Alternative power looks to be a more attractive option for consumers looking to save money at the pumps in Michigan. The price of ethanol across the state is $2.15 a gallon, up two pennies from a week ago, but still cheaper than the $2.27 average for conventional gasoline, according to AAA of Michigan.
This comes a day after General Motors Corp. said it is partnering with the state of Colorado to build 40 new E85 ethanol fueling stations in the Rocky Mountain state.
"Ethanol is essentially a substitute with conventional gasoline already," said Pavel Molchanov, energy analyst with Raymond James in Houston. "They are cost competitive, once the federal tax credit is taken into account. We feel that as oil prices begin to rebound then the economics of ethanol relative to gasoline should get better."
E85 is a mixture of 15% conventional gasoline and 85% ethanol. All passenger vehicles sold in the United States can use the E10 blend of gasoline, which is 10% ethanol and 90% gasoline.
In Michigan, ethanol is gaining momentum as a viable alternative to conventional gasoline. There are three stations already pumping out ethanol with one currently under construction.
Meanwhile, Gov. Jennifer Granholm recently announced plans to build 1,000 ethanol and biodiesel pumps across Michigan by the end of next year.
Nationally, there are over 100 ethanol refineries online and nearly as many under construction, according to www.e86fuel.com. In addition, the site says there are more than 1,100 ethanol fueling stations across the country, which is still a small portion of the estimated 170,000 gas stations in the United States.
A story in the Free Press online version on Thursday incorrectly said there was one ethanol plant operating in Michigan and there were about 800 E85 fueling stations across the country.
Nevertheless, E85 ethanol-powered vehicles have grown in popularity and have become a bigger part of the fleets of the domestic automakers. There are around 6 million flexible fuel vehicles on U.S. roads today.
"Right now, ethanol is a bargain when compared to gasoline," said Jim Rink, a spokesman for AAA Michigan in Dearborn.
http://www.freep.com/apps/pbcs.dll/article?AID=/20070216/BUSINESS01/70216048/1050/SPORTS
Monday, February 19, 2007
Friday, February 16, 2007
Ethanol Boom Raises Corn Prices
For farmers who raise corn, the ethanol boom has been a long time coming.
The Delmarva Peninsula lies just inland from the swanky beach hotels along the Maryland coast. It's green and pool-table flat, and its soil has fed Americans for more than 300 years.
For about 120 of those years, the Hutchison family has farmed here. They've raised soybeans, hogs and even a crop called kenaf, used to make paper.
Right now, corn is the hot crop, and Robert Hutchison's silos are bursting with shelled corn that's drying.
"We start selling January, February, March, and we'll empty our tanks by June," he said.
Corn farmers such as Hutchison are getting about $4 a bushel.
He says these high corn prices — pushed up in part by the demand for ethanol fuel — have farmers eager to buy seed.
"I sell seed corn as part of my other business," he said. "Every farmer I go to is planting additional acres of corn."
President Bush set the goal that in 10 years, Americans would replace one-fifth of the gasoline they use with ethanol.
That goal could also reshape the farm economy in unexpected ways.
Hutchison's a big fan of ethanol — but it also worries him and other farmers in the Delmarva Peninsula. They don't sell much corn to ethanol distilleries; their most important customers are hog and poultry producers.
"They are our No. 1 user of grain. We need to be concerned about that, and they need to remain viable," he said. "This whole thing will have to shake out to readjustment of prices and uses of grain."
Farmers here are happy to get record prices for corn, but they don't want to alienate the livestock producers, who are unhappy about the way ethanol is pushing up corn prices. And if those prices go too high, the livestock growers will switch to another kind of feed.
The challenge, he says, is find a way to keep feeding the new ethanol market without losing his old customers.
The ripple effects of higher demand for corn could reach far and wide. Pricier corn could mean pricier bacon, pricier steak, pricier Coke – because it uses corn syrup.
And an ethanol boom could have environmental costs, too. Elizabeth Marshall, an energy economist with the World Resources Institute in Washington, D.C., notes that corn uses a lot of fertilizer and a lot of herbicides. These have damaged rivers, lakes and especially the Chesapeake Bay along the Delmarva Peninsula. She says if the country wants more ethanol, it should help farmers find friendlier ways to grow corn and other crops in less harmful ways.
"A lot of people are looking for alternatives, including corn growers, but it's a very risky field," Marshall said. "You can't experiment with new technologies year-to-year and expect to stay in business if you hit a really bad year."
Delmarva farmer Robert Hutchison is already taking that risk, however.
Hutchison is growing a new kind of crop for the ethanol market — barley.
Most barley has a tough seed-hull that ethanol distilleries can't handle. So Hutchison is growing an experimental hull-less barley — the hull drops off during harvest. On a bumpy ride out to his test field, Hutchison says his first job is to persuade farmers to grow it.
"Part of the challenge of doing this ethanol plan is making sure we could pay the farmer enough additional that he would still net out the same, or more, as he would growing conventional barley," Hutchison says.
The idea is that farmers could grow winter barley for the ethanol market and summer corn to keep the chickens and hogs fat and happy. Moreover, barley keeps soil from blowing away in the winter, and sucks up excess fertilizer that might otherwise run into local waterways.
Hutchison says his hull-less barley is a gamble, but the ethanol boom has helped him make more from his corn crop than he has in decades.
"It's been since the '70s since I've been able to say farming is really profitable beyond just barely making a living and squeaking by."
http://www.npr.org/templates/story/story.php?storyId=7426827Two-hour promotion offering E85 for 85 cents
E85 fuel -- a blend of 85 percent ethanol and 15 percent gasoline -- will be sold for 85 cents a gallon today from 3 to 5 p.m. at the Sinclair station at 6301 W. 58th Ave. in Arvada to promote news today of a major E85 initiative.
State and federal officials and General Motors announced plans today for 40 new E85 fueling pumps at 22 gas stations to be opened in Colorado by the end of this year. Currently there are 13 E85 fueling stations in the state.
Cars and trucks designated as "flex fuel" can run on E85 or any combination of gasoline and ethanol.
"One of my top priorities is to establish a new energy economy for Colorado built around renewable and cleaner sources of energy," Gov. Bill Ritter said.
Ethanol boosters say use of E85 fuel will help reduce consumption of imported petroleum. Critics say that corn-based ethanol uses almost as much energy to produce as it delivers as a fuel.
http://www.denverpost.com/headlines/ci_5233117Ford Unveils First E85 Ethanol-Fueled Hybrid
A new version of Ford's hybrid SUV, the Escape Hybrid E85, will be the first hybrid electric vehicle to run on ethanol-based fuel.
Ford introduced its Ford Escape Hybrid E85 concept at this week’s 2007 Washington Auto Show, open to the public through Jan. 28. The model on display is the first of 20 vehicles that Ford will deliver to various test fleets in six states starting in the spring. The company didn't say whether or when it would start selling the Escape Hybrid E85 to the public.
Vehicles that can run on E85 ethanol, called flexible- or flex-fuel vehicles, are already available to consumers, such as General Motors' Chevrolet Tahoe and GMC Yukon. But there are currently no hybrid electric vehicles on sale that can use this fuel. Ford says it is committed to making half of its vehicle fleet flex-fuel capable by 2012.
Ford’s introduction of the Escape Hybrid E85 in Washington, D.C., was no doubt timed to coincide with President Bush’s State of the Union address on Tuesday, which happened to promote the development of biofuels such as ethanol as key to the domestic agenda.
Ethanol is a renewable fuel produced from organic substances such as corn or sugarcane. E85 fuel is 85 percent ethanol and 15 percent gasoline. Typically, gasoline sold in the U.S. contains only 10 percent ethanol.
Ethanol is widely used in some foreign countries, including Brazil. That country’s large sugarcane industry makes producing ethanol easier than in the U.S., where corn is used instead of sugarcane (it’s harder to convert corn to ethanol than it is sugarcane).
Ford said that the Escape Hybrid E85 produces 25 percent less carbon dioxide emissions when fueled by E85 as opposed to gasoline. If 5 percent of U.S. vehicles were powered by E85 ethanol-capable hybrids, oil imports could be cut by 140 million barrels each year, the company said.
“If all of the nearly six million flexible-fuel vehicles now on America’s highways operated on E85, more than 3.6 billion gallons of gasoline could be displaced a year,” said Sue Cischke, Ford’s VP of environmental and safety engineering. “That would be equivalent to saving a full year of gasoline consumption in a state like Missouri or Tennessee.” The issue of decreasing dependence on foreign oil aside, critics question whether burning the fuel required to produce ethanol negates any reduction in gasoline or oil consumption that comes as a result of ethanol being used in motor vehicles.
The gasoline-only Escape Hybrid became the first hybrid SUV available to the public when it was introduced in 2004; its 2007 model made ForbesAutos.com’s list of the 10 most fuel-efficient vehicles of 2007. Ford recently unveiled an updated 2008 version of the Escape Hybrid at the Los Angeles Auto Show.
GM has also updated its hybrid SUV for 2007, the Saturn Vue Green Line, and will launch a new version for 2008.
http://www.forbesautos.com/news/headlines/2007/january/fadc012407-ford_escape_hybrid_e85.html
Ford introduced its Ford Escape Hybrid E85 concept at this week’s 2007 Washington Auto Show, open to the public through Jan. 28. The model on display is the first of 20 vehicles that Ford will deliver to various test fleets in six states starting in the spring. The company didn't say whether or when it would start selling the Escape Hybrid E85 to the public.
Vehicles that can run on E85 ethanol, called flexible- or flex-fuel vehicles, are already available to consumers, such as General Motors' Chevrolet Tahoe and GMC Yukon. But there are currently no hybrid electric vehicles on sale that can use this fuel. Ford says it is committed to making half of its vehicle fleet flex-fuel capable by 2012.
Ford’s introduction of the Escape Hybrid E85 in Washington, D.C., was no doubt timed to coincide with President Bush’s State of the Union address on Tuesday, which happened to promote the development of biofuels such as ethanol as key to the domestic agenda.
Ethanol is a renewable fuel produced from organic substances such as corn or sugarcane. E85 fuel is 85 percent ethanol and 15 percent gasoline. Typically, gasoline sold in the U.S. contains only 10 percent ethanol.
Ethanol is widely used in some foreign countries, including Brazil. That country’s large sugarcane industry makes producing ethanol easier than in the U.S., where corn is used instead of sugarcane (it’s harder to convert corn to ethanol than it is sugarcane).
Ford said that the Escape Hybrid E85 produces 25 percent less carbon dioxide emissions when fueled by E85 as opposed to gasoline. If 5 percent of U.S. vehicles were powered by E85 ethanol-capable hybrids, oil imports could be cut by 140 million barrels each year, the company said.
“If all of the nearly six million flexible-fuel vehicles now on America’s highways operated on E85, more than 3.6 billion gallons of gasoline could be displaced a year,” said Sue Cischke, Ford’s VP of environmental and safety engineering. “That would be equivalent to saving a full year of gasoline consumption in a state like Missouri or Tennessee.” The issue of decreasing dependence on foreign oil aside, critics question whether burning the fuel required to produce ethanol negates any reduction in gasoline or oil consumption that comes as a result of ethanol being used in motor vehicles.
The gasoline-only Escape Hybrid became the first hybrid SUV available to the public when it was introduced in 2004; its 2007 model made ForbesAutos.com’s list of the 10 most fuel-efficient vehicles of 2007. Ford recently unveiled an updated 2008 version of the Escape Hybrid at the Los Angeles Auto Show.
GM has also updated its hybrid SUV for 2007, the Saturn Vue Green Line, and will launch a new version for 2008.
http://www.forbesautos.com/news/headlines/2007/january/fadc012407-ford_escape_hybrid_e85.html
Thursday, February 15, 2007
Betting the Farm on Ethanol
Chatting with a member of the extended family during holiday travels in Indiana, I learned that he's an electrician helping to build a new ethanol plant. He mentioned that there were quite a number of ethanol plants going up in that state. Turns out that it isn't just Indiana.
The Renewable Fuels Association, ethanolrfa.org, reports that 77 new ethanol plants or expansions are underway across the country. The list doesn't include recent announcements in New York State — a 60 million gallon a year facility in Caledonia and an experimental "cellulosic" ethanol plant in Greece to make ethanol from more random stuff than corn, such as wood chips, switch grass, and paper waste. The 79 new plants join 99 ethanol plants already producing about 5.4 billion gallons a year. That's a pretty small share of the roughly 140 billion gallons of gasoline burned in 2005 in America, but that's still a lot of ethanol.
The ethanol picture is confusing because there are two reasons for increasing ethanol capacity. One is to replace an additive called MTBE. The additive does good things for motor fuel but isn't something you want in your drinking water, so it is being phased out in favor of ethanol. The federal Energy Information Administration last year estimated that we'd need an extra 130,000 barrels a day — that's about 2 billion gallons a year — to replace all the MTBE.
The new plants will produce about 6 billion gallons a year, more than doubling our current capacity. So we're doing more than just replacing the MTBE. We want energy independence — the second reason for adding ethanol capacity — and the nation's corn growers are eager to help out. When the announced plants come on line, Iowa will be making 2.8 billion gallons a year, and Illinois, North Dakota, Nebraska, Indiana, Minnesota, and Wisconsin each will have capacity exceeding a half-billion gallons a year.
New York's comparatively modest output, then, will not make it the center of the ethanol universe. You need feedstock for serious ethanol production. Only about 20% of the corn feeding the Caledonia plant is expected to come from local farmers — the rest will come by rail from the corn states. So until this cellulosic ethanol experiment bears fruit, New York just isn't the perfect place to make ethanol. Not that corn is the only viable source. They're using cheese whey in California and Minnesota, and waste beer in Golden, Colorado.
All this interest in ethanol says a lot about the power of incentives. Not only are gas prices higher, but also Congress passed a long-overdue energy bill last year. Federal subsidies for ethanol production were reauthorized at 51 cents a gallon. Subsidies for ethanol are hardly surprising if you tally the number of votes in Congress from the states above and consider the historic power of the farm lobby in Congress. A 54-cent-a-gallon tariff on imported ethanol further distorts the market.
Ethanol plants receive state assistance, too. New York State plants producing renewable fuels are eligible for up to $2.5 million a year in state tax credits. We taxpayers also subsidize construction. A plant under construction in upstate Orleans County received $6 million from the state plus a federal loan guarantee of $25 million.
And the federal government administers programs that directly or indirectly subsidize corn production. The annual bill for all farm commodity programs is about $12 billion, according to the Congressional Budget Office.
Picturesque as it may be, do we know that growing corn to make motor fuel makes sense? An ecologist at Cornell, David Pimentel, has argued for years that the energy we use to make a gallon of ethanol — 131,000 BTUs, he estimates — is greater than the 77,000 BTUs we get out. One may contest some of Mr. Pimentel's assumptions, such as the relative efficiency of ethanol production processes and the amount of energy used to grow a bushel of corn. But even a more optimistic reading of the net energy balance from Hosein Shapouri at the U.S. Department of Agriculture claims that the net increase in energy by making ethanol from corn is about 34%.
Instead of mandating that 7.5 billion gallons of biofuel be mixed with gasoline by the year 2012, as does the Energy Policy Act of 2005, why don't we just tax gasoline and use the proceeds for competitive research grants? If gasoline were more expensive, we could let consumers and businesses figure out the most affordable substitute for liquid fuels. And we wouldn't be picking winning and losing technologies in the hallowed halls of Congress, investing untold billions on technologies that might not work or might suddenly become uneconomic when we change the level of subsidy.
I wonder what you can do with an abandoned ethanol plant. I sure hope we don't have to find out.
The Renewable Fuels Association, ethanolrfa.org, reports that 77 new ethanol plants or expansions are underway across the country. The list doesn't include recent announcements in New York State — a 60 million gallon a year facility in Caledonia and an experimental "cellulosic" ethanol plant in Greece to make ethanol from more random stuff than corn, such as wood chips, switch grass, and paper waste. The 79 new plants join 99 ethanol plants already producing about 5.4 billion gallons a year. That's a pretty small share of the roughly 140 billion gallons of gasoline burned in 2005 in America, but that's still a lot of ethanol.
The ethanol picture is confusing because there are two reasons for increasing ethanol capacity. One is to replace an additive called MTBE. The additive does good things for motor fuel but isn't something you want in your drinking water, so it is being phased out in favor of ethanol. The federal Energy Information Administration last year estimated that we'd need an extra 130,000 barrels a day — that's about 2 billion gallons a year — to replace all the MTBE.
The new plants will produce about 6 billion gallons a year, more than doubling our current capacity. So we're doing more than just replacing the MTBE. We want energy independence — the second reason for adding ethanol capacity — and the nation's corn growers are eager to help out. When the announced plants come on line, Iowa will be making 2.8 billion gallons a year, and Illinois, North Dakota, Nebraska, Indiana, Minnesota, and Wisconsin each will have capacity exceeding a half-billion gallons a year.
New York's comparatively modest output, then, will not make it the center of the ethanol universe. You need feedstock for serious ethanol production. Only about 20% of the corn feeding the Caledonia plant is expected to come from local farmers — the rest will come by rail from the corn states. So until this cellulosic ethanol experiment bears fruit, New York just isn't the perfect place to make ethanol. Not that corn is the only viable source. They're using cheese whey in California and Minnesota, and waste beer in Golden, Colorado.
All this interest in ethanol says a lot about the power of incentives. Not only are gas prices higher, but also Congress passed a long-overdue energy bill last year. Federal subsidies for ethanol production were reauthorized at 51 cents a gallon. Subsidies for ethanol are hardly surprising if you tally the number of votes in Congress from the states above and consider the historic power of the farm lobby in Congress. A 54-cent-a-gallon tariff on imported ethanol further distorts the market.
Ethanol plants receive state assistance, too. New York State plants producing renewable fuels are eligible for up to $2.5 million a year in state tax credits. We taxpayers also subsidize construction. A plant under construction in upstate Orleans County received $6 million from the state plus a federal loan guarantee of $25 million.
And the federal government administers programs that directly or indirectly subsidize corn production. The annual bill for all farm commodity programs is about $12 billion, according to the Congressional Budget Office.
Picturesque as it may be, do we know that growing corn to make motor fuel makes sense? An ecologist at Cornell, David Pimentel, has argued for years that the energy we use to make a gallon of ethanol — 131,000 BTUs, he estimates — is greater than the 77,000 BTUs we get out. One may contest some of Mr. Pimentel's assumptions, such as the relative efficiency of ethanol production processes and the amount of energy used to grow a bushel of corn. But even a more optimistic reading of the net energy balance from Hosein Shapouri at the U.S. Department of Agriculture claims that the net increase in energy by making ethanol from corn is about 34%.
Instead of mandating that 7.5 billion gallons of biofuel be mixed with gasoline by the year 2012, as does the Energy Policy Act of 2005, why don't we just tax gasoline and use the proceeds for competitive research grants? If gasoline were more expensive, we could let consumers and businesses figure out the most affordable substitute for liquid fuels. And we wouldn't be picking winning and losing technologies in the hallowed halls of Congress, investing untold billions on technologies that might not work or might suddenly become uneconomic when we change the level of subsidy.
I wonder what you can do with an abandoned ethanol plant. I sure hope we don't have to find out.
Tuesday, February 13, 2007
Ethanol from wood chips
They're betting on the chips. Wood chips, that is.
Scientists from the South Dakota School of Mines and Technology have designed a plant aimed at producing ethanol from wood chips.
According to George Douglas of the National Renewable Energy Laboratory in Golden, Colo., the planned facility in Upton would be the first of its kind in the nation. A second plant is planned in Georgia, he said.
The plant, near completion in the Black Hills, could bring closer to fruition a goal set for the country by President Bush: to make more fuel from renewable sources.
Scientists from the South Dakota School of Mines and Technology have designed a plant aimed at producing ethanol from wood chips.
According to George Douglas of the National Renewable Energy Laboratory in Golden, Colo., the planned facility in Upton would be the first of its kind in the nation. A second plant is planned in Georgia, he said.
The plant, near completion in the Black Hills, could bring closer to fruition a goal set for the country by President Bush: to make more fuel from renewable sources.
"This is certainly the wave of the future," said Dr. David Dixon of SDSM&T's Chemical and Bio-Engineering Department.
Ethanol is widely produced today from corn and other food crops and used as an additive to gas and diesel fuel. Making fuel from wood chips and other nonfood crops is more difficult but has the potential to significantly alter our dependence oil.
"We must continue investing in new methods of producing ethanol," Bush said in his State of the Union address last month, including, "using everything from wood chips to grasses to agricultural waste."
Dixon teamed with Western Biomass Energy, a Rapid City, S.D.-based company, to help develop a plan to convert Black Hills forest waste into ethanol. The company is now building a plant in Upton on just under 5 acres and hopes to open its doors in March.
The pilot plant is designed to produce 1 million gallons of fuel a year and could lead to a plant that would eventually produce as much as 20 million gallons of the fuel each year, using wood chips and wood residue as base material, according to President Randy Kramer.
According to its Web site, Western Biomass works closely with KL Process Design Group, a company that operates three other ethanol plants in Greybull; Sutherland, Neb.; and Buffalo, N.Y. Those other plants use corn as the primary source for ethanol.
The ethanol industry is growing by leaps and bounds, with 120 plants nationwide and 72 under construction. South Dakota boasts 12 plants with three more under construction. While the majority of ethanol plants use corn and other grains to make the fuel, a growing number worldwide are turning to wood, grasses and other plants for their needs.
Countries such China, Canada and Spain have joined the United States in the pursuit of this new form of energy.
Turning wood chips into ethanol is a little harder than with corn, so the South Dakota School of Mines and Technology has been developing new ways to do that, under the direction of Dixon.
"We just founded a biomass research center, and partnered with (South Dakota State University). Ethanol is going to be the primary focus of our efforts," Dixon said.
The Center for Bioprocessing Research and Development was created after Gov. Mike Rounds said the state needed to be a leader in research and development of biofuels. The center was funded for five years at $500,000 per year. A group of 10 instructors makes up the team of researchers, and they have experience in agricultural engineering, chemical and biological engineering, as well as biology and microbiology. The center joins four other research centers around South Dakota.
"With our dependence on oil, we found that this is a resource that is harder to get," Dixon said. "And so we're looking at renewable resources like ethanol, or biodiesel, made from feedstocks that can be added to fuels like gas or diesel."
While starch-based ethanol uses sugars as a starting point, cellulosic ethanol uses cellulose as a base. Cellulose is harder to break down than starch or sugar, so the School of Mines conducted research into making glucose out of cellulose, and then using microorganisms to ferment the mixture. Using cellulosic materials means being able to use the whole plant, making it potentially cheaper to procure.
"Cellulose is the primary part of the plant walls, lignin is the secondary part. Hemicellulose is the weaker part of the plant and can be easily dissolved," Dixon said. "Once that is done, it can be turned into glucose, a natural plastic. It's this that is turned into ethanol."
He said while this process is more expensive, the research being done may make it more efficient. He added the benefits outweigh the cost of producing this type of ethanol.
This different process in distilling ethanol will help lessen the need to use corn to make ethanol, which some contend is affecting the price of a food source for many people. Dixon -- and Western Biomass -- hope short grasses, the remnants of corn stalks and wood chips will replace grains in the process.
In addition, the use of wood residue for ethanol production has Wyoming and federal foresters happy with the prospect of a clean forest, without the use of fire to alleviate hazards.
That's because workers for Western Biomass would follow logging crews, clean up slash and residue piles on state and private land and use the wood for the ethanol process. And there's promising news for the future.
A feedstock study revealed that within a 25-mile radius of Upton, there is enough wood to support an ethanol facility for several years.
So what is E85 fuel?
- Eighty-five percent ethyl alcohol (ethanol), 15 percent automotive gas.
- Blends turn more to petroleum in winter months (E70, which has 30 percent gasoline).
- Today's supplies are made from corn.
- Cellulosic ethanol is a future supply source, and it can be made from fast-growing trees, corn stover, grain straw, switchgrass, forest products, waste, and construction waste.
- Although a high-profile study by a Cornell University professor claims ethanol production requires more energy than it produces, government and industry supporters of ethanol production say ethanol is energy efficient, yielding almost 25 percent more energy than is used in growing the corn, harvesting it and distilling it into ethanol.
- A vehicle uses up to 1.4 times as much E85 than gasoline to go the same distance, so price is an important factor in E85 marketing.
Source: U.S. Department of Energy
E85 slowly on its way
Gary Howey loves his 2006 F150 super-cab flex-fuel pick-up truck. He fills 'er up with E-85 -- a fuel that's just 15 percent gasoline and 85 percent ethanol -- as often as he can find a pump. The truck can also run on regular unleaded gasoline.
Howey, of Hartington, Neb., travels about 26,000 miles a year throughout Nebraska, South Dakota, Iowa and Minnesota producing an outdoor show for television. He's usually pulling a boat or an ATV on a trailer. For him, the flex-fuel vehicle, or FFV, and the fuel it burns are business expenses. He chooses E-85 for the cost savings.
Corn-based fuels and the cars and trucks that run on them are in the national spotlight. President Bush is pushing for more ethanol and other home-grown fuels. Iowa Gov. Chet Culver plans to create tax incentives for drivers who buy FFVs. And Bill Forsling, manager of new car sales at Knoepfler Chevrolet, said the company sold nearly 250 FFVs last year. Not only are ag supporters asking for them, but veterans returning from Iraq want them, too, saying they'd rather support Iowa corn than Middle East oil.
Even as lawmakers map out incentives to buy FFVs and fill them with E85, obstacles stand in the way:
-- E85 is not readily available, even in the corn belt.
-- While E85 costs less per gallon than regular gas, its fuel efficiency delivers 15 to 23 percent fewer miles per gallon than E10 or regular unleaded gas.
-- Despite state incentives to install E85 fuel pumps, some station owners are concerned about the high cost of installing the appropriate equipment and about possible environmental and property damage liabilities. One station owner even quit selling E85.
Those concerns don't damper Howey's enthusiasm, however.
"Flex fuel (E85) is unbelievably inexpensive compared to regular gas. There is a little difference in gas mileage," he admitted, "but performance-wise I don't see a difference."
Those with a stake in the E85 industry say they're working to overcome the obstacles, but that won't happen overnight. And, time itself will help the market to grow.
Why so few outlets?
Howey, whose truck is one of 6 million flex fuel vehicles sold in the U.S., said he doesn't have much trouble finding E85 as long as he sticks to the interstates or to towns where co-ops' gas stations sell it. But his experience is a bit unique, even in the Midwest.
Of the 170,000 gas stations in the United States, just 1,138 of them sell E85. And nearly a quarter of those are clustered in Minnesota alone. Iowa has 60 stations, South Dakota has 54 and Nebraska has just 29 stations selling E85 or planning to soon make it available, according to the National Ethanol Vehicle Coalition.
Of course, there's no way to know how many of the 6 million FFVs on the road use E85, but likely not many, or at least not often, given its limited availability. Culver said 45 percent of the country doesn't even have E10 yet.
In Iowa, most of the E85 pumps are in rural areas. Sioux City has none. Its nearest sources are in Sergeant Bluff, North Sioux City and Hinton, Iowa.
There are other practical and legal reasons for the sparsity.
Scott Mulder started selling E85 at his Sinclair gas station in Orange City, Iowa, 18 months ago, wanting to support the young industry. "I didn't learn until six months later that the DNR had a problem with it," Mulder said. He then took E85 out of his station.
"For me to get a system the DNR would accept I'd need new pumps, new lines and there's a question whether my tank would be acceptable," said Mulder, a six-year board member of the Petroleum Marketers and Convenience Stores of Iowa, a trade association that is paying considerable attention to E85 issues.
Retailers such as Mulder estimate it would cost between $50,000 and $80,000 to install the new tank and dispenser needed for older stations to sell E85. Costs could be considerably lower for stations with newer underground tanks, depending on their composition.
A leak is much more likely with older tanks, Iowa Department of Natural Resources spokesman Kevin Baskins, explained. The soft metals such as zink, aluminum and brass, and some nonmetalic materials such as rubber and polyurethane adhesives commonly found in conventional tanks and dispensing systems corrode much more quickly under the higher alcohol content of E85.
And, Baskins said, because ethanol blends with water, an underground plume of leaked E85 would be even harder to contain and clean up than one of gasoline.
The DNR has issued E85 infrastructure and testing guidelines in conjunction with the State Fire Marshal's office. All of the equipment, from tanks to 0-rings, must be compatible with E85; some parts must be approved by Underwriters Laboratory, or UL; and testing for water must be done on a set schedule, among other requirements.
One big piece retailers are waiting for is a UL approval dispenser, (commonly called a gas pump, although the actual pump nowadays is in the underground tank).
UL graduate engineer John Drengenberg said the lab has made E85 equipment "a very high priority" for public safety and environmental reasons, although industry requests for it came only recently.
It's a long journey from determining criteria for the parts to testing manufacturers' products, he said, declining to say how long it might take.
UL held a forum of industry experts a few months ago to collect known data. It will soon begin "harvesting" and studying ethanol dispensers from Brazil and Sweden, where high-ethanol fuels have been in use for much longer than in the United States.
Another liability concern for retailers is that unwitting motorists will see the lower price of E85 and automatically fill up with that, despite not having a flex-fuel car. E85 won't ruin the engine, said Sam Silacci, the service manager at Knoepfler, but it will damage the oxygen censor and perhaps other parts, too. He seen a couple of those towed in for repairs.
Some stations have an E-85 warning on the filler handle, warning drivers to be sure theirs is a flex-fuel vehicle.
Show me the money
In addition to infrastructure costs and liability concerns, most retailers won't stock E85 unless they can make a profit.
Mulder, who also wholesales ethanol through another business, said in addition to the cost of getting into the E85 business, there is little or no profit in it right now after taxes, insurance and delivery costs, despite the government's 50-cents-a-gallon subsidy for unblended ethanol.
He said coop gas stations will carry it at break-even prices or even take a little loss to show support for their corn-grower members, but few independent retailers will. Jim Harskamp, who manages the Coop Gas & Oil station in Sioux Center, Iowa, agreed.
"You probably break even with the price when all is said and done," he said. But he said he thinks the state legislature is on track, using various incentives to grow the sector.
The Cenex Ampride gas station in Hinton, Iowa, also sells E-85. Roger Price, general manager of the Farmers Cooperative Co., which owns the station, said the switch to E85 there was "relatively simple." Largely because the gas station was new, it involved changing only a few mechanical parts. He substituted E85 for the super unleaded and sales at those dispensers doubled.
"The problem is, the volume (15 percent of sales right now) isn't enough to pay the fixed costs," Price said. "You've got to have a threshold of gallons to cover the fixed costs. We expect to get there. But it isn't there today.
"What drives E85 sales more than anything is the spread between E85 and the regular unleaded gasoline." Price said ethanol's price is high right now because of the huge demand for it as a gasoline oxygenate, helping gas burn cleaner. As more ethanol comes onto the market over the next three years or so, he predicted E85 will have a better chance to compete head-to-head with gasoline.
Although ethanol gasoline blends had their start in the early 1970s as "gasohol," then died out quickly, Price believes today's ethanol is a much better product and is here to stay.
"There's too much momentum," he said.
http://www.siouxcityjournal.com/articles/2007/02/11/news/top/d9d9c9ce23e75ad28625727f0015e7c6.txt
Howey, of Hartington, Neb., travels about 26,000 miles a year throughout Nebraska, South Dakota, Iowa and Minnesota producing an outdoor show for television. He's usually pulling a boat or an ATV on a trailer. For him, the flex-fuel vehicle, or FFV, and the fuel it burns are business expenses. He chooses E-85 for the cost savings.
Corn-based fuels and the cars and trucks that run on them are in the national spotlight. President Bush is pushing for more ethanol and other home-grown fuels. Iowa Gov. Chet Culver plans to create tax incentives for drivers who buy FFVs. And Bill Forsling, manager of new car sales at Knoepfler Chevrolet, said the company sold nearly 250 FFVs last year. Not only are ag supporters asking for them, but veterans returning from Iraq want them, too, saying they'd rather support Iowa corn than Middle East oil.
Even as lawmakers map out incentives to buy FFVs and fill them with E85, obstacles stand in the way:
-- E85 is not readily available, even in the corn belt.
-- While E85 costs less per gallon than regular gas, its fuel efficiency delivers 15 to 23 percent fewer miles per gallon than E10 or regular unleaded gas.
-- Despite state incentives to install E85 fuel pumps, some station owners are concerned about the high cost of installing the appropriate equipment and about possible environmental and property damage liabilities. One station owner even quit selling E85.
Those concerns don't damper Howey's enthusiasm, however.
"Flex fuel (E85) is unbelievably inexpensive compared to regular gas. There is a little difference in gas mileage," he admitted, "but performance-wise I don't see a difference."
Those with a stake in the E85 industry say they're working to overcome the obstacles, but that won't happen overnight. And, time itself will help the market to grow.
Why so few outlets?
Howey, whose truck is one of 6 million flex fuel vehicles sold in the U.S., said he doesn't have much trouble finding E85 as long as he sticks to the interstates or to towns where co-ops' gas stations sell it. But his experience is a bit unique, even in the Midwest.
Of the 170,000 gas stations in the United States, just 1,138 of them sell E85. And nearly a quarter of those are clustered in Minnesota alone. Iowa has 60 stations, South Dakota has 54 and Nebraska has just 29 stations selling E85 or planning to soon make it available, according to the National Ethanol Vehicle Coalition.
Of course, there's no way to know how many of the 6 million FFVs on the road use E85, but likely not many, or at least not often, given its limited availability. Culver said 45 percent of the country doesn't even have E10 yet.
In Iowa, most of the E85 pumps are in rural areas. Sioux City has none. Its nearest sources are in Sergeant Bluff, North Sioux City and Hinton, Iowa.
There are other practical and legal reasons for the sparsity.
Scott Mulder started selling E85 at his Sinclair gas station in Orange City, Iowa, 18 months ago, wanting to support the young industry. "I didn't learn until six months later that the DNR had a problem with it," Mulder said. He then took E85 out of his station.
"For me to get a system the DNR would accept I'd need new pumps, new lines and there's a question whether my tank would be acceptable," said Mulder, a six-year board member of the Petroleum Marketers and Convenience Stores of Iowa, a trade association that is paying considerable attention to E85 issues.
Retailers such as Mulder estimate it would cost between $50,000 and $80,000 to install the new tank and dispenser needed for older stations to sell E85. Costs could be considerably lower for stations with newer underground tanks, depending on their composition.
A leak is much more likely with older tanks, Iowa Department of Natural Resources spokesman Kevin Baskins, explained. The soft metals such as zink, aluminum and brass, and some nonmetalic materials such as rubber and polyurethane adhesives commonly found in conventional tanks and dispensing systems corrode much more quickly under the higher alcohol content of E85.
And, Baskins said, because ethanol blends with water, an underground plume of leaked E85 would be even harder to contain and clean up than one of gasoline.
The DNR has issued E85 infrastructure and testing guidelines in conjunction with the State Fire Marshal's office. All of the equipment, from tanks to 0-rings, must be compatible with E85; some parts must be approved by Underwriters Laboratory, or UL; and testing for water must be done on a set schedule, among other requirements.
One big piece retailers are waiting for is a UL approval dispenser, (commonly called a gas pump, although the actual pump nowadays is in the underground tank).
UL graduate engineer John Drengenberg said the lab has made E85 equipment "a very high priority" for public safety and environmental reasons, although industry requests for it came only recently.
It's a long journey from determining criteria for the parts to testing manufacturers' products, he said, declining to say how long it might take.
UL held a forum of industry experts a few months ago to collect known data. It will soon begin "harvesting" and studying ethanol dispensers from Brazil and Sweden, where high-ethanol fuels have been in use for much longer than in the United States.
Another liability concern for retailers is that unwitting motorists will see the lower price of E85 and automatically fill up with that, despite not having a flex-fuel car. E85 won't ruin the engine, said Sam Silacci, the service manager at Knoepfler, but it will damage the oxygen censor and perhaps other parts, too. He seen a couple of those towed in for repairs.
Some stations have an E-85 warning on the filler handle, warning drivers to be sure theirs is a flex-fuel vehicle.
Show me the money
In addition to infrastructure costs and liability concerns, most retailers won't stock E85 unless they can make a profit.
Mulder, who also wholesales ethanol through another business, said in addition to the cost of getting into the E85 business, there is little or no profit in it right now after taxes, insurance and delivery costs, despite the government's 50-cents-a-gallon subsidy for unblended ethanol.
He said coop gas stations will carry it at break-even prices or even take a little loss to show support for their corn-grower members, but few independent retailers will. Jim Harskamp, who manages the Coop Gas & Oil station in Sioux Center, Iowa, agreed.
"You probably break even with the price when all is said and done," he said. But he said he thinks the state legislature is on track, using various incentives to grow the sector.
The Cenex Ampride gas station in Hinton, Iowa, also sells E-85. Roger Price, general manager of the Farmers Cooperative Co., which owns the station, said the switch to E85 there was "relatively simple." Largely because the gas station was new, it involved changing only a few mechanical parts. He substituted E85 for the super unleaded and sales at those dispensers doubled.
"The problem is, the volume (15 percent of sales right now) isn't enough to pay the fixed costs," Price said. "You've got to have a threshold of gallons to cover the fixed costs. We expect to get there. But it isn't there today.
"What drives E85 sales more than anything is the spread between E85 and the regular unleaded gasoline." Price said ethanol's price is high right now because of the huge demand for it as a gasoline oxygenate, helping gas burn cleaner. As more ethanol comes onto the market over the next three years or so, he predicted E85 will have a better chance to compete head-to-head with gasoline.
Although ethanol gasoline blends had their start in the early 1970s as "gasohol," then died out quickly, Price believes today's ethanol is a much better product and is here to stay.
"There's too much momentum," he said.
http://www.siouxcityjournal.com/articles/2007/02/11/news/top/d9d9c9ce23e75ad28625727f0015e7c6.txt
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