GM Wants More Ethanol Stations in US
But, is this the answer to a question that no one is asking anymore?
By Brendan Moore
For most of you, the excitement over ethanol is probably sort of a hazy memory; you remember when all the fuss was being made over ethanol fuel, but you also remember that it was rather quickly shown that making ethanol from corn was not a good deal from an environmental and energy standpoint.
So, it just sort of went away, right? Didn’t we move on to hybrids and electric vehicles?
The public moved on, but not the federal government. In those heady days (2007) of optimism about ethanol, the brave talk about the American Midwest being the new energy capitol of the world, and our sturdy corn farmers saving America from the clutches of Middle Eastern oil despots, Congress passed energy legislation that actually set mandatory targets for fuel blending each year.
That’s right. Is this all coming back to you now?
Ethanol use is required to rise to about 20.5 billion gallons by 2015 and 35 billion gallons by 2022 from 4 billion gallons in 2006, when this was all being put together, and almost 13 billion gallons last year, in 2009. It’s the law, and it’s still the law in 2010. All the public enthusiasm disappeared, but the legislation remained behind.
Corn is still the substance that most ethanol is made out of in the United States, and it’s still not a good deal from an overall energy perspective or an environmental standpoint. The United States EPA (Environmental Protection Agency) says that in order to increase it’s attractiveness as an alternative fuel, ethanol will need to be produced from something else besides corn; things like farm waste, landfill waste, algae and switchgrass. The EPA also states that the current 10% blend of ethanol in gasoline must be bumped up much higher in order for ethanol to be a viable energy solution.
Cue General Motors.
GM says it has produced 4 million of the approximately 7.5 million flex-fuel vehicles now on the road in the US. GM Vice Chairman Tom Stephens states that there are 2,200 ethanol fuel stations in the US, but 2/3 of those stations are in only 10 states. Those 10 states are all in the Midwest (corn country), and only 19% of GM’s four million flex-fuel vehicles are in those states. In other words, there are millions of flex-fuel capable vehicles driving around in the United States that are nowhere near an ethanol fuel station.
GM wants more ethanol stations. Stephens says there are around 160,000 gas stations in the country, and GM figures that there should be around 12,000 more locations that also offer ethanol. According to GM’s calculations, that will put an ethanol-dispensing station within two miles of almost every customer that owns a GM flex-fuel vehicle.
The Detroit automaker has invested heavily in flex-fuel technology over the last few years, and continues to do so, with the company stating that half of their lineup will be able to run on E85 fuel by 2012. The E85 fuel is a fuel mixture that is 85% ethanol and 15% gasoline. The current limit for ethanol blended gasoline is fuel with only 10% ethanol.
The company says it spends an average of $70 USD extra in production costs on every vehicle it equips with E85 capability. The total production cost to GM is $100 million per year across all vehicles. The company says this capital is “stranded” without a place for motorists to fill up with ethanol.
However, given the current situation regarding ethanol, that is, it doesn’t make much sense from an economic or environmental perspective to produce it from corn, and that is where almost all the ethanol in the US is derived from, does it make sense to push for more ethanol? Ethanol does produce less emissions than gasoline and it doesn’t come from oil, but it has been demonstrated rather conclusively that producing ethanol from corn is not practical when you factor in production costs and consequences of production.
Cynics also point out that the main reason GM started producing flex-fuel vehicles in the first place was not to be a good global citizen, but rather, to exploit a loophole in the federal CAFE requirements regarding combined corporate fuel economy. GM’s interests in promoting greater ethanol availability, these people say, are self-serving, and are designed to help the company meet corporate fleet fuel economy standards as opposed to reducing emissions or reducing dependence on foreign oil.
In fairness, it must be noted that GM neither produces ethanol nor is able to mandate the terms of CAFE. They are playing in this game, but they didn’t set the rules. And, as company executives have noted, having a network of ethanol fueling stations and vehicles that can run on E85 already in place is certainly not a bad thing when the code is finally cracked on making ethanol a practical fuel choice – whenever that might be.
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