• Jun 13th 2011 at 1:30PM
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Filling up your car with E85 can be a lot easier on you... Filling up your car with E85 can be a lot easier on your wallet (Seth Perlman, AP).
How does $2.00 a gallon sound to fill up your tank? How about 80-cents a gallon? No, you aren't in a time machine. But if you drive a Flex-Fuel car, truck or SUV that runs on E85 (ethanol), those are the kinds of per-gallon prices you've been seeing in parts of Minnesota.

It sounds great since E85 vehicles include such common rides as Chevy Suburbans and Impalas, Ford F150 pickups and Flex, Chrysler Town & Country and Dodge Charger. But running vehicles on E85 (85% ethanol and 15% gas) is one of the big political hot potatoes this year and going into next year's Presidential contest.

Look for the topic to get some air in tonight's New Hampshire Republican debate. Despite the importance of Iowa, a corn state that gets huge benefits from government ethanol subsidies, in presidential politics, most Republicans, and even some Democrats, are against continuing $6 billion a year in ethanol subsidies, an annual expenditure that is slated to balloon to $60 billion a year a decade from now.

GOP Presidential hopeful Mitt Romney and Newt Gingrich support ethanol subsidies, while rivals Tim Pawlenty, Jon Huntsman are against it. Minnesota Congresswoman Michele Bachmann says only that subsidies should be "examined," a predictable position considering the popularity of the subsidies in both her home state, as well as her birth-state of Iowa.

President Obama supports Ethanol subsidies, research and development, and a plan to double ethanol consumption in ten years. The vast majority of ethanol produced in the U.S. today is from corn. Chemists and other scientists have been trying to perfect the process, though, to extract ethanol on a large scale from all manner of materials -- grasses, corn husks, fibrous plant waste products like corn stalks, as well as trash.

The GOP opposition has an odd set of friends in this fight: The environmental lobby, who believe the production of ethanol wastes more fuel than it saves, and the food manufacturing lobby, which doesn't want to see grain prices skyrocket as grain is diverted from food supplies to fuel supplies.

The benefits of running our cars and trucks on ethanol and E85 are controversial. While it burns cleaner than gasoline, many credible scientists have shown through peer-reviewed studies that it takes more energy to produce ethanol than it provides when we burn it. On the other hand, supporters believe that ethanol can make the U.S. less dependent on foreign sources of oil, which is a national security issue, as well as a trade balance argument. Plus, there are more jobs to be created through developing an ethanol infrastructure than in continuing to import oil from hostile Middle East countries.

E85 Not So Popular With Drivers

For now at least, ethanol isn't very popular among drivers because it's not as efficient as gas. Running a vehicle on E85 delivers about a 23% fuel economy penalty. The government, for example, certifies a Chevy Suburban's fuel economy running on gasoline at 17 mpg combined city and highway driving, while it certifies the same vehicle at 13 mpg running on E85.

In Ann Arbor, MI, a gallon of unleaded regular gas costs $4.07, while a gallon of E85 costs $3.59 per gallon, only an 11% discount to the gas. [See website E85Prices.com].

But the spread between gasoline and E85 varies around the U.S., often favoring drivers in farm states where ethanol refineries are plentiful, thus so is the supply. Because ethanol is largely trucked rather than piped for now, prices tend to be lower the closer the station is to an ethanol production plant.

In Riverside, Iowa, E85 costs $2.89 a gallon, a 21% discount to gas. In North Liberty, Iowa, the discount to gas is 26%. Statewide in Iowa, the average discount to gas is 21%. In Washington State, the cheapest E85 is $3.59, and the state-wide average discount to gas is just 10%.


$2.00 per gallon E85 Sounds Good

To attract drivers, some non-profit and trade organizations subsidize the prices. Non-profits in the Midwest have been, on and off, offering discounts -- as much as 85 cents a gallon making the E85 about $2.00 a gallon -- to drivers to fill up with E85. The American Lung Association in Minnesota, for example, sponsors ethanol price promotions because it is promoting the cleaner fuel to go into more cars and eliminate pollution in the state, said Lisa Thurstin, a spokeswoman for the group.

"A lot of people don't even know their vehicles can take flex fuel," said Thurstin. "For a lot of them, it's their first time."

And that's the rub. Although the government spends a lot of money supporting ethanol, not many people use it. Still, the auto industry is happy to keep churning out flex-fuel vehicles that run on either gasoline or E85 because they get valuable credits toward meeting their Corporate Average Fuel Economy target.

Opponents of ethanol subsidies have important opposition in this fight: Voters in Iowa, who will be disproportionately important in picking presidential candidates next year due to the way primary elections are set up.

The fact that politicians on both sides of the aisle are not backing off opposition, though, shows a possible tipping point in the offing. In May, politicians from both sides of the aisle joined forces to oppose ethanol subsidies. Sen. Tom Coburn, a Republican from Oklahama, paired up with Democratic Sen. Diane Feinstein to voice their opposition to the subsidies. Feinstein called the benefits "a triple crown of government intervention: its use is mandated by law, it is protected by tariffs, and companies are paid by the federal government to use it."

Republican presidential hopeful John Huntsman, formerly Governor of Utah and ambassador to China, says he is skipping the Iowa Staw Poll this summer because he believes his well-known and unwavering opposition to ethanol subsidies will give him no chance in the corn state.

Obama is Pro Ethanol

President Obama wants to see ethanol use increase. He's pushing the Navy to find ways to use ethanol instead of jet fuel, and is investing millions in developing ethanol refineries. The Administration is pushing to install 10,000 blender pumps in U.S. gas stations to allow for more ethanol use.

President Bush was also a supporter of ethanol. In 2007, the U.S. doubled its consumption of corn-based ethanol, from 7.5 billion gallons to 15 billion gallons a year. That led to a spike in grain prices, because the U.S. uses 90% of the world's ethanol.

Ethanol seems like one of those fuels everyone should support: It comes from renewable sources (primarily corn in the U.S., although in Brazil they use sugar cane) and it spews fewer emissions into the air, and helps us reduce our dependency on foreign oil.

But it's expensive to support. And in this age of debt ceilings and high unemployment, paying farmers $60 billion annually to turn corn into fuel (which, incidentally, raises the price of food globally) seems like a puzzling idea to many.

There is promising research and development, though, that would at least make ethanol more fuel efficient to use. One of the big factors contributing to E85's poor fuel efficiency is that a vehicle's engine is not optimized to burn ethanol. In other words, when you have to design an engine to burn both gasoline and E85, you give up a lot of efficiency. Ford, however, has been working on a flex-fuel engine that would boost fuel economy by injecting ethanol and gasoline into the fuel system separately, rather than blending it. The rub, though, is that it requires two separate tanks of fuel, and U.S. consumers, other than early-adopter "green consumers," have shown themselves to have little tolerance for even a little inconvenience when it comes to changing habits and thinking differently about fueling their cars.

The ultimate would be an engine that is optimized to run on nothing but Ethanol. But without a better infrastructure of fueling stations, such vehicles would probably be limited to commercial vehicles and trucks that have limited and predictable driving chores.

Hybrids and EVs Getting the Love Now

Especially since automakers are throwing most of their development money into electric-powered cars and plug-in hybrids, they aren't burning the midnight oil to find ways to optimize ethanol. In fact, General Motors CEO Dan Akerson said this week that ethanol "is going to die slowly." Even though the automaker has pledged to make half its lineup capable of running on a blend of ethanol and gas, it appears GM is falling out of love with ethanol.

That's a shame, because one of the most promising futures for ethanol is tied in with a venture the automaker supports. Coskata, a company GM invested in prior to its 2009 bankruptcy and subsequent management overhaul that left Ackerson CEO, is working on ways to make ethanol from cellulosic materials like wood chips, scrap plastic and garbage. That would eliminate concerns that farmers are diverting food sources to make government-subsidized fuel.

The subsidies, chiefly benefiting corn ethanol, were intended to keep ethanol makers motivated to keep producing the stuff while car technology and ethanol extraction methods from other sources were fine-tuned enough to make the fuel a viable alternative energy source. But goodwill towards the industry is wearing thin:

"As our nation faces a crushing debt burden, rising gas prices and the prospect of serious inflation, continuing our parochial ethanol policy that increases the cost of energy and food is irresponsible," Senator Coburn said recently.

Iowa voters might have to get used to this new reality.


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  • 492 Comments
      • 4 Years Ago
      the stuffs alchohol
      Larry
      • 4 Years Ago
      Lets see If I got this right 6 billons dollars of our TAX money ( there is no such thing as Gov. money ) goes to a hand full of people that (A) have these flex fuel vehicles and (B) that have access to this fuel at that price . But when that same amount of money is given to those evil big oil companies the world will end . It is those evil big oil companies that employ at least 100 times more people , and have a 1000 times more customers . Something seems wrong here ? I know it is Obama and his need to cripple this country with his leftist way of thinking .
      • 4 Years Ago
      Using a food crop for fuel is totally ridiculous. If you don't pay at the pump, you pay at the dinner table. Face reality, we in the U.S. cannot drill our way out of the mess we are in, we simply do not have enough oil reserves even with the "shale/sand" oils. Exxon last week announced a new "giant" discovery in the Gulf of Mexico that has a combined potential of approximately 700 million barrels of recoverable oil and gas equivalent. This sounds like a lot of oil until you consider the U.S. daily consumption of oil is 18.8 million barrels per day. This new "giant find" would only supply our needs for 37.2 days. (Search Google if you think these figures are incorrect) We need to rush to get infrastructure in place to start using natural gas. We have known 50-100 year supplies of natural gas which is clean burning with low emissions. It's easy to build car, truck and industrial engines that operate on CNG, and as a plus factor existing engines can be easily converted to run on CNG so you don't have to purchase a new vehicle. We currently have approximately 110,000 CNG powered vehicles operating in the U.S. If we got the infrastructure in place, within the next decade we could be nearly energy independent and within 2 decades completely energy independent by using CNG as our primary fuel. It only makes sense to put our efforts into using the natural resources that are most abundant.
      mobeck
      • 4 Years Ago
      The Flintstones car is the car of the future. A hole in the floor where your legs go to the ground and push your car along....
      arnold
      • 4 Years Ago
      Teh best thing that could happen to America is that ethanol is phased out. my car looses about 30% of the power and mileage gas with only 10% ethanol I doubt if I would get 5 miles to a gallon of this junk. It cost more to produce 1 gallon of ethanol than 10 gallons of gas. The product uses up the cereal crops of wheat, corn, barley and oats. We need those products in our food line not out gas lines. Second the ethanol will ruin your engine if you leave it for prolong periods of time without using it gathers water which ruins your engine. No we do not need to save ethanol we need to get on with live. Produce cars that run off NG and Propane as well as elect. Although the elect cars down the road will have a problem with the batteries which are considered TOXIC AND COST UNGODLY FEES FOR DISPOSALS. Where NG and Propane are abundant and we have a 500 year supply of NG in the US along. i have the same feelings about ethanol as I do the illegal aliens or etbacks here in TEXAS. Frank Bowers, FIC, 100% DAV Austin, TX 78734
      • 4 Years Ago
      Brazil uses the unusable leaves from sugar cane to produce their ethanol. Why can't we do the same with the unusable parts of the corn stalks? I'm not a scientist but common sense is common sense.
      • 4 Years Ago
      My daughter turned 16 last month and there was just no way we could afford to add her to our existing insurance policy. I started shopping around for new car insurance and found this site: ( http://tinyurl.com/InsuranceTip ) I just put in my ZIP code and received four quotes instantly after filling out your form. By comparing rates we were actually able to include my daughter in our new policy and not pay anymore per month for car insurance than we were originally paying for just me and my wife!
      imahon36
      • 4 Years Ago
      Seems to me the answer is to open up our oil fields to production!
      Frank
      • 4 Years Ago
      The only reason ethanol is cheaper then gasoline is that it is being subsidiesed by the goverment. It does not burn as efficiently as gasoline and produces greenhouse gases when being made. Subsequently, when all things are compared, it produces more pollution then gasoline. Why doesn't the goverment lower the taxes they currently charge on gasoline and aloow for more of our own production.
      rajadesi
      • 4 Years Ago
      Oil will run out one day. Keep on investigating Ethanol and finding ways to efficiently use as an alternate source of energy. We will also have to sell this to Saudi Arabia and Kuwait to get our dollars back!
      • 4 Years Ago
      Seriously......We do not need to start depleting our food supply to fuel our vehicles. How about finding ways to use less fuel without putting a strain on our environment in a different way. We can't grow enough corn to eat and to feed our livestock plus run our vehicles. Not only that but it isn't even cost effective for us to do it. Figures Obama is for it. He is so inexperienced in all aspects of government, it is a wonder we aren't owned by China yet.
      john and donna
      • 4 Years Ago
      LL why dont you stuff your insurance problems It does not belong here .
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