GM's view of ethanol as an interim step to displace petroleum

Following the announcement of the Challenge-X winners at the General Motors headquarters in Detroit, several bloggers including your humble correspondent sat down to dinner with Dr. Gary Smyth and Nick Zielinski the chief engineer on the Chevy Volt. We had a wide ranging discussion with Nick and Gary which I will post soon, but one particular issue might be of interest in light of the story the other day about it taking up to two decades to turn over half the vehicle fleet in the United States to alternative drive systems.
People have given GM and other carmakers flack for putting so much emphasis on E85 and flex-fuel capability. But there is a method to the apparent madness. No one really sees ethanol as the dominant replacement for petroleum over the long term. Carmakers are well aware that with a total vehicle fleet of close to 240,000,000 units in the US and sales of around 17,000,000 even if every vehicle sold today were using alternative propulsion systems it will take a long time before a significant proportion of the existing fleet is replaced.

Continue reading after the jump By selling flex-fuel vehicles today even if most people aren't using the biofuel, the capability is there. Most of these vehicles will still be on the road 5-10 years from now when ethanol is expected to be more readily available. By that time cellulosic ethanol should also be available. All those vehicles will still have many years of life left in them and will likely be using at least some ethanol. During that time frame, electrically driven vehicles will also be coming on stream but it will be some time before they make up any significant chunk of the total fleet.

By building the flex-fuel vehicles now and starting to fill the pipeline with them, GM (and no doubt other carmakers) are trying to lead the way with an interim solution. And ethanol is definitely seen as an interim step. GM is projecting that between now and 2030 demand for energy world wide will rise by about seventy percent. With the flex-fuel vehicles that are on the road and coming in the next few years they will at least be able to make a significant dent in the demand for gasoline. In this way even the 5-, 10-, and 15-year old vehicles that are on the road in 2015-20 will be able to be part of the solution.

I still think that the way corn ethanol is being subsidized by the government today is largely a boondogle but as cellulosic ethanol displaces it, we will have a good stepping stone to the future.

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