C. could actually produce an imaginary 97.3 mpg sport utility vehicle!

      The government then takes that number, averages it with the 20.1 gasoline number, runs it through a special formula, and -- voila! -- arrives at the flex-fuel Chevy Tahoe's official CAFE mileage: a healthy 33 mpg.

      Such high numbers, naturally, threaten to blow out the federal fuel economy program and make it too easy to comply with. So the feds added a rule: They capped the total benefit of ethanol vehicles toward the CAFE standard at 1.2 mpg.

      Because automakers pay big fines on each tenth of 1 mpg that they are below the CAFE mark, a manufacturer like General Motors Corp. could face $180 million in fines for violating light truck fuel economy rules were it not for the ethanol provision. The cost of outfitting trucks to run on gas and E85 comes to about $150 a vehicle, according to General Motors -- or a total cost of $60 million.

      General Motors saves a possible $120 million by producing ethanol vehicles and avoiding CAFE fines -- not to mention the huge public relations costs if it were caricatured in the media as a fuel economy deadbeat for missing federal targets.

      Automakers argue that ethanol has other potential benefits.

      "If we want a game changer, then ethanol is a very good play for this country," Ford Chief Executive Bill Ford testified on Capitol Hill last month.

      Ethanol's benefits evaporate

      But a comprehensive study in Car & Driver magazine's July issue finds that ethanol's alleged advantages evaporate, leaving only its CAFE credit as a reason for production.

      For example, cleaner air is often raised as another reason to use ethanol, but the vegetable fuel increases hydrocarbon emissions as it reduces nitrogen oxide emissions. And ethanol consumes more fossil fuels to produce than it saves in use.

      Despite a 51 cents-per-gallon
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