Ethanol pros: Flex-fuel for masses, future 

The auto industry says it’s committed to expanding the use of flex-fuel vehicles – which can run on gasoline and any blend of ethanol up to 85 percent – but two major hurdles have yet to be overcome: a limited number of retailers and limited consumer awareness of its availability.

Dennis Rakicki, manager of environmental affairs at Chrysler, addressed his company’s efforts to further the use of flex-fuel vehicles and the 85 percent ethanol blend (called E85) during a Webinar held Tuesday Aug., 12. The presentation was attended in Boise by transportation managers, energy experts and fuel industry representatives from the City of Boise and Ada and Canyon counties.
Rakicki said automakers have already put 7.5 million E85 vehicles on the road and have a goal of 2 million more per year. The hope is to ensure half of all light-duty vehicles are ethanol or alternative fuel-capable by 2012.
To meet that goal, Chrysler plans to release at least 27 E85 models during the 2009 model year, and already offers several flex-fuel vehicles, running the gamut from minivans and cars to trucks and SUVs.
“The variety is there,” he said, but “the key to successful deployment is getting the customers out there to use the fuels – how do you do that?”
Charley Jones, co-owner of the only three stations in Idaho that sell E85, said while he’s seen an increase in demand for E85 at his Stinker stations in Boise, Nampa and Lewiston, public awareness is still low.
“To use E85 you need a flex-fuel vehicle, and there are a lot of flex-fuel vehicles out there that don’t use E85 because the owners don’t know they can,” he said.
Jones said there’s plenty of reason for drivers to take advantage of their flex-fuel capabilities – while national gas prices have fallen recently to around $3.79 per gallon Idaho’s have continued to hover around the $4 mark. Gassing up with E85 – despite its lower gas mileage – Jones said motorists pay about $3.39.
Combine that with lower tailpipe emissions, and Jones said people are more than willing to sacrifice some gas mileage for the savings.
“[E85 users are] people that believe in using renewable fuels, and the best of all is: ‘Gee, I can save 60 cents a gallon using E85? I’ll do that.’”
Christian King, president of New York-based KNC Holdings, which owns several Mobil gas stations selling E85 on the East Coast, also took part in the Webinar and agreed that low consumer awareness of high octane fuel isn’t helping push demand – and that doesn’t give retailers enough incentive to push the fuel, even though they’re eligible for a $30,000 federal tax credit for installing alternative fuel equipment. In Idaho, legislation has long provided financial rewards for selling ethanol, exempting it from the 25 cent state gas tax.  
“From a retailer perspective we’ve just got to get this information out,” King said.   
But many Idaho drivers think there’s already too much ethanol floating in their tanks. According to a press release issued by AAA Idaho and widely quoted in the media, “the quiet, rapid switchover to ethanol blended gasoline recently has Idahoans wondering where they can buy gasoline without the renewable fuel added.”
AAA Idaho’s release cited customer concerns about ethanol’s energy content and “recommendations that it be used sparingly or not at all by some manufacturers.” It also seemed to contradict the idea that ethanol availability is a problem. The EPA has required that 7.76 percent of gasoline products be blended with ethanol in 2008.
“Finding a station without ethanol is getting difficult,” AAA said.
While that may be true of E10 – gasoline mixed with 10 percent ethanol – there are still only three stations in the state that provide E85 – in Boise, Nampa and Lewiston, and all Stinker Stations (though Jones said Stinker is planning to open another E85 station in Twin Falls this October).
Jones said supply’s not the issue – it’s just too expensive for most retailers to justify installing the necessary equipment.
“The supply of ethanol is not the problem, there’s plenty of ethanol in Idaho,” Jones said. “The problem is for a gasoline retailer, to add ethanol to your facility is a significant capital investment – to the tune of $100,000.”
With depressed sales in the fuel industry, barriers to entry for new E85 retailers are holding back efforts of municipal fleet managers in Boise and Canyon County, who are ready to dramatically ramp up use of flex-fuel vehicles but need better access to refueling facilities.
“We’re in the same boat [as Canyon County], but the problem with ethanol is that there’s only one station in Boise that sells it,” said the Boise’s fleet manager Craig Croner, who added that between 30 and 40 of the city’s municipal vehicles run E85. “Logistically that poses a problem, but we’re geared up for it and the fuel vendors are saying that hopefully they’ll be adding more and more stations.”
Mark Tolman, Canyon County’s fleet manager, said demand pressure is needed to convince E85 producers to invest in more stations, but more than likely municipalities will have to take matters into their own hands – either by banding together for increased buying power or investing in their own blending and refueling facilities.
“When you’re buying four to eight million gallons a year instead of just a million or so gallons it’s a big difference in your buy power,” he said.
According to Tolman, all the patrol cars the county has ordered over the past two years have been flex-fuel compatible and his goal was to bring 75 percent of the entire fleet to that point this year, but it might not happen. Another goal, Tolman said, is the installation of two county-owned 20,000 gallon tanks. With its own tanks, the county could custom blend its own ethanol, fine-tuning for maximum performance and lowest price.
“We want to be able to blend to a particular point where we don’t lose a lot of mileage out of the deal and still are saving money,” he said. “I think we can get on average about a buck a gallon [in savings] – at a couple million gallons a year that’s a lot of money.”
But the tanks cost about $100,000 each and the budget – impacted heavily by state gas prices that are on average 26 cents higher than elsewhere in the county – has been a stumbling block.
“Fuel’s a big problem, we try to not to suspend any core services but we’ve had to cut back,” he said. “Our goal is lean and green.”

NEW! Online only subscription. 24/7 access to premium online subscriber content for only $79.00 a year!
CLICK HERE TO SIGN UP TODAY!

Comments are closed.