These so-called flex-fuel vehicles, or FFVs, represent a largely ignored
solution to reducing America's oil dependency, and GM has made them a
cornerstone of its environmental strategy. (Full disclosure: GreenOrder,
the consultancy with which I am affiliated, has provided strategic counsel
to GM on its FFV initiatives.) In its most recent announcement, GM said it
would lead a joint demonstration project along with the state of
California, Chevron Technology Ventures, and Pacific Ethanol "to learn
more about consumer awareness and acceptance of E85 as a motor vehicle
fuel by demonstrating its use in GM's flexible-fuel vehicles."
GM currently has 1.5 million vehicles on U.S. roads capable of using a
blend of gasoline that contains up to 85% ethanol (referred to as E85),
which is mostly derived from corn. (Its principal U.S. competitor, Ford,
also has a significant number of FFVs on the road.) E85 vehicles can run
on either conventional gas or E85 without any additional modifications,
aftermarket conversions, or cumbersome switches for vehicle users. The
cars automatically sense the current fuel mix and adjust accordingly.
Why push FFVs and E85? GM has several strategic reasons. First and
foremost, the company has been under tremendous pressure from
environmental groups and others to improve the fuel-efficiency of its
vehicles. GM has been slow to market with hybrids, having invested untold
millions in next-gen hydrogen fuel cell technology. GM views that strategy
as forward-thinking, though many of its critics see it as a dodge to avoid
improving the fuel efficiency of its current crop of cars and trucks.
So, FFVs offer a way for GM to demonstrate its environmental leadership
and generate sales -- and to help jump-start a much-needed flexible-fuel
infrastructure along the way.
Just as with hydrogen-powered vehicles, simply putting FFVs on the road
isn't enough. You've got to have in place the filling stations that allow
motorists to fuel up on E85 and other alternative fuels. And you've got to
have an adequate and cost-competitive supply of the fuels themselves.
Therein lies the chicken-and-egg dilemma that's led some researchers to
predict that a robust hydrogen infrastructure -- and, thus, a robust
fuel-cell vehicle marketplace -- could be as much as two decades off.
But that's not the case with E85, which is available today, at least in a
few outlets. The number of E85 stations in the U.S. doubled last year to
about 600 and is expected to continue to grow as the new Energy Security
Act of 2005 is implemented. That law provides a lucrative federal tax
credit to stations that install E85 fueling tanks. But even a tenfold
increase in ethanol availability would be a drop in the bucket compared to
the nation's 176,000 gas stations.
GM's recent announcement is designed to help grow that infrastructure.
Under its partnership, GM flex-fuel vehicles will be used by the
California Department of Transportation (CalTrans) at various operations
in the state. Chevron Technology Ventures will work with CalTrans to
provide E85 fuel and install the necessary refueling pumps in these
locations. Pacific Ethanol, a California-based ethanol production and
marketing company, will provide the ethanol to Chevron Technology Ventures
for the project. All told, it's the kind of systemic, cooperative approach
we need to see more of.
Brazil already has shown that an ethanol infrastructure is both possible
and profitable. Today, half of all new cars sold there are FFVs, and that
will rise to 100% within four years. Brazil's reliance on oil imports has
plummeted from 85 percent of its energy consumption in 1978 to nearly
zero, Brazilian officials say. Brazil's sugar and ethanol factories not
only produce fuel for cars, they generate their own thermal and electric
energy using bagasse (the residue of sugar cane crushing) as a fuel in
co-generation systems, selling excess electricity to the public grid.
Largely as a result of such savvy infrastructure investments, the country
is becoming a net exporter of ethanol made from sugar cane, and is
"scrambling to invest in port infrastructure to keep ahead of expected
growth in world demand for the biofuel," according to Reuters.
Infrastrucutre issues aside, E85 is far from perfect and, like practically
everything else, has trade-offs. For example, E85 holds less energy per
gallon than gasoline, reducing one's fuel economy slightly. But E85
ethanol has higher octane, providing increased horsepower, thereby
improving vehicle performance somewhat. E85 use also reduces tailpipe
emissions of greenhouse gases and some smog-forming exhaust. It's usually
price-competitive with conventional gas.
Beyond that is the issue of corn, the source of nearly all ethanol in the
U.S. Modern corn farming is energy and chemical intensive. Early ethanol
plants were also energy intensive, raising concerns as to whether the
transportation fuel being produced was worth the energy going into making
it. Ethanol production currently consumes about 11% of the total U.S. corn
crop.
But producing today's ethanol is more efficient. According to the U.S.
Energy Department:
The most official study of the issue, which also reviews other studies,
concludes that the "net energy balance" of making fuel ethanol from corn
grain is 1.34; that is, for every unit of energy that goes into growing
corn and turning it into ethanol, we get back about one-third more energy
as automotive fuel. That may not sound impressive, but bear in mind that
while the gasoline that ethanol displaces is largely imported and a
high-level pollution source, the mix of energy inputs for producing
bioethanol includes much domestic and relatively cleaner energy.
Still, there are better, more energy- and environmentally friendly ways to
make ethanol. Energy Department studies show that producing ethanol from
some types of plants or crop waste -- known as "cellulosic ethanol" --
instead of from corn or other crops has an impressive net energy ratio of
more than 5:1. It's at that level that E85 becomes a true environmentally
friendly fuel. Researchers are making strides in bringing affordable
cellulosic ethanol to market.
There's clearly an E85-powered bandwagon taking shape. In his
state-of-the-state address last week, New York Gov. George Pataki promoted
a plan to "provide for the establishment of refineries that make ethanol
out of agricultural products from our farms and wood products from our
northern forests" and to make such fuel "tax-free throughout the entire
state."
But one step at a time. For now, GM seems to be moving the needle on
flexible fuels, slowly but surely helping to grow the amount of
non-petroleum, American-grown energy we put in our tanks. FFVs aren't a
substitute for highly efficient vehicles, of course, but they represent an
important strategy for GM to burnish its environmental credentials and
build markets for greener vehicles -- and to create benefits for American
farmers and drivers, too.
About the author...
Joel Makower is founder of GreenBiz.com and co-founder of Clean Edge, Inc.
He can be reached through his Web site and blog: www.makower.com, also at
the link below.
The information and views expressed in this article are those of the
author and not necessarily those of RenewableEnergyAccess.com or the
companies that advertise on its Web site and other publications.
