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Everybody loves E85

by
Nicholas Seeley

8/27/2003

In the coming months thousands of Chicago-area residents will get yet another piece of junk mail, this one including stickers, flyers, and a debit card good for $40 worth of something called "E85". General Motors Corp. launched the promotion to promote the use of the mostly-ethanol alternative fuel, which is available to the public although few people have ever heard of it.

The direct-mail blitz is the tip of an unusual iceberg, a coalition of government agencies and interest groups that are trying to get ethanol, usually made from corn, into America's gas tank. Of course, ethanol is already required to be mixed into gasoline in the summer months in higher-pollution areas including metropolitan Chicago.

GM planned the campaign in collaboration with the National Ethanol Vehicle Council, a nonprofit funded in part by automakers, and put the advertising for the promotion together in-house, according to company representatives, although some other pro-ethanol organizations claim partial credit for the effort. State governments, farmers and environmentalists all have their own reasons for wanting to see ethanol consumption increase.

For years, ethanol, an alcohol which can be produced from corn, sugarcane, beets and other crops, has been a darling of alternative-fuels activists and farmers who want higher prices for their crops. E85 is an automotive fuel which is 85 percent ethanol and 15 percent gasoline.

Currently, there are somewhere between 22 and 30 gas stations in Illinois that also sell E85, according to the groups involved in the promotion. However, only 15 of them are available to the public (the others serve private or government fleets) and no one knows of them. In Indiana there's only one gas station offering E85 to the public, in Evansville.

Every year auto manufacturers turn out more than a million "flexible-fuel" vehicles, which can run on E85 or any other blend of gasoline and ethanol. FFV engines aren't options, they're simply built in to a number of popular vehicle models.

One GM spokesman called FFVs "the best kept secret at General Motors." Other ethanol advocates say automakers have been dragging their feet on the ethanol issue. According to Mark Lambert, spokesman for the Illinois Corn Growers Association, said the auto industry as a whole “has not gone out of their way to promote these vehicles for what they are.”

Since 1988 automakers have obtained government incentives to produce alternative-fuel vehicles, in the form of credits against federal emissions standards. Of course, with so few fueling stations offering E85, those FFVs are being run on ordinary gasoline, and any environmental benefits that might accompany the use of alternative fuels are not materializing.

“Automakers responded to an incentive provided by the Congress,” said Phil Lampert, executive director of the National Ethanol Vehicle Council. On the one hand, he said, that incentive has failed to increase use of ethanol; on the other hand, it has succeeded in getting FFVs on the road.

Lampert hopes that the new energy bill laboring through Congress will include include incentives to the petroleum industry to start building ethanol fueling stations.

In Illinois, E85 suppliers already are benefitting from federal funding, obtained through the state government. Officials of the Illinois Department of Commerce and Economic Opportunity applied for grants from the U.S. Department of Energy to fund construction of ethanol fueling stations.

The grants are “probably on an average of 40,000 [dollars] per station, for 12 stations,” said DCEO spokesman Dave Loos.

E85 is used in a number of Illinois state vehicle fleets, and the US Postal Service mandates that its vehicles fill up on E85 in areas where it's available, Loos said.

For this reason, the state has obtained grants for gas stations near postal facilities to install E85 pumps. “Stations need ... a base load of customers to ensure their interest, ” Loos said.

Lampert of the NEVC hopes for a flat grant of $25,000 to $30,000 per station, about half the usual cost of installing the equipment for supplying E85.

Construction grants are only one type of incentive state and federal governments are providing the ethanol "industry." The GM promotional program was timed to coincide with the Gov. Rod Blagojevich's signing of a bill to extend tax credits on alternative fuels and fund the construction of ethanol plants in Illinois.

Under state law, ethanol fuels were exempt from 80 percent of state sales tax. The new bill tacks a ten-year extension onto that exemption, however it reduces the exemption from to 70 percent, which is expected to bring the state $16 million in additional revenue.

The same bill allocates $15 million to grant programs for the construction of ethanol processing plants, which legislators hope will induce building in Illinois, said state Rep. Dan Reitz (D-Sparta).

“The benefit to the state is the jobs you get with it, the benefit to the environment, and the market for our Illinois corn,” Reitz said.

Corn producers, of course, are happy about the incentives, because they increase demand for corn.

"The end goal, of course, is to grow the ethanol market," said Loos. “We can’t depend on federal funds to change the infrastructure,” he said, although that seems to be what his department is doing.

Information on gas stations supplying E85 can be found on the NEVC's Website, www.e85fuel.org.




 
 
 
 
 







 
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